Anonymous asked in Politics & GovernmentPolitics · 1 decade ago

What is the difference in a United States Note and a Federal Reserve Note?

I ask the above question because I have in my pocket a Federal Reserve Note and a United States Note. The United States Note was placed into circulation while John F. Kennedy was president. Why would he do that if the Federal Reserve Note is not a private cartel of bankers?

2 Answers

  • 1 decade ago
    Favorite Answer

    From the U.S. Treasury website (see link in sources)

    "United States Notes (characterized by a red seal and serial number) were the first national currency, authorized by the Legal Tender Act of 1862 and began circulating during the Civil War. The Treasury Department issued these notes directly into circulation, and they are obligations of the United States Government. The issuance of United States Notes is subject to limitations established by Congress. It established a statutory limitation of $300 million on the amount of United States Notes authorized to be outstanding and in circulation. While this was a significant figure in Civil War days, it is now a very small fraction of the total currency in circulation in the United States.

    Both United States Notes and Federal Reserve Notes are parts of our national currency and both are legal tender. They circulate as money in the same way. However, the issuing authority for them comes from different statutes. United States Notes were redeemable in gold until 1933, when the United States abandoned the gold standard. Since then, both currencies have served essentially the same purpose, and have had the same value. Because United States Notes serve no function that is not already adequately served by Federal Reserve Notes, their issuance was discontinued, and none have been placed in to circulation since January 21, 1971.

    The Federal Reserve Act of 1913 authorized the production and circulation of Federal Reserve notes. Although the Bureau of Engraving and Printing (BEP) prints these notes, they move into circulation through the Federal Reserve System. They are obligations of both the Federal Reserve System and the United States Government. On Federal Reserve notes, the seals and serial numbers appear in green.

    United States notes serve no function that is not already adequately served by Federal Reserve notes. As a result, the Treasury Department stopped issuing United States notes, and none have been placed into circulation since January 21, 1971."

    So, in answer to your question, JFK did not place United States Notes into circulation. They were already being used in circulation and had been for more than 100 years. Also, as I pointed out in answer to one of your other questions, the Federal Reserve is NOT a private cartel or OWNED by private individuals.

  • ?
    Lv 4
    3 years ago

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