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Fiscal Agent o f the United States

r Circular N o. 3 9 5 4 "1
M arch 5, 1953

Offering o f $1,200,000,000 of 91-Day Treasury Bills
Dated March 12, 1953

Maturing June 11, 1953

To all Incorporated Banks and Trust Companies, and Others
Concerned, in the Second Federal Reserve D istrict:

Following is the text o f a notice published tod a y :
F O R R E L E A S E , M O R N IN G N E W S P A P E R S ,
Thursday, M arch 5, 1953.

W ashington

T he Secretary o f the Treasury, by this public notice, invites tenders for $1,200,000,000, or thereabouts, o f 91-day Treasury
bills, for cash and in exchange for Treasury bills maturing M arch 12, 1953, in the amount o f $1,200,342,000, to be issued on
a discount basis under competitive and non-com petitive bidding as hereinafter provided. The bills o f this series will be dated
M arch 12, 1953, and will mature June 11, 1953, when the face amount will be payable without interest. T h ey will be
issued in bearer form only, and in denominations o f $1,000, $5,000, $10,000, $100,000, $500,000, and $1,000,000 (maturity value).
T enders will be received at Federal Reserve Banks and Branches up to the closing hour, tw o o ’clock p.m., Eastern
Standard time, M onday, March 9, 1953. Tenders will not be received at the Treasury Department, W ashington. Each
tender must be for an even multiple o f $1,000, and in the case o f com petitive tenders the price offered must be expressed on the
basis o f 100, with not m ore than three decimals, e.g., 99.925. Fractions may not be used. It is urged that tenders be made
on the printed form s and forwarded in the special envelopes which will be supplied b y Federal Reserve Banks or Branches
on application therefor.
O thers than banking institutions will not be permitted to submit tenders except for their ow n account. Tenders w ill be
received without deposit from incorporated banks and trust companies and from responsible and recognized dealers in invest­
ment securities. Tenders from others must be accom panied by payment o f 2 percent o f the face amount o f Treasury bills
applied for, unless the tenders are accompanied by an express guaranty o f payment by an incorporated bank or trust com pany.'
Imm ediately after the closing hour, tenders w ill be opened at the Federal Reserve Banks and Branches, following' which
public announcement will be made by the Secretary o f the Treasury o f the amount and price range o f accepted bids. Th ose
submitting tenders w ill be advised o f the acceptance or rejection thereof. The Secretary o f the Treasury expressly reserves
the right to accept or reject any or all tenders, in w hole or in part, and his action in any such respect shall be final. Subject
to these reservations, non-com petitive tenders for $200,000 o r less without stated price from any one bidder will be accepted
in full at the average price (in three decimals) of accepted competitive bids. Settlement for accepted tenders in accordance
with the bids must be made or com pleted at the Federal Reserve Bank on March 12, 1953, in cash or other immediately
available funds or in a like face amount o f Treasury bills maturing M arch 12, 1953. Cash and exchange tenders w ill receive
equal treatment. Cash adjustments will be made for differences between the par value o f maturing bills accepted in exchange
and the issue price o f the new bills.
T h e incom e derived from Treasury bills, whether interest or gain from the sale or other disposition o f the bills, shall not
have any exemption, as such, and loss from the sale or other disposition o f Treasury bills shall not have any special treat­
ment, as such, under the Internal Revenue Code, or laws amendatory or supplementary thereto. T h e bills shall be subject
to estate, inheritance, gift, or other excise taxes, whether Federal or State, but shall be exempt from all taxation now or here­
after imposed on the principal or interest thereof by any State, or any o f the possessions o f the United States, or by any local
taxing authority. For purposes o f taxation the amount o f discount at which Treasury bills are originally sold by the United
States shall be considered to be interest. Under Sections 42 and 11 7(a )(1) o f the Internal Revenue Code, as amended by
Section 115 o f the Revenue A ct o f 1941, the amount o f discount at which bills issued hereunder are sold shall not be considered
to accrue until such bills shall be sold, redeemed or otherwise disposed of, and such bills are excluded from consideration as
capital assets. A ccordin gly, the owner o f Treasury bills (other than life insurance com panies) issued hereunder need include
in his incom e tax return only the difference between the price paid for such bills, whether on original issue or on subsequent
purchase, and the amount actually received either upon sale or redemption at maturity during the taxable year for w hich the
return is made, as ordinary gain or loss.
Treasury Department Circular No. 418, as amended, and this notice, prescribe the terms o f the Treasury bills and govern
the conditions o f their issue. Copies o f the circular may be obtained from any Federal Reserve Bank or Branch.

This Bank will receive tenders up to 2 p.m., Eastern Standard time, Monday, March 9, 1953, at the Securities
Department o f its Head Office and at its Buffalo Branch. Please use the form on the reverse side o f this circular to
submit a tender, and return it in an envelope marked “ Tender for Treasury Bills.” Tenders may be submitted by tele­
graph, subject to written confirmation; they may not be submitted by telephone. Payment fo r the Treasury bills
cannot be made by credit through the Treasury T ax and Loan Account.. Settlement must be made in cash or other
immediately available funds or in maturing Treasury bills.
A l l a n S p r o u l , President.
Results o f last offering o f Treasury bills (9 1 -d a y bills dated M arch 5, 1953, m aturing June 4, 1953)
Total applied for . . .$1,996,167,000
Total accepted ........ $1,300,085,000 (includes $197,423,000
entered on a non-com petitive basis
and accepted in full at the average
price shown below )
A verage price . . . 99.453 Equivalent rate o f discount
approx. 2.164% per annum
Range o f accepted com petitive bids:
H igh ..................... 99.500 Equivalent rate
approx. 1.978%
L ow ....................... 99.448 Equivalent rate
approx. 2.184%

o f discount
per annum
o f discount
per annum

(17 percent o f the amount bid for at the low
price was accepted)

Federal Reserve
Boston .......................
N ew Y o r k ................
Philadelphia ............
C le v e la n d ..................
Richm ond ..............
Atlanta .......................
Chicago .....................
St. Louis ..................
M inneapolis ............
Kansas City ............
Dallas .........................
San Francisco ........
Total ..........

Applied for





( over )

28 Y
IM P O R T A N T — I f you desire to bid on a c o m p e t i t i v e basis, fill in rate per 100 and m aturity
value in paragraph headed "C om petitive Bid.” I f you desire to bid on a n o n - c o m p e t i t i v e
basis, fill in only the m aturity value in paragraph headed "N on -com p etitive Bid.”
N O T fill in b o t h p a r a g r a p h s o n o n e f o r m . A separate tender m ust be used fo r each bid,
except that banks subm itting bids on a com petitive basis fo r their ow n and their customers*
accounts m ay submit one tender fo r the total am ount bid at each price, provided a list is
attached showing the name o f each bidder, the am ount bid fo r his a ccou n t, and method
o f paym ent. Forms fo r this purpose w ill be furnished upon request.
N o............................

D ated M arch 12, 1953

M aturing June 11, 1953
Dated at

To F ed era l R eserve B a n k o f N ew Y ork ,
Fiscal Agent o f the United States.




Pursuant to the provisions o f Treasury
Department Circular No. 418, as amended, and to
the provisions o f the public notice on March 5,
1953, as issued by the Secretary o f the Treas­

Pursuant to the provisions o f Treasury
Department Circular N o. 418, as amended, and to
the provisions o f the public notice on March 5,
1953, as issued by the Secretary o f the Treas­
ury, the undersigned offers a non-competitive

ury, the undersigned o f f e r s .................................... *
(Rate per 100)

for a total amount o f $ ...........................................
(maturity value) o f the Treasury bills therein
described, or fo r any less amount that may be
awarded, settlement therefor to be made at your
Bank, on the date stated in the public notice, as
indicated below :

By surrender o f

maturing Treasury bills

tender for a total amount o f $.
(N ot to exceed $200,000)

(maturity value) o f the Treasury bills therein
described, at the average price (in three deci­
mals) o f accepted competitive bids, settlement
therefor to be made at your Bank, on the date
stated in the public notice, as indicated b e lo w :

By surrender o f

maturing Treasury bills

amounting t o ................... $------------------------------------

amounting t o ................... $------------------------------------



B y cash or other immediately available funds

By cash or other immediately available funds

*Price must be expressed on the basis o f 100, with not
more than three decimal places, f o r example, 99.925.

The Treasury bills for which tender is hereby made are to be dated March 12, 1953, and are to
mature on June 11, 1953.
This tender will be inserted in special envelope marked “ Tender f o r Treasury Bills.”
Name o f Bidder
B y .......................

(Please print)
(T itle)

(Official signature required)

Street Address

(C ity, T ow n or Village, P. O. N o., and State)

If this tender is submitted by a bank for the account o f a customer, indicate the customer’ s name on line below :
(N am e o f Customer)

(C ity, T ow n o r Village, P . O . N o., and State)

1. N o tender for less than $1,000 will be considered, and each tender must be for an even multiple o f $1,000
(maturity value).
2. If the person making the tender is a corporation, the tender should be signed by an officer o f the corpora­
tion authorized to make the tender, and the signing o f the tender by an officer o f the corporation will be construed as a
representation by him that he has been so authorized. If the tender is made by a partnership, it should be signed by a
member o f the firm, w ho should sign in the form “ ............................................................................................. . a copartnership, by
................................................................................................................................ a member o f the firm.”
3. Tenders will be received without deposit from incorporated banks and trust companies and from respon­
sible and recognized dealers in investment securities. Tenders from others must be accompanied by payment o f 2 percent
o f the face amount o f Treasury bills applied for, unless the tenders are accom panied by an express guaranty o f payment
by an incorporated bank or trust company.
4. If the language o f this tender is changed in any respect, which, in the opinion o f the Secretary o f the
Treasury, is material, the tender may be disregarded.
P a y m e n t b y c r e d i t t h r o u g h T r e a s u r y T a x a n d L o a n A c c o u n t tv ill n o t b e p e r m itt e d .
TENTB— 1184-a
Federal Reserve Bank of St. Louis


A t C i r c u l a r N o. 3 9 5 4


Reserve Bank




N ew Y o r k 45, N. Y.

March 3, 1953
To t h e C h i e f E x e c u t i v e O f f i c e r s

o f Member Banks

the Second Federal R e s e r v e D i s t r i c t :

For the past year we have been circulating a coin and currency exhibit
among member banks for lobby display purposes.

Because of the public interest

shown in the exhibit, we have prepared an illustrated booklet, Coins and
Currency, for distribution to your customers and other interested persons, par­

ticularly students.

A copy of the booklet is enclosed.

It contains a short

history of money, and traces the coinage and currency of the United States from
Colonial days to the present time.

The cover of the booklet has been designed

so that you can imprint the name of your bank on it.

If you contemplate showing

the exhibit in your bank, you may wish to distribute the booklet at that time.
We can make copies available to you at $1.00 per 100.
Should you desire a supply of the booklets, please fill out the order
form below and return it to our Bank Relations Department.

( Dat e)


Federal Reserve Bank of New York,
Bank Relations Department:
Please send u s _____ copies of the booklet Coins and Currency at $1.00

per 100 copies and charge our reserve account for the cost (plus New York City
sales tax, if applicable).
(Name o f bank)

By__________ __ _____________________- _________________ ___________________





( Ci t y,


Town o r V i l l a g e ,

P. O.

No . ,

and S t a t e )


The story of money dates back almost as far as
man himself. It began when man learned that he
need not produce for himself everything that he
needed or desired, that he could trade things he
had for things he wanted. Difficulties were met,
A b r ie f s u m m a r y of

however, because there was no common standard of
value. A fisherman, for example, couldn't get much
wheat from a farmer who didn't like fish.


Before long man learned to set up a prized orna­
ment or a long-lasting item of food as a standard
to which all other things were compared. These


standards — beads, shells, stones, furs, fish hooks,
grain and cattle, to name a few — all have been
given a turn as money from time to time. Money,
then, should be a generally acceptable medium of
When mankind learned that money was usually
more generally acceptable if it was durable and
easy to carry, metal money began to gain favor. Our
earliest record of this type of money dates back to

2,500 B.C., when the Egyptians produced rings that

bark paper, bearing the red seal of Kubla and the

were used for exchange. Cubes of gold became

signatures of his treasurers. The earliest specimen

money in China about 400 years later. The first metal

of paper money known to exist today is the K uan,

coins were made in Asia Minor, about 700 B.C., by

a Chinese note issued during the Ming Dynasty

the Lydians. These coins, struck from an alloy of

(1368-1399 A .D .). The K u a n is about the size of a

gold and silver called electrum, were bean-shaped

sheet of typewriter paper.

and were stamped with rough impressions.

In the Middle Ages when travel became more

The Greeks and Romans contributed much to the

common, metal coins were looked upon by many as

art of coinage. Some of the most beautiful coins ever

a burden, for they were too heavy to carry from

produced were made by the Greeks during their

place to place. Then, too, travelers were always

Golden Age — 400 to 300 B.C. As time went on,

easy prey to robbers. Those who traveled began to

coins became the favored medium of exchange the

leave their coins with a goldsmith. In turn the

world over.
The origins of paper money probably go back

to a robber. This custom grew in popularity and

to the clay tablets of Babylon about 2,500 B .C On

gradually the receipts were transferred from one

traveler received a receipt which was of no value

these tablets were written due bills, receipts and the

person to another in payment of debts, instead of

like. Marco Polo, returning from his 13th century

withdrawing the actual coin. In effect, this was

voyage to China, reported that paper money was in

paper money at work.

use there. He also reported that Emperor Kubla

When the early colonial settlers departed for

Khan, in 1273 A.D ., issued notes printed on mulberry

North America, they left behind them a well-devel-

oped coinage system. The few foreign coins that
the colonists brought with them were used to pay
for European trade. In their new homeland they
soon found themselves engaged in primitive barter
or using Indian wampum as money. A group of
settlers soon learned to counterfeit wampum, how­
ever, and it lost its value. For home trade, then, the
product most widely used in an area became money.
For example, in Virginia it was tobacco and in
Massachusetts it was grain, fish, and furs. Through­
out all of the Colonies gun powder and bullets
were frequently used for small payments.
After trade with the West Indies was developed,
Spanish eight-reales pieces were widely circulated.
These coins, known as p ieces o f eight, became
standard money and remained in circulation with
official sanction until 1857. To meet the need for
small change, colonists frequently cut these “ Span­
ish dollars” into fractional parts. A half section of
the dollar therefore became “ four bits” — a quarter
section was “ two bits.”

The men of the Massachusetts colony were the

signifying “ time flies.” Below the dial was the

first to attempt their own coinage in British Amer­

phrase M ind Y our Business —

ica. In 1652 a mint was opened in Boston where the


pine tree shilling, so named because it bore the

Because these expressions were suggestive of the
spirit of Poor Richard, it became known as the

impression of a pine tree, was minted. Sixpence
and threepence pieces were also products of this

not the


an admonition to




Franklin cent, although Benjamin Franklin is not

mint, which was closed by the English Government

known to have had anything to do with the coin.

in 1686.
During the time following the Declaration of

known as the Excelsior cent and bore a design

Independence and up to the adoption of the Con­

New York State in 1787 issued a coin that was
resembling the Great Seal of the State.

stitution, a number of State legislatures authorized

After the adoption of the Constitution, Congress

the issuance of coins. The first attempt of any signif­

established a United States mint in Philadelphia in

icance on a national basis, however, came in 1787,

1792, and the nation’s first cents and half-cents

when James Jarvis was engaged by the national

were struck in 1793. They were copper and about

Congress to make copper one-cent coins. On one

the size of present-day quarters and nickels. A

side of this coin the design consisted of a circular

silver half-dime, half-dollar, and dollar were added

chain of 13 links enclosing the motto W e A re One.

in 1794, and the next year the eagle ($10 gold coin)

On the other side was a dial with the hours of the

and half-eagle appeared. At that time the eagle was

day marked on it. Above the dial was the noonday

the gold and the dollar the silver monetary unit.

sun, and beside it the word fu gio,

The motto E Plu ribu s Unum was first used on the

the whole

half-eagle of 1795. The next year our first quarters
and dimes were issued.
In 1690, men from Massachusetts returned, tired
and beaten, from an unsuccessful siege of Quebec.

T h ih t

Booty from the anticipated victory, it was thought,
would finance the expedition. Tables were turned,
however, and debts for ships, cannons, muskets,
powder, and shot mounted. And then there were
hundreds of hungry soldiers, threatening mutiny if
not fed and paid. All this was met with a nearly

C o n t in e n ta l c u rr e n c y

empty treasury. Out of this dire need, Bills of
Credit (in effect mere promissory notes) —


C o l o n ia l p a p e r c u r r e n c y

first paper money in America and in the entire
British Empire — were issued by the colony.
Other colonies followed by printing paper money
of their own. It circulated freely and notes were
even torn into pieces to substitute for coins in mak­
ing change. Issues were excessive, however, and
some of them quickly sank to small fractions of the
intended value. Despite the disadvantages, however,

S ta te b a n k n o te


Sh iiliic s .


early colonial paper money seems to have helped to

So bitter was the feeling toward paper money

solve some of the difficulties caused by a shortage

that a provision giving Congress the right “to emit

of metallic money in an expanding community.

bills on the credit of the United States” was struck

Then came the American Revolution and huge

out of the first draft of the Federal Constitution, and

expenses with no adequate power of taxation. The

the Constitution as adopted carried a provision for­

Continental Congress, in June of 1775, authorized

bidding the states to “emit bills of credit.” Not

the first issue of paper money, to be limited to $2

until more than 70 years later, in 1862. was paper

million. Soon, however, several other issues were put

money again issued by the Government of the
United States.

out and the total in circulation greatly exceeeded
all reasonable needs. Rapid depreciation of value
George Washington, in commenting on the con­
ditions, said, “a wagon-load of money will scarcely
purchase a wagon-load of provisions.” The vanishing
value of the currency of the Continental Congress
led to the term for worthlessness tiiat has remained
to this day — “ not worth a continental.” Congress
in 1790 authorized the Treasury to accept the con­
tinental notes at a rate of 100 to 1, in payment for
bonds of the new Federal Government.

Between 1790 and the Civil War no paper cur­
rency was issued by the Government. On several
occasions (1812-15, 1837-43, 1846-47, 1857, 1860-61)
connected with wars and depressions, the Treasury
issued small amounts of notes, almost always inter­
est-bearing, in denominations ranging down to $50.
Some of these notes appear to have had some limited
use as circulating currency, but at no time was
there much in circulation, and of course they were
not intended to serve as currency.

Until 1836 the larger part of paper currency in
circulation consisted of issues of the first (17911811) and the second (1816-1836) Bank of the
United States, a private Federal-chartered bank.
At the time of closing in 1836 the Bank of the
United States had outstanding note liabilities of

c h a n g e fro m
c o in in g press.


p re ss to

ste a m -o p e ra te d

silv e r d o lla r h a s fig u r e o f L ib e rty se a te d , a
d e s ig n u se d o n a ll silve r c o in s th e re a fte r (e x ­
ce p t f o r stiver d o lla r s) until 1 8 9 1 .

$23,100,000. Afterward, notes issued by State-char­
tered private banks were the chief form of paper

C o n g r e s s a u th o r iz e d c o in a g e o f a d o u b le e a g le
( $ 2 0 g o ld p ie ce) a n d a g o ld d o lla r.

currency. These notes had varying degrees of ac­
ceptability, were not always redeemable in gold or
silver on demand, and the issues of many banks
frequently circulated at a substantia] discount from
face value. Each bank chose its own design for its

W it h the d is c o v e ry o f g o ld in C a lif o r n ia , a n d
a n e e d fo r a c c e p t a b le m o n e y there, so m e p ri­
v a te firm s b e g a n m in tin g the ir o w n g o ld coins.
m in tin g o f silv e r three-cent p ie c e s o f a lm o st
p a p e r thinness; s o o n d r o p p e d a s im p ra c tica l.

notes, and they differed in size, color, and appear­
ance. By 1860. it is estimated, there were notes
of 8,000 banks in circulation. Under these circum­

c o in a g e o f t h re e -d o lla r g o ld piece.
e sta b lish m e n t o f S a n F ra n c isc o m int.

stances. it is not strange that counterfeiting fluorished as never before or (fortunately) since. Bank

F ly in g e a g le cent, m a d e o f c o p p e r a n d nickel.

failures were common throughout the period and
people regularly suffered losses on the notes they
received and held.

circ u la tio n o f fo r e ig n c o in s p ro h ib ite d ; the
S p o n is h silv e r d o l la r c e a se d to b e le g a l ten de r.







first In d ia n h e a d cent.

e sta b lish m e n t o f D e n v e r m int.

b ro n z e tw o-cen t p ie ce , the first co in to u se the
m oto In G o d W e Trust.

first "p o r t r a it c o in , " the L in coln cent.

three -ce nt p ie ce o f nickel, d isc o n tin u e d 1 8 9 0 .
first nickel five-cent p ie c e (the re w e re e a rlie r
silve r h alf-dim es).

first b u ffa lo nickel.
first m in tin g o f L ib e rty (fu ll-le ngth ) h a lf-d o lla r,
first m in tin g o f p re se n t L ib e rty h e a d silve r d o lla r.

c o in a g e o f t ra d e d o lla r s, slig h t ly la r g e r th a n
s t a n d a r d silv e r d o lla rs, in te n d e d f o r u se in the
C h in a t ra d e w h e re th e y " c o m p e t e d " w ith the
M e x ic a n p e so . W it h d r a w n fro m circ u la tio n in
1 8 8 7 b e c a u s e th e y d id n ot h e lp F a r East trc
b u t te n d e d to c irc u la te a t h om e.
c o in a g e o f 2 0 -c e n t p ie ce, d isc o n tin u e d


first L ib e rty h e a d nickels, a lm o s t im m e d ia te ly
w ith d ra w n b e c a u s e the r e v e rse b o re o n ly a
R o m a n letter V a n d c o u n te rfe ite rs p la t e d
them th in ly w ith g o ld to p a s s them cfF a s fived o lla r co in s. T h e n e xt issu e o f the c o in re a d
" V ce n ts."

W a s h in g t o n q u a rte r.
Je ffe rso n n ickel.
silv e r ( 3 5 % ) " n i c k e l " p ro d u c e d to s a v e nickel,
d isc o n tin u e d 1 9 4 5 .
Z in c -c o a te d steel ce n t p r o d u c e d to s a v e strate­
g ic c o p p e r a n d tin ( o n ly y e a r m inted).
R o o se v e lt d im e.
F r a n k lin h a lf-d o lla r.

K K N C T ft

The first paper money actually issued by the
Government of the United States consisted of noninterest-bearing Treasury notes issued in 1861 and
1862. These notes were payable on demand at cer­
tain designated sub-treasuries, and soon became
known as demand notes. The amount first author­
ized was $50 million but a second issue of $10
million was also paid out. In 1862, Congress pro­
vided for the issuance of United States notes, and
they were substituted for the demand notes, which
were retired. The United States notes were first
issued in the amount of $150 million and were
designated as legal tender for all debts, except
duties on imports and interest on the public debt.
They were popularly referred to as “ greenbacks” or
“ legal tenders." A second issue of $150 million was
also authorized in 1862 and a third issue of the
same amount in 1863. The highest amount outstand­
ing at any one time was $449,338,902 in early 1864.
By 1878 the amount outstanding had been reduced
to $346,681,016, and this amount is still outstanding

today, mostly in denominations of $2 and $5.

much smaller in size than our present currency,
were known as “ shinplasters” and were issued in

It was also during the Civil War (on January 3,


the Federal


denominations of 3, 5, 10, 25, and 50 cents (a small


amount of a 15-cent denomination was also issued).

specie payments — that is, dropped the provision

After the end of the war, when coinage was re­

for redeeming United States notes in coin. It was

sumed, this

not until January 1, 1879 that specie payments were

needed, and in 1875 and 1876 Congress provided

resumed. Following the suspension in 1862, subsid­
iary silver coins largely disappeared from circula­

for its redemption and retirement. One of the most
interesting of the few coins minted during the Civil

tion as they were hoarded. For a time their place

War was the two-cent bronze piece, the first of our
coins to bear the motto In G od W e Trust.

was taken by tickets, due bills, and other forms of

fractional currency was no longer

private obligations issued by merchants and others
whose business required them to make change. Con­

The first gold certificates were authorized in 1863,

gress then first authorized the use of postage stamps

when Congress directed the Secretary of the Treas­

for change (after people had begun to use them
called postal currency. Finally, fractional paper

ury to receive deposits of gold coin and bullion and
to issue certificates therefor in denominations of not
less than $20. (Later certificates were issued in the

currency was issued in denominations corresponding

$10 denomination also.) The first issue was made

to the silver coins. Congress authorized an issue of

in 1865, and gold certificates continued in circula­

$50 million, the highest amount outstanding at any

tion until 1933. The Treasury was authorized to

one time was $49,102,660.27. These “ paper coins,”

issue silver certificates in 1878; like the gold cer-

for this purpose), and later issued a modified stamp

tificates, they were given out in return for the
deposit of silver dollars with the Treasurer of the
United States. In 1934 this authority was increased
to authorize issuance of silver certificates equal in
value to silver purchased by the Treasury. Before

I M M M B r f M i 175740


\i g * * * £ £ * * » » 23
u < KExnzEnmm M

this latter date, however, the Congress in 1890
directed the Secretary of the Treasury to purchase
each month $4,500,000 ounces of silver at the
market price and to issue in payment “ Treasury

N a t i o n a l b a n k n o te ( o l d s iz e )

notes of the United States.” These notes, usually
called “ Treasury notes of 1890,” were redeemable
on demand in either gold or silver coin at the dis­
cretion of the Secretary of the Treasury and were
legal tender. The authority for purchase of silver
in this manner was repealed in 1893. when almost

K E H e p H H ^ K K l I 11\.\ i*

I 'l V K

$156 million of the notes were outstanding. Congress
later provided for the cancellation and retirement
of this issue.
Most of the paper currency in circulation between

F e d e r a l R e s e rv e b a n k n o t e ( o l d s iz e )

the Civil W ar and the First World War, however,

These notes a re re p ro d u ce d b y s p e c ia l perm ission o f the
S e cretary o f th e T re a s u ry ; fu rth e r re p ro d u c tio n , in w h o le
o r in p a r t, is s tric tly p ro h ib ite d .

consisted of national bank notes. This currency,

some cash in a special account to pay for these

uniform in size and general appearance, was issued

notes as they are presented.


The Federal Reserve Act of 1913 authorized the
issuance of Federal Reserve Bank notes against







Act of 1863, which provided that these banks were
required to deliver to the Treasurer of the United
States a certain amount (based on their capitaliza­

the deposit of United States bonds. These notes
were, in effect, very much like the national bank

of registered Treasury bonds bearing the

notes. In 1918 Congress authorized the issuance of

“circulation privilege.” The banks were then en­

Federal Reserve Bank notes in place of retired silver

titled to receive from the Comptroller of the Cur­

certificates, but by 1922 almost all had been retired.

rency paper money equal to 90 per cent of value of

In the banking emergency of 1933 and 1934, Con­

the bonds. The total amount of currency for all

gress once again authorized the issuance of Federal

banks was limited to $300 million until 1870, when

Reserve Bank notes secured by direct obligations

it was increased; in 1875, the limitation was re­

of the United States or by eligible commercial

moved. By 1913, national bank notes amounting to

paper. By the end of 1933 the value of these notes

almost $700 million were in circulation and the

in circulation reached a peak of $208 million; they

Treasury, of course, held bonds having the “circula­

were retired over the next two years. During World

tion privilege” as backing. The last of these bonds

War II a stock of unused Federal Reserve Bank

matured in 1935 and national bank notes have since

notes was issued in order to save paper and labor

been retired from circulation as they are deposited

that would have been used to produce other needed

in Federal Reserve Banks. The Treasury still keeps

currency. These notes are being retired gradually.

By far the largest portion of paper currency in
circulation today consists of Federal Reserve notes
issued by the twelve Federal Reserve Banks. These
notes are obligations of the United States and aie
first liens on all assets of the issuing Federal Reserve
Bank. Since 1933 they have been full legal tender
for all debts, public and private. Each Federal

A f r ic a n b r o n z e r in g

Reserve Bank was originally required to maintain a
reserve in gold of at least 40 per cent against its
notes in actual circulation. In 1945 this require­

A z t e c g o l d im a g e s

ment was reduced from 40 to 25 per cent, but in
recent years all the Federal Reserve Banks have

A la s k a n b r o n z e fish h o o k s

actually had gold reserves well in excess of the 25
per cent requirement. Federal Reserve notes, issued
in denominations from $5 to $10,000, are furnished
to the Federal Reserve Banks through the Comp­
troller of the Currency, and under the supervision
of the Board of Governors of the Federal Reserve
System. They are made by the Bureau of Engraving
and Printing, which also produces currency for the

M o n e y is n o t a lw a y s c o in s a n d p a p e r c u r r e n c y : p e o p le


t h r o u g h o u t th e w o r l d h a v e u s e d m a n y c u rio u s m a te ria ls


Federal Reserve

Bank desiring to

in o d d f o rm s , f r o m ir o n n a ils to h u g e sto n e sla bs.

obtain Federal Reserve notes applies for them to
the Federal Reserve agent of its district (who is

cisco). There is also a numerical identification
about an inch in from each of the corners (1 for

a representative of the Board of Governors) and

Boston, 2 for New York, and so on).

submits collateral equal in value to the notes re­

In addition to these Federal Reserve notes, the

commercial paper, gold or gold certificates, and
direct obligations of the United States. (New cur­

only other kinds of currency being issued today are
United States notes (issued only in denominations

quested. This collateral can consist of

rency can also be obtained in exchange for notes

of $2 and $5 and limited to an aggregate amount of

no longer fit for circulation.) No Federal Reserve

$346,681,016) and silver certificates (issued only in

Bank is permitted to pay out the notes issued by

denominations of $1, $5, and $10). The chief dis­

another Bank, and therefore notes of one Bank

tinguishing mark for the three types of notes is the

deposited in another Federal Reserve Bank are re­
turned to the issuing Bank (or to the Treasury

color of the seal to the right of the portrait on the

Department for final destruction by burning). The

notes, red on United States notes, and blue on silver

Federal Reserve Bank of issue is designated on a

certificates. There is one other note series, but this

note by the round seal which appears to the left of

“ currency.” consisting of gold certificates issued by

the portrait on the face of the note. The full name
of the Bank is given in the outer edge of the seal,

the Treasury to the Federal Reserve Banks, does
not circulate among the public. The certificates are

and a large letter within also identifies the Bank

issued in denominations of $100, $1,000, $10,000,

(A for the Boston Reserve Bank, B for New York,
C for Philadelphia, and so on to L for San Fran­

monetary gold stock of the United States.

face of a note: the seal is green on Federal Reserve

and $100,000. and they represent pledges of the


Federal Reserve Bank of St. Louis, One Federal Reserve Bank Plaza, St. Louis, MO 63102