Rare First National Bank of Du Quoin Bills in Coin Shop's Collection
A First National Bank of Du Quoin $20 bill in Darrell Robson's collection mirrors an era when money was worth something.
Robson is owner of Darrell's coins on North Division Street (next to the Razor's Edge barber shop).
It's a very rare and uniquely Du Quoin piece of paper currency that was printed as part of a 1902 U.S. Treasury series. The print and issue date was actually April 2012.
Back in the day the treasury allowed local banks with a national charter (there were both state and national charters) to issue their own currency, and under the National Banking Acts of 1863 and 1864 the currency required two things: 1.) That the bank had full value of the printed value on the face of the bill in its gold or silver assets, and 2.) each bill had to be signed by the bank president (In this case Walter Forrester-- like a contract--that the bank had the ability to exchange the note for gold or silver on demand.
The National Banking Acts established a system of national banks and created the United States National Banking System. They encouraged development of a national currency backed by bank holdings of U.S. Treasury securities and established the Office of the Comptroller of the Currency as part of the United States Department of the Treasury. It authorized the Comptroller to examine and regulate nationally chartered banks.
The legacy of the Act is its impact on the national banking system as it stands today and its support of a uniform U.S. banking policy.
The bill is beautifully engraved, is numbered, and says "Secured by United States Bonds or Other Securities."
If a bank could not redeem its bank notes for money (gold or silver), the bank had committed fraud and was subject to prosecution.
Over time, fully redeemable currency was replaced by "fractional" currency which required a lesser percentage of assets to guarantee the value.
The difficulty always lay in judging the ability of an issuing bank to be able to promptly redeem their currency for gold or silver. It was therefore extremely difficult for currency to serve as a means of exchange for inter-regional parties.
As Americans began to head West, these institutions began to issue more and more currency as a means of facilitating land speculation. This at-will adjustment of the money supply caused all forms of currency to fluctuate wildly in value. The issuance of currency by multiple banks also led to a nationwide counterfeiting problem that left the public wondering not only how much their money was worth but whether it was real.
The currency problem eventually became so bad that a magazine was issued that included photos and descriptions of the various bank notes and information about whether the issuing bank was sound.
In 1846 the Polk Administration created a United States Treasury system that moved public funds from private banks to Treasury branches in an effort to stabilize the economy. The bills were backed only by the national government's promise to redeem them and their value was dependent on public confidence.