The $10,000 bill is a denomination of United States currency that was printed by the Bureau of Engraving and Printing from 1934 to 1945. However, this large denomination bill was only used for transactions between Federal Reserve Banks and was not circulated among the general public. The $10,000 bill featured a portrait of Salmon P. Chase, who served as the Secretary of the Treasury under President Abraham Lincoln during the American Civil War.
Why was the $10,000 bill created?
The $10,000 bill was created in 1918 as a result of legislation passed to allow the Department of the Treasury to print large denomination currency during World War I. The purpose was to facilitate large financial transactions between banks and government institutions. However, the original run of $10,000 bills in 1918 were not released to the public and were mainly used for transactions between Federal Reserve banks.
In the aftermath of the 1929 stock market crash and subsequent depression, large denomination currency notes gained more use. As banks failed, the Federal Reserve issued more $10,000 bills to shore up the economy and large private transactions began utilizing the high denomination notes.
1934 series $10,000 bill
In 1934, the U.S. Treasury Department issued a new $10,000 bill as part of Series 1934. This redesigned large denomination currency featured Salmon P. Chase, who served as Secretary of the Treasury from 1861 to 1864 during the Civil War era. As Treasury Secretary, Chase oversaw the creation of the modern American financial system, establishing a national bank and national currency. Having Chase on the $10,000 bill was intended to inspire confidence in the country’s financial system after the Depression.
Why was the $10,000 bill discontinued?
The $10,000 bill was discontinued in 1969 under an initiative by the Federal Reserve to combat organized crime. The thinking was that large denomination bills made it easier for criminals to launder money and complete illegal transactions. As a result, the Federal Reserve made the decision to stop distributing $10,000, $5,000, $1,000, and $500 bills, which halted production of the $10,000 bill.
Existing $10,000 bills remained legal tender, but most were removed from circulation. Some bills made their way into private collectors’ hands. Today, an estimated 165 $10,000 bills from the 1934 series are known to still exist.
Declining usage
While the $10,000 bill was initially created out of necessity for large financial transactions, its usage had significantly declined by the time it was discontinued in 1969. Some key reasons for declining usage:
- Fewer private transactions large enough to necessitate such a high denomination bill
- Rarely used by general commercial banks or for savings
- Growth in electronic funds transfer reduced need for physical currency transactions
- Lower denomination bills like $100 were sufficient for most banks
The Federal Reserve estimated that 60% of all $10,000 bills in circulation were held by banks in vault cash or on deposit with the Federal Reserve Banks. Beyond banks, usage was limited mostly to illegal transactions.
Should the U.S. consider reintroducing the $10,000 bill?
While there have been some calls to bring higher denomination bills back, most economists and policymakers argue against reintroducing a $10,000 bill for the following reasons:
- It would likely facilitate money laundering and tax evasion
- The $100 bill is a large enough denomination for legal commerce
- Electronic transactions have further reduced need for physical high value currency
- The U.S. has kept the $100 as its largest denomination while most countries’ max out below $100
- Criminals could still use alternative stores of high value, like gold and diamonds
However, some argue a limited release of new $10,000 bills could generate a one-time revenue source for the government through notes sold to collectors at a premium. There are also arguments around inflation prevention and convenience for large financial transactions.
Possible rationale for reintroduction
- Commemorative or limited release to collectors could raise government revenue
- Makes large cash transactions easier for banks and financial institutions
- Could help prevent erosion of money’s value due to inflation over time
Conclusion
In summary, the $10,000 bill was a high denomination currency printed sporadically from 1918 to 1945 featuring Salmon P. Chase. Its usage declined markedly after World War II. Big bills were seen as facilitating criminal activity so the Federal Reserve officially discontinued the denomination in 1969. While the $10,000 bill represented an interesting chapter in American financial history and serves as a collectible today, it is unlikely to be reintroduced as a circulating currency given modern economic realities and policies.