I'm new to collecting notes, and would like to pose a question. Are National Banknotes still redeemable? (Like This) I tried to do some research on Google and could not find an answer.
It depends what you mean by "redeemable". They remain legal tender at their face value, at least since the Legal Tender Act of 1965. In their day, they were expected to be redeemable in gold, or silver, coin by the bank of issue. Nowadays, I doubt whatever giant modern bank, having gobbled up a particular national bank, would redeem an NBN in similar fashion. They would still accept it as a deposit, or exchange it for current money, since Uncle Sam will still accept them, though. If you're looking for someplace to spend a National at face, I'll happily volunteer, lol!
But in all seriousness, happy collecting! National bank notes are probably my favorite series of US currency.
"Render therfore unto Caesar the things which are Caesar's; and unto God the things that are God's." Matthew 22: 21
@TitusFlavius said:
It depends what you mean by "redeemable". They remain legal tender at their face value, at least since the Legal Tender Act of 1965.
Thank you, that is what I was asking, the question was somewhat vague. I wanted to make sure If you could possibly go to a bank and ask for the face value in FRN's
_ In their day, they were expected to be redeemable in gold, or silver, coin by the bank of issue. _
Small point, but except for CA Gold National Banks, NBNs were never required or expected to be redeemable in specie or related gold/silver certificates but only required to be redeemed in Legal Tender notes. This was true at either the bank's counter or at the Treasury or a subTreasury. Technically NBNs were not legal tender altho they could be redeemed for such. Also if a bank held NBNs of other NBs, those notes could not be counted in the cash or other reserves the bank was required by law to maintain.
By 1900 it appears that most redemptions occurred at one of the Treasury offices, and primarily in terms of banks' liquidating, extending charters (in terms of a prior series before new notes of a new series were issued to the bank associated with the extension ), or reducing it's circulation for some reason. Very few seem to have occurred at the bank itself.
Always interested in St Louis MO & IL metro area and Evansville IN national bank notes and Vatican/papal states coins and medals!
Thanks for the detailed info STLNATS. That's a much clearer picture of how the notes were actually used. Out of curiosity, Do you know if NBNs were handled any differently post-1900, while the US was officially on a gold standard? I know there were arrangements to keep silver certificates, legal tender notes, and subsidiary silver coins at par with, and exchangeable for, gold, but I haven't heard how NBNs were handled under the gold standard.
"Render therfore unto Caesar the things which are Caesar's; and unto God the things that are God's." Matthew 22: 21
_Do you know if NBNs were handled any differently post-1900, while the US was officially on a gold standard? _
I'm not aware of any change nor would I have expected any changes since NBNs continued to be redeemable for LT notes. I do think - but really don't have much evidence to prove - there was some preference of what types of money banks kept in the vault vs paid out over the counter but this was driven more by what could be counted as reserves vs anything else and I don't think it changed much, or any at all, over time.
Always interested in St Louis MO & IL metro area and Evansville IN national bank notes and Vatican/papal states coins and medals!
After posting my earlier reply, I looked thru a couple of my references and thought it might be helpful to add two points:
After resumption of specie in 1879 any form of $ was equal to any other form of dollar; that is, there was no discount vs gold. So if something cost $1 you could tender a 20 5 cent pieces, a gold dollar or a LT, SC or national banknote and all should have been accepted at par. There were legally some limitations on how much one was required to accept in cents and nickels ($5 I think) and I'm sure there might have been the occasional local or short term exceptions but par was the intention of the Resumption Act as I understand it. Before 1879, LT notes traded a discounts to gold. The low point was in 1864 when $100 in LT notes would buy less than $40 in gold. With the conclusion of the war, The value of LTs bounced back, but even for much of the 1870 there was nearly a 10% discount in favor of the yellow metal. And since NBNs were redeemable in LTs, the discount on NBNs was the same as LTs.
Changes in 1900 to the National Bank Act dramatically increased profitability and issuance of NBNs. John Hickman called this the start of "home town banking" as many small town national banks could be established profitably. A few key changes were: a. the capital required for banks in small towns was halved to $25k. b. previously national banks could receive circulation equal to only 90% of the par value of the bonds they were required to purchase; this was raised to 100% and c. the tax national banks had to pay on circulation secured by certain government bonds (those with 2% interest) was reduced. While this didn't impact the relationship between NBNs and other classes of money - they still passed at par as any other "dollar" - banks, businesses, etc would have seen more of them in circulation.
Hope these admittedly wonkish comments clarify and don't muddy the water.
Always interested in St Louis MO & IL metro area and Evansville IN national bank notes and Vatican/papal states coins and medals!
STLNATS, thank you! I found that very clear, and informative. I've been spending more time among ancient coins lately, but US paper money, and the history it represents, fascinate me, too.
"Render therfore unto Caesar the things which are Caesar's; and unto God the things that are God's." Matthew 22: 21
Comments
Yes, but much higher collector value of course.
It depends what you mean by "redeemable". They remain legal tender at their face value, at least since the Legal Tender Act of 1965. In their day, they were expected to be redeemable in gold, or silver, coin by the bank of issue. Nowadays, I doubt whatever giant modern bank, having gobbled up a particular national bank, would redeem an NBN in similar fashion. They would still accept it as a deposit, or exchange it for current money, since Uncle Sam will still accept them, though. If you're looking for someplace to spend a National at face, I'll happily volunteer, lol!
But in all seriousness, happy collecting! National bank notes are probably my favorite series of US currency.
I have one to share here:
nice westfield, ma note
Thank you, that is what I was asking, the question was somewhat vague. I wanted to make sure If you could possibly go to a bank and ask for the face value in FRN's
Buying all low end varieties of the $1 bill.
_ In their day, they were expected to be redeemable in gold, or silver, coin by the bank of issue. _
Small point, but except for CA Gold National Banks, NBNs were never required or expected to be redeemable in specie or related gold/silver certificates but only required to be redeemed in Legal Tender notes. This was true at either the bank's counter or at the Treasury or a subTreasury. Technically NBNs were not legal tender altho they could be redeemed for such. Also if a bank held NBNs of other NBs, those notes could not be counted in the cash or other reserves the bank was required by law to maintain.
By 1900 it appears that most redemptions occurred at one of the Treasury offices, and primarily in terms of banks' liquidating, extending charters (in terms of a prior series before new notes of a new series were issued to the bank associated with the extension ), or reducing it's circulation for some reason. Very few seem to have occurred at the bank itself.
Thanks for the detailed info STLNATS. That's a much clearer picture of how the notes were actually used. Out of curiosity, Do you know if NBNs were handled any differently post-1900, while the US was officially on a gold standard? I know there were arrangements to keep silver certificates, legal tender notes, and subsidiary silver coins at par with, and exchangeable for, gold, but I haven't heard how NBNs were handled under the gold standard.
_Do you know if NBNs were handled any differently post-1900, while the US was officially on a gold standard? _
I'm not aware of any change nor would I have expected any changes since NBNs continued to be redeemable for LT notes. I do think - but really don't have much evidence to prove - there was some preference of what types of money banks kept in the vault vs paid out over the counter but this was driven more by what could be counted as reserves vs anything else and I don't think it changed much, or any at all, over time.
After posting my earlier reply, I looked thru a couple of my references and thought it might be helpful to add two points:
After resumption of specie in 1879 any form of $ was equal to any other form of dollar; that is, there was no discount vs gold. So if something cost $1 you could tender a 20 5 cent pieces, a gold dollar or a LT, SC or national banknote and all should have been accepted at par. There were legally some limitations on how much one was required to accept in cents and nickels ($5 I think) and I'm sure there might have been the occasional local or short term exceptions but par was the intention of the Resumption Act as I understand it. Before 1879, LT notes traded a discounts to gold. The low point was in 1864 when $100 in LT notes would buy less than $40 in gold. With the conclusion of the war, The value of LTs bounced back, but even for much of the 1870 there was nearly a 10% discount in favor of the yellow metal. And since NBNs were redeemable in LTs, the discount on NBNs was the same as LTs.
Changes in 1900 to the National Bank Act dramatically increased profitability and issuance of NBNs. John Hickman called this the start of "home town banking" as many small town national banks could be established profitably. A few key changes were: a. the capital required for banks in small towns was halved to $25k. b. previously national banks could receive circulation equal to only 90% of the par value of the bonds they were required to purchase; this was raised to 100% and c. the tax national banks had to pay on circulation secured by certain government bonds (those with 2% interest) was reduced. While this didn't impact the relationship between NBNs and other classes of money - they still passed at par as any other "dollar" - banks, businesses, etc would have seen more of them in circulation.
Hope these admittedly wonkish comments clarify and don't muddy the water.
STLNATS, thank you! I found that very clear, and informative. I've been spending more time among ancient coins lately, but US paper money, and the history it represents, fascinate me, too.
Here’s the bank building it came from.....
I can remember spending a low grade $20 National Banknote, on a common bank, back in the 1970's.
I recall taking one to Chase once, with no issues. ..was a small $20 from milwaukee..
Got a (very worn) $10 Gold Certificate as change once at a gas station near Redlands, Ca...
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Great note, great city. Too bad the Polly Klaas incident is all that's entrenched in the minds of many who hear the city name Petaluma.
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i love the looks of that building uasf. neat