Early form of the reverse repo program
National Currency stamped with "First National Bank of East Palestine Ohio"
This explanation was arrived at by using Perplexity AI (warning ) – using google was futile – it kept interpreting "national currency" as the paper money we use today AKA Federal Reserve Notes or FRN
The key difference between Federal Reserve Notes and National Currency issued in the 1920s lies in their issuance, backing, and purpose within the U.S. monetary system:
Federal Reserve Notes
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Issuance: Federal Reserve Notes are issued by Federal Reserve Banks under the authority of the Federal Reserve Act of 1913. They are liabilities of the Federal Reserve and obligations of the U.S. government13.
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Backing: Initially backed by gold, Federal Reserve Notes transitioned to fiat currency after the U.S. abandoned the gold standard in 1971. Today, they are backed by collateral assets held by the Federal Reserve Banks, such as Treasury securities23.
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Design: These notes feature green seals and modern security features like watermarks, microprinting, and color-shifting ink. Denominations range from $1 to $10013.
National Currency
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Issuance: National Currency was issued by National Banks under the National Banking Act of 1863 and later amendments. These banks were chartered by the federal government and required to deposit bonds with the U.S. Treasury as collateral for issuing notes13.
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Backing: National Currency was backed by U.S. government bonds held by issuing banks, ensuring its stability and redeemability3.
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Design: National Currency typically featured brown seals and was identifiable by the name of the issuing bank printed on each note. It was designed to standardize currency across regions while maintaining local bank involvement3.
Comparison Table
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Feature
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Federal Reserve Notes
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National Currency
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Issuer
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Federal Reserve Banks
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National Banks
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Backing
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Initially gold; now fiat
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U.S. government bonds
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Seal Color
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Green
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Brown
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Purpose
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Centralized monetary system
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Regional banking system
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Denominations
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$1 to $100
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Varied denominations
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By the 1920s, both forms of currency were circulating simultaneously but served different roles in stabilizing and modernizing the U.S. financial system
Looks like this might have been an early form of the Fed's "reverse repo" program
