Jon D. writes: What does it mean if my 1953A 2 dollar bill has red writing on it and a red seal and below Jefferson it says The United States of America will pay to the bearer on demand Two Dollars. On the back it has Monticello instead of the signing of the declaration of independence. Any help would be great because I’m 16 and somewhat of a newbie in the currency collecting scene, thanks!
All currency has an “obligation” that tells what that certificate represents. At an earlier time in American History currency represented gold or silver. For example silver certificates represented the face value amount in silver coins in its obligation and gold certificates were redeemable in gold coins.
Red seal currencies are known as Legal Tender or United States Notes and have their roots in the Civil War. It was a method by which the government could raise funds without having to redeem these notes for gold or silver. It essentially was a loan to the United States Government.
At one time the “obligation” said that the notes were legal tender but you couldn’t use it to pay duty. The modern small size Legal Tender Notes only state that they are money. In 1953 we were still on a silver standard but the obligation on your note doesn’t mention precious metal only that “…..it is legal tender at its face value for all debts public and private”. The obligation was modified again in 1963 now stating only that “this note is legal tender for all debts, public and private”. Only 1, 2, 5 and 100 Dollar notes were issued as Legal Tender Notes.
Why were these notes still being issued, long after the need for them had past? Until fairly recent legislation finally ended the Legal Tender series, the last update on this law was The Act of May 3, 1878. That law decreed that the value of Legal Tender notes outstanding had to be maintained at $346,681,016. As this may be at the least silly, it does give us an opportunity to collect a few examples of this archaic paper money. Keep yours and enjoy!
For more information about Legal Tender notes, see The Story of Red Seal Notes.