Evening star. [volume] (Washington, D.C.) 1854-1972, 1899-08-29
POS tai CURRENCY
An Interesting Resume Of Its HIS
1 story and Use.
Mr.. VANDERLIP'S STATEMENT
Costpf Its Printing and Circulation
a y Was Great.
ITS DisUsE SATISFACTORY

An interesting resume of the history of
fractional and postal currency formerly
used by this government has been made
| by Assistant Secretary Vanderlip of the
treasury Department. The statement was
| made in r@piy to request from Walter ID.
Stinson of Augusta, Me. for information
showing the form, ard scope, as well
as amount of postal currency issued early
in the civil war;" and asking, what. if
any, effect a similar currency to be used
simply as a RENTING medium and not for
circulation, would have on the finances of
the country?''
Origin of Its Use.
In his reply Mr.. vanderlip said:
THE fso-called postal currency and the
fractional currency which succeeded it
came into use In this country under the fol-
lowing circumstances. Owing to financial
disturbances, resulting from the war, the
banks of the country suspended specie pay
nents on the 3Dth of December 1861. This
| suspension involved the government, and in
very short tine gold, which the
| principal coin in use at that time, was
forced to premium.
This premium soon became so great
that the subsidiary silver coins in circulation
were worth more than their face value,
and they disappeared The necessity of
making change in daily transactions caused
merchants, manufacturers, and other pr
sens IN business to issue tickets of frac-
tlcnai parts of dollar. and these, for a
time, were current in lieu of the absent
fractional silver money; but, of course, the
practice was speedily abused. and Con-
greSS accordingly, by the act of July II,
1862. authorized the issue of postage and
other stamps as currency, and forbade the
circulation of the tickets above mentioned.
1T soon became apparent. however that
ordinary postage stamps furnished a very
announcement medium OF circulation, and
the government accordingly prepared sup
ply of what was called postal currency
which was found to be much more salts
factory. Subsequently Congress authorized
the preparation and issue of $4,000. 900 OF
fractional currency, in denomina tons the
same as those of the fractional silver coins,
and this fractional currency remained in
use until 1876, when, in pursuance of acts
OF Congress- the circulation of subsidiary
silver coins was revived, and took the place
of the fractional paper currency which
was RAPIDLY retired and cancelled.
It's Disappearance Satisfactory.
The disappearance of the paper currency
and the, temperance of the subsidiary
coins was everywhere regarded with great
satisfaction Full experience of both kinds
| OF money had shown that the fractional
paper currency possessed no commendable
qualities not shared by subsidiary silver,
while in the matter of convenience clean
llness and durability the silver was far
preferable. This was the feeling in 1876
Zen years later, however, the enlargement
OF the business of seedsmen, publishers. de-
partment stores. etc. developed a limited
inquiry, for Ueans of sending. small sums
OF money through the mails, and this gave
rise to a bill to authorize the issue of frac-
tional silver certificates.
The bill passed the House of Represen-
tatives March, 10, 1888 and was taken up
Tor consideration in the Senate by the
| hnance. committee during the same session
or Congress At the instance OF that com
mlttee the Secretary of the Treasury pre-
pared statements showing the relative cost
or paper currency and silver coins 1t was
shown that the actual expense of printing
ana issuing fractional paper currency dur
ing the fourteen years of it's use was over
Sl2ooo 600. and that the loss to the people
| through the destruction of notes in that
period was $4,000. 900 more making a total
| loss of over s26,0oO,O0o
The average amount of fractional CIR
rency outstanding during that period was
shown to have been less than its cost 1t
was also shown that during a period Of
seven years, when the fractional naner
money was well established in use, the cost
or printing and paper alone was SO 49,
4I34s. it having been necessary during
that period to print over 239 900 900 of frac-
t1onal notes to take the place Of those
which came in for redemption on account
of their worn and mutilated condition 1t
| Is not doubted that the cost to the people
OF transmitting this enormous sum to the
| treasury for redemption and receiving the
fresh notes In return was greater than the
| cost Of printing and paper.
During a. similar period of seven wears
when the subsidiary coins were in full use
the coinage necessary to maintain the sup
ply only 81 .0S9, 11s, and the expense OF
such coinage was less than $50 600 This
was a fair statement of the relative cost
of fractional paper money and subsidiary
silver coins. and the bill in question was
not enacted into law.
It's Disadvantages.
"As to your inquiry respecting the effect
Of similar currency to be used for re-
mittances and not for circulation, you are
Informed that it would appear to be i'm
practica BILE to make one use of the money
without the other In other words, before
fractional paper money could become gen.
orally available for remittances, 1t would
have to be In general use for circulation
'It is apparent that the disadvantages Of
paper fractional money are so many, and
it's advantages few, that the use of it
for circulation would speedily be objected
to by the people.
Il inclose herewith copy Of the 'Princi-
pal Laws of the United States and would
call your attention to the acts of July II
1862 and March 3. 1863. section f. Other
publications relating to fractional currency
are also inclOsed, and 1t Is suggested that
you acquaint yourself with the form of the
several issues by inspecting samples when
you come to Washington. They may be
seen in the offices Of the treasurer Of the
United States"
HEAVY Loss REPORTED.