Currency in the late 1800's/early 1900's
Maxcrusha
Posts: 628 ✭
So, at any time you could pull out your wallet and have silver and gold cert's, nationals, legal tenders, FRN's etc... all these diff types off currency.
Was it weird to people to have all these different colored seals?
and the Nationals... did people look hard at the bank it was from - or they rarely cared?
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My grand parents remembered horse blankets and Gold Certificates.
Nobody really gave it a second thought, as it was the norm back then.
But ahhhh, to be able to go through straps of notes from that era.
I don't know how many people carried around substantial amounts of paper at the time, especially those types that weren't printed below $5 denominations.
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Henry Ford introduced the $5 a day wage at the beginning of 1914 (I think), more than doubling the prevailing wage at his plants. This was a really good "city" wage at the time so it's understandable that the most common everyday currency were denominations of $5 or less; if you opened your wallet then, you might see a $5 but most likely ones and maybe a two and most likely silver certs or the odd legal before WWI.
Gold notes, along with higher denomination legals and silvers were useful as national banks' cash reserve so I think they probably didn't circulate much at all. FRNs wouldn't have been in circulation before the start of WWI so the situation for most folks was probably less complicated than one might think by paging thru a modern catalog.
National banks had to keep the different types of currency in the vault separated. How the types used for the reserves is simple enough (they mostly stayed put) but it would be interesting to understand if there was a hierarchy of how different currency types were paid out. A bank's own nationals seem initially to have been reserved for making loans given the description of profit from circulation described in the annual Comptroller's reports. From a given bank's perspective I think nationals of other banks were rarely paid out. More likely they were used to settle clearings (eg checks) either directly or to the local clearing house (for notes from local banks) or a correspondent bank (for notes on banks from outside of the area). This would have been a holdover practice from the pre-national bank period. Banks tend to have a conservative bias so I suspect this would have continued well into the national bank period. How long this continued is open to question, since FRNs began to push out the other types of currency after WWI.
I've looked for a description of the "normal" practice in Pratt and other banking guidebooks of the time with no success. Maybe it was just generally accepted and there was no need to document for us future clueless collectors.
What fun.
For large size notes, Blue Seals and Red Seals were by far the most common notes seen by average folks (since these were the workhorse notes of $1 to $5 denominations). But, certainly Nationals circulated widely as well, as cash hoards that have turned up over the last 50 years confirm. From what my grandfather told me, Nationals were not deemed unusual or something to be saved, but Gold Certificates were always a rare item to see in circulation.
It is important to remember that during the large size era, the designs of notes were very far from uniform and not only different types of currency circulated side by side, but different designs of the same type of currency did the same. Still, the rather short life span of circulating currency meant that current issues eventually predominated.
There is little doubt that the large variety of currency that might be circulating at any time meant that people were more likely to be fooled by counterfeits.
My own recollection from the 1960s and even later, Silver Certificates, Legal Tenders and FRNs circulated alongside each other with not much distinction being made. Occasionally, you would get a small size National, but these (like WWII and FRBNs) would stand out as unusual.
It is only after the introduction of small size notes, with their uniform design features across different types of currency, that people began to expect currency to look only a certain way.
With the subsequent and effective demise of anything but FRNs in circulation, people have become particularly vigilant to anything that looks remotely different. We now laugh at people who think a 1928 series FRNs or even a $2 bill are counterfeit, but this is a logical consequence of (and the exact result the Treasury and Secret Service want from) the redesign and uniformity of our currency.
Evidently we didn't have enough silver dollars to support the amount of currency required. $5 United States notes reappeared in 1907. $1 and $2 USN appeared in 1917. Federal Reserve bank notes of $1 and $2 appeared in 1918. At some point the restriction on $5 National Bank Notes was removed.
Gold certificates disappeared from circulation in World War I until 1922.