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George Marks/Getty Images
George Marks/Getty Images

A $100,000 Bill? The Story Behind Large-Denomination Currency

George Marks/Getty Images
George Marks/Getty Images

Your local convenience store may not accept bills larger than $20, but once upon a time you could have paid for your gum with a nice fresh $10,000 bill. What's the story behind the large-denomination bills that the government used to issue?

What big bills has the U.S. issued?

In 1928, the federal government overhauled its system of printing banknotes. It shaved about an inch of length and just under a half of an inch in width off the bills and issued the new smaller bills in the $1 to $100 denominations with which we're familiar. However, the Treasury also issued larger denominations. They featured William McKinley ($500), Grover Cleveland ($1,000), James Madison ($5,000), and Salmon P. Chase ($10,000).

Who the heck was Salmon P. Chase?

chase-10000

His name might not be as familiar as those of the presidents featured on the other big bills, but once upon a time Chase was a big wheel in American politics. Chase, a mid-19th century politician, served as Chief Justice of the United States, spent stints as Ohio's governor and senator, and was Lincoln's first Secretary of the Treasury.

Nice resume, but how did Chase end up on the $10,000 bill?

He was in the right place at the right time. When the federal government started issuing greenback notes in 1861, Chase, as Secretary of the Treasury, was in charge of designing and popularizing the new currency. The politically ambitious Chase had to pick a portrait subject for the first $1 bill, and he chose"¦Salmon P. Chase.

Although putting his face in everyone's pocketbooks never propelled Chase to the presidency, when the Treasury started issuing the new $10,000 bills in 1928 they put Chase's portrait on the obverse to honor the man who helped introduce modern banknotes.

Even if you don't have a $10,000 bill Chase's name might still be in your wallet. Chase National Bank, the forerunner to Chase Manhattan Bank, was named in his honor.

Why on earth was the government printing such giant bills in the first place?

Believe it or not, it wasn't just to save space in fatcats' wallets. When the Treasury started printing these giant bills, their main purpose was making transfer payments between banks and other financial institutions. Before sophisticated wire transfer systems were fully developed, it was apparently easier and safer just to fork over a $5,000 bill to settle up with a fellow bank. Once transfer technology became safer and more secure, there really wasn't much need for the big bills anymore.

What's the largest denomination of currency the U.S. has printed?

wilson-100-grand

That would be the Series 1934 $100,000 gold certificate. The Bureau of Engraving and Printing only made these notes during a three-week stretch during December 1934 and January 1935. Even the few plutocrats who had that much cash during the Depression couldn't carry one of the $100K bills, though. They were only used for official transactions between Federal Reserve Banks, and the Treasurer of the United States only issued them to Fed banks that had an equal amount of gold in the Treasury. The note featured a picture of Woodrow Wilson.

Are any of these bills left in circulation?

There sure are, but don't expect to find a $500 bill the next time you make an ATM withdrawal. The Treasury announced on July 14, 1969, that it would quit issuing the $500, $1,000, $5,000, and $10,000 notes immediately, since the bills were so sparsely circulated. It's not like the Bureau of Engraving and Printing had to stop the presses, either; the bills hadn't seen an actual print run since 1945.

When the Treasury discontinued the bills, they rapidly fell out of circulation. However, a few are still lingering; as of May 2009, there were still 336 $10,000 bills at large. At the same time, Slate reported that there were also 342 $5,000 bills and 165,732 $1,000 bills still floating around.

If they're out of circulation, can you still spend them?

Although the Treasury is no longer issuing these bills, according to the Fed they're still legal tender. So yes, although it would probably raise some eyebrows, you could walk into Best Buy and plunk down a $1,000 bill to pay for a new plasma TV.

That wouldn't be the smartest move, though. Most of the high-denomination bills that are left in circulation are in collectors' safes, and at auction the bills tend to fetch prices that far exceed their face values. For instance, a pristine $10,000 bill can command a price as high as $140,000 on the open market.

What happens if you bring one of these big bills to a bank?

If you put it in your safety deposit box, your bill will be safe. Chase Bank actually acquired one of the $10,000 bills in its currency collection when a deceased customer's family found the bill in her deposit box and traded it for $10,000 in cash. Deposit the historical loot into your checking account, though, and it's bad news for the bill. You'll get the cash deposited in your account, but since the 1969 order to stop distributing these bills, Fed banks have been pulling the notes from circulation and destroying them whenever they are received.

Of course, there are other potential pitfalls to depositing a big bill, like blowing your cover when you're on the lam. Last February, three teenagers in Texas Township, Michigan, swiped one of their parents' safes and drove to Birmingham, Alabama, with their booty. Their downfall came when they tried to change an antique $1,000 bill from the safe at a bank. The police nabbed the thieves after a call from a suspicious teller.

So there was never a real $1 million bill?

Nope, but that doesn't mean that people haven't tried to make one. In 2004, a woman in Covington, Georgia, tried to pick up a $1,675 tab at a local Wal-Mart with a forged $1 million bill featuring a picture of the Statue of Liberty. Police quickly arrested her. It's hard to say what's more ludicrous: trying to pass off a million-dollar bill or thinking that Wal-Mart would just fork over $998,325 in change.

Someone gave me a fake $1 million bill as a joke. Was that illegal?

As long as you don't try to spend it or deposit it, you're in the clear. Gag makers and some religious and political groups have printed novelty $1 million bills for decades. In 1982, these novelty bills came to the attention of the Secret Service, which ruled that since there wasn't a real $1 million bill, these joke versions weren't technically forgeries or violations of any laws.

What about the opposite of these bills: the elusive $2 bill?

Although you don't see the $2 bill all that often, it's still a circulating denomination of American currency. According the U.S. Treasury, there are over $1.5 billion worth of $2 bills currently circulating around the world. However, since the bill changes hands less frequently than other denominations, it's not printed as often, either.

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How Investing Just $100 Per Month Can Give Your Nest Egg a Serious Boost
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iStock

If you have $100 to spare, you may want to consider investing it instead of spending it immediately. Later down the road, your frugality will be rewarded with a nice chunk of cash that you can use when you retire.

Start investing today and a $60,000 investment could turn into a nest egg of $522,000 in 50 years, according to an analysis by The Motley Fool, a financial services company. Even if you don’t have half a century to wait, a $12,000 investment will grow an extra $5700 over the course of 10 years, netting you $17,700. Not a bad return for just $100 a month.

What this all comes down to is compound interest, which is essentially earning interest on top of interest. Calculating that the market returns about 7 percent per year, adjusted for inflation, The Motley Fool explains what this would mean for someone who invests $100 a month:

“That means the $1,200 you invest in year one will be worth $84 more in year two. When year three rolls around, that original sum will gain even more—roughly $90—because the interest from the previous year will grow as well. That might seem like small stuff, but over time, the effects can be astounding.”

You can see this at work with bank accounts that pay interest, but compounding also affects other types of investments, like stocks. Many stocks have dividends, which are payments corporations disburse to investors each quarter—say, 50 cents per share. When you receive dividends, you can reinvest that money, using it to buy new stock shares. Each of those new shares then pays its own dividend, growing your money exponentially over time.

However, the financial service agency says you shouldn’t start investing until you’ve paid off all high-interest debt—like credit card debt—and established an emergency fund with enough money to cover your basic expenses for three months if you happened to lose your job. Once that's settled, you can start putting some of your extra earnings into an investment account, like a 401(k) or IRA. (The company also offers some tips on how to set up a brokerage account, and how to figure out which type of account is best for you.)

Ready to start building up that nest egg? Check out Mental Floss’s 15-minute guide to how you can start investing today.

[h/t The Motley Fool]

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Love Board Games? Now You Can Invest in Them
Space Goat Productions
Space Goat Productions

The rise of crowdfunded products in recent years has been a boon to projects that might not have survived a long and winding corporate road to consumers. And while technological innovations, food, and film draw a lot of those dollars, it may surprise you to learn that the gaming category is at the top of Kickstarter’s leader board. Donors have spent a total of $813 million on nearly 38,000 different video and analog game projects, with board games dominating most of the market.

Starting May 1, board game and comic book publisher Space Goat Productions is taking that marriage of direct-to-consumer financing and entertainment a step further. They’ve launched a Wefunder campaign that will allow people to become equity investors in the company best known for its Evil Dead II, The Terminator, and Howling board games.

“We are the first publicly-owned board game and comic book hybrid company,” Shon Bury, Space Goat’s president, tells Mental Floss. “We have a foot in both niches.”

Equity fundraising was first made possible in 2012, when Congress passed the Jumpstart Our Business Startups, also known as the JOBS Act. The legislation allows companies to solicit investors for an ownership stake with the potential for a financial reward: The ability to sell to anyone online, not just private investors, began in May 2016. Bury, who had grown tired of seeking capital from banks reluctant to lend to small businesses, saw an opportunity for gaming fans to take on a larger role in the publisher’s efforts. Campaigns that people have a personal investment in—like the Beta Bionics fundraiser to back an experimental diabetes monitor, which raised over $1 million—tend to attract the most attention.

“Comic book and board game fans like the participatory process,” Bury says. “Something about that type of consumer wants to get involved in the hobby with creators.”

Visitors stop by a Space Goat Productions convention table
Space Goat Productions

By law, investors in Space Goat or any other company must invest a minimum $100 to obtain a future equity share with the company, which has been estimated at a $5 million potential valuation cap. While they don’t get to outvote Bury, who is the majority owner, they can—at certain pricing tiers—get involved in beta-testing games, offer feedback, and get discounts off Space Goat merchandise.

The money raised during the Wefunder’s 45-day campaign will go toward company overhead, production costs, convention expenses, marketing, license acquisition, and distribution of games to retail outlets. Both Evil Dead II and The Terminator are slated for a 2018 release, while The Howling, an original board game titled Game Buds, and a possible Evil Dead II graphic novel are on tap for 2019.

With Kickstarter campaigns, donors are usually reserved copies of the product along with incentive extras. For Wefunder, the objective is to back the company as a whole, not just a single release. If Space Goat continues to be successful, investors will be able to sell their shares once a second round of crowdfunding begins or if the company goes public. If they elect to keep their shares, they’ll get a proportional percentage of their net profit. Company valuations and revenues will be SEC-compliant, Bury says.

“This is an actual investment with risks,” he adds, which means it’s possible you could, like any investor, fail to realize a return. But for some gaming fans, wagering on the appeal of werewolves, Deadites, and Skynet is likely more interesting than trading pharmaceutical stocks.

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