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:
“In the Corner Store, near the village center, hangs a large sign reading: ‘After 40 years of credit business, we have closed our book of Sorrow.’”
—For the State of Maine, U.S. public relief program (1935-1943)
“The almost unexplored Everglades lay close by and with a half- hour’s start a man who knew the country was safe from pursuit. As one man cheerfully confided ..., ‘A boat don’t leave no trail, stranger.’”
—For the State of Florida, U.S. public relief program (1935-1943)