A
Federal Reserve Note is a type of
banknoteA banknote is a kind of negotiable instrument, a promissory note made by a bank payable to the bearer on demand, used as money, and in many jurisdictions is legal tender. In addition to coins, banknotes make up the cash or bearer forms of all modern fiat money...
used in the United States of America. Federal Reserve Notes are printed by the United States
Bureau of Engraving and PrintingThe Bureau of Engraving and Printing is a government agency within the United States Department of the Treasury that designs and produces a variety of security products for the United States government, most notable of which is paper currency for the Federal Reserve. The Federal Reserve itself is...
on paper made by Crane & Co. of
Dalton, MassachusettsDalton is a town in Berkshire County, Massachusetts, United States. Dalton is the transition town between the urban and rural pieces of Berkshire County, Massachusetts. It is part of the Pittsfield, Massachusetts Metropolitan Statistical Area. The population was 6,892 at the 2000 census.- History...
. They are the only type of U.S. banknote that is still produced today and they should not be confused with
Federal Reserve Bank NoteFederal Reserve Bank Notes are legal tender in the United States, together with United States Notes, Silver Certificates, Gold Certificates, National Bank Notes and Federal Reserve Notes. They had the same value as other kinds of notes of similar face value...
s.
Federal Reserve Notes are authorized by Section 411 of Title 12 of the United States Code and are issued to the
Federal Reserve BankThe twelve Federal Reserve Banks form a major part of the Federal Reserve System, the central banking system of the United States. The twelve federal reserve banks together divide the nation into twelve Federal Reserve Districts, the twelve banking districts created by the Federal Reserve Act of...
s at the discretion of the Board of Governors of the Federal Reserve System. The notes are then put into circulation by the Federal Reserve Banks. Once the notes are put into circulation, they become liabilities of the Federal Reserve Banks and obligations of the United States.
Federal Reserve Notes are
legal tenderLegal tender is a medium of payment allowed by law or recognized by a legal system to be valid for meeting a financial obligation. Paper currency is a common form of legal tender in many countries....
, with the words
"this note is legal tenderLegal tender is a medium of payment allowed by law or recognized by a legal system to be valid for meeting a financial obligation. Paper currency is a common form of legal tender in many countries....
for all debts, public and private" printed on each note. (See generally .) They have replaced
United States NoteA United States Note, also known as a Legal Tender Note, is a type of paper money that was issued from 1862 to 1971 in the U.S. Having been current for over 100 years, they were issued for longer than any other form of U.S. paper money. They were known popularly as "greenbacks" in their heyday, a...
s, which were once issued by the
Treasury DepartmentThe Department of the Treasury is an executive department and the treasury of the United States federal government. It was established by an Act of Congress in 1789 to manage government revenue...
. Federal Reserve Notes are backed by the assets of the
Federal Reserve BankThe twelve Federal Reserve Banks form a major part of the Federal Reserve System, the central banking system of the United States. The twelve federal reserve banks together divide the nation into twelve Federal Reserve Districts, the twelve banking districts created by the Federal Reserve Act of...
s, which serve as collateral under
Federal Reserve Act Section 16. These assets are generally Treasuries which have been purchased by the Federal Reserve through its
Federal Open Market CommitteeThe Federal Open Market Committee , a committee within the Federal Reserve System, is charged under United States law with overseeing the nation's open market operations . It is the Federal Reserve committee that makes key decisions about interest rates and the growth of the United States money...
in a process called
monetizing the debt. (See
MonetizationMonetization is the process of converting or establishing something into legal tender. It usually refers to the coining of currency or the printing of banknotes by central banks...
.) This
monetized debt can increase the
money supplyIn economics, the money supply or money stock, is the total amount of money available in an economy at a specific time. There are several ways to define "money," but standard measures usually include currency in circulation and demand deposits .Money supply data are recorded and published, usually...
, either with the issuance of new Federal Reserve Notes or with the creation of
debt money (deposits). This increase in the monetary base leads to larger increase in the money supply through the
fractional-reserve bankingFractional-reserve banking is a form of banking where banks maintain reserves that are only a fraction of the customer's deposits. Funds deposited into a bank are mostly lent out, and a bank keeps only a fraction of the quantity of deposits as reserves...
as deposits are lent and re-deposited where they form the basis of further loans.
History
Prior to centralized banking, each commercial bank issued their own notes. The first institution with responsibilities of a central bank in the U.S. was the
First Bank of the United StatesThe First Bank of the United States is a National Historic Landmark located in Philadelphia, Pennsylvania within Independence National Historical Park.-Banking History:...
, chartered in 1791 by
Alexander HamiltonAlexander Hamilton was a Founding Father, soldier, economist, political philosopher, one of America's first constitutional lawyers and the first United States Secretary of the Treasury...
. Its charter was not renewed in 1811. In 1816, the
Second Bank of the United StatesThe Second Bank of the United States was chartered in 1816, five years after the First Bank of the United States lost its own charter. The Second Bank of the United States was initially headquartered in Carpenters' Hall, Philadelphia, the same as the First Bank, and had branches throughout the...
was chartered; its charter was not renewed in 1836, after it became the object of a major attack by president
Andrew JacksonAndrew Jackson was the seventh President of the United States . Based in frontier Tennessee, Jackson was a politician and army general who defeated the Creek Indians at the Battle of Horseshoe Bend , and the British at the Battle of New Orleans...
. From 1837 to 1862, in the Free Banking Era there was no formal central bank, and banks issued their own notes again. From 1862 to 1913, a system of national banks was instituted by the 1863
National Banking ActThe National Banking Acts of 1863 and 1864 were two United States federal laws that established a system of national charters for banks, and created the United States National Banking System. They encouraged development of a national currency backed by bank holdings of U.S...
. The first printed notes were Series 1914. In 1928, cost-cutting measures were taken to reduce the note to the size it is today.
Value
The authority of the Federal Reserve Banks to issue notes comes from the
Federal Reserve ActThe Federal Reserve Act is an Act of Congress that created and set up the Federal Reserve System, the central banking system of the United States of America, and granted it the legal authority to issue Federal Reserve Notes and Federal Reserve Bank Notes as legal tender...
of 1913. Legally, they are liabilities of the Federal Reserve Banks and obligations of the United States government. Although not issued by the Treasury Department, Federal Reserve Notes carry the (engraved) signature of the
Treasurer of the United StatesThe Treasurer of the United States is an official in the United States Department of the Treasury that was originally charged with the receipt and custody of government funds, though many of these functions have been taken over by different bureaus of the Department of the Treasury...
and the
United States Secretary of the TreasuryThe Secretary of the Treasury of the United States is the head of the United States Department of the Treasury, which is concerned with financial and monetary matters, and, until 2003, also with some issues of national security and defense. This position in the Federal Government of the United...
.
At the time of the Federal Reserve's creation, the law provided for notes to be redeemed to the Treasury in gold or "lawful money." The latter category was not explicitly defined, but included
United States NoteA United States Note, also known as a Legal Tender Note, is a type of paper money that was issued from 1862 to 1971 in the U.S. Having been current for over 100 years, they were issued for longer than any other form of U.S. paper money. They were known popularly as "greenbacks" in their heyday, a...
s,
National Bank NoteNational Bank Notes were United States currency banknotes issued by National banks chartered by the United States Government. The notes were usually backed by United States bonds the bank deposited with the United States Treasury.- Background :...
s, and certain other notes held by banks to meet
reserveBank reserves are banks' holdings of deposits in accounts with their central bank , plus currency that is physically held in the bank's vault . The central banks of some nations set minimum reserve requirements...
requirements, such as
clearingIn banking and finance, clearing denotes all activities from the time a commitment is made for a transaction until it is settled. Clearing is necessary because the speed of trades is much faster than the cycle time for completing the underlying transaction....
certificates. The
Emergency Banking ActThe Emergency Banking Act was an act of the United States Congress spearheaded by President Franklin D. Roosevelt during the Great Depression. It was passed on March 9, 1933...
of 1933 removed the gold obligation and authorized the Treasury to satisfy these redemption demands with current notes of equal face value (effectively making change). Under the
Bretton Woods systemThe Bretton Woods system of monetary management established the rules for commercial and financial relations among the world's major industrial states in the mid 20th century...
, although citizens could not possess gold, the federal government continued to maintain a stable international gold price. This system ended with the
Nixon ShockThe Nixon Shock was a series of economic measures taken by U.S. President Richard Nixon in 1971 including unilaterally cancelling the direct convertibility of the United States dollar to gold that essentially ended the existing Bretton Woods system of international financial exchange.-Background:By...
of 1971. Present-day Federal Reserve Notes are not backed by convertibility to any specific commodity, but only by the legal requirement that they are issued against collateral.
Production and distribution
A
commercialWhile business refers to the value-creating activities of an organization for profit, commerce means the whole system of an economy that constitutes an environment for business. The system includes legal, economic, political, social, cultural, and technological systems that are in operation in any...
bank that maintains a reserve account with the Federal Reserve can obtain notes from the Federal Reserve Bank in its district whenever it wishes. The bank must pay for the notes in full, dollar for dollar, by debiting (drawing down) its reserve account. Smaller banks without a reserve account at the Federal Reserve can maintain their reserve accounts at larger "correspondent banks" which themselves maintain reserve accounts with the Federal Reserve.
Federal Reserve Notes are printed by the
Bureau of Engraving and PrintingThe Bureau of Engraving and Printing is a government agency within the United States Department of the Treasury that designs and produces a variety of security products for the United States government, most notable of which is paper currency for the Federal Reserve. The Federal Reserve itself is...
(BEP), a bureau of the Department of the Treasury. When Federal Reserve Banks require additional notes for circulation, they must post
collateralIn lending agreements, collateral is a borrower's pledge of specific property to a lender, to secure repayment of a loan.The collateral serves as protection for a lender against a borrower's default - that is, any borrower failing to pay the principal and interest under the terms of a loan obligation...
in the form direct federal obligations, private bank obligations, or assets purchased through open market operations. If the notes are newly printed, they also pay the BEP for the cost of printing (about 4¢ per note). This differs from the issue of
coinA coin is a piece of hard material that is standardized in weight, is produced in large quantities in order to facilitate trade, and primarily can be used as a legal tender token for commerce in the designated country, region, or territory....
s, which are purchased for their face value.
A Federal Reserve Bank can retire notes that return from circulation by exchanging them for collateral that the bank posted for an earlier issue. Retired notes in good condition are held in the bank's vault by for future issues. Notes in poor condition are destroyed and replacements are ordered from the BEP. The Federal Reserve shreds 7,000 tons of worn out currency each year,
Federal Reserve notes, on average, remain in circulation for the following periods of time:
| Denomination |
$1 |
$2 |
$5 |
$10 |
$20 |
$50 |
$100 |
| Months in circulation |
21 |
136 |
16 |
18 |
24 |
55 |
89 |
The
Federal ReserveThe twelve Federal Reserve Banks form a major part of the Federal Reserve System, the central banking system of the United States. The twelve federal reserve banks together divide the nation into twelve Federal Reserve Districts, the twelve banking districts created by the Federal Reserve Act of...
does not publish an average life span for the $2 bill. This is likely due to its treatment as a collector's item by the general public; it is, therefore, not subjected to normal circulation.
Nicknames
U.S. paper currency has had many nicknames and slang terms. The notes themselves are generally referred to as
bills (as in "
five-dollar billThe United States five-dollar bill or fiver is a denomination of United States currency. The $5 bill currently features U.S. President Abraham Lincoln's portrait on the front and the Lincoln Memorial on the back. All $5 bills issued today are Federal Reserve Notes...
") and any combination of U.S. notes as
bucks (as in "fifty bucks"),
bones, or
beans. Notes can be referred to by the first or last name of the person on the portrait (
GeorgeGeorge Washington was the dominant military and political leader of the new United States of America from 1775 to 1799. He led the American victory over Great Britain in the American Revolutionary War as commander-in-chief of the Continental Army from 1775 to 1783, and presided over the writing of...
for One Dollar, "
AbeAbraham Lincoln was the 16th President of the United States, serving from March 1861 until his assassination in April 1865. He successfully led his country through a great constitutional, military and moral crisis – the American Civil War – preserving the Union, while ending slavery, and...
" or Lincoln for the Five Dollar, and so on).
- See tables below for nicknames for individual denomination
- Greenbacks, any amount in any denomination of Federal Reserve Note (from the green ink used on the back). The Demand Note
A Demand Note is a type of United States paper money that was issued between August 1861 and April 1862 during the American Civil War in denominations of 5, 10, and 20 US$...
s issued in 1861 had green-inked backs, and the Federal Reserve Note of 1914 copied this pattern.
- Deceased presidents or "Dead presidents", any amount in any denomination of Federal Reserve Note (from the portrait of a U.S. president on most denominations).
- fin, finif (from the Yiddish word for five), or finski is a slang term for a five-dollar bill
- sawbuck
A sawbuck is a device for holding rough wood so that it may be sawn into pieces of length usable in a stove or fireplace. Easily made in the field from rough material, it consists of two "X" forms, one at each end, which are stabilized by a central piece...
is a slang term for a ten-dollar bill, from the image of the roman numeral X
- double sawbuck is slang term for a twenty-dollar bill, from the image of the roman numeral XX, and in some cases can be used to denote a pair of ten-dollar bills, which would be double sawbucks, depending on the situation and type and amount of currency on hand.
- One hundred dollar bills are sometimes called "Benjamins" (in reference to their portrait of Benjamin Franklin
Dr. Benjamin Franklin was one of the Founding Fathers of the United States. A noted polymath, Franklin was a leading author, printer, political theorist, politician, postmaster, scientist, musician, inventor, satirist, civic activist, statesman, and diplomat...
) or C-Notes (the letter "C" is the Roman Numeral 100).
- One thousand dollars ($1000) can be referenced as "Large", "K" (short for "kilo"), "Grand" or "Stack", and as a "G" (short for "grand").
- The popularity of the Saturday Night Live
Saturday Night Live is a live American late-night television sketch comedy and variety show developed by Lorne Michaels and Dick Ebersol. The show premiered on NBC on October 11, 1975, under the original title of NBC's Saturday Night.The show's sketches often parody contemporary American culture...
skit Lazy Sunday"Lazy Sunday" is a song and short video by American comedy troupe The Lonely Island, released on December 17, 2005, broadcast on Saturday Night Live as the second Digital Short...
has led to $10 notes sometimes being referred to as "Hamiltons".
- In Raymond Chandler
Raymond Thornton Chandler was an American novelist and screenwriter.In 1932, at age forty-five, Raymond Chandler decided to become a detective fiction writer after losing his job as an oil company executive during the Depression. His first short story, "Blackmailers Don't Shoot", was published in...
's novel, The Long GoodbyeThe Long Goodbye is a 1953 novel by Raymond Chandler, centered on his famous detective Philip Marlowe. While some critics consider it inferior to The Big Sleep or Farewell, My Lovely, others rank it as the best of his work...
, the protagonist Marlowe refers to a five thousand dollar bill as "a portrait of Madison," due to the president portrayed on the bill being James MadisonJames Madison, Jr. was an American statesman and political theorist. He was the fourth President of the United States and is hailed as the “Father of the Constitution” for being the primary author of the United States Constitution and at first an opponent of, and then a key author of the United...
.
Many more slang terms refer to money in general (moolah, paper, bread, dough, do-re-mi, freight, loot, dinero, cheese, cake, stacks, greenmail, jack, rabbit, cabbage, pie, cheddar, scrilla,scratch, etc.).
Security
Despite the relatively late addition of color and other anti-counterfeiting features to U.S. currency, critics hold that it is still a straightforward matter to counterfeit these bills. They point out that the ability to reproduce color images is well within the capabilities of modern color
printersIn computing, a printer is a peripheral which produces a text or graphics of documents stored in electronic form, usually on physical print media such as paper or transparencies. Many printers are primarily used as local peripherals, and are attached by a printer cable or, in most new printers, a...
, most of which are affordable to many consumers. These critics suggest that the Federal Reserve should incorporate
holographicHolography is a technique that allows the light scattered from an object to be recorded and later reconstructed so that when an imaging system is placed in the reconstructed beam, an image of the object will be seen even when the object is no longer present...
features, as are used in most other major currencies, such as the
pound sterlingThe pound sterling , commonly called the pound, is the official currency of the United Kingdom, its Crown Dependencies and the British Overseas Territories of South Georgia and the South Sandwich Islands, British Antarctic Territory and Tristan da Cunha. It is subdivided into 100 pence...
,
Canadian dollarThe Canadian dollar is the currency of Canada. As of 2007, the Canadian dollar is the 7th most traded currency in the world. It is abbreviated with the dollar sign $, or C$ to distinguish it from other dollar-denominated currencies...
and
euro banknotesEuro banknotes are the banknotes of the euro, the currency of the eurozone and have been in circulation since 2002. They are issued by the national central banks of the euro area or the European Central Bank...
, which are more difficult and expensive to forge. Another robust technology, the
polymer banknotePolymer banknotes were developed by the Reserve Bank of Australia , Commonwealth Scientific and Industrial Research Organisation and The University of Melbourne and were first issued as currency in Australia in 1988. These banknotes are made from the polymer biaxially-oriented polypropylene ...
, has been developed for the
Australian dollarThe Australian dollar is the currency of the Commonwealth of Australia, including Christmas Island, Cocos Islands, and Norfolk Island, as well as the independent Pacific Island states of Kiribati, Nauru and Tuvalu...
and adopted for the
New Zealand dollarThe New Zealand dollar is the currency of New Zealand. It also circulates in the Cook Islands , Niue, Tokelau, and the Pitcairn Islands. It is divided into 100 cents....
,
Romanian leuThe leu is the currency of Romania. It is subdivided into 100 bani . The name of the currency means "lion". On 1 July 2005, Romania underwent a currency reform, switching from the previous leu to a new leu . 1 RON is equal to 10,000 ROL...
,
Thai bahtThe baht is the currency of Thailand. It is subdivided into 100 satang . The issuance of currency is the responsibility of the Bank of Thailand.-History:The baht, like the pound, originated from a traditional unit of mass...
, Papua New Guinea kina and other circulating, as well as commemorative, banknotes of a number of other countries. Polymer banknotes are a deterrent to the counterfeiter, as they are much more difficult and time consuming to reproduce. They are said to be more secure, cleaner and more durable than paper notes.
However, U.S. currency may not be as vulnerable as it is said to be. Two of the most critical anti-counterfeiting features of U.S. currency are the paper and the ink. The exact composition of the paper is confidential, as is the formula for the ink. The ink and paper combine to create a distinct texture, particularly as the currency is circulated. The paper and the ink alone have no effect on the value of the dollar until post print. These characteristics can be hard to duplicate without the proper equipment and materials. Furthermore, recent redesigns of the $5, $10, $20, and $50 notes have added
EURion constellationThe EURion constellation is a pattern of symbols found on a number of banknote designs worldwide since about 1996. It is added to help software detect the presence of a banknote in a digital image. Such software can then block the user from reproducing banknotes to prevent counterfeiting using...
s which can be used by scanning software to recognize banknotes and prohibit scanning them.
The differing sizes of other nations' banknotes are a security feature that eliminates one form of counterfeiting to which U.S. currency is prone: Counterfeiters can simply bleach the ink off a low-denomination note, typically a single dollar, and reprint it as a higher-value note, such as a $100 bill. To counter this, the U.S. government has included in all $5 and higher denominated notes of 1990 series and later a vertical laminate strip imprinted with denominational information, which under ultraviolet light fluoresces a different color for each denomination ($5 note: blue; $10 note: orange; $20 note: green; $50 note: yellow; $100 note: red).
Differentiation
Critics, like the
American Council of the BlindThe American Council of the Blind is a nationwide organization in the United States. It is an organization mainly made up of blind and visually impaired people who want to achieve independence and equality .-History:The American Council of the Blind was formed out of the dissolution of the...
, also note that U.S. bills are often hard to tell apart: they use very similar designs, they are printed in the same colors (until the 2003 banknotes, in which a faint secondary color was added), and they are all the same size. The American Council of the Blind has argued that American paper currency design should use increasing sizes according to value and/or raised or indented features to make the currency more usable by the
vision-impairedBlindness is the condition of lacking visual perception due to physiological or neurological factors.Various scales have been developed to describe the extent of vision loss and define blindness...
, since the denominations cannot currently be distinguished from one another non-visually. Use of
BrailleThe Braille system is a method that is widely used by blind people to read and write, and was the first digital form of writing.Braille was devised in 1825 by Louis Braille, a blind Frenchman. Each Braille character, or cell, is made up of six dot positions, arranged in a rectangle containing two...
codes on currency is not considered a desirable solution because (1) these markings would only be useful to people who know how to read braille, and (2) one braille symbol can become confused with another if even one bump is rubbed off. Though some blind individuals say that they have no problems keeping track of their currency because they fold their bills in different ways or keep them in different places in their wallets, they nevertheless must rely on sighted people or currency-reading machines to determine the value of each bill before filing it away using the system of their choice. This means that no matter how organized they are, blind Americans still have to trust sighted people or machines each time they receive change for their purchases or each time they receive cash from their customers.
By contrast, other major currencies, such as the
pound sterlingThe pound sterling , commonly called the pound, is the official currency of the United Kingdom, its Crown Dependencies and the British Overseas Territories of South Georgia and the South Sandwich Islands, British Antarctic Territory and Tristan da Cunha. It is subdivided into 100 pence...
and
euroThe euro is the official currency of the eurozone: 17 of the 27 member states of the European Union. It is also the currency used by the Institutions of the European Union. The eurozone consists of Austria, Belgium, Cyprus, Estonia, Finland, France, Germany, Greece, Ireland, Italy, Luxembourg,...
, feature notes of differing sizes: the size of the note increases with the denomination and different denominations are printed in different, contrasting colors. This is useful not only for the vision-impaired; they nearly eliminate the risk that, for example, someone might fail to notice a high-value note among low-value ones.
Multiple currency sizes were considered for U.S. currency, but makers of
vending machineA vending machine is a machine which dispenses items such as snacks, beverages, alcohol, cigarettes, lottery tickets, consumer products and even gold and gems to customers automatically, after the customer inserts currency or credit into the machine....
s and
change machineA change machine is a machine that accepts large denominations of currency and returns an equal amount of currency in smaller bills or coins. Typically these machines are used to provide coins in exchange for paper currency, in which case they are also often known as bill changers.In the US, these...
s successfully argued that implementing such a wide range of sizes would greatly increase the cost and complexity of such machines. Similar arguments were unsuccessfully made in Europe prior to the introduction of multiple note sizes.
Alongside the contrasting colors and increasing sizes, many other countries' currencies contain tactile features missing from U.S. banknotes to assist the blind. For example, Canadian banknotes have a series of
raised dotsThe Canadian currency tactile feature is a feature on the current "Canadian Journey" series of Canadian banknotes. The feature indicates the banknote denomination in the upper right corner of the face side of the bill using a series of raised dots. It was suggested by Bruno Thériault, an...
(not Braille) in the upper right corner to indicate denomination.
Mexican pesoThe peso is the currency of Mexico. Modern peso and dollar currencies have a common origin in the 15th–19th century Spanish dollar, most continuing to use its sign, "$". The Mexican peso is the 12th most traded currency in the world, the third most traded in the Americas, and by far the most...
banknotes also have raised patterns of dashed lines.
Suit by sightless over U.S. banknote design
Ruling on a lawsuit filed in 2002 (
American Council of the BlindThe American Council of the Blind is a nationwide organization in the United States. It is an organization mainly made up of blind and visually impaired people who want to achieve independence and equality .-History:The American Council of the Blind was formed out of the dissolution of the...
v. Paulson), on November 28, 2006, U.S. District Judge
James RobertsonJames Robertson is a United States federal judge serving on the United States District Court for the District of Columbia.Born in Cleveland, Ohio, Robertson graduated from Western Reserve Academy in Hudson, Ohio, and received a B.A. from Princeton University in 1959. He served in the United States...
ruled that the American bills gave an undue burden to the blind and denied them "meaningful access" to the U.S. currency system. In his ruling, Robertson noted that the United States was the only nation out of 180 issuing paper currency that printed bills that were identical in size and color in all their denominations and that the successful use of such features as varying sizes, raised lettering and tiny perforations used by other nations is evidence that the ordered changes are feasible.
Robertson accepted the plaintiff's argument that current practice violates Section 504 of the
Rehabilitation ActThe U.S. Rehabilitation Act of 1973 prohibits discrimination on the basis of disability in programs conducted by Federal agencies, in programs receiving Federal financial assistance, in Federal employment, and in the employment practices of Federal contractors...
.
(Ruling as PDF file) The Treasury is appealing the decision. The judge has ordered the
Treasury DepartmentThe Department of the Treasury is an executive department and the treasury of the United States federal government. It was established by an Act of Congress in 1789 to manage government revenue...
to begin working on a redesign within 30 days.
The
plaintiffA plaintiff , also known as a claimant or complainant, is the term used in some jurisdictions for the party who initiates a lawsuit before a court...
's attorney was quoted as saying "It's just frankly unfair that blind people should have to rely on the good faith of people they have never met in knowing whether they've been given the correct change."
Government attorneys estimated that the cost of such a change ranges from $75 million in equipment upgrades and $9 million annual expenses for punching holes in bills to $178 million in one-time charges and $50 million annual expenses for printing bills of varying sizes.
On May 20, 2008, in a 2-to-1 decision, the
United States Court of Appeals for the District of Columbia CircuitThe United States Court of Appeals for the District of Columbia Circuit known informally as the D.C. Circuit, is the federal appellate court for the U.S. District Court for the District of Columbia. Appeals from the D.C. Circuit, as with all the U.S. Courts of Appeals, are heard on a...
upheld the earlier ruling, pointing out that the cost estimates were inflated and that the burdens on blind and visually impaired currency users had not been adequately addressed.
As a result of the court's injunction, the
Bureau of Engraving and PrintingThe Bureau of Engraving and Printing is a government agency within the United States Department of the Treasury that designs and produces a variety of security products for the United States government, most notable of which is paper currency for the Federal Reserve. The Federal Reserve itself is...
is planning to implement a raised tactile feature in the next redesign of each note, except the $1 (which it is by law not allowed to redesign) and the version of the $100 bill already in process. It also plans larger, higher-contrast numerals, more color differences, and distribution of currency readers to assist the visually impaired during the transition period. The Bureau received a comprehensive study on accessibility options in July 2009, and solicited public comments from May to August 2010.
Fiat currency
Congressman
Ron PaulRonald Ernest "Ron" Paul is an American physician, author and United States Congressman who is seeking to be the Republican Party candidate in the 2012 presidential election. Paul represents Texas's 14th congressional district, which covers an area south and southwest of Houston that includes...
,
Austrian economistsThe Austrian School of economics is a heterodox school of economic thought. It advocates methodological individualism in interpreting economic developments , the theory that money is non-neutral, the theory that the capital structure of economies consists of heterogeneous goods that have...
, and other libertarians and constitutionalists criticize Federal Reserve Notes because they are a form of fiat currency and are not backed by tangible assets such as
goldGold is a chemical element with the symbol Au and an atomic number of 79. Gold is a dense, soft, shiny, malleable and ductile metal. Pure gold has a bright yellow color and luster traditionally considered attractive, which it maintains without oxidizing in air or water. Chemically, gold is a...
or
silverSilver is a metallic chemical element with the chemical symbol Ag and atomic number 47. A soft, white, lustrous transition metal, it has the highest electrical conductivity of any element and the highest thermal conductivity of any metal...
. Such critics argue that Federal Reserve Notes can lose value easily and point to the currency's inflation rates as proof of this claim.
Constitutionality
Critics, including U.S. Congressman
Ron PaulRonald Ernest "Ron" Paul is an American physician, author and United States Congressman who is seeking to be the Republican Party candidate in the 2012 presidential election. Paul represents Texas's 14th congressional district, which covers an area south and southwest of Houston that includes...
, allege that according to the U.S. Constitution, Article I, Section 8, that only the U.S. Congress has the ability
To coin money, regulate the value thereof, and of foreign coin, and fix the standard of weights and measures;
and, according to section 10, that
No State shall... make any Thing but gold and silver Coin a Tender in Payment of Debts;
and thus Federal Reserve banknotes are
not legal tender, as they were not issued by Congress, states have no authority to recognize anything but gold or silver (including federal reserve notes), and the Federal Reserve does not have the authority to print or create money. Though the printing of money is physically done by the
Department of the TreasuryThe Department of the Treasury is an executive department and the treasury of the United States federal government. It was established by an Act of Congress in 1789 to manage government revenue...
, that agency is told by the Federal Reserve how much to print. The Federal Reserve also does "regulate the value" of the U.S. Dollar through its various operations, as authorized by Congress.
Others contend that, since Congress passed the Federal Reserve Act, the Federal Reserve is constitutional as it was created by Congress and Congress retains oversight over the Federal Reserve. Congress retains the ability to delegate some of its legislative powers to other branches of the government or agencies based on the U.S. Supreme Court's interpretation of the
nondelegation doctrineThe doctrine of nondelegation describes the theory that one branch of government must not authorize another entity to exercise the power or function which it is constitutionally authorized to exercise itself. It is explicit or implicit in all written constitutions that impose a strict structural...
.
Series overview
Large-size notes
| Series |
Denominations |
Obligation clause |
| 1914 |
$5, $10, $20, $50, $100 |
This note is receivable by all national and member banks and Federal Reserve Banks and for all taxes, customs and other public dues. It is redeemable in gold on demand at the Treasury Department of the United States in the city of Washington, District of Columbia or in gold or lawful money at any Federal Reserve Bank. |
| 1918 |
$500, $1000, $5000, $10 000 |
Small-size notes
| Series |
Denominations |
Obligation clause |
Remarks |
1928The Series of 1928 was the first issue of small-size currency printed and released by the U.S. government. These notes were the first standardized notes in terms of design and characteristics, featuring similar portraits and other facets...
|
$5, $10, $20, $50, $100, $500, $1000, $5000, $10 000 |
Redeemable in gold on demand at the United States Treasury, or in gold or lawful money at any Federal Reserve Bank |
Branch ID in numerals |
| 1934 |
This note is legal tender for all debts, public and private, and is redeemable in lawful money at the United States Treasury, or at any Federal Reserve Bank |
Branch ID in letters; during the Great Depression The Great Depression was a severe worldwide economic depression in the decade preceding World War II. The timing of the Great Depression varied across nations, but in most countries it started in about 1929 and lasted until the late 1930s or early 1940s...
|
| 1950 |
$5, $10, $20, $50, $100 |
Slight design changes: branch logo; placements of signatures, "Series xxxx", and "Washington, D.C.", |
| 1963, 1969, 1969A,1969B,1969C, 1974 |
$1, $5, $10, $20, $50, $100 |
This note is legal tender for all debts, public and private |
First $1 FRN; "Will pay to the bearer on demand" removed; Seal in Latin replaced by seal in English in 1969 |
| 1976 |
$2 |
First $2 FRN, Bicentennial The United States Bicentennial was a series of celebrations and observances during the mid-1970s that paid tribute to the historical events leading up to the creation of the United States as an independent republic...
|
| Series | Denominations | | Obligation clause |
| 1977, 1977A, 1981, 1981A, 1985, 1988, 1988A |
$1, $5 |
This note is legal tender for all debts, public and private |
| 1977, 1977A, 1981, 1981A, 1985, 1988A |
$10, $20 |
| 1977, 1981, 1981A, 1985, 1988 |
$50, $100 |
| 1990 |
$10, $20, $50, $100 |
| 1993 |
$1, $5, $10, $20, $50, $100 |
| 1995 |
$1, $2, $5, $10, $20 |
| Large-portrait ($1 and $2 remain small-portrait) |
| 1996 |
$20, $50, $100 |
| 1999, 2001 |
$1, $5, $10, $20, $50, $100 |
| 2003 |
$1, $2, $5, $10, $100 |
| 2003A |
$1, $2, $5, $100 |
| 2006 |
$5, $100 |
| Color notes ($1 and $2 remain unchanged) |
| 2004 |
$20, $50 |
| 2004A |
$10, $20, $50 |
| 2006 |
$1, $5, $10, $20, $50 |
| 2006A |
$100 |
| 2009 |
$1, $10, $20, $100 |
Series 1928–1995
| Small size notes |
| Image | Value | Description | Date of |
| Obverse | Reverse | Obverse | Reverse | first series | last series |
 |
 |
$1The United States one-dollar bill is the most common denomination of US currency. The first president, George Washington, painted by Gilbert Stuart, is currently featured on the obverse, while the Great Seal of the United States is featured on the reverse. The one-dollar bill has the oldest...
|
George WashingtonGeorge Washington was the dominant military and political leader of the new United States of America from 1775 to 1799. He led the American victory over Great Britain in the American Revolutionary War as commander-in-chief of the Continental Army from 1775 to 1783, and presided over the writing of...
|
Great Seal of the United StatesThe Great Seal of the United States is used to authenticate certain documents issued by the United States federal government. The phrase is used both for the physical seal itself , and more generally for the design impressed upon it...
|
1963 |
current (2009) |
 |
 |
$2 The United States two-dollar bill is a current denomination of US currency. President Thomas Jefferson is featured on the obverse of the note...
|
Thomas JeffersonThomas Jefferson was the principal author of the United States Declaration of Independence and the Statute of Virginia for Religious Freedom , the third President of the United States and founder of the University of Virginia...
|
Trumbull's Declaration of IndependenceJohn Trumbull's Declaration of Independence is a 12-by-18-foot oil-on-canvas painting in the United States Capitol Rotunda that depicts the presentation of the draft of the Declaration of Independence to Congress...
|
1976 |
current (2003A) |
 |
|
$5The United States five-dollar bill or fiver is a denomination of United States currency. The $5 bill currently features U.S. President Abraham Lincoln's portrait on the front and the Lincoln Memorial on the back. All $5 bills issued today are Federal Reserve Notes...
|
Abraham LincolnAbraham Lincoln was the 16th President of the United States, serving from March 1861 until his assassination in April 1865. He successfully led his country through a great constitutional, military and moral crisis – the American Civil War – preserving the Union, while ending slavery, and...
|
Lincoln MemorialThe Lincoln Memorial is an American memorial built to honor the 16th President of the United States, Abraham Lincoln. It is located on the National Mall in Washington, D.C. The architect was Henry Bacon, the sculptor of the main statue was Daniel Chester French, and the painter of the interior...
|
1928 |
1995 |
 |
 |
$10 The United States ten-dollar bill is a denomination of United States currency. The first U.S. Secretary of the Treasury, Alexander Hamilton, is currently featured on the obverse of the bill, while the U.S. Treasury is featured on the reverse. The United States ten-dollar bill ($10) is a...
|
Alexander HamiltonAlexander Hamilton was a Founding Father, soldier, economist, political philosopher, one of America's first constitutional lawyers and the first United States Secretary of the Treasury...
|
United States Department of the TreasuryThe Department of the Treasury is an executive department and the treasury of the United States federal government. It was established by an Act of Congress in 1789 to manage government revenue...
Building |
 |
|
$20The United States twenty-dollar bill is a denomination of United States currency. U.S. President Andrew Jackson is currently featured on the front side of the bill, which is why the twenty-dollar bill is often called a "Jackson," while the White House is featured on the reverse side.The...
|
Andrew JacksonAndrew Jackson was the seventh President of the United States . Based in frontier Tennessee, Jackson was a politician and army general who defeated the Creek Indians at the Battle of Horseshoe Bend , and the British at the Battle of New Orleans...
|
White HouseThe White House is the official residence and principal workplace of the president of the United States. Located at 1600 Pennsylvania Avenue NW in Washington, D.C., the house was designed by Irish-born James Hoban, and built between 1792 and 1800 of white-painted Aquia sandstone in the Neoclassical...
|
 |
 |
$50The United States fifty-dollar bill is a denomination of United States currency. Ulysses S. Grant is currently featured on the obverse, while the U.S. Capitol is featured on the reverse. All current-issue $50 bills are Federal Reserve Notes....
|
Ulysses S. GrantUlysses S. Grant was the 18th President of the United States as well as military commander during the Civil War and post-war Reconstruction periods. Under Grant's command, the Union Army defeated the Confederate military and ended the Confederate States of America...
|
United States CapitolThe United States Capitol is the meeting place of the United States Congress, the legislature of the federal government of the United States. Located in Washington, D.C., it sits atop Capitol Hill at the eastern end of the National Mall...
|
1993 |
 |
 |
$100 The United States one hundred-dollar bill is a denomination of United States currency. U.S. statesman, inventor and diplomat Benjamin Franklin is currently featured on the obverse of the bill. On the reverse of the banknote is an image of Independence Hall. The time on the clock according to the...
|
Benjamin Franklin Dr. Benjamin Franklin was one of the Founding Fathers of the United States. A noted polymath, Franklin was a leading author, printer, political theorist, politician, postmaster, scientist, musician, inventor, satirist, civic activist, statesman, and diplomat...
|
Independence Hall |
 |
 |
$500The base currency of the United States is the U.S. dollar, and is printed on bills in denominations of $1, $2, $5, $10, $20, $50, and $100.At one time, however, it also included five larger denominations. High-denomination currency was prevalent from the very beginning of U.S. Government issue...
|
William McKinleyWilliam McKinley, Jr. was the 25th President of the United States . He is best known for winning fiercely fought elections, while supporting the gold standard and high tariffs; he succeeded in forging a Republican coalition that for the most part dominated national politics until the 1930s...
|
"Five Hundred Dollars" |
1934 |
 |
 |
$1000The base currency of the United States is the U.S. dollar, and is printed on bills in denominations of $1, $2, $5, $10, $20, $50, and $100.At one time, however, it also included five larger denominations. High-denomination currency was prevalent from the very beginning of U.S. Government issue...
|
Grover ClevelandStephen Grover Cleveland was the 22nd and 24th president of the United States. Cleveland is the only president to serve two non-consecutive terms and therefore is the only individual to be counted twice in the numbering of the presidents...
|
"One Thousand Dollars" |
 |
 |
$5000The base currency of the United States is the U.S. dollar, and is printed on bills in denominations of $1, $2, $5, $10, $20, $50, and $100.At one time, however, it also included five larger denominations. High-denomination currency was prevalent from the very beginning of U.S. Government issue...
|
James MadisonJames Madison, Jr. was an American statesman and political theorist. He was the fourth President of the United States and is hailed as the “Father of the Constitution” for being the primary author of the United States Constitution and at first an opponent of, and then a key author of the United...
|
"Five Thousand Dollars" |
 |
 |
$10 000The base currency of the United States is the U.S. dollar, and is printed on bills in denominations of $1, $2, $5, $10, $20, $50, and $100.At one time, however, it also included five larger denominations. High-denomination currency was prevalent from the very beginning of U.S. Government issue...
|
Salmon P. ChaseSalmon Portland Chase was an American politician and jurist who served as U.S. Senator from Ohio and the 23rd Governor of Ohio; as U.S. Treasury Secretary under President Abraham Lincoln; and as the sixth Chief Justice of the United States Supreme Court.Chase was one of the most prominent members...
|
"Ten Thousand Dollars" |
Series 1996–2006
| Small size notes |
| Image | Value | Description | series |
| Obverse | Reverse | Obverse | Reverse | first | last |
 |
 |
$5The United States five-dollar bill or fiver is a denomination of United States currency. The $5 bill currently features U.S. President Abraham Lincoln's portrait on the front and the Lincoln Memorial on the back. All $5 bills issued today are Federal Reserve Notes...
|
As small-size, small-portrait notes |
1999 |
2006 |
 |
 |
$10 The United States ten-dollar bill is a denomination of United States currency. The first U.S. Secretary of the Treasury, Alexander Hamilton, is currently featured on the obverse of the bill, while the U.S. Treasury is featured on the reverse. The United States ten-dollar bill ($10) is a...
|
2003 |
| |
|
$20The United States twenty-dollar bill is a denomination of United States currency. U.S. President Andrew Jackson is currently featured on the front side of the bill, which is why the twenty-dollar bill is often called a "Jackson," while the White House is featured on the reverse side.The...
|
1996 |
2001 |
| |
|
$50The United States fifty-dollar bill is a denomination of United States currency. Ulysses S. Grant is currently featured on the obverse, while the U.S. Capitol is featured on the reverse. All current-issue $50 bills are Federal Reserve Notes....
|
 |
 |
$100 The United States one hundred-dollar bill is a denomination of United States currency. U.S. statesman, inventor and diplomat Benjamin Franklin is currently featured on the obverse of the bill. On the reverse of the banknote is an image of Independence Hall. The time on the clock according to the...
|
2006 A |
Post-2004 redesigned series
Beginning in 2003, the Federal Reserve introduced a new series of bills, featuring images of national symbols of freedom. The new $20 bill was first issued on October 9, 2003; the new $50 on September 28, 2004; the new $10 bill on March 2, 2006; the new $5 on March 13, 2008. Introduction of a new $100 had been repeatedly delayed, but was revealed on April 21, 2010.
| Color series |
| Images |
Value | Background color | Description | Date of |
| Obverse | Reverse | Obverse | Reverse | Watermark | first series | Issue |
 |
 |
$5The United States five-dollar bill or fiver is a denomination of United States currency. The $5 bill currently features U.S. President Abraham Lincoln's portrait on the front and the Lincoln Memorial on the back. All $5 bills issued today are Federal Reserve Notes...
|
PurplePurple is a range of hues of color occurring between red and blue, and is classified as a secondary color as the colors are required to create the shade....
|
President Abraham LincolnAbraham Lincoln was the 16th President of the United States, serving from March 1861 until his assassination in April 1865. He successfully led his country through a great constitutional, military and moral crisis – the American Civil War – preserving the Union, while ending slavery, and...
; Great Seal of the United StatesThe Great Seal of the United States is used to authenticate certain documents issued by the United States federal government. The phrase is used both for the physical seal itself , and more generally for the design impressed upon it...
|
Lincoln MemorialThe Lincoln Memorial is an American memorial built to honor the 16th President of the United States, Abraham Lincoln. It is located on the National Mall in Washington, D.C. The architect was Henry Bacon, the sculptor of the main statue was Daniel Chester French, and the painter of the interior...
|
Two Watermarks of the Number "5" |
2006 |
March 13, 2008 |
 |
 |
$10 The United States ten-dollar bill is a denomination of United States currency. The first U.S. Secretary of the Treasury, Alexander Hamilton, is currently featured on the obverse of the bill, while the U.S. Treasury is featured on the reverse. The United States ten-dollar bill ($10) is a...
|
OrangeThe colour orange occurs between red and yellow in the visible spectrum at a wavelength of about 585–620 nm, and has a hue of 30° in HSV colour space. It is numerically halfway between red and yellow in a gamma-compressed RGB colour space, the expression of which is the RGB colour wheel. The...
|
Secretary Alexander HamiltonAlexander Hamilton was a Founding Father, soldier, economist, political philosopher, one of America's first constitutional lawyers and the first United States Secretary of the Treasury...
; The phrase "We the People" from the United States ConstitutionThe Constitution of the United States is the supreme law of the United States of America. It is the framework for the organization of the United States government and for the relationship of the federal government with the states, citizens, and all people within the United States.The first three...
and the torch of the Statue of LibertyThe Statue of Liberty is a colossal neoclassical sculpture on Liberty Island in New York Harbor, designed by Frédéric Bartholdi and dedicated on October 28, 1886...
|
United States Department of Treasury Building |
Alexander Hamilton |
2004 A |
March 2, 2006 |
 |
 |
$20The United States twenty-dollar bill is a denomination of United States currency. U.S. President Andrew Jackson is currently featured on the front side of the bill, which is why the twenty-dollar bill is often called a "Jackson," while the White House is featured on the reverse side.The...
|
GreenGreen is a color, the perception of which is evoked by light having a spectrum dominated by energy with a wavelength of roughly 520–570 nanometres. In the subtractive color system, it is not a primary color, but is created out of a mixture of yellow and blue, or yellow and cyan; it is considered...
|
President Andrew JacksonAndrew Jackson was the seventh President of the United States . Based in frontier Tennessee, Jackson was a politician and army general who defeated the Creek Indians at the Battle of Horseshoe Bend , and the British at the Battle of New Orleans...
; EagleEagles are members of the bird family Accipitridae, and belong to several genera which are not necessarily closely related to each other. Most of the more than 60 species occur in Eurasia and Africa. Outside this area, just two species can be found in the United States and Canada, nine more in...
|
White HouseThe White House is the official residence and principal workplace of the president of the United States. Located at 1600 Pennsylvania Avenue NW in Washington, D.C., the house was designed by Irish-born James Hoban, and built between 1792 and 1800 of white-painted Aquia sandstone in the Neoclassical...
|
Andrew Jackson |
2004 |
October 9, 2003 |
 |
 |
$50The United States fifty-dollar bill is a denomination of United States currency. Ulysses S. Grant is currently featured on the obverse, while the U.S. Capitol is featured on the reverse. All current-issue $50 bills are Federal Reserve Notes....
|
PinkPink is a mixture of red and white. Commonly used for Valentine's Day and Easter, pink is sometimes referred to as "the color of love." The use of the word for the color known today as pink was first recorded in the late 17th century....
|
President Ulysses S. GrantUlysses S. Grant was the 18th President of the United States as well as military commander during the Civil War and post-war Reconstruction periods. Under Grant's command, the Union Army defeated the Confederate military and ended the Confederate States of America...
; Flag of the United StatesThe national flag of the United States of America consists of thirteen equal horizontal stripes of red alternating with white, with a blue rectangle in the canton bearing fifty small, white, five-pointed stars arranged in nine offset horizontal rows of six stars alternating with rows...
|
United States CapitolThe United States Capitol is the meeting place of the United States Congress, the legislature of the federal government of the United States. Located in Washington, D.C., it sits atop Capitol Hill at the eastern end of the National Mall...
|
Ulysses S. Grant |
2004 |
September 28, 2004 |
| |
|
$100 The United States one hundred-dollar bill is a denomination of United States currency. U.S. statesman, inventor and diplomat Benjamin Franklin is currently featured on the obverse of the bill. On the reverse of the banknote is an image of Independence Hall. The time on the clock according to the...
|
Teal Teal may mean:* Teal , a medium greenish-blue color* Various ducks:** Baikal Teal, Anas formosa** Black Teal, Aythya novaeseelandiae** Blue-winged Teal, Anas discors** Brown Teal, Anas aucklandica** Campbell Teal Anas nesiotis...
|
Benjamin Franklin Dr. Benjamin Franklin was one of the Founding Fathers of the United States. A noted polymath, Franklin was a leading author, printer, political theorist, politician, postmaster, scientist, musician, inventor, satirist, civic activist, statesman, and diplomat...
; Declaration of IndependenceThe Declaration of Independence was a statement adopted by the Continental Congress on July 4, 1776, which announced that the thirteen American colonies then at war with Great Britain regarded themselves as independent states, and no longer a part of the British Empire. John Adams put forth a...
|
Independence HallIndependence Hall is the centerpiece of Independence National Historical Park located in Philadelphia, Pennsylvania, United States, on Chestnut Street between 5th and 6th Streets...
|
Benjamin Franklin |
2009 |
To be announced |
|
All small-sized bills measure 6.14 ×.
See also
- Coins of the United States dollar
- Bureau of Engraving and Printing
The Bureau of Engraving and Printing is a government agency within the United States Department of the Treasury that designs and produces a variety of security products for the United States government, most notable of which is paper currency for the Federal Reserve. The Federal Reserve itself is...
External links