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Are There Post-1865 State Banknotes With Revenue Stamps?

 
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Posted 12/07/2020   5:49 pm  Show Profile Bookmark this topic Add GregAlex to your friends list Get a Link to this Message
This is a topic that's being discussed on a numismatic forum that I frequent, but I thought I'd bring it over here for the revenue buffs to chew on.

The National Banking Act of 1865 imposed a 10 percent tax on currency issued by state banks (obsolete notes), effectively taxing these out of existence and encouraging conversion to more regulated National Banks. BUT, state banknotes were not illegal, just not cost effective.

Were there any state banks that continued to issue notes and paid the tax? And would these notes have revenues affixed to show the tax paid? NOT scrip, which could only be used on goods or services from a specific business, but bank-issued currency.
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Posted 12/07/2020   6:13 pm  Show Profile Bookmark this reply Add revcollector to your friends list  Get a Link to this Reply
I have only seen scrip taxed that way, never actual bank notes.
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Posted 12/07/2020   8:12 pm  Show Profile Bookmark this reply Add m and m to your friends list  Get a Link to this Reply
i agree with revcollector.......... I also have only seen scrip.
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Posted 12/07/2020   8:53 pm  Show Profile Check ericjackson's eBay Listings Bookmark this reply Add ericjackson to your friends list  Get a Link to this Reply
Two items come to mind. First, the Bank of Mecklenburg, Charlotte, North Carolina. Taxed at two cents as a draft in an attempt to skirt the 10c tax, these items, when found, obviously circulated as currency.

Second is the South Carolina Railroad in Charleston. Taxed at five cents, these are normally found unused although a few used, well circulated examples do exist.


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Posted 12/07/2020   8:53 pm  Show Profile Bookmark this reply Add revenuermd to your friends list  Get a Link to this Reply
It is my understanding that circulating currency was not subject to a STAMP tax, so circulating currency would never have had stamps affixed.

In the various periods that there were shortages certified checks were sometimes circulated as currency. Again, my understanding is that every time the check was endorsed and passed on it was subject to 2 tax. Never have I seen an example that paid the additional tax for each signature on the check. in the Upper Peninsula the mines issued drafts that functioned as circulating currency.

Perhaps more interesting are the Bank of Mecklenburg notes that certainly circulated in 1875, but were cleverly worded to say that they were payable one day at sight, technically time drafts. Even though these technically were no longer subject to the documentary taxes after Oct 1, 1872, they had them imprinted with a two cent type D stamped paper design to give them the look of authenticity. These certainly were circulated.

These are two ways that got around the 10% tax on circulating currency.
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Ron Lesher
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Posted 12/07/2020   9:20 pm  Show Profile Bookmark this reply Add revenuermd to your friends list  Get a Link to this Reply




This is the obverse and reverse of the $1 Bank of Mecklenburg note. Obviously printed to look like a bank note and certainly circulated extensively, even though it is worded as a time draft.
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Ron Lesher
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Posted 12/07/2020   10:39 pm  Show Profile Bookmark this reply Add GregAlex to your friends list  Get a Link to this Reply
The Mecklenburg notes are fascinating -- I was completely unaware of these. Here is an image I borrowed from Heritage Auctions which enables you to read the text more easily. Clever these Southern bankers!

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Posted 05/18/2021   09:50 am  Show Profile Bookmark this reply Add stampfan9 to your friends list  Get a Link to this Reply
From GregAlex "The National Banking Act of 1865 imposed a 10 percent tax on currency issued by state banks (obsolete notes), effectively taxing these out of existence and encouraging conversion to more regulated National Banks. BUT, state banknotes were not illegal, just not cost effective."

Louisiana avoided the tax by disguising its currency as interest paying bonds.

Showing an 1875 $5.00 Louisiana "Baby" Bond






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Robert
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Posted 05/27/2021   12:43 am  Show Profile Bookmark this reply Add GregAlex to your friends list  Get a Link to this Reply

Quote:
Louisiana avoided the tax by disguising its currency as interest paying bonds.

Showing an 1875 $5.00 Louisiana "Baby" Bond


Yes, indeed -- I have an uncut sheet of those. The City of New Orleans followed suit with their own mini-bonds that functioned as currency. There were a lot of creative financial instruments in the South during Reconstruction until the Feds got wise to it. Both of these avoided the 10% tax and, as government securities, didn't need the revenue imprints either.



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Edited by GregAlex - 05/27/2021 12:52 am
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