Buchanan County bulletin. [volume] (Independence, Iowa) 1869-1891, 1878-04-12
their !

December $1,000 900 less than in Janu-
airy, and $4,000, 900 less than in June.
The mere fact of a Bank having more
greenbacks at one time than at another,
may be due to an increase in it's depos-
it's. As the deposits increase or dimin-
ish, the legal tenders held must increase
or lessen in the legal ratio. A consider
alton of the second question may show
us that the Banks have little occasion
for gathering up all the greenbacks.
2. Will National Bank Notes be con-
vertible into gold, at par, after the first
day of January next, after resumption?
Under existing laws, we have three
legal tenders: Greenbacks. Gold and Sill
yer. If an individual can pay his obliga-
tons in any one of the three currencies,
we see no reason why a Bank may not
avail itself of the same privilege. With
gold at a premium of one per cent, or
even less, there is a strong probability
that greenbacks will be worth one hun
bred cents in gold by January LIST.
Since the National Bank notes have al
ways been redeemed in greenbacks, their
values have been the same, and a Bank
may redeem it's notes either with a sill
yer dollar, a gold dollar, Or a greenback
dollar worth one hundred cents in gold.
3. Explain why the first $60,OOO,OOO
of greenbacks were taken in by the gov
eminent. Were they always at par
with gold?
We understand the question to refer
to the $50, 200, 600 of Treasury demand
notes issued under acts of July II, 1861,
and February IL, 1862; Greenbacks pro-
per were not issued until February %,
1862. One of Secretary Chase's first
acts was to issue $50, 100000 of govern
ment notes promising to pay coin dol
lars on demand. The Treasury had not
a single dollar to pay them with. For a
short time they succeeded in drawing
coin from the Banks, but when they
stopped paying specie, December 80,
1861, this supply was cut off. The gov
eminent had no means to pay these
notes then, and was compelled to issue
$15O,0OO,0OO of greenbacks, S%5O,OOO,OOO
of which took the place of the demand
notes, and the g~reenbacks were not pay
able on demand, or at any specified
time.
Our Greenback friends tell us these
demand notes were always at par be-
cause receivable for custom duties. The
law that created them July II, 1861
did not make them receivable for Gus
tom duties. This feature was added by
a supplementary act of August 5, 1861.
But this addition to their powers was
not sufficient to hold them at par with
gold.
On the 18th Of March, 1862, Congress
passed an act providing that the de
mand notes authorized by the acts of
July II, 1861 and Feb. II, 1862" in ad-
dition to being receivable in payment of
duties on imports, should be a legal ten
der for the same purposes and to the
same extent as the greenbacks Of Feb
ruary %, 1862. Up to this date the de-
mand notes were not legal tenders for
payment of individual debts, but only
of debts due the government. Henry
V. Poor, in his exhaustive work on the
Laws and History of Money" says of
the demand notes:
'They still remained at a discount
from gold for the reason that they could
not, as legal tender, serve all the uses
of gold. The banks in the leading cit
les would not receive them as money.
They were previously at a considerable
discount, as they would only pay debts
due the government. Their value was
raised by their being made receivable in
the payment of debts to individuals as
well as to the government"
4. Was Frances paper money al
ways at par with gold?
Will our correspondent indicate the
years to which he refers? We will take
pleasure in looking up the facts for him
then.