The Democratic advocate. [volume] (Westminster, Md.) 1865-1972, 1883-12-08
Our 0lio.
Origin of Paper Currencies.

were used in China B. G. 2697. These
notes were first issued by national authority
but afterwards private corporations were
permitted to issue them. They were in
form, or rather in general particulars, sim
liar to bank notes, each bearing the name
of the bank, the date of issue, the number
of the note, the signature of the party
issuing it, the sum of money represented
in figures and in words. 1t also contained
a pictorial representation of coins equal to
its face value, and clause stating the
i pains and penalties that would be incurred
by those who counterfeited it. These
notes were also decorated with exhortations
to industry and thrift, such as, Produce
all you can, )" "Spend with economy" etc.
They were printed in blue ink, on paper
made from the fibre of the mulberry tree.
4 One issued in 1899 is preserved in the
Asiatic museum in St. Petersburg. The
sI first European notes of a similar character
I. issued by national authority for general
circulation, were the notes of the Bank of
Venice, which was founded in I'LL. 1t
was at first bankof deposit only, but it soon
became bank of issue also, probably be-
fore the termination of the twelfth century
For more than FIVE hundred years its notes
commanded premium of from twenty to
thirty per cent. over gold
Although it is certain that bills of credit
issued by individuals were known to the
ancient Greeks and Romans, they were
by no means of general use in business
transactions. However, soon after the
issue of notes by the Bank of Venice
written bills of exchange were invented
and came into general use by the merchants
of Europe.
The first great transaction recorded in
history in which such bills of exchange
were used occurred in 1855 Henry IT.
was indebted to the Pope of Rome to the
amount of 150, $40 marks, then very large
sum of money. As the Pope was indebted
to the merchants of some of the cities of
Italy, it was agreed between the above
mentioned potentates that those merchants
should draw bills for specified amounts on
the bishops and abbots of England By
the commands of both Church and State,
the latter were compelled to pay them by
law.
As previously the currencies of civilized
nations were limited to the metals, and as
there was consequently an insuficiency
everywhere of the mediums of exchange,
the addition of such individual bills of
credit to them proved so great relief that
in 1882 "By royal edict merchants were
requested, or rather commanded, to liqui-
date their foreign debts by using their own
bills of exchange for that purpose, when
ever practicable. "-( Henrys "History of
| Britain.
The monetary condition of the civilized
world at that time must not be forgotten.
Money had previously been limited to the
metals, and even then they were not nearly
sufficient in quantity to fill the public de-
mand for mediums of exchange. In Eng
land and other countries strenuous laws
existed, virtually forbidding the expectation
of coins Under these circumstances the
issue of bills of exchange by the merchants
relieved the famine in the money market,
and was doubtless the reason why Richard
Ii. commanded the traders of England to
liquidate their foreign debts with their own
bills of exchange. What was needed was
the issue of paper money by the English
monarch in volume sufficient for the use
and service of the people; not promises to
pay money, but real bona tide money,
resting on the entire property of that ma
tion. Since that time no advance has been
made in Europe on the subject of finance.
Nine-tenths of the worlds traffic is yet
done on the strength of national and indi-
vidual paper mediums of exchange, that
are not money but merely its representa-
! tives.
Paper money is an American invention.
! The colonists of Massachusetts were the
first people to make their money of paper.
Some of the other original colonies followed
suit. Not the least of the difficulties that
beset the paths of the European settlers of
this continent was that of the need of
reasonable suficiency of the medium of
exchange.
For more than half century sheep,
horses, cattle, and even household goods,
were made legal tenders in payment for
debts, and as such accepted for taxes, &c,
in the treasury of Massachusetts. There
is a law extant, passed in the seventeenth
century, which forbids officials TO receive
lean cattle in payment for public dues.
/ The first advance made on this kind Of
barter currency was the legal endorsement
Of wampum, the money of the Indians, as
medium of exchange. This was admitted
not only by the colonists of Massachusetts,,
but by those of Connecticut, Rhode Island
and New York. Nor let us look upon
wampum with scorn, for, as money, it was
superior article to any bank note that
ever was issued in Europe, inasmuch as it
was not limited to represent, and redeem
able solely in the metals. As Professor
Sumner admits in his History of Ameri-
can Currency :" at was for the Indians,
in their limited community, perfect
money"
The first mint in the American colonies
was established in Boston in 1862. 1t was
established to coin silver and keep it in
circulation, but, as it was breach Of the
royal prerogative to coin money, its coins
-shillings, sixpences and threepences-
were pre-dated. 1t was soon closed by or
ders from England; but, Notwithstanding
them, it was again leased, in spite of pro-
hibition by the mother country, in 1875.
1t may be well to say here that the issue
of mediums of exchange by the colonies in
any form, metallic or paper, were from first
to last opposed by Great Britain, and con-
sequently by the governors of the colonies
who were appointed by the British govern
ment. In every way the colonial banks
were attacked openly and insiduously, and,
as might be expected, generally with sue
cess.
Summers History of American Curren-
cy' instructs US that
In 1856 Tin Massachusetts, bank was pro-
posed to issue notes. Its history is obscure,
and, though it seems to have made issues,
they soon disappeared.
In 1890 the first paper money was issued
Seven thousand pounds were issued IN notes
from IS. to e5 They were made receivable
for taxes, and for goods paid into the treas
ury for taxes In 1892 it was ordered that
the bills be received at five per cent, advance
over coin in the colonial treasury, and the
court promised to redeem them in money
within twelve months
This statement respecting the redemption
of the aforementioned bills In money, JUS