As used as we are to paper bank notes today, the United States didn’t issue paper bills until 1861 when the need to finance the Civil War made it impossible to do so with the gold and silver coins that had been used for commerce up to that time.
Greenback “Demand Notes”
The first notes were originally redeemable in gold or silver (specie) on demand. These “Demand Notes” were printed with an all-green design on the back, giving rise to their colloquial name: Greenbacks. But by December, 1861 it was evident that the Treasury needed to conserve its gold and silver reserves, so the Demand Notes were uncoupled from specie payments. This led to the issuance of United States Notes in 1862.
United States Notes, Legal Tender and Red Seal Notes
United States Notes, or Legal Tender notes, were not backed by bullion, so they had no intrinsic value other than the public’s faith that the country’s economy would support their value. They were printed with a Treasury seal and serial number in red and carried the statement that the notes were legal tender for payment of all public and private debt. Why was that? Because the government said so. It became money by declaration, better known by the Latin term, fiat. Because of the red printing on the notes, they’ve come to be called Red Seal Notes.
Legal Tender Red Seal Notes Replaced by the Federal Reserve
After the war, the government began issuing banknotes that were redeemable in specie again, first for gold in 1865 and later (1886) for silver. But Red Seal United States Notes continued to be printed as well until they were finally discontinued in the 1960s. Since then, when Legal Tender Red Seal notes are returned to the banking system, they are replaced by Federal Reserve Notes and destroyed.
1953 and 1963 $2 Red Seal United States Notes
Because the supply of Red Seal Notes has rapidly dwindled, they are becoming highly sought by collectors. The Great American Coin Company™ is pleased to offer 1953 $2 Red Seal United States Notes and 1963 $2 Red Seal United States Notes in 100-bill bundles for currency collectors. These increasingly rare bills are available for purchase by the grade—from Very Good, Circulated to pristine Uncirculated notes. We also have limited supplies of 1928 $1 “Funny Back” Puerto Rico issue Red Seal Notes.
To learn more, call us at 855-644-2242.
