NATIONAL BANK NOTES Preparation of National Bank Notes After the bonds have been deposited, the bank is entitled to receive from the Comptroller of the Currency circulating notes in blank, registered, and countersigned, equal to the par value of the bonds. The Comptroller has the plates engraved and the notes printed. The plates are made at the expense of the issuing bank, a plate with four notes on its face costing $75, and with two notes $50, but no charge is made for printing. The general expenses of the Bureau of the Currency are paid out of the pro ceeds from taxes on bank note circulation. To prevent the loss of the plates or the illegal issuing of notes, the plates are kept in the custody of the Secretary of the Treasury. The Comptroller is required to examine yearly the plates, dies, bed-pieces, and other material from which the notes are printed, and to file in his office a correct list of the same.
About 4o days are required to get out the first order of notes, and about 20 days for future orders, the difference in time being caused by the necessity of preparing plates in the first instance. The original order for circulation should, however, exceed the amount of circulation that can be taken out against the bonds deposited, as it is necessary for the Comptroller to have on hand enough notes to replace without delay any worn-out or mutilated notes sent in for redemption. Unless otherwise ordered, circu lating notes are shipped by the Comptroller to the issuing bank by express at its own expense.
The notes when received by the bank are in large perforated sheets ready for the signature of the president, or vice-president, and of the cashier. It was formerly held that written signatures on notes were necessary, but, while the Comptroller did not authorize or sanction any change in this respect, it gradually came about that no objection was made to printed or stamped signatures as distinguished from written signatures. Indeed, by an Act of 1920 engraved signatures were expressly permitted. As, however, all notes issued to or received by a bank are subject to redemption whether or not they are signed by the officers, the signature is not very important. After signing, the notes are cut
and turned over to the paying teller who puts them into the cash of the bank.
Denominations and Character The Act of June 3, 1864, provided for $1, $2, $5, $ro, $20, $50, $ too, $500, and $r,000 notes, but not more than one-sixth part of the notes furnished to any bank was to be of smaller denomination than $5, and after the resumption of specie pay ments no bank was to be furnished with notes smaller than $5. The issuance of $5oo notes was discontinued in 1885, and of $1,000 notes in 1884. Some notes of these early issues arc still outstand ing, but probably most of them are lost or held as souvenirs. The Act of March 4, 190o, limited the amount of $5 notes issuable to any bank to one-third of its total issues. The rising price level and great business activity during the war occasioned a demand for small bills, and the passage of the Act of October 5, 1917, provided for the issue to any bank of $1, $2, $5, $10, $20, $50, and $roo notes in such proportion as the bank might elect, but no bank may receive or have in circulation at any one time more than $25,00o in notes of the denominations of $r and $2. The Act of 1920 permitted again the issue of $50o and $1,000 notes. The notes state that they are secured by United States bonds or other securities, and express the promise of the issuing bank to pay on demand.
National bank notes are not a legal tender for private debts, but are receivable by the government in all payments except for customs duties. The notes are also a legal tender in payments by the United States, except for interest on the public debt and in redemption of the national currency. Every national bank is required to accept at par the notes of every other national bank, but is forbidden to accept them as security for loans. The notes are redeemable in lawful money at the United States Treasury and at the bank of issue, and are also exchangeable at the Treas ury for subsidiary silver and minor coins. Any notes not re deemed go to the profit of the United States.