"one signature paper" and "two signature paper"

[Gavilan]

[Gavilan]

Here's why U.S. Notes and Federal Reserve Notes existed as two distinct types of paper currency, especially in regards to their connection to bank-issued notes:

Historical Context: Banking in the U.S. before the Federal Reserve (created 1913) was a messy patchwork

National Bank Notes: Federally chartered banks could issue their OWN notes, backed by U.S. Treasury Bonds they held. This aimed to make currency uniform, but in practice, thousands of different note designs were out there.
U.S. Notes ('Greenbacks'): First issued during the Civil War. Directly backed by government credit, NOT tied to specific held assets like gold or bonds.

The Rise of Federal Reserve Notes:

Addressing the Chaos: The Fed's goal was a single, reliable currency. National Bank Notes were phased OUT, replaced with Fed Notes we use today.
Two Signatures Why?: Fed Notes had to bridge the transition. They signify 1) The Fed's obligation to redeem the note, and 2) The U.S. Treasury ultimately guaranteeing its value.
Gold Standard Era: Back then, currency WAS, in theory, convertible to gold. Notes weren't "just paper", but promises tied to a (finite) underlying asset.

Why Promissory Notes Matter:

Notes as IOUs: BOTH national bank notes and early Fed notes functioned as promissory notes. The holder could, in theory, demand redemption for the promised thing (first bonds, later gold, eventually just the abstraction of "legal tender").
Trust is Key: Currency only works if people trust the issuer has the means to back up their promises. The dual signature was meant to reinforce that during a shift between banking systems.

Modern Echoes

The Phrase Lingers: While the specific 'two signature' era is long past, the concept of currency still being tied to something of value persists in some economic fringe theories.
Ending Gold Backing: When Nixon took the U.S. off the gold standard, this completely severed currency from a 'hard' asset basis. That was seismic, even if most people never handled a two-signature note.

[Gavilan]

The term "one signature paper" applied to a specific period of U.S. Notes, and it's a bit of a misnomer. Here's the breakdown of why:

What U.S. Notes Were ("Greenbacks")

Civil War Financing: Issued first in 1862, these were a way to pay Union expenses when traditional revenue wasn't enough.
Not Backed by Gold: Unlike some prior currency, they were "fiat money", their value based on faith in the U.S. government's solvency. This was controversial at the time.
Legal Tender Status: Despite debate, they were made legal to settle debts. This is key, as otherwise their value would rely on who voluntarily accepted them.

Where the Signature Confusion Arises:

Early Designs: Initially, the only signatures WERE the Treasury Register and Treasurer. This visually separated them from earlier notes with bank officials' signatures as well.
Multiple Series: Over time, U.S. Notes had design changes, including different combinations of signatures.
The Red Seal: The distinctive red Treasury Seal was more consistent than which specific officials signed. This may contribute to the misconception of "all being the same" in terms of backing.

Why "One Signature" Isn't Quite Accurate:

While the term is colloquially used, it simplifies a complex history. Even in the early years, some smaller denomination U.S. Notes had additional signatures for anti-counterfeiting purposes.

A More Accurate Framing:

It's better to think of "one signature" era notes as highlighting the shift to a centralized currency model where:

Federal Government is SOLE Issuer: No more patchwork of thousands of different bank notes.
Value Tied to Trust: The signature(s) represented a promise the U.S. stood behind its money, even when not directly linked to a stock of gold.

[David Merrill]

Thank you Gavilan;

That is something to seriously chew on regarding redemption and gold metal.

Financing the North

Interestingly I inquired about the GILPIN NOTES that began the whole fiat system in government. Apparently they were all turned in to the Treasury and all of them destroyed. Nobody at the Numismatic Museum had ever heard of them.