>...There are historic cases of private banks issuing paper money in the U.S., but it usually degraded into distrusting the currency, ... I don't think that wa

>...There are historic cases of private banks issuing paper money in the U.S., but it usually degraded into distrusting the currency, ... I don't think that was the general case at least with the bank notes issued by the national banks after the civil war: >...From 1863 to 1935, National Bank Notes were issued by banks throughout the country and in US territories. Banks with a federal charter would deposit bonds in the US Treasury. The banks then could issue banknotes worth up to 90 percent of the value of the bonds. The federal government would back the value of the notes—the issuance of which created a demand for the government bonds needed to back them. >The program was a form of monetization of the Federal debt. Bonds eligible as collateral for posting to the Treasury were said to have the "circulation privilege" and the interest they bore provided seigniorage to the National Banks. https://en.wikipedia.org/wiki/National_Bank_Note https://en.wikipedia.org/wiki/National_Bank_Note The program was run for over 70 years, it was only with the Great Depression and the desire to have the Fed have greater control over the money supply that the program ended.