The sun. [volume] (New York [N.Y.]) 1833-1916, 1899-08-27
FORFRACTIONAL CURRENCY
CONCERTED MOVEMENT IN THE
COuyTRY TO SECURE IT'S ISSUE
TREASURY Department Obtains a Circular
winch is Being sent Broadcast-Assist-
ant Secretary Vanderlip Replies to
.r.,mept by n Maine Postma ster.

w,sutSoToS Aug. ga more or less con-
sorted effort to induce tho Government to re-
sumo the issue ef fractional paper currency
h,s como TO the attention OF the Treasury De-
nartment Not only has the Department re-
ceiyed copies OF circular letter which is APP
p,rently being circulated widely. but Secretary
Goyo has received at least one letter setting
forth an argument in favor OF the proposed
issue, Assistant Secretary Nanderlip re-
nIi.d TO this last letter at considerable
i,neth. describing the history Of frac-
tional paper currency during the period
OF its circulation beginning in the Civil
War. and giving the objections which are
commonly urged against the resumption OF
the system tits evident that Secretary Gage
nndth officials OF the Treasury Department
would frown upon the proposal to issue frac-
tioral currency, Il a measure to that effect
sboull be introduced in the next Congress. in
the same way 1t was frowned upon in 1888.
Tho circular letter which has come to tho
Treasury Departments notice makes this
statement:
People living in the country or small towns
are compelled to order many necessaries OF life
by mail from large cities Among these arc
books papers, magazines. 6c Improved
methods OF manufacturing have reduced the
urice of many Of these necessaries to fraction
of n dollar Postal money orders cannot be
had in small post offices and are expensive as
veIl a. oublesome to obtain. The proof nee
essary to sustain this opinion is afforded con-
stantly in everyday life, and will present it.
self TO you. il you will place yourself for a
moment in the position OF one who. living
some distance away from post office. desires
10 order books. papers or other goods by mail.
The undersigned respectfully solicits your
cooperation for the purpose OF securing the
Passage OF law authorizing the printing OF
fractional paper currency to the amount
NJ S25, OOO, 900. each bill to be OF tho
value of twenty-five cents. These bills
10 be offered for sale at twenty-
nix cents each by oil postmosters.
Charging an additional cent for each bill will
have the effect that no more will be circulated
than are actually needed. Our experience
teaches us however. that demand for such
fractional paper currency exists. and there can
be no doubt that this demand is sufficiently
strong to ensure the sale Of the proposed
amount"
Representative Babcock. who was a member
OF the Republican Caucus Committee which
devised the new currency bill at Atlantic City
this summer. has been quoted as generally
favorng the proposition set forth in this cir
cular letter. although II is not known positively
that he would endorse it II it were brought be-
fore tho next Congress.
The letter recently received by Secretary
Gage on a similar subject was addressed to him
by Walter ID. Stinson. the postmaster at
Augusta. Me. Mr. StinSon suggested that
fractional currency in the same denominations
ms the present subsidiary silver coins be issued
by the Government, not for general circulation.
but for the convenience Of persons wishing to
transmit small sums OF money by mail. He
asserts that there is a considerable popular de-
mand for such currency for the purpose des-
crited. this demand possibly being auEm ented
NJ only nv the inpOn Of ObtaininR pOst
office money orders. but by tho additional ex-
pense OF obtaining such money orders imposed
by the War Revenue tax. Assistant Secretary
Vanderlip addressed long letter to Mr.. Stn-
son in reply. He answered the inquiries OF the
writer as to the form. use and scope as we'll
amount OF the postal currency issued carly
in the civil war" and as to what, II any. effect
a similar currency to be used simply as a re-
hitting medium and not for circulation would
have on the finances Of the country"
Mr.. Vanderbilt said that the so called postal
currency and the fractional currency which
succeeded it came into circulation owing to the
financial disturbances resulting from the war.
which caused the banks OF the country to
suspend specie payment ON Dec. 30. 1861.
This suspension, he said. involved the Gov
eminent, and in very short time gold.
which was the principal coin in use at that
time, was forced to a premium. This pre-
MUM soon became so great that the subsid-
larry silver coins in circulation were worth
more than their face value. and they disap-
Feared The necessity OF making change in
daily transactions caused persons in business
to issue tickets Of fractional parts OF dollar.
and these for time were current in lieu OF
the fractional silver money. but Of course the
principle was speedily abused,
Congress authorized the issue OF postage
and other stamps as currency and forbade the
cir of ha Ok Re u,
inconvenient. and a supply OF the so-called
postal currency was issued. Subsequently
$oOOOO.OOO in fractional currency OF the same
denominations as the subsidiary silver coins
were issued. In 1876 the circulation OF sub
sidiary silver revived, and tho fractional cur
rency was called in and cancelled.
Mr.. Vanderlip wrote that the experience OF
the public and Of the Treasury Department
with both kinds offractioDal money showed that
silver was preferable. Ten years later the en-
largement OF the business Of seedsmen. pub
fishers and department stores gave rise to
new demand for fractional paper money. A
bill authorizing an issue was passed by the
House in March 1888 and was sent to the Sen
ate. The Finance Committee OF that body
asked the Secretary of the Treasury for some
Information on the subIcct and he submitted 4
statement showing the relative cost OF coming
silver and Of printing fractional paper money
HIllHtulnlES lHeNl III circulation. nc
showed that during the twelve years in which
fractional currency was issued an expenditure
Of $l2OOO,OO0 was necessary to produce It..
The loss to the people in tho destruction OF the
small bills was very great amounting to not
less than Sl4OOO,U0O. In seven years. the
Secretary said, the Government had TO print a
large number Of notes FOR the redemption OF
WORKOUT currency, and the issue for this pur-
pose alone in seven years was S6.i3S473. The
4
during the same periol was only S4.0SD.ll S.
The EXPENSE OF coinage during that time was
only $4,000 The bill which had passed the
House was killed in tho Senate. as a result OF
this statement OF the Secretary Of the Treasury
Mr.. Vanderbilt in writing to Secretary Cages
correspondent. expressed tho opinion strongly
that it would be found impracticable to use
fractional currency for remittance purposes and
not for circulation. The money. he said. would
necessarily have to be in circulation for some
time before it could reach in n Legitimate
manner the persons who desired to use it fol
tran snnitt