The New York herald. [volume] (New York [N.Y.]) 1840-1920, 1874-04-11
LEGAL TENDERS.
Their History in the
United States.
First Emission of Paper Money
in the Colonies.
ENGLAND FORBDS the ISSUANCE.
Wampum, Tobacco and Fish
as Currency.
THE REVOLUTIONARY PERIOD.
Efforts to Stop Depreciation in
Paper Money.
A THOUSAND DOLLARS FOR ONE.
The Ruinous Policy Of Initiation
Illustrated.
Wampum, Tobacco and Fish
as Currency.
THE REVOLUTIONARY PERIOD.
Efforts to Stop Depreciation in
Paper Money.
A THOUSAND DOLLARS FOR ONE.
The Ruinous Policy Of Imitation
Illustrated.

The issuance OF paper money made compulsory
on the people to receive constitutes most in
teresting chapter IN the history OF the United
States Through the colonial period the legal
tender was q continual, though not insepara-
bic incident TO bill OF credit. 1t was SO much so
that the English Parliament interered to separate
the two, and while sanctioning the bill OF credit
forbade the paper legal tender. During the
OF the Revolution, when S2o0,000,0 900 had been
emitted, the paper or the government became act
ually valueless and the country was TO consider
bic extent saved from ruin by the hard money
brought by the French army, that went into circu-
lauon. In every instance it found that nna-
ton or over-lssues led TO steady depreciation, and
also to commercial disasters and the undermining
OF pubic morality. contraction Of the currency
and resumption OF specie payments were con-
sidered all sides to be the safeguards and props
of the country.
TWO KINDS OF PAPER MONEY
1t NAV be well to point out the difference which
exists between paper money issued by govern
ment, and which is rendered obligatory the
people to receive, and that species OF paper money
which consists in the notes of bankers. payable to
the bearer on demand, ana which pass current
for the sums specified in them. OF the former
kind were the assgnats and mandats issued by
the government OF France during the first years
OF the revolution, the paper money issued by the
United states in their struggle lor independence
and during the late rebellion; that which was
issued by the Dutch during their long wars for in
dependence and, generally speaking the paper
money which most OF the governments on the
Continent OF Europe found themselves compelled
to issue during the French revolutionary wars.
These two species OF paper money differ CON-
pletey and essentially. In general the
paper issued by the governments OF the Continent
OF Europe contained promise to pay either on
demand, or at the termination of limited
specified period. 1t was in reality nothing more
than paper stamped with the amount OF the sum
for which it was to pass current, and with such
marks or signatures might serve TO distinguish
what was gerNine from what was forged The
essential difference between government and
bank paper is that the former is in fact paper
money In other words paper issued as money
instead OF the precious metals; the latter, though
denominated in popular language paper money, is
but written obligation TO pay certain sum OF
money demand. 1t is plain, therefore, that If the
written obligation to pay certain sum OF money on
demand is gwen by persons who are OF undisputed
and established credit, few Will be disposed to re-
fuse such written obligation, and therefore this
species of paper currency will be received without
compulson, and where the credit OF the issuer
1ssuers is undoubted, equally metallic money.
The legal tenders now in circulation in the United
states nave no specIneu time lor payment. Iney
are irredeemabe.
EARLY HISTORY OF PAPER MONEY.
From the earliest days the American colonies ex-
perienced that insuiiciency OF capital to meet
their growing wants which has ever attended new
settlements, and III nothing was this want OF cap
ltal more manifested than in the scarcity OF cur
rency. This scarcity afforded occasion. as stated
for the English Parliament to exercise control OF
the Colonial legislatures, and in consequence such
interference be came source OF collision. The
scarcity OF gold and silver might be increased by
the restraints On the commerce and industry Of
the colonsts: but IL would have existed under any
circumstances. Hence it was that the first set
tiers used the Indian wampum and beaver skins
as currency; that fish used in Newfoundland
and tobacco in Virginia for the purposes OF cur
rency. With this deficiency in currency, when the
colonies were involved in the expense OF raising
and paying troops, they were induced to issue bills
or credit, or promissory notes, which, being pay
able to bearer and divided into OF small
amount answered the purposes OF currency;
and they were subsequently led to further issues
as cheap and ready way OF remedying the gen
era scarcity OF money. In I113, to defray the cost
OF an expedition to Canada New York issued bills
to the amount OF 10000, Connecticut OF $780, 600
and New Jersey OF f3,0 900.
THE FIRST LEGAL TENDERS.
These bills OF credit, being redeemable at dis
tant day and being commonly issued IN excess,
gradually deprecated. although TO sustain their
credit the colonial legislatures made them legal
tender. As this provision proved injurious TO the
British merchants, whom the colonies were
generally Indebted the governors OF the colonies
were at length instructed TO prevent the passage
OF any law authorizing further issue OF paper. This
restriction caused great alarm in Massachusetts
where the paper currency, being redeemed In an
nual quotas, must be constantly decreasing,
less they could make new issues They therefore
devised the expedient oil a currency be issued by
a land bank, for which company was formed:
but before IL obtained charter RON the Colonial
Legislature The company was dissolved by an act
Parliament. Another act OF Parliament was
finally passed providing that no paper money
should be legal tender in the colonies. This dis.
position was plainly and frequently manifested
on the part or the mother country C draw cords
OF colonial dependence tighter that even then
men discussed the problem whether this conflict OF
fcellng and interests would not lead 10 separa-
ton as soon as the colonies had sufficient strength
to effect 1t.
DURING THE REVOLUTION.
Several years previous to the Revolution most OF
the states were IN the habit, Notwithstanding the
Imperial prohibition whenever they had occasion
for more money than could be raised Immediately
by taxes, to issue paper, notes or bis IN the name
OF the state, wherein they promised 10 pay to the
bearer the sum named IN the note or bill. In some
OF the states no time OF payment was .xed nor tax
laid to enable payment. In these the bills depre-
GATED But others OF the states named in the bill
che day wnen 1t should be paid laid taxes TO bring
In money enough for the purpose and paid the bills
punctually or before the day named. In these
States paper money was IN as high estimation as
Rola and silver On the commencement OF the Rev.
oIution Congress had no money. The external
commerce or the states being suppressed, the
farmer could not sell nlb produce, dLu, VI course,
could not pay q tax. Congress haG no recourse
then but In paper money. Not being able 10
lay tax for its redemption, they could only
promise that taxes would be laId Tor that purpose
so to redeem the bills by certain day. Tney
did not Ioresee the long continuance o. the war
the almost suppression Of their exports and otnei
events which rendered the performance 81 thel
engagements impossible.
TUE PAPER MoNEY CONTINUED EQUAL TIC GOLD
and silver Tor a twevemonth But the quantities
winch they we're obliged TO emit for the purposes
OF the war exceeded what had been the usua
quantity 81 the circulating medium. 1t began