By Cory Williams for PCGS ……
Back of Series of 1918 “Battleship Note” $2 Federal Reserve Bank Note, courtesy of Heritage Auctions
While the terminology sounds almost the same, Federal Reserve Bank Notes differ from Federal Reserve Notes in the language of which entity will be paying to the bearer on demand. “FRBNs”, as they are referred to in the hobby, were actually payable by the individual Federal Reserve banks, whereas “FRNs” were payable by the United States.
Somewhat similar to the language seen on National Bank Notes, the notes themselves were actually backed by bonds deposited with the United States Treasury by the individual Federal Reserve bank.
Forever confusing new collectors, the top of these notes read “NATIONAL CURRENCY” but they are not what is referred to as National Bank Notes.
Starting off with the main attraction to these interesting banknotes is the design on the back, with its imposing visage of the 27,000-ton USS New York dreadnought battleship. The vignette was never labeled on the note itself and was intended to be generic, but in comparing it to an image of New York it is clear the two are the same.
Face of Series of 1918 “Battleship Note” $2 Federal Reserve Bank Note, courtesy of Heritage Auctions
The face of the note has a vignette of third United States President Thomas Jefferson; his first appearance on the Federal $2 bill was on the Series of 1869 Legal Tender, and he can be found there on modern $2 notes to this day.
As briefly mentioned above, these notes were payable by the individual banks themselves and as such the full text of the obligation on the particular note pictured in this article reads:
SECURED BY UNITED STATES CERTIFICATES OF INDEBTEDNESS OR
UNITED STATES ONE-YEAR GOLD NOTES, DEPOSITED WITH THE TREASURER OF
THE UNITED STATES OF AMERICA
FEDERAL RESERVE BANK
WILL PAY TO THE BEARER ON DEMAND
Just to the right of this is the date May 18, 1914. This is the date when each Federal Reserve bank, as a whole, was incorporated.
Vertically at the far right is the following text:
AUTHORIZED BY THE
ACTS OF DECEMBER 23, 1913,
AND APRIL 23, 1918
The first act refers to when the Federal Reserve System was established; the second, also known as the Pittman Act, allowed the Secretary of the Treasury to withdraw Silver Certificates from circulation and to melt not more than 350 million silver dollars held by the Treasury backing the aforementioned certificates. In conjunction with this, the Federal Reserve banks were allowed to issue these banknotes to replace them in circulation.
In each corner, a letter and number combination is seen, and these correspond to the Federal Reserve bank in the center text. They are as follows:
- A-1 for Boston, MA
- B-2 for New York, NY
- C-3 for Philadelphia, PA
- D-4 for Cleveland, OH
- E-5 for Richmond, VA
- F-6 for Atlanta, GA
- G-7 for Chicago, IL
- H-8 for St. Louis, MO
- I-9 for Minneapolis, MN
- J-10 for Kansas City, MO
- K-11 for Dallas, TX
- L-12 for San Francisco, CA
All 12 districts of the Federal Reserve system issued these battleship $2 bills, which were printed as late as 1921.
Across this issue, John Burke remained Treasurer of the United States with his signature affixed at the top alongside the two Registers of the Treasury during this issue: Houston B. Teehee or William S. Elliot. A further two signatures are found on these Federal Reserve Bank Notes: those of the Cashier, and the Governor of each respective Federal Reserve bank.
The resulting combination of signatures, with some cashiers and governors changing during this issue, has ended up providing the collecting community with some real rarities to pursue. Throw in the fact that most, but not all, of the districts had Star Notes – Replacement Notes – printed, and completing this set with one of each variety known would be an impressive feat indeed.
* * *