St. Paul daily globe. [volume] (Saint Paul, Minn.) 1884-1896, 1884-07-13
UNITED STATES NOTES.
When and How They Have Been Used
History Of the Paper Money Of
the Republic-The Circum-
stances Under Which Is
sued.

WASHINGTON, July S.-John Jay Knox,
late Comptroller of the currency, has pub
hshed a volume whose value will be recog-
nized from the title: ''United States Notes I;
a History of the Various Issues of Paper
Money of the United States" The book
gives an account of the gradual rise and de-
velopment of doctrine which has at length
been embodied in a recent decision of the
United States supreme court, namely: That
1t is in the power of congress to issue United
States legal tender notes in any amount at
any time that may be deemed advisable.
''AL the date of the adoption Of the consti-
tution," writes Mr.. Knox, 1.-THE issue of pa
per money in any form was popularity re-
garded with aversion. The experience of
the colonists with bills of credit as paper
money was then called, had been fraught
with loss and political disturbance, and the
experience with like issues by the continent
tai congress had SO affected the minds of
the WIsest and best men of that time in the
Federal convention the general feeling was
one of almost bitter opposition to granting
the power to emit bills of credit to the gov
ernment." The author further adduces the
fact that from 1871 until 1912 ssthe method
of raising funds for the government by the
issue of bills of credit was not even sug-
gested.''
| Before the revolutionary war paper money
was issued to a greater or less extent by each
one OF the thirteen colonies, Massachusetts
taking the lead in 1890, to aid in fitting out
the expedition against Canada. Similar is
| sues had been made by New Hampshire,
Rhode Island, Connecticut New York and
New Jersey previous to the year It'll. South
Carolina began to emit bills in 1712 Pen
nsylvania not until 1923. Delaware followed
the example in 1884, Virginia in 1855 and
Georgia in 1850. Thus it appears that a
privilege, somewhat grudgingly accorded, it
| is true, to the colonies by the mother coun-
try, was withheld from them as individual
states; land wisely, too,'' said Alexander
Hamilton, by the Federal Constitution
But the English Government did not view
this independent financiering of the various
colonies with complacency. In 174O Parlia-
ment passed a bill to extend the act of 1920,
significantly know as ''the bubble act,n to
the American colonies, with the intention of
breaking up all companies formed for the
purpose OF issuing paper money. Under this
law the Land Bank and the Specie Bank of
Massachusetts, were compelled to close their
business, to the great dissatisfaction of the
colonists. The action OF parliament was not
altogether unreasonable, since in 174S e100
in gold was worth 81, 100 of the deprecated
| paper money of the Massachusetts banks
! The first issue of continental money was
made in June, 1775, and maintained its value
Tor whole year. In two years these notes
had fallen to so per cent of their nominal
value, to 25 per cent of tin three years, and
in nine months more to 10 per cent of their
par value. In September, 1779, paper mon
ey was at 95 per cent discount, and though
congress had determined that the total issues
should not exceed $500, 900, 900, the value of
| gold as compared to paper money in 1850
was as 40 to l. The proportion finally reached
1000 to l in Virginia, shortly after which
continental paper money ceased to have any
value whatsoever.
The eighth clause of the first section of the
seventh article of the constitution, as pre-
sented for consideration of the convention
held in Philadelphia on May Ia, 1857, read
originally as follows s'The legislature or
the United States shall have power to borrow
money and emit bills on the credit of the
United States.'' 1t now reads, as amended:
1.-The congress shall have power to borrow
money on the credit of the United States
Then and there the question of making bills
Of credit issued by the government legal
| tender was for the first time brought under
discussion and was not again brought up in
congress until the legal tender acts of 1862.
| During the debate in 1857 Governor Nor
ris, of New York, moved to strike out the
words in the original clause Sand emit bills
on the credit of the United Statesn His ar
gument was: ''If the United States has credit
such bills would be unnecessary, if they had
not, unjust aud useless" Madison asked
/ i l.
the making them tender; but Morris, in
reply, urged that striking out the words
would still leave room for the notes Of re-
| sponsibe minister, which would do all the
| good without the mischief. The words were
finally stricken out, nine states voting yea !;
| two-Maryland and New Jersey-voted in
the negative.
The enactments of the Conscript Fathers
of America lost THAR force the moment they
were confronted with a real emergency in
the shape of foreign war. Interest bearing
treaury notes were issued in the years 1912,
1913, 1914 and 1915. They were not, how
ever, intended to circulate as money, and
| were retired as soon as possible when the
emergency was passed. The crash of 1887
and the Mexican war afro gave occasion for
temporary issues Of treasury notes, but it was
not until the war of the rebellion that the
subject became of first importance, and then
| for the first time the legal tender quality was
suggested, and with the rapidly succeeding
issues the last constitutional scruples were
swept away.
The amount of Treasury notes issued dur
ing the war Of IS12-15, under six different
acts Of Congress, including the SO, 1872, 994 of
of small Treasury notes issued undes the act
of Feb "a, 1915, was S39, $50, 1874 In Jan
uary, 1S47, the Treasury was again in need,
on account Of the expenses of the war with
Mexico, and bill was introduced authoriz-
| ing the issue of $4,000, 900 of Treasury
notes, supplemented by an additional issue
of $1,000, 900 under the previous act of July
| %, 1916. The whole amount ever actually
| issued was S26, 122, 100. The rate of inter
| est was 6-2-5 and 8 per cent, secured by
| s2S, 230, $50, of United States per cent
bonds. The Treasury notes issued under the
act Of January, 1847. were all retired before
July 1, 1850, with the exception of $500, 900;
| and no more were issued until, under the
| pressure of panic. an act was passed on
! Dec. %, 1857 authorizing an issue Of Treas
ury notes not exceeding $40, 600, 900. The
whole amount was issued. During President
| Buchanan's administration 1851, 1854. $50 in
all OF Treasury notes were issued, under the
| act Of Feb. S, 1861.
| The public debt Of the United States reach
ed its maximum on Aug. 81, 1865, when It
amounted to 2,s45. 907, 626.59. OF this
amounted LOG, SIS, 191 was in funded
debt, 81 100000 was debt which had ma
tured, and 81. III, 900 was in. suspended re-
QUESTIONS, The remainder was as follows
United Stated legal tender notes. s4ss, 1899 90
| Compound interest legal tender
notes .....-................. 2f7 100 90
Five per cent. legal tender notes 90, 1854. 23O 90
| Seyen-thirty notes. $40. 900, 900 90
Fractional currency ............ 26,344,74 81
Temporary loans. 107, f48,713 I6
Certificates Of indeptedness..... g, 093, 900 90
Total. 81, 722, 725, 414 81
More thBn 6s4 millions Of these obligations