LOUDONVILLE -- The First National Bank of Loudonville once issued legal U.S. currency bearing its, and the town's, name.
Following the National Banking Act of 1863, the United States Treasury authorized the establishment of a series of "National" banks with a federal charter and oversight.
These banks were required to deposit bonds in the U.S. Treasury, and then were authorized to issue banknotes worth up to 90 percent of the value of the bonds.
In essence, the program monetized the federal debt and provided credibility to participating banks by guaranteeing their notes were backed by the U.S. government.
These National Bank Notes, also known as "Hometown Notes," were retired in the 1930s when the Great Depression led to the passage of the Gold Reserve Act and consolidation of the Federal Reserve.
The First National Bank of Loudonville began as the first bank in Loudonville under the name Haskell's Bank in 1867. In 1875 they reorganized as the Loudonville Banking Company and after gaining "National" status became the First National Bank of Loudonville.
In 1918 the National status was dropped and the bank merged with Citizen's Savings Bank to form First & Savings. In 1930 another merger, this time with Farmers Bank, formed Farmers & Savings Bank.
More information on the Cleo Redd Fisher Museum can be found at this link.