Why So Many Different Types Of $5 Bills In The 1950-S?

It's on the notes themselves, really. and it wasn't just the 5's in the 50's. It all amounts to what the notes could be used for. While most stores, people and banks had no problem in accepting them, there were some specific rules that were in place on some of the notes at certain times. You could certainly buy your groceries, pay your bills, go to the hardware store, etc. and pay with any of the notes, so most people were not affected. But there were some limitations that were in place for things such as Duties on Imports and Interest on Public Debt. These restrictions were in place because the different types of banknotes were issued with separate funds. For instance one type of banknote called the "United States Note" (AKA Legal Tender or Red Seal Notes) were restricted for being used to repay the public debt with notes that are a part of the public debt. This was because the way that the country funded (or at any rate accounted) for the notes, they were considered a direct obligation of the United States, and thus were public debt. At the time, it was seen as fiscally irresponsible to repay debt with notes that were issued that were a large part of that debt.

After a while, the Legal Tender Notes lessened their restrictions and began using the generic phrase "Legal Tender For All Debts Public and Private", which in effect made them indistinguishable from Federal Reserve Notes, and they were eventually discontinued.

Another interesting feature is that there was a long time when you could redeem your notes, and not just the Silver Certificates, or Gold Certificates. Certain phrases such as "Redeemable in Lawful Money" were common, and to prove that these were Bank 'Notes', the phrase "Will Pay To The Bearer" told the person who had the note that they could indeed go and get 'Real' money for their paper notes. Few did so, as there was no reason to: people accepted the notes as money, and thus it became so. That's why the phrase "LEGAL TENDER FOR ALL DEBTS PUBLIC AND PRIVATE" is on our notes today. It is a declaration that it is money itself, not a check, a note, a certificate or a receipt of money.

All the notes in this photo below circulated at the same time!




1917 2 Dollar Legal Tender



1923 1 Dollar Legal Tender



1928 1 Dollar Legal Tender



1966 100 Dollar Legal Tender



1899 1 Dollar Silver Certificate



1923 1 Dollar Silver Certificate



1928 1 Dollar Silver Certificate



1922 10 Dollar Gold Certificate



1928 20 Dollar Gold Certificate



1929 20 Dollars National Bank Note



1918 FRBN



1929 20 Dollars FRBN



1914 FRN



1934 FRN



1950 FRN



1969 FRN

I agree with DVcollector. Very informative post. Thanks

Thanks for the history lesson, Dave! I knew much of it, but not all.

I guess my main question is whether any of that still meant anything by the 1950s, though. Were different types of notes still used for different purposes? Were all the different types equally seen in circulation? Did anybody think it odd to have so many different flavors of the same note at the same time?