13 November 1865: US issues its first gold certificates

The effects of loose money-printing and counterfeit notes led the US to issue its first ‘gold certificates’ – a form of paper currency backed by gold – on this day in 1865.

US gold certificates
Gold certificates, none of which have been printed since the 1930s, are collectors' items
(Image credit: © Bill Johnson/The Denver Post via Getty Images)

Americans began to move out west in the first half of the 19th century. Banks started printing their own money to fund land purchases, and that quickly led to two problems: loose money-printing had a volatile effect on prices, and it became increasingly hard to tell what was counterfeit from what wasn't.

To tackle these problems, the government decreed in the 1830s that it would only accept transactions in gold and silver. But of course, lugging metals around is nobody's idea of fun. So in 1863, Congress paved the way for the first “gold certificates” to be printed two years later, in November 1865.

A gold certificate was, in effect, a form of paper currency backed by gold – although not entirely. The Treasury was allowed to issue $120 in gold certificates for every $100-worth of gold it held in its vaults.

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The first gold certificates featured an American eagle, while later issues displayed portraits of presidents. The design on the reverse of the notes was yellow and orange, and so the certificates became known as “goldbacks”. There were nine issues in total, with denominations ranging from $10 to $10,000. However, in 1934, there was an additional issue.

During the Great Depression of the early 1930s, the economy was in a rut. President Franklin D Roosevelt believed that ordinary people stashing gold away was holding back the recovery. So, in 1933, he made the "hoarding of gold coin, gold bullion and gold certificates" illegal. But not for the government. The following year, the highest-ever denomination gold certificate was printed, with a value of $100,000.

Today, gold certificates from the early years are much sought after by collectors, who can rest easy it's no longer illegal to own them. But future collectors will be disappointed. While the US Treasury still issues gold certificates for "government-owned gold", these now take the form of electronic book-entries.

Chris Carter

Chris Carter spent three glorious years reading English literature on the beautiful Welsh coast at Aberystwyth University. Graduating in 2005, he left for the University of York to specialise in Renaissance literature for his MA, before returning to his native Twickenham, in southwest London. He joined a Richmond-based recruitment company, where he worked with several clients, including the Queen’s bank, Coutts, as well as the super luxury, Dorchester-owned Coworth Park country house hotel, near Ascot in Berkshire.

Then, in 2011, Chris joined MoneyWeek. Initially working as part of the website production team, Chris soon rose to the lofty heights of wealth editor, overseeing MoneyWeek’s Spending It lifestyle section. Chris travels the globe in pursuit of his work, soaking up the local culture and sampling the very finest in cuisine, hotels and resorts for the magazine’s discerning readership. He also enjoys writing his fortnightly page on collectables, delving into the fascinating world of auctions and art, classic cars, coins, watches, wine and whisky investing.

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