The Federal Reserve Act of 1913 created the Federal Reserve Bank and the issuance of United States currency passed from the United States government to the Federal Reserve Bank. These were still notes, payable in dollars (silver) or gold coin to the bearer on demand. In 1922, the words, "is legal tender… in payment of all debts and dues public and private.." were added.
This depicts a ten dollar federal reserve note, series of 1914, shortly after the Federal Reserve Bank was created.
This says that "The United States of America will pay to the bearer on demand ten dollars." Note that
the "silver" has been dropped from "silver dollars."
In 1933, Franklin Roosevelt said that private ownership of gold was "contrary to public policy" and issued
a decree which made it illegal for most Americans to own gold or gold certificates. American citizens were required
to turn in their gold for silver certificates at the rate of $35 per ounce. As of 1949 (the last official tally),
some 702 million Troy ounces of gold were held by the US government at Fort Knox. Click here to find out what
happened to all of that gold.
Federal Reserve notes were still payable on demand but were payable in dollars (silver). As of 1963, Federal Reserve
notes dropped the "payable to the bearer on demand." In 1965, silver certificates remaining in circulation
were called in and coins for 1965 and later have not been made from silver. Needless to say, silver coins disappeared
from circulation within a few months. (Gresham's Law: Bad money drives out good money.)
This depicts a Federal Reserve note that you use today. It does not have a payee, a due date, or an amount that
is to be paid in money. Hence, it is NOT a note. It contains the words "This note is legal tender for all
debts public and private." This means that Federal Reserve notes have value only by government edict and,
by our definition of money, cannot be considered as proper money. Federal Reserve notes serve as a medium of exchange
thru a dictate of the US government and are commonly referred to as money.
Click here
to find out who owns the Federal Reserve Bank.