When Harriet Tubman died in in March of 1913, the U.S. $20 bill bore George Washington’s portrait and the inscription “This certifies that there have been deposited in the treasury of the United States of America $20 in gold coin payable to the bearer on demand.”
Later that year, Congress passed and President Woodrow Wilson signed the Federal Reserve Act. The following year, the Federal Reserve issued a new $20 bill, adorned with the portrait of Grover Cleveland. In 1928, the first $20 bill bearing the visage of Andrew Jackson appeared. Even though the Federal Reserve had taken over the creation of “money” (loosely defined) from the U.S. Treasury, the note still promised that it could be redeemed for gold at the U.S. Treasury, or gold or “lawful money” at any Federal Reserve Bank.
Nearly 90 years later, as the Treasury announces that Tubman’s likeness will grace the next $20 bill, Federal Reserve Notes are just paper, no longer redeemable in gold and sustained only by the faith of buyers and sellers in a government nearly $20 trillion of its own debased dollars in actual debt – and even deeper in the hole when unfunded promises of future spending are taken into account.