The History of the One Dollar Bill
Although experiments with paper money did occur throughout the early history of the country, they were largely unsuccessful. People, for good reason, didn't trust the notes and preferred gold and silver coin. In 1861, needing money to finance the Civil War, Congress authorized the issuance of Demand notes in $5, $10 and $20 denominations. The Demand notes were so named because they were redeemable in coin "on demand." The notes were nicknamed Greenbacks, a name which is still in use today to refer to United States currency.
The first $1 bill was issued in 1862 as a Legal Tender Note with a portrait of Salmon P. Chase, the Treasury Secretary under President Abraham Lincoln.
The National Banking Act of 1863 established a national banking system and a uniform national currency. Banks were required to purchase U.S. government securities as backing for their National Bank Notes. Although United States Notes were still widely accepted, most paper currency circulating between the Civil War and World War I were National Bank Notes. They were issued from 1863 through 1932. From 1863 to 1877 National Bank Notes were printed by private bank note companies under contract to the Federal government. The Federal government took over printing them in 1877.
Gold certificates, were first issued in 1863 and put into general circulation in 1865. The severe economic crisis of the 1930s - better known as the Great Depression - resulted in runs on the banks and demands by the public for gold. In 1934 all Gold Certificates were called in from the Federal Reserve Banks and between the years 1934 and 1974 it was illegal for US Citizens to hold gold bullion or certificates.
Silver certificates were first issued in exchange for silver dollars in 1878. For many years silver certificates were the major type of currency in circulation. However, in the early 1960s when rising silver prices threatened to undermine the currency system, Congress eliminated silver certificates and also discontinued the use of silver in circulating coinage such as dimes and quarters.
The current design of the United States one dollar bill ($1) technically dates to 1963 when the bill became a Federal Reserve Note as opposed to a Silver Certificate. However, many of the design elements that we associate with the bill were established in 1929 when all of the country's currency was changed to its current size. Collectors call today's notes "small size notes" to distinguish them from the older, larger formats. The most notable and recognizable element of the modern one dollar bill is the portrait the first president, George Washington, painted by Gilbert Stuart.
The one dollar bill issued in 1929 (under Series of 1928) was a silver certificate. The treasury seal and serial numbers on it were dark blue. The reverse had a large ornate ONE superimposed by ONE DOLLAR. These $1 Silver Certificates were issued until 1934.
In 1933, $1 United States Notes were issued to supplement the supply of $1 Silver Certificates. Its treasury seal and serial numbers were red. Only a small number of these $1 bills entered circulation and the rest were kept in treasury vaults until 1949 when they were issued in Puerto Rico.
In 1934, under Washington's portrait, the words ONE SILVER DOLLAR were changed to ONE DOLLAR due to the fact that Silver Certificates could be redeemed for silver bullion. The treasury seal was moved to the right and superimposed over ONE, and a blue numeral 1 was added to the left.
In 1935, design changes included changing the blue numeral 1 to gray, the treasury seal was made smaller and superimposed by WASHINGTON D.C., and a stylized ONE DOLLAR was added over the treasury seal. The reverse was also changed to its current design, except for the absence of IN GOD WE TRUST.
The World War II years featured several special printings including the Hawaii overprints. The Government was concerned that Hawaii might be lost to the Japanese and wanted to be able to devalue the money should this invasion occur.
In 1957 the $1 bill became the first U.S. currency to bear the motto IN GOD WE TRUST.
In 1963 production of one dollar Federal Reserve Notes began to replace the $1 Silver Certificate. The border design on the front was completely redesigned and the serial numbers and treasury seal were printed in green ink.
In 1969 the $1 bill began using the new treasury seal with wording in English instead of Latin.