United States High Denomination Bills

Large denominations of United States currency greater than $100 were circulated by the United States Treasury until 1969. Since then, U.S. dollar banknotes have only been issued in only seven denominations: $1, $2, $5, $10, $20, $50, and $100. But in the 1920’s the United States Treasury issued bills ranging from $1,000 to $100,000 denominations.

 

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Salmon P. Chase

Featured on some of these bills were William McKinley ($500), Grover Cleveland ($1,000), James Madison ($5,000), and Salmon P. Chase ($10,000). Salmon P. Chase might not be as familiar as those of the presidents featured on the other big bills, but once upon a time Chase was huge  in American politics. Chase, a mid-19th century politician, served as Chief Justice of the United States, spent stints as Ohio’s governor and senator, and was Lincoln’s first Secretary of the Treasury.

 

When the federal government started issuing greenback notes in 1861, Chase, as Secretary of the Treasury, was in charge of designing and popularizing the new currency. Although putting his face in everyone’s pocketbooks never propelled Chase to the presidency, when the Treasury started issuing the new $10,000 bills in 1928 they put Chase’s portrait on the obverse to honor the man who helped introduce modern banknotes. Even if you don’t have a $10,000 bill Chase’s name might still be in your wallet. Chase National Bank, the forerunner to Chase Manhattan Bank, was named in his honor.

It may be hard to imagine when such a large denomination of bills would come in handy especially in our modern day when we mainly handle cash electronically. Matthew Wittmann, an assistant curator at the American Numismatic Society, explains this by stating that, back then, it was only worth a fraction of that value. “[the] $1,000 note seems incredible, but what it reflects is actually how little paper dollars were valued,” Wittmann said. “It might only have been worth $20 in ‘real’ hard money at the time.”

 

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A $1,000 Gold Certificate, Series 1928, Depicting Grover Cleveland


Lee Ohanian, an economics professor at the University of California, also explains that the larger bills were mostly used to rapidly purchase supplies like ammunition during the war.  In the decades after the war, large denomination currencies were mostly used in real estate deals or inter-bank transfers. “They facilitated really, really large financial transactions that primarily were being carried out between banks or other financial intermediaries,” Ohanian said. Before sophisticated wire transfer systems were fully developed, it was simply easier and safer just to fork over a $5,000 bill to settle up with a fellow bank. Once transfer technology became safer and more secure, there really wasn’t much need for the big bills anymore.

 

Although the high bill denominations are still technically legal tender in the United States, they were last printed on December 27, 1945, and officially discontinued on July 14, 1969, by the Federal Reserve System, due to ‘lack of use’. The $5,000 and $10,000 had effectively disappeared well before then.

The Federal Reserve began taking high-denomination currency out of circulation (destroying large bills received by banks) in 1969. As of May 30, 2009, only 336 $10,000 bills were known to exist; 342 remaining $5,000 bills; and 165,372 remaining $1,000 bills. Due to their rarity, collectors often pay considerably more than the face value of the bills to acquire them. Some are in museums in other parts of the world.

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A $5,000 Gold Certificate, Series 1928,  Depicting James Madison


There was often concerns about counterfeiting and the use of cash in unlawful activities such as the illegal drug trade and money laundering, it is unlikely that the U.S. government will reissue large denomination currency in the near future, despite the amount of inflation that has occurred since 1969 (a $100 bill is now worth less, in real terms, than a $20 bill was worth in 1969). According to the U.S. Department of Treasury website, “The present denominations of our currency in production are $1, $2, $5, $10, $20, $50 and $100. The purpose of the United States currency system is to serve the needs of the public and these denominations meet that goal. Neither the Department of the Treasury nor the Federal Reserve System has any plans to change the denominations in use today.”

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The Obverse of the 2009 Zimbabwe $100 trillion banknote

The chance of bringing back large bills is only likely if there are big problems within the economy. The circulation of large denominations of currency is almost always due to inflation or depreciation. Countries like  Zimbabwe have issued million-, billion- and trillion-dollar notes. One $100 trillion note from the southern African country is worth 40 U.S. cents. Or take a step back to Germany in the early ’20s, known then as the Weimar Republic, when hyperinflation hit the country. That’s when 4.2 trillion marks were equivalent to a dollar.

Experts also say they think modern technology renders large bills unnecessary. Credit cards, checks, any form of electronic transfer — these all pretty much fulfill large transactional needs more efficiently than a tangible note could. “If you didn’t have your credit card, you didn’t have your debit card, or there’s a massive meltdown of the world in telecommunication systems and computers … then you can imagine high-denomination bills would be very useful,” Ohanian said. “Assuming the other person wants to accept it.”

Origins of the U.S. Postal Service

Thinking about taking a trip down to the Post Office conjures up images of long lines and regulated service in an age of instantaneous communication through text messaging and the internet.  But looking back on the history of Postal Service, the transportation of information was a privilege of the utmost relevance.

The importance of long distance communication was recognized by the early North American colonies and several programs were initiated but none took into account the vastness of all the colonies.  With a limited scope and disjointed function, these independent services failed.

In 1691, Thomas Neale petitioned for a grant from the British Crown for the establishment of a North American Postal Service.  On February 17th of 1691, he heard his response from regents William and Mary, giving him the funds “to erect, settle and establish…an office or offices for receiving and dispatching letters and pacquets, and to receive, send and deliver the same under such rates and sums of money as the planters shall agree to give, and to hold and enjoy the same for the term of twenty-one years.”

PostRoad

Excited, Neale wasted no time in appointing Andrew Hamilton, New Jersey Governor as deputy postmaster with the first official service up and running by 1692.  Postage rates were standardized and a Post Office erected in each Virginia town.  When Neale’s patent expired in 1710, Parliament advanced the English postal system to support the colonies.  The head office was established in New York City.

All was fine and dandy with this system until the Revolutionary War which seated Philadelphia as the information hub of the new nation, collapsing the English postal service.  The postal service found necessity in the expedited transportation of news, laws, military and political intelligence.  Newspapers were distributed among the thirteen states as journalists began reaching more people at a lower cost.  Overthrowing the English based postal service, the United States postal Service was created on July 26th, 1775 by the decree of the Second Continental Congress.  It was initially led by Benjamin Franklin, previous colonial postmaster.

Photograph by Mike Peel (www.mikepeel.net). [CC BY-SA 4.0 (http://creativecommons.org/licenses/by-sa/4.0)], via Wikimedia Commons

Photograph by Mike Peel

Seventeen years later The Post office Department was created in 1792 in order to establish Post Offices and Post roads by Constitutional authority.  Representative of core American values, the 1792 law guaranteed low-cost access to information while sanctifying personal correspondence and privacy.

As the country grew West, Post Offices began popping up across the land.  To most efficiently reach far away places, this new service operated on a hub and spoke system in which Washington was the hub.  By 1869, the USPS had gained so much leverage that it contained 27,000 local Post Offices and began utilizing railroad mail cars.  The USPS influenced national expansion crucially.  Supplying a quick and affordable way to communicate increased migration to the West, encouraging trade and business ventures while maintaining political relevance.  Aside from practicality, the easy spread of information bolstered a sense of nationalism in a blooming country, providing a necessary infrastructure in establishing the new frontier!

So next time you complain about a letter getting lost in the mail or not having mail service on Sundays, remember the long history of the Post in this county and the value of sharing information in America!

Collecting American Flags

 

In April 2014, an American Revolutionary War flag went up for auction in New York City. The flag is the earliest known surviving flag representing the 13 original colonies and sold for millions of dollars.

Early American flags tend to sell for high prices at auction. Flags often wear away or deteriorate over time, so finding flags in good condition is rare.

In wars of the 18th century, soldiers strove to capture the opposing unit’s flag as a victory trophy. It makes sense, then, that flags have often been prized possessions through the years.

Of course, American flags have evolved over time. The star-spangled flag of all 50 states is the result of a long process of designed and redesigned flags.

The first American flag combined the British flag with red and white stripes.

But in 1777, America decided it wanted its own flag and Congress passed the Flag Resolution that said, “Resolved, That the flag of the thirteen United States be thirteen stripes, alternate red and white; that the union be thirteen stars, white in a blue field, representing a new constellation.”

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A 1777 battle during the Siege of Fort Stanwix saw the first flight of the official U.S. flag. Soldiers used their shirts to make white stripes, red petticoats of officers’ wives formed the red stripes, and the blue came from Captain Abraham Swartwout’s blue coat.

The Betsy Ross flag, a flag with stars forming a circle rumored to be the first flag created by Betsy Ross herself, may only be a story of legend. But the flag with the thirteen original colonies in a circle is still a distinct early design, albeit one not designed by Betsy Ross.

In 1787, Captain Robert Gray sailed around the world displaying the flag on his boat for all the world to see.

A variety of star formations formed on the flag through the years, thanks to the increasing number of states of this growing country.

Today, you can easily find replicas of American flags, but finding the originals becomes a little more difficult. Aside from the country’s official flags through the years, other flags formed from U.S. battles and ships.

You can learn more about rare flags at this link.

Do you collect flags? Which flag throughout history is your favorite?