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If the party holding the acceptance sold the note before maturity, a discount value called the Banker's Discount was used to reduce the face value of the amount to be handed over to the claimant. Historically, the discount rate used by the Banks on such acceptances was FV × r × t (FV: Face Value, r: interest rate, t: time period).
These notes were known as state bank notes. State bank notes did not achieve widespread acceptance outside of their state of issue. The first institution to issue notes with national acceptance in the U.S. was the nationally chartered First Bank of the United States, chartered in 1791 by Alexander Hamilton. Its charter was not renewed in 1811.
National Gold Bank Notes were issued by private banks, mostly from California. The concept is similar to that of the National Bank Notes, the difference being that National Gold Bank Notes were redeemable in gold. They were issued from 1870 to 1875 in denominations of $5, $10, $20, $50, $100 and $500.
This development required the acceptance in trade of the goldsmiths' promissory notes, payable on demand. Acceptance in turn required a general belief that coin would be available; and a fractional reserve normally served this purpose. Acceptance also required that the holders of debt be able to legally enforce an unconditional right to payment ...
What the Fed has exchanged these deposits and notes for (gold and mostly t-bills) are recorded as assets to the Fed. To the private banks, the Federal Reserve Deposits are assets. Private banks do have the option to convert Federal Reserve Deposits into Federal Reserve Notes and vice versa, as needed to meet the demands of bank customers.
This made counterfeiting bank notes harder still, at least in the short term, and in 1803 the number of forged bank notes fell to just 3000, compared to 5000 the previous year. [16] Banks asked skilled engravers and artists to help them make their notes more difficult to counterfeit during the same time period, which historians refer to as "the ...
Thompson's Bank Note Reporter was a periodical published in New York City by John Thompson beginning in 1842. As a bank note reporter, its main purpose was to convey information about the notes issued by each of the hundreds of different banks operating in North America at the time, including the discounts at which their notes traded, and descriptions of counterfeits currently in circulation.
The United States Notes were dramatically redesigned for the Series of 1869, the so-called Rainbow Notes. The notes were again redesigned for the Series of 1874, 1875 and 1878. The Series of 1878 included, for the first and last time, notes of $5,000 and $10,000 denominations. The final across-the-board redesign of the large-sized notes was the ...