You can no longer bank on these

For those who may have forgotten that such things existed, we bring you a Series 1902 banknote that listed on eBay last month for $267:

1907 National Bank Note obverse

1907 National Bank Note reverse

In 1863, the National Banking Act provided that nationally-chartered banks could issue banknotes, backed by US bonds purchased by the issuing banks. This practice continued until the Great Depression, when the government decided that all currency should be issued from a single source.

Hugh McCulloch, portrayed on this $20 note issued in Oklahoma City, served as Secretary of the Treasury in Abraham Lincoln’s second, rudely interrupted term, and continued into Andrew Johnson’s; he returned to Treasury for the last few months of the Chester A. Arthur administration. Interestingly, he had opposed the idea of paper money without gold backing, and in his first report called for the gradual replacement of greenbacks with specie.

The text on the lower reverse:

This note is receivable at par in all parts of the United States, except duties on imports, and also for all salaries and other debts and demands owing by the United States to individuals, corporations and associations within the United States except interest on public debt.

(Via user Praedura on OKCTalk.com.)







3 comments

  1. Mark Alger »

    3 February 2013 · 10:41 pm

    That’d be Andrew Johnson. Jackson came first.

    M

  2. CGHill »

    3 February 2013 · 10:45 pm

    Fixed now. Sorry. (Why in the world would I think of Andrew Jackson in connection with a $20 bill, anyway?)

  3. McGehee »

    4 February 2013 · 8:37 am

    I wonder, since gold-backed currency has been a thing of the past for longer than most can now remember, whether returning to the National Banking Act would be that bad an idea.

    What became of a bank’s greenback issuances if the bank failed?

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