$10 Gold Certificate, 1907

Let's talk about the lowest denomination Gold Certificate (GC) ever issued in the US, the 1907 Gold Certificate. Gold Certificates, as the name suggests, were backed by gold coin. You could exchange your GC for gold coin, but most people never bothered.

Actually, 1907 was only the first issuance of a $10 GC. They would be issued until the 1930s. First of all, why were they issued? The Treasury had a strange calculus for determining the denominations of its various types of currency. (In 1907, there were probably 5 types of US banknotes circulating.)

In the early 1900s, the expansion of the US economy was causing a shortage in smaller denomination notes. $1s, $2s, and $5s were supplied by Silver Certificates (backed by silver) and United States Notes (back by gold reserves). Expanding the supply of these notes was out of the question because the silver and gold backing these notes could not be increased to issue more notes.

So, the Treasury decided to start issuing $10 GCs to help out. It did this not by buying more backing gold. Instead, it reallocated the backing gold. As $100, $500, and $1000 GCs were returned to the Treasury, they were retired and $10 notes issued in their stead. Hence, a $100 GC was converted into 10 $10 GCs. These are the games that must be played when you don't have a fiat currency.

And, the notes featured Michael Hillegas the first Treasurer of the US whose descendants lobbied the Treasury to put him on the note.