Obsolete Currency: Federal Reserve Bank Notes

Shown is an obsolete form of currency: the Federal Reserve Bank Note (FRBN).

Not to be confused with the current Federal Reserve Notes, the FRBN was issued between 1914 to 1945. FRBNs were obligations only of the regional Federal Reserve Bank issuing them, not the entire Fed system.

The first notes were issued to the regional Federal Reserve Banks with the start of the Fed. There were worries of regional cash shortages as National Bank Notes were taken from circulation in expectation of being replaced by Federal Reserve Notes. The regional banks could then issue their own notes to fill any gaps. These shortages never occurred.

FRBNs were held in reserve until World War I when they were put into circulation to replace disappearing Silver Certificates. (During the war, the silver backing the Silver Certificates was sold to India via the UK causing the withdrawal of Silver Certificates.)

FRBNs next appeared during the March 1933 Bank Holiday when US banks were closed by Franklin Roosevelt. It was feared that when the banks reopened that there would be panic withdrawals of cash. So, FRBNs were shipped around the country before reopening to supply the banks. But, a panic never materialized.

The last issue of FRBNs was in 1942, during World War II, to meet a cash shortage. In 1945, after the war, Congress ended authorization for the notes, leaving only the familiar Federal Reserve Notes of today.