Your Money in Transition


Obverse and reverse of a 
1933 Saint-Gaudens double Eagle. American money has changed significantly over the past century. Until 1972, the U.S. was on the gold standard, meaning that all of our money was backed (at least in theory) by reserves of gold bullion at Fort Knox and elsewhere. Before 1933, gold was used in our coinage, as exemplified by this never-issued 1933 double Eagle ($20). In 1933, as part of Franklin Roosevelt's "New Deal," the Federal government demonetized gold, making it illegal for Americans to own gold except in certain forms of jewelry and collectible coins to stop the wholesale exportation of gold abroad and the further destabilization of the U.S. economy.

$100,000 series of 1934 gold certificate.
  Largest U.S. banknote ever issued.

So that Federal Reserve banks could continue to balance their accounts without actual bullion transfers, the Treasury authorized a series of new "Gold certificates" - in 100,000; 10,000; 5,000; 1,000; and 500-dollar denominations in 1934. These notes were not for public circulation. They were issued only for use by Federal Reserve banks for transfers of reserves. By the 1960s this system was replaced by electronic transfers of money.

Diner's Club paper credit card, 1955. 
 One of the early modern credit cards. American Express plastic credit card, 1963.  
One of the early plastic credit cards.

The next major change came about with the popular acceptance of credit cards during the 1950s, which were followed by the first "smart" cards (cards containing a computer chip that records the "value" of the card) in the 1970s. The Bureau of Engraving and Printing gradually discontinued the production of all banknotes larger than the $100 Federal Reserve notes, since credit cards are much easier and safer to carry around than large numbers of high-denomination banknotes.

Master Card credit card, 
First & Merchants National Bank, 1984. French telephone card, 1974. 
 This was the first card to use Smart card 
technology in the form of a computer chip.  
The design of the card shows a technical
 drawing of the chip. As the 21st century unfolds, there is a real possibility that smart cards containing information about our bank accounts, medical records, personal identification, and so on, will replace money as we know it.

First Union Jacksonville Jaguars 
fixed-value $100 smart card, 1996.



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