In 1928, the United States Treasury decided to reduce the size of its currency in order to speed up transactions, and also to cut costs. By this time, the Federal Reserve had taken over much of the currency market, and the prices of gold and silver had risen greatly. For the Series of 1928, only $1 Silver Certificates were produced. Fives and tens of this time were mainly Federal Reserve Notes, which were backed by and redeemable in gold. All this would change with the beginning of the Great Depression in October 1929, when the United States economy was met with profound disaster.
In response, President Franklin Roosevelt persuaded Congress to recall all gold coins, gold bullion, and gold certificates, which circulated alongside Silver Certificates. This prompted Congress to quietly place the U.S. on the silver standard. May 12, 1933, the Agricultural Adjustment Act was passed, which included a clause allowing for the pumping of silver into the market to replace the gold. A new Series 1933 $10 Silver Certificate was printed, but few were released into circulation.
A 1934 law allowed the government to exchange silver bullion (instead of silver dollars) for Silver Certificates. The 1933 $10 certificates, as well as the 1928 $1 certificates, were phased out and replaced with Series of 1934 certificates. The obligation on these certificates was changed to read "THIS CERTIFIES THAT THERE IS ON DEPOSIT IN THE TREASURY OF THE UNITED STATES OF AMERICA (NUMBER) DOLLAR(S) IN SILVER PAYABLE TO THE BEARER ON DEMAND". The small-size $5 Silver Certificate was also introduced with this series.
Certificates circulated, mainly in the $1 denomination, widely throughout the United States in the years following 1934. When the '34s wore out, they were replaced with a new, more modern-looking Series 1953 (1935 for the $1 silvers; see below), with the same face changes as the Series 1950 Federal Reserve Notes had experienced. However, the Silver Certificates began to disappear from circulation during the 1940s and 1950s. The amount of Silver Certificates in circulation depended directly upon the amount of silver bullion in the Treasury vaults. As people redeemed the certificates for bullion or silver dollars, the notes were shredded, because the notes had lost their backing and could not be recirculated unless there was more silver being produced. The price of silver was also rising. In 1960, it was nearing $1.29, which meant that silver dollars were worth more than $1. This meant that people would receive their silver dollars and melt them down for the bullion, thereby reducing the amount of silver in circulation, which was already falling.
In 1963 President John F. Kennedy issued Executive Order 11110, authorizing the Department of Treasury to issue additional Silver Certificates for any silver held by the U.S. Government in excess of that not already backing issued certificates.
In March 1964, Secretary of the Treasury C. Douglas Dillon halted redemption of Silver Certificates for coined silver dollars; during the following four years, Silver Certificates were redeemable in uncoined silver "granules." All redemption in silver ceased on June 24, 1968. In the 1970s, large numbers of the remaining silver dollars in the mint vaults were sold to the collecting public for collector value.