Federal Reserve Bank Notes of 1918

During World War I, when Americans were hoarding gold and making 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 of the 1915 series. Most were larger than previous Federal Reserve notes. They featured the portraits on the left side instead of 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 1918 Series, $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 bills deposited with the Treasurer of the United States of America.”

• The $1 denomination features George Washington on the left side of the bill. The back features a soaring eagle holding an American flag. The current value depends on the condition of the invoice.
• The 1918 $2 bill, known as the “Battleship Bill,” shows Thomas Jefferson on the front and a battleship on the reverse 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 the 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 notes are worth more money to collectors of rare paper money.
• The $20 bill, which features a profile image of Grover Cleveland, was only issued by a few districts. Since not many were printed, they are rare and valuable.
• The $50 bill featuring Ulysses S. Grant was only issued by the District of St. Louis. Some dozens of these exist in high grades.

1918 FRBNs are in short supply because the US Treasury withdrew them after the war ended. Star Replacement Bills are the hardest to find and are sought after by rare currency dealers.

According Numismatic News“[t]The Federal Reserve Bank note did not suddenly become rare and interesting. Rather, it is that many [collectors] I have suddenly discovered that large and small Federal Reserve bank notes are rare and interesting.”