Middletown transcript., 1883-12-28
ORIGIN OF PAPER oURRENCIEs

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"promises to pay" or representatives
of money, were used in China B. G.
1897. These notes were first issued by
national authority, but afterwards pri-
vate corporations were permitted to
issue them. They were in form, or
rather in general particulars, similar 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 repre-
sented in figures and in words. 1t also
contained pictorial representation of
coins equal to its face value, and a
clause stating the 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. One issued in 1899 is preserved
in the Asiatic musem in st. Petersburg.
The first European notes of a similar
character issued by the national au-
thority for general circulation, were the
notes of the Bank of Venice, which
was founded in III. 1t was at first a
bank of deposit only, but it soon be-
came bank of issue also, probably be-
fore the termination of the twelfth cen
tury. 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 ex-
change were invented and came into
general use by the merchants Of Europe.
The first great transaction recorded
in history in which such bills of eX-
change were used occurred in 1255.
Henry II was indebted to the Pope of
Rome to the amount of $50, $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
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 civil
lied nations were limited to the metals,
md as there was consequently and in
everywhere of the mediums
If exchange, the addition of such indi-
7idual bills of credit to them proved so
great a relief that in 1882, ''By royal
,dict, merchants were requested, or
'ather commanded, to liquidate their |
,oreign debts by using their own bills
If exchange for that purpose, whenever
"-(Henry's History of |
3ritain.")
The monetary condition of the civil
lied world at that time must not be
Money had previously been
United to the metals, and even then
hey were not nearly sufficient in guam
ity to fill the public demand for me-
liums of exchange. In England and
,ther countries strenuous laws existed,
forbidding the expectation of |
,oins. Under these circumstances the
ssue of bills of exchange by the mer-
chants relieved the famine in the money |
market, and was doubtless the reason
Why Richard II. commanded the trad
IFS of England to liquidate their for
,ign debts with their own bills of ex-
change. What was needed was the
ssue of paper money by the English
in volume sufficient for the |
use and service of the people not pro-
misses to pay money, but real bona ,Jfde
resting on the entire property
If that nation. Since that time no ad-
vance 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 individual pa
per mediums of exchange, that are not
money but merely its representatives.
Paper money is an American inven-
ion. The colonists Of Massachusetts,
we're the first people to make their
money of paper. Some of the other
original colonies followed suit. Not |
,he least of the difficulties that beset |
5he paths of the European settlers of
,his continent was that of the need of a
sufficiency of the medium Of
exchange.
For more than half century sheep,
lorses, cattle, and evenhousehold goods,
we're made legal tenders in payment for
lebts, and as such accepted for taxes,
&C., in the treasury of Massachusetts.
There is a law extant, passed in the
century, which forbids Of
icials to receive lean cattle in payment |
or public dues. The first advance
made on this kind of barter currency
was the legal endorsement of wampum,
,he money of the Indians, as medium
If exchange. This was admitted not
only by the colonists of Massachusetts,
out 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
,ank note that ever was issued in Eu-
,ope, inasmuch as it was not limited to
and redeemable solely in the
metals. As Professor Sumner admits
n his "History Of American Cur
,ency;'' s'It was for the Indians, in
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