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FAQs

Currency & Coin

 

Does the Federal Reserve produce bank notes and coins?
No, the Federal Reserve does not produce bank notes or coins. The Bureau of Engraving and Printing (BEP) produces currency and stamps, and the U.S. Mint produces our nation's coins. The Federal Reserve issues Federal Reserve notes and places them in circulation.

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How long is the life span of U.S. paper money?
$ 1 ................. 5.9 years
$ 5 ................. 4.9 years
$ 10................ 4.2 years
$ 20 ............... 7.7 years
$ 50 ............... 3.7 years
$100 ............... 15 years

Is U.S. currency legal tender for all debts?

According to the "Legal Tender Statute" (section 5103 of title 31 of the U.S. Code), "United States coins and currency (including Federal Reserve notes and circulating notes of Federal Reserve banks and national banks) are legal tender for all debts, public charges, taxes, and dues." This means that all U.S. money, as identified above, when tendered to a creditor legally satisfies a debt to the extent of the amount (face value) tendered.

However, no federal law mandates that a person or an organization must accept currency or coins as payment for goods or services not yet provided. For example, a bus line may prohibit payment of fares in pennies or dollar bills.

Some movie theaters, convenience stores and gas stations as a matter of policy may refuse to accept currency of a large denomination, such as notes above $20, and as long as notice is posted and a transaction giving rise to a debt has not already been completed, these organizations have not violated the legal tender law.



What are U.S. notes, and how do they differ from Federal Reserve notes?

U.S. notes, the first national currency, began circulating during the civil war; they were authorized by the Legal Tender Act of 1862. The Department of the Treasury issued these notes directly. Issuance was subject to limitations; the Congress established a statutory limitation of $300 million on the amount of U.S. notes outstanding and in circulation. Although this amount was significant in Civil War days, it is a very small fraction of the total currency now in circulation in the United States.

U.S. notes serve no function that is not already served by Federal Reserve notes. As a result, the Treasury Department stopped issuing U.S. notes, and none have been placed into circulation since January 21, 1971. Those that remain in circulation are obligations of the U.S. government.

The Federal Reserve Act of 1913 authorized the production and circulation of Federal Reserve notes. Although printed by the Bureau of Engraving and Printing (BEP), these notes move into circulation through the Federal Reserve System. They are obligations of both the Federal Reserve System and the U.S. government.

Both U.S. notes and Federal Reserve notes are part of our national currency and are legal tender. They circulate as money in the same way.



Are national bank notes still accepted as currency, or are they only collector's items?
Yes, any national bank notes still in circulation are legal tender at face value as a matter of law. National bank notes were issued from 1863 to 1935. They are probably worth more than face value to currency collectors, however, because they are very rare.

How can I find out how much a specific bill is worth?
If you believe that a bill may be worth more than its face value, you should consult a currency collector or dealer.

How are coins and currency put into circulation?
Coins and currency are placed into circulation through depository institutions, which obtain coins and currency from their Reserve Banks. The Federal Reserve, the Bureau of Engraving and Printing (BEP), and the U.S. Mint do not provide coins and currency directly to the public for circulation.

How can I determine if a note is counterfeit?
The U.S. Secret Service's web site provides detailed information about detecting counterfeiting.

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What was the largest denomination ever issued, and whose picture was on it?
The largest note ever printed by the Bureau of Engraving and Printing was the $100,000 gold certificate, series 1934, featuring Woodrow Wilson. This series was issued only to Federal Reserve Banks against an equal amount of gold bullion held by the Department of the Treasury for certain credits established between the Treasurer of the United States and the Federal Reserve Banks.

How is U.S. currency destroyed when it is removed from circulation?
Currency processing and authentication machines at Federal Reserve Bank cash offices determine whether the currency received from circulation is genuine and fit for recirculation. If a note is genuine but too worn for recirculation, the note is shredded. The shredded notes are sent to landfills or packaged and provided as souvenirs to the public during tours of the Federal Reserve Banks.

How can I obtain a supply of shredded currency?
Federal Reserve Banks may distribute small packages of currency residue to visitors and other members of the public in connection with Bank tours and other informational and public relations programs. For larger quantities, Treasury approval is required.

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How can I safely clean old coins?

Ordinary coins, if they are in reasonably good condition, may be freshened by rubbing them with cheesecloth or cotton that has been moistened with a paste consisting of baking soda and a few drops of water. Once a coin has been tarnished, there is no way to completely restore it to newly minted luster.

The condition of a coin is an important aspect in determining its value as a collector's item. The finish could be inadvertently destroyed, or seriously affected by, the indiscriminate use of a cleaning agent. If you believe that you have coins that are, or could be, of numismatic value, you should seek advice from a coin dealer or collector regarding methods currently being used to clean coins.



What portraits are shown on U.S. coins?
United States coins currently in circulation have the following portraits:
  • Abraham Lincoln on the one-cent coin
  • Thomas Jefferson on the nickel
  • Franklin D. Roosevelt on the dime
  • George Washington on the quarter
  • John F. Kennedy on the half-dollar coin

In the past 30 years there have been 3 one-dollar coins. The Eisenhower dollar was produced from 1971 - 1978; the Susan B. Anthony dollar was produced from 1979 - 1980, then again in 1999; and a new one-dollar coin bearing the portrait of Sacagewea and her infant son was released in 2000.



Where can I purchase sheets of uncut money?
You can purchase money from the Bureau of Engraving and Printing's web site.

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Where can I find information on the new currency note features? Why is it being changed?
Information about new currency note features is available on the Bureau of Engraving and Printing web site.

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When was the "In God We Trust" motto adopted?

Congress passed an Act on April 22, 1864 changing the design of the one-cent coin to include the motto and authorizing the creating of the two-cent coin. "In God We Trust" first appeared on the 1864 two-cent coin.

For more information on the history of the "In God We Trust" motto, go to The U.S. Treasury web site.


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Can I obtain specific coins and currency from a Federal Reserve Bank?
The Federal Reserve Banks only provide coin and paper currency directly to depository institutions. You may call the depository institution you bank with to see if they will honor your request when they order currency or coin.

What are paper notes made of and which company manufactures the paper for the U.S. notes?
All U.S. notes are made of 75 percent cotton and 25 percent linen. This special paper is made by the Crane Company, Dalton, MA, which created it for the Treasury in 1879 and holds the patent.

Can the U.S. government use the security thread or machine- readable features to track currency or detect it remotely?
No, the machine features are intended for authentication purposes only; they will not set off metal detectors or similar devices. Individual bills are not traceable to individual users.

How can I determine the value of an old coin or note?
The Federal Reserve does not render opinions concerning the numismatic value of notes or coins. There are two good sources of information on this subject. First, public libraries have books with the values of old coins and notes. Alternatively, if you'd like to have the item appraised, you may contact several currency dealers and collectors. Listings are available in the telephone directory under the headings of CURRENCY and HOBBIES. Also, to obtain a list of local dealers, you may contact the American Numismatic Society by calling (212)571-4470 or visiting its website.

To determine the numismatic value of notes or coins, currency dealers may consider the condition, series date, denomination, production totals, and other factors. Grading is not an exact science; it is possible to have the same item appraised at different values.

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What does the "$" sign mean, and where did it originate?
The origin of the "$"sign has been variously accounted for, but the most widely accepted explanation is that the symbol is the result of an evolution of the Mexican or Spanish "P's" for pesos, or piastres, or pieces of eight. The theory, derived from a study of old manuscripts, is that the "S" gradually came to be written over the "P", developing a close equivalent of the "$" mark. It was widely used before the adoption of the United States dollar in 1785.

For more information about the U.S. paper currency, visit the Bureau of Engraving and Printing web site


Do you have any resources that would help me teach about money in my classroom?
Visit the Federal Reserve's educational website, Fed eralReserveEducation.org, for resources for educators, students, parents, and the general public.

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Who is in the painting on the back of the $2 bill?
The image on the back of the $2 bill is that of The Signing of the Declaration of Independence by John Turnbull, which currently hangs in the Rotunda of the Capitol building. The painting features the committee that drafted the Declaration of Independence--John Adams, Roger Sherman, Thomas Jefferson presenting the document, and Benjamin Franklin--standing before John Hancock, the President of the Continental Congress. The painting includes portraits of 42 of the 56 signers and 5 other patriots.

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Is it okay to continue to use the older federal reserve notes when newly designed bills are in circulation?
Yes, you can continue to use older federal reserve notes. It is not necessary to trade in your old-design notes for new ones. All U.S. currency remains legal tender, regardless of when it was issued.

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Is it against the law to write on dollar bills?
According to "Money Facts," at the Bureau of Engraving and Printing's website, the "defacement of currency is a violation of Title 18, Section 333 of the United States Code. Under this provision, currency defacement is generally defined as follows: Whoever mutilates, cuts, disfigures, perforates, unites or cements together, or does any other thing to any bank bill, draft, note, or other evidence of debt issued by any national banking association, Federal Reserve Bank, or Federal Reserve System, with intent to render such item(s) unfit to be reissued, shall be fined not more than $100 or imprisoned not more than six months, or both. Defacement of currency in such a way that it is made unfit for circulation comes under the jurisdiction of the United States Secret Service. Their mailing address is: United States Secret Service 950 H Street, NW Washington, DC 20223

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Where can I find information on coin and currency collecting?
The Federal Reserve does not provide information on currency or coin collecting. You may find such information in your telephone directory or on the Internet under "currency and coin collectors." The Bureau of Engraving and Printing, a bureau of the United States Department of Treasury, provides fact sheets for currency collectors as well as other basic information about United States currency. The United States Mint, also a bureau of the United States Treasury, provides basic information on United States coins.

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What is the significance of the pyramid on the back of a one dollar bill?
The pyramid is part of the Great Seal of the United States and is a symbol of material strength and endurance. The pyramid is unfinished, symbolizing a striving toward growth and a goal of perfection. Above the pyramid a glory, with an eye inside a triangle, represents the eternal eye of God and places the spiritual above the material. At the top edge is the 13-letter Latin motto Annuit Coeptis, meaning "He has favored our undertakings." The base of the pyramid bears the roman numerals MDCCLXXVI (1776). Below is the motto Novus Ordo Seclorum, "a new order of the ages."

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When did the United States go off the gold standard?
H.J. Res. 192, approved by President Roosevelt on June 5, 1933, provided that obligations payable in gold or specific coin or currency are contrary to public policy, and that those obligations could be discharged dollar for dollar in legal tender. After that resolution was adopted, currency of the United States could not be converted into gold by United States citizens, but the Treasury would convert dollars into gold for foreign governments as a means of maintaining stability and confidence in the dollar. Because the dollar was no longer freely convertible, one could consider that the United States was no longer on the gold standard at that time. If, however, one considers the gold standard as a monetary system in which the unit of money is backed by gold even if the monetary unit cannot be converted into gold, one could argue that the United States went off of the gold standard on August 15, 1971 when President Nixon announced that the U.S. dollar would no longer be convertible into gold in the international markets. The President was able to suspend the ability to convert the dollar into gold because there was no legal requirement that the United States exchange gold for dollars. On December 18, 1971 the President devalued the dollar, and even though the devaluation was effective immediately, only Congress could officially change the gold value of the dollar. Early in 1972, Congress passed Public Law 92- 268, which gave formal approval to the December 1971 devaluation.

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