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National Banknotes Basic Questions

 
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Author Previous TopicReplies: 6 / Views: 590Next Topic  
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United States
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 Posted 04/03/2020  11:02 pm Show Profile   Bookmark this topic Add howell1018 to your friends list Get a Link to this Message
I collect coins ( Morgan dollars) but have always been curious about this area of numismatics. I have some basic questions about these items.
1) From what year to what year were these issued?
2) What did a bank/institution have to do to get these authorized?
3) If a bank wanted to issue $200,000 in banknotes (an example) did they have to send a like amount of Federal banknotes somewhere?
4) Who made the actual notes? The BEP? Private companies?
5) Are they still legal tender, and if not, when did they lose their recognition?
6) Let's say it's 1883, I live in Des Moines, and I travel to Chicago on business. Will my 1st National Bank of Des Moines banknotes be accepted in the Windy City? Could I use them at Mrs. O'Leary's milk bar, or do I have to exchange my notes at a bank first? How were the individual notes identified as authentic. Did the banks have a book with illustrations perhaps?
7) Why were these created in the first place? Was there a lack of Federal notes?
8) If the issuing bank went "belly up," were the notes then worthless?
9) Who designed them?

I know that's a lot to address. Appreciate any response.
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United States
2769 Posts
 Posted 04/04/2020  12:28 am  Show Profile   Bookmark this reply Add SteveInTampa to your friends list Get a Link to this Reply
Good questions, and some answers could be long.
1) 1863 - 1929 (1935)
2 & 3) Be granted a Charter by the national government by depositing government bonds with the Treasurer of the United States, after which they could issue notes in an amount limited to 90% of the par value of the bonds.
4) A collaboration between private bank note companies and the BEP.
5) Yes.
6) Yes. *
7) *
8) No.
9) *

The * designates a long answer and you can read more about the the details here; https://en.wikipedia.org/wiki/National_Bank_Note

Edited to add; Unlike Obsolete Bank Notes, that also were issued by individual banks, National Bank Notes were/are backed by the United States government and are still legal tender today. Most of the detailed information concerning National Bank Notes is best obtained from books.
Edited by SteveInTampa
04/04/2020 04:43 am
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United States
49523 Posts
 Posted 04/04/2020  3:37 pm  Show Profile   Bookmark this reply Add Coinfrog to your friends list Get a Link to this Reply
Well summarized, Stever.
Valued Member
United States
340 Posts
 Posted 04/04/2020  4:57 pm  Show Profile   Bookmark this reply Add howell1018 to your friends list Get a Link to this Reply
Thanks Steve
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United States
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 Posted 06/07/2020  6:35 pm  Show Profile   Bookmark this reply Add suipakpaikungfu to your friends list Get a Link to this Reply
Well said Steve! There's good reference book I use, "National Bank Notes"
by Don C Kelly. Great info section about these in the front pages.
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United States
402 Posts
 Posted 06/07/2020  6:38 pm  Show Profile   Bookmark this reply Add suipakpaikungfu to your friends list Get a Link to this Reply
Here are some nice ones, I was fortunate enough to own the Belfast #1 note for a while...

http://goccf.com/t/371949
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United States
440 Posts
 Posted 07/02/2020  12:29 am  Show Profile   Bookmark this reply Add GregAlex to your friends list Get a Link to this Reply
A little more precise answer to #4 - Initially the Treasury contracted three major bank note firms (Continental, National, and American) to print these because they didn't have the capacity at the time. Over the next decade, as the BEP became established, they brought the work in-house. By the mid-1870s all National Bank Notes were being printed by the Bureau.
Edited by GregAlex
07/02/2020 12:29 am
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