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<p>[QUOTE=&quot;lettow, post: 1294457, member: 6986&quot;]I am going to go with a highly imaginative description.</p><p><br /></p><p>The process described in your post does not make any sense.&nbsp; The teller was the line of defense against counterfeiting.&nbsp; Once a note was received by the bank it was the bank&#039;s problem if it was counterfeit.&nbsp; &quot;The back room cashiering operation&quot; (whatever that means) would have no idea who deposited a particular note.&nbsp; A teller with a counterfeit note in their till at the end of the day had no need to come to work the next.</p><p><br /></p><p>The more common practice was for the receiving bank to take up notes from &quot;good banks&quot; and pay out notes from &quot;bad banks&quot;.&nbsp; Whether a bank&#039;s notes were good or bad was based on the discount applied to a bank&#039;s notes.&nbsp; Discount tables were frequently published in newspapers of the day.&nbsp; The bank&#039;s would send the notes from good banks to the banks for redemption or for clearance against their own notes received by the other bank.&nbsp; </p><p><br /></p><p>Most banks circulation privileges were based on a combination of one of two things -- capitalization and deposits.&nbsp; Marking genuine notes of other banks as counterfeit would diminish the amount of deposits.&nbsp; If a bank wanted to ruin a competitor, the usual method was to gather up as many of the competitor&#039;s notes as possible and present them at one time for redemption putting a stress on that banks reserve of specie.&nbsp; This was usually done in a very public manner to cause depositors of the targeted bank to make a run on deposits.[/QUOTE]</p><p><br /></p>

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