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:
“They had their fortunes to make, everything to gain and nothing to lose. They were schooled in and anxious for debates; forcible in argument; reckless and brilliant. For them it was but a short and natural step from swaying juries in courtroom battles over the ownership of land to swaying constituents in contests for office. For the lawyer, oratory was the escalator that could lift a political candidate to higher ground.”
—Federal Writers’ Project Of The Wor, U.S. public relief program (1935-1943)
“The blacksmith dropped his hammer, the carpenter his plane, the mason his trowel, the farmer his sickle, the baker his loaf, and the tapster his bottle. All were off for the mines, some on horses, some on carts, and some on crutches, and one went in a litter.”
—For the State of California, U.S. public relief program (1935-1943)