During World War I, when Americans hoarded gold and made it difficult for the government to maintain a supply of gold coins, the US issued the original Federal Reserve Bank Notes (FRBNs). Unlike previous Federal Reserve Notes, FRBNs were obligations of one of 12 district banks rather than the Federal Reserve System as a whole. They were printed using the template for national banknotes.
The original FRBNs were from the 1915 series. Most were larger than earlier Federal Reserve Notes. They featured the portraits on the left side rather than the center, and had a blue treasury seal. Small size FRBNs were also printed, but only a few were distributed. Therefore, they are valuable to old money dealers.
denominations
The first FRBNs were issued in denominations from $5 to $20. With the printing of the Series 1918, $1 and $2 denominations were added to replace the Silver Certificates, and a $50 note was also introduced. All district banks now printed the notes, although not all banks printed all denominations. The new obligation on the notes read: “Secured by United States Bonds or United States Certificates of Debt or United States One Year Gold Notes deposited with the Treasurer of the United States of America.”
- The $1 denomination features George Washington on the left side of the note. The back shows a flying eagle holding an American flag. The actual value depends on the condition of the invoice.
- Known as “the battleship bill,” the 1918 $2 bill features Thomas Jefferson on the front and a battleship on the back of each bill. They have a variety of firms and districts.
- The $5 bill, with Abraham Lincoln on the front, is not valued as highly as other denominations.
- The $10 bill, featuring Andrew Jackson, is particularly rare and valuable, with the exact value based on the issuing district and whether or not it is a star bill. Star bills are worth more money to collectors of rare paper money.
- The $20 note, which features a profile picture of Grover Cleveland, was only issued by a few districts. Since not many were printed, they are rare and valuable.
- The $50 note featuring Ulysses S. Grant was only issued by the St. Louis district. A few dozen of these exist in high grades.
FRBNs from 1918 are rare because the US Treasury retired them after the war ended. Star replacement bills are the hardest to find and are sought after by rare currency dealers.
According to Numismatic News“[t]The Federal Reserve Bank note did not suddenly become scarce and interesting. Rather, it is that many [collectors] I have suddenly discovered that Federal Reserve bank notes large and small are rare and interesting.”