The Program
From 1863 to 1935, National Bank Notes were issued by banks throughout the country and in U.S. territories. Banks with a federal charter would deposit bonds in the U.S. Treasury. The banks then could print banknotes worth up to 90% of the value of the bonds. The federal government would back the value of the notes - the issuance of which created a demand for the government bonds needed to back them.
The program was a form of monetization of the Federal debt. Bonds eligible as collateral for posting to the Treasury were said to have the "circulation privilege" and the interest they bore provided seigniorage to the National Banks.
Read more about this topic: National Bank Note
Famous quotes containing the word program:
“The last public hanging in the State took place in 1835 on Prince Hill.... On the fatal day, the victim, a man named Watkins, peering through the iron bars of his cell, and seeing the townfolk scurrying to the place of execution, is said to have remarked, ‘Why is everyone running? Nothing can happen until I get there.’”
—Administration for the State of Con, U.S. public relief program (1935-1943)
“When Paul Bunyan’s loggers roofed an Oregon bunkhouse with shakes, fog was so thick that they shingled forty feet into space before discovering they had passed the last rafter.”
—State of Oregon, U.S. public relief program (1935-1943)