Five dollar note issued 1881 to Citizen's National Bank, the second bank chartered in Dakota Territory and a predecessor to Alerus Financial.
Did you know banks used to print their own money?
The U.S. government first issued paper money as we know it in 1861. During years of crisis—such as the War of 1812—the Government issued Treasury Notes. During this same timeframe (1793–1861), up to 1,600 private banks were allowed to print and circulate their own money, resulting in more than 7,000 uniquely-designed notes.
By the time the Bank of Grand Forks (predecessor to Alerus Financial) was formed in 1879, the Government no longer allowed banks to create their own notes without Federal oversite. Instead, individual banks like ours functioned under the National Banks Acts of 1863 and 1864, allowing banks to create “National Bank Notes” on paper authorized by the U.S. Government.
Individual notes were stamped with the name of the issuing bank and bore the signatures of the bank’s president and cashier. The notes were backed by United States bonds the bank deposited with the United States Treasury.