Silver Certificates
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Silver Certificates were created by Act of Congress on February 28, 1878. This was a response to "Free Silver" agitation. If the partisans of inflation could not get paper currency, then retaining the monetary status of silver seemed like the next best choice. Putting the United States on the Gold Standard in 1873 (the "Crime of 1873") had set off the controversy. But while the United States was never formally off the Gold Standard, Congress did respond to Free Silver forces with various laws for the Treasury to purchase and coin silver (as dollars, on the 1837 weight). This continued for many years after 1878, though fatal blows were dealt against it by Grover Cleveland, who was a hard money Democrat, and the defeat of William Jennings Bryan in 1896. While Bryan contended that ordinary people were being crucified on a "Cross of Gold," he ended upon crucified on his Cross of Silver.
Although cowboys may have liked silver dollars, heavy coins were never popular with most people. Silver Certificates therefore allowed the Treasury to mint its silver dollars, let them sit, and just issue paper instead. Silver Certificates originally were in denominations up to $1000; but after 1896, notes were kept to $10 and under. The Series 1896 $1, $2, and $5 Silver Certificates were the stunning and celebrated "Educational Series," featuring various allegorical designs, such as "History instructing youth" on the $1 [& reverse]. These rare and valuable notes have probably the most elaborate designs (subsequently never repeated) of any United States currency.
Except for the rare 1928 $1 United States Note, all small $1 bills until 1963 were Silver Certificates. Starting in 1934, these simply said they were redeemable "in silver" instead of "in silver dollars"; and, strangely enough, they could be redeemed in silver at the United States Treasury all the way until 1968 -- the last hard money activity of the United States government.
The major change in design that took place in the history of Silver Certificates was that the reverse of the 1928 $l bill was replaced in the Series 1935 notes with the familiar Great Seal of the United States design, though still without "In God We Trust," which only appears starting with Series 1957.
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Gold Certificates
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Gold Certificates were first issued in 1863, perhaps to reassure people that the United States Government did not intend to replace all U.S. money with greenbacks. The distinctive orange reverse marked them as different in kind. A "Certificate" signified that the notes were backed by 100% reserves of gold coins, for which they could be redeemed on demand. This was the hardest of hard money short of gold coin itself, since for other currencies the Treasury would never maintain more than a fractional gold reserve. The $10 large note of series 1922 showed Michael Hillegas on the obverse [& orange reverse]. Hillegas, the Treasurer of the United States under the Articles of Confederation (1775-1789), was such an obscure historical figure, then as now, that he was identified in small print under his name ("First Treasurer of the U.S.").
In small notes, the orange reverse of Gold Certificates was abandoned. This might be seen as a portent of the future; for once the Depression started, and the widespread failure of banks, as the Federal Reverse System refused to support their liquidity, led to a massive deflation, gold came under attack, as it had in the previous century, as the culprit. The refrain that there "wasn't enough money" was heard again, and Congress decided to give President Roosevelt the power to call in all the gold coinage, "regulate the Value therefore," and create more money. The Gold Reserve Act of 1933 thus required that all gold coins and gold certificates be surrendered to the Treasury. This was at first said to be a temporary measure, as would have been consistent with age old practices of recoinage, but then it became permanent. Americans were soon forbidden to hold gold (or gold certificates) as a store of wealth, though amusement (e.g. jewelry) was allowed. This appalling, tyrannical, and unconstitutional (as discussed above) measure was allowed as "necessary" under the "necessary and proper" clause, though all it accomplished was to turn Fort Knox into the tomb for a grotesquely Mediaeval hoard of useless metal.
The Series 1934 gold certificates, consequently, were not a public issue. They were only intended to circulate among Federal Reserve Banks and therefore read, "Payable to the Bearer on Demand as Authorized by Law." Like contemporaneous Silver Certificates, the 1934 Gold Certificates also now specified payment "in gold" rather than "in gold coin," so that the value of the dollar could be easily repegged -- though that value actually remained at 35$ a troy ounce from the 1930's to the 1970's.
It became legal to hold gold certificates on April 24, 1964. The obligation, of course, to "pay the bearer on demand" in "gold coin" would not be honored. By the 1970's Americans could again freely own and trade gold, but this was probably allowed only because President Nixon ceased redeeming U.S. dollars held by foreign governments for gold. The amount of U.S. Currency (Federal Reserve Notes at that point) had come to exceed what could be covered even by the reserves of Fort Knox; and, after all, the federal government still wanted to maintain its hoard.
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