Old certificates of deposit like that can be collectable, especially if they have interesting artwork. Railroad, Indian and shipping themes are popular.

Notes like the one you pictured were made payable to the depositor, so they really were just certificates of deposit - evidence to the bank that you had loaned them some money. In some communities, and particularly later into the 19th century, they would often be made payable to a specific person or to "bearer" - creating bearer notes that others could redeem at the bank. That enabled the notes to serve like early checks, except they were already made out by the bank for specific amounts - and they could be odd amounts like "$4.12." Within a community they would be used like regular money, but they were only valid at a particular bank so their value dropped as you got farther away from that bank, since time and money would have to be spent to bring it back.

Soon banks began issuing their own currency, which were bearer notes promising to pay the bearer on demand. Again, these would be circulated within a community but created problems outside that vicinity. Money would be discounted - Chicago notes might be worth 20% less in Detroit, for example. Widespread fraud followed as counterfeiters made their own. Since money came in so many different forms, it was even easier to pull a fast one on an unsuspecting person than it is today to get accused of passing phoney money for trying to use two-dollar bills!

Naturally, this led to instability and a lack of confidence in the monetary system. Eventually the federal government stepped in and told the banks they could no longer issue their own currency. Yet, if you think about it, the check you write is not much different.

Do you remember when thrift institutions (S&Ls and credit unions) were barred from issuing checking accounts? They got around the law by creating "NOW accounts" (negotiable orders of withdrawal). Your "NOW" check wasn't really a check - it was a withdrawal slip that others could cash! It was another way that banks could enable customers to use paper money that they had issued in lieu of cash.

In early Canada, the government allowed banks to issue notes under $5 (thinking they would only issue $1 notes). They started issuing $4 notes and other unusual denominations. In the UK, some banks are still allowed to issue currency for 5 pounds or higher (the Bank of Scotland does, as do banks in Northern Ireland). While Bank of England money is good throughout Great Britain, N. Irish and Scottish money is technically valid only in those regions.