The Colville examiner. [volume] (Colville, Wash.) 1907-1948, 1909-10-30
Checks for Less Than One Dollar

been publishing reports that congress- at its last
session, passed new law to take effect the first
of next January prohibiting the use of checks for
less than one dollar, and statements that such law
would seriously hamper many business interests.
AS result of this widespread publication, the
attorneys for the American Bankers Association
have received large number of letters from bank
ers, questioning the consttutionality of such
law, and all criticizing it.
The answer to all such inquiries has been that
the newspaper reports have been erroneous; that
congress has not passed any new law on the sub
ject but that the law in question has been in force
for nearly half a century, having been enacted in
1862; and that such law has never been construed
to prohibit the giving of checks for less than one
dollar as ordinary payments in business transac-
tions.
What has given rise to all this misinformation
and led the newspaper writers of the country to
fall into such an error is the fact that congress, at
its last session, enacted a new criminal code
Chapter 321, Laws of 1909, Goth Congress, passed
March a, 1909, IAN Act to codify, revise and
amend the Penal Laws of the United States"),
which code contains the following:
Section 49, No person shall make ISSUE cir
culate or pay out any note, check memorandum,
token or other obligation for less sum than one
ceived or used in lieu of lawful money of the
United States; and every person so offending shall
be fined not more than five hundred dollars or i'm
prisonment not more than six months, or BOTH"
But instead of this provision being newly en-
acted it has, already said, been incorporated in
the Revised Statutes for many years as section
1888 and was originally section of the Act of July
IT, 1862: IAN Act to authorize payments in stamps
and to prohibit circulation of notes for less than
one dollar
Looking back into the financial history of that
time, it will be found that gold was at premium;
silver coin had begun to disappear and business
men who desired silver for convenience in making
small change bought it at a premium. The neces-
sity for some medium to be used as small change
led to the extensive use of postage stamps and,
also, many persons engaged in retail trade and
railroads and other corporations having large
number of small payments to make began to use
their own notes or obligations in fractions of dol
lar, commonly known as "shinplasters, " to supply
the deficiency, in many cases making them ex-
changeable for commodities and also for bank and
treasury notes. Unless the government should
prevent this 'shnplaster' circulation, it was evil
dent that the country would be flooded with vari-
ETY. of fractional currency having very little value
and causing little vexation and loss in the trans
action of business. (See Knox, United States
Notes, page 100; Bolls Financial History of the
United States, Vol. 2, pages SO, 84.)
The Act of July II, 1862, had for it's purpose the
egaizing of the of postage stamps as fraction
al currency and the prohibition of the use of
private obligations or "shinpasters." The post
age currency was, in time, superseded by the
fractional paper currency and this, later, by the
present fractional silver coins, but the provision of
law prohibiting the use as fractional currency of
private notes, checks or obligations for less than
one dollar has always been continued in force, and
in the recent revision of the Penal Laws of the
nation was Incorporated in the identical language
in which originally enacted as section 178 of the
new Criminal Code
This is in brief the history of the provision 1t
is not new law, but merely an old law incorpo-
rated in new Criminal Code, and as seen,i is not
aimed at the issue of checks for less than dollar
in the ordinary business ways in which small pay
ments are made, such checks not being primarily
designed for circulation but for payment, but it
prohibits the issue or circulation of notes. checks
or oligations in fractional parts of dollar, de-
signed to be used as fractional currency
''One million dollars will be expended on state
and state-ad roads in eastern Washington early
possible next spring, and we expect to have some
thing that will impress the people of the entire
state with the practicabiity of building good roads,
The movement is young and on account of the
youth of this commonwealth it needs conscientious
support as we'll as local interest and active cooper
alton by the people,"
Henry L. Bowlby state highway commissioner
of Washington, who has just completed a trip of
5000 miles, visiting various points of the state to
familiarize himself with conditions said this at