Comparison To Federal Reserve Notes
The United States Note was a national currency whereas Federal Reserve Notes are issued by the quasi-federal Federal Reserve System. Both have been legal tender since the gold recall of 1933. Both have been used in circulation as money in the same way. However, the issuing authority for them came from different statutes. United States Notes were created as fiat currency, in that the government has never categorically guaranteed to redeem them for precious metal - even though at times, such as after the specie resumption of 1879, federal officials were authorized to do so if requested. The difference between a United States Note and a Federal Reserve Note is that a United States Note represented a "bill of credit" and was inserted by the Treasury directly into circulation free of interest. Federal Reserve Notes are backed by debt purchased by the Federal Reserve, and thus generate seigniorage, or interest, for the Federal Reserve System, which serves as a lending parent to the Treasury and the public.
As the debt purchased by the Federal Reserve System to back its notes consists primarily of Treasury and Government-sponsored enterprise debt, and because the seigniorage is largely remitted back to the Treasury as "interest on Federal Reserve Notes", the economics to the Treasury are comparable to issuing United States Notes. This stands in contrast to National Bank Notes which allowed the issuing banks to privately retain the seigniorage as profit.
Read more about this topic: United States Note
Famous quotes containing the words comparison to, comparison, federal, reserve and/or notes:
“In comparison to the French Revolution, the American Revolution has come to seem a parochial and rather dull event. This, despite the fact that the American Revolution was successful—realizing the purposes of the revolutionaries and establishing a durable political regime—while the French Revolution was a resounding failure, devouring its own children and leading to an imperial despotism, followed by an eventual restoration of the monarchy.”
—Irving Kristol (b. 1920)
“I have travelled a good deal in Concord; and everywhere, in shops, and offices, and fields, the inhabitants have appeared to me to be doing penance in a thousand remarkable ways.... The twelve labors of Hercules were trifling in comparison with those which my neighbors have undertaken; for they were only twelve, and had an end; but I could never see that these men slew or captured any monster or finished any labor.”
—Henry David Thoreau (1817–1862)
“It is odd that the NCAA would place a school on probation for driving an athlete to class, or providing a loan, but would have no penalty for a school that violates Title IX, a federal law.”
—Cardiss L. Collins (b. 1931)
“We must reserve a back shop all our own, entirely free, in which to establish our real liberty and our principal retreat and solitude.”
—Michel de Montaigne (1533–1592)
“What neat repast shall feast us, light and choice,
Of Attick tast, with Wine, whence we may rise
To hear the Lute well toucht, or artfull voice
Warble immortal Notes and Tuskan Ayre?
He who of those delights can judge, and spare
To interpose them oft, is not unwise.”
—John Milton (1608–1674)