What Is a Gold Certificate?

A Gold Certificate is a paper note or bill issued by the United States government that represents a specified claim for a particular dollar value of gold or gold bullion deposited in the United States Treasury. Unlike other notes issued by the United States government, these notes were issued as a convenience rather than a political or economic strategy. Therefore, a majority of the notes issued were of higher denominations.

History of the Gold Certificate

The first Gold Certificates were issued under the Banking Act of March 3, 1863. Generally, Gold Certificates are divided into two groups: large size and small size. Large size currency measured 3.125 x 7.4218 inches, and small size currency measured 2.61 x 6.14 inches. The following series were issued until production was suspended in 1934:

Large Size Denominations

• Series 1865: $20, $100, $500, $1,000, $5,000, $10,000 
• Series 1870-75: $100, $500, $1,000, $5,000, $10,000
• Series 1882: $20, $50, $100, $500, $1,000, $5,000, $10,000
• Series 1888: $5,000, $10,000
• Series 1900: $10,000
• Series 1905 & 1906: $20
• Series 1907: $10, $1,000
• Series 1913: $50
• Series 1922: $10, $20, $50, $100, $500, $1,000

Small Size Denominations

• Series 1928: $10, $20, $50, $100, $500, $1,000, $5,000, $10,000
• Series 1934: $100, $1,000, $10,000, $100,000

Originally, paper money issued in the United States was printed and distributed by individual banks. If the bank failed, the notes became worthless. Eventually, people did not trust paper currency and demanded gold or gold coins to complete financial transactions. 

For large transactions, gold and gold coins proved to be bulky and difficult to transport. Additionally, transporting large amounts of gold was very risky because it was hard to conceal. Gold Certificates were created to restore trust in paper currency and facilitate larger financial transactions. Gold Certificates circulated widely alongside other paper currency throughout the United States for years. Because a majority of them were used to complete commercial transactions, many of them are still in good condition.

The Treasury Department maintained a large number of gold coins and gold bullion in their inventory to back these notes that were issued. When the United States was removed from the gold standard by President Roosevelt in 1934, he required that all citizens turn in their Gold Certificate for silver coins or replacement paper currency.

On December 13, 1935, a fire in the United States Post Office in Washington, D.C. triggered a series of events where postal workers were trying to save documents from the fire. A box of canceled Series 1900 $10,000 Gold Certificates were thrown out the window. The box burst open, and people scrambled to collect them. Much to their dismay, the canceled bills were worthless. Although they are still considered stolen property because they are worthless, the United States government does not prosecute anybody possessing them.

Are Gold Certificates Legal Tender Today?

Gold Certificates are no longer redeemable for gold coins or gold bullion. However, all gold certificates are considered legal tender and can be redeemed at any financial institution for their face value in equivalent current coin or paper money. However, if the Gold Certificate was redeemed, it was canceled by punching a series of holes in the note that spelled the word CANCELED. These notes are not redeemable at face value. Source