Why The American Penny Needs To Go.

The federal reserve notes had fractional backing by gold ($0.25 worth of gold per dollar) foreign countries could redeem them for that backing, in gold. US citizens could not. That fractional backing was what Nixon removed in 1971. And the Fed did not have solitary authority to issue our paper money until 1968. The Federal government was still issuing red seal United States notes and blue seal silver certificates until the mid 1960's. (Kennedy's order was basically to increase the amount of silver certificate that could be printed. Until that time certificates could only be issues against specific reserves of silver. Kennedy's order allowed the certificate to be issued against any silver the government owned.) The last red seals in 1966 or 67, the silver certificates until 67 or 68. I'm not sure why the red seals were discontinued, but the silver certificates ended because of the rising values of silver. Once we stopped artificially controlling the price of silver it became too difficult and potentially fiscally unwise to continue issuing silver certificates.