1. Early Banking and Monetary Standards Pgs. 292 – 298
Chapter 11.2
Early Banking and Monetary Standards
Pgs. 292 – 298

2. Privately Issed Bank Notes
Paper Currency has a rough start
States can’t print money, Feds don’t
State Banking
Laws don’t prevent banks from issuing currency
State banks issue money
Redeemable fro gold & silver
Abuses
Some banks over did it – on purpose

3. Cont. Problems w/ currency Different sizes, shapes & colors
If I print more $$$ what does that do to value?
Counterfeiting anyone?
How do you exchange one note for another
Who would believe it’s worth what you said it was?

4. The Greenback Standard
Civil War means we need $$$$
When in doubt, make your own
Legal Tender – pass a law that says they’re worth what you say they are.
National Currency
Congress created national banks
National Bank notes – backed by government bonds
You have to buy the bonds & issue that much money
Tax other money to force banks onto this one

5. Cont. Gold Standard Silver Certificates Treasury Coin Notes
Paper money backed by government gold
Initially for banks, eventually for people
Silver Certificates
Backed by silver
Replaced inconvenient coin dollars
Treasury Coin Notes
Gold or silver backing, whichever we had

6. The Gold Standard