In those days U.S. Treasury bills and bonds were not acceptable as collateral for note issuance at the reserve banks.

FORBES: Quantitative Easing and the Money Printing Press

Regarding collateral effects, there are a few things to take note of.

FORBES: Raytheon's New Collateral Damage Minimizing Munition

An alternative to the promissory note arrangement is considered in which a 40-year bond is used as collateral for regular ECB loans which replace an equivalent amount the ELA debt.

FORBES: How Much Would Ireland Benefit from Replacing the Promissory Notes with a Long-Term Bond?