When you look in your wallet, you may find a $1, $5, $10, $20, even $50 or $100 bill, but you’ll almost never see a $2 bill with Thomas Jefferson on the front. The $2 bill has had an unfortunate history in the US economy, but it is perfectly legal tender.
In 1862, the federal government printed the first nationalized paper bills. The only bills that were printed were $1 and $2. Nationalized coins have been in circulation for at least the last sixty years. Therefore, the federal government was not sure how the public would react to the use of paper money for the first time.
By the early 20th century, the average worker earned $15 a month. Inflation slowly reduced the value of paper money, but then the Great Depression plunged the economy into chaos. Most things cost a lot and most people didn’t have much money. Paper money was rarely used. Therefore, owning $2 bills was considered a luxury that only the rich could afford. It has even become known as a “shadow” account, used for shady exchanges such as gambling, prostitution and under-the-table deals.
After the economy recovered, $2 bills were rarely printed because the federal government began printing many new $5, $10, and $20 bills between 1928 and 1950.
By 1966, the federal government didn’t know what to do with the bill, so it stopped printing them altogether. However, they returned to circulation in 1976. Nevertheless, the average consumer began to hide them as collectibles. A few years ago, I remember receiving a crisp new $2 bill from my uncle for Christmas, encased in a special leather case. He gave the whole family the same gift. Everyone was so impressed that we wondered how much he paid for it. “Two $1 bills,” he said.
One common misconception is that the $2 bill is no longer in circulation. However, this is not the case, as the official Bureau of Engraving lists the $2 bill as one of the smaller denominations of US currency. Today, millions of such bills have been reprinted in circulation. However, people still stop when they are handed a $2 bill to change; they think they’ve either been given a collector’s item that’s worth more money, or it could be some new novelty that the government has started printing.
Although the $2 bill is not enough, it is perfectly legal to use it to buy anything. But if you get stopped because the cashier thinks the bill is fake, you’re now ready to talk about its history.