Anyone who collects paper currency and studies American monetary history will eventually come across the term “silver certificate.” But what does it mean and what is the most profitable way to collect it?

The Origins of Silver Certificates

The silver certificate is a type of bill that was issued during various periods of American history, namely the 1800s. It was recognized as legal tender similar to the U.S. dollar today, and was also federal government issued. The difference is that the note represented a specific value of physical silver which was secured in a vault. This meant that the certificate holder could take the bill and redeem it for their physical silver when desired, but in the meantime had a bill which was much lighter and easier to carry around.

Although these silver certificates can no longer be exchanged for physical silver, the bills themselves have become sought after collector items, thanks to their rarity and beauty. These notes often depict stunning and vibrant American artwork from the 19^th century, and due to the lengthy period of time which has passed since their introduction, few surviving examples exist, especially in quality condition. Those that do can fetch a fantastic amount.

Why the U.S. Government Issued Them

The Founding Fathers originally envisioned a nation that used gold and silver as a medium of exchange, and during the first 150 years of American history, this is how it was, to a greater or lesser degree. During the 1860s the U.S. quickly emerged as a major silver producer, thanks to huge deposits found in places like Nevada (Comstock Lode). This encouraged the creation of a newer monetary system that was silver based, and silver certificates became a key part of this.

Why the U.S. Government No Long Issues Them

The short answer is that starting in 1913; the United States transitioned into a debt/cash based system that no longer used full gold or silver backing. This was largely due to the creation of the Federal Reserve.

Without a silver or gold backed currency, there are no limits to how much paper currency the government could print. With silver certificates there were constraints, because if the government issued too many certificates citizens and investors would become nervous and begin requesting their physical silver. There are those in the U.S. today that want to return to silver or gold standards, who argue that it is the only way to control inflation and increase prosperity.

How to Collect Silver Certificates

Before getting started collecting silver certificates, you should first own a nice chunk of physical silver, because after all this is where the certificates are derived from. Once you own a respectable amount of physical silver, you can then begin searching for silver certificates. Coin Exchange NY sells lots of antique currency on their website but it is important to do your research to learn which notes are most valuable and the history behind them. This will help you build a wonderful collection that you can one day pass down to your forebears.