The Three US Currencies of 1960

There is much concern these days about multiple currencies circulating at the same time, causing chaos. There may be less panic if people remembered their history. In the US, there were multiple currencies circulating until the 1970s.

For a better picture, let's look at 1960. At that time, there were three types of currency circulating in the US: United States Notes, Silver Certificates (Series 1957 is pictured), and Federal Reserve Notes.

United States Notes originated with the Civil War and were redeemable in silver by this time. They were mainly issued in $5 and $100 denominations, increasingly in $100 denominations as time went on. They were issued by the US Treasury and had a small circulation. They were taken out of circulation in the early-1970s.

Silver Certificates were backed by and redeemable in silver and issued by the Treasury, too. They originated in 1878 as a way to provide quantitative easing during a recession. By 1960, most $1s and $2s were Silver Certificates. Silver Certificates were phased out in the mid-1960s as the price of silver rose, overvaluing the silver dollars that backed the currency.

There were no $1 and $2 Federal Reserve Notes in 1960. These were not authorized until 1963 when it became clear that Silver Certificates would have to be removed from circulation. Federal Reserve Notes were issued by the Fed and made up most of the $10s, $20s, $50s, $100s, and higher denominations. These notes were backed by a combination of securities and gold.

It was typical in US history up until 1970 for different types of currency to fill specific denominations. This usually depended on their backing, tradition, and legislation.

So, if 60 years ago, everyone could deal in multiple currencies, I think we can do the same today.