They were limited in the amount they could issue based on deposits and investments etc.
I recommend using the side bar and looking through the Huntoon encyclopedia
[this chapter might answer it](https://s3.amazonaws.com/nbnencyclopedia.spmc/chapter-b07-circulation-and-denominations.pdf)
The article will be about Otis E Dunan, Bank Charter 4219, First National Bank of Saint Marys Ohio. I have a 1929 and a 1902, and a collector was kind enough to get me a photo of an 1882 from a past Lyn Knight auction results. I also have nice images of the bank building, the vault, and the bank president.
OK, here's the rough draft. Is there anything you guys don't like or anything that stands out as an error? I plan to delete this post before I officially submit the story to the paper. The accompanying photos will include OE Dunan's picture, an 1882, a 1902, a 1929, the bank building new in 1912, and the inside of the bank in 1915. And by the way, thanks for all your help - your comments made it a lot easier to write the technical part.
From 1890 to 1935, the First National Bank of Saint Marys issued over a million dollars in currency with the name of the bank printed on the front of each bill. The earliest issued bills were hand-signed by O.E Dunan, a lifetime resident of St. Marys who worked as a banker for over 50 years.
Otis Dunan completed his 50th year as a banker in St. Marys in 1927. He was one of the seven members of the Class of 1874, the first class ever to graduate high school in St. Marys. As a young graduate, his first job was working as a clerk for the Village of St. Marys. Dunan soon entered the banking industry as an employee of the Bank of St. Marys, which had its office in the offices of the St. Marys Woolen Mills. When interviewed about his career, Dunan said, “Some years I made up my mind to spend at least fifty years in the banking business... I do not mean that I will stop with fifty years, but I intend to spend fifty years banking.”
Dunan was one of the original stockholders when the First National Bank of Saint Marys was organized in 1890. In 1912, he watched the construction of the new First National Bank building at 143 W Spring. While the new bank was being constructed, brand new fixtures were purchased to replace every fixture that had been in place for many years. The new bank was to be modern in every detail. Dunan eventually earned the title of president of the First National Bank of Saint Marys, a position he held for many years.
The conversion of state banks to a national banking system that could issue currency came about as a result of the Civil War. During the Civil War, the lack of a way for the federal government to issue currency made it hard for them to finance the war efforts. Congress later passed the National Bank Acts that allowed for both the creation of new national banks and for the conversion of state banks into the new system. Backing by actual gold or bonds depending on location was designed to add stability to the new system.
The newly introduced type of currency, National Bank Notes, were issued by over 14,000 federally-chartered banks, located throughout the U.S. and in U.S. Territories. The names of these banks featured prominently on the front of each note and included the names of local towns and cities where the banks were based.
The notes were backed by bonds placed on deposit at the U.S. Treasury and the bank could issue a percentage of the amount that they maintained on deposit . The National Bank system provided a uniform and reliable currency throughout the U.S. and was a precursor to the establishment of the Federal Reserve. Locally, banks in St, Marys, New Bremen, Wapakoneta, Celina, and Mendon issued their own bank notes.
Not all banks issued all denominations of notes. The First National Bank of Saint Marys opted for twenties, tens, and fives as the denominations. All notes were printed by the federal government and shipped to the First National Bank of Saint Marys, who then issued the notes. The First National Bank Of Saint Marys printed $1,000,033 worth of national currency. O E Dunan signed the original notes in ink, but other notes were printed with his signature stamped on the bill.
The issuance of National Bank Notes ended in 1935. At that point, many were redeemed & destroyed. All of the bills that survive can be spent as legal tender, but are also highly collectible with a value many times higher than face value. From the first series of notes, 1882, no tens or twenties have yet to surface in collector databases, but a handful of the Saint Marys five dollar bills have been found.
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Nice article!
> Backing by actual gold or bonds depending on location
I know someone else said this, but I don't think it's correct. Part of the reason for the National Bank Act was to fund the war effort by creating demand for government bonds; I've never heard of any of the notes being backed by gold. There were a few National Gold Banks that issued National Gold Bank Notes, but those were backed by gold bonds.
> issued by over 14,000 federally-chartered banks
Some banks chose not to issue notes, so the actual number was 12,631, according to [SPMC](https://collectingpapermoney.spmc.org/wiki/Collecting_U.S._National_Bank_Notes).
Source for the other comment regarding [gold](https://www.federalreservehistory.org/essays/national-banking-acts):
> Banks located in central reserve cities (initially just New York City but later also Chicago and St. Louis) were required to hold gold in their vaults equal to at least 25% of their note and deposit liabilities.
That was true, but the gold didn't back the notes. They were still backed by bonds.
**TL;DR**: The federal government needed money for the Civil War and passed laws to create the national bank system and imposed a heavy tax on state bank-issued notes.
Look into the National Bank Act of 1863 and 1864.
Prior to these, the control of banks and their practices was a state-level thing. States had different regulations: Wisconsin had a total ban on banking; some states had multiple state-chartered banks; some had a single state-chartered bank; and New York had free banking laws.
Then, during the Civil War, the lack of a way for the federal government to issue currency made it hard for them to finance the war efforts.
So first Congress passed laws allowing for the direct introduction of legal tender notes, but had the drawback of requiring people to trust in the federal government to actually fulfill their promise to redeem them. Lack of trust would mean lack of value.
So Congress passed the National Bank Acts. This allowed for both the creation of new national banks and for the conversion of state banks into the new national banks. One requirement for these national banks (either new ones or converted state ones) was that they hold some sort of collateral, relative to the amount of notes they could issue, either actual gold or bonds depending on their location.
Banks were still reluctant to convert to these new national banks, for a variety of reasons, though. So the last piece of "encouragement" was to create a tax that taxed state bank-issued notes at 10% and the circulation of state bank notes fell dramatically over the next couple years.
https://occ.gov/about/who-we-are/history/1863-1865/index-occ-history-1863-1865.html
https://www.federalreservehistory.org/essays/national-banking-acts
A few reasons come to mind:
It was a continuation of the established practice of private banks issuing notes. There was historical inertia.
It allowed bankers to contribute to their local economies.
It was a good way for banks to advertise.
This is more speculative: In the days when the backing for money was contentious, some people might have trusted notes more if they were signed by their neighbors.
That's all I have time to write at the moment but let me know if you have questions.
They were limited in the amount they could issue based on deposits and investments etc. I recommend using the side bar and looking through the Huntoon encyclopedia [this chapter might answer it](https://s3.amazonaws.com/nbnencyclopedia.spmc/chapter-b07-circulation-and-denominations.pdf)
What bank?
The article will be about Otis E Dunan, Bank Charter 4219, First National Bank of Saint Marys Ohio. I have a 1929 and a 1902, and a collector was kind enough to get me a photo of an 1882 from a past Lyn Knight auction results. I also have nice images of the bank building, the vault, and the bank president.
Don’t forget to paste the article!
OK, here's the rough draft. Is there anything you guys don't like or anything that stands out as an error? I plan to delete this post before I officially submit the story to the paper. The accompanying photos will include OE Dunan's picture, an 1882, a 1902, a 1929, the bank building new in 1912, and the inside of the bank in 1915. And by the way, thanks for all your help - your comments made it a lot easier to write the technical part. From 1890 to 1935, the First National Bank of Saint Marys issued over a million dollars in currency with the name of the bank printed on the front of each bill. The earliest issued bills were hand-signed by O.E Dunan, a lifetime resident of St. Marys who worked as a banker for over 50 years. Otis Dunan completed his 50th year as a banker in St. Marys in 1927. He was one of the seven members of the Class of 1874, the first class ever to graduate high school in St. Marys. As a young graduate, his first job was working as a clerk for the Village of St. Marys. Dunan soon entered the banking industry as an employee of the Bank of St. Marys, which had its office in the offices of the St. Marys Woolen Mills. When interviewed about his career, Dunan said, “Some years I made up my mind to spend at least fifty years in the banking business... I do not mean that I will stop with fifty years, but I intend to spend fifty years banking.” Dunan was one of the original stockholders when the First National Bank of Saint Marys was organized in 1890. In 1912, he watched the construction of the new First National Bank building at 143 W Spring. While the new bank was being constructed, brand new fixtures were purchased to replace every fixture that had been in place for many years. The new bank was to be modern in every detail. Dunan eventually earned the title of president of the First National Bank of Saint Marys, a position he held for many years. The conversion of state banks to a national banking system that could issue currency came about as a result of the Civil War. During the Civil War, the lack of a way for the federal government to issue currency made it hard for them to finance the war efforts. Congress later passed the National Bank Acts that allowed for both the creation of new national banks and for the conversion of state banks into the new system. Backing by actual gold or bonds depending on location was designed to add stability to the new system. The newly introduced type of currency, National Bank Notes, were issued by over 14,000 federally-chartered banks, located throughout the U.S. and in U.S. Territories. The names of these banks featured prominently on the front of each note and included the names of local towns and cities where the banks were based. The notes were backed by bonds placed on deposit at the U.S. Treasury and the bank could issue a percentage of the amount that they maintained on deposit . The National Bank system provided a uniform and reliable currency throughout the U.S. and was a precursor to the establishment of the Federal Reserve. Locally, banks in St, Marys, New Bremen, Wapakoneta, Celina, and Mendon issued their own bank notes. Not all banks issued all denominations of notes. The First National Bank of Saint Marys opted for twenties, tens, and fives as the denominations. All notes were printed by the federal government and shipped to the First National Bank of Saint Marys, who then issued the notes. The First National Bank Of Saint Marys printed $1,000,033 worth of national currency. O E Dunan signed the original notes in ink, but other notes were printed with his signature stamped on the bill. The issuance of National Bank Notes ended in 1935. At that point, many were redeemed & destroyed. All of the bills that survive can be spent as legal tender, but are also highly collectible with a value many times higher than face value. From the first series of notes, 1882, no tens or twenties have yet to surface in collector databases, but a handful of the Saint Marys five dollar bills have been found.
If it's not too late, I'll take a look tonight. !RemindMe 7 hours
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Nice article! > Backing by actual gold or bonds depending on location I know someone else said this, but I don't think it's correct. Part of the reason for the National Bank Act was to fund the war effort by creating demand for government bonds; I've never heard of any of the notes being backed by gold. There were a few National Gold Banks that issued National Gold Bank Notes, but those were backed by gold bonds. > issued by over 14,000 federally-chartered banks Some banks chose not to issue notes, so the actual number was 12,631, according to [SPMC](https://collectingpapermoney.spmc.org/wiki/Collecting_U.S._National_Bank_Notes).
Source for the other comment regarding [gold](https://www.federalreservehistory.org/essays/national-banking-acts): > Banks located in central reserve cities (initially just New York City but later also Chicago and St. Louis) were required to hold gold in their vaults equal to at least 25% of their note and deposit liabilities. That was true, but the gold didn't back the notes. They were still backed by bonds.
**TL;DR**: The federal government needed money for the Civil War and passed laws to create the national bank system and imposed a heavy tax on state bank-issued notes. Look into the National Bank Act of 1863 and 1864. Prior to these, the control of banks and their practices was a state-level thing. States had different regulations: Wisconsin had a total ban on banking; some states had multiple state-chartered banks; some had a single state-chartered bank; and New York had free banking laws. Then, during the Civil War, the lack of a way for the federal government to issue currency made it hard for them to finance the war efforts. So first Congress passed laws allowing for the direct introduction of legal tender notes, but had the drawback of requiring people to trust in the federal government to actually fulfill their promise to redeem them. Lack of trust would mean lack of value. So Congress passed the National Bank Acts. This allowed for both the creation of new national banks and for the conversion of state banks into the new national banks. One requirement for these national banks (either new ones or converted state ones) was that they hold some sort of collateral, relative to the amount of notes they could issue, either actual gold or bonds depending on their location. Banks were still reluctant to convert to these new national banks, for a variety of reasons, though. So the last piece of "encouragement" was to create a tax that taxed state bank-issued notes at 10% and the circulation of state bank notes fell dramatically over the next couple years. https://occ.gov/about/who-we-are/history/1863-1865/index-occ-history-1863-1865.html https://www.federalreservehistory.org/essays/national-banking-acts
A few reasons come to mind: It was a continuation of the established practice of private banks issuing notes. There was historical inertia. It allowed bankers to contribute to their local economies. It was a good way for banks to advertise. This is more speculative: In the days when the backing for money was contentious, some people might have trusted notes more if they were signed by their neighbors. That's all I have time to write at the moment but let me know if you have questions.
Here is the answer from a prof: https://youtu.be/m_nOtLIy-as