$1,000 Federal Reserve Notes are Popular Collectibles With a Long History

Although no longer found in circulation, high-value Federal Reserve Notes in denominations of $500, $1,000, $5,000, and $10,000 were once issued by the United States. These notes remain legal tender but are much more valuable as collectibles, even in circulated grades.

A Short History of the $1,000 Bill

The $1,000 bill was first issued following the passage of the Act of February 25, 1862 – also known as the Legal Tender Act of 1862. The Legal Tender Act of 1862 was a landmark piece of legislation that reshaped the nation’s monetary system during a time of crisis. The law introduced paper currency–commonly known as “greenbacks”–as legal tender for the first time in the United States and addressed the urgent need for funding the Union’s war efforts against the Confederacy.

By 1861, the Civil War had plunged the nation into financial turmoil. The Federal Government faced escalating costs to equip soldiers, build and maintain infrastructure, and sustain the war effort. Traditional revenue sources like taxes and loans proved insufficient. At the time, the U.S. monetary system relied heavily on gold and silver coins, backed by the specie standard. However, hoarding and a precious metal shortage crippled the economy, making it nearly impossible for the Government to pay its debts or soldiers. Even ordinary Americans found it difficult to carry out ordinary transactions.

Congress and President Abraham Lincoln, recognized the need for a flexible currency to meet these demands. The Legal Tender Act of 1862 emerged as a bold solution, authorizing the issuance of paper money that citizens and businesses were required to accept as payment for debts, taxes, and transactions.

The Legal Tender Act empowered the U.S. Treasury to issue $150 million in United States Notes, a form of fiat currency not backed by gold or silver but by the Government’s credit. By war’s end, Congress authorized the printing of hundreds of millions of additional notes. These notes were declared legal tender for all public and private debts, except for customs duties and interest on government bonds, which still required payment in specie. This marked a significant departure from the gold standard.

Three $1,000 Legal Tender Note designs were issued. The first type featured a portrait of Robert Morris (pictured above), while the second and third styles featured a portrait of New York City Mayor DeWitt Clinton.

The proliferation of fiat money proved inflationary, taking more than a decade after the war’s end for the United States to resume payment in specie. By then, the issuance of paper money remained a constant in American life. Most notes were issued by banks, but a series of reforms brought the business of making paper money back to the Federal Government, which lead to the Federal Reserve Notes that we spend today.

The $1,000 Federal Reserve Note

The first $1,000 Federal Reserve Notes were issued under the authority of the Federal Reserve Act of 1913. This law, born out of a financial panic that had raged just a few years earlier, established a Federal Reserve System to serve as the country’s central bank. The first notes that it issued measured 7‑3/8 x 3‑1/8 inches. The notes’ large size earned them the popular nickname “horseblankets”. The large-sized $1,000 Federal Reserve Note featured a portrait of Alexander Hamilton – the same portrait that would be used on the small-sized $10!

These notes are rare in all conditions and series and feature three signature combinations: Burke-Glass, Burke-Houston, and White-Mellon. The bill imaged above has a value of about $40,000.

In 1929, the Federal Reserve reduced the size of U.S. currency to its current size of 6.14 x 2.61 inches. production of $1,000 bills continued in the new smaller size, with notes being issued by the Federal Reserve Bank branches at Atlanta, Boston, Chicago, Cleveland, Dallas, Kansas City, Minneapolis, New York, Philadelphia, Richmond, San Francisco, and St. Louis. The first series, the Series of 1928 notes, features the signature combination of Woods and Mellon. The value of these notes start at about $3,000 in circulated condition and exceeds $10,000 for examples in crisp uncirculated condition.

The small-sized $1,000 Federal Reserve Note featured an entirely new design. Hamilton’s portrait was replaced by President Grover Cleveland and the guilloché pattern was made more intricate on both sides of the bill. It was produced through 1946, with the final signature combination being that of Julian and Snyder. However, according to Bureau of Engraving and Printing records only 1,368 of these notes were produced and none have ever appeared. The prior series, featuring the signatures of Julian and Morgenthau were produced through 1945.

Despite not bring printed since 1945/46, the $1,000 Federal Reserve Note was distributed until July 14, 1969, when the Department of the Treasury and the Federal Reserve System announced that the $500, $1,000, $5,000, and $10,000 bills would be discontinued immediately due to lack of use.

For those who could afford to put away such high value denominations, the hunt was on. The $1,000 Federal Reserve Note remains legal tender, although the note’s face value purchasing power is significantly diminished since its issue. According the Bureau of Labor Statistics, $1,000 in 1945 had the same purchasing power as $17,847 dollars today.

As a collectible, examples of the small-size $1,000 Federal Reserve Note trade on eBay in average circulated condition for $3,000 and up. It’s advisable either to buy one from a reputable currency dealer or to choose notes certified by PMG or PCGS Banknote, as these notes have been tested for authenticity and alterations.

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