Littleton Coin Company’s Collector’s Corner

Notes Reflect the Great Depression, Part 2


The Gold Recall Order of 1933 wasn’t the only source of problems for notes in the late 1920s and early 1930s. Silver Certificates presented something of a conundrum as well. Circulating at the time was the $1 Silver Certificate, which included a clause promising "One Silver Dollar" to the bearer on demand. But the U.S. Mint had ceased production of silver dollars in 1928, when it had finally produced enough to comply with the Pittman Act of 1918. And with the onset of the Great Depression, they just weren’t in great demand.

Unless the United States was willing to produce millions of silver dollars to back silver certificates that weren’t being redeemed – and no one wanted to do that – there needed to be a change. And so there was. Beginning with the Series 1934, the obligation was changed to promise "One Dollar In Silver." A subtle change, but important nonetheless. The Series 1928E certificates were caught in the change, and it’s likely that part of its printing was never released. So it can be it very tough for collectors.

The impact of the Great Depression can also be seen in the other new small-sized Silver Certificate denominations, such as the $5 and $10. Introduced in 1934, the $5 bore the updated obligation. However, the $10 had already been introduced and did not. The obligation was changed with the Series 1934 $10, and the Series 1933 and 1933A $10 had to be destroyed. Making them, too, rare notes!

It can be said that the $5 and $10 Silver Certificates were only created because of the Great Depression. And the same is true of the $1 United States Note. There had been no $1 United States Note when the change to small-size notes was begun in 1929. In fact, none were expected. Officials, however, were desperate to find notes they could produce that wouldn’t require gold or silver backing. And the United States Note seemed to fit the bill.

Production on a Series 1928 $1 United States Note was begun between April and May of 1933. And $10 and $20 United States Notes were put on display that year at the World’s Fair in Chicago. But the printing suddenly stopped after just 1,872,012 new $1 United States Notes. Of these, only 5,000 were released immediately, and the rest appeared in circulation years later in Puerto Rico. The $10 and $20 notes on display were never produced. Clearly something very strange happened.

Precisely why production of the $1 United States Note was stopped after just a small printing we can’t be sure. Nor can we be certain why the $10 and $20 were not printed after being displayed. But the best guess is that, much to their chagrin, officials discovered their plans would cause them to exceed legal limitations on the amount of United States Notes. Rather than try to explain to the Congress what they were doing, it appears that they simply decided to drop the idea. Making the Series 1928 $1 United States Note – which was actually printed in 1933 – a classic note of the Great Depression.

What officials were willing to take to Congress was a request to authorize new small-size Federal Reserve Bank Notes with relaxed collateral requirements. Until then, the Federal Reserve Bank Note had only been issued in large-size. The rush request caused little debate and was quickly approved. Such was the hurry to get out the new notes that officials didn’t even wait for proper stock on which to print them. Instead, they simply overprinted National Bank Note stock. So the first of the new Federal Reserve Bank Notes were on their way in a matter of days, instead of months.

As it turned out, the crisis was not as grave as some had feared. Only part of the total Federal Reserve Bank Notes printed during the Great Depression were issued at that time. The rest would be released in the first years of World War II, which certainly qualified as an emergency as well. Because of this, you cannot tell when specific small-size Federal Reserve Bank Notes were actually released. But you can be sure they were made in the dark days of the Great Depression, by a government trying desperately to put more money in circulation – but without any major collateral requirements.

None of the issues of the Great Depression carry a notation saying they were created by frantic officials – officials trying desperately to deal with a national crisis. But once you know their story, you realize such a notation might not be out of place. Each note of the Great Depression tells an interesting story and provides some insight into what was happening at the Treasury. That makes them a fascinating collection today, and one well worth assembling. So if you’re looking for truly historic notes, the notes of the Great Depression might well be a perfect choice for you.