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  • Writer's picturecapolen

National Currency

Updated: Dec 22, 2022

Photo courtesy of Heritage Auctions

Prior to 1861 the federal government allowed the states and territories individual regulatory authority over their financial and banking systems. Thus, there was a lack of standardization and widely divergent banking laws & regulations, many of which were often vague or lax. The result was a proliferation of paper money issues, many beautifully designed, but with no guarantee of worth or ability to be redeemed. Paper money issued from 1782 to 1866 is commonly referred to as “Obsolete Currency.” These paper money issues were sponsored by private banks, organizations, businesses and individuals in most areas of what was then the United States or its territories. Due to the large number of paper money issuers the problem of which notes were legitimately issued and which were fraudulently issued became acute. Several organizations began issuing weekly registers on relative validity of a long list of circulating bank issues from all over the country, including their percentage of redemption discount, if any. The Civil War changed everything. From the outset of war in 1861 it was apparent the Union would need to find some way of financing its military expenditures. Privately issued paper money continued to be used throughout the Civil War in both the North and South. Eventually the Union government imposed a10% surtax on all privately issued paper money effectively removing them from circulation by 1866.

The National Currency Act of February 25, 1863 (NCA) provided for the organization of national banks with an initial capital of $50,000 or more and granted them a corporate life of 20 years or less, beginning with the date of the act. It also established The National Currency Bureau and the position of Comptroller of the Currency. The Bureau was responsible for the regulation of national banks and the issue of national bank notes. National banks were required to purchase U.S. Bonds and ‘deposit’ them with the U.S. Treasury. By doing this, a national bank could circulate national bank notes in amounts up to 90% of the value of those bonds. NCA had two major purposed goals (1) create a stable currency that would circulate at par (face value) throughout the country and (2) provide for the secure backing of this currency with U.S. bonds purchased by the national banks. Thus, the Union could concurrently finance the Civil War through the bank purchases of bonds and stabilize the chaos within the country’s money supply.

During the seventy-two (72) years of the note issuing period of 1863 to 1935 eleven different types of notes were issued in four distinguished series. Each series, or charter period, has a distinctive look. Each type of national bank note issued between 1863 and 1935 may be identified by its respective distinctive features. Many features, dictated by legislative acts, had three main effects on national banks and the notes they issued:

1. Changed the requirements for organizing a national bank usually making it easier for a bank to organize or possible to increase the circulation of an existing bank;

2. Allowed for the extensions of a bank’s corporate life and led to the issue of notes with a different design;

3. The Federal Reserve Act adversely impacted national banks by discouraging the issuance of national bank notes and marked the beginning of the end of the national bank note era.

There are four basic types of note design, commonly called “charter period” or “series” to distinguish each. This designation coincides with the legislation allowing banks to charter or re-charter to extend their life.

The “First Charter Period” was 1863 to 1882. These notes are referred to as “Original Series” and “Series of 1875” to reflect their design differences. Original Series or Series 1865 notes were printed from 1863 to 1875 in denominations of $1, $2, $5, $10, $20, $50, $100, $500 and $1,000. Both the “Original Series” and “Series of 1875” notes featured historical vignettes on their front and bank making them appear similar in design. The National Bank Act of June 3, 1864 changed this, only the words ‘national’ and ‘bank’ had to be used in the title. These notes were printed by private bank note companies in New York City and shipped to Washington DC where the Bureau of Engraving & Printing (BEP) added the Treasury seal and Treasury serial numbers. Original Series notes did not include bank charter numbers in their design and were only allowed to use numerical titles, i.e. First, Second, Third, etc. The Act of June 30, 1874 required Series 1875 notes to have the bank charter number imprinted on the face of the note. In addition, these notes have a red surcharge of “Series 1875” next to one of the charter number imprints.

The Act of March 3, 1875 required banknotes be printed on “distinctive” paper and that no banknotes with denominations of less than $5 should circulate after the resumption of specie (gold & silver coins) payments. On January 1, 1879 specie payments resumed, issues of $1 and $2 national banknotes ended on January 22, 1879 with shipments of notes to several hundred banks.

The “Second Charter Period” was 1882 to 1902. These notes are referred to as “Series of 1882”. The Act of July 12, 1882 extended the corporate life of national banks for 20 years and provided for a series of new note designs with denominations of $5, $10, $20, $50 and $100. Congressional actions resulted in three types of Series 1882 notes, 1882 ‘Brown Backs’, 1882 ‘Date Backs’ and 1882 “Value Backs’.

· Brown Backs - The name stems from the fact the backs of the notes were printed in brown. The Treasury seal on the face of the note is also brown. The charter number is printed on the back of the note along with the state seal (on the left side of the note). The charter number is engraved six times around the front border.

· Date Backs – The Emergency Currency Act of May 30, 1908 (ECA) permitted national banks to issue notes backed by securities other than U.S. bonds such as state or municipal bonds. The faces of these notes are the same as brown backs with the exception of the securities clause and the Treasury seal and charter number are printed in blue. The back of the note replaces the charter number and state seals with the dates 1882-1908.

· Value Backs – The ECA expired on June 30, 1915 after which national banks were not permitted to use “other securities” to secure their notes. These notes were issued to replace date backs, however the faces of most of these notes include the other securities clause unless a new face plate was engraved. The back of the notes replaces the dates 1882-1908 with the spelled-out denomination of the note.

The Gold Standard Act of March 14, 1900 contained a provision that allowed the organization of national banks with capital of $25,000 in towns with populations of 3,000 or less. The Act of April 12, 1902 allowed existing national banks to receive a 20-year extension on their corporate existence and for new banknote designs. Newly organized banks and those receiving extensions began issuing Series 1902 notes.

The “Third Charter Period” was 1902 to 1929. These notes are referred to as “Series of 1902”. Once again there were three types of Series 1902 notes, 1902 ‘Red Seals’, 1902 ‘Date Backs’ and 1902 ‘Plain Backs’.

· Red Seals – The name stems from the Treasury seal and charter number being printed in red. The first notes were shipped March 17, 1902. These are the scarcest of the Series 1902 notes and are usually found with pen signatures of bank officers.

· Date Backs – Banks issuing red seals in 1908 switched to date backs as a result of the ECA. The changed allowed the security clause to include “other securities” and had the Treasury seal and charter number printed in blue. The design of these notes was the same as red seals but included the dates 1902-1908 on the back.

· Plain Backs – Banks issuing date backs when the ECA expired on June 30, 1915 switched to 1902 plain backs. The design of these notes was the same as date backs but with the backs void of any design or date.

Making the dating of some notes a challenge is the fact that if a bank was re-chartered at the end of the second charter period, such as in 1901, that bank would be issuing Series of 1882 notes from 1901 to 1921 when it again needed to be re-chartered and would have begun issuing third charter period or Series of 1902 notes from 1921 to 1929 when all national banks switched to fourth charter period or Series of 1929 notes.

The “Fourth Charter Period” was 1929 to 1935. These notes are referred to as “Series of 1929”. The “Series of 1929” notes were issued in ‘small size’ only but with two different serial number layouts. Series of 1929 Type 1 notes were issued from July 1929 to May 1933 with a 6-digit serial number with a prefix and suffix letter, for example A000001A. Series of 1929 Type 2 notes were issued from 1933 to 1935 with a 6-digit serial number with only a prefix letter followed by the bank’s charter number, for example A000001.

National Gold Bank Notes were authorized by the Act of July 12, 1870. Only a few west coast national banks were organized un the NCA because people in the west preferred “hard money” or gold & silver which resulted in the Act of July 12, 1870. These notes were issued in denominations of $5, $10, $20, $50, $100, $500 and $1,000 with face designs similar to the Original Series faces but with two very prominent distinctions. Boldly displayed on the face of these notes is the phrase “Redeemable in Gold Coin” and they were printed on yellow paper. Of the 10 National Gold Banks that issued notes, nine were organized in California. The Kidder National Gold Bank of Boston, MA received notes but records indicate all were returned to the Comptroller of the Currency. The Act of February 14, 1880 allowed National Gold Banks to convert to regular national banks – all surviving national gold banks converted.

The Federal Reserve Act of December 23, 1913 (FRA) was passed creating the Federal Reserve System and marked the beginning of the end for national currency. Two provisions of FRA discouraged the issuing of national bank notes (1) the act permitted national banks to organize without depositing bonds with the Treasury which made those banks ineligible to issue notes and (2) permitted national banks to sell their bonds to the Federal Reserve. By selling their notes to the Federal Reserve the bank could then reduce its circulation of notes by an equal amount. FRA had a dramatic impact on the number of national banks issuing notes. Before 1914 10,472 national banks were organized, all but 30 of these banks issued notes. From 1914 to 1935 4,000 national banks were organized with over 1,600 of these banks not issuing notes. The Federal Home Loan Act of 1932 contained a provision that ultimately caused the demise of national banknotes. FHLA specified that bonds used to secure national banknotes would lose that privilege three years after the passage of FHLA. Therefore, note issuing privilege ended on July 22, 1935, ending the period of national banknotes.

Missouri National Banks

Two hundred eighty-nine (289) Missouri banks received a national charter during the note issuing years of 1863 – 1935. Of these two hundred sixty-six (266) banks issued national bank notes. The Bankers World’s Fair National Bank of St. Louis, Charter #7179 issued 334 $50 and 334 $100 denomination Series 1902 ‘Red Seal’ notes. By January 3, 1905 these notes had been received by the redemption agency in Washington, DC therefore only 265 charters are considered collectible. Seventy-six of 114 Missouri counties had national banks chartered and with 73 counties collectable. Two hundred fifty-three charters issued ‘large size’ notes (Series 1863 – 1928) with forty-two titles from thirty-seven charters unreported. One hundred nineteen charters issued ‘small size’ notes (Series 1929 Type 1 & Type 2). Cities and towns are listed in alphabetical order, for cities or towns with more than one issuing national bank the charters will be in numerical order.


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