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<h4><a name="text1">Federal Reserve Notes and</a><br>
Federal Reserve Bank Notes:<br>
The Nation's Central Bank</h4>
<ul>
<li><a href="frnotes/index.html" target="_top">Federal Reserve Notes</a></li>
<li> <a href="frbnotes/index.html" target="_top">Federal Reserve Bank
Notes</a></li>
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<p>Federal Reserve notes, which comprise more than 99 percent of today's
paper currency, were first issued by Federal Reserve Banks in 1914. The
Federal Reserve System was established by the Federal Reserve Act of 1913,
which, in part, called for the creation of an independent central bank
to furnish an elastic money supply that would expand and contract in response
to the economy's changing demand for money. Such flexibility in the financial
system acts as a stabilizing influence on prices and credit in the economy.</p>
<hr>
<h4><a name="text2">Small-Size Currency:</a><br>
Standards and Uniformity<a name="gold"></a></h4>
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<li><a href="legal/index.html" target="_top">Legal Tender Notes</a></li>
<li><a href="certs/index.html" target="_top">Gold & Silver Certificates</a></li>
<li><a href="banknotes/index.html" target="_top">Federal Reserve Bank
Notes</a></li>
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<p>With the rapid growth of our nation, there was a demand for more currency.
During the 1920s, the U.S. Treasury realized that millions of dollars
could be saved by replacing large-size or "blanket" bills with smaller
bills. The currency most familiar to Americans and to the world today,
Small-size Currency has been issued since 1928 in many forms: Legal Tender
notes, Silver Certificates, Gold Certificates, Federal Reserve notes,
National Bank notes, and Federal Reserve Bank notes. The last "large-size"
or blanket bills were printed in 1929.</p>
<hr>
<h4><a name="text3">Special Currency Issues:</a><br>
Contingencies for War</h4>
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<li><a href="notes/index.html" target="_top">Hawaii and North Africa Notes</a></li>
<li><a href="allied/index.html" target="_top">Allied Military Currency</a></li>
<li><a href="military/index.html" target="_top">Military Payment Certificates</a></li>
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<p>During World War II, the U.S. Treasury replaced all American currency
in Hawaii with special issue notes as a precautionary measure in the event
of a Japanese victory. Had the Japanese conquered Hawaii, the distinctively
marked currency would have been withdrawn from circulation. </p>
<p>The major Allied powers issued Allied Military Currency to troops during
and after World War II in newly liberated or defeated countries such as
France, Italy, and Japan. After World War II, the United States issued
Military Payment Certificates to its troops overseas. Unlike Allied Military
Currency, these notes were denominated in U.S. dollars rather than in
foreign currencies, and were controlled by the occupying U.S. military
authorities.</p>
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