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Small-Size Gold Certificates Worth a Look - Part I
Small-Size Gold CertificatesBy Carlson R. Chambliss, Bank Note Reporter
December 29, 2008
Small-Size Gold Certificates

Part I of II. Click here to view part II.



During the era of large-size notes, Gold Certificates became one of the most important forms of paper money in the United States. The first three issues of these notes, however, were issued at a time when gold traded at a premium over most forms of paper money (by then very largely United States Notes and National Bank Notes), and gold notes did not circulate on a daily basis. The first act authorizing Gold Certificates was passed on Aug. 2, 1863, but no actual notes were issued before late in 1865.

The four lower denominations of the first issue were bearer documents, but the notes of this issue for $5,000 and $10,000 were made payable to the order of a person specified on the notes. This was also true of all notes of the next two issues (Series 1870 and 1875). These items were transferable to third parties, but they were much more in the nature of warehouse receipts than circulating paper money.

When all U.S. paper money became convertible to gold at par on Jan. 1, 1879, the idea of regularly circulating Gold Certificates would have been appropriate, but this had fallen down to only $5 million by 1882. Within a year, however, the circulation of Gold Certificates was up to $60 million, but almost all of these were the newly printed notes of Series 1882.

For the next 25 years, however, the circulation of Gold Certificates remained well under that of gold coins. In fact, during the late 1890s when the "free silver" question was an extremely important political issue and when Greenbackers advocated a greatly increased output of paper money, the circulation of Gold Certificates fell to as low as only 5 percent of the total of circulation of gold coins. Persons who favored gold money wanted it in coin form rather than as notes with fancy orange backs. Just the opposite was true for Silver Certificates. By 1882 their circulation had exceeded that of silver dollars outstanding and for most of the next four decades roughly seven times as much money was outstanding in the form of these notes instead of in that of the bulky silver dollars into which they were redeemable.

On March 14, 1900 the Unite States went fully on a gold standard, and by then almost everyone had complete confidence that our paper money was indeed "as good as gold." The circulation of Gold Certificates began to increase rapidly, and by 1907 their circulation had outpaced that of gold coins for the first time. During the late 1920s the amount of these notes outstanding was roughly 10 times that of gold coins in public hands. In 1929 Gold Certificates were some 24 percent of the total paper money in circulation. In this respect they were exceeded only by Federal Reserve Notes that constituted about 43 percent of the outstanding money.

When plans were being made to introduce small-size notes, there must have some consideration given to retaining the bright orange backs for the Gold Certificates. The idea, however, was to make the new small-size currency as uniform as possible for all types, and so it was decided to use only green ink for printing on the backs of all small-size notes. The seals and serial numbers, however, continued to be printed in the familiar orange-yellow color and the ink used for these had to be the same lead chromate pigment that had been used for printing all earlier Gold Certificates.

In comparing production statistics for large-size Series 1922 Gold Certificates with those of the small-size Series 1928 notes, some close similarities are noted. The numbers issued for the Series 1922 $10, $20, $50, and $100 gold notes were 160.6, 87.12, 5.98, and 2.44 million, respectively. For the corresponding notes of Series 1928 these totals are 130.8, 66.2, 5.52, and 3.24 million, respectively. In terms of face value the total amount issued for these denominations of Series 1922 notes was $3.89 billion, and for the Series 1928 gold notes it was $3.23 billion.

When one takes into consideration that the Series 1922 notes were in circulation for about eight years whereas the Series 1928 notes were in circulation for only about four years, these two totals come out more or less the same. Clearly the function of the Series 1928 gold notes was to replace the outstanding large-size gold notes, more or less on a one-for-one basis.

The higher denominations of Gold Certificates were largely held by banks and used for transfer purposes rather than for everyday circulation. Furthermore these notes once issued tended to remain available for many more years than would have been the case for the lower value notes that required more frequent replacement. Thus in comparing the production of Series 1928 $500 and $1,000 gold notes with those of large-size notes of the same denominations, we should look not just at the Series 1922 notes, whose printings were far below those of the corresponding Series 1928 notes, but at some earlier $500 and $1,000 gold notes as well.

If we combine the three collectible varieties of Series 1882 $500 gold notes with those of Series 1922, then the total issued was 292,000 notes. For the Series 1928 this total was 420,000 notes. Similarly for the $1,000 notes, if we combine the Series 1907 and 1922 Gold Certificates, the total issued was 308,000 notes. For Series 1928 $1,000 Gold Certificates the printing was 288,000.

For these large-size gold notes the face value for both denominations was $45 million, and for the Series 1928 notes this amount was $498 million. Once again these totals are quite similar, although it seems that a bias toward $500 notes as compared with $1,000 notes is apparent for Series 1928. In the days before credit cards the use of $500 and $1,000 notes was by no means restricted to interbank transfers, and quite possibly there was rather more demand for $500 than for $1,000 notes when making large purchases.

When plans for replacing all large-size notes with the small-size notes of Series 1928 and 1929 were being drawn up, it is almost surprising that there was a decision to continue with the circulation of $5,000 and $10,000 notes. There had been only three different issues of large-size notes of these values that saw active circulation, viz., the United States Notes of Series 1878, the Gold Certificates of Series 1882, and the Federal Reserve Notes of Series 1918. Of these, all of the United States Notes of 1878 had long since been redeemed and the Federal Reserve Notes of 1918 saw minimal use. Only the gold notes of Series 1882 saw much actual use.

At the turn of the 19th century these items were often used for making large bank transfers by mail, with their serial numbers duly recorded before shipping, they proved to be a safe and convenient means for transferring large sums between banks, since it would have been virtually impossible for a thief or other unauthorized party to negotiate such items at a time when $5,000 or $10,000 was several times an average person's annual salary. In the early 1900s, in fact, notes for these denominations constituted almost 5 percent of the total paper money in circulation, but by the 1920s their used had fallen sharply despite a large increase in the overall money supply.

Nevertheless the persons planning the new small-size notes approved the authorization of the issue of $5,000 and $10,000 notes both as Federal Reserve Notes and as Gold Certificates. About 18,240 Series 1928 $5,000 and about 15,380 $10,000 notes of this series were issued to replace the 6,800 Series 1918 $5,000 and the 5,600 $10,000 notes that had been issued previously.

Actually a total of 21,600 $5,000 and 18,400 $10,000 Federal Reserve Notes never left the Federal Reserve System and thus were never issued to the public. This would have been especially true of the Series 1928 Federal Reserve Notes that carried the gold clause and that were probably replaced by Series 1934 notes at the various Federal Reserve banks once the latter series became available.

It is know that a total of 24,000 $5,000 Gold Certificates and 48,000 $10,000 notes were printed in Series 1928. These would have had a total face value of $600 million, or about 14 percent of all the Gold Certificates of Series 1928. According to Bureau of Engraving and Printing records, about 110,000 $5,000 and 136,500 $10,000 large-size gold notes were printed in Series 1882, but it is well known hat many of these were never issued. If the Series 1928 notes were designed to replace existing stocks of Series 1882 notes, it seems likely that the amounts of that latter that were actually issued were only about one-third or one-quarter that of the numbers the BEP records claim as having been printed.

Today only two each of the Series 1882 $5,000 and $10,000 gold notes have been recorded as existing in issued form, and for the Series 1928 notes only a single pair are known to exist. Both of the latter have serial No. 1, and they reside in the National Numismatic Collection at the Smithsonian Institution. If any others exist on the outside, they would be fully legal to possess, but their extremely high face values coupled with the fact that they would have subjected to forced redemption between 1934 and 1964 makes it seem unlikely that there are presently any of these notes in private hands.

Although the Series 1928 $10,000 gold note is in CU condition, the $5,000 note of this series has been damaged and is in urgent need of professional restoration work. Hopefully such work will be undertaken, thus giving this ultra rarity the respect that it deserves.

It should be noted that the Gold Certificates of Series 1888 and 1900 were never regarded as currency in circulation by the Treasury or by anyone else. These items allowed for the one-time-only transfer of a fixed amount of gold ($5,000 or $10,000) between the Treasury and a second party specified on the note. The Series 1888 notes are domiciled to New York, and only a few proofs of this issue are known, all of which are in government hands. The Series 1900 notes ($10,000 only) are not specifically domiciled, and until being filled out they were in effect blank checks. As is well known, several hundred of these in cancelled form became available to collectors as a result of a fire in an office building in Washington in 1935. Although the government has never formally relinquished title to these items, there have been no seizures for many years, and today they are actively collected despite the fact that they are quite non-negotiable.

Collectors needn't worry about acquiring any $5,000 or $10,000 Gold Certificates for Series 1928, but the other dominations of this series are available. For budget-minded collectors the basic task is to complete a set of the $10, $20, $50, and $100 notes in decent condition. The days when these items were available in Fine for double face are long past, but Fine prices of $100, $125, $350, and $600, respectively, are about what one should pay in today's market.

For the normal $10 notes there are two block varieties, AA and BA. BEP records indicates that a total of 130,812,000 notes were printed, and thus serials as high as B30812000A might exist. My own note from this block has serial number B25348403A, and thus I am inclined to believe that all of these notes were actually issued.

It is often stated that many of the later serial numbers of these notes were still unissued at the time of President Roosevelt's gold recall order of March 1933, but the existence of a note with a serial number in the 125 million range would seem to argue against this assertion. Nonetheless the BA block is scarcer than the AA block for Series 1928 $10 gold notes, and it does command a fairly modest premium.

If higher grades than Fine are desired, prices for these notes are obviously higher. In typical uncirculated (CU-63) prices of $750, $900, $3,000, and $6,000 might be expected for the $10, $20, $50, and $100 notes, respectively, and notes in superb gem CU grade would sell for quite a bit more. Indeed a $100 note graded gem CU-66 sold for a record price of $35,650 in 2007.

Major errors are very scarce on Series 1928 gold notes, but the $10 note is known with an inverted back and the $20 with all of its third printing in orange-yellow omitted. Originally thought unique, there are now at least three of the $20 errors recorded. In CU grade these sell for about $7,500. The $10 invert is equally scarce, if not rarer.

Although quite expensive, the $500 and $1,000 notes of these series are also available to collectors. If one assembles a full set of small-size notes from $1 to $1,000 in face value by series as well as type, then there are four notes that stand out as being decidedly rare. These are the Series 1933 $10 Silver Certificate, the Series 1934 $10 North Africa note, and the Series 1928 $500 and $1,000 Gold Certificates. All four of these are comparable in rarity and in price, since from 60 to 100 examples of each are known. I like to call these the "fabulous four," and this is a quartet that many collectors seek.

My estimates for the populations of the two Gold Certificates are 65 to 80 for the $500 notes and 60 to 75 of the $1,000 notes, and Martin Gengerke has recorded the serial numbers of 50 of the former and 46 of the latter. A couple of years ago I suggested prices of $25,000 to $30000 for each of these notes in uncirculated, but these estimates were proven to be too low by the results achieved in the Goldbergs' sale held in 2007. A $1,000 gold note graded CU-64 sold for $41,400, while a $500 note grade gem CU-66 realized a fantastic $120,750.

In uncirculated these two items are much rarer than are Series 1933 $10 Silver Certificates, and so they should sell for significantly more, as indeed has proven to be the case. In Fine these notes are much more affordable, and prices of about $5,000 and $6,000 would seem reasonable for the Series 1928 $500 and $1,000 gold notes, respectively.

Were all 420,000 $500 notes and 288,000 $1,000 notes of this series actually issued? The highest serial number quoted in the Schwartz-Lindquist catalog for the $500 note is A00113198A, and the serial number of the $1,000 note in my collection is A00104173A, so at least well over 100,000 each of these notes were issued, but it seems that the full numbers printed and delivered to the Treasury may not have been issued before their release would have been halted in the spring of 1933.

According to BEP records, a total of 4,000 star notes each were printed in advance for the $500 and $1,000 denominations. The processing of these high denomination notes would have been carried out with great care at the BEP, however, and it seems that there was no spoilage among the normally numbered notes. Thus it seems likely that all star notes for these denominations were destroyed. The discovery of a star note of either of these denominations would be an important event for syngraphics.

According to BEP records, the deliveries of $10 and $20 gold notes to the Treasury took place between May 29, 1929 and Feb. 6, 1933. For the $50 notes these dates were Aug. 21, 1929 and Oct. 26, 1931. For the $500 and $1,000 dates these dates were Dec. 2, 1929 and Oct. 20, 1930. The $5,000 and $10,000 gold notes were all delivered in a short interval in late November and early December 1929.

If it could talk, my $10 gold note of the BA block might have an interesting story to tell. Clearly it was not delivered to the Treasury prior to the beginning of 1933, but since it exists, it would subsequently have been delivered to a commercial bank before being paid out to a private customer at a date that was well into 1933.

The initial gold recall order of March 6, 1933 focused very largely on gold coins rather than Gold Certificates, and in fact, it was not until Dec. 28, 1933 that a formal ban on the holding of Gold Certificates took place. During much of 1933 numerous Gold Certificates continued to circulate in everyday trade, and many doubtless were paid out by banks.

One of the most mysterious productions of Gold Certificates are the Series 1928A $10 and $20 notes that bear the signature of Walter Woods and Ogden Mills. According to the BEP, a total of 2,544,000 $10 notes were delivered to the Treasury between March 28 and April 14, 1933. At this time the circulation of Gold Certificates was still quite legal, although banks were no longer supposed to pay them out. If any Series 1928A gold notes show up, I expect that they would be regarded as fully legal to collect. Thus legally they most likely fall into the same category as Series 1933A $10 Silver Certificates, which most definitely were printed and delivered, but apparently were subsequently all destroyed (most likely in November 1935).

It is sometimes stated that the Series 1928A $10 and $20 Gold Certificates were held for many years as backing for Federal Reserve Notes, but that is almost certainly not true. Like all earlier normal Gold Certificates these items are bearer documents that promise to pay the bearer on demand $10 or $20 in gold coin (at $20.67 per troy ounce). During the tenure of the gold reserve standard, this obligation would have become meaningless once Gold Certificates had become illegal to hold outside official channels and gold was officially valued at $35 per troy ounce and no longer in the form of coins for redemption purposes. Although the Treasury did pay out numerous Gold Certificates in January and February of 1933, it is quite likely that they did not pay out any of these items after March of that year. The BEP does have at least one or two specimen sheets of the Series 1933A $10 Silver Certificates, but it possesses no such sheets for the Series 1928A $10 and $20 gold notes and quite possibly all such items, either as issued notes or as specimens, were destroyed, most likely late in 1933 or sometime in 1934.

Numerous collectors also attempt to acquire the Series 1928 gold notes in replacement form. There is some uncertainty as to just how many of each of the four denominations were actually released, but John Schwartz has recorded a serial number as high as *01530786A for the $10 gold notes. This makes it seem likely that something like 1,600,000 of these items were released.

For the $20 notes the highest recorded serial number is *00488307A, thus making it seem probable that about 500,000 of these items were issued. For the $50 notes it is known that 48,000 replacements were printed in advance of the normal run, but the highest recorded serial number is *00028165A. Thus it appears that only about 30,000 of these were released. For the $100 gold notes the advance printing of replacements was 36,000. The highest known serial number, however, is *00011566A, and thus it seems that the total number actually issues was about 12,000.

In only Fine the two lower denominations of gold star notes are affordable for most collectors, since the $10 and $20 notes would sell for about $400 and $600, respectively, in replacement form. In CU, however, these prices are more like $6,000 for a $10 note and $7,500 for a $20 gold star note. Both the $50 and $100 notes are acknowledged as rarities in replacement form. Apparently the survival rate was greater for the $100 notes than it was for the $50 items, and thus the numbers known are more comparable to each other than the numbers released would indicate. My estimate is about 40 for the $50 notes and somewhat less than this for the $100 notes. L. Talks, however, has recorded the serial numbers and grades for only 29 of the $50 star notes and 18 of the $100 notes. This makes these items not quite as rare as the $1 Silver Certificate of Series 1928E or the $2 United States Note of Series 1928B in replacement form. I can state categorically, however, that the Series 1928 $50 and $100 gold star notes are significantly rarer than are the normal $500 and $1,000 gold notes of this series. This becomes readily apparent when the numbers of auction appearances for these two pairs of notes over several years are compared.

The $50 and $100 star notes in my collection are both in VF-EF, but I was fortunate to acquire them several years ago. In the comprehensive Taylor Family Collection that was sold by HCAA in February 2005, the $50 star note was graded F-VF and the $100 replacement note was described as F+. These notes sold for $2,760 and $3,910, respectively.

Uncirculated examples of these notes are rarely seen, and they would fetch prices far in excess of $15,000 each in today's market. Judging from the prices that have recently been paid for non-star gold notes in superb gem CU, extremely high prices can be anticipated for the $50 and $100 star notes in similar grades.

During 1933-1934 the United States underwent the most severe overhaul of its monetary policies that had taken place at any time since the Civil War. There was a significant transition period between the gold recall order of March 1933 and the formal adoption of the gold reserve standard in the following year. With an embargo in place on the export of gold during most of 1933, the free market price of this metal began to rise. Finally, on Jan. 31, 1934, an official price of $35 per troy ounce was adopted, and this became a cornerstone of the gold reserve standard.

At this time the United States began to purchase all newly mined gold as well as jewelry, dental gold, etc., at this price. Gold coins were mostly turned in at commercial banks, but the other items went directly to Federal agencies. Huge amounts of gold passed through the Federal Reserve System, but with time this wound up in the U.S. Gold Depository that was controlled by the U.S. Treasury.





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