A Technical Question on National Bank Notes

[jtryka]

Ok, this is probably just my analytical mind thinking too hard on these things, but since I have a few large size nationals the question arose. Originally when the National Bank Acts of 1863 and 1864 were passed, National Banks were required to maintain Treasury Bonds with the Comptroller of the Currency which would be used to back the issuance of National Currency notes (the amount issued could not exceed 90% of the amount of bonds on deposit), So it's 100 years or more later, and in the case of the notes I own, none of these banks exist anymore that I could tell, yet the notes themselves are still legal tender. So what happened to the bonds that were backing those notes? Are they still on deposit with the Federal Government somewhere? Were they exchanged for new bonds when they matured? If I have $90 face in national bank notes, there should be $100 in bonds somewhere backing them, and I just wondered what happened with that. If anyone knows, please help a curious collector out!

[gpnyc]

That's a great question and I'm curious to hear the answer. If you don't get one here, I would contact Don Kelly. He would know for sure.

[Jamericon]

The bonds for any outstanding national bank notes were eventually purchased by the Treasury, whereby they assumed the liability and responsibility for all unredeemed national bank notes.

 

The notes themselves became obiligations of the Federal government - in effect, they became equivalent to Federal Reserve Notes.

 

The bonds are long gone - they lost circulation priviliges in 1935 (which ended NBNs).

 

[Edited to correct inconsistencies.]