OK, we've discussed this before, and I think most here know what is fit versus unfit, but I figured since I stumbled across this, I might as well post it. This is the Federal Reserve's "Fitness Guidelines for Federal Reserve Notes" One thing that caught my attention, they only list $5's, $10's, and $20's prior to 1996 as being unfit. No mention of $50's or $100's in that section. Also no mention of $2's either, so wonder if that really means that United States Notes are destroyed or recirculated. http://www.frbservices.org/Cash/pdf/FRB_Fitness_guidelines.pdf New file location http://www.frbservices.org/files/operations/pdf/FRB_Fitness_guidelines.pdf
wow! it says the note is available for 'redistribution' if it meets the following critera: "Is a series-design approved for recirculation (old series-design notes are considered unfit after a certain period of time in circulation) WOW, as you put it "striaght from the horses mouth"!!!! i want to work for them, and have the notes run through MY detection scanneres they destroy god knows how many notes .. how mnay old legal tender notes, or silver certificates..... my head hurts thiking about it!!!!!!
My guess is that the rate of incidence for older notes such as legal tenders, silver certificates, gold certificates, etc... is low enough that it's more cost effective to kick them out with the counterfeits and manually verify their genuineness. That's why I think it would be more cost effective for the FRN and the US Treasurer (for notes that are obligations of the US Government) to use the BEP's website to re-sell these notes, even if they resell them in bulk lots. If they destroy the note, they get nothing for it. If they sell it, the get more than face value and it's more than likely still removed from circulation. I always see the statement that the US Treasurer meets the obligation to keep a minimum value of US Notes (legal tenders) in circulation via red seal $100 bills. This makes me wonder if they do in fact send small size $100 legal tenders back out into circulation.
If they destroy the note, they lose money, becuse they have to replace it with a new note. I have wondered about the old obligation to keep a certain amount of legal tender notes in circulation, but for some reason i thouhgt that was repealed a while back....
Current publications of books on US notes still reiterate the requirement as a piece of entertaining trivia. My guess is that it will remain in place until the number of notes destroyed exceeds a certain threshhold. As we know, fewer and fewer get cashed in every year.
It would appear that they moved the file. http://www.frbservices.org/files/operations/pdf/FRB_Fitness_guidelines.pdf
No, it's because that FRB document only discusses $5, $10, and $20 notes. (Notice that it only lists wear standards for those three denominations, too; that doesn't mean $50's and $100's can be arbitrarily worn and still circulate.) Just by watching how quickly the old-style notes disappeared from circulation, it's clear that the small-head $50's and $100's were retired by the Fed. In 1995 it was easy to pull even 1934 $100's from circulation; now it's tough to find anything pre-1996. Interestingly, the 1996-generation notes don't seem to be getting the same treatment; there are still plenty of pre-Kodachrome $20's out there, even four-plus years after the Kodachrome version was issued. My guess is that this reflects the fact that the Kodachrome redesign was primarily cosmetic and did not represent a major increase in security the way the 1996 redesign did. (Oh, and about the red-seal-$100-note topic higher up this thread: the requirement for USNs to be kept in circulation was repealed in 1994. Currency books are horrible about updating those "trivia" sections. Until quite recently, many of them still pointed out that a star note was used for the 100,000,000th note of each block--despite the fact that blocks of 100,000,000 notes haven't been used since 1977.)
I'm guessing that it focused on those three because now the Fed charges a fee for cross-shipping fit $10's and $20's and was in discussions on whether to charge the fee for $5's.
