Federal Executive Branch
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Surface Transportation Board Issues Decision Involving Quarterly Rail Cost Adjustment Factor
WASHINGTON, Feb. 7 -- The U.S. Department of Transportation Surface Transportation Board issued the following decision (Docket No. EP 290; Sub-No. 5) entitled "Quarterly Rail Cost Adjustment Factor":* * *
In Railroad Cost Recovery Procedures, 1 I.C.C.2d 207 (1984), the Interstate Commerce Commission (ICC) outlined the procedures for calculating the all-inclusive index of railroad input prices and the method for computing the rail cost adjustment factor (RCAF). Under the procedures, the Association of American Railroads (AAR) is required to calculate the index on a quarterly basis and submit ... Show Full Article WASHINGTON, Feb. 7 -- The U.S. Department of Transportation Surface Transportation Board issued the following decision (Docket No. EP 290; Sub-No. 5) entitled "Quarterly Rail Cost Adjustment Factor": * * * In Railroad Cost Recovery Procedures, 1 I.C.C.2d 207 (1984), the Interstate Commerce Commission (ICC) outlined the procedures for calculating the all-inclusive index of railroad input prices and the method for computing the rail cost adjustment factor (RCAF). Under the procedures, the Association of American Railroads (AAR) is required to calculate the index on a quarterly basis and submitit to the agency on the fifth day of the last month of each calendar quarter. In Railroad Cost Recovery Procedures--Productivity Adjustment, 5 I.C.C.2d 434 (1989), aff'd sub nom. Edison Electric Institute v. ICC, 969 F.2d 1221 (D.C. Cir. 1992), the ICC adopted procedures that require the adjustment of the quarterly index for a measure of productivity.
The provisions of 49 U.S.C. Sec. 10708 direct the Surface Transportation Board (Board) to continue to publish both an unadjusted RCAF and a productivity-adjusted RCAF. In Productivity Adjustment--Implementation, 1 S.T.B. 739 (1996), the Board decided to publish a second productivity-adjusted RCAF called the RCAF-5. Consequently, three indices are now filed with the Board: the RCAF (Unadjusted); the RCAF (Adjusted); and the RCAF-5.
On December 5, 2025, AAR filed its RCAF calculations for a forecast of the first quarter of 2026. The Board served a decision on December 18, 2025, adopting AAR's RCAF figures. However, on December 23, 2025, the Western Coal Traffic League (WCTL) filed a letter with the Board alleging that AAR made two errors in its calculations. (WCTL Ltr. 1.) According to WCTL, AAR calculated the "Forecast of Depreciation Index (1982 = 100)" and "Forecast of Other Index (1982 = 100)" by incorrectly using an average of the December 2025, January 2026, and February 2026 figures instead of an average of the January 2026, February 2026, and March 2026 figures. (Id. at 1-2.) These figures are used to compute the all-inclusive index. (Id.) WCTL states that AAR's errors "do not alter the ultimate RCAF forecast." (Id. at 1.)
To assist the Board in assessing the alleged errors raised by WCTL, AAR will be directed to respond to WCTL's letter by February 13, 2026.
It is ordered:
1. AAR is directed to respond to WCTL's letter by February 13, 2026.
2. This decision is effective on its service date.
By the Board, Anika S. Cooper, Chief Counsel, Office of Chief Counsel.
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Original text here: https://dcms-external.s3.amazonaws.com/DCMS_External_PROD/1770405831095/52918.pdf
Seattle Man Sentenced to 35 Years in Prison Following September 2025 Conviction by Jury for Role in Transnational Drug Trafficking Organization
PITTSBURGH, Pennsylvania, Feb. 7 -- The office of the U.S. Attorney for the Western District of Pennsylvania posted the following news release on Feb. 6, 2026:* * *
Seattle Man Sentenced to 35 Years in Prison Following September 2025 Conviction by Jury for Role in Transnational Drug Trafficking Organization
A resident of Seattle, Washington, was sentenced in federal court to 420 months in prison, to be followed by five years of supervised release, on his conviction of violating federal narcotics laws in relation to a transnational criminal organization (TCO), United States Attorney Troy Rivetti ... Show Full Article PITTSBURGH, Pennsylvania, Feb. 7 -- The office of the U.S. Attorney for the Western District of Pennsylvania posted the following news release on Feb. 6, 2026: * * * Seattle Man Sentenced to 35 Years in Prison Following September 2025 Conviction by Jury for Role in Transnational Drug Trafficking Organization A resident of Seattle, Washington, was sentenced in federal court to 420 months in prison, to be followed by five years of supervised release, on his conviction of violating federal narcotics laws in relation to a transnational criminal organization (TCO), United States Attorney Troy Rivettiannounced today. The defendant was among 35 individuals charged through a Second Superseding Indictment unsealed in January 2024 for their participation in a domestic and international narcotics and money laundering conspiracy involving substantial quantities of fentanyl, methamphetamine, and cocaine (read the Second Superseding Indictment news release here [https://www.justice.gov/usao-wdpa/pr/thirty-five-individuals-charged-second-superseding-indictment-participating-violent]).
United States District Judge J. Nicholas Ranjan imposed the sentence on Bryce Hill, 28. Hill was convicted by a jury following a two-and-a-half-week trial in September 2025.
Evidence presented during the trial established that Hill was a member of the Phoenix-based Monarrez Drug Trafficking Organization--a transnational criminal organization responsible for the distribution of millions of fentanyl pills, hundreds of pounds of methamphetamine, and dozens of kilograms of cocaine, from August 2021 to June 2023. The Monarrez TCO provided the drugs to a network of subordinate drug distributors, who redistributed the narcotics throughout the country, including into western Pennsylvania. Hill was intercepted over a federal wiretap obtaining hundreds of thousands of fentanyl pills and kilograms of fentanyl powder for redistribution.
Additional evidence presented at trial included testimony regarding the execution of a search warrant on January 11, 2023, during which law enforcement seized 27 kilograms of fentanyl pills, multiple firearms, and $387,000 cash from Hill's apartment, and the seizure of 28 kilograms of fentanyl pills, 7.5 kilograms of fentanyl powder, three kilograms of cocaine, 48 kilograms of methamphetamine, and 20 firearms (pictured below) from a short-term rental property in Scottsdale, Arizona, on December 25, 2022.
The jury found that, in the Western District of Pennsylvania and elsewhere, Hill conspired with others to distribute and possess with intent to distribute five kilograms or more of cocaine, 400 grams or more of fentanyl, and 500 grams or more of methamphetamine.
Hill's sentencing follows those of 32 co-defendants.
Assistant United States Attorneys Arnold P. Bernard Jr. and Katherine C. Jordan prosecuted this case on behalf of the government.
United States Attorney Rivetti commended the Federal Bureau of Investigation's Laurel Highlands Resident Agency and Homeland Security Investigations for the investigation leading to the prosecution of Hill. Additional agencies participating in this investigation included the Internal Revenue Service-Criminal Investigation, United States Postal Inspection Service, and other local law enforcement agencies, including the Scottsdale, Arizona, Police Department.
This case is part of Operation Take Back America, a nationwide initiative that marshals the full resources of the Department of Justice to achieve the total elimination of cartels and transnational criminal organizations, combat illegal immigration, and protect our communities from the perpetrators of violent crime. Operation Take Back America streamlines efforts and resources from the Department's Organized Crime Drug Enforcement Task Forces (OCDETFs) and Project Safe Neighborhoods (PSN).
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Original text here: https://www.justice.gov/usao-wdpa/pr/seattle-man-sentenced-35-years-prison-following-september-2025-conviction-jury-role
President Trump Issues Proclamation on Ensuring Affordable Beef for the American Consumer
WASHINGTON, Feb. 7 -- President Trump issued the following proclamation on Feb. 6, 2026:* * *
ENSURING AFFORDABLE BEEF FOR THE AMERICAN CONSUMER
1. Cattle ranchers have played an integral role in United States history, helping to forge an American identity and an American diet with beef as a key staple food. Today, beef remains vital in the American diet, evidenced by the fact that the United States is the largest consumer of beef by volume, followed closely by China and Brazil. And the United States ranks second in per capita beef consumption globally.
2. But in 2022, the United States faced ... Show Full Article WASHINGTON, Feb. 7 -- President Trump issued the following proclamation on Feb. 6, 2026: * * * ENSURING AFFORDABLE BEEF FOR THE AMERICAN CONSUMER 1. Cattle ranchers have played an integral role in United States history, helping to forge an American identity and an American diet with beef as a key staple food. Today, beef remains vital in the American diet, evidenced by the fact that the United States is the largest consumer of beef by volume, followed closely by China and Brazil. And the United States ranks second in per capita beef consumption globally. 2. But in 2022, the United States faceda widespread and severe drought, affecting beef-producing States, such as Texas, Oklahoma, Missouri, Nebraska, South Dakota, and Kansas. Texas and Kansas, for example, continue to face persistent drought conditions. The effects of drought are particularly pronounced for livestock producers as many of their operations rely on precipitation to grow forage crops to feed their herds.
3. In addition to droughts, wildfires have affected the grasslands of the western United States, including America's cattle-producing States. Apart from the direct threat of burns and burn-associated deaths to cattle, cattle ranchers have had to adapt to indirect effects of wildfires, including changes in grazing patterns, loss of feed supplies, and suboptimal animal health for those cattle surviving the wildfires.
4. Given the demand for beef, certain United States cattle farmers and ranchers supplement their herds, specifically their feedlot stocks, with cattle (calves) imported from Mexican ranchers. But following new detections of the New World screwworm in Mexico in May 2025, the Department of Agriculture Animal Plant and Health Inspection Service, in conjunction with U.S. Customs and Border Protection (CBP), restricted the importation of live animal commodities from or transiting through Mexico, further limiting domestic feedlot stock supplies.
5. These factors have combined to result in the United States cattle herd contracting to record lows. As of July 2025, the United States cattle inventory totaled 94.2 million head, including 28.7 million beef cows. This is one percent lower than the United States cattle inventory surveyed in July 2023, continuing the downward trend of cattle inventory in the United States.
6. The abovementioned factors have also cumulatively resulted in higher beef prices for United States consumers, including for ground beef. Since January 2021, ground beef prices have continued to rise, reaching an average of $6.69 per pound in December 2025, according to the Bureau of Labor Statistics -- the highest since the Department of Labor started tracking beef prices in the 1980s.
7. Despite the increased prices and the availability of more affordable protein alternatives, United States consumers' demand for beef remains strong. The United States imported a record high amount of beef in 2024, reaching 4.64 billion pounds, a more than 24 percent increase in beef imports since 2023. Among the beef products the United States imports are lean trimmings, which are blended with fattier domestic trimmings to produce ground beef products, such as hamburgers.
8. The Secretary of Agriculture has monitored the domestic supply of beef products subject to a tariff-rate quota (TRQ), including lean beef trimmings falling under Harmonized Tariff Schedule of the United States (HTSUS) statistical reporting numbers 0201.30.5085 and 0202.30.5085, and noted the domestic supply of such products and substitutable products combined with the estimated imports of such products under the United States beef import TRQ. The Secretary of Agriculture also advised on related domestic demand and pricing.
9. As President of the United States, I have a responsibility to ensure that hard-working Americans can afford to feed themselves and their families. After considering the information provided to me by the Secretary of Agriculture, among other relevant information, I am taking action to temporarily increase the quantity of in-quota imports of lean beef trimmings under the United States beef TRQ to increase the supply of ground beef for United States consumers.
10. Section 404 of the Uruguay Round Agreements Act (URAA) (Public Law 103-465, 108 Stat. 4809, 4959-61 (19 U.S.C. 3601)) authorizes the President, in certain circumstances, to modify TRQs on certain agricultural products. In particular, section 404(b) of the URAA (19 U.S.C. 3601(b)) provides that where imports of an agricultural product are subject to a TRQ, and where the President determines and proclaims that the supply of the same or directly competitive or substitutable agricultural product will be inadequate, because of a natural disaster, disease, or major national market disruption, to meet domestic demand at reasonable prices, the President may temporarily increase the quantity of imports of the agricultural product that is subject to the in-quota rate of duty established under the TRQ. And section 404(d)(3) of the URAA (19 U.S.C. 3601(d)(3)) provides that the President may allocate the in-quota quantity of a TRQ for any agricultural product among supplying countries or customs areas and may modify any allocation as determined appropriate by the President.
11. After considering the information provided to me by the Secretary of Agriculture, among other relevant information, I find that imports of lean beef trimmings into the United States are currently subject to the United States TRQ for beef and determine that the supply of lean beef trimmings or directly competitive or substitutable agricultural products will be inadequate to meet domestic demand at reasonable prices because of a natural disaster and major national market disruption. Accordingly, I determine that it is necessary and appropriate to temporarily increase the quantity of imports of lean beef trimmings subject to the in-quota rate of duty established under the beef TRQ. In addition, I determine that it is appropriate to allocate all of the increased in-quota quantity of beef, as established by this proclamation, to Argentina.
12. Section 604 of the Trade Act of 1974, as amended (19 U.S.C. 2483), authorizes the President to embody in the HTSUS the substance of statutes affecting import treatment, and actions thereunder, including the removal, modification, continuance, or imposition of any rate of duty or other import restriction.
NOW, THEREFORE, I, DONALD J. TRUMP, President of the United States of America, by the authority vested in me by the Constitution and the laws of the United States, including section 404 of the URAA, section 604 of the Trade Act of 1974, as amended, and section 301 of title 3, United States Code, do hereby proclaim as follows:
(1) For calendar year 2026, the aggregate in-quota quantity for certain products described in Additional U.S. Note 3 of Chapter 2 of the HTSUS will be increased by 80,000 metric tons (mt).
(2) The additional 80,000 mt described in clause (1) of this proclamation will apply only to lean beef trimmings classifiable under HTSUS statistical reporting numbers 0201.30.5085 and 0202.30.5085.
(3) The additional 80,000 mt described in clauses (1) and (2) of this proclamation will be administered on a first-come, first-served basis in four quarterly tranches. The first tranche of 20,000 mt will open on February 13, 2026, and close on March 31, 2026. The second tranche of 20,000 mt will open on April 1, 2026, and close on June 30, 2026. The third tranche of 20,000 mt will open on July 1, 2026, and close on September 30, 2026. The fourth tranche of 20,000 mt will open on October 1, 2026, and close on December 31, 2026.
(4) The additional 80,000 mt described in clauses (1) and (2) of this proclamation is allocated in its entirety to Argentina.
(5)(a) To establish the TRQ amendments described in this proclamation, the HTSUS is modified as set forth in the Annex to this proclamation.
(b) The United States Trade Representative (Trade Representative), in consultation with CBP, shall determine whether any additional modifications to the HTSUS are necessary to effectuate this proclamation and shall make such modifications to the HTSUS through notice in the Federal Register, including any technical correction to the Annex to this proclamation.
(6) The Secretary of Agriculture shall continue to monitor the domestic supply of lean beef trimmings, as the Secretary considers appropriate, and shall advise me on the domestic supply of lean beef trimmings or directly competitive or substitutable products, combined with the estimated imports of such products under the TRQ as adjusted by this proclamation, and how such availability relates to domestic demand at reasonable prices. The Secretary of Agriculture, in consultation with the Trade Representative, shall inform me of any circumstances that, in the Secretary's opinion, might indicate the need for further action and shall recommend to me any additional action I should take, if necessary.
(7) Each executive department and agency (agency) is authorized to and shall take all appropriate measures within its authority to implement this proclamation. The head of each agency may, consistent with applicable law, including section 301 of title 3, United States Code, redelegate any of these functions within their respective agency.
(8) Any provision of previous proclamations and Executive Orders that is inconsistent with the actions taken in this proclamation is superseded to the extent of such inconsistency. If any provision of this proclamation or the application of any provision to any individual or circumstance is held to be invalid, the remainder of this proclamation and the application of its provisions to any other individuals or circumstances shall not be affected.
IN WITNESS WHEREOF, I have hereunto set my hand this
sixth day of February, in the year of our Lord two thousand twenty-six, and of the Independence of the United States of America the two hundred and fiftieth.
DONALD J. TRUMP
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Original text here: https://www.whitehouse.gov/presidential-actions/2026/02/ensuring-affordable-beef-for-the-american-consumer/
Leading the Transformation: USU Faculty and Students Chart the Path for AI in Military Medicine
BETHESDA, Maryland, Feb. 7 -- The Uniformed Services University issued the following research news:* * *
Leading the Transformation: USU Faculty and Students Chart the Path for AI in Military Medicine
USU faculty and the School of Medicine Class of 2027 co-authored a roadmap for military medical education in an era of rapid digital transformation.
By Hadiyah Brendel
As the speed of medical discovery continues to accelerate--with global medical knowledge now doubling every few months--the Uniformed Services University of the Health Sciences (USU) is ensuring its graduates are not just keeping ... Show Full Article BETHESDA, Maryland, Feb. 7 -- The Uniformed Services University issued the following research news: * * * Leading the Transformation: USU Faculty and Students Chart the Path for AI in Military Medicine USU faculty and the School of Medicine Class of 2027 co-authored a roadmap for military medical education in an era of rapid digital transformation. By Hadiyah Brendel As the speed of medical discovery continues to accelerate--with global medical knowledge now doubling every few months--the Uniformed Services University of the Health Sciences (USU) is ensuring its graduates are not just keepingpace, but leading.
A recent article in Military Medicine, titled "Transforming Military Healthcare Education and Training: AI Integration for Future Readiness," provides a definitive roadmap for this evolution. Led by Air Force Lt. Col. (Dr.) Justin Peacock, associate dean for Research, and Dr. Rebekah Cole, acting assistant dean for Academic Success, both in USU's School of Medicine, the article provides a collaborative review of how to strategically integrate artificial intelligence (AI) literacy into the core of military medical education.
USU co-authors joining Peacock and Cole include Air Force Lt. Col. (Dr.) Joshua Duncan, Department of Preventive Medicine and Biostatistics, Dr. Anita Samuel, Department of Health Professions Education, and Class of 2027 School of Medicine students Air Force 2nd Lt. Brandon Jensen, and Army 2nd Lt. Brad Snively. Peacock also serves as faculty in the Department of Radiology, and Cole in the Departments of Military and Emergency Medicine and Health Professions Education.
Preparing for the AI-Driven Battlefield
The publication arrives at a pivotal time for the Military Health System (MHS). USU leaders anticipate future conflicts are expected to take place in increasingly complex, far-forward operational environments where AI-enabled tools will be essential for casualty care and decision support.
"The goal isn't to make physicians AI experts," the authors state, "but to train them to effectively use AI's capabilities to improve patient care, diagnosis, and operational medicine."
Cole emphasizes that the strategy requires a multi-layered approach. "This paper lays out a practical roadmap for how medical education can evolve--beginning with faculty development, expanding through student engagement, and strengthened by partnerships with industry--to responsibly integrate AI throughout the curriculum," Cole says. "This approach supports competency-based medical education and ensures our students are prepared for the realities of modern healthcare delivery."
This approach aligns with USU's broader mission to produce "future-ready" clinicians. The roadmap addresses the integration of AI from the first year of medical school through graduate medical education, focusing on ethical use, technical literacy, and practical application at the point of care.
The "Student-Centered" Revolution
What sets this transformation apart is the active role of USU students in shaping the curriculum. Jensen and Snively's involvement underscores a university-wide shift toward co-creating educational tools that meet the needs of the next generation of military clinicians.
For Jensen, AI is already a daily reality in the classroom and the clinic. "I use AI every single day," Jensen says. "It can make complex topics significantly easier to understand and frame difficult concepts in ways that are easier to remember. I also use AI to generate practice questions and flashcards, which has made my studying more efficient and personalized."
Jensen's experience extends beyond the library. During an internal medicine rotation, he used AI to broaden his clinical reasoning--an approach that helped identify an important diagnosis that might have otherwise been overlooked.
While Jensen brings a focus on diagnostic precision, Snively emphasizes the "behind-the-scenes" power of AI--specifically how it acts as a high-speed clinical assistant that handles the heavy lifting of data organization, allowing medical students and residents to focus more on the patient.
Snively highlighted AI's value in generating summary tables from complex data, crucial for quickly processing patient history during clerkships. AI also serves as a rapid clinical reference, instantly bridging knowledge gaps on the hospital floor. He argues that delegating "cognitive busywork" to AI allows clinicians to focus on communication and clinical judgment, promoting a "Human-Centered" shift. Snively advises peers to proactively seek research opportunities and mentorship, citing the Radiology Interest Group as an example.
A Roadmap for Tomorrow's Clinicians
The MilMed article identifies several "force multipliers" that AI brings to the MHS:
* Reduced Cognitive Burden: Automating administrative tasks allows providers to focus on "high-touch" patient care.
* Operational Readiness: Training clinicians to use AI in austere environments ensures a high standard of care even when separated from traditional medical infrastructure.
* Personalized Learning: Tools allow students to tailor their education to their specific needs, creating a more versatile medical force.
The Path Ahead
The authors acknowledge barriers, specifically the "black box" nature of complex algorithms. This term describes systems that provide answers without revealing the underlying logic or evidence used to reach those decisions. This lack of transparency requires clinicians to maintain high AI literacy, verifying the AI's output against established medical standards and maintaining a "human-in-the loop" approach.
Despite these hurdles, the consensus is clear: integration is inevitable. Snively envisions a trusted, AI-enabled ecosystem to solve the problem of misinformation.
"One of the primary concerns with AI is its tendency to 'hallucinate' or present incorrect information as fact," Snively says. "However, if we can combine the processing power of AI with the verified data in medical journals, it becomes a powerful tool to help clinicians quickly identify the things they might have missed."
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Original text here: https://news.usuhs.edu/2026/02/leading-transformation-usu-faculty-and.html
Fed: Brief History of Bank Notes in the United States and Some Lessons for Stablecoins
WASHINGTON, Feb. 7 -- The Federal Reserve issued the following Fed Notes article:* * *
A brief history of bank notes in the United States and some lessons for stablecoins
Mark Carlson
Prior to the establishment of the Federal Reserve, commercial banks issued "bank notes" that circulated as a privately issued form of money. In addition to being backed by the issuing bank, these notes were backed by various types of collateral, including state government bonds and U.S. government bonds. The experiences of the United States with these privately-issued, collateral-backed forms of money may provide ... Show Full Article WASHINGTON, Feb. 7 -- The Federal Reserve issued the following Fed Notes article: * * * A brief history of bank notes in the United States and some lessons for stablecoins Mark Carlson Prior to the establishment of the Federal Reserve, commercial banks issued "bank notes" that circulated as a privately issued form of money. In addition to being backed by the issuing bank, these notes were backed by various types of collateral, including state government bonds and U.S. government bonds. The experiences of the United States with these privately-issued, collateral-backed forms of money may providea useful reference for thinking about issued related to stablecoins today. For instance, the historical experience highlights the role of a credible regime to convert the private notes into government issued money in shaping the value of private money.
The Free Banking Era
The period from 1837 to 1863 is known as the "Free Banking" era. In many states during this period, the establishment of a new bank was freely allowed if investors raised a certain amount of equity and met other registration requirements./1 All banks were chartered by state governments.
Each bank in the free-banking states was allowed to issue its own paper currency, commonly referred to as bank notes. These notes were liabilities of the bank, but were required to be secured by specified high-quality collateral, typically state-issued bonds or mortgage assets which were held in a security deposit account with the state banking authority (Dwyer 1996). A bank could issue notes up to the value of the assets that it had in that account; if the value of the assets in that account declined, the bank would have to add more assets or shrink its notes outstanding. Banks could earn a profit from the interest earned on assets held in their security deposit account that backed the non-interest-bearing notes. For many banks, notes represented a substantial portion of their liabilities.
Notes were redeemable in specie (gold or silver coin) or other legal tender./2 Redemption could occur at the issuing bank or at a correspondent bank in a financial center that the issuing bank maintained a formal relationship with; that correspondent bank was referred to as the redemption agent. Banks other than the redemption agent were not required to pay specie when presented with the notes of another bank. However it was typical for banks in financial centers to exchange specie for bank notes upon request if a note of another bank was presented to them, but that exchange often occurred at a discount to the face value of the bank note presented (or they would credit the bank account of the person presenting the bank note, but again at a discount to the face value of the note). The size of that discount would depend on whether the bank issuing the note was known and considered trustworthy by the bank receiving the note and the effort that the bank receiving the note would have to exert to obtain specie from the bank issuing the note (if desired).
Discounts on notes were not constant; they varied across place and over time. Local merchants had to keep track of which bank notes would be taken by their local banks and at what discount. Dealing with these issues added notably to the cost of doing business.
During financial stress, differences in the discounts across bank notes widened significantly (see Figure 1). Notes secured by higher quality collateral or from states with more better-quality regulations (such as New York) did not see as substantial increases in discounts. Notes secured by somewhat less high-quality collateral or from states considered to have lesser-quality governance rules (such as Michigan) tended to see discounts increase notably (Bordo 2025).
Figure 1. Discounts applied to selected bank notes in Philadelphia
The National Banking Era
The period from 1863-1913 is known as the National Banking Era. Banks chartered by the national government, known as national banks, were able to issue bank notes. (States could continue to charter banks and these banks were also legally able to issue notes, but there was a steep federal tax on state bank notes that made such issuance unprofitable.) These national bank notes were required to be secured by Treasury securities that were held by the bank at the Treasury (indeed a small degree of overcollateralization was required). Overall, this setup was successful in creating a uniform currency (Luck 2025).
It is quite probable that the shift in the 1860s to national bank notes that had a stable and uniform value had considerable benefits for trade and finance. The Comptroller of the Currency argued that point extensively in his Annual Report for 1894. However, quantifying the benefits is extremely difficult given the other regulatory developments, new class of banks, and the economic changes wrought by the Civil War that occurred around the transition from one system to the other.
Importance of ease of redemption
One aspect of addressing one of the defects of the previous banking era was to try to eliminate the discount on the notes of particular banks and make all bank notes effectively interchangeable. Doing so took some time and adjustments to regulation. A key part of making this work was enhancing the ability of holders of the notes to convert them into specie when desired.
In the first years of the National Banking Era, notes could only be redeemed for specie at the issuing bank or at designated agent banks located in a reserve or central reserve city (a regional or national financial center). Challenges and expenses in delivering notes to a place where they could be redeemed resulted in notes of remote banks trading at a discount to par amongst financial institutions in financial centers such as New York (Friedman and Schwarz 1963, p. 21-22), but not amongst the general public./3 To enhance the ease with which the notes could be redeemed, the Treasury Department changed its procedures in 1874 to allow for the redemption of national bank notes at any sub-Treasury office throughout the country. Banks were required to have on deposit with the Treasury a redemption fund equal to 5 percent of their outstanding circulation to be used when notes were presented for redemption (James 1978). (The Treasury could then send the bank notes received to the issuing bank for specie to replenish the redemption fund.) The fact that the Treasury securities securing the notes were also held at the Treasury also meant that the notes were fully protected by the federal government in the event that the bank failed (Ennis, Wang, and Wong 2022). With this greater ease of redemption, the notes of all national banks traded uniformly at par.
The fact that all notes traded uniformly at par was key. Holders of bank notes did not need to keep track of the exchange rate between notes issued by different banks, unlike in the Free Banking Era, and indeed bank note holders could be indifferent regarding the identity of the issuing bank. The notes were interchangeable and in the terminology of Gorton (2010) were informationally insensitive.
Interestingly Canada had a similar framework where banks issued their own notes subject to backing requirements. These notes also traded at a discount when they were some distance from the issuing bank. As discussed by Fung, Hendry, and Weber (2017), to promote having the bank notes circulate at par, the Canadian government required the banks to establish redemption agencies in financial centers throughout the country. In addition, in the event that a bank suspended, the holders of notes of the suspended bank were paid interest on the notes from the day that the bank suspended until the first day that the banks made arrangements for their notes to be redeemable in specie; that encouraged any party responsible for overseeing the resolution of the suspended bank to rapidly provide for the redemption of the bank notes. These policies proved effective in ensuring that the notes of all the Canadian banks were treated uniformly and circulated at par.
Economic historians (such as Fung, Hendry and Weber 2017, Gorton and Zhang 2023) highlighted the role of the government in both the US and Canadian cases. They argue that the government did not itself guarantee the notes, but did establish rules and oversight to ensure the credibility and expediency of the banks' ability to make good on the notes they issued.
The ease with which stablecoins can be redeemed has been found to affect the deviation of the prices of the coins from par, which is reminiscent of the findings regarding historical bank notes. Typically, stablecoin holders cannot go to the issuer of the stablecoin directly to seek redemption of their notes; redemption may only be done by authorized agents. In a highly efficient system, if the price of the stablecoins were to deviate from par then the redemption agent would have an incentive to either buy stable coins in the market and redeem them with the issuing entity (in the case they are at a discount to par in the market) or obtain more stablecoins from the issuer by requesting that they be minted and sell them in the market (if the coins are trading above par). However, there are frictions associated with the redemption or minting process. Researchers have found that having more redemption agents reduces those frictions. For instance, Ma, Zeng, and Zhang (2025) find that there are fewer deviations for USDC with a large number of agents able to arbitrage between the primary and secondary markets for the coin, than for USDT, where there are few such agents. The fact that there are any deviations from par (either to the upside or downside) means that holders of stablecoins have an incentive to monitor the value of their coins and, similar to the notes in the Free-Banking Era, are not indifferent to the identity of the issuer of the particular coins that they hold./4
Issuance patterns of bank notes
National banks were subject to both minimum and maximum restrictions on note issuance. One of the puzzles from this period is that since these notes were not interest bearing and the banks retained the interest on the bonds that they held to back the notes, why did banks not always maximize the amount of issuance? Analysis of this period has provided evidence in favor of several factors. In general they point to behavior being shaped by considerations related to earnings potential and restrained by the potential for redemptions.
One factor was the size of the incentive provided by the interest that might be earned on the US bonds. Unsurprisingly, when the interest rates on the government bonds eligible to be used to secured the notes were higher, banks issued more notes.
A factor that appears to have restrained issuance was the possibility of having to deal with redemptions also appears to have affected note issuance. Banks had to hold funds in redemption sites away from the main office of the bank so that holders of the notes could trade the notes for specie at those locations; that encouraged the bank notes to trade at par. Maintaining, and if necessary replenishing the funds at these redemption sites was potentially costly. Correia (2010) considers the impact of changes in the locations of these redemption sites and finds that evidence that banks that had a greater likelihood of having to deal with more costly redemptions tended to issue fewer bank notes.
Experiences during financial instability
During the National Banking Era there were regular episodes of financial instability. There were three nationwide panics in which the normal operation of the banking system was severely disrupted and a number of minor episodes of instability.
There were risks associated with individual institutions. This was due to the fact that only part of each banks' business was issuing notes. The other, often larger, part consisted of taking deposits and making commercial loans which involved taking on some risk. At times those risks resulted in losses to the banks that caused them to become insolvent and fail. If the risks at the individual banks were correlated, for instance due to a severe recession, then bank failures could be correlated. If there were widespread concerns about bank health, systemic withdrawals--a panic--could occur. As noted by Gorton (1988) the onsets of recessions were typically correlated with banking panics.
During the National Banking Era, the United States was on the gold standard. In the early 1890s, the nation's gold reserve declined to low levels. Concerns about a possible devaluation of the US dollar resulted in a foreign exodus from US assets, that included bank notes (although the reduction in holdings of US assets was not obviously more pronounced for bank notes than for other assets). This contributed to a cascade of deterioration in financial conditions and was blamed for triggering a financial panic that closed many financial institutions and impaired economic activity (see Friedman and Schwarz 1963).
Even amid these banking panics, the public does not appear to have had concerns about the value of the bank notes themselves, at least relative to specie. While banks were suspended, secondary markets developed in which claims on frozen bank deposits could be traded at a discount to specie and bank notes. Newspaper reports regarding these secondary markets suggest that there was not a differentiation between specie and bank notes. This suggests that credible system of private money, when it is credibly backed by instruments whose value is not questioned and timely redemption is assured even in the event of default by the issuing agent, can be robust during periods of stress. The stability of the system also depended on the public's belief in the value of the underlying collateral. It is worth pointing out that none of the financial stresses in the National Banking Era raised concerns about the nominal values of the Treasury obligations that secured the bank notes.
When considering financial stability in the National Banking Era and any comparisons to what might occur under the Genius Act there are some important differences to keep in mind. As noted above, commercial banks had considerable liabilities other than bank notes and it was these other liabilities that mattered during the panics and financial crises of the era. Under the Genius Act, the stablecoin issuing entities will not have such other liabilities. Another difference is that the bank notes of this period were backed exclusively by Treasury securities, a direct obligation of the U.S. government. That was a key reason why they were stable. Under the Genius Act, stablecoin issuers may back the stablecoin assets with items other than direct obligations of the U.S. government, such as bank deposits that exceed the deposit insurance threshold./5
Transition to Federal Reserve Notes
The shift from national bank notes to Federal Reserve notes does not appear to have had significant impacts on the quality of the notes. The difference between the two periods is mainly related to the liquidity backstop provided by a central bank and "elasticity" of the currency (as noted in the preamble of the Federal Reserve Act) as the economy evolved and the demand for credit changed. The ability of the central bank to adjust the supply of liquid assets enabled the banking system to stay open during liquidity stress events and allowed the central bank to regulate the supply of money in the economy through open market operations to smooth economic fluctuations.
There was a period from 1914 to 1935 where national bank notes and Federal Reserve notes circulated simultaneously. These two types of notes appear to have been treated as interchangeable by the public and the financial sector. This is not too surprising since they were both effectively backed by the US government - national bank notes because they were backed by Treasury securities while Federal Reserve notes were obligations of the US government. Moreover, the Federal Reserve Act included provisions that encouraged the interchangeability between the two types by allowing commercial banks to deposit them at the Federal Reserve to credit their reserve account.
After Federal Reserve notes were introduced, there was quick but modest drop in national bank notes as Federal Reserve officials actively sought to swap them for Federal Reserve notes, but amid World War I financing needs, that activity ended. Subsequently, the volume of national bank notes outstanding held broadly constant as commercial banks appear not to have found it attractive to have increased issuance nor did the Federal Reserve appear to have found it necessary to remove them from circulation (see Weber 2015 for details). The national bank notes were retired from circulation in the 1930s as the Treasury redeemed without replacement the securities that were eligible to serve as collateral for the notes.
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References
Bordo, Michael (2025). "The U.S. Genius Act, Stablecoins, National, State and Canadian bank notes: A Cautionary Tale," Presentation at the Hoover Institute, October 8.
Correia, Sergio (2010). "The Underissuance of National Bank Notes and the Act of June 1874," Master Thesis, Universitat Pompeu Fabra.
Du, Chuan, Ria Sonawane, and Cy Watsky (2025) "In the Shadow of Bank Runs: Lessons from the Silicon Valley Bank Failure and Its Impact on Stablecoins," FEDS Notes. Washington: Board of Governors of the Federal Reserve System, December 17, 2025.
Dwyer, Gerald (1996). "Wildcat Banking, Banking Panics, and Free Banking in the United States (PDF)," Federal Reserve Bank of Atlanta Economic Review, December, pp. 1-20.
Ennis, Huberto, Zhu Wang, and Russell Wong (2022). "A Historical Perspective on Digital Currencies," Federal Reserve Bank of Richmond Economic Brief, 22-21.
Friedman, Milton and Anna Schwarz (1963). A Monetary History of the United States, 1867-1960, Princeton: Princeton University Press.
Fung, Ben, Scott Hendry, and Warren Weber (2017). "Canadian Bank Notes and Dominion Notes: Lessons for Digital Currencies," Bank of Canada Working Paper 2017-5.
Gorton, Gary (1998). "Banking Panics and Business Cycles," Oxford Economic Papers, Vol. 40(4), pp. 751-781.
Gorton, Gary (2010). Slapped by the Invisible Hand: The Panic of 2007, Oxford: Oxford University Press.
Gorton, Gary and Jeffrey Zhang (2023). "Taming Wildcat Banks," University of Chicago Law Review, pp. 909-966.
James, John (1978). Money and Capital Markets in Postbellum America, Princeton: Princeton University Press.
Luck, Stephan (2025). "A Historical Perspective on Stablecoins," Federal Reserve Bank of New York Liberty Street Economics, October 1.
Weber, Warren (2015). "Government and Private E-Money-Like Systems: Federal Reserve Notes and National Bank Notes," Federal Reserve Bank of Atlanta CenFIS Working Paper 15-03
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1./ The previous arrangement involved each new bank charter needing an act of the legislature. That arrangement created incentives for bribes to effectively buy local monopolies. Return to text
2./ Redemption means that the presenter of the bank note would receive an amount of specie exactly equal in value to the face value of the bank note. That differs from the bank note being exchanged or exchanged for specie where the amount of specie received could be variable and determined by market forces. Return to text
3./ This trading occurred between banks and "note brokers" who were involved with returning the notes to the issuing banks. The notes do not appear to have traded at a discount as far as the general public was concerned.
James (1978) reports that preferences for gold coin in California meant that there was a discount on bank notes there; however, there was also a discount on other forms of government issued paper money, like "greenback notes" so the issue appears not to have been with the bank notes themselves. Return to text
4./ As documented by Du, Sonowane, and Watsky (2025), when holders of stablecoins were concerned about the credibility of the peg of some stablecoins in 2023, there was a rapid flight from those coins. That indicates that the holders of those coins were very attentive to the identity and condition of the issuers of the coins that they held. Return to text
5./ In addition, the clarity of the process for redeeming the notes of failed banks has been cited as a reason for the stability of the system (see Fung, Hendry and Weber 2017, Gorton and Zhang 2023). The rules under the Genius Act for redemption of stablecoins issued by a firm that goes out of business have not yet been developed. Return to text
Please cite this note as:
Carlson, Mark (2026). "A brief history of bank notes in the United States and some lessons for stablecoins," FEDS Notes. Washington: Board of Governors of the Federal Reserve System, February 06, 2026, https://doi.org/10.17016/2380-7172.4001.
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Disclaimer: FEDS Notes are articles in which Board staff offer their own views and present analysis on a range of topics in economics and finance. These articles are shorter and less technically oriented than FEDS Working Papers and IFDP papers.
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Original text here: https://www.federalreserve.gov/econres/notes/feds-notes/a-brief-history-of-bank-notes-in-the-united-states-and-some-lessons-for-stablecoins-20260206.html
Chesterfield Woman Pleads Guilty to Defrauding Numerous COVID-19 Programs and Tax Charges
ALEXANDRIA, Virginia, Feb. 7 -- The office of the U.S. Attorney for the Eastern District of Virginia posted the following news release on Feb. 5, 2026:* * *
Chesterfield woman pleads guilty to defrauding numerous COVID-19 programs and tax charges
RICHMOND, Va. - A Chesterfield woman pled guilty today to making false statements to steal from multiple COVID-19 relief programs.
According to court documents, from approximately May 12, 2020, through at least March 18, 2021, Sheila C. Bynum-Coleman, 54, filed for and received at least nine fraudulent COVID-19 Paycheck Protection Program (PPP) loans ... Show Full Article ALEXANDRIA, Virginia, Feb. 7 -- The office of the U.S. Attorney for the Eastern District of Virginia posted the following news release on Feb. 5, 2026: * * * Chesterfield woman pleads guilty to defrauding numerous COVID-19 programs and tax charges RICHMOND, Va. - A Chesterfield woman pled guilty today to making false statements to steal from multiple COVID-19 relief programs. According to court documents, from approximately May 12, 2020, through at least March 18, 2021, Sheila C. Bynum-Coleman, 54, filed for and received at least nine fraudulent COVID-19 Paycheck Protection Program (PPP) loanstotaling over $225,000 on behalf of eight different businesses she and her husband, Rashad H. Coleman, 48, purportedly operated. To obtain these PPP loans, Bynum-Coleman made numerous false certifications, including that each business had significant annual sales and revenue. Bynum-Coleman inflated and manufactured annual sales and revenue figures to inflate the amount of PPP funds for which the business could qualify. Additionally, with each PPP application, Bynum-Coleman fabricated Internal Revenue Service (IRS) income tax return documents to falsely support the inflated business sales and revenue figures.
For instance, though Bynum-Coleman submitted excerpts of a 2020 income tax return as part of multiple PPP loan applications, neither Bynum-Coleman nor her husband filed any income tax returns in 2020. Bynum-Coleman and Coleman also pled guilty to failing to file 2020 income tax returns.
Though Bynum-Coleman represented to financial institutions in PPP applications that she and her husband were operating numerous businesses in 2020, Bynum-Coleman represented to the Virginia Employment Commission (VEC) that she was unemployed from March 15, 2020, through February 13, 2021, to obtain pandemic unemployment benefits. Bynum-Coleman falsely certified to the VEC that she had not applied for or received PPP funds for the same time period she was seeking pandemic unemployment benefits. Bynum-Coleman made false statements to the U.S. Small Business Administration to defraud a separate COVID-19 program, the Emergency Injury Disaster Loan (EIDL) Program.
Bynum-Coleman routinely spent fraudulently obtained PPP funds on paying down her home loan, luxury clothing, paying down credit card bills, and other personal spending. Moreover, on May 29, 2020, about a week after receiving $62,500 in PPP loans, Bynum-Coleman transferred $10,000 of fraudulently obtained PPP funds into a bank account in the name of "Friends of Sheila for Delegate," an account for Bynum-Coleman's political campaign for the Virginia House of Delegates.
Assistant U.S. Attorneys Avi Panth and Thomas A. Garnett prosecuted the case.
The Department of Justice Office of Inspector General Mid-Atlantic Region and the Internal Revenue Service Criminal Investigation Washington D.C. Field Office investigated the case.
A copy of this press release is located on the website of the U.S. Attorney's Office (https://www.justice.gov/usao-edva) for the Eastern District of Virginia. Related court documents and information are located on the website of the District Court (https://www.vaed.uscourts.gov/) for the Eastern District of Virginia or on PACER (https://pcl.uscourts.gov/) by searching for Case No. 3:25-cr-44.
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Original text here: https://www.justice.gov/usao-edva/pr/chesterfield-woman-pleads-guilty-defrauding-numerous-covid-19-programs-and-tax-charges
BLS Midwest Region Issues Report on Iowa Job Openings and Labor Turnover November 2025
CHICAGO, Illinois, Feb. 7 (TNSLrpt) -- Iowa Job Openings and Labor Turnover November 2025 - A report from U.S. Department of Labor Bureau of Labor Statistics Midwest Region - Feb. 6, 2026* * *
Iowa had 67,000 job openings in November 2025, compared to 68,000 openings in October, the U.S. Bureau of Labor Statistics reported today. (See table 1.) Assistant Commissioner for Regional Operations Michael Hirniak noted that the job openings rate in Iowa was 4.0 percent in November and 4.1 percent in the previous month. (See chart 1 and table 2.) The job openings rate nationally was 4.3 percent in November ... Show Full Article CHICAGO, Illinois, Feb. 7 (TNSLrpt) -- Iowa Job Openings and Labor Turnover November 2025 - A report from U.S. Department of Labor Bureau of Labor Statistics Midwest Region - Feb. 6, 2026 * * * Iowa had 67,000 job openings in November 2025, compared to 68,000 openings in October, the U.S. Bureau of Labor Statistics reported today. (See table 1.) Assistant Commissioner for Regional Operations Michael Hirniak noted that the job openings rate in Iowa was 4.0 percent in November and 4.1 percent in the previous month. (See chart 1 and table 2.) The job openings rate nationally was 4.3 percent in Novemberand 4.5 percent in October. (See table 3.) All data in this release are seasonally adjusted.
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Chart 1. Job openings rates for the United States and Iowa, seasonally adjusted
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The ratio of unemployed persons per job opening in Iowa was 0.9 in November. Nationwide, 37 states and the District of Columbia had ratios in November that were lower than the national measure of 1.1 unemployed persons per job opening; 10 states had ratios that were higher than the national ratio, and 3 states had ratios equal to the national measure. (See map 1.)
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Map 1. Number of unemployed persons per job opening by state, November 2025, seasonally adjusted
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In November, Iowa had 51,000 hires and 53,000 separations, compared to 61,000 hires and 44,000 separations in October. (See chart 2.) Over the 12 months ending in November, hires and separations each averaged 54,000 per month. These averages include workers who may have been hired and separated more than once during the year.
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Chart 2. Hires and total separations in Iowa, seasonally adjusted (in thousands)
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Among the November separations in Iowa, 35,000 were quits and 15,000 were layoffs and discharges, compared to 30,000 quits and 12,000 layoffs and discharges in October. (See chart 3.) Over the year, quits averaged 33,000 per month, ranging from 30,000 to 39,000. Layoffs and discharges have averaged 17,000 per month, ranging from 12,000 to 26,000.
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Chart 3. Quits and layoffs and discharges in Iowa, seasonally adjusted (in thousands)
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Federal Government Shutdown
September 2025 state JOLTS estimates reported in this release include partial data that businesses self-reported electronically during the lapse in appropriations and data collected in November following the shutdown. October 2025 data presented in this release were collected in November following the shutdown, as originally planned. The October 2025 unemployment data are unavailable due to the shutdown, and therefore the number of unemployed persons per job opening is also unavailable.
Additionally, BLS temporarily suspended use of the monthly alignment methodology for October 2025 preliminary estimates; use of this methodology will resume with the publication of October 2025 final estimates. See the State Job Openings and Labor Turnover Technical Note for information on state JOLTS alignment methodology.
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Upcoming Change to the JOLTS State Estimates
The national State Job Openings and Labor Turnover news release will move from a monthly news release to an annual news release. The last monthly news release will occur with the December 2025 data published in February 2026. The first annual news release will be in July 2026. Going forward, monthly estimates for the prior calendar year will be published each year along with the annual news release. The annual news release will incorporate benchmark revisions to JOLTS national estimates, updated Current Employment Statistics (CES) employment estimates, and updated Quarterly Census of Employment and Wages (QCEW) data.
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Technical Note
This news release presents statistics from the Bureau of Labor Statistics' Job Openings and Labor Turnover Survey (JOLTS). The JOLTS program provides information on labor demand and turnover. The state estimates produced by JOLTS are model-based, incorporating JOLTS sample, Quarterly Census of Employment and Wages (QCEW), and Current Employment Statistics (CES) estimates. For more information see the JOLTS State Estimates Methodology.
Job Openings. Job openings include all positions that are open on the last business day of the reference month. A job is open only if it meets all three of these conditions:
* A specific position exists and there is work available for that position.
* The job could start within 30 days.
* The employer is actively recruiting workers from outside the establishment to fill the position.
The number of unemployed persons per job opening is a ratio of the level of unemployed persons and the level of job openings. The number of unemployed persons at the national level is an estimate from the Current Population Survey (CPS), while state-level unemployment estimates are modeled by the Local Area Unemployment Statistics (LAUS) program. A ratio of 1.0 means there is a job available for every unemployed person. Lower ratios signal tighter labor markets, where firms have more job openings than there are unemployed persons available to work. Higher ratios indicate there are more unemployed persons competing for each job opening.
Hires. Hires include all additions to the payroll during the entire reference month.
Separations. Separations include all separations from the payroll during the entire reference month and are reported by type of separation: quits, layoffs and discharges, and other separations.
* Quits include employees who left voluntarily, except for retirements or transfers to other locations.
* Layoffs and discharges include involuntary separations initiated by the employer.
* Other separations include retirements, transfers to other locations, separations due to employee disability, and deaths.
Levels and rates of other separations represent a small portion of total separations and are not published with the release of state estimates.
Complete definitions, including exclusions, and additional information about the State JOLTS data presented in this release are available in the State Job Openings and Labor Turnover Technical Note.
Information in this release will be made available to individuals with sensory impairments upon request. Voice phone: 202-691-5200; Telecommunications Relay Service: 7-1-1.
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Table 1. Job openings and labor turnover for Iowa, seasonally adjusted (in thousands)
Table 2. Job openings and labor turnover rates for Iowa, seasonally adjusted
Table 3. Job openings and labor turnover rates for the United States, seasonally adjusted
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View original text plus charts and tables here: https://www.bls.gov/regions/midwest/news-release/2026/jobopeningslaborturnover_iowa_20260206.htm