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How a federal reserve note enters the money system
Federal Reserve Notes are printed by the Bureau of Engraving and Printing (BEP),
a bureau of the Department of the Treasury. The Federal Reserve Banks pay the
BEP only the cost of printing the notes (about 4˘ a note), but to circulate the
note as new currency rather than merely replacing worn notes, they must pledge
collateral for the face value. In contrast, the Fed pays the United States
Mint—another Treasury bureau—face value for coins, as coins are direct
obligations of the Treasury.
A commercial bank that maintains a reserve account with the Federal Reserve can
obtain notes from the Federal Reserve Bank in its district whenever it wishes.
The bank must pay for the notes in full, dollar for dollar, by debiting (drawing
down) its reserve account. Smaller banks without a reserve account at the
Federal Reserve can maintain their reserve accounts at larger "correspondent
banks" which themselves maintain reserve accounts with the Federal Reserve.
Nicknames
U.S. paper currency has had many nicknames and slang terms, some of which
("sawbuck" and "double-sawbuck") are now obsolete. The notes themselves are
generally referred to as bills (as in "five-dollar bill") and any combination of
U.S. notes and coins as bucks (as in "fifty bucks").
See tables below for nicknames for individual denomination
Greenbacks, any amount in any denomination of Federal Reserve Note (from the
green ink used on the back)
Dead presidents, any amount in any denomination of Federal Reserve Note (from
the portrait of a U.S. president on most denominations)
One hundred dollar bills are sometimes called "Benjamins" (in reference to their
portrait of Benjamin Franklin) or C-Notes (the letter "C" stands for the Roman
Numeral 100).
One thousand dollars($1000) can be referenced as "Large", "K", "Grand" or
"Stack".
Many more slang terms refer to money in general (fishes, buckaroo, moolah,
cheddar, duckets, C.R.E.A.M., cabbage, dough, lettuce, smackers, simoleons,
clams, big ones, bread, paper, cheese, etc.).
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