Iowa County democrat. [volume] (Mineral Point, Wis.) 1877-1938, 1884-04-18
AMERICAN PAPER MONEY.
Comptroller KNOBS History OF the
limited States Notes.

Knox has recently completed his
torical paper on tae subject of United
States notes, which will soon be given
to the public. The following is
brief abstract of its features: The
first chapter of the article is upon the
subject of Colonial Paper Money"
the second upon 1.-The Issue of Con-
tinental Paper Money" and the
third, bills Of Credit on the Federal
Convention" The debate in the
Federal Convention in reference to
emitting bills of credit" is given in
full, and is important for the reason
that the subject of authorizing bills of
credit issued by the Government to be
legal tender was then, for the first
time, discussed. The proposition,
though twice presented in Congress,
was not subsequently considered un-
til the Legal Tender act of 1862 was
introduced and discussed in the House
of Representatives The original
clause in the Constitution on the sub
ject that "the Legislature of the
United States shall have power to Dor
row money and emit bills on the
United States" On motion for strik-
ing out the words land emit bills"
nine States voted in the affirmative
and two States in the negative
namely, New Jersey and Maryland.
The periods of the issue of the
United States notes were FIVE. First,
the war of 1912; second, the financial
crisis of 1887; third, the Mexican war;
fourth, the crisis of 1857 and during
the Buchanan Administration, and
fifth, the War Of the Rebellion.
Treasury notes of more than twenty
differ ent forms and dates were issued
by the Government. previous to the
civil war, all OF which were either
receivable for dues payable to the
Government or fundable in bonds.
For seventy-fve years subsequent to
the adoption of the Constitution no
Treasury notes were authorized to be
issued which were payable on demand
in lawful money, or which by the
terms of law were made legal ten
der. Such notes were first authorized
by the act of February 25, 1862.
There were no treasury notes OF any
kind issued from 1879 to 1872, a period
of 33 years. Ia 1911 a loan was author
lied by Congress, but it was taken SO
slo WY that the Secretary of the Treas
Ury, for the first time in the history
of the Government, recommended the
issue of Treasury notes. The amount
authorized to be issued by the law
which was passed was not to exceed
| the amount unsubscribed to the loan,
namely, 81, 10000 This frat issue
of notes bore interest at 2-5 per cent.
a year, or II cents per day on a 500
note, and this probably suggested the
issue of the seven-t thirty notes during
the late civil war.
The notes were payable one year af-
ter date and were receivable in pay
mcnt of all issue due the United
States. The first issue was in 1872,
and there were other issues during the
three subsequent years. The total
and they were all of large denomina-
items with the exception of less than
50, 5000, coo, which were of denomina-
tons as low as SIS, and read as follows:
THE United States promise to re-
ceive this note for So in all payments
to them or to fund the amount at z
per cent. interest on request, agree
able TO the act of Congress of Feb. "A
1916"
These where the only notes issued
from the adoption of the Constitution
to the passage of the Legal tender act
of 1862 which could be d:nominated
bills of credit, and these notes were
not payable ON demand. but only re-
ceivable for dues to the Government.
The notes of large denominations
(fifties and one hundreds were of the
same form except that they were
drawn to order with interest and
fundable into 6-Ner cent. bonds. From
1887 to 1914 treasury notes amount
ing to ST., 900, 900 were issued under
eight different acts. The lowest de-
nomination of any one note was $50,
but where new notes were issued IN
place of the old ones the accrued in
tcrest was added. These notes, like
those issued during the war of 1912,
were payable to order, and usually
bore interest at tho rate of 5 per cent.
During the administration of
President Tyler, Sohn G. Spencer,
who was for time Secretary of the
Treasury, issued under the act of
March 3, 1913, about $3.50, 900 of
Treasury notes. Each note on It's
face promised to pay one year from
date $50, with interest at the rate of l
mill per 500 per annum. On the
back of each note engraved length
wise were the words: This note will
be purchased at par for the amount of
principal and interest thereof on
presentation at either of the deposi-
tories of the Treasury in the city of |
New York" The notes, which were
issued at the nominal rate of 4,oOOth |
of per cent. per annum and by the !
endorsement made payable on demand,
were considered by Congress an
evasion of the act under which they
were issued, and the Committee on
Ways and Means was instructed to
inquire and report whether the notes
lately issued by the Treasury Depart
ment bearing a nominal interest and
INTO coin on demand, and
now forming part Of the circulating
medium of the country, are author
lied by the existing laws and Con-
stitution OF the United States. The
report of the committee, which also
embraces a letter on the subject, is
from the fact that it con-
tains the principal constitutional
against the issue of paper
by the Government. 1t was
by the committee that the
Constitution authorized the Govern
ment to borrow money, but not to
issue hills of credit; that borrowing
implied the paying of interest
for the borrowed; that interest-bear-
ing Treasury notes payable al fu-
ture day were temporary loan, not
designed 10 circulate as money, and
could properly be issued, while notes
bearing no interest and payable on
demand were bills of credit, and could
be issued only in violation Of the
and this was the ground
usually taken in Congress in all dis
cussions in reference to the issue of
Treasury notes.
A full account is also given of the
Treasury notes issued during the
Buchanan administration, the diff
Guilty attending their negotiation,
and the proposition of General Dix
that the States should return to the
the surplus money dis
tributed to then in the year 1873, or
at least should be called upon to
ruarantea tho iSsI,e of the Govern ent