Compare -- Contrast FRBNs and FRNs ... or are they the same thing?

Question: Are Federal Reserve Bank Notes (FRBNs) and

Federal Reserve Notes (FRNs) the same?

No, they are very different notes and it is important to make the distinction when buying, selling, or trading these notes. Here is some history and information. 

1929 ..$20 Federal Reserve Bank of Minneapolis PMG 63 EPQ Choice Unc. Fr#: 1870-I

Federal Reserve Bank Notes, also known as FRBNs, were issued in the US between 1915 and 1934. As legal US tender, they were regarded, just as other kinds of notes, according to their face value. There are 12 Federal Reserve Banks. It is important to note that Federal Reserve Bank Notes are backed up by just ONE of the 12 Federal Reserve Banks, not all of these banks as a unified group.

And size does matter. Two size designations exist for FRBNs – large size and small size. Large size FRBNs were initially issued in 1915 with the five, ten, and twenty dollar denominations. The one, two, and fifty dollar denominations surfaced in 1918.

Small size FRBNs were emergency printed in 1933 (during the depths of the American Depression), using paper stock from the printing of National Bank Notes and in denominations ranging from five through 100 dollars. During the depression, Americans lost faith and trust in their banks, so wide-spread currency hoarding created extreme shortages. Of great interest to collectors is that, just as is seen in our current one dollar bills, the letter A through L appears, denoting one of the 12 Federal Reserve Districts. Since 1934, these small size FRBNs were not printed and banks stopped making them publicly available in 1945. They have serial numbers and brown seals and have the “National Currency” printed across the top of the obverse side.

FRBNs were issued by each individual member bank, as mentioned, and were phased out in the mid-1930s. FRBNs are considered by numismatists to be very different bills, when compared with Federal Reserve Notes.

Federal Reserve Notes (FRNs) are still in production. Notably, the term Federal Reserve Notes (FRNs) is considered to be the best term to use when describing circulating US paper currency. The only U.S. banknotes still in production since 1971 are the FRNs.

FRNs were backed in a similar way to National Bank Notes, using U.S. bonds, but issued by Federal Reserve banks instead of by chartered National banks. Before 1971, FRNs (in theory) were supported by an equal amount of US Treasury gold. Under President Nixon, however, the gold standard was replaced by a government declaration that the paper money had value and was legal tender in the US. 

But how was this possible? In December of 1913, during his first year in office, Democratic President Woodrow Wilson aggressively influenced and subsequently signed into law the Federal Reserve Act. This Act of Congress established the Federal Reserve System and the US Central Banking System (a major reform for US banking and currency).

Importantly, this Act provided the US central banking system official authority to issue Federal Reserve Notes and Federal Reserve Bank Notes as legally authorized US currency. Notably, the bill’s co-sponsor was the Chairmen of the House Banking and Currency Committee, Virginia Congressional Democratic Representative Carter Glass.

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