1976 $2 Small Size Legal Tender Note // Star Note // PMG Certified Gem Uncirculated 65 Condition

United States Notes, also known as Legal Tender Notes, were a form of U.S. paper money issued from 1862 to 1971. Having been produced for 109 years, they were the longest running form of paper money in U.S. history. They were authorized as a form of fiat currency by the first Legal Tender Act. United States Notes acquired the name Legal Tender Notes due to the obligation that appeared on the reverse of the notes during the 1860’s, which read: “This Note is a Legal Tender for All Debts Public and Private Except Duties On Imports And Interest On The Public Debt; And Is Redeemable In Payment Of All Loans Made To The United States.”

Legal tender notes were originally placed in circulation by the U.S. Treasury to pay expenses incurred by the Union during the Civil War. During the next century, the legislation governing these notes was modified many times and numerous versions were issued by the Treasury. Prior to 1929, United States Notes were issued in a large-size format, measuring 7.4 x 3.1 inches. Given this large size, they were later referred to as “horse blankets.”

Starting in 1929, the size of U.S. currency was reduced to its present dimensions, and the United States Notes appeared more similar to recent Federal Reserve Notes, with the distinction of having Treasury seals and serial numbers that were red instead of green. Although all United States Notes remain valid currency to this day, they are virtually non-existent in circulation and some command significant collectible premiums.

The note offered here is a $2 example of one of the last series of Legal Tender notes, certified to be in Gem Uncirculated-65 condition. This note also has the distinction of being a replacement note, or “star note.” When notes are found to be damaged or printed incorrectly, the misprinted error notes are replaced with notes bearing the same serial number, but with a star symbol replacing the first or last letter. They are used to maintain a correct count of notes in a serial number run. By their nature, star notes are scarcer than standard notes and are often sought after by collectors.