STANLEY HOWARD ENFRANCHISE INC. PECUNIARY LITERACY: TAX

Sec 19 [Tax on circulating notes]. Every person, firm, association other than national banking

associations, and every corporation, State bank, or State banking association, shall pay a tax of ten per centum on the amount of their own notes used for circulation and paid out by them. 18 STAT. L. 311. The provisions of this Act superseded those of Revised Statutes. sections 3412, 3413.  

[Bank] Notes to bearer for a given sum, payable in merchandise at retail, paid out and used as

circulation, were held not to be “notes” within the meaning of this Internal Revenue section.

Section 13 of the Federal Reserve Act of 1913, as amended (12 USC 372) authorizes the Federal Reserve Bank City, Trade Districts to discount (i.e. purchase) collateral security promissory notes, bills of exchange trade acceptances and domestic banker acceptance drafts in the form of checks, that meet certain eligibility criteria set forth in the Federal Reserve Act statute of Congress.

Therefore, dollar exchange bills, notes, drafts, and trade or banker’s acceptances do not arise from specific trade transactions, instead, they are used to anticipate the ten percent tax proceeds from being exported out of a individual state, into a Federal Reserve Bank City, Trade District, which shall be forthcoming within a three-month period (12 USC 373) and used by the State or Nation.