Anyone know the history of...
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Hello,

 

I have been wanting to buy a 1918 $1 PMG note in high grade condition for some time. While I don't think I'll ever get one for less than $500; I wonder if anyone knows the history of these notes? These were Federal Reserve Bank notes; however, could anyone at the time use these as general currency? This I am confused about. Please let me know any info if you can, as I can't seem to find any fascinating stories on these notes in any of the books I own. Thank you!

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As far as I know, these were all legal tender and redeemable in gold or lawful money at the Fed or Treasury, so anyone could have used them for face value at the time. These were not like the $10,000 gold certificates of 1907, or the series 1934 $100,000 gold certificates which were never issued for general circulation. Hope this helps.

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The series of 1918 $1 and $2 Federal Reserve Bank notes were issued to replace $1 and $2 silver certificates that were being redeemed under the requirements of the Pittman Act. Under this act, Treasury-owned silver was sold to Britian to lend to India to help that country's economy after World War I. However, most of the Treasury's silver was silver dollars, which needed to be melted for export overseas. Take a silver dollar out of circulation, and you need to redeem one silver certificate. But silver certificates were the workhorse small denomination note in the early 20th century, and these needed a replacement—hence, the 1918 $1 and $2 notes. The notes were obligations of the issuing Federal Reserve Bank and carried a legal tender clause similar to contemporary circulating currency.

 

The $5 and up 1918 notes were issued under the authority of the 1913 Federal Reserve Act.

Edited by Jamericon
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