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The Treasury Department issued these notes directly into circulation, and they are obligations of the United States Government.

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United States Notes (characterized by a red seal and serial number) were the first national currency, authorized by the Legal Tender Act of 1862 and began circulating during the Civil War. What are United States Notes and how are they different from Federal Reserve notes? In another sense, because they are legal tender, Federal Reserve notes are 'backed' by all the goods and services in the economy. The notes have no value for themselves, but for what they will buy. Federal Reserve notes represent a first lien on all the assets of the Federal Reserve Banks, and on the collateral specifically held against them.ДЇederal Reserve notes are not redeemable in gold, silver or any other commodity, and receive no backing by anything This has been the case since 1933. This would meet the requirements of Section 411, but the government would also take over the assets, which would be of equal value. The idea was that if the Congress dissolved the Federal Reserve System, the United States would take over the notes (liabilities). This provides backing for the note issue. This collateral is chiefly gold certificates and United States securities. It pays the BEP for the cost of producing the notes, which then become liabilities of the Federal Reserve Banks, and obligations of the United States Government.Д¬ongress has specified that a Federal Reserve Bank must hold collateral equal in value to the Federal Reserve notes that the Bank receives. It must pay for them in full, dollar for dollar, by drawing down its account with its district Federal Reserve Bank.ДЇederal Reserve Banks obtain the notes from our Bureau of Engraving and Printing (BEP). A commercial bank belonging to the Federal Reserve System can obtain Federal Reserve notes from the Federal Reserve Bank in its district whenever it wishes. The twelve Federal Reserve Banks issue them into circulation pursuant to the Federal Reserve Act of 1913. What are Federal Reserve notes and how are they different from United States notes?ДЇederal Reserve notes are legal tender currency notes.

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In addition, movie theaters, convenience stores and gas stations may refuse to accept large denomination currency (usually notes above $20) as a matter of policy. For example, a bus line may prohibit payment of fares in pennies or dollar bills.

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Private businesses are free to develop their own policies on whether or not to accept cash unless there is a State law which says otherwise. There is, however, no Federal statute mandating that a private business, a person or an organization must accept currency or coins as for payment for goods and/or services. This statute means that all United States money as identified above are a valid and legal offer of payment for debts when tendered to a creditor. 5103, entitled 'Legal tender,' which states: 'United States coins and currency (including Federal reserve notes and circulating notes of Federal reserve banks and national banks) are legal tender for all debts, public charges, taxes, and dues.' The pertinent portion of law that applies to your question is the Coinage Act of 1965, specifically Section 31 U.S.C. Some businesses or governmental agencies say that they will only accept checks, money orders or credit cards as payment, and others will only accept currency notes in denominations of $20 or smaller. I thought that United States currency was legal tender for all debts.

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