This limit by law, was set prior to the civil war, for issuance of the Greenback. That law limited the notes based on how much Gold coin of the US was already in the Nation or would be with current gold reserve bullion. Since nearly all the Greenbacks were eventually redeemed in Gold coin and the total was about 300 million (at face value of the coins) after the Civil War and when the Silver dollar and Gold Coins had a par value again.
Those gold coins were then voluntarily given back to the Treasury in the New Deal of 1933 and the Gold confiscation. US Notes were again issued (in various forms) and ON DEMAND could be exchanged for Federal Reserve Notes and some Federal Reserve Bank Notes could be redeemed directly for gold coins.
I found this interesting and wanted to share it about United States Bank Notes (legal tender):
"So, great. But what do these obligations mean? Well, remember that these notes [
US Bank notes with RED SEALS] were actual U. S. debt issued by the US Treasury.
Therefore, at certain times, restrictions on their use were deemed necessary to avoid the treasury to default.
Acceptance of U. S. notes issued by the treasury for interest on its debt (which includes these notes) would be silly. They wanted notes which were backed by other banks or government agencies, like the Federal Reserve."
from:
http://www.banknoteden.com/Legal%20Tender.htm alterations in bold and brackets mine.
The US Notes were discontinued because for 150 years, the confusion of several different notes in circulation as "legal tender" both public (lawful money) and private (reserve notes) was out of hand. And, it was actually nearly impossible to know who was using what notes for what.
It is my belief that there is a US Note on the face of every currently issued Note today (above the 1 and 2 dollar denomination). This brilliant solution to different notes and my recorded DEMAND for lawful money per 12-USC 411 leaves no question which notes I am using.
It is already record on every bank transaction and that simple act of 2 notes in one makes book keeping a matter of record, not which notes where used in which transaction and what transactions are taxable events and which are not.
It also hides the US Note in plain view to confuse those seeking a different Note or Gold or silver coin redemption. Masterful manipulation of the law and the human mind while all the while, not breaking the law and keeping lawful remedy accessible to all.
Originally Posted by martin earl
This limit by law, was set prior to the civil war, for issuance of the Greenback. That law limited the notes based on how much Gold coin of the US was already in the Nation or would be with current gold reserve bullion. Since nearly all the Greenbacks were eventually redeemed in Gold coin and the total was about 300 million (at face value of the coins) after the Civil War and when the Silver dollar and Gold Coins had a par value again.
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