The Act of June 3, 1864, provided for $1, $2, $5, $10, $20, $50, $100, $500, and $1,000 notes, but not more than one-sixth part of the notes furnished to any bank was to be of smaller denomination than $5, and after the resumption of specie payments no bank was to be furnished with notes smaller than $5. The issuance of $500 notes was discontinued in 1885, and of $1,000 notes in 1884. Some notes of these early issues are still outstanding, but probably most of them are lost or held as souvenirs. The Act of March 4, 1900, limited the amount of $5 notes issuable to any bank to one-third of its total issues. The rising price level and great business activity during the war occasioned a demand for small bills, and the passage of the Act of October 5, 1917, provided for the issue to any bank of $1, $2, $5, $10, $20, $50, and $100 notes in such proportion as the bank might elect, but no bank may receive or have in circulation at any one time more than $25,000 in notes of the denominations of $1 and $2. The Act of 1920 permitted again the issue of $500 and $1,000 notes. The notes state that they are secured by United States bonds or other securities, and express the promise of the issuing bank to pay on demand.
National bank notes are not a legal tender for private debts, but are receivable by the government in all payments except for customs duties. The notes are also a legal tender in payments by the United States, except for interest on the public debt and in redemption of the national currency. Every national bank is required to accept at par the notes of every other national bank, but is forbidden to accept them as security for loans. The notes are redeemable in lawful money at the United States Treasury and at the bank of issue, and are also exchangeable at the Treasury for subsidiary silver and minor coins. Any notes not redeemed go to the profit of the United States.