Trying to learn so don't shoot me for this (likely) stupid question:
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What is the difference between a red seal and a blue seal note from the 1950s and before? I'm going to be trying to pick up a few books on this stuff to learn a bit more on my own but I hope you guys will humor me on this one. I'm confused. ???

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I'm far from an expert on paper but here goes.

 

The Red Seal notes are United States Notes and are the decendants of the Legal Tender notes of 1862. They are legal tender but had no real backing. The backing behind the notes were simply more government securities on deposit with the Treasury. (The only real difference between the United States notes and the Federal Reserve Notes is the authority issuing them, either the Treasury (red seals) or the Federal Reserve (green seals) )

 

The Blue Seals are Silver certificates and for each dollar in silver certificates issued there was on deposit with the Treasury one dollars worth of silver at the official rate of $1.2929 per oz or just about .7734 oz of silver. In theory the silver certificates could be redeemed for silver on demand. For the most part they never were because for most of the late 19th century and the first 60 years of the 20th century silver was WELL below $1.2929 an oz so they were worth more as money than for the metal backing them. Then in the early sixties silver rose above the $1.2929 level and that, combined with the fact that many rare date pieces started being discovered, resulted in a run on the Treasury to exchange the silver certificates for silver dollars. As the stockpile of dollars was bottoming out in 1964 the Treasury cut off redeeming the notes for dollar coins and then you could only get either granules or bars for larger amounts. Finally in 1968 with silver still rising the cut off redemption altogether. The notes were still legal tender but were no longer backed by silver.

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Keep in mind that conder's excellent post really applies only to modern small size notes. In large size notes, there are Federal Reserve notes with blue or red seals, silver certificates with blue or red seals and national bank notes with blue or red seals, but if I recall, the Legal Tender (United States Notes) all had red seals like the small size, though there may be exceptions that I am not aware of.

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