<P> Both United States Notes and Federal Reserve Notes are parts of the national currency of the United States, and both have been legal tender since the gold recall of 1933 . Both have been used in circulation as money in the same way . However, the issuing authority for them came from different statutes . United States Notes were created as fiat currency, in that the government has never categorically guaranteed to redeem them for precious metal - even though at times, such as after the specie resumption of 1879, federal officials were authorized to do so if requested . </P> <P> The difference between a United States Note and a Federal Reserve Note is that a United States Note represented a "bill of credit" and was inserted by the Treasury directly into circulation free of interest . Federal Reserve Notes are backed by debt purchased by the Federal Reserve, and thus generate seigniorage for the Federal Reserve System, which serves as a lending intermediary between the Treasury and the public . </P> <P> Today, like the currency of most nations, the dollar is fiat money, unbacked by any physical asset . A holder of a federal reserve note has no right to demand an asset such as gold or silver from the government in exchange for a note . Consequently, some proponents of the intrinsic theory of value believe that the near - zero marginal cost of production of the current fiat dollar detracts from its attractiveness as a medium of exchange and store of value because a fiat currency without a marginal cost of production is easier to debase via overproduction and the subsequent inflation of the money supply . </P> <P> In 1963, the words "PAYABLE TO THE BEARER ON DEMAND" were removed from all newly issued Federal Reserve notes . Then, in 1968, redemption of pre-1963 Federal Reserve notes for gold or silver officially ended . The Coinage Act of 1965 removed all silver from quarters and dimes, which were 90% silver prior to the act . However, there was a provision in the act allowing some coins to contain a 40% silver consistency, such as the Kennedy Half Dollar . Later, even this provision was removed, with the last circulating silver - content halves minted in 1969 . All previously silver coins minted for general circulation are now clad . During 1982, the composition of the cent was changed from copper to zinc with a thin copper coating . The content of the nickel has not changed since 1946 . Silver and gold coins are produced by the U.S. government, but only as non-circulating commemorative pieces or in sets for collectors . </P>

When was the us dollar backed by gold