When the United States printed $100,000 notes

By Paul Gilkes

Published: Jul 15, 2016, 8 AM

The Series 1890 $1,000 Treasury note with Union Gen. George Meade on the face is nicknamed a “Grand Watermelon note” because the design of the zeroes on the back resembles the pigment pattern in the skin of the fruit.

Original images courtesy of Heritage Auctions.

The Series 1890 $1,000 note shown, which is a replacement note marked by the suffix star in the serial number, is unique in collector hands. It sold at auction in 2014 for $3.29 million.

Images courtesy of Heritage Auctions.

The $100,000 gold certificates featuring a portrait of Woodrow Wilson on the face were printed for Series 1934 only and used solely for large cash transfers between Federal Reserve Banks.

Images courtesy of National Numismatic Collection, Smithsonian Institution’s National Museum of American History.

Proof printing for a Series 1891 $500 Treasury note depicts a likeness of Union Gen. William Tecumseh Sherman on the face. No finished notes were ever printed.

Images courtesy of National Numismatic Collection.

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James Madison, the fourth president of the United States and secretary of state in Thomas Jefferson’s administration, appears on the Series 1928 $5,000 Federal Reserve note.

Images courtesy of Heritage Auctions.

Treasury Secretary Salmon P. Chase's portrait appears on the face of a Series 1934 $10,000 gold certificate.

Gold certificate image courtesy of National Numismatic Collection.

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A likeness of Salmon P. Chase — Treasury secretary from 1861 to 1864 and chief justice of the United States from 1864 to 1873 — appears on the face of the Series 1928 $10,000 Federal Reserve note

Images courtesy of Heritage Auctions.

The highest denomination U.S. paper money currently in use in general circulation is the $100 Federal Reserve note, which bears the portrait of statesman and inventor Benjamin Franklin on its face. The latest issue, the Series 2009 $100 Federal Reserve notes, printed under the NextGen program and incorporating sophisticated anti-counterfeiting devices, began entering circulation in March 2016, five years behind schedule because of production problems.

From 1861 to 1945, the Bureau of Engraving and Printing — which has officially produced U.S. paper money since 1862 — printed $500, $1,000, $5,000, $10,000 and even $100,000 notes, but not necessarily for general commerce. Some denominations were reserved for exclusive use in transferring large sums of money between banks.

All together, 11 different types of U.S. paper money were issued bearing denominations of $500 and higher spanning 20 different series dates.

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During the Federal note issuing period beginning during the Civil War, the earliest high-denomination notes included three-year interest-bearing notes of $500, $1,000 and $5,000 face values that were congressionally authorized on July 17, 1861.

Series 1934 gold certificates denominated $100, $1,000, $10,000 and $100,000 were issued after the repeal of the gold standard, when most gold was required to be surrendered to the federal government under provisions of President Franklin Roosevelt’s Executive Order 6102. As a consequence of that presidential directive, none of those gold certificates were issued to the public; they were relegated to only transactions between Federal Reserve Banks. Production of Series 1934 gold certificates ended in calendar-year 1940.

Although no longer printed, high-denomination notes of $500 and higher are still considered legal tender in the United States. Notes in denominations higher than $100 were last printed by the BEP on Dec. 27, 1945, but released over the next more than two decades.

If you come across any of the high denomination notes in your numismatic travels, they are still considered legal tender, but one would be smarter to direct such acquisitions to a well-heeled collector.

For example, a Series 1934 $10,000 Federal Reserve note, graded Currency Grading & Authentication Gem Uncirculated 65, realized $70,150 in a September 2005 Heritage Auctions sale.

A Paper Money Guaranty Choice Uncirculated 64 Series 1934 $5,000 Federal Reserve note brought $164,500 in a May 20, 2015, sale conducted by Stack’s Bowers Galleries and Sotheby’s.

Apparent lack of use was cited by the Federal Reserve for officially discontinuing use of high-denominated notes in transactions as of July 14, 1969. The $5,000 and $10,000 notes had effectively disappeared from use well before that date, according to the Treasury Department.

President Nixon issued an executive order July 14, 1969, initiating withdrawal from circulation through the Federal Reserve of high-denomination notes above $100.

According to government sources, fewer than 170,000 $1,000 notes, and fewer than 400 notes each of the $5,000 and $10,000 issues from all series are reported extant.

In total, 100 of the extant $10,000 notes were displayed in an acrylic enclosure beginning in 1951 in the entryway to Binion’s Horseshoe Hotel & Casino in Las Vegas, Nev. The exhibit was dismantled in 2000 after the notes were sold to an individual buyer and then resold as individual notes to collectors. All of the Binion notes are Series 1934 Federal Reserve notes.

What could such highly denominated notes be used for?

Although government sources suggest the high denomination notes were pulled for lack of use, they did serve a purpose upon issuance.

The $500 and $1,000 notes printed by the U.S. government found their genesis during the American Civil War in 1862 and 1863.

The $5,000 and $10,000 notes made their debut with Series 1878 legal tender notes, also called United States notes.

High-denomination gold certificates followed with Series 1882 issues.

Soon after their issuance, many of the notes found use in real estate transactions or transfer between banks. The $1,000 notes were also used during the Civil War to quickly purchase supplies, such as munitions, to support the conflict.

The initial $500 and $1,000 notes, called United States notes or legal tender notes, were originally issued directly into circulation by the U.S. Treasury to pay expenses incurred by the Union during the American Civil War, according to Paper Money of the United States by Arthur L. and Ira S. Friedberg, based on the original work by Robert Friedberg.

High-denomination notes served mainly as a means to settle large transactions, before the days of wire transfers, according to Art Friedberg.

When the Federal Reserve began withdrawing the high-denomination notes from circulation pursuant to President Nixon’s 1969 executive order, the primary reason cited was “lack of use.” However, concerns were also expressed that the high-denomination notes were subject to counterfeiting and being used in other criminal activities, including the illicit drug trade and money laundering.

Plus, producing engraved plates for short printing runs of the higher denomination notes was not cost effective when compared to the cost of producing printing plates for much larger runs of notes in denominations less than $100. The average American could not afford to use high-denominated notes in daily transactions. Perhaps $100 notes were received in a cash payroll, but not generally the higher denominations.

Most of the 20th century’s $5,000 and $10,000 notes experienced much of their circulation life in small transfers between banking institutions.

Advances in banking technology eventually rendered use of high denomination paper money moot.

If you had a $500, $1,000, $5,000 or $10,000 note now, and would turn the note in to your local bank, the bank would only credit you with the face value of the note.

The bank, now, would be obligated to surrender the note to the Federal Reserve, which in turn would destroy it.

High-denomination note types

High-denomination notes were printed by the BEP in large-size and small-size formats, but not necessarily in both formats for all of the denominations.

The following details outline what series of notes were issued for the $500, $1,000, $5,000 and $10,000 denominations.

??Compound-interest Treasury notes — Series 1863 and 1864 for $500, 1864 for $1,000.

??Legal tender notes — large-size, Series 1862 through 1923, all four denominations.

??Interest-bearing notes — Series 1861, 1863, 1864 and 1865 for all except the $10,000 note.

??Silver certificates — large-size, covering the period 1878 to 1923, Series 1878 and 1880 for the $500 note; 1878, 1880 and 1881 for the $1,000 note.

??Treasury notes — large size, Series 1891 for the $500 note and 1890 and 1891 for the $1,000 issue.

??National bank notes — large-size, covering the period 1865 to 1875, Series 1865 and 1875 for the $500 and $1,000 denominations.

??Federal Reserve notes, large-size — Series 1914 and 1918, with only Series 1918 being issued in all four high denominations.

??National gold bank notes — large size, 1870 to 1883, Series 1870 only for the $500 and $1,000 issues; no proofs or issued notes survive for either denomination.

??Gold certificates, large-size — Series 1865, 1870, 1875, 1882 and 1922 for the $500 note; 1865, 1870, 1875, 1882, 1907 and 1922 for the $1,000 note; 1865, 1879, 1882 and 1888 for the $5,000 issue; and 1865, 1870, 1875, 1882, 1888 and 1900 for the $10,000 note.

??Federal Reserve notes, small-size — Series 1928 and 1934 for all four denominations.

??Gold certificates, small-size — Series 1928 for all four denominations, and 1934 for the $1,000, $10,000 and $100,000 notes.

About those $100,000 notes

While the $10,000 notes were the highest denomination of United States paper money printed for general circulation, The $100,000 note is the highest denomination note issued for any financial purpose.

According to the BEP, the Series 1934 gold certificates were printed from Dec. 18, 1934, through Jan. 9, 1935.

The gold certificates were issued by the treasurer of the United States “to Federal Reserve Banks only against an equal amount of gold bullion by the Treasury. These notes were used for transactions between Federal Reserve Banks and were not circulated among the general public.”

A vignette featuring a portrait of President Woodrow Wilson, who orchestrated the Federal Reserve’s creation in 1913, appears on the face of the note.

The back of the note features ornate scrollwork, and includes as the central feature, THE / UNITED STATES OF AMERICA / 100,000 / ONE HUNDRED THOUSAND / DOLLARS.

Collectors who travel the major coin show circuit likely have seen $100,000 gold certificates at least once. Uncut sheets of Series 1934 $100,000 gold certificates are often displayed in the BEP’s Billion Dollar Exhibit at various numismatic conventions it attends.

Status quo

There are no plans to change the denominations available for U.S. paper currency, which is currently printed in $1, $5, $10, $20, $50 and $100 denominations, although all but the two lowest denominations have undergone complete redesign.

According to the Department of the Treasury website: “The purpose of the United States currency system is to serve the needs of the public and these denominations meet that goal. Neither the department of the treasury nor the Federal Reserve System has any plans to change the denominations in use today.”

For some series of early high-denomination notes, only a small number of examples remain extant, thus stirring great interest among collectors of U.S. paper money willing to pay significant premiums to obtain a surviving note regardless of condition.