$1000 US Dollar Bill
To help fund the Revolutionary War, the Continental Congress started to issue paper money of different denominations, including the $1,000 bill. According to Mattew Wittmann, an assistant conservator at the American Numismatic Society. An organization that researchers coins and currency. Despite its large denomination, the value of the $1,000 would only amount to around $20 in real money.
An economics professor at the University of California, Los Angeles (UCLA), Lee Ohanian, explains that the country used the notes to procure wartime supplies like ammunition.
Decades after the war, the nation mainly utilized large-denomination bills like the $1,000 note for real estate or interbank transactions only.
In 1946, the United States stopped producing the $1,000 and other large denomination bills. However, they were still in circulation until 1969 when the Federal Reserve recalled them. Then-President Richard Nixon thought that the larger bills would make it easier for illegitimate activities to be done, like money laundering.
Another reason for its demise is that producing the $1,000 was not very cost-effective. Manufacturers would need new engraving plates to print the bills, and they cannot mass-produce the bills either. Instead, the US Government saw the production of $1 bills as more cost-effective than printing a handful of $1,000 bills.
Even though the Federal Reserve officially discontinued the production of $1,000 and other higher denomination bills on July 14, 1969, the United States still considered them as legal tender.
Large-denomination bills that the Federal Reserve destroyed to avoid them being taken back into circulation to the public. However, according to the Reserve’s records, there are still 165,372 $1,000 still in public possession. These bills are considered rare, and collectors are willing to pay more than its face value just to have it.
Higher denomination bills are not making a comeback anytime soon. Although banks and the federal government historically used them for larger transactions, recent technological advances such as electronic money systems have already made it possible for large-scale transactions to happen without having physical money.