"National Currency" Note

[cpm9ball]

I have a $10, Series 1929 from the Federal Reserve Bank of San Francisco. Why was it called "National Currency"? Is there any significance to the brown seal and serial number?

 

Chris

 

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[HaydenTubbs]

Maybe because it was used nationally?

[Jamericon]

They are not known as National Currency. Federal Reserve Bank Note, or FRBN, is the normal name.

 

National Currency was a long running program begun in 1863, where banks bought the rights in federal government bonds to issue local currency. FRBNs are special issue currency, circulated during the depression in the early 1930's to help boost the economy. They were notes of the Federal Reserve Banks which gave the government more flexibility with their issuance.

 

They were printed using the same plates that National Currency was printed on.

 

The signifigance of the brown seal was to differentiate the notes from currenct Federal Reserve notes, United States notes, and Gold Certificates.

[cpm9ball]

They are not known as National Currency. Federal Reserve Bank Note, or FRBN, is the normal name.

 

National Currency was a long running program begun in 1863, where banks bought the rights in federal government bonds to issue local currency. FRBNs are special issue currency, circulated during the depression in the early 1930's to help boost the economy. They were notes of the Federal Reserve Banks which gave the government more flexibility with their issuance.

 

They were printed using the same plates that National Currency was printed on.

 

The signifigance of the brown seal was to differentiate the notes from currenct Federal Reserve notes, United States notes, and Gold Certificates.

 

Thanks, Jam ! As a postscript to your explanation, maybe you can confirm something I was told...........

 

Apparently, there was a critical shortage of circulating paper money sometime during the 30's. The BEP had sufficient stock available to print more, but with the drying process and all, it would take too long to get it into circulation. Some of the "National Currency" stock was already partially, pre-printed and could be distributed in much shorter time. Is there any truth to this?

 

Chris

[gnat-migration]

maybe you can confirm something I was told...........

 

Apparently, there was a critical shortage of circulating paper money sometime during the 30's. The BEP had sufficient stock available to print more, but with the drying process and all, it would take too long to get it into circulation. Some of the "National Currency" stock was already partially, pre-printed and could be distributed in much shorter time. Is there any truth to this?

 

This is not entirely correct. At the time (1934), there was a critical shortage of circulating currency, mostly due to the redemption of FRNs for gold (series 1928, 28A, 28B, 28C & 28D all were redeemable for gold) and some being horded. In the year previous, nearly 1/4th of all the banks in the US had closed because of runs on deposits. The Fed was required by law to maintain a certain ratio of gold reserves to back outstanding currency. Simply issuing more FRNs, particularly with gold redemption privileges, was not an option since the Fed's reserves were quickly being depleted.

 

As part of the emergency legislation passed by Congress in early March, 1934 (after Rosevelt was inaugurated) a new emergency issue of Federal Reserve Bank Notes was authorized. These were backed by US Bonds and other commercial paper, and could not be redeemed for gold.

 

As a pure expediant (because it could take up to 18 months to design and print a new series of currency), existing stocks of National Bank Notes (without the Bank overprintings) were used. As a result, within days, the new FRBNs were delivered to some of the Federal Reserve Districts. Then to meet the demand for these notes, new National Currency sheets were also printed over the next 6 months.

 

The National Bank Notes were "converted" into FRBNs by using different overprintings of the bank names, security requirements, serial numbers and Fed Reserve Seal. Due to a lessening of hording and thus demand, less than 1/2 of the $2,000,000,000 in FRBNs authorized by Congress were ever printed and of those, less than 50% were ever issued during the Depression. Actually, the bulk of the remaining stocks of FRBNs (mostly higher denominations) were not issued into circulation until 1943 and 1944 during WWII to address another currency shortage.

[cpm9ball]

Thanks, Gnat ! Very interesting.

 

Welcome to the boards.

 

Chris

[Joel-migration]

good stuff Gnat!!