Can someone fill me in? I honestly thought gold certs were superseded by FRNs after FDR instituted gold confiscation in 1933. Now I find a FRN from 1914 (Series) which means they co-existed. Were they really considered of equal value to gold certs??!! If not, why didn't Gresham's Law apply? TIA to anyone who can shed light on this!
There is an overlap. FRNs were created with the Federal Reserve Act of 1913 that established a central bank that was in charge of the monetary system. There were already a large number of different types of money being circulated. I'm not sure how Gresham's Law would apply with so many kinds of currency. Federal Reserve Notes, Federal Reserve Bank Notes, National Bank Notes and National Gold Bank Notes, Legal Tender Notes, Refunding Certificates, Interest Bearing Notes, Silver Certificates, Gold Certificates, Treasury (Coin) Notes, and a plethora of different coins. I think that gold certificates and silver certificates were used frequently because of the profit loop available for some time. Correct me if I'm wrong, but I think it went something like this: in the late 1800s, the government bought back silver in exchange for silver certificates at less than the exchange rate. People would then take the silver certificates, exchange them for gold certificates and change those into gold for face value. Then they could trade the gold for silver and continue this loop.
