United States Paper Money Collection United States Paper Money Collection
| [ Last Update: Monday, 14-Feb-2011 12:18:01 EST ] |
On July 14, 1969, David M. Kennedy, the 60th Secretary of the Treasury, and officials at the Federal Reserve Board announced that they would immediately stop distributing currency in denominations of $500, $1,000, $5,000 and $10,000. Production of these denominations stopped during World War II. Their main purpose was for bank transfer payments. With the arrival of more secure transfer technologies, however, they were no longer needed for that purpose. While these notes are legal tender and may still be found in circulation today, the Federal Reserve Banks remove them from circulation and destroy them as they are received.
The text of the press release is provided below.
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TREASURY DEPARTMENT (THIS IS A SIMULTANEOUS RELEASE BY TREASURY AND FEDERAL RESERVE SYSTEM) LARGE DENOMINATIONS OF CURRENCY TO BE DISCONTINUED The Treasury Department and the Federal Reserve System announced today that the issuance of currency in denominations of $500, $1,000, $5,000, and $10,000 will be discontinued immediately. Use of these large denominations has declined sharply over the last two decades and the need for them appears insufficient to warrant the added cost of production and custody of new supplies. The large denomination notes were first authorized primarily for interbank transactions by an amendment to the Federal Reserve Act in 1918. With demand for them shrinking, printings of new notes of these denominations were discontinued in 1946, and the supply that was on hand at that time has now diminished to the point where continued issuance of such notes would require additional printings. Surveys have indicated that transactions for which the large denomination notes have been used could be met by other means, such as checks or $100 notes. Under the decision announced today all existing supplies of large denomination bills at the Federal Reserve Banks will be turned over to the Treasury for destruction as will circulating notes that find their way back to the Federal Reserve Banks in the normal course of business. The Federal Reserve will continue to issue notes in denominations of $1, $5, $10, $20, $50, and $100. Currency comprises only about 25 percent of the nation's money supply, the vast bulk of which is made up of demand deposits (checking accounts).
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