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(US HISTORY) federally chartered bank. In 1863, the US Congress passed the National Bank Act that empowered banks with federal charters to issue currency backed by US Treasury securities.

National bank notes were issued until 1935; after 1928, they looked exactly the same as "national notes," or paper money circulated by the US Treasury.

(The US Treasury stopped issuing banknotes in 1971. Such notes were distinguished from federal reserve notes by a red seal and the absence of the legend, "federal reserve note" at the top of the bill).
Any national bank could issue currency equal in value to 90% of US treasury securities that it had on deposity with the Treasury. National bank notes initially had their own distinctive engraving, but after 1928 were visually almost indistinguishable from federal reserve notes.
by Abu Yahya May 05, 2010
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