What Are United States Notes?
As you may know, both United States notes and Federal Reserve notes are part of our national currency and are legal tender. Both circulate as money in the same way. However, the issuing authority for them comes from different statutes.
United States notes were the first national currency, authorized by the Legal Tender Act of 1862 and began circulating during the Civil War. The Treasury Department issues these notes directly, and they are obligations of the United States Government. The issuance of United States notes is subject to limitations established by Congress. It established a statutory limitation of $300 million on the amount of United States notes authorized to be outstanding and in circulation. While this was a significant figure in Civil War days, it is now a very small fraction of the total currency in circulation in the United States. Presently, the Treasury Department issues United States notes in the $100 denomination only. Issuance of the $2 denomination stopped in 1966 and the $5 denomination stopped in 1969.
The Federal Reserve Act of 1913 authorized the production and circulation of Federal Reserve notes. Although the BEP prints these notes, they move into circulation through the Federal Reserve System. They are obligations of both the Federal Reserve System and the United States Government. On Federal Reserve notes, the seals and serial numbers appear in green.
United States notes serve no function that is not already adequately served by Federal Reserve notes. As a result, the Treasury Department stopped issuing United States notes, and none have been placed into circulation since January 21, 1971.