WEBVTT 00:00:00.000 --> 00:00:01.700 I want you to imagine something for a second. 00:00:01.919 --> 00:00:05.099 Just picture yourself holding a single crisp 00:00:05.099 --> 00:00:07.440 piece of paper. Right. It fits right in the palm 00:00:07.440 --> 00:00:09.859 of your hand, you know, just like a normal dollar 00:00:09.859 --> 00:00:12.279 bill. It's not a winning lottery ticket. And 00:00:12.279 --> 00:00:14.539 well, it's not a deed to a mansion. But it is 00:00:14.539 --> 00:00:17.640 a piece of official United States currency. Exactly. 00:00:17.940 --> 00:00:20.640 But here is the catch. That one little piece 00:00:20.640 --> 00:00:23.420 of paper you are holding is worth over two million 00:00:23.420 --> 00:00:26.699 dollars today, which is just staggering to think 00:00:26.699 --> 00:00:30.600 about. It is. And the moment you realize what 00:00:30.600 --> 00:00:33.820 it is, a cold sweat breaks out. Because you also 00:00:33.820 --> 00:00:36.000 realize something else, you could be immediately 00:00:36.000 --> 00:00:38.399 arrested by federal agents just for having it 00:00:38.399 --> 00:00:40.539 in your pocket. It sounds like the inciting incident 00:00:40.539 --> 00:00:43.740 of a spy thriller, honestly. Holy. But it is 00:00:43.740 --> 00:00:45.920 entirely real. If you were holding that note, 00:00:46.000 --> 00:00:48.020 you'd be holding a piece of raw financial history 00:00:48.020 --> 00:00:51.780 that was never ever meant for your hands or anyone 00:00:51.780 --> 00:00:54.359 else's in the general public. Welcome to today's 00:00:54.359 --> 00:00:56.920 Deep Dive. I am so glad you could join us because 00:00:56.920 --> 00:00:59.219 today we are looking at something truly mind 00:00:59.219 --> 00:01:01.490 -boggling. We really are. Our source material 00:01:01.490 --> 00:01:04.569 for this exploration is a fascinating Wikipedia 00:01:04.569 --> 00:01:07.969 article detailing the history, the design, and 00:01:07.969 --> 00:01:10.489 like the sheer mechanics of the United States 00:01:10.489 --> 00:01:13.469 $100 ,000 bill. Yes, you heard that right. A 00:01:13.469 --> 00:01:16.609 $100 ,000 bill. It's an artifact that completely 00:01:16.609 --> 00:01:19.109 challenges our basic understanding of what money 00:01:19.109 --> 00:01:24.030 even is and who it's actually for. Right. And 00:01:24.030 --> 00:01:26.310 our mission for this deep dive is to explore 00:01:26.310 --> 00:01:29.329 the incredibly weird physical quirks of this 00:01:29.329 --> 00:01:32.629 mythical currency, uncover exactly why the government 00:01:32.629 --> 00:01:34.709 was secretly printing them during the darkest 00:01:34.709 --> 00:01:37.950 days of the Great Depression. figure out what 00:01:37.950 --> 00:01:39.890 this strange piece of paper teaches us about 00:01:39.890 --> 00:01:42.090 the very nature of value. It's a huge topic. 00:01:42.189 --> 00:01:44.370 It is. And I am joined by our resident expert, 00:01:44.510 --> 00:01:47.010 the perfect guide to help us decode this bizarre 00:01:47.010 --> 00:01:49.489 financial anomaly. Hello to you listening. I 00:01:49.489 --> 00:01:51.530 am thrilled to be diving into this with you today. 00:01:51.650 --> 00:01:53.709 It is a really fascinating subject. It's going 00:01:53.709 --> 00:01:56.750 to be a fun one. Definitely. And I promise that 00:01:56.750 --> 00:01:59.439 by the end of our conversation, We are going 00:01:59.439 --> 00:02:03.379 to connect the dots between this one singular 00:02:03.379 --> 00:02:07.500 piece of paper and the massive sprawling economic 00:02:07.500 --> 00:02:10.800 chaos of the 1930s. We are going to look under 00:02:10.800 --> 00:02:13.240 the hood of the American banking system itself. 00:02:13.460 --> 00:02:15.639 I can't wait. But before we get into the massive 00:02:15.639 --> 00:02:18.240 historical forces and the mechanics of it all, 00:02:18.699 --> 00:02:20.840 we really need to understand the physical object 00:02:20.840 --> 00:02:23.000 itself. Right. Because it's so unique. Because 00:02:23.000 --> 00:02:25.819 it is strikingly different from the fives, tens, 00:02:25.919 --> 00:02:27.979 and twenties sitting in your wallet right now. 00:02:28.430 --> 00:02:31.629 OK, let's unpack this. Visually, this bill is 00:02:31.629 --> 00:02:34.669 an absolute trip. It really is. It measures exactly 00:02:34.669 --> 00:02:38.210 157 millimeters wide by 66 millimeters high. 00:02:38.270 --> 00:02:40.710 Which, for context, is the exact same size as 00:02:40.710 --> 00:02:42.969 the modern paper currency you use today. Oh, 00:02:42.969 --> 00:02:44.789 really? So it doesn't feel oversized or anything? 00:02:44.870 --> 00:02:46.729 No, not at all. It feels completely standard 00:02:46.729 --> 00:02:50.330 in your hands. But that physical dimension is 00:02:50.330 --> 00:02:52.849 right about where the similarities completely 00:02:52.849 --> 00:02:54.430 end. Yeah, because when you look at the face 00:02:54.430 --> 00:02:57.360 of the bill, The obverse staring back at you 00:02:57.360 --> 00:03:00.020 is President Woodrow Wilson. The engraving of 00:03:00.020 --> 00:03:02.819 his vignette portrait was done by a master engraver 00:03:02.819 --> 00:03:05.219 named George Frederick Cummings Milley. And the 00:03:05.219 --> 00:03:08.120 detail is just incredible. But the text surrounding 00:03:08.120 --> 00:03:10.740 Wilson is where the legal weight of this thing 00:03:10.740 --> 00:03:13.379 really hits you. Oh, absolutely. The text is 00:03:13.379 --> 00:03:16.060 crucial. It reads, and I'm quoting here, this 00:03:16.060 --> 00:03:19.020 is to certify that there is on deposit in the 00:03:19.020 --> 00:03:22.080 Treasury of the United States of America. $100 00:03:22.080 --> 00:03:26.379 ,000 in gold payable to bearer on demand as authorized 00:03:26.379 --> 00:03:29.039 by law. That phrasing is absolutely critical. 00:03:29.300 --> 00:03:32.139 Payable in gold. Exactly. It also explicitly 00:03:32.139 --> 00:03:34.560 states, located right on top of the treasury 00:03:34.560 --> 00:03:37.960 seal, that this certificate is legal tender in 00:03:37.960 --> 00:03:40.599 the amount thereof in payment of all debts and 00:03:40.599 --> 00:03:43.879 dues, public and private. But the visual design 00:03:43.879 --> 00:03:46.020 choices are what really make it feel like a totally 00:03:46.020 --> 00:03:48.219 alien object. I mean, this doesn't even sound 00:03:48.219 --> 00:03:50.580 like regular money. No, not at all. It sounds 00:03:50.580 --> 00:03:53.080 like a literal golden ticket from Willy Wonka, 00:03:53.280 --> 00:03:56.280 complete with, like, radiating orange sunbeams 00:03:56.280 --> 00:03:58.360 on the back. Seriously, I want you to picture 00:03:58.360 --> 00:04:00.939 this jarring design compared to a standard green 00:04:00.939 --> 00:04:03.419 dollar bill. It's night and day. On the front, 00:04:03.639 --> 00:04:06.159 there's very little gold ink at all. You just 00:04:06.159 --> 00:04:08.680 have the treasury seal, two serial numbers, and 00:04:08.680 --> 00:04:10.780 the words Washington D .C. printed in this very 00:04:10.780 --> 00:04:12.699 bold font, but you flip it over to the reverse 00:04:12.699 --> 00:04:16.680 side. There is no green anywhere. None. The reverse 00:04:16.680 --> 00:04:20.920 exhibits bright, vibrant orange ink. There is 00:04:20.920 --> 00:04:24.839 a massive number, 100 ,000. sitting right in 00:04:24.839 --> 00:04:27.540 front of a US dollar sign. And as you mentioned, 00:04:27.699 --> 00:04:30.459 there are literal orange rays extending outward 00:04:30.459 --> 00:04:32.839 from the center, just sweeping across the back 00:04:32.839 --> 00:04:35.600 of the bill. It is loud. Very loud. It is completely 00:04:35.600 --> 00:04:38.839 impossible to mistake for a 20 or a 50. It just 00:04:38.839 --> 00:04:41.000 screams, you know, I am carrying the weight of 00:04:41.000 --> 00:04:43.519 a nation. It really does. And what's fascinating 00:04:43.519 --> 00:04:45.800 here is that every single one of those design 00:04:45.800 --> 00:04:48.939 choices, from explicitly stating it is payable 00:04:48.939 --> 00:04:51.899 in gold to the use of that vibrant orange ink 00:04:51.899 --> 00:04:54.420 on the back was a deliberate signal. Like a warning 00:04:54.420 --> 00:04:57.100 label almost. Sort of, yeah. They were signaling 00:04:57.100 --> 00:04:59.500 to whoever held it that this was an entirely 00:04:59.500 --> 00:05:01.779 different class of currency. This is not a standard 00:05:01.779 --> 00:05:04.040 Federal Reserve note. You know, the greenbacks 00:05:04.040 --> 00:05:06.339 we are used to carrying around that rely purely 00:05:06.339 --> 00:05:09.000 on trust in the government. This was a gold certificate. 00:05:09.290 --> 00:05:11.889 So it wasn't money in the traditional fiat sense. 00:05:11.990 --> 00:05:15.230 It was basically like a warehouse receipt for 00:05:15.230 --> 00:05:17.689 a very heavy chunk of metal sitting in a vault. 00:05:18.250 --> 00:05:21.389 Precisely. It was a paper stand -in for a massive 00:05:21.389 --> 00:05:23.850 physical asset. If you held the paper, you literally 00:05:23.850 --> 00:05:27.980 owned the gold. Wow. But labeling it a gold certificate 00:05:27.980 --> 00:05:30.579 wasn't just a quirky design choice, was it? It 00:05:30.579 --> 00:05:33.660 was a direct response to a massive national panic 00:05:33.660 --> 00:05:36.759 happening right outside the bank's doors in 1934. 00:05:37.040 --> 00:05:39.399 Yes, exactly. Which brings us to the historical 00:05:39.399 --> 00:05:41.920 crisis that forced this bizarre bill into existence. 00:05:42.439 --> 00:05:44.439 The printing presses at the Bureau of Engraving 00:05:44.439 --> 00:05:46.759 and Printing started churning these out between 00:05:46.759 --> 00:05:50.620 1934 and 1935 under the direct order of President 00:05:50.620 --> 00:05:53.699 Franklin D. Roosevelt. FDR himself. Right. OK, 00:05:53.699 --> 00:05:56.120 so FDR takes office. The economy's in free fall. 00:05:57.060 --> 00:05:59.800 Why is his immediate reaction to print a $100 00:05:59.800 --> 00:06:03.519 ,000 bill? That seems totally counterintuitive 00:06:03.519 --> 00:06:05.459 to me. To understand that, you really have to 00:06:05.459 --> 00:06:08.740 look at the severe psychological and economic 00:06:08.740 --> 00:06:11.339 trauma of the time. The depression. Right. It's 00:06:11.339 --> 00:06:14.360 the Great Depression. Unemployment is skyrocketing. 00:06:14.699 --> 00:06:17.180 Thousands of banks are quite literally failing. 00:06:17.300 --> 00:06:19.560 They're shutting their doors and wiping out people's 00:06:19.560 --> 00:06:21.800 life savings overnight. Just gone. Just gone. 00:06:23.339 --> 00:06:26.480 Human nature being what it is, when people get 00:06:26.480 --> 00:06:28.699 terrified about the abstract financial system, 00:06:28.860 --> 00:06:30.759 they look for something solid. They look for 00:06:30.759 --> 00:06:33.060 gold. Right. If you don't trust the bank ledger, 00:06:33.480 --> 00:06:36.139 you want the physical metal in your hand. Exactly. 00:06:36.480 --> 00:06:38.160 So people started pulling their wealth out of 00:06:38.160 --> 00:06:40.779 the system and just hoarding it. And to combat 00:06:40.779 --> 00:06:44.860 this, FDR signed executive order 6102, which 00:06:44.860 --> 00:06:48.220 was later ratified by Congress in 1934. A very 00:06:48.220 --> 00:06:50.620 controversial move. Yeah, because it strictly 00:06:50.620 --> 00:06:52.819 prohibited the hoarding of gold certificates, 00:06:53.139 --> 00:06:56.480 gold bullion, and coins by the public. But I 00:06:56.480 --> 00:06:58.500 have to push back on the economic logic here 00:06:58.500 --> 00:07:00.300 just to make sure we really understand it. Sure. 00:07:00.720 --> 00:07:02.819 Wait, if people are scared during a depression, 00:07:03.019 --> 00:07:04.839 saving their gold makes perfect sense for them 00:07:04.839 --> 00:07:07.180 on an individual level. It does. They want to 00:07:07.180 --> 00:07:09.480 protect their families. So why is the government 00:07:09.480 --> 00:07:12.079 stepping in to stop them from doing what feels 00:07:12.079 --> 00:07:15.110 safe? It is a phenomenal question, and it represents 00:07:15.110 --> 00:07:17.730 a classic conflict between individual security 00:07:17.730 --> 00:07:20.649 and systemic health. If we connect this to the 00:07:20.649 --> 00:07:23.290 bigger picture, we have to look at the mechanics 00:07:23.290 --> 00:07:25.970 of fractional reserve banking. Okay, lay it on 00:07:25.970 --> 00:07:28.800 me. Think of the gold -backed economy like a 00:07:28.800 --> 00:07:31.639 massive engine, and the gold itself is the oil. 00:07:32.199 --> 00:07:35.399 When individual citizens get terrified, take 00:07:35.399 --> 00:07:38.360 their gold and shove it under their mattresses 00:07:38.360 --> 00:07:41.240 or bury it in coffee cans in the backyard. They're 00:07:41.240 --> 00:07:42.839 draining the oil out of the engine. They are 00:07:42.839 --> 00:07:44.920 draining the oil out of the engine completely. 00:07:44.959 --> 00:07:47.639 And without oil, the gears just grind together 00:07:47.639 --> 00:07:51.139 and lock up. Yes. The banks rely on holding a 00:07:51.139 --> 00:07:53.500 fraction of their deposits in reserve, in this 00:07:53.500 --> 00:07:56.459 case physical gold, to lend out money and keep 00:07:56.459 --> 00:07:58.699 credit flowing. Right. That's how banking works. 00:07:58.899 --> 00:08:00.939 When the gold disappears into private hands, 00:08:01.180 --> 00:08:03.639 the bank's reserves just collapse. They have 00:08:03.639 --> 00:08:05.759 to call in loans, they stop lending to businesses, 00:08:06.139 --> 00:08:08.800 businesses can't make payroll, and workers get 00:08:08.800 --> 00:08:12.220 fired. Yeah. It creates a brutal multiplier effect 00:08:12.220 --> 00:08:14.720 of frozen credit. So the government realized 00:08:14.720 --> 00:08:17.100 that individual survival instincts were actually 00:08:17.100 --> 00:08:19.339 accelerating the collective collapse. That is 00:08:19.339 --> 00:08:24.040 the tragic irony of a bank run. So the government's 00:08:24.040 --> 00:08:25.939 perspective was that they had to force the gold 00:08:25.939 --> 00:08:29.160 back into the system to restart the engine. By 00:08:29.160 --> 00:08:32.000 making it illegal to hold it. Right. They legally 00:08:32.000 --> 00:08:34.720 demanded citizens turn in their gold to the Federal 00:08:34.720 --> 00:08:37.360 Reserve in exchange for standard paper currency. 00:08:38.059 --> 00:08:40.559 And here is a crucial layer of depth to this. 00:08:40.740 --> 00:08:43.610 OK. Right after confiscating all that gold at 00:08:43.610 --> 00:08:47.690 the official rate of $20 .67 an ounce, Congress 00:08:47.690 --> 00:08:50.909 passed the Gold Reserve Act of 1934. OK, what 00:08:50.909 --> 00:08:53.850 did that do? This act suddenly revalued gold 00:08:53.850 --> 00:08:57.309 to $35 an ounce. Wait, hold on. So the government 00:08:57.309 --> 00:08:59.809 forces everyone to hand over their gold at 20 00:08:59.809 --> 00:09:02.529 bucks and then instantly declares, actually, 00:09:02.570 --> 00:09:06.570 it's worth 35 bucks now. Yep. That is a massive 00:09:06.570 --> 00:09:08.629 overnight profit for the Treasury. It was an 00:09:08.629 --> 00:09:11.450 ultimate arbitrage. By simply changing the peg, 00:09:11.789 --> 00:09:14.269 the treasury's gold holdings surged in dollar 00:09:14.269 --> 00:09:17.529 value. by billions, literally overnight. But 00:09:17.529 --> 00:09:20.289 that newly created value needed to be formally 00:09:20.289 --> 00:09:22.909 accounted for on the balance sheets. The Treasury 00:09:22.909 --> 00:09:26.289 had to deposit this newly minted profit into 00:09:26.289 --> 00:09:28.809 the Federal Reserve banks to actually use it 00:09:28.809 --> 00:09:31.549 to fund government programs. Oh, I see. Which 00:09:31.549 --> 00:09:34.009 perfectly explains why these massive certificates 00:09:34.009 --> 00:09:36.470 needed to exist. Exactly. A government outlaws 00:09:36.470 --> 00:09:39.289 private citizens from hoarding gold, takes it 00:09:39.289 --> 00:09:42.149 all, revalues it, and suddenly has billions of 00:09:42.149 --> 00:09:45.259 dollars in new ledger wealth. But That brings 00:09:45.259 --> 00:09:48.519 up a massive contradiction. How so? If Executive 00:09:48.519 --> 00:09:51.580 Order 6102 just made it strictly illegal for 00:09:51.580 --> 00:09:53.659 regular citizens to hold onto gold certificates, 00:09:54.320 --> 00:09:57.879 who on earth was this specific $100 ,000 bill 00:09:57.879 --> 00:10:01.210 actually printed for? Well, it was printed exclusively 00:10:01.210 --> 00:10:04.029 for the banks themselves. Specifically, it was 00:10:04.029 --> 00:10:06.049 used for transactions between the United States 00:10:06.049 --> 00:10:08.370 Treasury and the Federal Reserve Banks. Oh, wow. 00:10:08.549 --> 00:10:11.470 Yeah. This bill never, ever circulated publicly. 00:10:11.769 --> 00:10:14.049 Not once. Here's where it gets really interesting. 00:10:14.409 --> 00:10:17.149 So if I'm understanding this right, this bill 00:10:17.149 --> 00:10:19.950 was essentially the ultimate internal corporate 00:10:19.950 --> 00:10:21.950 gift card. Huh. That's a great way to put it. 00:10:22.129 --> 00:10:24.379 I mean, it wasn't money. for people to go out 00:10:24.379 --> 00:10:27.600 and buy bread or pay rent. It was a highly specialized 00:10:27.600 --> 00:10:31.360 physical tool to let banks move literal tons 00:10:31.360 --> 00:10:34.279 of gold around on paper without having to actually 00:10:34.279 --> 00:10:36.840 put heavy metal onto an armored truck. That is 00:10:36.840 --> 00:10:39.179 a brilliant analogy. The ultimate corporate gift 00:10:39.179 --> 00:10:42.759 card. You have to remember the Federal Reserve 00:10:42.759 --> 00:10:45.960 System is a network of regional banks. New York. 00:10:46.139 --> 00:10:49.700 Chicago, San Francisco, and they need to settle 00:10:49.700 --> 00:10:52.179 massive accounts with each other and the Treasury 00:10:52.179 --> 00:10:55.860 constantly. Imagine the New York Fed owes the 00:10:55.860 --> 00:10:58.779 Chicago Fed $50 million at the end of the month. 00:10:59.379 --> 00:11:01.559 Back then, because the system was strictly tied 00:11:01.559 --> 00:11:04.529 to physical gold, settling that debt technically 00:11:04.529 --> 00:11:07.129 meant moving the underlying asset. Moving $50 00:11:07.129 --> 00:11:10.529 million worth of physical gold in 1934. Just 00:11:10.529 --> 00:11:11.990 trying to picture the logistics of that. How 00:11:11.990 --> 00:11:14.470 much does that even weigh? Well, at $35 an ounce, 00:11:14.889 --> 00:11:18.309 $50 million is roughly 45 tons of solid gold. 00:11:18.389 --> 00:11:22.250 45 tons. Yeah. Think about what it takes to move 00:11:22.250 --> 00:11:26.210 45 tons of gold from New York to Chicago in the 00:11:26.210 --> 00:11:29.929 1930s. You need heavily armored trains, platoons 00:11:29.929 --> 00:11:33.149 of armed guards, massive logistical coordination. 00:11:33.269 --> 00:11:36.570 And days of travel time. Exactly. And there is 00:11:36.570 --> 00:11:39.549 always the massive risk of robbery or a train 00:11:39.549 --> 00:11:41.090 derailment. It sounds like an absolute nightmare. 00:11:41.409 --> 00:11:44.080 The security costs alone would be astronomical. 00:11:44.340 --> 00:11:48.139 It was incredibly inefficient. So the $100 ,000 00:11:48.139 --> 00:11:51.679 gold certificate digitized this process in a 00:11:51.679 --> 00:11:55.100 completely analog world. Oh, I love that. Digitizing 00:11:55.100 --> 00:11:58.039 an analog world. Right. By creating these ultra 00:11:58.039 --> 00:12:00.580 high value certificates, the Treasury could hand 00:12:00.580 --> 00:12:02.899 them to the Fed and the Fed branches could trade 00:12:02.899 --> 00:12:05.700 them internally. They could settle these massive 00:12:05.700 --> 00:12:08.820 multimillion dollar debts instantly just by handing 00:12:08.820 --> 00:12:11.360 over a piece of paper. Exactly. They completely 00:12:11.360 --> 00:12:13.360 bypassed the physical movement of the metal. 00:12:13.759 --> 00:12:16.100 A bank clerk simply handed over a stack of a 00:12:16.100 --> 00:12:18.399 few hundred pieces of paper with Woodrow Wilson's 00:12:18.399 --> 00:12:21.600 face on them and a 45 ton debt was instantly 00:12:21.600 --> 00:12:24.220 cleared. It's just wild to think about and you 00:12:24.220 --> 00:12:27.500 know the Wikipedia article notes this $100 ,000 00:12:27.500 --> 00:12:31.809 bill was actually part of a larger 1934 gold 00:12:31.809 --> 00:12:34.090 certificate series. That's right. It wasn't entirely 00:12:34.090 --> 00:12:38.690 alone. The series also included 100, 1000, and 00:12:38.690 --> 00:12:41.889 $10 ,000 notes designed for these internal bank 00:12:41.889 --> 00:12:45.590 transfers. But obviously, the 100 ,000 is the 00:12:45.590 --> 00:12:48.309 crown jewel. Oh, absolutely. It is the absolute 00:12:48.309 --> 00:12:51.230 peak of large denominations ever printed by the 00:12:51.230 --> 00:12:53.950 United States. It was a tool of pure institutional 00:12:53.950 --> 00:12:56.889 utility. It was never meant to sit folded in 00:12:56.889 --> 00:12:59.350 a leather wallet. It was designed to sit in a 00:12:59.350 --> 00:13:02.570 reinforced vault, quietly sliding from one bank's 00:13:02.570 --> 00:13:04.789 ledger to another. Which brings us to the ultimate 00:13:04.789 --> 00:13:07.529 fate of these bills. Because they were these 00:13:07.529 --> 00:13:10.850 internal tools printed for a very specific narrow 00:13:10.850 --> 00:13:14.279 window in time. just between roughly December 00:13:14.279 --> 00:13:17.799 1934 and January 1935. A very short run. Yeah. 00:13:18.059 --> 00:13:19.759 What happened to them once they served their 00:13:19.759 --> 00:13:21.480 purpose? And more importantly, for you listening, 00:13:21.559 --> 00:13:23.779 why can't you own one today? Well, the printing 00:13:23.779 --> 00:13:26.740 run was relatively tiny given their immense face 00:13:26.740 --> 00:13:31.299 value. Only 42 ,000 of these $100 ,000 bills 00:13:31.299 --> 00:13:33.620 were ever produced by the Bureau of Engraving 00:13:33.620 --> 00:13:36.000 and Printing. Let me just do the math on that 00:13:36.000 --> 00:13:39.740 really quickly in my head. 42 ,000 bills times 00:13:39.740 --> 00:13:46.480 $100 ,000 each. That is $4 .2 billion in 1934 00:13:46.480 --> 00:13:49.480 money. That is a staggering amount of value locked 00:13:49.480 --> 00:13:52.559 up in just 42 ,000 physical pieces of paper. 00:13:52.720 --> 00:13:55.539 It is an astronomical concentration of wealth. 00:13:55.899 --> 00:13:58.460 But as the decades passed, banking technology 00:13:58.460 --> 00:14:01.320 evolved. Wire transfers and digital accounting 00:14:01.320 --> 00:14:04.080 made physical certificates, even million dollar 00:14:04.080 --> 00:14:06.059 sacks of them, completely obsolete. They just 00:14:06.059 --> 00:14:08.159 didn't need them anymore. Right. Because their 00:14:08.159 --> 00:14:10.100 use was so restricted and they were no longer 00:14:10.100 --> 00:14:12.460 needed for daily settlement, the government decided 00:14:12.460 --> 00:14:14.580 to clean house. In the years following their 00:14:14.580 --> 00:14:16.340 commission, the vast majority of these bills 00:14:16.340 --> 00:14:19.320 were actively destroyed. Oh, man. They were gathered 00:14:19.320 --> 00:14:23.149 up, accounted for and incinerated. burning billions 00:14:23.149 --> 00:14:26.350 of dollars of beautiful engraving and the ones 00:14:26.350 --> 00:14:28.690 that somehow survived the incinerator. The remaining 00:14:28.690 --> 00:14:31.950 few are strictly legally bound to the possession 00:14:31.950 --> 00:14:34.889 of the United States federal government. We know 00:14:34.889 --> 00:14:37.090 specifically that the Smithsonian Institution 00:14:37.090 --> 00:14:39.909 and the Federal Reserve System hold the surviving 00:14:39.909 --> 00:14:43.110 bills. And let's be crystal clear about the law 00:14:43.110 --> 00:14:44.789 here, because this is the part that truly blows 00:14:44.789 --> 00:14:48.429 my mind. OK. Let's say you were rummaging through 00:14:48.429 --> 00:14:51.350 your grandparents attic, opening an old dusty 00:14:51.350 --> 00:14:54.919 trunk. And you somehow found one of these orange 00:14:54.919 --> 00:14:58.100 -backed beauties tucked inside a hollowed -out 00:14:58.100 --> 00:15:00.600 book. A fun scenario, but... You wouldn't be 00:15:00.600 --> 00:15:02.600 a secret millionaire. You'd be holding an illegal 00:15:02.600 --> 00:15:05.480 artifact. That is correct. The law explicitly 00:15:05.480 --> 00:15:07.600 decreed that possession of these certificates 00:15:07.600 --> 00:15:10.720 by private individuals was entirely illegal. 00:15:10.879 --> 00:15:13.779 Wow. The regulations enacted during the hoarding 00:15:13.779 --> 00:15:16.659 crisis of the 1930s meant that holding gold certificates 00:15:16.659 --> 00:15:19.659 was a federal crime. And because this specific 00:15:19.659 --> 00:15:21.799 bill never circulated publicly to begin with, 00:15:21.799 --> 00:15:24.940 if you have one, it means it was unlawfully removed 00:15:24.940 --> 00:15:27.519 from federal custody. So you can't spend it. 00:15:27.639 --> 00:15:29.899 You can't deposit it in your local bank branch. 00:15:30.039 --> 00:15:31.740 You can't even keep it framed on your wall in 00:15:31.740 --> 00:15:33.899 your living room. No, the Secret Service would 00:15:33.899 --> 00:15:36.559 be knocking on your door very quickly. Outside 00:15:36.559 --> 00:15:38.700 of the federal government, they can only be used 00:15:38.700 --> 00:15:41.919 for educational purposes. Like in a museum. Which 00:15:41.919 --> 00:15:44.379 practically means public viewing in highly secure 00:15:44.379 --> 00:15:47.799 museums, yes. If you want to see one, you have 00:15:47.799 --> 00:15:49.759 to go to where they are legally allowed to be 00:15:49.759 --> 00:15:52.200 displayed. Where's that? For example, there is 00:15:52.200 --> 00:15:56.659 a series 1934 issue with the serial number A 00:15:56.659 --> 00:16:00.899 0000001A. The very first one off the press. The 00:16:00.899 --> 00:16:03.740 very first one. And another with the serial number 00:16:03.740 --> 00:16:08.519 ending in 20109A. Both of those specific bills 00:16:08.519 --> 00:16:11.320 have been showcased behind very thick glass at 00:16:11.320 --> 00:16:13.779 the National Museum of American History. Just 00:16:13.779 --> 00:16:16.259 sitting there, a silent testament to a totally 00:16:16.259 --> 00:16:19.080 different era of finance. And we mentioned at 00:16:19.080 --> 00:16:21.200 the top of the deep dive that holding one is 00:16:21.200 --> 00:16:23.580 like holding millions today. Yes, adjusting for 00:16:23.580 --> 00:16:26.269 inflation. Right. Factoring in inflation from 00:16:26.269 --> 00:16:29.830 1934 up to modern day, the estimated equivalent 00:16:29.830 --> 00:16:33.190 value of just one of these bills is roughly $2 00:16:33.190 --> 00:16:39.429 .29 million. One single piece of paper, 157 millimeters 00:16:39.429 --> 00:16:42.769 wide, two and a quarter million dollars of purchasing 00:16:42.769 --> 00:16:45.549 power. This raises an important question, doesn't 00:16:45.549 --> 00:16:47.450 it? What's that? It challenges everything we 00:16:47.450 --> 00:16:49.429 intuitively feel about what makes money real. 00:16:50.250 --> 00:16:53.320 Here you have a physical object. The text, printed 00:16:53.320 --> 00:16:56.299 beautifully and permanently, directly on it explicitly 00:16:56.299 --> 00:16:59.460 states, this certificate is legal tender in the 00:16:59.460 --> 00:17:01.860 amount thereof in payment of all debts and dues 00:17:01.860 --> 00:17:04.079 public and private. It says it right there. The 00:17:04.079 --> 00:17:06.779 bill itself declares that it is money. It declares 00:17:06.779 --> 00:17:09.180 that it is legal to use for debts. But the underlying 00:17:09.180 --> 00:17:12.339 law says you, the private citizen, absolutely 00:17:12.339 --> 00:17:14.960 cannot hold it or use it. It's a profound paradox. 00:17:15.539 --> 00:17:17.559 It is a piece of currency that simultaneously 00:17:17.559 --> 00:17:21.019 asserts its own ultimate absolute value, while 00:17:21.019 --> 00:17:23.299 the legal framework surrounding it completely 00:17:23.299 --> 00:17:25.640 forbids the public from realizing that value. 00:17:25.740 --> 00:17:28.029 That's fascinating. It beautifully highlights 00:17:28.029 --> 00:17:30.390 the absolute power of the government to not just 00:17:30.390 --> 00:17:33.329 print money, but to rigidly define what money 00:17:33.329 --> 00:17:36.369 is, what form it can take, and exactly who is 00:17:36.369 --> 00:17:38.789 allowed to hold it at any given moment in history. 00:17:39.450 --> 00:17:42.509 Money isn't a natural law of physics. It is a 00:17:42.509 --> 00:17:44.849 legally constructed system of rules. So what 00:17:44.849 --> 00:17:47.869 does this all mean? We started by imagining holding 00:17:47.869 --> 00:17:49.970 a piece of paper worth millions that could get 00:17:49.970 --> 00:17:52.180 you arrested on the spot. Right. And over the 00:17:52.180 --> 00:17:54.380 course of this deep dive, we've explored how 00:17:54.380 --> 00:17:57.440 a single piece of paper featuring Woodrow Wilson's 00:17:57.440 --> 00:18:01.160 face and bright radiating orange rays was created 00:18:01.160 --> 00:18:04.220 as a drastic sweeping measure to fight the Great 00:18:04.220 --> 00:18:06.880 Depression. It was a chaotic time. It was a tool 00:18:06.880 --> 00:18:10.130 to stop panic gold hoarding. to unfreeze a terrified 00:18:10.130 --> 00:18:12.930 economy by revaluing the metal itself, and to 00:18:12.930 --> 00:18:15.789 act as a secret backstage pass, moving massive, 00:18:15.849 --> 00:18:18.769 literal tons of wealth internally between Federal 00:18:18.769 --> 00:18:21.029 Reserve banks without needing a fleet of armored 00:18:21.029 --> 00:18:23.470 trains. It was a temporary, almost desperate 00:18:23.470 --> 00:18:26.089 solution to a massive logistical and economic 00:18:26.089 --> 00:18:28.769 bottleneck. And it's wild to think about how 00:18:28.769 --> 00:18:31.099 far we've come. I want you to think about this. 00:18:31.160 --> 00:18:33.440 The next time you use your phone to pay a utility 00:18:33.440 --> 00:18:36.460 bill or, you know, the next time you use a banking 00:18:36.460 --> 00:18:39.259 app to instantly split a dinner check with a 00:18:39.259 --> 00:18:42.980 friend. It's basically magic. In a way, you are 00:18:42.980 --> 00:18:45.900 effortlessly doing exactly what the United States 00:18:45.900 --> 00:18:48.640 government once needed. A hundred thousand dollar 00:18:48.640 --> 00:18:51.180 piece of paper, a presidential executive order 00:18:51.180 --> 00:18:54.200 and the confiscation of private gold to accomplish. 00:18:54.490 --> 00:18:58.029 You are moving abstract value instantly without 00:18:58.029 --> 00:19:00.349 the weight of physical metal. That is exactly 00:19:00.349 --> 00:19:03.490 right. Today, we transfer millions, even billions 00:19:03.490 --> 00:19:06.230 of dollars between banks globally in milliseconds, 00:19:06.289 --> 00:19:08.690 and we do it using nothing but invisible digital 00:19:08.690 --> 00:19:12.730 code. But back in 1934, achieving that immense 00:19:12.730 --> 00:19:15.049 instant transfer of wealth required a physical 00:19:15.049 --> 00:19:17.589 object. It required a beautifully engraved piece 00:19:17.589 --> 00:19:19.809 of paper that a bank teller actually had to hold 00:19:19.809 --> 00:19:21.990 in their hands. It's hard to wrap your head around. 00:19:22.190 --> 00:19:25.569 And it leaves me with this final thought. As 00:19:25.569 --> 00:19:28.829 our money becomes completely invisible, as we 00:19:28.829 --> 00:19:31.549 move into the era of central bank digital currencies, 00:19:31.769 --> 00:19:34.589 where money is just programmable code on a government 00:19:34.589 --> 00:19:37.970 server, what happens to that ultimate power to 00:19:37.970 --> 00:19:41.289 define money? Oh, wow. The $100 ,000 bill shows 00:19:41.289 --> 00:19:43.670 us the government can legally dictate who is 00:19:43.670 --> 00:19:46.069 allowed to hold wealth. If all money becomes 00:19:46.069 --> 00:19:48.289 digital, they don't just control who holds it. 00:19:48.549 --> 00:19:50.789 They could theoretically program an expiration 00:19:50.789 --> 00:19:53.710 date on your savings or dictate exactly what 00:19:53.710 --> 00:19:56.049 you are legally allowed to buy with it. That 00:19:56.049 --> 00:19:58.349 is a scary thought. When we trade the physical 00:19:58.349 --> 00:20:01.369 paper for the convenience of code, what tangible 00:20:01.369 --> 00:20:03.710 safeguards against that power are we leaving 00:20:03.710 --> 00:20:06.670 behind? That is a phenomenal, slightly terrifying 00:20:06.670 --> 00:20:08.609 question, and definitely something to mull over 00:20:08.609 --> 00:20:10.329 the next time you tap your card at the grocery 00:20:10.329 --> 00:20:12.470 store. Thank you so much for joining us on this 00:20:12.470 --> 00:20:15.190 deep dive into one of the rarest, weirdest pieces 00:20:15.190 --> 00:20:17.950 of American history. Keep questioning the everyday 00:20:17.950 --> 00:20:20.589 systems around you, keep looking closely at the 00:20:20.589 --> 00:20:22.809 invisible mechanics you take for granted, and 00:20:22.809 --> 00:20:24.650 we will catch you on the next deep dive.