A silver certificate dollar bill represents a unique time in American history. It no longer carries monetary value as an exchange for silver, yet collectors still seek out the print. Its history dates to the 1860s, when the United States rapidly developed into one of the top producers of silver in the world. This ushered in a new monetary structure in the U.S., of which the silver certificate is unique historical artifact.

Silver-Certificate Dollar Bill

The U.S. government began issuing certificates in 1878 under the Bland-Allison act. Under the act, people could deposit silver coins at the U.S. Treasury in exchange for certificates, which were easier to carry. This representative money could also be redeemed for silver equal to the certificate’s face value. In the past, China, Colombia, Costa Rica, Ethiopia, Morocco, Panama and the Netherlands have issued silver certificates.

Old Silver Dollar Certificates

Congress adopted a bimetallic standard of money in 1792, making gold and silver the mediums of exchange. Under a "free coinage" policy, raw gold or silver could be taken to the U.S. mint and converted into coins. However, few silver coins were minted between 1793 and 1873, as the raw silver required to make a coin was worth more than their gold dollar and greenback counterparts. It was for this reason that provisions in the Coinage Act of 1873 went little noticed. The act ended free coinage for silver, effectively ending bimetallism and placing the United States on the gold standard. Though silver coins could still be used as legal tender, few were in circulation.

A year later, Section 3568 of the Revised Statutes further diminished silver's status by prohibiting the use of silver coins as legal tender for amounts exceeding five dollars. But then silver's importance became apparent with the development of the Comstock lode and other deposits, and as Congress looked for ways to grow the monetary base. The U.S. went from producing 1% of the world's silver to nearly 20% by the 1860s and 40% by the 1870s. The Bland-Allison Act reintroduced free coinage for sliver. It also required the government to purchase and coin into dollars between $2 million and $4 million worth of silver each month, though not more than $2 million per month was ever purchased.

Although the certificates no longer can be exchanged for silver coins, the historical significance in the printings resides in the economic impact the certificates held, as well as the certificate’s short-term status as valid legal tender.

Obsolescence

In 1963, the House of Representatives passed PL88-36, repealing the Silver Purchase Act and instructing on the retirement of $1 silver certificates. The act was predicated by a prospective shortage of silver bullion. Certificate holders could exchange the print for silver dollar coins for approximately 10 months. In March 1964, Secretary of the Treasury C. Douglas Dillon stopped the issuance of coins, and for the next four years, certificates were redeemable for silver granules. The redemption period for silver certificates ended in June 1968.

Silver Certificate Denominations

Silver certificates are often referred to as large certificates and small certificates. Certificates issued from 1878 to 1923 were larger in size, often measuring more than seven inches long and three inches wide. Large-sized silver certificates issued through 1923 were issued for between $1 and $1,000. The designs varied and depicted former presidents, first ladies, vice presidents, founding fathers, and other notable figures. The U.S. bank notes were redesigned in 1928, and, until the ceased issuance in 1964, the silver certificates issued measured the same size as modern-day U.S. currency (6.4 inches long and 2.6 inches wide). All small-sized silver certificates depict the portraits of George Washington, Abraham Lincoln or Alexander Hamilton. In general, the value of a silver certificate is not directly correlated to its size or denomination.

Silver Certificate Value Today

The value of a silver dollar certificate is contingent on the condition and year issued. Although it is no longer possible to redeem a silver dollar certificate for silver, certificates are still technically legal tender, as they can be exchanged for a Federal Reserve note. Still, the actual value of a silver certificate is in its collectability. The certificates have become a collectors' item, and collectors of the certificates pay greater-than-face value, depending on the rarity of the print.

Features Adding Value

The value of each silver certificate is based on numerous variables. One of the largest determinants of the value of the bill is the grading of the certificate. Most silver certificates receive a grade on the Sheldon numerical scale, ranging from one to 70, with 70 being a perfect mint condition. The numerical grade corresponds with an adjectival letter that indicates the condition is one of the following: good, very good, fine, very fine, extremely fine, almost uncirculated or crisp uncirculated.

In addition to the grade, there are various features found on certain silver certificates that increase their worth to a collector. In general, a silver certificate with a star in the serial number or error on the face of the bill is worth more than a silver certificate of the same year, grade and denomination without these features. However, star notes from 1957 are common and some collectors won't buy them. The errors may include folding, cutting or inking mistakes. In addition, unique and interesting serial numbers are more valuable to investors. For example, a serial number with each digit as the numeral two holds more value than a random combination of numbers.

Valuation of Silver Dollar Certificates

The most common silver certificates were issued between 1935 and 1957. Their design is nearly identical to a standard U.S. dollar bill featuring George Washington. The key difference is the text below Washington’s portrait, which states the tender is valued at one dollar in silver payable to the bearer on demand. These certificates fetch slightly more than face value, though uncirculated notes typically sell for $2 to $4.

In 1896, the silver dollar certificate carried a unique design that is known as the educational series. The face of the certificate depicts a woman instructing a young boy. The asking price for a Series 1896 $1 Silver Certificate Educational note is more than $500 for a print in good condition, while a "very choice uncirculated note 64" commands more than $4,000. 

The 1899 print is another popular certificate among collectors. The note is often referred to as the black eagle because of the large eagle on its face. Below the eagle are presidents Abraham Lincoln and Ulysses Grant. The asking price for a 1899 Black Eagle $1 Silver Banknote Certificate in very good condition is just under $200, while a note in "gem uncirculated premium" condition fetches as much as $950. 

In 1928, the treasury issued six different silver certificates, and around 640 million notes went into circulation. The 1928, 1928A and 1928B versions are common. The 1928C, 1928D and 1928E versions are rare, with notes in very fine condition fetching between $125 and $600. Certificates from 1928 with a star symbol in the serial number are extremely valuable, commanding between $4,000 and $17,500.

Alternatively, the 1934 silver certificate is considered common, even though it is the only year to have a blue “one” printed on its face. A 1934 certificate in very fine condition is worth around $30.

Silver Investing Options

Investors looking to hold an ownership share in silver should purchase the metal elsewhere. Silver certificates no longer represent an ownership stake in the commodity, and their value is mainly derived as collectors' items. However, there are numerous alternatives for investors wanting to own silver. First, an investor can purchase the physical product through silver coins, bullion, jewelry or silverware. Alternatively, an investor can purchase an exchange-traded fund (ETF) backed by physical silver stored in a secure location. In some situations, investors may redeem the ETF for physical silver bullion.

In addition, a speculator can invest in numerous mining or precious metal streaming companies. Wheaton Precious Metals (WPM) operates on a "streaming" model, whereby it purchases silver mined by other companies that is produced as a by-product of their main business, such as copper or gold mining. Silvercorp Metals Inc. (SVM) is a Canadian miner with three active sites in China. First Majestic Silver Corp (AG) owns six producing silver mines in Mexico. Hecla Mining Company (HL) owns silver mines in Alaska, Idaho and Mexico. Meanwhile, SSR Mining (SSRM) operates a silver mine in Argentina.

Although owning stock in these companies does not result in the ownership of silver, the financial success of these companies is directly tied to the price of the precious metal.