National Bank Notes

What a national bank note is

The National Banking Act of 1863 let federally chartered banks issue their own notes. A bank deposited US government bonds with the Treasury and in return received notes worth 90 percent of the bonds' value, raised to the full value in 1900. The Treasury printed the notes in standard designs with each bank's name and town added, so a note from a bank in a small farming town is as official as one from a big city bank.

The program ended in the 1930s, when the bonds that backed the notes were retired and US paper money was consolidated into Federal Reserve notes, United States notes and silver certificates. Notes with brown seals and the words "National Currency" across the top are the last of the line.

Reading the charter number

Every national bank received a charter number from the Comptroller of the Currency, numbered in the order the banks were chartered. The number is printed on the note, usually more than once. It is how collectors identify the bank. Charter number 1 went to the First National Bank of Philadelphia.

Low charter numbers mark the earliest banks, which appeals to some collectors. More often the charter number simply lets you look the bank up in a reference and see where it was, how long it issued notes and how many survive.

The main types

• Original Series and Series 1875: the first notes, with ornate designs and hand-signed or stamped signatures of bank officers.
• Series 1882: three varieties, known as brown backs, date backs and value backs, by what the back shows.
• Series 1902: red seal notes first, then blue seal date backs (with the years 1902 and 1908 on the back) and plain backs. Red seals are the scarcest of the three.
• Series 1929 small size: brown seals. Type 1 shows the charter number printed twice in black. Type 2 adds the charter number in brown ink as well.

Why some towns are prized

National bank note collecting is local. Many collectors want notes from their own town, county or state. They compete hard for the few known examples. A bank that was small, issued notes for only a few years or failed early may have only a handful of surviving notes. Every one of those becomes a significant rarity no matter the condition.

Territorial notes are a favorite category. Banks in places that were still US territories, such as Arizona, New Mexico, Oklahoma, Indian Territory, Alaska and Hawaii, issued notes before statehood. Those notes draw collectors from every state.

By contrast, a big city bank that issued notes for decades is usually common. A worn note from a large New York or Chicago bank is still a collectible with a collector premium, just not a hometown rarity.

What else moves a note up

• Serial number 1: banks numbered their own sheets, so a note with bank serial 1 is a coveted first note.
• Signatures: the bank's president and cashier signed the notes, at first by hand and later with printed or stamped signatures. Clear original signatures add appeal.
• Type: red seal 1902 notes and the first charter types are scarcer than plain backs or Series 1929 notes from the same bank.
• Condition: as always, but a rare bank in rough condition still beats a common bank in fine shape.

How to research your note

Start with what's on the face: bank name, town, state, charter number, series and type. Collector societies and references keep censuses of known notes listed by bank, so you can see how many examples of your bank's notes have been recorded. If only a few are known, treat yours carefully and show it to a currency dealer who specializes in nationals before you agree to any price.

Family history adds to the story too. If the note came from a relative who lived in that town, write down what you know and keep it with the note. Provenance doesn't change the grade, but collectors of local history love it.

Handle them like the rare items they can be

Many national bank notes have pencil marks, bank teller stamps or old pinholes. Leave them. Erasing pencil or patching a pinhole does more harm than the original mark. Store the note flat in a polyester sleeve and keep it away from damp basements and hot attics.

Frequently asked questions