If Scott Chillo’s 4-year-old daughter Leah hadn’t once again attempted to pilfer the change he left on their kitchen table, he may never have discovered a rare bit of Union City’s financial history.
Chillo, a resident of Auburn, Mass., bought his wife Sara a bottle of wine in a store in Massachusetts earlier this month and paid for it with a $50 bill. At home, his daughter tried to swipe the change from the table. Then Chillo noticed an “odd-looking” $20 bill.
“At first I looked down and I thought, ‘Great. I got an old bill and it’s not even real,’ ” Chillo said. Then he noticed a brown stamp and the words “The First National Bank of Union City, N.J.” It was dated 1929, the first year of the Great Depression.
Chillo was intrigued.
“I love history,” he said.
He began contacting online currency appraisers. He said that they all claimed to know nothing about the Union City bank that appeared to have once issued its own notes – but they all offered to buy the bill.
Chillo wasn’t interested in selling, even though he was offered up to $300. Believing that a more local search would prove more fruitful, he contacted the Union City Reporter, and the quest for the bill’s history began.
It turns out that the bank building in Union City still exists – although it lies vacant at the corner of Broadway Avenue and 48th Street – and a New Jersey-based currency expert said the twenty has an interesting tale to tell.
Rare billing
New Jersey currency expert Robert Hearn said last week that Chillo’s find was unusual for many reasons, particularly because the bill is in such good condition, and even more because it is a $20 note.
“In 1929, cash was king,” Hearn said. Because people lacked credit cards or checking accounts, and most earned an average of $10 a week, “people rarely carried bills in their pocket larger than five dollars. Anything more was used for real estate or automobile purchases.”
When shown a photo of Chillo’s twenty, Hearn said it had several “unusual” markings.
First, there was the brown seal on the right front side. This, Hearn said, was the color seal specifically used for Federal Reserve notes issued by national banks between 1929 and 1935.
The second set of markings was the number “9544” printed vertically along the sides of the bill. This, according to Hearn, was the federally issued charter number specific to the First National Bank of Union City.
Finally, there is the matter of the serial number. Chillo’s bill reads “B000806A.” At the time bills were printed six to a sheet. The first letter indicated the bill’s location on the printing plate, which ran from A through F.
In modern currency, each bill has its own serial number. Back then, each of the six bills had the same six digit number followed by the letter “A.” The “B” on this bill indicates it was the second bill from the top on the printing plate.
Above the note’s brown seal is printed, “Redeemable in lawful money of the United States at United States Treasury or at the bank of issue.” The bank of issue no longer exists, but the bill is still worth $20 in common circulation because it was backed by the federal government.
“It’s a unique part of history, and it’s a fabulous find.” –Scott Chillo
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Taking it to the bank
In 1909, the First National Bank of the Town of Union was built, before Union became Union City. The bank changed its name to the First National Bank of Union City in 1925. It was one out of 342 banks in N.J. that issued its own currency between 1863 and 1935, Hearn said.
Hudson County had around 15 charter banks during that time. Union City had one, Bayonne had one, and Jersey City reigned supreme with eight charters. The former First National Bank of Jersey City was one of the largest in the state and issued millions of dollars’ worth of notes.
While the bank building on Broadway Avenue still bears the name of the bank, it now stands vacant. A church across the street has a painted ad for the bank on its outer wall.
Hearn said all 342 of the original New Jersey institutions, as they were, are now gone.
Own currency was common
Before the Civil War, local banks issued their own currency, and because there was no federal regulation, counterfeiting ran rampant. It became such an issue that journals known as “Bank Note Reporters” were circulated specifically to inform the public as to which banks handed out legit bills, and which did not.
After the financial panic of 1907, during which massive numbers of bank customers pulled their deposits from regional banks across the nation, Pres. Woodrow Wilson signed the Federal Reserve Act into law in 1913. This created a national, central banking system more able to respond to future panics with the ability to put more legitimate currency into circulation.
Banks with the designation of “National” – as was the First National Bank of Union City – were chartered by the U.S. Treasury Department. The notes were printed in Washington D.C. and then sent to select chartered banks, which issued them into circulation.
There were roughly 12,500 banks in the country with this charter privilege between 1914 and 1935. After 1935, the federal government no longer allowed private banks like Union City’s to issue money. The banks were required to redeem their bills for new notes issued exclusively by the National Treasury Department.
According to Hearn, around one million of the notes produced by national banks between 1914 and 1935 were left unredeemed. Most are in collections, kept by former bank workers as family mementos, or held in safe deposit boxes all over the country.
Where did it come from?
So how did this note get into Chillo’s change?
Because most bills of this type are in private collections, both Chillo and Hearn speculate that the bill was used by accident. “It is in such pristine condition,” Chillo said. “I can’t imagine it’s been in circulation since 1929.”
Hearn said he recently saw a similar bill issued from the same bank that sold on eBay for $145; though it was what he termed a “type two” note. Type two notes have their own unique serial numbers and were produced between 1933 and 1935.
“It’s amazing that it’s retained its condition and made it to Massachusetts,” Chillo said last week.
He said that when his wife asked him if he’d sell the bill for $1,000, he was pretty sure he wouldn’t.
“It’s a unique part of history,” he said, “and it’s a fabulous find.”
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