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UNITED STATES NOTES 
 
 A HISTORY OF THE VARIOUS ISSUES OF 
 
 PAPER MONEY BY THE GOVERNMENT 
 
 OF THE UNITED STATES 
 
 JOHN JAY KNOX 
 
 LATE COMPTROLLER OF THE CURRENCY 
 
 WITH AN APPENDIX CONTAINING THB RECENT DECISION OF THE 
 
 SUPREME COURT OF THE UNITED STATES AND THE 
 
 DISSENTING OlINION UPON JHE LEGAL 
 
 TENDER QUESTION 
 
 THIRD EDITION REVISED 
 
 NEW TOEK 
 CHARLES SCEIBNER'S SONS 
 
 1894 
 

 COPVEIGHT, 1884, BY 
 
 CHARLES SCRIBNER'S SONS 
 
PREFACE. 
 
 In the course of his official career the author has had 
 occasion to deal with subjects kindred to those presented 
 in this volume. From time to time, he has collected 
 material with the hope of publishing at some future 
 day a volume worthy of the title of " History of Bank- 
 ing in the United States." The results of these investi- 
 gations have appeared from time to time, in official re- 
 ports, occasional addresses, and in articles contributed 
 to various encyclopaedias. The present volume is pub- 
 lished in accordance with the request of many friends, 
 who believe that at the present time a small volume 
 containing a history of all the various issues of paper 
 money by the Government will be useful and interest- 
 ing to the public. 
 
 The recent decision of the United States Supreme 
 Court has virtually placed it in the power of Congress 
 to issue United States legal tender notes in any amount, 
 at any time it may be deemed politic or advisable. A 
 
Iv PREFACE. 
 
 connected history of the paper money issued by the 
 Government will enable the reader to trace the gradual 
 rise and development of a doctrine which has at length 
 been endorsed by so much weight of authority. 
 
 At the date of the adoption of the Constitution, the 
 issue of paper money in any form was popularly 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 the like issues by the Contin- 
 ental Congress had so affected the minds of the wisest 
 and best men of that time, that in the Federal Conven- 
 tion the general feeling was one of almost bitter opposi- 
 tion to granting the power to emit bills of credit to the 
 new Government. No one can examine the records of 
 those days without being thoroughly impressed that the 
 sense of the Convention was in favor of an absolute 
 prohibition. Further proof may be found in the fact 
 that from 1791 to 1812, a period of twenty-one years, 
 the method of raising funds for the Government by 
 the issue of bills of credit was not even suggested ; 
 nor indeed were circulating notes, in form payable on 
 demand without interest, issued at all, until more than 
 seventy years after the adoption of the Constitution. 
 
 The charter of the first Bank of the United States 
 expired in 1811, and the Federalists were not strong 
 enough to secure a recharter. "When the war of 1812 
 
rREFAOE. V 
 
 broke out, the necessity of funds was so imperative, 
 that the Administration and Congress felt themselves 
 forced, the one to recommend, and the other to author- 
 ize, the issue of interest-bearing Treasury notes. They 
 were regarded as a measure of necessity. Loans in the 
 ordinary form had failed, and these notes were regarded 
 as a convenient form of loan. They were not intended 
 to circulate as money ; they were fundable into public 
 stock, and, as a matter of fact, were retired as soon as 
 possible after the close of the war. These issues were, 
 however, a fatal precedent out of which has grown a 
 latitude of constitutional construction not then antici- 
 pated. 
 
 From 1816 to 1837, a period of twenty-two years, 
 there was no resort to this remedy for the relief of 
 the Government finances. In 1836, the charter of 
 the second Bank of the United States expired, and 
 again party spirit prevented a recharter. Soon after 
 came the financial disasters of 1837, and again the Ad- 
 ministration recommended, and Congress authorized, 
 the issue of interest-bearing Treasury notes as forms of 
 short loans. These issues extended from 1837 to 1844, 
 and during that period the views of many, as to the 
 constitutionality of their use, considerably expanded. 
 The discussions in Congress, and the executive docu- 
 ments of that day, show how severe was the strug- 
 gle between the strict constructionists and those who 
 
VI PREFACE. 
 
 were in favor of a view of the Constitution giving 
 wider powers to Congress. 
 
 During the Mexican war, 1846-1847, the plea of 
 iieeessity secured congressional authority for another 
 issue of interest-bearing Treasury notes. The financial 
 panic of 1857 again caused Congress to consider such 
 notes as the only remedy for the existing distress. 
 
 It remained for the Civil war, however, to bring 
 such pressure that all remaining constitutional scru- 
 ples were swept away. Until 1862 no notes had 
 been issued with the legal-tender quality. All propo- 
 sitions to make Government paper a legal tender had 
 been rejected almost with contempt by Congress. In 
 1862, however, the first Legal-tender Act was passed, 
 and for the first time, notes having the quality of legal 
 tender, and intended to circulate as money, were is- 
 sued by the United States Treasury. These notes 
 were at first fundable in United States bonds, and had 
 not this provision been afterward repealed by Con- 
 gress, they would, like previous issues of Treasmy 
 notes, have soon disappeared from circulation. By this 
 repeal they were made a permanent circulation. Then 
 came the decision of the United States Supreme Court, 
 reversing a former decision and making them a legal 
 tender for all debts — for those contracted before the 
 passage of the Legal-tender Act as well as for those 
 contracted after that date. This decision, however, 
 
PREFACE. vii 
 
 based the constitutionality of legal-tender notes upon 
 the war powers of Congress. This still left open the 
 question whether such notes issued in time of peace 
 were constitutional, and the Supreme Court has now 
 settled that, under the Constitution, Congress has 
 power, if it deems it expedient, to issue legal-tender 
 money to any amount, either in time of peace or war. 
 
 The chapter upon the distribution of the surplus 
 money of the United States is, it is believed, the first 
 complete history of that subject. It serves to illus- 
 trate the subject of United States notes. The crisis of 
 1837, which at that time was deemed sufficient cause 
 for the issue of the latter, can be readily traced to the 
 withdrawal of the surplus from the banks to distribute 
 it among the States. 
 
 The late decision of the Supreme Court on tli<5 legal- 
 tender question, and the dissenting opinion, on account 
 of their importance, are given in an Appendix. 
 
 A considerable portion of the material in the present 
 volume was contained in the third volume of the 
 "Cyclopaedia of Political Science and Political Econ- 
 omy," recently published by M. B. Gi»ry & Co., of 
 Chicago ; and by their courtesy, and with their consent, 
 it is given to the public yi this convenient form. 
 
 In addition to the authorities quoted, the following 
 have been consulted: American State Papers; Annals 
 of Congress ; Madison Papers ; Elliot's Debates ; Con- 
 
VIU PREFACE. 
 
 gressional Globe ; Bolles' Financial History o£ the 
 United States; ISTational Loans of the United States, 
 by E. A. Bayley ; Annual Cyclopaedia ; Hunt's Mer- 
 chants' Magazine ; Bankers' Magazine ; Schucker's Life 
 of Chase; Spaulding's Legal- tender Paper Money; 
 Newspapers, 1861, 1862, 1863. 
 
 J. J. Ja.. 
 
 WASHiNGTOiir, April 30, 1884. 
 
COIJI'TEJS'TS. 
 
 PAGJ 
 
 PEBFACE, ui 
 
 CHAPTER L 
 Colonial Paper Monet, 1 
 
 CHAPTER II. 
 Paper Monet axjthokized bt the Continental Congbbss, 9 
 
 CHAPTER m. 
 Bills of Credit in the Federal Convention, , . .1? 
 
 CHAPTER rv. 
 
 Treasury Notes authorized under the Constitution, . ir 
 
 CHAPTER V. 
 Treasury Notes op the War op 1813 21 
 
 CHAPTER VI. 
 
 Treasury Notes op the Period op the Financial Crisis 
 OF 1837, 40 
 
X CONTENTS. 
 
 CHAPTER VIT. 
 
 PAGE 
 
 Treasury Notes of the Period of the Mexican War, 63 
 
 CHAPTER VUX 
 
 Treasury Notes of the Buchanan Administration, . 70 
 
 CHAPTER rx. 
 
 'JiBEAsuRT Notes op the Period of the Citil Wab, . 80 
 
 CHAPTER X. 
 The Silver Dollar and the Silver Certificate, . . 148 
 
 CHAPTER XI. 
 
 The Legal-tender Cases in the Supreme Court of the 
 United States 156 
 
 CHAPTER XII. 
 The Distribution of the Surplus among the States, . 167 
 
 APPENDIX 193 
 
 INDEX 23J 
 
UST OF FAC-SIMILES AND FOEMS OF 
 TEEASUEY NOTES. 
 
 Form of One Hundred Dollar Note, Act February 24, 1815, 
 bearing interest at 5f per cent., or one cent and one- 
 half a cent per day. Page 35 
 
 Form of Five Dollar Note, Act February 24, 1815, fund- 
 able into seven per cent, bonds. Page 36 
 
 Form of One Hundred DoUar one year Note, Act March 
 31, 1840, bearing interest at five per cent. Page 47 
 
 Form of One Hundred Dollar one year Note, Act July 22, 
 1846, bearing interest at 5| per cent. Page 65 
 
 Form of One Hundred Dollar two years Note, Act January 
 28, 1847, bearing interest at six per cent. Page 67 
 
 Form of One Hundred Dollar one year Note, Act Decem- 
 ber 23, 1857, bearing interest at three per cent. 
 
 Page 73 
 
 Form of Fifty Dollar two years Note, Act March 2, 1861, 
 bearing interest at sis per cent. Page 81 
 
 Form of Ten Dollar Note, being the first Demand Notq 
 ever issued by the United States, Act July 17, 1861. 
 
 Page 91 
 
/ 
 
 xii FAC-aiMILES OF TBEASURT NOTES. 
 
 Form of Seven-thirty Fifty Dollar three years Note, in- 
 terest one cent per day, Act March 3, 1865. Page 101 
 
 Form of Five Cent Postage Currency and Reverse, re- 
 ceivable for Postage Stamps, Act July 17, 1862. 
 
 Page 105 
 
 Form of Ten Cent Postage Currency and Reverse, Act 
 July 17, 1862. Page 106 
 
 Form of Twenty-five Cent Postage Currency and Reverse, 
 Act July 17, 1862. . Page 107 
 
 Form of Fifty Cent Postage Currency and Reverse, Act 
 July 17, 1862. ^ Page 108 
 
 Form of Compound Interest three years Ten Dollar Note, 
 bearing interest at six per cent., compounded semi- 
 annually, Act June 30, 1864 Page 111 
 
 Form of Reverse of Note, giving interest for each six 
 months. Page 112 
 
UNITED STATES NOTES. 
 
 CHAPTER I. 
 
 COLONIAL PAPEE MONET. 
 
 PftEvioTJS to the Eevolutionary War paper money was 
 issued to a greater or less extent by each one of the 
 thirteen colonies. The first issue was by Massachusetts 
 in 1690, to aid in fitting out the expedition against 
 Canada. Similar issues had been made by New Plamp- 
 shire, Ehode Island, Connecticut, New York, and New 
 Jersey, previous to the year 1711. South Carolina 
 began to emit bills in 1712, Pennsylvania in 1723, 
 Maryland in 1734, Delaware in 1739, Yirginia in 1755, 
 and Georgia in 1760. Originally the issues were au- 
 thorized to meet the necessities of the colonial treasuries. 
 In Massachusetts, in 1715, as a remedy for the 
 prevailing embarrassment of trade, a land bank was 
 proposed with the right to issue circulating notes se- 
 cured by land. John Colman, a merchant of Boston, 
 urgently advocated its establishment. The land bank 
 was forbidden by the Province Council, unless author- 
 ized by the General Assembly. There was a large party, 
 1 
 
2 UNITED STATES NOTES. 
 
 however, in favor of paper money in some form. The 
 plan for the land bank was defeated, bnt the issue of 
 paper money by the treasury was authorized to the ex- 
 tent of £50,000, to be loaned on good mortgages in 
 sums of not more than £500, nor less than £50, to one 
 person. The rate of interest was 5 per cent., payable 
 with one-fifth of the principal, annually. The bills 
 were in form the same as those previously issued for 
 the benefit of the treasury. This round sum or aggre- 
 gate of £50,000, to be so loaned, was styled a bank, and 
 was the first of the so-called loan banks, which were 
 afterward authorized by nearly, if not quite, all of the 
 colonies. In 1Y33 an issue of bills to the amount of 
 £110,000 was made by the merchants of Boston, which 
 were to be redeemed at the end of ten years, in silver, 
 at the rate of 19 shillings per ounce. In 1739, the com- 
 mercial and financial embarrassment still continuing, 
 another land bank was started in Massachusetts. John 
 Colman was one of the corporators. The stock of the 
 land bank was to be £150,000. No one was permitted 
 to subscribe more than £2,000, nor less than £100. The 
 subscribers were to pay down lawful money at the rate 
 of 40 shillings for every £1,000 subscribed, and for the 
 remainder were to pledge security in lands to the satis- 
 faction of the directors. They were to pay 3 per cent, 
 interest per annum, either in bills of the bank or in 
 produce and manufactures, at prices regulated by the 
 directors. Circulating notes equal to the capital were 
 to be issued, payable in twenty years in produce or 
 manufactures, and 5 per cent, of the capital was to be 
 paid annually in the notes, produce, or articles manu- 
 factured. The "manufactures, being the produce of 
 
FIRST PAPER MOJSTET ISSUED; BUBBLE ACT- 3 
 
 this province," were enumerated as follows : ' " Hemp, 
 flax, cordage, bar iron, cast iron, linens, sheep's wools, 
 copper, tanned leather, flaxseed, beeswax, bayberry 
 wax, sail cloth or canvas, nails, tallow, lumber or cord 
 wood, or logwood from New Spain." This scheme 
 was strenuously opposed by Governor Eelcher, but in 
 spite of all opposition £49,250 of its notes were struck 
 off, of which the treasurer of the company issued 
 £35,582, and £4,067 were employed by the directors in 
 trade. 
 
 A specie bank was also formed in 1739, by Edward 
 Hutchinson and others, which issued bills to the amount 
 £120,000, redeemable in fifteen years in silver, at 20 shil- 
 lings per ounce, or gold pro rata. The payment of these 
 notes was guaranteed by wealthy and responsible mer- 
 chants. These notes, and those of a similar issue in 1733, 
 were largely hoarded and did not pass generally into 
 circulation. 
 
 In 1740 Parliament passed a bill to extend the act of 
 1720, known as the bubble act, to the American colonies, 
 with the intention of breaking up all companies formed 
 for the purpose of issuing paper money. Under this 
 act both the land bank and the specie bank were forced 
 to liquidate their affairs, though not without some re- 
 sistance on the part of the former. Tlie Governors of 
 Massachusetts rendered themselves very obnoxious to 
 the people by their determined opposition to these banks 
 and to paper money generally," and Governor Belcher 
 
 ' An Historical Account of Massachusetts Currency, p. 103. By 
 Joseph B. Felt. Boston, 1839. 
 
 '' The History of Massachusetts Bay, vol. ii. , p. 396. By Lieutenant- 
 Governor Hutchinson. Boston, 1767. 
 
4 UNITED STATES NOTES. 
 
 was recalled to England on account of misrepresentations 
 of tlie paper money advocates, but was subsequently ap- 
 pointed Governor of J!^ew Jersey. 
 
 The paper money of the colonies, whether issued by 
 them or by the loan banks, depreciated almost without 
 exception as the amounts in circulation increased. The 
 bills as originally emitted were intended to be equal to 
 coin, but when depreciation advanced to such an extent 
 as to appal the authorities, a new set of bills would be 
 issued, with new assurances that they would be kept 
 equal to coin. In these new bills the old bills would be 
 redeemable at their depreciated value. Sometimes this 
 second set of bills, having also depreciated, was replaced 
 by a third set in the same way. These various sets were 
 designated tenors ; the terms old tenor, middle tenor, 
 new tenor, new tenor 1st, new tenor 2d, being used to 
 distinguish them. To give all the details of the depre- 
 ciation of this currency in each of the colonies would re- 
 quire much space ; but the best authorities agree that it 
 underwent in all cases a constant diminution in value, 
 inflicting loss and misery upon all classes of citizens. 
 Pelatiah "Webster says of this paper and the Continental 
 currency : " "We have.suffered more from this cause than 
 from any other cause or calamity. It has killed more 
 men, pervaded and corrupted the choicest interests of 
 our country more, and done more injustice than even the 
 arms and artifices of our enemies." The following table' 
 gives the price of £100 in coin in the currencies of the 
 several colonies in the year 1748 : 
 
 ' A Short History of Paper Money and Banking in the United 
 States, p. 10. By Wm. M. Gouge. Philadelphia, 1833. 
 
VALUE OF PAPER MONEY IN COIN. 
 
 New England £1,100 
 
 New York 190 
 
 New Jersey £180 to 190 
 
 Pennsylvania 180 
 
 Maryland , . 200 
 
 North Carolina 1,000 
 
 South Carolina 750 
 
 Virginia £130 to 125 
 
 The emission of bills by the coloTiies and the banks was 
 not regarded with favor by the mother comitry, and the 
 provincial governors were as a general thing opposed to 
 these issues. They were consequently frequently em- 
 broiled with their legislatures. Felt, in his " Massachu- 
 setts Currency," gives examples of this controversj-. 
 Governor Belcher, in 1740, issued the following proclama- 
 tion : " Whereas, a scheme for emitting bills or notes by 
 John Colman, Esq., and others,was laid before the General 
 Court in their session held the 5th of December, 1739, 
 and by a report of a committee appointed by said Court, 
 was represented, if carried on, to have a great tendency 
 to endamage His Majesty's good subjects as to their 
 properties ; and whereas, application has been very 
 lately made to me and His Majesty's Council, by a great 
 number of men of the most considerable estates and 
 business, praying that some proper method may be 
 taken to prevent the inhabitants of this province being 
 imposed upon by the said scheme ; and it being very 
 apparent that these bills or notes promise nothing of 
 any determinate value, and can not have any general, 
 certain or established credit ; wherefore, I have thought 
 fit, by arid with the advice of His Majesty's Council, to 
 issue this proclamation, hereby giving notice and warn- 
 
6 UNITED STATES NOTES. 
 
 ing to all His Majesty's good subjects of the danger they 
 are in, and cautioning them against receiving or passing 
 the said notes, as tending to defraud men of their sub- 
 stance and to disturb the peace and good order of the 
 people, and to give great interruption and bring much 
 confusion into their trade and business." 
 
 Subsequently, on November 6, of the same year, being 
 assured that part of the military corps encouraged the 
 circulation of the land bank paper, he published the fol- 
 lowing : " I hereby warn all commissioned oflBcers in the 
 militia from signing or giving any countenance to the 
 passing of the said notes of hand, directly or indirectly. 
 And as It apprehend that if these should obtain a cur- 
 rency, it will reflect great dishonor on His Majesty's Gov- 
 ernment here, and be very detrimental to the public in- 
 terests of this province and people, I do hereby declare 
 my firm resolution, that if after this publick notice given, 
 any of the military oflBcers of this province persist in 
 being any way concerned in or giving any encouragement 
 whatsoever to the passing of the said notes of hand, and 
 full proof be made thereof to xny satisfaction, I will im- 
 mediately dismiss them from their said offices." These 
 proclamations had but little effect. A gentleman writing 
 to a correspondent in London, imder date of February 
 27, 1741, says : " 'Whole troops, nay almost whole regi- 
 ments either resigned or told their colonels, who ex- 
 amined them, that they would resign rather than not 
 encourage the bills." Later in the same year Governor 
 Belcher 'writes to Thomas Hutchinson : " You say it 
 would be much better if some other way than by appli- 
 cation to Parliament could be found to suppress it (land 
 bank). I assure you, the concerned openly declare they 
 
PAPER MONEY A CAUSE OF THE BEVOLUTION. T 
 
 defy any act of Parliament to be able to do It. They 
 are grown so brassy and hardy as to be now combining 
 in a body to raise a rebellion, and the day set for their 
 coming to this town is at the election, and their treas- 
 nrer, I am told, is in the bottom of the design, and I 
 donbt it not. I have this day sent the sheriff and his 
 officers to apprehend some of the heads of the conspir- 
 ators." 
 
 These continued disputes, which largely curtailed the 
 use of an expedient which the colonists considered 
 necessary to their prosperity, together with the action 
 of Parliament in restricting the issue of paper money, 
 embittered the minds of the colonists against England, 
 and had undoubtedly much to do with the final out- 
 break. The Bubble Act, which laid an interdict on all 
 banking associations having no legal charter within the 
 dominions of the king, was passed by Parliament in 
 1720. In 1740 another enactment was made, extending 
 the provisions of the act of 1720 to tlie American colo- 
 nies, where it had been disregarded. Banking in those 
 days consisted merely in the pi-ivilege of issuing circu- 
 lating notes, and this act restricted all private enter- 
 prises of this kind. On June 25, 1751, Parliament 
 enacted a law forbidding paper money of the colonies 
 to be passed, except for current expenses of the Govern- 
 ment each year, or in case of invasion by the enemy. 
 It seeme also that these exceptional cases, where paper 
 money was permitted, were to be under control of the 
 Crown, as Mr. BoUan, the agent in London of the prov- 
 ince of Massachusetts, writes that he opposed the bill 
 on the ground that it might open the way for the un- 
 constitutional exercise of the king's authority in the 
 
8 UNITED STATES NOTES. 
 
 colonies in other matters. Legal tender paper money 
 was prohibited by this act of Parliament, and in 1763 
 such issues were declared void ; but subsequently, in 
 1773, they were allowed to be received as legal tendei 
 at the treasuries of the several colonies. 
 
CHAPTER II. 
 
 PAPER MOJSTEY AUTHOEIZED BY THE CONTINENTAL CON- 
 GRESS. 
 
 The second Continental Congress was convened in 1775, 
 and, in order to raise funds, Laving no power to insti- 
 tute taxation, naturally turned toward tlie expedient of 
 an emission of paper money on tlie credit of the Union, 
 but in the redemption of which each colony was to bear 
 a part. The first ' issue was made in June, 1775. For 
 a year these issues continued equal to gold ; in two 
 years they had depreciated to 2 for 1 ; in three years to 
 4 for 1 ; in nine months more their relative value was 
 10 for 1 ; in September, 1779, it was 20 for 1. Con- 
 gi'ess now determined that the total issues should not 
 exceed $200,000,000, and renewed the declaration that 
 this currency should be redeemed in full, and went to 
 some labor to prove that the States had the ability to do 
 so. In March, 1780, these issues had so depreciated 
 that their value, as compared with specie, was as 40 to 1. 
 Congress now required the whole to be brought in for 
 redemption at its market value in coin, and also author- 
 ized the emission of new notes bearing interest at 5 per 
 cent., and payable six years from date in silver and gold. 
 These were to be exchanged in the proportion of 1 
 dollar of the new for 20 dollars of the old euiission. 
 1* 
 
10 UNITED STATES NOTES. 
 
 During the year 1780 the notes of the old issue sank 
 first to 75 to 1, then ceased to circulate in the States 
 north of the Potomac. In Virginia and North Carolina 
 they passed for a year longer, and finally depreciated to 
 1,000 to 1, and then ceased to circulate. 
 
 According to Thomas Jefferson, but 200 millions of 
 the first emission was issued, which was the amount au- 
 thorized by resolution of Congress ; but other authorities 
 state the amount much higher. Joseph Nourse, register 
 of the treasury in 1828, places it at $241,552,780. The 
 amount as given in the treasury statement of 1843 was 
 $242,100,176. The aggregate loss to the people of the 
 country from this currency was estimated by Secretary 
 "Woodbury at $196,000,000. During the war paper 
 money, distinct from the continental currency, was also 
 issued by several of the States. The amount thus issued 
 has been placed at $209,000,000, which is probably too 
 high. It is, however, difficult to obtain exact informa- 
 tion in reference to these emissions. 
 
 At the close of the war the minds of all classes were 
 imbued with a wholesome antipathy to paper money, and 
 as a consequence, when the Federal Constitution was un- 
 der consideration, the power to emit bills, which in the 
 original draft was given to the United States, was strick- 
 en out. Moreover, the original draft having contained 
 a qualified permission to the States to issue paper money, 
 an amendment was inserted which took away from the 
 States all power to coin money, emit bills of credit, or 
 make anything but gold or silver coin a tender in pay- 
 ment of debts. It has been held that the lack of power 
 on the part of a State to coin money, taken in connection 
 with the prohibition of the emission of bills, prevents the 
 
VIEWS OH' WEBSTER AND STORY. 11 
 
 issue of paper money by banks chartered by the State, as 
 well as such issue by the State itself. This view was held 
 by Daniel "Webster, in his speech on the Bank of the 
 United States, on the 26th and 28th of May, 1832, and 
 his arguments are quoted with commendation by Mr. 
 Justice Story, in his commentaries on the Constitution, 
 as follows: "It will be hereafter seen that this (the 
 power to coin money) is an exclusive power in Congress, 
 the States being expressly prohibited from coining money. 
 And it has been said by an eminent statesman that it 
 is difficult to maintain, on the face of the Constitution it- 
 self, and independent of long-continued practice, the doc- 
 trine that the States, not being at liberty to coin money, 
 can authorize the circulation of bank paper as currency 
 at all. His reasoning deserves grave consideration, and 
 is to the following effect : The States cannot coin money. 
 Can they, then, coin that which becomes the actual and 
 almost universal substitute for money ? Is not the right 
 of issuing paper intended for circulation in the place and 
 as the representative of metallic currency, derived merely 
 from the power of coining and regulating the metallic 
 currency ? Could Congress, if it did not possess the power 
 of coining money and regulating the value of foreign 
 coins, create a bank with the power to circulate bills ? It 
 would be difficult to make it out. Where, then, do the 
 States, to whom all control over the metallic currency is 
 altogether prohibited, obtain this power ? It is true that 
 in other countries private bankers, having no legal author- 
 ity over the coin, issue notes for circulation. But this they 
 do always with the consent of the Government, express or 
 implied ; and Government restrains and regulates all their 
 operations at its pleasure. It would be a startling propo 
 
12 UNITED STATES NOTES. 
 
 sition in any other part of the world, that the prerogative 
 of coining money held by the Government was liable to 
 be defeated, counteracted, or impeded by another pi-e- 
 rogative, held in other hands, of authorizing a paper cir- 
 culation. It is further to be observed that the States 
 cannot issue bills of credit ; not that they cannot make 
 them a legal tender, but that they cannot issue them at 
 all. This is a clear indication of the intent of the Con- 
 stitution to restrain the States as well from establish- 
 ing a paper circulation as from interfering with the 
 metallic circulation. Banks have been created by States 
 with no capital whatever, their notes being put in circu- 
 lation simply on the credit of the State. What are the 
 issues of such banks but bills of credit issued by the 
 State ? " Mr. Justice Story says : " This opinion was 
 not peculiar to Mr. Webster ; it was maintained also by 
 Hon. Samuel Dexter, one of the ablest statesmen and 
 lawyers who have adorned the annals of the country." 
 
 Nearly thirty years after, Chief Justice Chase, when 
 Secretary of the Treasury, in his report to Congress, of 
 December 9, 1861, said: "It has well been questioned 
 by the most eminent statesmen, whether a currency of 
 bank notes, issued by local institutions under State laws, 
 is not, in fact, prohibited by the national Constitution. 
 Such emissions certainly fall within the spirit, if not 
 ■within the letter, of the constitutional prohibition of the 
 emission of bills of credit by the States, and of the mak- 
 ing by them of anything except gold and silver coin, a 
 legal tender in payment of debts." 
 
CHAPTER III. 
 
 BILLS OF CEEDIT DT THE FEDEEAL CONVENTION. 
 
 The committee appointed by the Federal Convention held 
 in Philadelphia on May 14, 1Y87, reported, on August 
 6, a draft of the Constitution, which contained, in article 
 thirteen, a clause giving qualified authority to the States 
 to issue paper money, as follows : " No State without 
 the consent of the Legislature of the United States shall 
 emit bills of credit, or make anything but specie a ten- 
 dor in payment of debt." This clause, after discussion, 
 was finally so amended as to read as follows : " No State 
 shall coin money, emit bills of credit, make anything 
 but gold and silver coin a tender in payment of debts." 
 The eighth clause of the first section of the seventh 
 article of the Constitution, as presented for the consid- 
 eration of the Convention, provided that " the Legislature 
 of the United States shall have power to borrow money, 
 and emit bills on the credit of the United States." This 
 clause, as embodied in the eighth section of the first 
 article of the Constitution as finally adopted, reads, 
 " The Congress shall have power to borrow money on 
 tlie credit of the United States." The debate' on 
 the question of striking out the words " and emit bills," 
 is important, for the reason that the subject of making 
 
 ' Madison papers, vol. iii., p. 1343. 
 
14 UNITED STATES NOTES. 
 
 bills of credit issued by the Government a legal tender, 
 was there for the first time discussed, and was not sub- 
 sequently at any time, as far as I am aware, discussed at 
 any length by Congress, though it was twice presented 
 for its consideration, until the Legal Tender acts of 1862 
 were brought before Congress for its consideration. 
 This debate was as follows : 
 
 " Mr. Gouverneur Morris moved to strike out, ' and 
 emit bills on the credit of the United States.' If the 
 United States had credit, such bills would be unneces- 
 sary ; if they had not, unjust and useless. Mr. Butler 
 seconds the motion. Mr. Madison: Will it not be suffi- 
 cient to prohibit the making them a tender ? This will 
 remove the temptation to emit them with unjust views. 
 And promissory notes, in that shape, may in some emer- 
 gencies be best. Mr. Gouverneur Morris : Striking 
 out the words will leave room still for notes of a re- 
 sponsible minister, which will do all the good without the 
 mischief. The moneyed interest will oppose the plan of 
 Government, if paper emission be not prohibited. 
 
 "Mr. Gorharn was for striking out without inserting 
 any prohibition. If the words stand, they may suggest 
 and lead to the measure. Mr. Mason had doubts on the 
 subject. Congress, he thought, would not have the 
 power, unless it were expressed. Though he had a mor- 
 tal hatred to paper money, yet as he could not foresee 
 all emergencies, he was unwilling to tie the hands of the 
 Legislature. He observed that the late war could not 
 have been carried on, had such a prDliibition existed. 
 Mr. Gorham : The power, as far as it will be necessary 
 or safe, is involved in that of borrowing. 
 
 " Mr. Mercer was a friend to paper money, though 
 
BILLS OF CREDIT IN FEDERAL CONVENTION. 15 
 
 in the present state and temper of America, lie should 
 neither propose nor approve of such a measure. lie 
 was consequently opposed to a prohibition of it alto- 
 gether. It will stamp suspicion on the Government, to 
 deny it a discretion on this point. It was impolitic, 
 also, to excite the opposition of all those who were 
 friends to paper money. The people of property 
 would be sure to be on the side of the plan, and it was 
 impolitic to purchase their further attachment with 
 the loss of the opposite class of citizens. Mr. Ellsworth 
 thought this a favorable moment to shut and bar the 
 door against paper money. The mischiefs of the vari- 
 ous experiments which had been made were now fresh 
 in the public mind, and had excited the disgust of all 
 the respectable part of America. By withholding the 
 power from the new Grovernment, more friends of influ- 
 ence would be gained to it than by almost anything else. 
 Paper money can in no case be necessary. Give the 
 Government credit, and other resources will offer. The 
 power may do harm, never good. Mr. Randolph, not- 
 withstanding his antipathy to paper money, could not 
 agree to strike out the words, as he could not foresee all 
 the occasions that might arise. 
 
 " Mr. Wilson : It will have a most salutary influence 
 on the credit of the United States to remove the possi- 
 bility of paper money. Tliis expedient can never suc- 
 ceed while its mischiefs are remembered. And as long 
 as it can be resorted to, it will be a bar to other resources. 
 Mr. Butler remarked that paper was a legal tender in 
 no country in Europe. He was urgent for disarming 
 the Government of such a power. Mr. Mason was still 
 averse to tying the hands of the Legislature altogether. 
 
16 UNITEB STATES NOTES. 
 
 If there was no example in Europe, as just remarked, it 
 might be observed, on the other side, that there was 
 none in which the Government was restrained on tliis 
 head. Mr. Kead thought the words, if not struck out, 
 would be as alarming as the mark of the beast in Keve- 
 lation. Mr. Langdon had rather reject the whole plan 
 than retain the three words, 'and emit bills.' 
 
 " On the motion for striking out, New Hampshire, 
 Massachusetts, Connecticut, Pennsylvania, Delaware, 
 Virginia, North Carolina, South Carolina, Georgia, aye 
 —9; New Jersey, Maryland, no — 2. The clause for 
 borrowing money was agreed to, nem. con. Adjourned." 
 
 Nine States voted to strike out, and two States to re- 
 tain. Yirginia voted in the affirmative, and in explana- 
 tion of his vote, Mr. Madison appended the following 
 note : " This vote in the affirmative by Virginia was oc- 
 casioned by the acquiescence of Mr. Madison, who be- 
 came satisfied that striking out the words would not 
 disable the Government from the use of public notes as 
 far as they could be safe and proper, and would only 
 cut off the pretext for & joaper currency, axiA particularly 
 for making the bills a tender either for public or private 
 debts." 
 
 Mr. Martin, of Maryland, a delegate to the Federal 
 Convention, who was in favor of retaining the words, in 
 his address to the Legislature of his own State, soon 
 after the proceedings of the Convention, said:' "By 
 
 ' "The Genuine Information delivered to the Legislature of Mary- 
 land, relative to the Proceedings of the General Convention lately 
 held at Philadelphia, ty Luther Martin, Esq., Attorney General of 
 Maryland, and one of the Delegates in the said Convention. Phil' 
 adelphia: printed hy Eleazer Oswald, at the Coffee House. 1788." 
 
PHILIPPIG OF DELEGATE MARTIN, OF MB. 17 
 
 our original articles of confederation, the Congress 
 have a power to borrow money and emit bills of 
 credit on the credit of the United States ; agreeable 
 to which was the report on this system as made by the 
 Committee of Detail. When we came to this part of the 
 report, a motion was made to strike out the words, ' to 
 emit bills of credit ; ' against the motion we urged that 
 it would be improper to deprive the Congress of that 
 power ; that it would be a novelty unprecedented to es- 
 tablish a government which should not have such au- 
 thority. That it was impossible to look forward into 
 futurity so far as to decide that events might not hap- 
 pen tliat should render the exercise of such a power ab- 
 solutely necessary. And that we doubted whether, if a 
 war should take place, it would be possible for this coun- 
 try to defend itself without having recourse to paper 
 credit, in which case there "w^ould be a necessity of be- 
 coming a prey to our enemies, or violating the Constitu- 
 tion of our Government; and that, considering the ad- 
 ministration of the government would be principally in 
 the hands of the wealthy, there could be little reason to 
 fear an abuse of the power by an unnecessary or injuri- 
 ous exercise of it. But, sir, a majority of the Conven- 
 tion, being wise beyond every event, and being willing 
 to risque any political evil rather than admit the idea 
 of a paper emission, in any possible case, refused to 
 trust this authority to a Government to which they were 
 lavishing the most unlimited powers of taxation, and to 
 the mercy of which they were willing blindly to trust 
 the liberty and property of the citizens of every State 
 in the Union ; and they erased that clause from the sys- 
 tem." 
 
18 UNITED STATES NOTES. 
 
 Forty-eight years later, in a speech in the Senate on the 
 famous "specie circular" in 1836, Daniel Webster said : 
 " Most unquestionably there is no legal tender, and 
 there can be no legal tender in this country, under the 
 authority of this Government or any other, but gold and 
 silver, either the coinage of our own mints or foreign 
 coins at rates regulated by Congress. This is a Constitu- 
 tional principle, perfectly plain and of the highest im- 
 portance. The States are expressly prohibited from 
 making anything but gold and silver a legal tender in 
 payment of debts, and although no such express pro- 
 hibition is applied to Congress, yet, as Congress has no 
 power granted to it in this respect but to coin money 
 and to regulate the value of foreign coins, it clearly has 
 no power to substitute paper or anything else for coin 
 as a tender in payment of debts and in discharge of 
 contracts. Congress has exercised this power fully in 
 both its branches ; it has coined money, and still coins 
 it ; it has regulated the value of foreign coins, and still 
 regulates their value. The legal tender, therefore, the 
 constitutional standard of value, is established and can- 
 not be overthrown. To overthrow it would shake the 
 whole system." 
 
CHAPTEE IV. 
 
 TEEASUEY NOTES ATJTHOEIZBD UNDEE THE CONSTITUTION. 
 
 The Constitution was adopted on September 17, 1T87, 
 and three years thereafter, Hamilton, in his report of 
 December 13, 1790, on a national bank, said : " Tho 
 emitting of paper money by the authority of Government 
 is wisely prohibited to the individual States by the 
 national constitution ; and the spirit of that prohibition 
 ought not to be disregarded by the Government of the 
 United States. Though paper emissions, under a gen- 
 eral authoritj^, might have some advantages not applica- 
 ble, and be free from some disadvantages which are ap- 
 plicable, to the like emissions by the States separately, yet 
 they are of a natiu-e so liable to abuse — and, it may even 
 be affirmed, so certain of being abused— that the wis- 
 dom of the Government will be shown in never trusting 
 itself with the use of so seducing and dangerous an ex- 
 pedient." Although notes of different forms were issued 
 subsequently by the Government at various dates, some 
 of which were receivable for all dues payable to the 
 Government, no circulating notes were authorized to be 
 issued which were payable on demand in coin, until the 
 passage of tlie act of July 17, 1861, which authorized 
 the issue of fifty millions of notes payable " on demand " 
 and "receivable in payment of all public dues ; " and no 
 circulating notes were authorized, which by the terms of 
 law were made a full legal tender, until the passage of 
 the act of February 25, 1862, which was nearly seventy- 
 five years after the adoption of the Constitution. Some 
 
20 UNITED STATES N02ES 
 
 of the treasury notes, issued since the adoption of the 
 Constitution, and previous to the passage of the Legal 
 Tender act, were receivable for all dues to the Govern- 
 ment, and others not ; some were payable at a fixed date, 
 both with and without interest ; some were fundable at 
 any time after the date of their issue, others at a fixed 
 date in United States bonds. 
 
 During the late civil war, treasury notes were also is- 
 sued of all these different forms, and also notes payable 
 on demand, receivable for all dues to the Government, 
 and others payable to bearer, not receivable for duties on 
 imports, or payable by the Government for interest upon 
 the public debt, but in every other respect a full legal 
 tender to and by the Government, and between the people 
 iu all payments. Postage currency was also issued, re- 
 ceivable in payment of all dues less than five dollars ; and 
 f i-actional currency, which was " excliangeable for United 
 States notes " in sums of not less than three dollars. 
 
 ITo notes were issued from 1789 to 1812, a period 
 of twenty-three years. Notes bearing interest were 
 issued in the years 1812, 1813, 1814 and 1815, and at 
 various dates from 1837 to 1847. They were again 
 issued in 1857, and subsequently, in the years 1860, 1861 
 and thereafter. The periods for the issue of these notes 
 may be summarized as follows : first, the war of 1812 ; 
 second, the financial crisis of 1837 ; third, the Mexican 
 war; fourth, the financial crisis of 1857, or during 
 the Buchanan administration ; and fifth, the war of 
 the rebellion. It will thus be seen that there have 
 been four emergencies in which Congress has seen fit 
 to authorize interest-bearing notes, and only one in which 
 it has authorized bills of credit or circulating notes paya- 
 ble on demand in lawful monev. 
 
CHAPTER V. 
 
 TREASURY NOTES OF THE WAR OF 1812. 
 
 The original debt had, at the beginning of 1812, been 
 reduced from seventy-five millions to forty-five millions. 
 In 1810 it was found impossible to meet all of the annual 
 reduction of the debt required by law from the sinking 
 fund, and a temporary loan was authorized to make up 
 the deficiency, which amounted to $2,'750,000. This 
 loan was paid the next year. In 1811, however, re- 
 course was had to a loan, and the one authorized by 
 Congress for that year was taken so slowly, that, in the 
 month of May of the following year the Secretary of 
 the Treasury, for the first time since the adoption of the 
 Constitution, recommended the issue of treasury notes 
 upon the following principle, viz. : " 1. Not to exceed, 
 in the whole, the amount which may ultimately not be 
 subscribed to the loan ; that is to say, that the amount 
 received on account of the loan, and that of the treasury 
 notes, shall not, together, exceed eleven millions ; which 
 limits, therefore, the greatest possible amount of treasury 
 notes to less than $4,900,000. 2. To bear an interest of 
 5|- per cent, a year, equal to one cent and one-half a cent 
 per day on a hundred dollar note. 3. To become pay- 
 able by the treasury one year after the date of their re- 
 spective issues. 4. To be, in the meanwhile, receivable in 
 
22 UNITED STATES NOTES. 
 
 payment of all duties, taxes, or debts, due to the United 
 States." He did not propose that the notes should be 
 fundable in the loan which they were intended to re- 
 enforce. This recommendation of Secretary Gallatin 
 was made in his letter of May 14, 1812, to Mr. Langdon 
 Cheves, chairman of the Committee of "Ways and Means 
 of the House, and, in conformity therewith, a bill was 
 reported by that Committee on June 12, 1812. 
 
 "War was declared against Great Britain June 18, 1812. 
 The failure of the loan was due to the fact that the 
 money had to be borrowed from the very classes who 
 bad been opposed to the war ; therefore, when the bill 
 for authorizing treasury notes was put upon its passage 
 on June 16, it met with much opposition. It was 
 argued that the notes under the bill were not equal in 
 value to gold and sUver, and would not be received by 
 the banks or the people, who were prejudiced against 
 such Government paper ; that if issued they could not be 
 redeemed, and would depreciate ; that the measure 
 would be subversive of public and private credit ; that 
 it was a confession of impaired credit ; that to allow 
 the notes to be deposited in banks and to accept bank 
 paper in exchange was to depreciate the Government's 
 paper; that if issued, additional taxes should be im- 
 posed and set apart for the redemption of the notes, as 
 in the case of the English exchequer notes ; that the pro- 
 posed notes were the same as the old continental money, 
 and would depreciate in the same way. 
 
 Others opposed the bill simply because they opposed 
 the war or any preparation for it. In case war proved 
 unavoidable the necessary funds should be raised by 
 taxes and loans. The shortness of the time for which 
 
ARGUMENTS FOR AND AGAINST ISSUE OF NOTES 23 
 
 the notes were to be issued was another objection. 
 The public revenues would not meet the engagement, 
 and engagements should not be entered into without a 
 certainty of fulfilment. Taxes were necessary. It was 
 a paltry expedient never suggested by Hamilton or 
 Wolcott, and not even the spontaneous production of 
 Gallatin ; that the first suggestion of the latter was to 
 authorize a loan on such terms as would have insured 
 its success. It Avas a humiliating spect'Scle to exhibit the 
 Government failing in negotiating its first war loan. 
 
 On the other hand, the supporters of the bill main- 
 tained that the notes would be received by the banks in 
 the same manner as any good individual paper was re- 
 ceived. The banks would give the Government credit 
 for them, and in return the Government could draw gold 
 and silver from the banks. The notes would be even 
 more valuable to the latter than specie, as they could be 
 kept as an interest-bearing reserve. They would have 
 currency, being receivable in duties, taxes, and debts due 
 the Government, and, as interest accumulated, they 
 would increase in value. In reply to the suggestions 
 that money should be raised by taxes, it was stated that 
 when, previously, measures of that kind had been pro- 
 posed, the opposition had refused to consent. The 
 issue of treasury notes, bearing interest at 5|- per cent, 
 only, did not indicate bad, but rather good credit. In- 
 dividuals in good credit could not borrow at less than 6 
 per cent. There was no depreciation of Government 
 paper in exchanging the notes for bank paper, as the 
 latter was ready money, while the former were payable 
 one year after date. It was denied that the people had 
 or would have any ja-ejudice against treasury notes. 
 
24 UNITED STATES NOTES. 
 
 They were iiot prejudiced against bank notes, and the 
 proposed notes bearing interest had many advantages 
 over bank paper. The proposed notes would be in no 
 way inferior to exchequer bills ; in fact, it was only 
 want of credit that compelled the English Government 
 to set aside certain revenues to meet the latter. The 
 treasury notes would have two advantages over ex- 
 chequer bills : one, the superior credit of the United 
 States, and the other, that they were receivable for 
 taxes and public dues. They were also superior to pub- 
 lic Stocks, in that, while bearing interest, they also can 
 serve as currency, the same as gold and silver, thus en- 
 hancing the medium of circulation. There was no re- 
 semblance between them and continental money. 
 When the latter was issued, the Government was de- 
 pendent on the pledges of the several States for its 
 revenues, but now its credit was above suspicion, its 
 power to raise revenue complete, and its a,bility to pay 
 its debts undoubted. War was unavoidable. Both 
 loans and taxes would have to be resorted to. The pro- 
 posed notes were nothing but a loan with extraordinary 
 advantages, taking, however, but little fi'om the circulat- 
 ing medium of the country. In many transactions they 
 would have all the effect of monej'. While not secured 
 by any specific fund set apart for their redemption, the 
 entire duties and taxes of the year are indirectly pledged 
 for this purpose, since they are receivable in payment 
 of subh duties and taxes. The revenues of the year 
 were estimated at eight millions, and the proposed issue 
 of notes was five millions only. The faith of the Gov- 
 ernment was pledged for their redemption. That faith 
 had never been violated. The resources of the Govern- 
 
FIRST ISSUES UNDER CONSTITUTION, 1813. 25 
 
 ment were ample beyond those of any other nation. 
 Its sources of revenue were unimproved land, aTpspduc- 
 tive agriculture, an extensive commerce, an enterprising 
 people, and an unlimited right of taxation. The antici- 
 pated abuse of a privilege was. no argument against its 
 legitimate use. 
 
 The bill passed the House June 17, 1812, yeas 83, 
 nays 41. It passed the Senate June 26, and became a 
 law June 30, 1812. Eyit the President was authorized 
 to issue treasury notes to an amount not exceeding 
 $5,000,000. Section two of the first " Act to authorize 
 the issuing of treasury notes," read as follows : " That 
 the said treasury notes shall be reimbursed by the 
 United States, at such places, respectively, as may be 
 expressed on the face of the said notes, one year, re- 
 spectively, after the day on which the same shall have 
 been issued ; from which day of issue they shall bear 
 interest at the rate of five and two-fifths per centum a 
 year, payable to the owner and owners of such notes, at 
 the treasury, or by tlie proper commissioner of loans, at 
 the places and times respectively designated on the face 
 of said notes for the payment of principal." 
 
 They were signed by persons designated by the Presi- 
 dent, and the compensation of these persons was fixed 
 at one dollar and twenty-five cents each for one hundred 
 notes signed. They were countersigned by the Com- 
 missioners of Loans for the State in which the notes were 
 respectively made payable. With the approval of the 
 President, the Secretary of the Treasury was authorized 
 to borrow money upon the security of the notes, and to 
 pay them to such banks as would give the Government 
 credit for them at par. When the notes were paid to 
 3 
 
26 UNITED STATES NOTES. 
 
 collectors of revenue and receivers of public money, the 
 interest ceased on the day of payment. The Commis- 
 sioners of the Sinking Fund were authorized to cause 
 tlie principal and interest to be paid when due, and to 
 purchase them at not more than par, in the same way 
 as they purchased other public securities, with a view of 
 reducing the debt. They were made payable to order, 
 transferable by delivery and assignment on indorsement 
 by persons to whose order they were made payable. 
 The notes were made everywhere receivable for duties, 
 taxes, and in payment of public land, at their par value 
 with accrued interest on the day paid in. Penalties 
 were imposed for counterfeiting them, and an appro- 
 priation made for the expense of printing and preparing 
 the notes. 
 
 There was nothing in the law regulating the denomi- 
 nations in which they should be issued, but, as a matter 
 of fact, none were issued of a denomination of less than 
 one hundred dollars. The largest amount authorized 
 under this act, outstanding at any one time, was five 
 millions. The notes authorized were all issued bef oi-e 
 the end of the year 1813, and were all redeemed during 
 the year 1814. Niles^ Begister for July 4, 1812, in an 
 editorial, thus refers to the issue of these notes. The 
 arguments used in favor of their issue were almost pre- 
 cisely the same as those afterward urged by Chase and 
 Fessenden in favor of the issue of seven-thirty and com- 
 pound-interest notes : 
 
 "To meet any possible exigency from a transient 
 failure of adequate supplies to carry on the war against 
 an unprincipled and inveterate enemy, it has been re- 
 solved to issue certain notes from the treasury depart- 
 
mLES? MEQISTEB FAVOBS TBEASVBT NOTES. 27 
 
 ment, to tlie amount of about five million dollars, bear- 
 ing interest of five and two-fifths per cent, per annum, 
 equal to one and one-half cents per day on every note 
 of $100 — which notes are to become payable at the 
 treasury one year after the date of their respective 
 issues, and in the meantime are receivable (with interest 
 that may have accumulated upon them) in all payments 
 to be made to the United States. 
 
 " This plan appears the most eligible that could possi- 
 bly have been adopted, as it will mutually accommodate 
 the Government and the people, and be advantageous 
 to both. Yet attempts are making (what will not the 
 enemy attempt ?) to depreciate the value of this intended 
 emission, by comparing it with the old continental 
 money. The pitiful design will not avail, for though 
 treasury notes to the value of five millions may issue, 
 the probability is that a ten thousandth part of the 
 population of the United States will never see one of 
 them. The whole will be locked in the vaults of the 
 bank, or snugly put away by individuals as soon as they 
 appear ; because they will be convertible into current 
 money (specie or bank notes) at a moment's notice, and 
 have constantly increasing value. The sum to be issued 
 is so completely within the means of the Government, 
 that these notes will always bear a premium equal to 
 the interest that may have accumulated on them. The 
 city of New York itself, in the course of one year 
 would consume the whole emission. The proposed op- 
 eration of these notes is so perfectly understood by the 
 trading part of the community, particularly on the sea- 
 board, that an explanation of it may well be thought 
 superfiuous ; but as bad men may seize upon them to 
 
28 UNITED STATES NOTES. 
 
 alarm the ignorant and unsuspecting, it appears right 
 we should dffer a few propositions to show their folly 
 and wickedness. A person receives of the United 
 States $10,000 in treasury notes ; if he has no use for 
 the money for ten days, he lays them in his desk for 
 that time — the interest in the interim amounts to $15. 
 He then carries them to a bank and deposits them with 
 other monies, for $10,015, or exchanges them with a 
 friend or neighbor (and in our seaports he can alwaj's 
 find such) who has duties to pay for that amount. Thus 
 the money is never idle, it works night and day, in the 
 language of money lenders, and is constantly accumu- 
 lating. The banks will be glad to receive these notes 
 in exchange for their own ; the advantage is on their 
 side, as the treasury notes bear a daily interest, and their 
 own bear none at all. If the stock should rise to a 
 greater amount than the bank may think it advisable to 
 keep, which can hardly be possible, they are immedi- 
 ately convertible into any kind of money desired, for 
 tlie banks always have customers who will use them in 
 payment of bonds due the United States for duties. 
 They are better as deposits than specie, gold, and silver, 
 for gold and silver lie dormant in the vaults, whereas 
 the treasury notes will be an active capital, every hour 
 becoming more and more valuable, and as fully compe- 
 tent to all the purposes of the banks as specie, because 
 they will produce it. 
 
 " From tliese brief remarks it will appear evident that 
 treasury notes, the moment they are issued, will be 
 hoarded up by the banks, if they can get them ; and 
 very few of us will be alarmed at the sight of one unless 
 we seek it as a matter of curiosity." 
 
ADDITIONAL IB8TIEB IN 1813. 29 
 
 The Secretary estimated that there would be a deficit 
 of nineteen millions for the year 1813. Congress au- 
 thorized sixteen millions of this amount to be obtained 
 by loans, without the usual provision that the bonds 
 should be sold at par, or specifying the rate of interest. 
 The loan was placed with great difficulty, the sixteen 
 millions authorized being obtained from the avails of 
 $18,109,377.43 of stock, bearing interest at six per cent. 
 
 To supply the remainder, a bill was introduced into 
 the House on January 27, 1813, to authorize a new issue 
 of treasury notes. The bill was similar in its provisions 
 to the act of 1812 ; the arguments for and against the 
 measure were in the main the same as those of 1813. 
 The opposition complained that much favoritism had 
 been shown in the dealings with the banks. It was al- 
 leged that among the banks granting credit in return 
 for the treasury notes deposited, as authorized by the 
 law of 1812, were those acting as depositaries of public 
 moneys derived from the deposits of collectors and pub- 
 lic agents ; that this very money so deposited by the 
 Government agents was again loaned to the Government 
 on the credit of treasury notes. On the other hand, it 
 was urged that the use of banks as depositaries was un- 
 avoidable, and that, in any event, banks would receive 
 incidental benefit from keeping Government deposits. 
 Even if a stock loan was substituted for treasury notes 
 the money realized therefrom would be deposited with 
 the same banks until required by the Government. The 
 bill passed the House by a vote of 79 to 41, and the Sen- 
 ate by a vote of 17 to 9, and became a law on February 25, 
 1813. The greatest amount of notes authorized by this 
 act, outstanding at anyone time, was five millions; they 
 
30 UNITED STATES NOTES. 
 
 ■were all redeemable by the first quarter of the calendai 
 year of 1815, but at the close of that quarter only 
 $1,483,900 had been redeemed, and all of the remainder 
 was not finally paid until the year 1820, although the 
 greatest portion was called in by 1817. They were is- 
 sued in denominations of not less than $100. 
 
 An act similar in all respects to that of February 25, 
 
 1813, passed the House by vote of 83 to 48, and the Senate 
 without debate, on March 1, and was approved March 4, 
 
 1814. It authorized the issue of five millions of treasury 
 notes, and of an additional five millions, which, if issued, 
 was to be considered as part of a stock loan for the year, 
 which was subsequently to be authorized. This loan for 
 twenty-five millions M-as authorized on March 24th of the 
 same year, and could only be placed at a large discount. 
 An additional five millions was therefore issued in place 
 of an equal amount of stock, making in all ten millions 
 of treasury notes issued under this act. These notes 
 were for the first time issued in denominations of less 
 than $100, notes of the denomination of twenty dollars 
 being placed in circulation. The whole ten millions 
 were issued previous to June 30, 1815. The policy of 
 Congress seemed to be to keep the authorized issue of 
 treasury notes each year below the amount of the reve- 
 nue of the year, or, if more was authorized, they were to 
 be in lieu of, and to re-enforce, stock loans. 
 
 On December 26, 1814, an act was passed which 
 authorized the issue of $7,500,000 of treasury notes in 
 place of portions of the loans of March 24th and Novem- 
 ber 15th not already placed, and three millions more for 
 the expenses of the War Department. These notes bore 
 the same rate of interest and were for the same time as 
 
LEGAL TENDER A " DESPERATE EXPEDIENT." 31 
 
 those of the act of June 30, 1812, and under this act 
 $8,318,400 of notes were issued, a portion of which was 
 in the denominations of twenties and fifties. 
 
 On August 31, 1814, specie payments were suspended 
 except in New England. The accounts of the Treasury 
 Department show that tliere were outstanding on Sep- 
 tember 30, 1814, $10,649,800 of treasury notes. Mr. 
 Crawford was succeeded in October by Secretary Dallas, 
 and the latter, in his report to the Committee of "Ways 
 and Means on October 17, 1814, said the condition of the 
 circulating medium presented another copious source of 
 mischief and embarrassment. The stock of specie was 
 diminished by exportation, and by its withdrawal into 
 the private coffers of individuals. The multiplication of 
 banks had increased the paper currency, so that it was 
 difficult to calculate its amount, and still more difficult 
 to ascertain its value. Bank currency was of no benefit 
 since the suspension of specie payments, and there virtu- 
 ally existed no circulating medium common to all the 
 citizens of the United States. The money transactions 
 of private individuals were at a stand, and the fiscal opera- 
 tions of the Government labored with extreme inconven- 
 ience. Under favorable circumstances, the limited issue 
 of treasury notes would probably afford relief, but they 
 were an expensive and precarious substitute for coin or 
 bank notes. He concluded by recommending the estab- 
 lishment of a national bank, and added : " But whether ' 
 the issues of paper currency proceed from the national 
 treasury, or from a national bank, the acceptance of the 
 paper in a course of payments and receipts must be for- 
 ever optional with the citizens. The extremity of that 
 day cannot be anticipated, wlien any honest and enlight- 
 
32 UNITED STATES NOTES. 
 
 ened statesman will again venture upon the desperate 
 expedient of a tender law." This statement was called 
 out by a report made by Mr. Eppes, Chairman of the 
 Committee of "Ways and Means of the House, on Octo- 
 ber 10, 1814, in which, in order to secure the circulation 
 of treasury notes, it was recommended that notes of small 
 denominations should be issued, to be funded into 8 per 
 cent, stock, payable to bearer, and transferred by deliv- 
 ery, receivable in all payments for public lands and taxes. 
 The internal revenue taxes were to be pledged for pay- 
 ment of interest, and tliey were to be exchangeable for 
 stock at 8 per cent., or redeemable in specie after six 
 months' notice from the Government. 
 
 On Kovember 24, 1814, in a report to the committee 
 to which a bill for establishing a national bank had 
 been referred, Mr. Dallas mentions, as one of the means 
 at the disposal of the Treasury, the issue of treasury 
 notes, " which none but necessitous creditors, contractors 
 in distress, or Government agents acting officially were 
 willing to accept." He also states that the act of Ko- 
 vember 15, 1814, authorizing treasury notes to be taken 
 in payment for subscriptions to loans, was passed too 
 late ; that the interest on the public debt had not been 
 punctually paid, and that a large amount of treasury 
 notes had already been dishonored. In a subsequent 
 communication of December 14, 1814, he said that the 
 non-payment of treasury notes, and the risk of not pay- 
 ing the interest on tlie funded debt, were chiefly owing 
 to the suspension of specie payments by the banks, and 
 the consequent impracticability of transferring public 
 funds from the place where they were deposited to the 
 place where they were needed. Tlie difficulty referred to 
 
LEGAL TMNBER FIRST PROPOSED IN' CONGRESS. 33 
 
 in meeting the interest npon the public debt was in Bos- 
 ton. A State bank had large Government deposits, and a 
 draft was sent to meet the interest, upon October 1, 1814. 
 The State bank declined paying in coin or bank notes, 
 and the creditors refused to receive the treasury notes 
 that were offered instead. After the suspension, the 
 Government was deprived of the use of specie, and as 
 the banks in each State refused credit and circulation to 
 the notes of banks in other States, no transfer of funds 
 could be made to places where they were wanted to 
 meet treasury notes ; consequently the credit of these 
 notes was lessened,, and creditors refused to accept them 
 in payment. ' 
 
 On November 12, 1814, Mr. Hall, of Georgia, intro- 
 duced in the House a series of five resolutions to revive 
 the credit of treasury notes. The second resolution pro- 
 vided that the notes should be a legal tender between 
 citizens, and between citizens and foreigners, for all debts 
 then due or afterward to become due, which the House 
 refused to consider by a vote of 95 to 42 — more than 
 two-thirds. These resolutions were evidently introduced 
 as measures in opposition to the proposition for a na- 
 tional bank, and the other four resolutions Were subse- 
 quently laid upon the table by a large majority. 
 
 On January 30, 1815, a bill authorizing the issue of 
 treasury notes in accordance with the recommendations 
 of Secretary Dallas in his communication of January 
 17th, was introduced in the House and referred to the 
 Committee of the "Whole. The bill passed the House 
 February 11th, and the Senate February 21st, and was 
 approved February 24, 1815 ; it was the last of a series 
 of five acts, commencing with that of June 30, 1812, the 
 
34 UNITED STATES NOTES 
 
 first four of which had authorized the issue of treasury 
 notes bearing interest at the rate of 5f per cent. The 
 form of the large notes issued under this act, which in 
 size were 1% by Sf inches, is shown on the next pa^e. 
 
 This act authorized the issue and reissue of treasury 
 notes to an amount not exceeding twenty-five millions, 
 upon principles essentially different from those govern 
 ing prior issues. These notes might be of any denomi- 
 nation : if of a denomination less than |100, they were 
 designated as "small treasury notes," were payable to 
 bearer, and bore no interest ; if of a denomination of 
 $100 or upward, they were payable to order, transferable 
 by indorsement, and bore interest at the same rate as 
 those of $100 and upward previously authorized. The 
 "form of the "small treasury notes," in size 6f by 3 
 inches, is shown on page 36. 
 
 These notes were not chargeable upon the sinking fund, 
 as in the case of the first three acts of the series, nor 
 were they payable out of any money in the treasury not 
 otherwise appropriated, as in the previous act of Decem- 
 ber 26, 1814, but rested entirely upon the provision 
 making them fundable into stock. The principal and 
 interest were not payable at any specified time, but the 
 notes were everywhere receivable in all payments to the 
 United States. The act reduced the pay of those sign- 
 ing the notes to seventy -five cents for each one hundred 
 notes, and also provided that treasury notes of previous 
 issue should be fundable into 6 per cent, stock. The 
 holders of the small treasury notes could exchange them 
 at pleasure, in sums of not less than $100, for certificates 
 of funded stock bearing interest at 7 per cent. The 
 treaty of peace was signed on December 14, 1814 but 
 
ONE HUNDRED. 
 
 '^^'"^(^ r^.^^'J^ 
 
 
 aaaaMiiH hno 
 
O -s 
 
 HVTTOa HA 
 
TOTAL NOTES ISSUED DUSUVG WAR OF 1813. 3T 
 
 the news reached "Washington a few days only before 
 the passage of the bill, which, although a war measure, 
 was carried through, inasmuch as it was considered 
 necessary to the regulation of the disordered finances of 
 the country. The whole amount of treasury notes, ab- 
 solute and contingent, which was authorized by these 
 five acts, was $60,500,000, of which amount $36,680,794 
 was issued. The following table exhibits the amount 
 issued under each act : 
 
 Under act of June 30, 1813 $5,000,000 
 
 Under act of February 35, 1813 5,000,000 
 
 Under act of March 4, 1814 10,000,000 
 
 Under act of December 36, 1814 8,318,400 
 
 Under act of February 34, 1815— $100 notes. .$4,960,400 
 Under act of February 34, 1815 — small treas- 
 ury notes 3,393,994 
 
 8,363,394 
 
 Total amount issued $36,680,794 
 
 Although the treasury notes of 1815 of small denomi- 
 nations, originally issued, amounted to only $3,392,994, 
 the law made them fundable into 7 per cent, stock, 
 payable after December 31st ; and as the notes were re- 
 issuable, they were, under various exigencies, again and 
 again paid out, until the whole amount of the 7 per 
 cent, stock issued for the purpose of funding them, 
 amounted to $9,070,386. On account of the high rate 
 of interest of these bonds, the small treasury notes were 
 in demand, and a small amount was sold at a premium 
 of 4 per cent., and $1,365,000 at a premium of 
 $32,107.64, or about 2| per cent. The Secretary, in 
 his annual report for 1815, says : " The treasury notes. 
 
38 UNITED STATES NOTES. 
 
 which were issued under act passed previous to February 
 24, 1815, were, for the most part, of a denomination too 
 high to serve as a current medium of exchange ; and it 
 was soon ascertained that the small treasury notes, 
 fundable at an interest of Y per cent., though of a con- 
 venient denomination for common use, would be con- 
 verted into stock almost as soon as they were issued." ' 
 The notes of $100 and upward, though fundable into 6 
 per cent, bonds, were depreciated from 8 to 10 per cent, 
 belo^ bank notes, which bore no interest, but were re- 
 deemable in specie. 
 
 In recapitulation, it may be stated that the treasury 
 notes of the period of the war of 1812 were issued under 
 five acts of Congress, as stated in the table. The notes 
 of the first three acts were made chargeable to the sink- 
 ing fund — those of the last two, not ; those of the first 
 two acts were in denominations of not less than $100 ; 
 those of the next two were not less than $20 ; and those 
 of the last act were in denominations of $3, $5, $10, $20, 
 $50, $100 and upward. Those of the first three acts 
 were not originally fundable into stock, but were made 
 so by the act of November 15, 1814, and by the subse- 
 quent act of February 24, 1815. The notes of the acts 
 of December 26, 1814, became fundable by the act of 
 February 24, 1815, but those of the last-named act were 
 fundable by the terms of their aiithorization. The notes 
 of all the acts but the last were made payable one year 
 from the date of their issue ; those of the last act were 
 payable at no fixed date. All of these notes (with the 
 exception of the small treasury notes, which were with- 
 
 ' Report of the Secretary of the Treasury, 1815, p. 36. 
 
DEPRECIATION' OF OOVMBNMENT LOANS, 1812-1815. 39 
 
 out interest) bore interest at the rate of 5f per cent. 
 None were in the form of a promise to pay coin on de^ 
 mand, but all in the form of a receipt for all dues pay- 
 able to the Government. None of these notes had any 
 legal tender quality, and Congress, without debate, re- 
 jected the only proposition made to give them this 
 quality. The denominations, except in the case of the 
 small notes of 1816, were too large for general circulation, 
 and the inducements for funding the latter were so great 
 that they were speedily funded into seven per cent, bonds. 
 As long as the banks redeemed their notes in specie, treas- 
 ury notes appear to have been kept at par, but when 
 specie payments were suspended, they began to depreci- 
 ate, but were kept from great discount by the funding 
 acts of November 25, 1814, and February 24, 1815. It 
 is said, " that of eighty millions of loans negotiated by 
 the Government during this period, the avails were 
 only thirty-four millions, after deducting discounts and 
 depreciations.'" After the close of the war, in Decem- 
 ber, 1814, these notes were rapidly funded. 
 
 ' Beport of Committee of Ways and Means, April 13, 1830. 
 
CHAPTER VI. 
 
 TEEASUET NOTES OF THE PEKIOD OF THE FINANCIAL OEISIS 
 OF 1837. 
 
 In anticipation of a large surplus, Congress, by act of 
 June 23, 1836, provided for the distribution of a large 
 amount of Government money among the States in pro- 
 portion to their representation in the Senate and House 
 of Eepresentatives, and three instalments, amounting in 
 all to $27,063,430, were so distributed.' In the mean- 
 time, about May 1, 1837, specie payments were suspended, 
 owing to the great depression in commercial circles. An 
 extra session of the 25th Congress was called in Septem- 
 ber of the same year. The charter of the second Bank 
 of the United States had expired on March 4, 1836, and 
 on June 23, 1836, Congress had passed an act authoriz- 
 ing and regulating the deposit of public moneys in State 
 banks. Wo action was taken during the extra session 
 toward rechartering the Bank of the United States. 
 The distribution of the fourth instalment to the States 
 was, however, postponed, but the Secretary was pro- 
 hibited from calling for any of the money already dis- 
 tributed without special authority from Congress, which 
 has not, up to the present date, been given. 
 
 The reveimes for the year (1837) were from six to ten 
 
 ' See page 180. 
 
DISCUSSION OF TBEASUBT NOTE BILL, 1837. 41 
 
 millions short of the expenditures. The public funds 
 already deposited with the States were unavailable, and 
 there was another instalment to be deposited on Octo- 
 ber 1st. The Secretary recommended the withholding of 
 this instalment, and, in order to supply currency, an is- 
 sue of treasury notes, the small denominations to bear 
 no interest, and the large with interest. 
 
 A large party in Congress were in favor of recharter- 
 ing the Bank of the United States. The advocates of 
 treasury notes urged the issue principally upon the 
 ground of necessity, there being no currency upon which 
 the Government could rely to make and receive pay- 
 ments. Many were in favor of a substitute to be issued 
 by the proposed new Bank of the United States. A 
 bill was presented and passed by the Senate. When it 
 came to the House, objection was made that it was a 
 money bill, which the Senate had no constitutional right 
 to originate. This point was not discussed, but the 
 Committee of Ways and Means presented their own bill, 
 by which the issue of ten millions in treasury notes was 
 authorized. The bill encountered much opposition, par- 
 ticularly from those in favor of authorizing a new bank, 
 but passed the House on October 9, 1837, by a vote of 
 127 to 98, which was a strict party vote. In the Senate, 
 the next day, Mr. Benton moved to make the lowest de- 
 nomination of notes $100, instead of $50, as provided in 
 the bill. He presented strong objections to the issue of 
 treasury notes. Nothing but the fact that the Govern- 
 ment must otherwise stop for want of funds, would in- 
 duce him to vote for paper money in time of peace. 
 He particularly objected to the policy of reducing the 
 denominations of paper currency. It was the most dan- 
 
42 UNITED STATES NOTES. 
 
 gerous feature of the system, and would drive all specie 
 from circulation. Mr. Clay spoke in favor of Mr. Ben- 
 ton's motion, and characterized the whole measure to be, 
 to all intents and purposes, a great bank experiment, and 
 alluded to the inconsistency of issuing, in time of pro- 
 found peace, ten millions additional notes after decrying 
 the banks for enlarging their circulation. Mr. Webster 
 favored Mr. Benton's motion. It was lost by a vote of 
 25 to 16. The bill then passed by a vote of 35 to 6, 
 both Mr. Benton and Mr. Webster voting for it, and Mr. 
 Clay against it. This bill authorized the issue of treas- 
 ury notes to an amount not exceeding ten millions, and 
 in denominations not exceeding fifty dollars. The in- 
 terest was not to exceed 6 per cent ; and they were to be 
 payable, principal and interest, after one year from date, 
 and were, for the first time, signed by the Treasurer and 
 countersigned by the Register. Tliey were to be issued 
 in payment of the debts of the United States to any 
 creditor who would receive them, and were to be re- 
 ceivable in payment of all debts and dues to the Gov- 
 ernment. They were not reissuable, and the authority 
 to issue terminated December 31, 1838. The ten mil- 
 lions authorized were issued by Secretary Woodbury 
 previous to July 1, 1838. About two millions were is- 
 sued at the nominal rate of interest of 1 mill per cent.; 
 three millions at 2 per cent. ; and over four millions at 
 5 per cent. On account of the low rate of interest 
 upon a large portion of the notes, the object for which 
 they were issued, namely, to supply a circulating me- 
 dium, was thwarted, for they were soon presented in 
 payment of taxes, and over five millions were retired be- 
 fore the whole amount had been issued. 
 
SECOND PBOPOSniON OF LEGAL TENDER. 43 
 
 At the end of 1837 the Secretary estimated that the 
 balance in the treasury for July, 1838, would be $34,- 
 187,000, of which $28,101,644 was due from the States, 
 $1,100,000 due chiefly from insolvent banks, and $3,500,- 
 000 from other banks, payment of which was postponed. 
 These sums, and the bullion fund in the mint, reduced 
 the estimated available balance in July, 1838, to about 
 one million. This estimate was nearly correct, for Con- 
 gress was advised by the President, in May, 1838, that 
 only $216,000 of available funds remained in the treas- 
 ury. There were several propositions in the House, one 
 of which was a bill for authorizing loan certificates, which 
 should be a legal tender to public creditors, but not re- 
 ceivable for dues to the Government. The question of 
 the legal tender was not discussed. Mr. Cambreleng, of 
 New York, from the Committee of "Ways and Means, re- 
 ported a short bill, authorizing the issue of treasury notes 
 to the amount of the issue of October, 1837, which had 
 been redeemed and cancelled. The interest upon the 
 issues already made under the laws of 1837 had been too 
 small, and they had been immediately paid into the treas- 
 ury when due. There were gratifying signs of a revival 
 of prosperity. The Northern banks had resumed specie 
 payment sooner than expected. This he ascribed to the 
 firmness of the President in refusing to allow dues to the 
 United States to be paid in notes of banks not paying 
 specie. He referred to the passage of the Free Banking 
 act of New York as a presage of sound banking in future. 
 He also urged the necessity of providing notes to enable 
 the treasury to meet its payment. The objections to the 
 bill were much the same as those urged in the debate dur- 
 ing the previous session, though they were presented with 
 
44 UNITED STATES NOTES. 
 
 more force and completeness, particularly by Mr. Caleb 
 Cushinff. He said that such issues were bills of credit 
 not warranted by the Constitution ; that they were based 
 only upon the faith of the Government ; that such meas- 
 ures were considered of doubtful and dangerous charac- 
 ter by all the friends of democratic institutions ; and that 
 Madison and others had always been opposed to the issues 
 of Government paper founded not on funds or specie, 
 but only upon faith or credit, and only consented to its 
 expediency in remarkable exigencies. Experience had 
 shown, that whatever interest they might bear, whether 
 1 mill or 6 per cent., they would not be above the value 
 of the notes of good banks. It was said that, if the 
 United States under the Constitution could issue these 
 bills, so could the States. They were the same as con- 
 tinental money, although bearing interest. Much of the 
 currency issued by the States, during the revolution, de- 
 nominated bills of credit, bore interest. Chief Justice 
 Marshall's definition' of bills of credit was, "paper issued 
 by the sovereign authority, and intended to circulate as 
 money." These notes are issued by sovereign authority, 
 and intended to circulate as money. They operate un- 
 equally, and afford no general relief ; they are below par 
 
 ' The Supreme Court of the United States in a famous case, Briscoe 
 m. Bank of Kentucky, 11 Pet., 357, held that a note of circulation 
 " issued by a State, involving the faith of the State, and designed to 
 circulate as money on the credit of the State, in the ordinary course 
 of business," is a bill of credit. Other decisions of the Supreme 
 Court — Craig ra. Missouri, 4 Pet. , 410 ; Byrne is. Missouri, 8 Pet. , 40 — 
 hold "that certificates issued by a State in sums not exceeding ten 
 dollars nor less than fifty cents, receivable in payment of taxes, the 
 faith and credit of the State being pledged for their redemption, are 
 bUls of credit within the prohibition of the Constitution." 
 
MARSHALL'S DEFINITION OF BILLS OF GliEDIT. 45 
 
 in New York, and at 5 per cent, premium in Charleston. 
 The bill was amended to obviate some technical objec- 
 tions, and finally passed by a small majority, 106 to 99, 
 on May 16, 1838. It came up in the Senate on. May 18th. 
 "Wright, of New York, Benton, Calhoun, Brown, and Tal- 
 madge were in favor of it. Webster, Clay, Crittenden, 
 and Preston were on the other side. The discussion 
 took a wide range, involving the causes of the condition 
 of the treasury, and the constitutionality of the issue of 
 treasury notes. It passed by a vote of 27 to 13, and was 
 approved on May 21, 1838. Nearly five millions were 
 issued within one month after the passage of the bill, 
 which showed conclusively the pressing needs of the 
 treasury. Under the previous acts of October, 1837, and 
 May 21, 1838, the authority to issue treasury notes ex- 
 pired on January 1, 1839. The whole issue was not to 
 exceed ten millions, and the latter act permitted the re- 
 issue of those paid in. 
 
 The whole amount which had been issued to Decem- 
 ber, 1838, was $15,709,801.01, with interest as follows : 
 $6,888,809.60 at 6 per cent. ; $4,280,273.72 at 5 per 
 cent. ; $2,784,844.73 at 2 per cent. ; and $1,755,881.96 
 with interest at 1 mill per cent. There had been re- 
 deemed, up to the same date, $7,955,250, leaving 
 $7,754,560 outstanding. The authority to reissue ex- 
 pired with the year. On January 1, 1839, there was 
 a large amount of notes in the treasury, which con- 
 tinued to grow larger until March 2, 1839, when an act 
 was passed, extending the authority to reissue until June 
 30, 1839, provided the whole amount outstanding did 
 not exceed ten millions. In December, 1839, Secretary 
 Woodbury reported that at no time had more than ten 
 
46 UNITED STATES NOTES. 
 
 millions been outstanding, and that the amonnt out- 
 standing was less than the amount due from suspended 
 banks, and from the Pennsylvania bank of the United 
 States, to the Government, and that the principal and 
 interest on the treasury notes had always been promptly 
 paid when desired. 
 
 A bill was subsequently presented by Mr. Jones, 
 Chairman of the Committee of Ways and Means. 
 Amendments were offered requiring that the notes 
 should bear interest at not less than 2 per cent., and 
 making them negotiable and transferable only by in- 
 dorsement, in the same manner as bills of exchange : tlie 
 first to prevent the issuance of notes at the nominal rate 
 of 1 mill per cent., or one-thousandth of 1 per cent., per 
 annum, and the second to prevent their circulation as 
 money, and both to cure, as was alleged, the constitu- 
 tional difficulty which pertained to bills of credit issued 
 by sovereign authority and intended to circulate as 
 money. The Whigs refused to vote, leaving no quorum. 
 On March 24, 1840, the House continued in session 
 from ten o'clock until five p.m. of the next day. Finally, 
 when the House adjourned, the consideration of the 
 bill was fixed for the following Friday, and on that day 
 — March 27, 1840 — it finally passed the House by a vote 
 of 110 to 66. It passed the Senate on March 30, 1840, 
 and was approved the following day. On page 47 is 
 the form of a $100 note issued under this act. On each 
 end of the reverse were printed the figures 100. Under 
 this act the issues amounted to $7,114,251. Notes 
 were to be redeemed sooner than one year, if the condi- 
 tion of the treasury would admit, and at any time with- 
 in the year, after sixty days' notice. 
 
^ 
 
 ^ 
 
 «^ 
 
 ^ 
 
 ?(i 
 
 1 
 
 •I 
 
 
REPORT OF SECRETARY SWING. 49 
 
 The Secretary, in his report for 1840, states, that 
 treasury notes had been at par during the year, although 
 never bearing interest higher than 5f per cent.,' and 
 subject to payment after sixty days' notice. To meet 
 the wants of the treasury, a treasury note bill was intro- 
 duced, and passed Congress on February 15, 1841. This 
 law authorized an issue of notes, in the aggregate, of 
 $10,000,000, one-half to be issued in payment of amounts 
 due and payable prior to March 4, 1841, and the remain- 
 ing $5,000,000 in payment of amounts due and payable 
 after that date. In all, $7,629,062 were issued under 
 act of February 15, 1841. 
 
 In the fall of 1840, Harrison had been elected Presi- 
 dent to succeed Van Buren, but died April 4, 1841. 
 He was the representative of the Whig party, which had, 
 since the year 1837, so bitterly opposed the issue of 
 treasury notes. Mr. Ewing, of Ohio, was appointed Sec- 
 retary of the Treasury by President Harrison. In his re- 
 port to Congress at its special session of May 31, 1841, 
 he said that, from January 1, 1837, to March 4, 1841, 
 the expenditures of the Government had exceeded the 
 revenues by over $31,000,000. Of about twenty-six 
 millions of treasury notes issued under the acts from 
 October 12, 1837, to February 16, 1841, inclusive, all 
 but about six millions had, as claimed by Secretary 
 Woodbury, been issued in anticipation of revenues, or 
 upon the basis of existing debts due to the United States, 
 leaving about six millions outstanding when the new ad- 
 ministration came in. Mr. Ewing estimated that the 
 deficit in the revenues for the year 1841, after meet- 
 
 ' Finance Report, vol. iv. , p. 354. 
 3 
 
50 UNITED STATES NOTES. 
 
 ing the current expenses and redeeming the treasury 
 notes then outstanding and to be issued, would be 
 $12,088,215, which he considered to be the amount 
 of the public debt. He objected to the issue of treas- 
 ury notes, and recommended a loan redeemable after 
 eight years or upon six months' notice by the Govern- 
 ment. 
 
 A bill was introduced by Millard Fillmore, Chairman 
 of the Committee of "Ways and Means, on June 24tli. It 
 provided a loan, payable after January 1, 1856, with in- 
 terest at 5 per cent., and authority was given the Secre- 
 tary to purchase the bonds out of any surplus in the 
 treasury. It was objected that the loan was unnecessary, 
 and that it was the commencement of a scheme to or- 
 ganize a national bank. The debate was bitterly politi- 
 cal. It was urged, that as this was an administration 
 measure, the loan should be paid within the term of the 
 administration. This point was foolishly conceded, but 
 the rate of interest was raised to 6 per cent. As thus 
 amended the bill became a law on July 21, 1841. The 
 reduction of the length of the loan from eight to three 
 years, together with the proviso that no stock could be 
 sold below par, destroyed the usefulness of the measure, 
 and less than one-half, or only $5,672,076, of the stock 
 was sold, which was about equal to the amount of treas- 
 ury notes outstanding. 
 
 On September 13, 18il, Mr. Ewing was succeeded by 
 Secretary Forward, of Pennsylvania. The policy of the 
 administration was changed by the death of the Presi- 
 dent. The repeal of the Independent Treasury act 
 August 13, 1841, which had been authorized at the close 
 of the Van Bnren administration, was about the only 
 
BILL OF 1843 INTBODUCED BY MB. FILLMOBE. 51 
 
 point gained by the Harrison administration, and this 
 repeal practically left the treasury to be managed by 
 those who were unfriendly to the policy of the "Whig 
 party. 
 
 A bill for the issue and reissue of treasury notes was 
 introduced into the House by Mr. Fillmore, January 5, 
 1842. Among other proposed amendments which were 
 rejected, was one by Mr. Benton, heavily taxing all 
 bank circulation, especially small notes. The bill be- 
 came a law January 31, 1842. Under it the amount 
 authorized to be outstanding at any one time was limited 
 to five millions, but the total amount issued and reissued 
 was $7,959,994. The subsequent act of August 31, 
 
 1842, authorized the issue and reissue of treasury notes, 
 provided the amount outstanding at any one time 
 should not exceed six millions, and under it notes to 
 the amount of $3,025,554.89 were issued. 
 
 All of the notes issued since the act of October 12, 
 1837, were issued payable either one or two years after 
 date, chiefly for one year. These notes were continually 
 falling due and embarrassing the treasury. Eleven 
 millions of such notes were to fall due during the year 
 
 1843, and accordingly another bill was introduced by 
 Mr. Fillmore, providing for the reissue of such notes as 
 should be redeemed before July 1 , 1844. The bill be- 
 came a law on March 3, 1843. 
 
 The amount of the treasury notes outstanding on the 
 dates named from November, 1837, to March, 1843, are 
 shown in the following table : ' 
 
 ' Page 186, 3d Session 27th Congress, Appendix. Speech of 
 Woodbury. 
 
62 
 
 UNITED STATES NOTES. 
 
 Months. 
 
 1837. 
 
 1838. 
 
 1839. 
 
 1840. 
 
 March 
 
 
 $6,518,964.65 
 8,009,760.01 
 
 $6,552,946 
 3,394,180 
 
 $2,176,981 
 
 November .... 
 
 $53,723.83 
 
 4,664,200 
 
 Marcli 
 
 1841. 
 $5,393,094.00 
 
 1842. 
 S8.539.115 
 
 1843. 
 $11,656,387 
 
 
 7,371,705.0010.039.056 
 
 
 
 
 ' ' 
 
 
 John C. Spencer succeeded Walter Forward as Secre- 
 tary of the Treasury, on March 3, 1843, and was himself 
 succeeded, on June 15, 1844, by George M. Bibb. Under 
 the act of March 3, 1843, Mr. Spencer issued about 
 $850,000 treasury notes. On the face of each note' was 
 engraved " The United States promise to pay, one year 
 
 after date, to or order, fifty dollars, with interest 
 
 at the rate of 1 mill per $100 per annum." On the back 
 
 of each note, lengthwise, was engraved, " This note will 
 be purchased at par for the amount of principal and in- 
 terest thereof, on presentation at either of the Deposi- 
 taries of the Treasury in the City of New York." These 
 notes, which were issued at the nominal rate of interest 
 of one-thousandth of 1 per cent, per annum, and by the 
 indorsement made payable on demand, were considered 
 by Congress an evasion of the act under which they were 
 issued. The Secretary of the Treasury, in his report for 
 December 6, 1843, had stated that less than $270,000 
 of these notes had then been issued, and asserted that 
 the right to purchase such notes at par on presentation 
 was given by the eighth section of the act of October 12, 
 1837, as follows : " And the said Secretary is further 
 authorized to make purchases of the said notes, at par, 
 
 ' See Frontispiece. 
 
NOTES ISSUED BY 8ECBETABY SPENCER 63 
 
 for the amount of the principal and interest due at the 
 time of purchase on such notes." The Committee of 
 Ways and Means were instructed, on January 15, 1844, 
 " to inquire and report whether the notes lately issued 
 by the Treasury Department, bearing a nominal in- 
 terest and convertible into coin on demand, and now 
 forming part of the circulating medium of the country, 
 are authorized by the existing laws and Constitution of 
 the United States ; " and the report of the Commit- 
 tee, which also contains a letter of the Secretary 
 giving his views on the subject, is interesting from 
 the fact that it contains the principal constitutional ar- 
 guments against the issue of paper money by the Gov- 
 ernment' 
 
 During the second session of the 27tli Congress, 
 after the veto, by President Tyler, of a bill to au- 
 thorize the organization of a Bank of the United 
 States, he recommended the passage of a bill for the 
 issue of exchequer bills of not less than $5 in denomina- 
 tion, which notes were to be signed by the Treasurer of 
 the United States, and countersigned by the President of 
 the Board of Exchequer, and redeemable in gold and 
 silver on demand at the agency where issued. This bill, 
 which was prepared at the Treasury Department, did not 
 become a law, and it was claimed by the Committee that 
 the notes issued by Secretary Spencer were in most re- 
 spects like the exchequer notes proposed in this bill. 
 The principal difference was, that while the exchequer 
 notes were to be in denominations as low as $5, without 
 interest, the notes issued were of denominations not less 
 
 ' Report No. 370, 28th Congress, 1st Session, H. of R. 
 
54 VNITEB STATES NOTES. 
 
 than $50, and bore a merely nominal rate of interest. 
 It was claimed by the Committee that the Constitution 
 authorized the Government to borrow money, but not to 
 issue bills of credit ; that borrowing money implied the 
 paying of interest for the money borrowed ; that inter- 
 est-bearing treasury notes payable at a future day were 
 a temporary loan, not designed to 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 Constitution. 
 
 The following are extracts from the report of the 
 Committee : " The power to issue treasury notes 
 under the act of March 3, 1843, at a rate of interest 
 not exceeding six per centum per annum, should the 
 wants of the public service require, in place of others 
 redeemed before the first day of July, 1844, seems to 
 be clearly granted. The notes are to be redeemed at 
 the Treasury after one year from their dates, respect- 
 ively ; and the Secretary is authorized to make pur- 
 chases of said notes, at par, for the amount of principal 
 and interest due at the time of purchase. This is con- 
 strued to mean, and the Committee do not intend to 
 question such construction, a purchase before the expira- 
 tion of one year, when the notes would, by limitation of 
 time, become payable. Such purchases, however, in an- 
 ticipation of time, necessarily imply the ability of the 
 treasury to make them, and fair notice to the holders. 
 These issues promise, on their face, to pay one year 
 after date. In good faith, in point of fact, they are is- 
 sued because required by the wants of the public ser- 
 vice. If the wants of the public service really require 
 the issue of treasury notes, to supply the deficiency of 
 
COMMITTEE'S REPORT ON SPENCEWS NOTES. 55 
 
 means, then it is clearly impossible that the ability to 
 purchase the notes should exist at the time of issue, and 
 to make them, presently, convertible into coin. If the 
 means to purchase are coextensive with the amount is- 
 sued, coeval and coexistent, then it is perfectly manifest 
 that the wants of the public service do not require the 
 issue. If the wants of the public service require the is- 
 sues, then there must be a present inability to redeem. 
 Whether this inability will be removed before the efflux 
 of one year depends upon the income of revenue, and 
 consequent improved condition of the treasury. 
 
 " The ability to purchase the notes within the year, 
 therefore, is, at the time of issue, a future contingency ; 
 which cannot be foreknown by the Secretary, so as to 
 authorize him to give notice that the notes will be pur- 
 chased at par, at all times on presentation, and at any 
 time after the date of issue. The sound construction 
 and the common-sense view of the matter seem to be, 
 that the notes may be issued, if the wants of the public 
 service require ; and if it shall be seen, subsequently, 
 that the treasury can spare the means, then, and not till 
 then, is the Secretary authorized, or indeed able, to 
 make the purchase ; and ought not, and cannot, but 
 upon ascertainment of the existence of those means, 
 give notice to the holders of the notes to be purchased. 
 IIow can it be known what amount in the treasury, not 
 otherwise appropriated, will be applicable to the pur- 
 chase ? How can it be known what specific amount can 
 be drawn from the treasury to make purchases of notes ? 
 
 " These views render it clear that the notice endorsed 
 on the notes, and issued simultaneously with them, that 
 they will be purchased on presentation, is not such 
 
56 UNITED STATES NOTES. 
 
 notice of purchase, as to time or amount, as the act au- 
 thorizing the purchase contemplates ; nor is it such 
 notice as a common borrower of money upon time, of 
 one year, with the privilege of redeeming within the 
 time, if able, would give to his lender. * * It is 
 a useless and dangerous experiment with the public 
 faith and public credit in times of peace. The public 
 credit should be used sparingly in time of peace ; should 
 be nursed and invigorated, so that it might be a safe 
 reliance in great and pressing emergencies. But nobody 
 can suppose that the Secretary either expected, desired, 
 or intended, that these notes should be actually forth- 
 with presented and paid. It is impossible to avoid the 
 conclusion, that the whole plan of issuing notes payable 
 on demand, as these notes are, in fact, made payable on 
 demand, by the endorsement, is a deliberate contrivance 
 of the Secretary of the Treasury, with the approbation of 
 the President, to infuse into the circulation of the coun- 
 try. Government paper. """ * The Committee may 
 admit that the maximum rate of interest being six 
 per cent, per annum, and no restriction as to a mini- 
 mum rate, that a mere nominal rate of interest cannot, 
 of itself, be charged as transgressing the letter of the 
 law. But if a mere nominal rate of interest be charged 
 for the purpose of aiding in an object not contemplated 
 by the law or authorized by the Constitution, then such 
 nominal rate of interest is a mere pretext to cover a 
 perversion of law, and a violation of the Constitution. 
 The nominal rate of interest is so very small as hardly 
 to admit of computation; and for all practical purposes, 
 the notes may be regarded as carrying no interest ; 
 wliilst the endorsement, that they will be paid at sight. 
 
CONSTITUTIONALITY OP DEMAND NOTES. 57 
 
 at either of the depositaries of tlie Treasury, in the city 
 of New York, imparts to them the character of ordinary 
 hank paper, calculated and 'intended to circulate as 
 money, in the hands of the citizens. It is an emission 
 of paper, on the public credit, to be circulated as money, 
 like bank notes. * * 
 
 " It is strongly to be inferred that Congress did not 
 intend or expect any departure from the former prac- 
 tices, much less the introduction of a new principle. 
 For the Committee conceive that the issue of notes pay- 
 able on demand, out of funds then on hand, and in the 
 treasury, is totally different in principle from the issue 
 of notes promising to pay one year after date, intended 
 to supply a present deficit in the treasury, and to be re- 
 imbursed thereafter out of accruing revenue. * * The 
 power to boiTOw money on the credit of the United States 
 was unanimously given, whilst the power to emit bills of 
 credit was refused/ — was struck out of the plan proposed, 
 by a vote, in convention, of nine States to two. And 
 yet the Secretary of the Treasury contends that because 
 there are no express words of prohibition, as there are 
 applied to the States, that Congress may exercise the 
 power incidentally or appertinently to the power of bor- 
 rowing money, whilst the States are totally precluded 
 from a resort to bills of credit, either as a principal or 
 pi-imary power, or in any way as incidentally or appro- 
 priately connected with some other power clearly re- 
 served to the States. It was thought that it was too 
 late to undertake to revive the exploded Federal doc- 
 trine of claiming power because it had not been ex- 
 pressly forbidden. And it is a matter of equal surprise 
 that, at this late day, it should be seriously maintained 
 
58 UNITED STATES NOTES. 
 
 by any federal officer, that bills of credit (a paper cur. 
 rency) may be supplied to the country under cover of the 
 granted power to borrow money. The power to supply 
 a paper currency is thus made of contingent existence, 
 depending, first, upon the necessity of exercising the 
 primary power to borrow money, and then upon the 
 policy adopted of making the loan more permanent, in 
 the shape of funded debt, or upon shorter time, in the 
 shape of treasury notes. The want of additional cur- 
 rency might possibly be experienced by the country, 
 when there would be no deficiency of means in the 
 treasury to make a loan necessary or proper. In this 
 condition of affairs there would exist no authority to 
 supply the needed currency. Again, a temporary loan 
 might become necessary, and might be authorized by 
 Congress in the form of treasury notes, at a time when 
 the country was abundantly supplied with a sound cir- 
 culating medium, and in that condition of affairs, accord- 
 ing to the argument of the Secretary of the Treasury, 
 imder cover of the authorized loan, and by the adoption 
 of a peculiarly ingenious mode of issuing the notes of 
 the treasury, a currency, not needed, might be sup- 
 plied. * * The omission to give the power to the 
 Federal Government ' to emit bills of credit ' as com- 
 pletely bars that Government from the exercise of the 
 power, as does the express prohibition to the States ' to 
 emit bills of credit ' bar them from the exercise of such 
 power. According to the received and well-established 
 doctrine, that the States are sovereign, and have the 
 right of self-government, it would follow that they 
 might impart to their legislatures ample powers to leg- 
 islate upon all subjects whatsoever meet for legislation ; 
 
REPORT OF COMMITTEE GONTINUEB. 69 
 
 that they might constitute tliem, under their own con- 
 stitutions, complete legislatures. Hence they agreed, in 
 convention, to abstain from the exercise of certain enu- 
 merated powers, which otherwise would justly and right- 
 fully pertain to them as ' free and independent States.' 
 And intending, in good faith, to relinquish and abandon 
 the exercise of those certain powers, they inserted in 
 their constitutional compact of union express prohibi- 
 tions. The States, by fair and natural construction, 
 would retain to themselves all powers not conferred ex- 
 clusively upon the Federal Government, or expressly 
 prohibited to the States ; and yet, out of abundant cau- 
 tion, and to remove the possibility of doubt or cavil, an 
 express amendment of the Constitution to that effect was 
 adopted and ratified. 
 
 " It will not be questioned by the Secretary, the Com- 
 mittee suppose, that the States did possess, and have re- 
 served the power to borrow money. Certain it is, that 
 they have very generally and very extensively exercised 
 such power. Now, if the power to borrow money on the 
 credit of a State be unqualified, like the power of Con- 
 gress to borrow money on the credit of the United 
 States, the Committee cannot comprehend the logic by 
 which the conclusion is reached, that, in the latter case, 
 whilst the absolute and independent power of issuing 
 bills was intentionally vrithheld, yet it was meant to 
 leave Congress unrestricted in the choice of such means 
 of borrowing, if the emission of bills should, at any 
 time, be deemed the most expedient mode of attaining 
 that object ; and by which, in the former case, the other 
 and contrary conclusion is also reached, that whilst the 
 absolute and independent power of emitting bills of 
 
60 UNITBD STATES NOTES. 
 
 credit is prohibited to the States, the like unrestricted 
 choice in the means of borrowing, by the emission of 
 bills, should at any time be deemed the most expedient 
 mode of attaining that object, is not left to the States. 
 ^Neither Congress nor the States can emit bills of credit, 
 in the exercise of an absolute and independent power. 
 Congress and the States possess the unqualified power 
 to borrow money. Congress is unrestricted in the choice 
 of means, and may issue bills of credit, if that mode of 
 borrowing should, at any time, be deemed the most ex- 
 pedient. The States, however, are not equally unre- 
 stricted in the choice of means, and may not issue bills, 
 although that mode of borrowing should, at any time, 
 be deemed the most expedient. * " When the 
 loan obtained is for any considerable length of time, 
 it is usual to fund the debt thereby created by issuing 
 certificates of stock. Where the loan obtained has only 
 a short time to run, and it is proposed to pay it off 
 speedily with the accruing revenue, the ordinary mode 
 is, to authorize the Secretary of the Treasury to issue 
 treasury notes, payable at the expiration of a limited 
 time, bearing such interest as may be expressed and al- 
 lowed by the act directing the issue of the notes. Such 
 notes are intended, hona fide, as a temporary loan, and 
 are not designed or expected to circulate as a currency. 
 Such notes were doubtless within the contemplation of 
 Gouverneur Morris, when he remarked, that striking 
 out the authority to issiie bills of credit, would not 
 prevent the use of the notes of a responsible minister, 
 and that would do all the good without the mischief. 
 * * The use of public notes can be justified only 
 as the mode of effecting a loan — they are employed to 
 
AMOUNT OF NOTE ISSUES, 1837-1844. 61 
 
 acknowledge the existence of a debt due by the United 
 States, and contain a promise to pay it, at some future 
 stipulated time, with interest, as may be agreed. To 
 issue notes for circulation, payable on demand, under 
 cover of the authority to borrow money in the form of 
 treasury notes, is deemed an abuse of authority which 
 ought to be con-ected." 
 
 From March 3, 1843, until July 26, 1846, no new is- 
 sues of treasury notes were authorized. From 1837 to 
 1844 treasury notes amounting to $47,002,900 were is- 
 sued under eight different acts, of which $46,216,935.82 
 were redeemed by the close of 1845. The lowest de- 
 nomination for any one note was $50, but where new 
 notes were issued in place of old ones the accrued inter- 
 est was often added. The amount ^authorized to be 
 originally issued by these several acts was thirty-one 
 millions. The remainder consisted of reissues. 
 
 The notes issued under the act of October 12, 1837, 
 and the six succeeding acts were all printed from the 
 same series of plates, and the different rates of interest 
 were inserted in writing. A new set of plates were 
 prepared for notes issued under the act of March 3, 1843, 
 and the following words, " with interest at the rate of one 
 mill per $100 per annum," were engraved in the body 
 of the note. These notes were all of the same size, the 
 largest ever issued, and measure eight by four inches. 
 Photo-lithographs of the originals issued under these acts 
 may be found at the beginning and end of this volume. 
 
 The following table exhibits the amount of treasury 
 notes issued each yeai', under different acts of Con- 
 gress, from October 12, 1837, to March 3, 1843, from 
 which it will be seen that the total amount issued was 
 
62 UNITED STATES NOTES. 
 
 $47,002,900, all of which was sold or issued at par. 
 Interest varied from 1 mill per cent, to 6 per cent., and 
 the amount authorized was fifty-one millions. 
 
 1837— Act of October 13, 1837 $2,993,989 15 
 
 1838— Act of Oototer 13, 1837 7,007,010 85 
 
 1838— Act of May 31, 1838 5,709,810 01 
 
 1839— Act of Marci 3, 1839 3,857,376 31 
 
 1840— Act of Marcli 31, 1840 5,589,547 51 
 
 1841— Act of March 31, 1840 1,534,703 80 
 
 1841— Act of February 15, 1841 6,468,856 70 
 
 1842— Act of February 15, 1841 1,060,306 05 
 
 1843— Act of January 31, 1843 7,914,644 83 
 
 1843— Act of January 31, 1843 45,350 00 
 
 1843— Act of August 31, 1843 3,408,554 89 
 
 1843— Act of August 31, 1843 617,000 00 
 
 1844— Act of March 3, 1843 1,806,950 00 
 
 Total $47,002,900 00 
 
CHAPTER VII. 
 
 TEEASUET NOTES OF THE PEEIOD OF THE MEXICAK WAE. 
 
 On July 1, 1844, the public debt of the United States 
 amounted to $24,748.5188, and consisted principally of 
 stocks not payable until the lapse of ten and twenty 
 years.' The 5 per cent, stocks payable in ten years 
 were at a premium of 106, and the 6 per cent, stocks 
 payable in twenty years, at a premium of 116. The 
 Secretary estimated that the revenue under the tariff of 
 1842 would yield a much larger amount than was neces- 
 sary. Accordingly, Congress, in July, 1846, passed a bill 
 amending the tariff and reducing the duties on imports. 
 In the meantime, during the year 1845, difficulties with 
 Mexico, owing to the annexation of Texas, rendered war 
 inevitable, and on May 13, 1846, war was declared. 
 Secretary Walker estimated that, if the war should 
 continue for a year, there would be a deficiency of more 
 than twelve milHons ; and, in order to meet this defi- 
 ciency, a bill was reported from the Committee on Ways 
 and Means, which, with some additions, embodied the 
 provision of the act of October 12, 1837, as to treasury 
 notes, and that of April 14, 1842, as to a loan. The 
 following is the form of a $100 note issued under this 
 act : Seejpage 65. 
 
 • Report of Secretary Bibb, 1844. 
 
64 UNITED STATES NOTES. 
 
 These notes were printed from the plates used foi 
 printing the notes authorized by the acts of October 12, 
 1837, to August 31, 1842. The bill referred to author, 
 ized an issue of treasury notes to an amount of ten mil- 
 lions, which could also be reissued, and also a loan which 
 could be issued in lieu of treasury notes ; the amount of 
 both not to exceed ten millions. The stock was to be 
 redeemable after ten years, no notes of less than $50 
 were to be issued, and they were to be signed by the 
 Treasurer and the Kegister. The rate of interest was 
 not to exceed 6 per cent. Notes were to be used in pay- 
 ment of public creditors who would receive them, and 
 the Secretary could borrow money on them. The 
 bill became a law July 22, 1846. Under this act, $7,- 
 687,800 of notes were issued, and $4,999,149 of stoct. 
 Of these notes $2,086,550 bore interest at 5| per cent, 
 and $1,766,450 at 1 mill per cent, per annum. 
 
 In January, 1847, the treasury was again in need, and 
 to meet this necessity a bill was introduced, authorizing 
 the issue of twenty-three millions of treasury notes, and 
 an additional five millions under the act of July 22, 
 1846. This was an elaborate bill, containing all neces- 
 sary provisions within itself, without referring back to 
 the provisions of previous acts, as had been usually the 
 case in legislation of this kind. The debate was princi- 
 pally upon the condtict of the war, and, after one or two 
 amendments had been agreed to, the bill passed the 
 House on the same day that it was introduced, by a vote 
 of 166 to 22. In the Senate, on January 25th, a resolu- 
 tion to postpone its consideration was lost, and the debate 
 took .considerable latitude, principally upon the tariff 
 question. The general sentiment appeared to be, that 
 
^ 
 
 ^ 
 
 ^ 
 
 ^ 
 
 ^ 
 
 •^•^ 
 
 
 
 
 
 
 
 of at£^ Slu^uo ^Jaei-. 
 
au fa JMfecUei. 
 
 
 I- r r r 
 
 / 
 
 20 MJcMj. 
 ■/O 
 
TBEA8VBY NOTES OF THE MEXICAN WAB. 69 
 
 in the midst of the war the honor of the country must 
 be sustained. Finally, with some slight amendments, 
 the bill passed on January 27, 1847, by a vote of 43 to 
 2, and became a law on the following day. 
 
 l^Totes issued under this act were not to be of a less 
 denomination than $50, and were receivable in paj'ment 
 of public dues, including duties on imports, and weio 
 redeemable at the expiration of one or two years, and 
 the interest was to cease at the expiration of sixty 
 days' notice. On page 67 is the form of a 6 per cent. 
 $100 note issued under this act. {A j>hoto4it/ioffraph 
 of this note is given at end of the vol/wine.) 
 
 The principal of the notes was fundable into 6 per 
 cent, bonds, redeemable after December 30, 1867, and 
 this privilege was extended to the holders of notes issued 
 uiider previous acts. Eeissues were authorized, but the 
 amount of stock and notes, at any one time, was not to 
 exceed twenty-three millions. The right to issue treas- 
 ury notes, under the act of July 22, 1846, was extended 
 by the fifteenth section to the period fixed by these acts, 
 and on the same terms, but the issue, under this section, 
 was not to exceed five millions. $12,371,150 of these 
 notes were issued previous to July 1, 1847, and $11,- 
 956,950 additional notes were issued during the next 
 fiscal year. The whole amount of issues and reissues 
 under the act was $26,122,100, all of which were either 
 sold or paid to pviblic creditors at par. The rate of in- 
 terest of the notes was 5| and 6 per cent., and United 
 States 6 per cent, bonds, chiefly for the purpose of re- 
 deeming these notes, were issued under the same act, 
 amounting to $28,230,350. 
 
CHAPTEE, Vni. 
 
 TEEASTJET NOTES OF THE BTJCHANAlir ADMINISTEATION. 
 
 The treasury notes issued under the act of January 28, 
 1847, were all retired, with the exception of about $200,- 
 000, previous to July 1, 1850, and no additional treasury 
 notes were authorized, until the passage of the act of 
 December 23, 1857. Secretary Cobb, in his report for 
 that year, estimated that the receipts would exceed the 
 expenditures, but said that the financial revulsion which 
 had caused the banks to suspend specie payment in Octo- 
 ber of that year, had also caused a large part of the duti- 
 able merchandise to be stored without payment of duty, 
 where it could remain vmder the law for three years, 
 although it was probable that a considerable portion 
 would be withdrawn and the dnties paid previous to that 
 date. Meanwhile, means should be provided for meet- 
 ing the demands upon the treasury, and he recommended 
 that authority should be given to issue treasury notes 
 " for an amount not exceeding twenty millions of dollars, 
 and payable within a limited time, and carry a specified 
 rate of interest." A bill, in accordance with the sugges- 
 tion of the Secretary, was introduced into both Houses of 
 Congress on December 18, 1857. It passed the Senate 
 on the following day, by a vote of 31 to 18, and the 
 House on the 22d by a vote of 118 to 86, and was ap- 
 proved on the following day and became a law. The 
 bill provided for the issue of notes payable in one year 
 
MOTES OF THE BUCHANAN ADMINISTRATION. 71 
 
 from date of issue, to an amount not exceeding twenty 
 millions. $6,000,000 were to be issued at a rate of inter- 
 est not exceeding 6 per cent. The remainder was to bo 
 sold after public advertisement of not less than thirty 
 days, at their par value, for specie, to the bidders offering 
 to take them at the lowest rate of interest, not exceeding 
 6 per cent. The interest upon the notes was to expire, 
 after maturity of notes, upon sixty days' notice from the 
 Secretary, of his readiness to redeem such notes ; they 
 were to be issued in denominations of not less than $100, 
 and were to be signed by the Treasurel" aiid Register ; 
 they were receivable in payment of all dues to the United 
 States. The whole amount authorized was issued, and 
 the amount of issues and reissues, in all, was $.52,778,900. 
 The interest upon these notes was as follows : $6,323,600 
 at 3 per cent.; $985,000 at from S^to 4 percent.; $688,- 
 000 at 4:i per cent.; 10,055,700 at 4| per cent.; $4,532,- 
 500 at 4f per cent.; $7,533,900 at 5 per cent.; $8,204,- 
 600 at 5^ per cent.; $3,514,100 at 5f per cent.; and 
 $10,941,600 at 6 per cent. On page 73 is the form of a 
 3 per cent. $100 note issued under this act. 
 
 The following table exhibits the different kinds of 
 treasury notes outstanding which were issued from the 
 organization of the Government to the date of the pas- 
 sage of the act of March 2, 1861, and which had not 
 been presented for payment on October 1, 1887 : 
 
 Notes. 
 
 Act. 
 
 Bate of Interest. 
 
 Principal. 
 
 Interest. 
 
 Treasury Notes, 1846. 
 Treasury Notes, 1846. 
 Treasury Notes, 1847. 
 Treasury Notes, 1857. 
 
 Prior to 1846 
 July 32, 1846 
 Jan. 28i 1847 
 Dec. 23,1857 
 
 1 mill to 6 per cent. 
 
 1 mill to 6 per cent. 
 
 6 per cent. 
 
 3 to 6 per cent. 
 
 #83,435 
 
 5,900 
 
 950 
 
 700 
 
 #3,662.06 
 
 300.60 
 
 57.00 
 
 40.76 
 
72 UNITED STATES NOTES. 
 
 The total public debt on June 20, 1860, was $64,769,- 
 703.08. The outstanding treasury notes issued under act 
 of June 23, 1857, were $19,690,500. The amount of treas- 
 ury notes outstanding, issued under acts previous to that 
 date, was $105,111.64. The act of June 22, 1860, au- 
 thorized a loan of twenty-one millions, at a rate of in- 
 terest not exceeding 6 per cent., to be reimbursed within 
 a period not more than twenty years, and not less than 
 ten years. The money was to be used in the redemp- 
 tion of treasury notes, and to replace any amount paid 
 to the treasurer in such notes for public dues. Under 
 this authority, proposals were invited by Secretary Cobb, 
 on September 8, 1860, for ten millions of this loan, 
 which amount was " ample to meet all the treasury notes 
 that would fall due before January 1, 1861." In his 
 report for December 4, 1860, he says : " The rate of 
 interest was fixed at 5 per centum per annum, under 
 the conviction that the loan could be readily negotiated 
 at that rate, for, at that time, the 6 per cent, stock of 
 the United States was selling in the market at the pre- 
 mium of 3 per cent. The result realized this just ex- 
 pectation, and the whole amount offered was taken, 
 either at par or a small premium." Before, however, 
 the time had arrived for payment on the part of the 
 bidders, political complications arose, which affected 
 the credit of the Government so unfavorably that the 
 amount realized was but $7,022,000, the subscribers of 
 $2,978,000 having failed to make good their subscrip- 
 tions. The Secretary stated that, in the present condition 
 of the country, capitalists were unwilling to invest in 
 United States stock at par, and recommended a repeal 
 of so much of the act of June 22, 1860, as authorized 
 
BECOMMENDAllONS OF 8ECRETABT COBB. 75 
 
 the issue of tlie additional stock, and asked for authority 
 for the issue of treasury notes for the same amount, " to 
 be negotiated at such rates as will command the confi- 
 dence of the country." He recommended that the public 
 lands be unconditionally pledged for the ultimate re- 
 demption of all the treasury notes which it may become 
 necessary to issue, and suggested, " that there should al- 
 ways exist in the Department power to issue treasury 
 notes for a limited amount, under the direction of the 
 President, to meet unforeseen contingencies. It is a 
 power which can never be abused, as the amount realized 
 from such source can only be used to meet lawful de- 
 mands upon the treasury. No Secretary of the Treasury 
 or President would ever exercise it, unless compelled to 
 do so by the exigencies of the public service. On tlie 
 other hand, it would enable the Government to meet, 
 without embarrassment, those sudden revulsions to which 
 the country is always liable, and which cannot always 
 be anticipated. I have already stated that provision 
 sliould be made at once to relieve the treasury from its 
 present embarrassment, produced by the causes referred 
 to. To do this. Congress should authorize the issue of 
 an additional amount of treasury notes, not less than ten 
 millions of dollars ; with this means the Department 
 would be enabled to meet all lawful demands upon it 
 for the present. The extent of the financial crisis, 
 tlirough which the country is now passing, cannot now 
 be determined, and until it is better known, no policy 
 can be recommended of a permanent character." 
 
 Secretary Cobb resigned on December 10th, but the 
 act of December 17, 1860, was passed in compliance 
 with the suggestions contained in his report. The pledge 
 
TO UNITED STATES NOTES. 
 
 of the proceeds of the public land was not given in the 
 act, and one of the reasons for withholding such legis^ 
 lation was, that it would interfere with the passage of 
 the homestead bill which, was then under consideration. 
 The act authorized the issue of ten millions of treasury 
 notes in denominations of not less than $60, redeemable 
 in one year from tlie date of issue, with interest at the 
 rate of 6 per cent., but the Secretary was authorized to 
 issue such notes after advertisement at the lowest rate of 
 interest offered. Of these notes, five millions were of- 
 fered to subscribers. The bids were opened December 
 28th, and only $500,000 were taken at 12 per cent. It 
 was important to negotiate the loan, in order to meet 
 the interest on Government bonds upon January 1st. 
 The remainder of the loan was subscribed by the 
 banks in New York, previous to that date, at 12 per 
 cent. 
 
 Gen. John A. Dix was appointed Secretary of the 
 Treasury on January 11th, and bids for the remaining 
 $5,000,000 were opened on the 19th, and the notes 
 awarded at the average rate of lOf per cent., as follows : 
 
 $10,000 at 8J per cent. 
 
 30,000 9 
 
 10,000 9i 
 
 140,000 9i 
 
 G7,000 9| 
 
 731,000 10 
 
 205,000 lOi 
 
 543,000 lOi 
 
 1,267,000 .■ lOJ 
 
 1,947,000 11 
 
 Total . . $5,000,000 Average, lOJ per cent. 
 
BIDS FOR TREASURY NOTES UNDER SECT DIX. T7 
 
 The whole ten millions were issued, redeemable at the 
 expiration of one year from date, bearing interest as 
 follows : 170,200 at 6 per cent. ; $384,500 at rates va- 
 rying from 6 to 10 per cent. ; $1,027,500 at 10 per 
 cent. ; $3,688,700 at rates from 10 to 12 per cent. ; and 
 $4,840,000 at 12 per cent. Additional offers bearing in- 
 terest, ranging from 15 to 36 per cent., were declined. 
 The amount of treasnry notes outstanding on Decem- 
 ber 1, 1860, previous to the passage of this act, was 
 $14,599,700, of which $42,600 was payable in 1859, 
 $3,133,400 in 1860, and $11,423,700 in 1861. Of these 
 notes, $8,684,200 bore interest at 6 per cent., and the 
 remainder at lower rates. 
 
 Secretary Dix, in a letter to the Chairman of the Com- 
 mittee of Ways and Means, dated January 18, 1861, says : 
 " Within the last few days the amount of over-due treas- 
 ury notes presented for redemption has exceeded the 
 power of the Treasm-er to place drafts for payment on the 
 Assistant Treasurer at 'New York, where the holders de- 
 sire the remittances to be made ; and an accumulation of 
 warrants, to the amount of about $433,000, has accrued on 
 this account in the Treasurer's hands, which he has been 
 unable to pay." He also says : " That notice issued on 
 the 18th ultimo invited proposals for the exchange of 
 five millions of dollars for treasury notes, and offers at 
 12 per cent, or less were made only to the amount of 
 $1,831,000 ; offers to exchange $465,000 for notes bear- 
 ing interest at rates varying from 18 to 36 per cent, 
 were also received. The offers at 12 per cent, and less 
 were accepted ; those above that rate were rejected. 
 The remainder of the five millions offered was soon 
 thereafter taken at 12 per cent., and the whole amount 
 
78 UNITED STATES NOTES. 
 
 was pledged to the payment of over-due treasury notes 
 and other pressing demands on the treasury. * * 
 During the last quarter, about eight millions of treasury 
 notes were redeemed, which, with the two and one-half 
 millions redeemed since the first instant, make ten and 
 a half millions. The amount received from the loan, a 
 small fraction above seven millions, threw upward of 
 three and a haK millions of these notes on the other re- 
 sources of the treasury for redemption. This is one of 
 the principal causes of the delay and difficulty which 
 have recently existed in providing for other demands of 
 public service." So low had the credit of the Govern- 
 ment fallen, through the political agitations and troubles 
 just previous to the War of the Rebellion, that he closed 
 his communication by calling attention to the fact, that, 
 " there are deposited with twenty-six of the States, for 
 safe keeping, over twenty-eight millions of dollars be- 
 longing to the United States, for the payment of which 
 the promise of these States is pledged by written instru- 
 ments on file in this Department. The annual statement 
 of receipts and expenditm'es for the year ending June 
 30, 1860, represents this amount as part of the ' balance 
 in the treasury ' on that day. * * I refer to this 
 final resource as an available one, should the public ex- 
 igencies demand it. It is not doubted that the greater 
 portion of the amount so deposited would be promptly 
 and cheerfully paid should an exigency arise involving 
 the public honor or safety. If, instead of calling for 
 these deposits, it should be deemed advisable to pledge 
 them for the repayment of any money the Government 
 might find it necessary to borrow, loans contracted on 
 such a basis of security, superadding to the plighted 
 
LOANS AND NOTES OF 1861. T9 
 
 faith of the United States that of the individual States, 
 could hardly fail to be acceptable to capitalists." 
 
 During the following month the act of February 8, 
 1861, was passed, which authorized a loan not exceeding 
 twenty-five millions of 6 per cent, bonds, the avails to be 
 used in the payment of current expenses, for the redemp- 
 tion of outstanding treasury notes, and to replace in the 
 treasury such amounts as had been paid in treasury notes. 
 Of this loan, bearing 6 per cent, interest, and having 
 twenty years to run, $18,415,000 was issued, at an aggre- 
 gate discount of $2,019,776, or an average rate of $83.03 
 for $100. In less than a month after the passage of this 
 act providing for the payment of the treasury notes out- 
 standing, the act of March 2, 1861, was passed, which au- 
 thorized a loan of ten millions at 6 per cent., redeemable 
 upon three months' notice, after July 1, 1871, payable 
 July 1, 1881, or, instead thereof, the issue of $10,000,000 
 of new notes in denominations of not less than $60, bear- 
 ing interest at the rate of 6 per cent, per annum, payable 
 semi-annually, receivable in payment of aU debts due the 
 United States, including customs duties, and redeemable 
 at pleasure, within two years from the passage of the act. 
 The same act largely increased the duties on imports, 
 and authorized the substitution of treasury notes for the 
 whole or a part of the loans previously authorized. Under 
 this act, $35,364,450 in all, of treasury notes, were issued, 
 of which $22,468,100 were redeemable in two years, and 
 $12,896,350 redeemable in sixty days after date ; and a 
 considerable portion of these notes were paid out to cred- 
 itors. A new series of plates was prepared for each of 
 the issues of treasury notes under the acts of January 28, 
 1847, December 23, 1857, and March 2, 1861. The size 
 of the latter note was 7i by 3f inches. 
 
CHAPTEE IX. 
 
 TEEASTIEY NOTES OF THE PEEIOD OF THE CITLL WAB. 
 
 GsiraiEAL Dix was succeeded by Secretary Chase on 
 March 7, 1861. The great inci'ease of import duties, 
 imposed by the act of March 2d, had caused the bonds 
 of the Government to advance in the market, and it 
 seemed to be a favorable time to offer the remainder of 
 the bonds authorized by the act of February 8, 1861. 
 Bids for eight millions of the bonds were opened on 
 April 2d. Offers at fi'om 94 to par were received for 
 $3,099,000, and 93^ for the remainder of the loans. All 
 bids below 9'4 were rejected. In the midst of these 
 negotiations it became known that arrangements were 
 being made to send an additional force for the relief of 
 Fort Sumter. No additional bonds were sold until May 
 31st, when $7,310,000 were sold at an average rate of 
 $85.34 for $100. In place of bonds, five millions of 
 treasury notes were offered, and the bids opened on April 
 11th amounted to only one million; but shortly there- 
 after the whole amount oifered was taken. On the fol- 
 lowing page is the form of a $50 note issued imder the 
 act of March 2, 1861. The United States 6 per cent, 
 bonds were selling in the market at 83, and money at call 
 was worth from 4 to 5 per cent. ; but the treasury notes 
 bearino- 6 per cent, interest could be held and used or sold 
 
BEGINNING OF THE CIVIL WAR. 83 
 
 at a profit for the purpose of paying duties. Additional 
 treasury notes of the same kind, as has been seen, were 
 subsequently sold, amounting, in all, to more than thirty- 
 five millions, at rates ranging from par to lyV-jj- per cent. 
 premium. 
 
 Civil war was inaugurated by the attack on Fort Sum- 
 ter on April 12th. The fort surrendered on April 14th, 
 and on the following day President Lincoln issued a call 
 for seventy -five thousand soldiers. The Southern States 
 were declared blockaded. Seven of these States bad, by 
 ordinances, publicly declared their secession from the 
 Union, and their defiance of the national authority, and 
 a convention at Montgomery, Alabama, had organized a 
 new government, under the name of " Tlie Confederate 
 States of America." Massachusetts soldiers, on their 
 way to Washington, were attacked by a mob in Balti- 
 more. In the month of May the Confederate capital 
 was removed to Richmond ; North Carolina and Arkan- 
 sas.seceded, and the Union army crossed the Potomac 
 into Yirginia, and took possession of Alexandria and 
 Arlington Heights. In June, Tennessee passed an or- 
 dinance of secession, and General Butler was defeated 
 at Big Bethel. The two-year treasury notes which had 
 been recently issued at par were at 2|- per cent, discount ; 
 and the Government, instead of disposing of the notes, 
 borrowed five millions at sixty days upon them as col- 
 lateral security. During the following month the disas- 
 trous results of the first battle of Bull Run startled the 
 entire country. The Union army, defeated, fell back 
 upon "Washington, and the capital of the country was 
 believed to be in danger. Two days thereafter, Presi- 
 dent Lincoln called for five hundred thousand three-year 
 
84 UNITED STATES NOTES. 
 
 volunteers. An extra session of Congress had been 
 called for July 4, 1861, and on that day, amid events 
 like these, Secretary Chase transmitted his first report 
 to Congress, which recommended measures to provide 
 the means for continuing a civil war which proved in 
 magnitude to be unequalled in the history of nations. 
 
 Specie payments were suspended on December 28, 
 1861. The war was carried on chiefly by the use of 
 treasury notes as a circulating medium. The purchasing 
 power of these notes rapidly declined. Prices of all 
 kinds advanced rapidly, and particularly the prices of 
 articles most needed for the supply of the army. The 
 expenditures of the Government during the four years 
 of the war were vastly increased beyond the amount 
 which would have been necessary if the war could have 
 been conducted upon the gold standard, instead of upon 
 the fluctuating standard of the legal tender paper dollar. 
 
 ITever was a great national debt contracted so rapidly. 
 In 1835, as has been seen, the country was entirely put 
 of debt. General Lee surrendered at Appomattox, on 
 April 9, 1865 ; which date was four years, lacking five 
 days, after Fort Sumter had surrendered to the enemy. 
 On the first day of July, 1861, the debt was 90 millions ; 
 at the close of that fiscal year it had reached 624 mil- 
 lions ; at the end of the succeeding year, it was consid- 
 erably more than twice that amount, being on July 1, 
 1863, $1,119,772,138. During the following year it in- 
 creased nearly 700 millions. For the next nine months, 
 to the close of the wai-, it increased at the rate of about 
 sixty millions a month. An immense amount of obliga- 
 tions against the Government were presented, after the 
 close of the war, and for the five months thereafter the 
 
TBEASUBT NOTES OF THE OIVIL WAS. 85 
 
 ascertained debt increased at the rate of three millions 
 a day. The cost of conducting the war, after it was once 
 fully inaugurated, was scarcely at any time less than 
 thirty millions a month. At many times it far exceeded 
 that amount ; sometimes it was not less than ninety 
 millions a month, and the average expenses of the war, 
 from the date of its inception to its conclusion, may be 
 said to have been not less than two millions each day. 
 
 The public debt reached its maximum on August 31, 
 1865, at which day it amounted to $2,845,907,626.56. 
 Of this amount, $1,109,568,191 was in funded debt ; 
 $1,503,020 was debt which had matured ; and $2,111,000 
 was in suspended requisitions. The remainder was as 
 follows : 
 
 United States legal tender notes $433,160,569 00 
 
 Compound interest legal tender notes 217,024,160 00 
 
 Five per cent, legal tender notes 88,954,230 00 
 
 Seven-thirty notes 830,000,000 00 
 
 Fractional currency 26,844,743 51 
 
 Temporary loans 107,148,718 16 
 
 Certificates of indebtedness 85,093,000 00 
 
 Total $1,783,725,414 67 
 
 There were more than 684 millions of these obligations 
 which were a legal tender, of which 217 millions were 
 bearing compound interest at the rate of 6 per cent. ; 
 830 millions were in treasury notes, bearing interest 
 at the rate of Yj^^ per cent, per annum. There were 
 $1,540,483,701 of treasury notes, either payable on de- 
 mand or bearing interest. If the temporary loans, which 
 were payable in thirty days fi'om the time of deposit, after 
 notice of ten days, and the certificates of indebtedness, 
 
86 UNITED STATES NOTES. 
 
 •which, bore interest at 6 per cent., payable one year after 
 date, or earlier, at the option of the Government, are in- 
 cluded with the treasury notes, the whole would amount 
 to considerably more than three- fifths of the whole pub- 
 lic debt of the country. 
 
 Secretary Chase, in his report, estimated the whole 
 sum required for the fiscal year to be not less than 318 
 millions, of which 215 millions would be requii-ed for 
 the war and naval service ; more than twelve millions 
 ($12,639,861.64) to pay treasury notes due and to be- 
 come due, and nine millions to pay interest upon the 
 proposed new debt. He was of the opinion that not 
 less than eighty millions should be provided by taxation, 
 and 240 millions obtained by loans. The principal part 
 of the revenue was to be obtained from the tariff, the 
 remainder by a system of direct taxation or internal 
 duties. Six per cent, bonds, amounting to $18,415,000, 
 had already been sold at from par to |85.34 for $100, 
 and treasury notes bearing interest at 6 per cent, had been 
 paid to creditors. He considered that " in a contest 
 for national existence and the sovereignty of the peo- 
 ple, it is eminently proper that the appeal for the means 
 of prosecuting it with energy to a speedy and successful 
 issue should be made, in the first instance at least, to the 
 people themselves." 
 
 Among other recoroinendations, he proposed a loan of 
 100 millions, to be '.osued in the form of treasury notes, 
 or exchequer bills, bearing interest at the rate of 1^-^ per 
 cent., to be paid semi-annually, and redeemable at pleas- 
 ure, after three years from date. The interest at this 
 rate was suggested, because it was liberal to the subscrib- 
 ers, convenient for calculation, and, under existing cir- 
 
CHASE REGOMMBNDS SEVEN-THIRTY NOTES. 87 
 
 cumstances, a fair rate for the Government. The rate 
 would be convenient for calculation; for, the interest 
 being equal to one per cent a day on $50, two cents a 
 day on §100, ten cents on $500, twenty cents on $1,000, 
 and one dollar on $5,000, it would be only necessary to 
 consider the number of days since the date of the note, 
 to determine, at the close, the amount due on it. It was 
 proposed to issue these notes in sums of fifty, one hun- 
 dred, five hundred, one thousand, and five thousand dol- 
 lars, with the amount of interest for specified periods 
 engraved on the back of each note, and the facility thus 
 secured to the holder of determining the exact amount 
 of interest, it was thought, would enhance its value. 
 " While the rate proposed is thus liberal and convenient, 
 the Secretary regards it also as, under existing circum- 
 stances, fair and equitable to the Government. The 
 bonds of the United States, bearing an interest of 6 per 
 cent., and redeemable twenty years after date, cannot be 
 disposed of at current market rates, so that the interest 
 on the amount realized will not exceed 7^ per cent.; nor 
 is there any reason to believe that treasury notes, bearing 
 an interest of 6 per cent., receivable for public dues and 
 convertible into twenty years' 6 per cent, bonds, can be 
 disposed of in any large amounts, so that the interest on 
 the sum realized will not fall much, if at all, short of the 
 rate proposed. For the difference of interest, if any, be- 
 tween such notes and those of the proposed national loan, 
 the Secretary thinks that the absence of the feature of 
 receivability for public dues in the latter is a sufficient 
 compensation." He also proposed notes ot small denomi- 
 nations, ten, twenty, and twenty-five dollars, payable one 
 jear from date, to an amount not exceeding fifty mil- 
 
88 UNITED STATES NOTES. 
 
 lions, bearing interest at the rate of 3^'^^^ per cent., to 
 be excbanged for the other form of treasury notes, bear- 
 ing interest at 7-^^^, or, if more convenient, made redeem- 
 able in coin, on demand, without interest. " The great- 
 est care," he said, "will, however, be requisite to prevent 
 the degradation of such issues into an irredeemable paper 
 currency, than which no more certainly fatal expedient 
 for impoverishing the masses and discrediting the Gov- 
 ernment of any country can well be devised." 
 
 Treasury notes authorized by the acts of June 30, 1812, 
 February 24, 1815, and three intervening acts, bore in- 
 terest, as recommended by Secretary Gallatin, as has 
 been seen, at the rate of 5f per cent, a year, and were 
 receivable in payment of all duties and taxes laid by the 
 authority of the United States, and for all public lands 
 sold by said authority ; and when so received, interest was 
 to be computed at the rate of " one cent and one-half a 
 cent per day" on every one hundred dollars of principal, 
 each month being reckoned as thirty days. It is prob- 
 able that the proposition for the issue of the seven-thirty 
 notes was obtained from this act, for a substitute was 
 proposed for the legal tender act which passed the 
 House of Eepresentatives February 6, 1862, which con- 
 tained a section providing for the issue of transferable 
 certificates bearing interest at the rate of 6f per cent, 
 per annum. 
 
 These recommendations of the Secretary were em- 
 bodied in the acts of July 17 and August 5, 1801. 
 The first was passed by nearly the unanimous vote of the 
 House, only five votes (one from Kentucky, two from 
 Missouri, one from Ohio, and one from New York) hav- 
 ing been against it. It authorized the Secretary to bor- 
 
DEMAND NOTES REFUSED. 8S» 
 
 row 250 millions, either in twenty-year treasury notes, 
 with interest not exceeding 7 per cent., or in seven-thirty 
 three-year treasury notes, and to issue demand notes, 
 bearing no interest, and receivable for public dues. 
 These latter notes were limited to fifty millions, and to 
 denominations of not less than ten dollars. But the act 
 of August 5th authorized the issue of five-dollar notes ; 
 also twenty-year 6 per cent, bonds for the amount of the 
 seven-thirty notes issued, whicli bonds were to be used 
 only in exchange, or for the purpose of funding such 
 notes. Under these acts, nearly 140 millions of seven- 
 thirty notes were issued, and sixty millions of demand 
 notes, without interest ; ten millions of these notes hav- 
 ing been authorized by the act of February 12, 1862. 
 
 The first demand notes were issued in August, and 
 paid for salaries at Washington. They were received 
 with reluctance, and the merchants and shop-keepers 
 endeavored to discredit them. Kaih-oad corporations 
 refused them in payment of fares and freight ; and lead- 
 ing banks in the city of New York refused to receive 
 them except on special deposit. The Secretary and 
 other officers of the treasury signed a paper agreeing 
 to accept them in payment of salaries. A circular was 
 issued to the various assistant treasurers, stating that 
 treasury notes of the denominations of five, ten, and 
 twenty dollars had been, and will continue to be issued, 
 redeemable in coin on demand in Boston, 'Eew York, 
 Philadelphia, St. Louis, and Cincinnati. Gen. Scott 
 also issued a circular on September 3, 1861, announcing 
 to the army, " that the Treasury Department, to meet 
 future payments to the troops, is about to supplj', besides 
 coin, treasury notes in five, ten, and twenty dollars, as 
 
90 UNITED STATES NOTES. 
 
 good as gold in all banks and Government offices through 
 out the United States, and most convenient for transmis- 
 sion by mail from the officers and men to their families 
 at home." Of these notes $24,550,325 were issued 
 before December 1st, and $33,460,000 were in circula- 
 tion at the time of the suspension of specie payment 
 on December 28th. The whole amount authorized was 
 issued prior to April 1, 1862. On page 91 is the form 
 of the demand note, the size of which was precisely the 
 same as the greenback, now in circulation. Notwithstand- 
 ing the circular of the Secretary, it became necessary to 
 use the available coin in payment of the interest upon 
 the public debt, and there was at times some difficulty 
 in redeeming the notes promptly in gold. 
 
 At a meeting of the associated banks in the city of • 
 Xew York, in January, 1862, it was resolved, "That 
 before we receive such notes, we must require that such 
 legal provision be made by Congress as shall insure their 
 speedy redemption, and that a committee of the associa- 
 tion be appointed to consider the subject and report on 
 it at an adjourned meeting." The notes were receivable 
 for duties, and soon obtained good credit. After the 
 suspension of specie payment, efforts were made to retire 
 them as rapidly as possible, for as they were receivable 
 for duties, they embarrassed the Government in provid- 
 ing for the gold interest upon the public debt. On 
 July 1, 1863, more than fifty-six millions had been re- 
 tired, and a much larger amount of legal tender notes 
 had been placed in circulation. The demand notes 
 were not, by the terms of the law, made payable in gold, 
 but as they were authorized prior to the suspension o£ 
 specie payment, and proclaimed as payable in coin by the 
 
8EVEN-TE1RTY LOAN OF 1861. 93 
 
 circular of the Secretary, they were considered so pay- 
 able, and, after the suspension of specie payment, were 
 quoted at times at about the same premium for legal- 
 tender notes as gold. 
 
 Interest upon the first issue of the seven-thirty notes 
 was paid in gold. These notes were fundable into twenty- 
 year 6 per cent, bonds of 1881, and but few were pre- 
 sented for payment. The amount redeemed in money 
 to November 1, 1864, was only $63,500, while the whole 
 amount converted into bonds to that date was $125,864,- 
 900.' The seven-thirty loan was successfully negotiated 
 through the associated banks of New York, who, jointly 
 with the banks of Boston and Philadelphia, made a con- 
 tract with the Secretary on August 15, 1861, for the 
 purchase of Government securities to the amount of 150 
 millions, in three different instalments. The total 
 amount taken by the New York banks was 105 millions. 
 Whenever subscriptions were made, 10 per cent, was 
 paid to the Assistant Treasurers in New York, Boston, 
 and Philadelphia, and the remainder was placed to the 
 credit of the United States on the books of the banks 
 subscribing. The arrangement of the associated banks 
 among themselves was to issue certificates to each sub- 
 scriber, stating the amount so subscribed, and placed to 
 the credit of the Government ; and, as such deposits 
 were withdrawn, or paid into the treasury, seven-thirty 
 notes were issued for the same amount to the subscribers 
 respectively. An immediate issue was to be made of 
 seven-thirty treasury notes, dated August 16, 1861, to 
 the extent of fifty millions, bearing interest from that 
 
 ■ Finance Report, 1864, p. 10. . 
 
94 UNITED STATES NOTES. 
 
 date. The associated banks were to take jointly this 
 amount at par, with the privilege of fifty millions ou 
 October 15th, and fifty millions on December 15th ; the 
 banks giving their decision on the first days of these 
 months. It was understood that, if the whole amount 
 should be taken, no other Government stock or treasury 
 notes, except demand notes, should be negotiated or paid 
 out by the treasury until February 1, 1862. The details 
 of this negotiation, which was perhaps the most impor- 
 tant one during the war, are given in the Bankers' Mag- 
 azine for September, 1861, and August, 1862. 
 
 The report of June 12, 1863, of the Loan Committee 
 of the Associated Banks of I^ew York, states that, at the 
 time' the negotiation was made, " the credit of the Gov- 
 ernment had become impaired to such a degree that a 
 large loan could not be obtained in any ordinary way, 
 nor even a small temporary loan, except for a very short 
 period at a high rate of interest. Men's hearts failed 
 them ; the rebellion was on so large a scale, and had so 
 unexpectedly broken out and raged with such fury, that 
 to subdue it seemed to most persons to be impossible. 
 Then it was, after careful deliberation and consultation 
 with the Secretary, that the banks decided it to be wise 
 for them to depart from their usual legitimate business, 
 and sustain the Government credit, and stand or fall with 
 it. This act restored the public confidence, and was the 
 highest indorsement of the public credit that could then 
 have been given. * * When the banks agreed to 
 advance this large amount to the Government, they 
 did so without hope or expectation of profit from it, and 
 they earnestly sought to obtain from the Government 
 the assurance that they should be indemnified from loss. 
 
REPORT ASSOCIATED BANKS OF NEW YORK. 95 
 
 It was not until five months after taking the first loan, 
 and two months after taking the third, in the month of 
 January last, that there was any reason to expect the 
 securities to command in the market a price higher 
 than that at which they had been taken. * * Much 
 doubt was expressed, even by our most experienced bank- 
 ers and financiers, when the contract was entered into, 
 of the ability of the banks fo fulfil it. It has been ful- 
 filled by them to the letter, and has proven of more 
 value to the country than can be estimated. As fortu- 
 nately as unexpectedly, it has resulted profitably for the 
 associates, and has probably enabled them to employ 
 their means to nearly as much advantage as would have 
 been done but for the political disturbances of the 
 country." 
 
 Secretary Chase, in his report for December 9, 1861, 
 thus refers to this negotiation : " Kepresentatives from 
 the banking institutions of the three cities, responding 
 to his invitation, met him for consultation in ISTew York, 
 and after full conference, agreed to unite as associates 
 in moneyed support to the Government, and to subscribe 
 at once a loan of fifty millions of dollars, of which five 
 millions were to be paid immediately to the Assistant 
 Treasurers, in coin, and the residue, also in coin, as 
 needed for disbursement. The Secretary, on his part, 
 agreed to issue three-year seven-thirty bonds, or treas- 
 ury notes, bearing even date with the subscription, and 
 of equal amount ; to cause books of subscription to the 
 national loan to be immediately opened ; to reimburse 
 the advances of the banks, as far as practicable, from 
 this national subscription ; and to deliver to them seven- 
 thirty bonds, or treasury notes, for the amount not thus 
 
96 UNITED STATES NOTES. 
 
 reimbursed. It was further understood, that the Secre- 
 tary of the Treasury should issue a limited amount of 
 United States notes, payable on demand, in aid of the 
 operations of the Treasury, and that the associated insti- 
 tutions, when the first advance of fifty millions should be 
 expended, would, if practicable, make another, and, when 
 that should be exhausted, stUl another advance to the 
 Government of the same amount, and on similar terms. 
 * * AU these objects were happily accomplished. 
 Fifty millions of dollars were immediately advanced by 
 the banks. The Secretary caused books of subscription 
 to be opened throughout the country, and the people 
 subscribed freely to the loan. The amounts thus sub- 
 scribed were reimbursed to the banks, and the sum re- 
 imbursed, though then covering but little more than 
 half the amount, enabled those institutions, when a 
 second loan was required, to make a second advance of 
 $50,000,000. Thus, two loans, of $50,000,000 each, 
 have been negotiated for three-year seven-thirty bonds, 
 at par. The first of these loans was negotiated, and the 
 first issue of bonds bears date, August 19, the second 
 October 1, 1861." 
 
 On November 16th, a third loan was negotiated with 
 the associated institutions, under the seventh section of 
 the act of August 6, 1861, the Secretary agreeing to 
 issue to them fifty millions of dollars in 6 per cent, 
 bonds, at a rate equivalent to par, for bonds bearing 7 
 per cent, interest, authorized by the act of July lY, 1861. 
 
 The following table gives quotations of United States 
 6 and 6 per cent, bonds, of treasury notes and of gold, at 
 the dates stated, compiled from tables in Hvmis M&F' 
 chcmts' Magazine for 1862-63-64. 
 
QUOTATIONS OF BONDS, MOTES, AND GOLD. 97 
 
 Teaks iun> Mohtbs. 
 
 1., 
 10.. 
 7., 
 5. 
 2. 
 
 February 5 . 
 
 March 1 . 
 
 April 
 
 May 
 
 June 
 
 July 
 
 August 
 
 Septomber 6. . 
 
 October 4.. 
 
 November 1 , , 
 
 December 6 . . 
 
 1863. 
 
 January 3 . 
 
 February 7 . 
 
 March 7 
 
 April 4. 
 
 May a. 
 
 June 6. 
 
 July 11. 
 
 August 1 
 September 6. 
 October 3. 
 November 7 . 
 November 27. 
 1864. 
 January 2 
 February 6 
 March 
 
 6'e, 1861. 
 
 April 
 
 Msiy 
 
 June 
 
 July 
 
 August 
 
 September 3 
 
 October 1 
 
 November 5 
 
 December 13 
 
 5 
 
 2... . 
 
 7 
 
 4 
 
 11 
 
 6 
 
 Regis- 
 tered. 
 
 Coupon, 
 
 88 
 
 93X 
 
 93 
 
 103)^ 
 103 
 lOOK 
 
 98)i 
 
 99X 
 104>f 
 104 
 101 
 
 96>tf 
 
 92 
 
 993f 
 
 104 
 
 104J< 
 
 104% 
 
 lOB 
 
 107 
 
 108 
 
 108 
 
 104V 
 
 mx 
 
 HI 
 113 
 109 
 1025i 
 
 107 
 lOS 
 
 108X 
 
 flax 
 
 93 
 103 
 106 
 100 Ji 
 
 WX 
 104K 
 104X 
 104 
 
 98 
 935i 
 
 wax 
 
 106 
 
 wen 
 
 108^ 
 
 105 
 
 105ii 
 
 106 
 
 108M 
 
 109 
 
 100 
 
 imn 
 
 107)i 
 
 111 
 
 110 
 113 
 113K 
 
 wax 
 
 1053jf 
 107 
 106X 
 lOUfi 
 108 ?6 
 
 86>i 
 
 87 
 
 94 
 
 96 
 
 95 
 
 865^ 
 
 88X 
 
 94 
 
 9BX 
 
 SIX 
 
 85)f 
 943i 
 97>i 
 
 97J^ 
 
 99 
 
 97>i 
 
 9S 
 95 
 
 96 
 100 
 100 
 100 
 102 
 102 
 lil2 
 
 99 
 lOO 
 103 
 100 
 
 100 
 
 f s. 
 
 99X 
 995i 
 
 104 
 
 1063^ 
 
 102 
 
 lOiJi? 
 
 lOJX 
 
 10534 
 
 105« 
 
 104 
 
 102Jf 
 102 
 105 
 104 J^ 
 
 106J^ 
 
 107 
 
 106 
 
 106Jf 
 
 106 
 
 106)i 
 
 107 
 
 106X 
 
 106X 
 
 108 
 
 111 
 
 111 
 
 109J< 
 
 109% 
 
 1C3X 
 
 107>^ 
 
 111 
 
 llOK 
 
 106Ji 
 
 120 
 
 
 96X 
 99% 
 lOOJi 
 98X 
 98X 
 99 
 94 
 
 9nj< 
 
 97X 
 
 96K 
 
 94 
 
 9SM 
 
 102 
 101=4 
 100^ 
 101 
 
 ma 
 loix 
 loix 
 loix 
 
 101>^ 
 W2X 
 
 IflOJi 
 
 101 
 
 105!^ 
 
 lt'5K 
 
 108 
 
 1225^ 
 
 126>^ 
 
 125 
 
 129 
 
 155 
 153 
 
 1 Year 
 
 Oertifl- 
 
 catea 
 
 New. 
 
 99J^ 
 
 97ii 
 
 98Ji 
 
 9flH- 
 
 99% 
 
 99% 
 
 98% 
 
 98 
 
 975^ 
 98% 
 99% 
 99)€ 
 98 Ji 
 98 
 
 SIX 
 93% 
 SIX 
 96X 
 875i 
 
 10-2>tf 
 
 l(i2 
 
 108% 
 
 ]04J^ 
 
 109% 
 
 115 !i 
 
 1191^ 
 
 133 
 
 131K 
 
 132 
 
 134M 
 157% 
 165X 
 165X 
 
 lEO^ 
 145% 
 182X 
 129^ 
 1315i 
 143>^ 
 147% 
 145X 
 
 152 
 
 my. 
 
 1H1% 
 
 166% 
 
 172% 
 
 191 
 
 !;« 
 
 H61X 
 
 243;^ 
 
 193^ 
 
 2l43i 
 
 237X 
 
 About three years after the passage of the act author- 
 izing the first issue of seven-thirty notes, another act 
 was passed, on June 30, 1864, authorizing 200 millions 
 of similar notes, and a subsequent act of March 3, 1865, 
 authorized 600 millions in addition, and under this act 
 the whole amount (including $29,992,600 of reissues), was 
 
98 UNITED STATES NOTES. 
 
 issued. Of this amount forty-four millions were in de- 
 nominations of fifty dollars ; 137 millions, in one hun- 
 dreds; 228 millions, in five hundreds ; 3T0 millions, in one 
 thousands ; and about fifty millions, in five thousands. 
 They were issued in three series, dated August 15, 1864, 
 June 15, 1865, and July 15, 1865. These notes, like 
 those that preceded them, were fundable into 6 per 
 cent, bonds — the former into eighty-ones, and the latter 
 into five-twenties — and this fact was printed upon the 
 reverse of each note. The 800 millions last issued were 
 payable, principal and interest, in lawful money. More 
 than twenty millions, which were authorized by the act of 
 June 20, 1864, wfere paid to the soldiers direct. Of the 600 
 millions, authorized by the act of March 8, 1865, seventy 
 millions were issued during that month, and the whole 
 remainder was taken during the following four months. 
 Secretary McCulloch, in his report for December 4, 
 1865, thus refers to the negotiations and issue of the 
 remaining 530 millions of these notes : " Upon the 
 capture of Richmond, and the surrender of the Confed- 
 erate armies, it became apparent that there would be an 
 early disbanding of the forces of the United States,- and 
 consequently heavy requisitions from the War Depart- 
 ment for transportation and payment of the army, in- 
 cluding bounties. As it was important that these 
 requisitions should be promptly met, and especially im- 
 portant that not a soldier should remain in the service a 
 single day for want of means to pay him, the Secretary 
 l^erceived the necessity of realizing as speedily as pos- 
 sible the amount— $530,000,000— still authorized to be 
 borrowed under this act. The seven and three-tenths 
 notes had proved to bo a popular loan, and although a 
 
SEVEN- THIBTIEB OF 18G4-5. 99 
 
 security on longer time and lower interest would have 
 been more advantageous to the Government, the Secre- 
 tary considered it advisable, under the circumstances, to 
 continue to offer these notes to the public, and to avail 
 himself, as his immediate predecessors had done, of the 
 services of Jay Cooke, Esq., in the sale of them. The 
 result was in the highest degree satisfactory. By the 
 admirable skill and energy of the agent, and the hearty 
 co-operation of the national banks, these notes were dis- 
 tributed in every part of the Northern and some parts of 
 the Southern States, and placed within the reach of every 
 person desiring to invest in them. 'Eo loan ever offered 
 in the United States, notwithstanding the large amount 
 of Government securities previously taken by the people, 
 was so promptly subscribed for as this. Before the 
 first of August the entire amoimt of $530,000,000 had 
 been taken, and the Secretary had the unexpected satis- 
 faction of being able, with the receipts from customs 
 and internal revenue and a small increase of the tem- 
 porary loan, to meet all the requisitions upon the treas- 
 ury." 
 
 On page 101 is the form of the seven-thirty note 
 issued under the act of March 3, 1865, with one coupon 
 attached. 
 
 The whole half year's interest was payable with the 
 note, and there were five coupons upon the right end of 
 the note. The size of the note was 3f by 11|- inches, in- 
 cluding the coupons, which were Z^ inches in width. On 
 the reverse was printed these words : " Pay to bearer. 
 At maturity convertible at the option of the holder into 
 bonds redeemable at the pleasure of the Government, at 
 any time after five years, and payable twenty years from 
 
too UNITED STATES NOTES. 
 
 July 16, 1868, •with interest at 6 per cent, per annum, 
 payable semi-annually in coin." 
 
 During the month of July, 1862, gold was at a pre- 
 mium for legal tender notes of from 10 to 15 per cent., 
 and demand notes, which were receivable for customs, at 
 a premium of about 8 per cent. The subsidiary silver 
 coinage authorized by the act of February 21, 1853, was 
 about 7 per cent, less in intrinsic value than the silver 
 dollar, and this difference in weight was authorized, so 
 that it might be retained in the country for purposes of 
 change. This silver coin soon began to disappear. Con- 
 siderable amounts were hoarded in the North and South, 
 and larger amounts wei-e exported to Canada and South 
 America ; and a premium of from 10 to 12 per cent, 
 was offered for small amounts by business men who de- 
 sired it for convenience in making change. Many in- 
 dividuals as well as corporations issued small obligations, 
 or " shinplasters," such as had been issued in 1812 and 
 1837. Postage stamps were used to a considerable ex- 
 tent for purposes of change. The Postmaster-General, 
 in his report of December, 1862, says: "In the first 
 quarter of the current year, ending September 20th, the 
 number of stamps issued to postmasters was one hundred 
 and four millions; there were calls for about two hun- 
 dred millions, which would have been nearly sufiicient 
 to meet the usual demand for a year. This extraordi- 
 nary demand arose from the temporary use of these 
 stamps as a currency for the public in lieu of the 
 smaller denominations of specie, and ceased with the 
 introduction of the so-called ' postal currency.' " 
 
 On July 17, 1862, an act was passed which authorized 
 the issue of " postage and other stamps of the United 
 

 Pay Bearer $1.83>^-100 JatCy Vath 1868 for Bift slxmonthainte!retton 
 
 Six pfir cent 
 |50 (7. s. Treas'y Note JFo. 123,150 ^. ^. Spinner. 
 
 Gold Option Trtaa. of the U. S, 
 
 °X 
 
 § 
 
 |5h 
 
 •tunuv/D jad 
 
 fU99 J/3d XVS /o S?W 9^? ?» HOM *?'/? "" iS9MfU} 911% 
 
 moQ wi dmUvd fo mBu 911% s»ckjas9u, fuamuu^dof) mij, ^ 
 OS 09 09 S 
 
POSTAOB STAMPS— POSTAGE CURBENOT. 103 
 
 States ;" whicli were receivable in exchange for United 
 States notes, and in payment of all dues to the United 
 States, in sums of not less than five dollars. Under this 
 law, notes of the denominations of 5, 10, 25 and 60 cents 
 were issued, and the denominations of 5 cents were 
 printed on brown tinted paper, with an engraved head of 
 Jefferson, which was the exact counterpart of that used 
 on the five-cent postage stamp. On the twenty-five- 
 cent note the head of Jefferson was five times repeated. 
 The form and size of these notes are given on pages 
 105-7. The ten-cent note was printed in green, with 
 the head of Washington, the counterpart of that used on 
 the ten-cent postage stamp. Upon the fifty-cent note 
 this vignette was five times repeated. The form and size 
 of the ten-cent and fifty-cent notes are given on pages 
 106-8. These notes were issued in the month of August, 
 1862, and were termed "postage currency," and continued 
 in use until they were replaced by the fractional currency 
 authorized by section four of the act of March 3, 1863. 
 The previous act prohibited private corporations, bank- 
 ing associations, and individuals from issuing or circulat- 
 ing notes for fractions of a dollar, and imposed a pen- 
 alty, upon conviction, of a fine not exceeding five 
 hundred dollars, and imprisonment not exceeding six 
 months. The law did not prohibit the issue of frac- 
 tional currency by cities, and considerable amounts were 
 placed in circulation by various municipalities, notwith- 
 standing that in many of the States, laws had been 
 passed in the year 1837, or prior thereto, prohibiting 
 such issues. 
 
 The amount of fractional currency was limited to 
 fifty millions of dollars, and denominations of from 
 
104 UNITED STATES NOTES. 
 
 three cents to fifty cents were issued, which were ex- 
 changeable for United States notes in sums of not less than 
 three dollars. On the days on which this small currency 
 was first issued to the public, the offices of the Assistant 
 Treasurer in New York and in other cities were thronged 
 with long lines of people anxious to obtain this paper 
 currency to supply the deficiency caused by the with- 
 drawal of silver coin. On account of the scarcity of one 
 and two-dollar notes and of fractional currency, whole 
 sheets of these notes, when they were first issued, were 
 paid to the army, and subsequently were so cut that 
 four 25-cent notes were used in place of a one-dollar 
 note, and four fifty-cent notes in place of a two dollar 
 note, and in this form considerable amounts were paid 
 out. These notes were universally used for small change 
 in and out of the army. The total issue of " postage cur- 
 rency," which commenced August 21, 1862, and ceased 
 May 27, 1863, was $20,215,635. $4,282,082 was out- 
 standing on April 1, 1884, of which $1,028,332 was in de- 
 nominations of five- cents ; $1,243,974 in ten cents ; $1,- 
 039,203 in twenty-five cents, and $970,572 in denomina- 
 tions of fifty cents. The total amount of issues and 
 reissues under both acts was $368,720,074. These little 
 notes were stuffed in the trowsers pocket of the soldier, 
 vrith the jack-knife, the cartridge, the plug of tobacco, 
 and other handy articles, and soon became unfit for cir- 
 culation. They wore out rapidly and became ragged and 
 filthy, and were frequently returned for redemption. 
 
 The first issues under the act of March 3 commenced 
 on October 10, 1863, and ceased on February 15, 1876 ; 
 and an act was passed on April 17th, of the latter year, 
 directing the Secretary to replace this circulation by the 
 
[obverse.] 
 
 Furnisked only by the Assistant 
 Treasurers and Designated Depositaries of the U. S. 
 
 BECEI7ABLE FOB 
 At Any 
 
 m.s.i 
 
 FOSTAQE STAMPS 
 Post Office. 
 
 [reverse.] 
 
 EXCHANCEABLE FOR UNITED STATES NOTES 
 
 By any Assistant J g g g J Treasurer 
 
 5 5 
 
 designated U. S, 
 
 sumsnot lesstkan 
 
 Receivable in 
 
 Depositary in 
 
 V\MtOO\_\.kHS. 
 payment of all 
 
 dues to the U. States less than V\Mt DO\_Lk^S. 
 
 ACT APPROVED JULY 17, 1862. 
 

 [obverse.] 
 
 POSTA&M CUMMEWCT 
 
 Furnished only hy the Assistant 
 
 Treasurers and Designated Depositaries of the Z/. S. 
 
 ■A r\ 
 
 i 0^ 
 
 S3SSHSS3S3SESSSE^ 
 
 10 loa 
 
 U.S. Postage | -4 r^ 
 
 WASHINGTON'S HEAD | -^ ^ 
 
 
 Ten Cents ^ ^ 
 
 U. S. 
 
 BEGEI7ABLI! FOB ITT C I FOSTAaS STAUFS 
 At Any I U - 0« J Post Office. 
 
 [reverse.] 
 
 EXCHANGEABLE FOR UNITED STATES NOTES 
 
 TEN X \ 
 
 than » ^ 1 U '^ < 
 
 [X N3X X| 
 
 Treasurer or 
 Depositary in 
 sumsmtlessthan \^ 1 U '^ } TWt DOLLkRS. 
 • Receivalle in \ A "ax ^ j payment of all 
 duet to the U. States less than f \Mt DOLLARS. 
 
 ACT APPROVED JULY 17, 1S62. 
 
[obverse.] 
 
 25 FOSTA&M VWMMENCT 9^ 
 
 Furnished only hy ike Assistant 
 Treasurers and Designated Depositaries of the U. S, 
 
 This 
 design 
 
 RECEIVABLE FOR 
 At Any 
 
 appears 
 five times. 
 
 POSTAGE STAMPS 
 Post Office, 
 
 [reverse.] 
 
 
 EXCHUGEABLE FOE UlTED STATES BOTES 
 
 
 By any Assistant ^,^ ^ Treasurer or 
 
 
 Designated U.S. • I yL Depositary in 
 
 
 tumsnot less than ^ fj TWt DOVVKKS. 
 
 
 Receivable in payment oj all 
 
 
 dues to the U. States less than v\\ij. QO^-^.^RS. 
 
 
 4CT APPROVEDj July 17, 1862. 
 
 
[obverse.] 
 
 50 ^^ 
 
 ^TA 
 
 GM €UMB,EMCY Kf\ 
 
 Furnished only by the Assistant 
 
 Treasurers and Designated Depositaries of the K S, 
 
 
 
 iO io| 
 
 
 This 
 design 
 
 
 TT. B. Foitage { 
 
 WABHINGTON'S HEAD 
 
 Ten Cents 
 
 u. s.j 
 
 appears 
 five times. 
 
 RECEIVABLE 
 At Any 
 
 FOR 
 
 U.S. 
 
 POSTAGE STAMPS 
 Post Office. 
 
 [reverse.] 
 
 
 EXCHAMeEABIE FOB UillTEI) STATES ITES 
 
 By any A ssistani 
 
 Treasurer or 
 
 desigTiated U. S. L~<. i | 
 
 Depositary in 
 
 sums not less than f / \ / 
 
 VWt QO\.\-kHS. 
 
 Receivable in 
 
 payment of all 
 
 dues to the U. States less than Y\^t DO\.\.k^S. | 
 
 Act APPROVED, JULY 17 
 
 1862. 
 
FRACTIONAL OUBBENOT. 109 
 
 issue of subsidiary silver coin. The fractional paper 
 currency was issued in five different series. The high- 
 est amount outstanding at any one time was less than fifty 
 millions. Tlie amount outstanding on October 1, 1887, 
 was $15,319,885. A considerable amount is stUl held 
 by banks and bankers, which is grudgingly paid out to 
 those customers who desire it for purposes of remittance 
 by letter. The principal portion of the amount out- 
 standing will probably never be presented for redemp- 
 tion. The proportion of loss to the people from this 
 fractional currency is vastly greater than that of any 
 other kind of circulation ever issued in this country, and 
 this loss, in a large measure, must be attributed to the small 
 value of the notes and the many casualties of the war. 
 The proportion of legal tender notes and national bank 
 notes, of the highest amount outstanding at any one time, 
 not presented for redemption, or lost, in the course of 
 twenty years, is estimated at about 1|- per cent. 
 
 Authority was given by the second section of the act 
 of March 3, 1863, to issue 400 millions of treasury 
 notes, bearing interest at a rate not exceeding six per 
 cent, in lawful money for a term not exceeding three 
 years, payable at periods expressed on their face, and in 
 denominations of not less than ten dollars. These notes 
 were exchangeable, together with the accumulated in- 
 terest for treasury notes not bearing interest. TKey 
 were made legal tender for their face value, excluding 
 interest. Power was also given to the Secretary to issue 
 150 millions of additional greenbacks, which were to be 
 issued only in exchange for these interest-bearing notes. 
 Under this act, $44,520,000 notes were issued, redeem- 
 able one year from date, and $166,480,000 two years 
 
110 UNITED STATES NOTES. 
 
 from date, bearing interest at 5 per cent, per annum, 
 wMcli were known as " one and two year notes of 1863." 
 Authority was given by the act of June 30, 1864, for 
 the issue of 200 millions of treasury notes in denomina- 
 tions of not less than ten dollars, not exceeding three 
 years, and bearing interest not exceeding 7.30 per cent, 
 per annum, interest payable semi-annually, principal and 
 interest to be paid in lawful money. The notes were 
 to be a legal tender for their face value. No seven- 
 thirty notes were issued under this act, but, in lieu there- 
 of, $266,695,440 of compound interest notes were issued. 
 The act did not authorize in terms the issue of compound 
 interest notes, but as the interest at six per cent, com- 
 pounded, would be considerably less than at T.30 per cent, 
 simple interest, their issue was not in conflict with the 
 terms of the act.. The notes were of the form shown on 
 pages 111-112. The size of these notes was Sf by Y^ 
 inches. Of these notes, |17T,045,7Y0 were issued in re- 
 demption of the one and two year five per cent, notes, 
 and it is not probable that more than 200 millions of 
 these notes were outstanding at any one time. Secre- 
 tary Fessenden, in his report for December 6, 1864, 
 thus refers to the issue of these notes : " The whole 
 amount of national circulation, not bearing interest, ex- 
 clusive of fractional currency, and of notes issued by 
 national banks, is limited to four hundred millions of 
 dollars, subject to slight occasional increase from the fifty 
 millions held in reserve for the payment of temporary 
 deposits. Of five per cent, interest-bearing notes there 
 were outstanding, on the first of November last, $120,- 
 519,110. To a considerable extent these notes have been, 
 and will continue to be, used as currency. Those with 
 
E^ "N 
 
^ 
 \ 
 
 2 
 
 3 to s^ =5 
 
 1^ 
 
 a <a S 'S "S^ S 
 
 
 fi => ^ 
 
 Co K (W y 
 
 Is, 
 
 ^ 
 
 
THREE PER GENT. CERTIFI0ATE8. 113 
 
 coupons have been found particularly objectionable, as, 
 though withdrawn to a certain extent while the interest 
 is maturing, they are liable to be periodically rushed 
 upon the market. In consideration of this feature, a 
 large amount, viz., about ninety millions of the original 
 issue of one hundred and fifty millions of these coupon 
 notes, have been withdrawn and destroyed, and their 
 place occupied by notes payable in three years, bearing 
 interest at six per centum, compounded semi-annually. 
 This is believed to be the best form of interest-bearing 
 legal-tender notes, as being more likely to be withdrawn 
 and held until maturity, as an investment. Of these, 
 fifteen millions in amount were issued under the act of 
 March 3, 1863, and about ninety millions under the act 
 of June 30, 1864. The total amount of interest-bearing 
 notes outstanding on the 22d of November last was $210,- 
 222,870. What proportion of these may be considered as 
 an addition to the circulation I am unable to determine. 
 To that extent, whatever it may be, they contribute to 
 the amount of the currency, and thus in some degree 
 occasion, and in still greater degree sustain, an increase 
 of prices, and depress values." 
 
 About two years and eight months after the passage 
 of the last act, authority was given for the issue of tem- 
 porary loan 3 per cent, certificates, for the purpose of 
 retiring the compound interest notes. When these latter 
 notes were issued, it was expected that they would, as the 
 interest accumulated, soon pass out of circulation into the 
 hands of bankers and capitalists. These expectations 
 were realized, for the interest was only payable at ma- 
 turity, three years from date. Such notes, with accrued 
 interest, would not be paid out by the holders except in 
 
114: UNITED STATES NOTES 
 
 cases of absolute necessity. In order to insure the re- 
 tirement of these notes, " An act to provide ways and 
 means for the payment of compound interest notes," 
 was passed on March 2, 1867. This act authorized the 
 issue of 3 per cent, certificates in denominations of not 
 less than $100, payable on demand. The national banks 
 were authorized to hold these certificates as a part of 
 their reserve, provided that not less than two-fifths of 
 the entire reserve should consist of lawful money of the 
 United States. This privilege did not largely diminish 
 the amount of gold coin and greenbacks which the 
 banks were required continually to keep on hand, as 
 most of the banks held a large amount of cash reserve, 
 in addition to the amount required by law. This excess 
 could with great profit be invested in the new certifi- 
 cates, and they could be used to advantage for clearing- 
 house piirposes, and the banks at once availed them- 
 selves of this privilege. The amount authorized by this 
 act was fifty millions, which was increased to seventy- 
 five millions by the act of July 25, 1868. These certifi- 
 cates were payable on demand, and redeemable at the 
 pleasure of the Government ; they were chiefly issued 
 during the fiscal year 1868 and 1869, and for the most 
 part retired in the fiscal years from 1869 to 1873 — 
 $12,195,000 being retired during the latter year. 
 
 The act of July 12, 1870, authorized the issue of $54,- 
 000,000 additional bank circulation, and section two of 
 that act provided that, at the end of each month after 
 the passage of this act, the Comptroller of the Currency 
 should report the amount of such circulating notes issued, 
 whereupon the Secretary of the Treasury should redeem 
 and cancel a like amount of 3 per cent, certificates ; and 
 
FIBST GOLD CERTIFICATES. 115 
 
 in order to retire such certificates he was authorized to 
 give notice to the holders, designating the number, date 
 and amount, that snch certificates shall cease to hear 
 interest and be available for reserve, from and after the 
 day designated in the notice. 
 
 Thus it will be seen tliat the compound interest notes 
 were issued for the purpose of retiring 5 per cent, notes, 
 the 3 per cent, certificates for the retirement of the com- 
 pounds which were maturing, and the act of July 12, 
 18Y0, was passed in turn for the retirement of the 3 per 
 cents ; and the different acts authorizing these issues had 
 the effect of rapidly accomplishing these results, with but 
 little inconvenience either to the banks or to the public. 
 
 The act of March 3, 1863, authorized the issue of gold 
 certificates, of one and two-year notes, and of compound 
 interest notes ; and certificates under the fifth section of 
 that act were used for clearing-house purposes soon after 
 the passage of the national bank act. They were au- 
 thorized to be issued in sums of not less than $20, cor- 
 responding with the denomination of United States 
 notes. The coin and bullion deposited were required to 
 be retained in the treasury for the payment of the same 
 on demand. Certificates representing coin in the treas- 
 ury were authorized to be issued in payment of interest 
 on the public debt, but it was provided that the amount of 
 certificates issued should not, at any one time, exceed 20 
 per centum beyond the amount of coin and bullion in 
 the treasury. These certificates were authorized to be 
 received at par in payment of duties. The first issue 
 was made on November 13, 1865. On June 30, 1875, 
 there were outstanding $21,796,300, of which the na- 
 tional banks in New York City held $12,64:2,180. 
 
116 VNITSD STATISS NOTES. 
 
 Their issue was discontinued on December 1, 1878, just 
 previous to the resumption of specie payments, and the 
 amount outstanding had decreased on June 30, 1879, to 
 §16,413,700. The amount outstanding on October 3, 
 1883, was $4,907,440, of which the national banks held 
 $4,594,300. On October 1, 1887, the amount outstand- 
 ing was $2,354,600. Most of these certificates were is- 
 sned for clearing-house purposes, in denominations of 
 $1,000, $5,000, and $10,000. 
 
 On June 8, 1872, an act was passed authorizing the 
 Secretary of the Treasury to receive United States notes 
 on deposit without interest from national bank associa- 
 tions, in sums not less than $10,000, and issue certifi- 
 cates therefor, of denominations not less than $5,000. 
 These certificates were similar to the 3 per cent, cer- 
 tificates just referred to, except that they bore no in- 
 terest, and were largely used in place thereof for clear- 
 ing-house purposes. The certificates were payable on 
 demand in United States notes at the place of issue, 
 and they were authorized to be held and counted by 
 national banks as part of their legal reserve, and to be 
 used in settlement of clearing-house balances. These 
 certificates were not properly treasury notes, and the 
 highest amount issued was $64,780,000, on August 3, 
 1875, which amount was rapidly reduced after the re- 
 sumption of specie payments. On June 30, 1875, there 
 were outstanding $59,045,000, of which the national 
 banks held $47,310,000. On June 30, 1876, the amount 
 outstanding was $33,140,000, of which the banks held 
 $27,955. The amount outstanding on August 1, 1887, 
 was $8,460,000, of which the banks held $7,810,000. 
 
FOUR PJEB CENT. 0EBTIFICATE8. 117 
 
 The act of February 26, 1879, authorized the issue 
 of 4 per cent, certificates, of the denomination of $10, 
 which were convertible at any time, with accrued in- 
 terest, into the 4 per cent, bonds authorized to be issued 
 July 14, 1870. This act was passed for the purpose of 
 facilitating the refunding of 5 and 6 per cent, bonds 
 then falling due into 4 per cents, but the act was really 
 xmnecessary, for about the time the certificates began to 
 be issued, the 4 per cent, bonds were above par in the 
 market. Long lines of people gathered at the different 
 Government depositories where the certificates were 
 offered, and the amount was taken as fast as they could 
 be furnished. $40,012,750 were disposed of at par, of 
 which $39,398,110 were issued during the fourth quarter 
 of the fiscal year 1879, and the amount outstanding on 
 October 1, 1887, was $163,430. 
 
 The table on page 118 exhibits the amount of treasury 
 notes of the different forms issued during the late civil 
 war, outstanding on October 1, 1887, interest upon all 
 of which has long since ceased. 
 
 " An act to authorize the issue of United States notes, 
 and for the rcdemj^tion or funding thereof, and for re- 
 funding the floating debt of the United States," which 
 was signed by President Lincoln on February 25, 
 1862, is the first law ever placed upon the statute books 
 making treasury notes, or anything but gold and silver 
 coin, a tender in payment of debts. Indeed, it may be 
 said that neither the Congress of the United States nor 
 the Continental Congress, which preceded it, issued any 
 form of legal tender treasury notes. The Continental Con- 
 gress had no power to enact such a law. It did, however, 
 pass a resolution, on January 4, 1777, recommending to 
 
118 
 
 UNITED STATES NOTES. 
 
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CONTINENTAL MONEY A TENDER. 119 
 
 the legislatures of the different States to pass laws mak- 
 ing the bills of credit issued by Congress a lawful tender 
 in payment of public and private debts, and a refusal 
 thereof an extinguishment of such debts ; that debts 
 payable in sterling money be discharged in continental 
 dollars at the rate of 43.6 sterling per dollar ; and that 
 in the discharge of all other debts and contracts, conti- 
 nental dollars shall pass at the rate fixed by the respect- 
 ive States for the value of Spanish milled dollars. In 
 accordance with the recommendation contained in these 
 resolutions, continental paper money was made a legal 
 tender in Connecticut, Massachusetts, Ehode Island, and 
 New Jersey in 1776, and in Pennsylvania, Delaware, 
 Maryland, and Yirginia in 1777. 
 
 The legal tender act was passed curing the second ses- 
 sion of the 32d Congress, which met December 2, 1861. 
 The report of the Secretary of the Treasury bears date 
 December 9th. The third instalment of fifty millions, 
 of the loan of 150 millions already referred to, had been 
 negotiated on the 16th of liTovember previous, with the 
 associated banks. The Secretary was hopeful that the 
 war would be brought to an auspicious termination be- 
 fore midsummer, but at the same time submitted esti- 
 mates based upon its continuance. In this event, it was 
 estimated that the public debt, which, on July 1, 1861, 
 was $90,867,828, would be on July 1, 1862, 517 millions, 
 and on July 1st of the following year, 897 millions. He 
 recommended the issue of circulating notes in place of 
 the existing bank-note circulation, which depended "on 
 the laws of thirty-four States, and the character of some 
 sixteen hundred private corporations." 
 
 Two plans for effecting this object were suggested; 
 
120 UNITED STATES NOTES. 
 
 the first was the withdrawal of the bank circulation, 
 and the issue o£ United States notes instead thereof, pay- 
 able in coin on demand ; the second contemplated the 
 delivery to banks of. notes prepared for circulation un- 
 der national direction, and to secure prompt convertibil- 
 ity into coin by the pledge of United States bonds, and 
 other needful regulations. Both of these plans were 
 discnssed at considerable length in the report, the pret 
 orence of the Secretary being decidedly in favor of the 
 issue of bank notes. The avails of the large loan made 
 from the banks were not allowed to remain on deposit, 
 to be drawn by checlcs as the necessities of the Gov- 
 ernment should require, but were, fi-om time to time, 
 paid into the treasury, so that it was quite difficult for 
 some of the banks to meet the last instalment. The 
 banks were in danger of suspending specie payment at 
 the time of the meeting of Congress. Suspension finally 
 took place on December 28, 1861, and two days later, 
 on the SOtli, Mr. Spaulding, of the snb-committee of the 
 Committee of Ways and Means, introduced the legal 
 tender bill. 
 
 A national bank bill had been prepared previously, and 
 when nearly completed, Mr. Hooper, of Massachusetts, 
 also of the sub-committee, incorporated in it several pro- 
 visions contained in a recent free-banking bill, which had 
 passed the Legislature of his own State. Two hundred 
 copies of this bill, which was hastily prepared late in the 
 month of December, were printed for the use of the 
 Committee of Ways and Means, and a copy of this bill, 
 wliich was the basis of the national bank act, which be- 
 came a law about a year afterward, is in the possession 
 of the writer. It being evident that the bank bill would 
 
LEGAL TENDER NOTES DENOUNCED. 121 
 
 encounter considerable opposition from the friends of 
 banks organized under State laws, and that great delay 
 would necessarily occur from the consideration of an 
 elaborate bank bill of sixty or more sections, arranged 
 for the organization of banks in the different States of 
 the Union, the bill was laid aside, and the bill authoriz- 
 ing the issue of legal tender notes was considered. 
 
 An informal letter was read to the Committee from 
 Attorney-General Bates, in which he gave it as his 
 opinion that Congress had not only the right to issue- 
 such bills of credit, but also to make them a legal 
 tender. Discussion of the bill continued for several 
 days, and upon a vote being taken, it was found that 
 the Committee was equally divided, but by the change 
 of a Tote it was finally reported to the House on July 7, 
 1862, and published in the leading Isesf York news- 
 papers. Only two daily newspapers favored the meas- 
 ure, and it is said that other newspapers, which were 
 bitterly hostile, were for a time excluded from the 
 privilege of the mails. The leading financial magazine 
 ridiculed and denounced the plans of the Secretary and 
 of Congress in its monthly issues, and at one time de- 
 clared that " the financial fabric of the Union totters 
 to its base ! " Delegates from ten of the principal banks 
 in the three leading cities appeared in Washington and 
 opposed the bill. The bill was afterward submitted to 
 the Secretary of the Treasury by the Committee, and, 
 upon its return with his suggestions, was reported to the 
 House on January 22, 1862, with the title above given, 
 as a substitute for the previous bill. The bill passed the 
 House on February 6, 1862, by a vote of 93 to 59. There 
 were no democratic votes in favor of the bill, and among 
 
122 UNITED STATES NOTES. 
 
 the nays were : Morrill, of Yermont ; Conkling and 
 Pomeroy, of j^^ew York ; Porter, of Indiana ; Lovejoy, 
 of Illinois ; Thomas, of Massachusetts ; Kollins, of New- 
 Hampshire, and other leading Kepublicans. The chief 
 amendments in the Senate were : requiring payment of 
 interest semi-annually in coin on bonds and seven-thirty 
 notes ; conferring on the Secretary power to sell 6 per 
 cent, bonds at the market value thereof for coin ; making 
 the bonds redeemable in five years and payable in twenty 
 years from date at the option of the Government, and 
 authorizing temporary deposits in the treasury at 6 per 
 cent. 
 
 There was considerable debate in both Houses upon the 
 question of the right of the G-overnment to issue demand 
 notes, and the arguments were not unlike those which 
 have already been given in previous debates in Congress. 
 The principal discussion was, however, upon the consti- 
 tutional right of Congress to make these notes a legal 
 tender. 
 
 Secretary Chase, afterward Chief Justice, in a letter 
 to the Committee of Ways and Means on January 29, 
 1862, says : " It is not unknown to the Committee that 
 I have felt, nor do I wish to conceal that I now feel, a 
 great aversion to making anything but coin a legal ten- 
 der in payment of debts. It has been my anxious wish 
 to avoid the necessity of such legislation. It is, how- 
 ever, at present impossible, in consequence of the large 
 expenditures entailed by the war, and the suspension of 
 the banks, to procure suincient coin for disbursement ; 
 and it has, therefore, become indispensably necessary 
 that we should resort to the issue of United States notes. 
 The making them a legal tender miglit, however, still 
 
LEGAL TENDER A NECES8LTT. 123 
 
 be avoided, if the willingness manifested by the people 
 generally, by railroad companies, and by many of tlie 
 banking institutions, to receive and pay them as money 
 in all transactions, were absolutely or practically univer- 
 sal; but, unfortunately, there are some persons and 
 some institutions which refuse to receive and pay them, 
 and whose action tends, not merely to the unnecessary 
 depreciation of the notes, but to establish discrimina- 
 tions in business against those who, in this matter, give 
 a cordial support to the Government, and in favor of 
 those who do not. Such discriminations should, if pos- 
 sible, be prevented ; and the provision making the notes 
 a legal tender, in a gi-eat measure at least, prevents it, 
 by putting all citizens in this respect on the same level, 
 both of rights and duties. 
 
 " The Committee, doubtless, feel the necessity of ac- 
 companying this measure by legislation necessary to se- 
 cure the highest credit, as well as the largest currency 
 of these notes. This security can be found, in my judg- 
 ment, by proper provisions for funding them in interest- 
 bearing bonds ; by well-guarded legislation autliorizing 
 banking associations with circulation based on the bonds 
 in which the notes are funded ; and by a judicious sys- 
 tem of adequate taxation, which will not only create a 
 demand for the notes, but — by securing the prompt pay- 
 ment of interest — raise and sustain the credit of the 
 bonds. Such legislation, it may be hoped, will divest 
 the legal tender clause of the bill of injurious tenden- 
 cies, and secure the earliest possible return to a sound 
 currency of coin and promptly convertible notes." 
 
 From the introduction of the bill in Congress on De- 
 cember 30, 1861, to its final approval on February 25, 
 
124 UNITED STATES NOTES. 
 
 1862, a period of eight weeks, it was thoroughly dis- 
 cussed both in Congress and throughout the country. 
 More than twenty members of the House participated 
 in the debate. Messrs. Spanlding, Hooper, Alley, Kel- 
 logg, Campbell, Hickman, and Stevens were the most 
 prominent speakers in favor of the measure. Messrs. 
 Pendleton, Yallandigham, Morrill, Conkling, Wright, 
 and Lovejoy opposed it. Mr. Spaulding made the 
 speech introducing the bill. He said : " The bill before 
 us is a war measure, a measure of necessity, and not of 
 choice, presented by the Committee of Ways and Means 
 to meet the most pi'essing demands upon the treasury 
 to sustain the army and navy, until they can make a 
 vigorous advance upon the traitors, and crush out the^ 
 rebellion. These are extraordinary times, and extraor- 
 dinary measures must be resorted to in order to save 
 our Government, and preserve our nationality." 
 
 In the course of the discussion the following extract 
 fiom a letter just received by Mr. Spaulding from the 
 Secretary of the Treasury was read : " Immediate action 
 is of great importance. The treasury is nearly empty. 
 I have been obliged to draw for the last instalment of 
 the November loan. So soon as it is paid, I fear the 
 banks generally will refuse to receive the United States 
 notes, unless made a legal tender. You will see the 
 necessity of urging the bill through without more delay." 
 
 The influences which seemed to render it necessary 
 tiiat the notes authorized to be issued by the bill should 
 be declared a legal tender, is shown, not only by the let- 
 ters of the Secretary but by the debate which followed. 
 
 Mr. Hooper said : " The unusual exigencies of the 
 country require that we should look for other and deeper 
 
DEBATE IN THE HOUSE. 125 
 
 sources o£ revenue than any to which we have heretofore 
 been accustomed. We are contending for maintenance 
 of the Government, the preservation of the Union, and 
 for the enforcement of the laws." 
 
 Mr. Alley said : " Beneficent as this measure is, as 
 one of relief, nothing could induce me to give it sanc- 
 tion but uncontrollable necessity. * * There can be 
 no more issues than the real necessities of the Govern- 
 ment require. The Government cannot make issues, 
 like the banks, for profit. * * Its issues must neces- 
 sarily be limited to its absolute wants." 
 
 On the same point Mr. Kellogg said : " If this ques- 
 tion came up in ordinary times, I am frank to confess 
 that I might, perhaps, have had some doubt of its con- 
 stitutionality sufficient to induce me to oppose it. I 
 mean by that only to say that in time of peace, when the 
 integrity of the Government is not threatened, I would 
 be more careful and cautious ; and if I doubted the con- 
 stitutionality of the measure I would not vote for it. 
 But, sir, in this our extremity, while we are struggling 
 to perpetuate our Government, I am willing to go to the 
 very verge of the Constitution. I treat this, Mr. Chair- 
 man, as emphatically and clearly a war measure." 
 
 Mr. Blake argued that it was constitutional to issue 
 treasury notes and make them a legal tender. lie in- 
 sisted that it was a necessary and proper means of cai'ry- 
 ing into effect the war powers — to raise and support 
 armies, and to provide and maintain a navy. We are 
 now in the midst of a great national exigency, and one, 
 too, that we must provide for ; and one that in the appli- 
 cation of the means there must of necessity be great lati- 
 tude of discretion. 
 
126 UNITED STATES NOTES. 
 
 Mr. Campbell remarked : " The bill now before the 
 Committee is necessary to sustain the credit of the coun- 
 ivj, and to carry on the war. It is with reluctance that 
 I have come to this conclusion. I do not like the neces- 
 sity which CKists for the legal tender clause ; still less 
 do I like to place the issues of the Goverimient in the 
 hands of the brokers and money-lenders of the country. 
 Depreciated now, let the legal tender clause fail, and 
 mark the result to-morrow. The treasury notes will fall 
 from 4 per cent, to 15 and 25 below par, and the Gov- 
 ernment will have to pay that percentage additional for 
 every article they purchase." 
 
 Mr. Hickman, of Pennsylvania, on the same side, 
 said : " I am disposed to waive the question of propriety 
 or expediency, and to vote for it as a necessity." 
 
 Mr. Stevens, who closed the debate, said : " This bill 
 is a measure of necessity, not of choice. ]^o one would 
 willingly issue paper currency not redeemable on de- 
 mand, and make it a legal tender. It is never desirable 
 to depart from the circulating medium which, by the 
 common consent of civilized nations, forms the standard 
 value. But it is not a fearful measure, and when ren- 
 dered necessary by exigencies it ought to produce no 
 alarm." 
 
 He argued in favor of the constitutionality of the 
 legal tender clause, and that it was a necessary and 
 proper measure at this time. " In short, whenever any 
 law is necessary and proper to carry into execution any 
 delegated power, such law is valid. That necessity need 
 not be absolute, inevitable, and overwhelming — if it be 
 useful, expedient, profitable, the necessity is within the 
 constitutional meaning. Whether such necessity exists 
 
SPEECH OF TIIADDEU8 STEVENS. 127 
 
 is solely for the decision of Congress. Their judgment 
 is absolute and conclusive. If Congress should decide 
 this measure to be necessary to a granted power, no de 
 partment of the Government can rejudge it. The Su- 
 preme Court might think the judgment of Congress 
 erroneous, but they could not review it. * * Our 
 proposition is to issue Uuited States notes, secured at the 
 end of twenty years to be paid in coin, and the interest 
 raised by taxation semi-annually ; such notes to be 
 money, and of uniform value throughout the Union. 
 I look upon the immediate passage of the bill as es- 
 sential to the very existence of the Government. Keject 
 it, and the financial credit, not only of the Government, 
 but of all the great interests of the counti-y, will be 
 prostrated. Mr. Chairman, let me say iu conclusion, 
 that unless this bill is to pass with the legal tender 
 clause in it, it is not desirable to its friends, or to the 
 Administration, that it should pass at all ; and those 
 who think as I do will have to vote against it, if it 
 should be thus mutilated and emasculated. If it is to 
 be defeated, I sliould be glad if we had the power which 
 they have in the British Parliament — to resign our 
 places on the Committee of "Ways and Means, and leave 
 it to those \i\io oppose this bill to mature some other 
 measure. So far as I am concerned, I shall be modest 
 enough not to attempt any other scheme. The Com- 
 mittee of Ways and Means have labored in the prepara- 
 tion of this measure anxiously, and to the best of their 
 poor abilities. We are not infallible. We do not come 
 near it. I am but poorly qualified for anything of this 
 kind. But we have given it our most anxious consider- 
 ation, and have consulted those whom we believed to 
 
128 UNITED STATES NOTES 
 
 be the best qualified to advise us. "We have sought to 
 harmonize conflicting vievps in the substitute which the 
 majority of the Committee have prepared, and we hope 
 it will pass. "We believe that the credit of the country 
 will be sustained by it, that under it all classes will be 
 paid in money which all classes can use, and that it 
 will confer no advantage on the capitalist over the poor 
 laboring man." 
 
 The following extracts from the speeches of those op- 
 posed to the bill will indicate the drift of then- argu- 
 ments. Mr. Pendleton said: "These notes are to be 
 made lawful money, and a legal tender in discharge of 
 all pecuniary obligations, either by the Government or 
 individuals, a cliaracter which has never been given to 
 any note of the United States, or any note of the Bank 
 of the United States, by any law ever passed. Not only, 
 sir, was such a law never passed, but such a law was 
 never voted on, never proposed, never introduced, never 
 I'ccommended by any department of the Government ; 
 the measure was never seriously entertained in debate 
 in either branch of Congress." He contended that the 
 bill, if passed, would impair the obligation of past as 
 well as of future contracts, and that it would make it il- 
 legal to make a conti-act for dealing in gold or silver 
 coin, for the reason that these legal tender notes might 
 be tendered in payment of coin contracts ; and added : 
 " "When I come to examine the powers of Congress ac- 
 cording to the principles of interpretation to which I ad- 
 here, I look to the grants of the Constitution. I find 
 no grant of this power in direct terms, or, as I think, by 
 fair implication. It is not an accidental omission ; it is 
 not an omission through inadvertency. It was inten- 
 
DEBATS m THE HOUSE.' 129 
 
 tionally left out of the Constitution, because it was de- 
 signed that the power should not reside in the Federal 
 Government." 
 
 Mr. Vallandigham denied the riglit of the Federal 
 Government to provide a paper currency, intended 
 primarily to circulate as money, and meet the demands 
 of business and commercial transactions, and to the ex- 
 clusion of all other paper. It is not the intent or object 
 of the substitute to furnish such a currency for the coun- 
 try. He said : " The ship of State is upon the Rocks. 
 I was not the helmsman who drove her there ; nor had 
 I part or lot in directing her course." 
 
 Ml-. Morrill protested " against making anything a legal 
 tender but gold and silver, as calculated to undermine all 
 confidence in the Eepublic, whose reputation should be 
 dearer to statesmen, as well as to soldiers, than life itself." 
 
 Mr. Conkling assigned his i-easons for voting against 
 the attempt to make paper a legal tender as follows : 
 " The proposition is a new one. No precedent can be 
 urged in its favor ; no suggestion of the existence of 
 such a power can be found in the legislative histoiy of 
 the country ; and I submit to my colleague, as a lawyer, 
 the proposition that this amounts to affirmative author- 
 ity of the highest kind against it. Had such a power 
 lurked in the Constitution, as construed by those who 
 ordained and administered it, we should find it so re- 
 corded. The occasion for resorting to it, or at least re- 
 ferring to it, has, we know, repeatedly arisen ; and had 
 such a power existed, it would have been recognized and 
 acted on. It is hardly too much to say, therefore, that 
 the uniform and universal judgment of statesmen, jur- 
 ists, and lawyers has denied the constitutional right of 
 
130 UNITED STATES NOTES. 
 
 Congress- to make paper a legal tender for debts to any 
 extent whatever. But more is claimed here than the 
 right to create a legal tender heretofore imknown. The 
 provision is not confined to transactions in future, but is 
 retroactive in its scope. It reaches back and strikes at 
 every existing pecuniary obligation." And he added : 
 " I believe all the money needed can be provided in sea- 
 son by means of unquestionable legality and safety. 
 The substitute I have offered will, I believe, without 
 essential alteration, effect that result." 
 
 Mr. Wright thought that "the people had means 
 enough in their possession, and he was willing to go for 
 taxation to the uttermost limit; but the time had not yet 
 arrived when we should resort to such an extreme meas" 
 ure as to make these notes a legal tender." 
 
 Mr. Lovejoy held " that no respectable argument could 
 be made in vindication of the constitutionality of this 
 bill. He would admit the plea of necessity if he be- 
 lieved it ; and he thought it more manly to confess it, 
 as Jefferson did, than to attempt to torture the Consti- 
 tution into the support' of a measure which everybody 
 must see to be unconstitutional." 
 
 The bill passed the House on February 6th, by a vote 
 of 93 to 59. It was sent to the Senate on February 
 7th. Mr. Fessenden, Chairman of the Finance Com- 
 mittee, obtained unanimous consent to consider the sub- 
 ject forthwith, and read a letter from the Secretary of 
 the Treasury of which the following is an extract: 
 " The condition of the treasury requires immediate legis- 
 lative provision." 
 
 Mr. Fessenden opened the debate. He proposed'to 
 state briefly the arguments on both sides without either 
 
8BNAT0B, FE88ENDBN'8 SPEECH. 131 
 
 favoring or opposing tlie measure. He said : " The 
 ground upon which this clause making these notes a 
 legal tender is put, I have already stated. It is put 
 upon the ground of absolute, overwhelming necessity ; 
 that the Government has now arrived at that point 
 where it must have funds, and those funds are not to be 
 obtained from ordinary sources, or from any of the ex- 
 pedients to which we have heretofore had recourse, and 
 therefore, this new, anomalous, and remarkable provi- 
 sion must be resorted to in order to enable the Govern- 
 ment to pay ofE the debt that it now owes, and afEord 
 circulation which will be available for other purposes. 
 The question then is, does the necessity exist ? " He 
 did not hesitate to say that he " woidd advocate the use 
 of the strong arm of the Government to any extent in 
 order to accomplish the purpose in which we are engaged. 
 He would take the money of any citizen against his will 
 to sustain the Government, if nothing else was left, and 
 bid him wait until the Government could pay him. It 
 is a contribution which every man is bound to make under 
 the circumstances. We can take all the property of any 
 citizen. That is what is called a forced contribution. 
 * * The question after all returns ; Is this measure 
 absolutely indispensable to procure means ? If so, as I 
 said before, necessity knows no law. Say what you 
 will, nobody can deny that it is bad faith. If it be 
 necessary for the salvation of the Government, all con- 
 siderations of this kind must yield ; but to make the 
 best of it, it is bad faith, and encourages bad morality, 
 both in public and private. Going to the extent that it 
 does, to say that notes thus issued shall be receivable in 
 payment of all private obligations, however contracted, 
 
132 UNITED STATES NOTES. 
 
 is in its very essence a wrong, for it compels one man 
 to take from his neiglibor, in payment of a debt, that 
 which be would not otherwise receive or be obliged to 
 receive, and what is probably not full payment." 
 
 Mr. Collamer made an elaborate speech against the 
 legal-tender clause in the bill. lie argued that it was 
 unconstitutional, and that even if it was a necessity, he 
 could not vote for tlie measure. His honest opinion was 
 that the Constitution never intended to invest Congress 
 with any such power. He referred to the debates in 
 the convention that formed the Constitution, to show 
 that " the men of that period always entertained the 
 opinion that the United States could have nothing else 
 a tender but coin. While they lived there never was 
 sncli a thing thought of as attempting to make the evi- 
 dences of the debt of the Government a legal tender, 
 let their form be what they might." He argued that 
 there was an express power " to borrow money on the 
 credit of the United States. That where there is an 
 express power to do a thing, there can be no implied 
 power to do the same thing. There were two modes Qf 
 replenishing the ti-easury. One was by taxation, and 
 the other to borrow money. To borrow money there 
 must be a lender and a borj-ower ; and both should act 
 voluntarily, and not compel the lender to part with his 
 money without an inducement. The operation of this 
 bill was not anything like as honorable or honest as a 
 forced loan." 
 
 Mr. Sherman spoke in favor of the legal-tender clause, 
 and in regard to its necessity said : " Every organ of 
 financial opinion" — referring to the action of the Cham- 
 bers of Commerce in the principal cities — " if that is a 
 
DEBATE m THE SENATE. 133 
 
 correct expression — in this country agrees that there is 
 such a necessity, in case we authorize the issue of de- 
 mand notes. * * Our arguments must be submitted 
 finally to the arbitration of the courts of the United 
 States. When I feel so strongly the necessity of this 
 measure, I am constrained to assume the power, and re- 
 fer our authority to exercise it to the courts. I have 
 shown, in reply to the argument of the Senator from 
 Maine, that we must no longer hesitate as to the neces- 
 sity of this measure. That necessity does exist, and now 
 presses upon us." He thought himself required " to 
 vote for all laws necessary and proper for executing 
 these high powers, and to accomplish that purpose. 
 This is not the time when I would limit these powers. 
 Kather than yield to revolutionary force, I would use re- 
 volutionary force." 
 
 Mr. Howe said : " Congress is also clothed with power 
 ' to make all laws which shall be necessary and proper 
 for carrying into execution the foregoing powers, and 
 all other powers vested by this Constitution in the Gov- 
 ernment of the United States.' Those who deny the 
 constitutional authority to pass this bill must deny its 
 necessity or its propriety. Those who deny its necessity 
 or its propriety ought to show us some plan for avoid- 
 ing it, some measure adequate to the emergency, and 
 more proper than the one proposed by this bill. Two 
 months have elapsed since the policy of this bill has 
 been discussed, and no one of its opponents has yet pro- 
 duced a substitute. The total neglect to offer a substi- 
 tute IS prirna facie evidence of the necessity for this." 
 
 Mr. Bayard said : " No one can deny the fact that in 
 contracts between man and man, and in government 
 
134: UNITED STATES NOTES. 
 
 contracts to pay money, the obligation is to pay intrin- 
 sic value. If you violate that by this bill, which yon 
 certainly do, how can you expect that the faith of the 
 community will be given to the law which you now pass, 
 in which yon say that you will pay hereafter the interest 
 on your debt in coin ? Why should they give credit to 
 that declaration ? If you can violate the Constitution of 
 the United States in the face of your oaths, in the face 
 of its palpable provision, what security do you offer to 
 the lender of money ? " 
 
 Mr. Sumner argued, in the present existing state of the 
 country, for the constitutionality and expediency of the 
 legal-tender clause. He quoted from Mr. Justice Story 
 " that all these prohibitory clauses as to coining money, 
 emitting bills of credit, and tendering anything but gold 
 and silver in payment of debts, are founded upon the 
 same general considerations. The policy is to provide 
 a fixed and uniform rule throughout the United States, 
 by which commercial and other dealings of the citizens, 
 as well as the moneyed transactions of the Government, 
 might be adjusted" (2 Story's Com., Sec. 1372). 
 
 " If this view be correct, then no inference adverse to 
 the powers of the National Government can be drawn 
 from these prohibitory clauses ; for whatever may be 
 tlie policy of the National Government, it will be a 
 fixed and uniform rule throughout the United States." 
 " Surely, we must all be against paper money, we must 
 all insist upon maintaining the integrity of the Govern- 
 ment ; and we must all set our faces against any propo- 
 sition like the present, except as a temporary expedient, 
 rendered imperative by the exigency of the hour." 
 
 " Others may doubt if the exigency is sufficiently ira^ 
 
THE VOTE IN TEE SENATE. 135 
 
 perative ; but the Secretary of the Treasury, whose duty 
 it is to understand the occasion, does not doubt. In his 
 opinion the war requires this sacrifice. Whatever may 
 be the national resources, they are not now within reach, 
 except by summary process. Eeluctantly, painfully, I 
 consent that the process should issue. And yet I cannot 
 give such a vote without warning the Government 
 against the dangers from such an experiment. The 
 medicine of the Constitution must not become its daily 
 bread." 
 
 The motion of Mr. Collamer, on February 13, to 
 strike out the legal tender clause, was defeated, lY yeas 
 to 22 nays. Anthony, of Khode Island, Collamer and 
 Foot, of Yermont, Fessenden, of Maine, King, of New 
 York, Cowan, of Pennsylvania, Foster, of Connecticut, 
 and "Willey, of Yirginia, of the Kepublicans, voted yea. 
 Four Democrats only — Davis, of Kentucky, McDougall, 
 of California, Eice, of Minnesota, and Wilson, of Mis- 
 souri — ^voted nay. The bill passed by a vote of 30 to T, 
 three Eepublicans — Collamer, Cowan, and King — and 
 four Democrats — Kennedy, Pearce. Powell, and Sauls- 
 bury — voting nay. 
 
 The Senate amendment to pay interest upon the five- 
 twenty bonds in coin was adopted by the House, by a 
 vote of 88 to 56. The amendment authorizing the 
 Secretary to sell tlie bonds at the market value was also 
 adopted — ayes, 72 ; nays, Q&. 
 
 On February 20th the amendments were returned 
 to the Senate with the concurrence of the House in 
 part of them, and non- concurrence in others, and with 
 some amendments to the Senate amendments ; afteir 
 which a conference committee — Senators Fessenden, 
 
136 UNITED STATES NOTES. 
 
 Sherman, and Carlisle, and Representatives Stevens, 
 Horton, and Sedgwick — ^was appointed, which committee 
 had a long consultation extending through two or three 
 days. The report of the conference committee was agreed 
 to on the 24tli in the House by yeas 97, nays 22, and in 
 the Senate on the 25th without a division, and on the 
 same day the bill was approved by the President. It 
 authorized the issue of 150 millions of United States 
 notes, not bearing interest, payable to bearer at the Treas- 
 ury of the United States, and of denominations of not 
 less than $5, fifty millions of which were to be in lieu of 
 the demand tf-easury notes which had been previously 
 issued ; they were similar in form to those notes, but they 
 were not receivable in payment of duties on imports, and 
 were not payable by the Government for interest upon 
 its obligations, which were payable in coin ; they were to 
 be a legal tender in payment of all other debts, public 
 and private, within the United States. They differed 
 from the first notes issued also, and in this respect — that 
 all holders of legal-tender notes were authorized to de- 
 posit any sum not less than $50, or any multiple of $50, 
 with the Treasure!-, or either of the Assistant Treasurers, 
 and receive duplicate certificates, upon which were to be 
 issued to the holder an equal amount of bonds of the 
 United States bearing interest at the rate of 6 per cen- 
 tnm per annum, payable semi-annually, and redeemable 
 at the pleasure of the United States after five years, 
 and payable twenty years fi-om the date thereof. The 
 second section of the same act authorized the issue of 
 500 millions of five-twenty bonds into which the treas- 
 ury notes were to be funded, in accordance with the 
 previous section and as stated in the title of the bilL 
 
FIRST LEGAL TEITDEBS ISSUED nf 1863. 137 
 
 The first notes issued were of the date of March 10, 
 1862, and there was printed upon tlie hack the following 
 words : " This note is a legal tender for all debts,, public 
 and private, except duties on imports and interest on the 
 public debt, and is exchangeable for United States 6 
 per cent, bonds redeemable at the pleasure of the United 
 States after five years." The ten-dollar note was in its 
 general appearance almost precisely like the demand 
 note of that denomination ; the principal difference being 
 that the words " on demand" were omitted, and the sig- 
 natures of the Register and Treasurer were engraved. 
 
 On June 7, 1862, the Secretary addressed letters to 
 the chairmen of the Committee of Ways and Means of 
 the House and the Finance Committee of the Senate, 
 recommending a further issue of 150 millions of dollars 
 of legal-tender notes. He said that nearly the whole 
 issue of sixty millions in demand notes was held by 
 bankers and by capitalists, and was at a premium of from 
 f to li per cent, on account of its availability for the 
 payment of duties ; so that there was really only about 
 ninety millions of United States notes in circulation. 
 Pie said that the United States notes are maintained at 
 near par in gold by the provision for their conversion 
 into bonds bearing 6 per cent, interest payable in coin, 
 and that resumption would be more easily effected " if 
 the currency — small as well as large — were of United 
 States notes, than if the channels of circulation be left 
 to be filled up by the emissions of non-specie paying 
 corporations, solvent and insolvent." With these letters 
 he transmitted bills for the consideration of these com- 
 mittees. The immediate necessities of the Government 
 admitted of but little delay, and the bill, substantially 
 
138 UNITED STATES NOTES. 
 
 as recommended by the Secretary, passed both Honses, 
 and was signed by the President on June 11, 1862, 
 The bill authorized the issue of 150 millions of legal- 
 tender notes, thirty -five millions of which were to be in 
 denominations less than $5. The subsequent act of 
 March 3, 1863, authorized the issue of an additional 
 150 millions, making the aggregate authorized issue of 
 legal-tender notes 450 millions of dollars. This act was 
 similar to the previous legal-tender acts, so far as the 
 issue of treasury notes was concerned, except that it 
 provided " that the holders of United States notes issued 
 under former acts shall present the same for the purpose 
 of exchanging them for bonds as therein provided on or 
 before July 1, 1863, and thereupon the right to exchange 
 the same shall cease and determine." 
 
 After the passage of the act of March 3, 1863, the 
 Secretary decided to commence the negotiation of 5 per 
 cent, ten-forty bonds, and gave notice that he should de- 
 cline to allow the holders of legal tenders to fund such 
 notes in bonds bearing a greater rate of interest than 
 5 per cent, after July 1, 1863. The negotiation of the 5 
 per cents was not successful at that time, and that por- 
 tion of the act of Mai-ch 3d which repealed the right to 
 fund legal tenders into five-twenties, as printed upon 
 the back of the notes, was not only a violation of the 
 contract with the holder, but also a serious financial 
 mistake. It had the effect to materially reduce the 
 value of the treasury notes in the market, prevented the 
 further funding of treasury notes after July 1st, and 
 undoubtedly postponed for many months the date for 
 the resumption of specie payment. 
 
 The highest amount of legal-tender notes outstanding 
 
BEPORT OF 8EGRETABY McGULLOCH, 1865. 139 
 
 at any time was ou January 3, 1864, when tlie amount 
 reached $449,338,902. The second section of the act of 
 June 30, 1864, provided that "the total amount of 
 United States notes issued or to be issued shall not ex- 
 ceed 400 millions, and such additional sum, not exceed- 
 ing fifty millions, as may be temporarily requii'ed for 
 the redemption of temporary loans." The following 
 table shows by denominations the amount of legal-ten- 
 der notes outstanding on January 1, 1885 : 
 
 Ones $26,523,143 80 
 
 Twos 26,840,317 30 
 
 Fives 77,538,815 00 
 
 Tens 67,860,366 00 
 
 Twenties 55,513,489 00 
 
 Fifties 32,703,695 00 
 
 One hundreds 33,263,790 00 
 
 Five hundreds 15,015,000 00 
 
 One thousands 22,272,500 00 
 
 Five thousands 100,000 00 
 
 Ten thousands 50,000 00 
 
 Less destroyed in the Chicago fire 1,000,000 00 
 
 Total $346,681,016 00 
 
 Secretary McCulloch, in his report for 1866, expressed 
 the opinion that the legal-tender acts were war meas- 
 ures, and ought not to remain in force one day longer 
 than should be necessary to enable the people to prepare 
 for a return to the gold standard. The House of Eepre- 
 sentatives during the same month passed a resolution, by 
 a vote of 144 yeas to 6 nays, " cordially concurring in the 
 views of the Secretary of the Treasury in relation to the 
 necessity of the contraction of the currency, with a view 
 
140 UNITED STATES NOTES. 
 
 to as early a resiiinption of specie payment as tlie busi- 
 ness interests of the country will permit." In order to 
 carry into effect this resolution, Congress, by an act ap- 
 proved March 12, 1866, authorized the retiring and can- 
 cellation of not more than ten millions of legal-tender 
 notes within six months from the passage of the act, 
 and thereafter not more than four millions in any one 
 month. Under this act the amount outstanding was so 
 far reduced that on December 31, 1867, the amount was 
 356 millions. On February 4, 1 868, the further reduc- 
 tion of the volume of such notes was prohibited, leaving 
 the last-named amount outstanding until October 1, 
 1872. Between March 17, 1873, and January 15, 1874, 
 nnder Secretary Eichardson, the amount was increased 
 to $382,979,815, and on June 20, 1874, the maximum 
 amount was fixed at $382,000,000 ; section six of the 
 act of that date providing that " the amount of United 
 States notes outstanding and to be used as a part of the 
 circulating medium shall not exceed the sum of 382 mil- 
 lions, which said sum shall appear in each monthly state- 
 ment of the public debt, and no part thereof shall be 
 held or used as a reserve." 
 
 Section three of the act of January 14, 1875, author- 
 ized an increase of the circulation of national banks, in 
 accordance with existing law, without respect to the 
 limit previously existing, but required the Secretary of the 
 Treasury to retire legal-tender notes to an amount equal 
 to eighty per cent, of the national-bank notes thereafter 
 issued, until the amount of such legal-tender notes out- 
 standing should be 300 millions, and no more. Undei 
 the operation of this act $35,318,984 of legal-tender 
 notes were retired, leaving the amount in circulation on 
 
SPECIE PAYMENTS RESUMED, 1879. 141 
 
 May 31, 1878, the date of the repeal of the act, $346,- 
 081,016, which is the amount no\y outstanding. 
 
 Tlie table on page 142 exhibits the amount of the 
 various issues of Treasury notes outstanding on July 1st, 
 of each year from 1862 to 1884, and on October 1, 
 1887; together with the amount of national-bank notes 
 and the value of the legal-tender Treasury note as com- 
 pared with coin for the same dates. 
 
 The act of January 14, 1875, required the Secretary 
 of the Treasury, on and after January 1, 1879, to re- 
 deem in. coin the legal-tender notes on their presentation 
 at the office of the Assistant Treasurer in the city of New 
 York, in sums of not less than $50. In order that he 
 might always be prepared to do this, he was authorized 
 "to use any surplus revenue from time to time in the 
 Treasury not otherwise appropriated, and to issue, sell, 
 and dispose of, at not less than par in coin, any of the 
 five, four and one-half, and four per cent, bonds author- 
 ized by the act of July 14, 1870. Under this act Sec- 
 retary Sherman, in 1877, sold at par in coin fifteen 
 millions of four and one-half per cents, and twenty-five 
 millions of four's ; and in April, 1878, he sold fifty mil- 
 lions of four and one-half per cents at a premium of 1^ 
 per cent. This coin was placed in the Treasury for pur- 
 poses of resumption, and on January 1, 1879, the Sec- 
 retary held 135 millions of gold coin and bullion, and, 
 in addition, over thirty-two millions in silver coin and 
 bullion ; the gold coin alone being nearly equal to 40 
 per cent, of the United States notes then outstanding. 
 
 The Assistant Treasurer of the United States, at New 
 York, became a member of the clearing-house, thus fa- 
 cilitating the business of the banks with the GovemmeDt 
 
142 
 
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8PE0m RESUMPTION, JANUARY 1, 1879. 143 
 
 The banks in ]S"ew York strengthened the hands of the 
 Government by agreeing to receive United States notes, 
 not only for their ordinary balances, but in payment of 
 the interest upon the public debt, and of other coin ob- 
 ligations of the Government. The banks of the country, 
 at the date of resumption, held more than one-third of 
 the outstanding treasury notes ; but they had so much 
 confidence in the ability of the Secretary to maintain re- 
 sumption that none were presented by them for redemp- 
 tion. The people preferred the issues of national banks 
 and of the Government to coin itself. There was, there- 
 fore, no demand for payment of the notes of the Govern- 
 ment, and the gold coin in the treasury, which amounted 
 to 135 millions on the day of resumption, increased more 
 •than thirty-six millions in the next ten months. The 
 amount held on ISTovember 1, 1879, exceeded 171 mill- 
 ions, and on November 1, 1883, 209 millions. Tlie 
 amount held on October 1, 1887, was $290,702,630, in- 
 cluding $97,984,683, held for the redemption of gold 
 certificates outstanding. The resumption act is stiU in 
 force, and gives the Secretary unlimited power with 
 which to provide for the redemption in coin of the legal- 
 tender notes. He is thus enabled, so long as the credit 
 of the Government continues good, to check, by the sale 
 of United States bonds, any exportation of coin which 
 might endanger the redemption of the United States 
 legal-tender notes. 
 
 From the date of the passage of the act of April 12, 
 1866, which authorized a reduction of the amount of 
 legal-tender notes, to the passage of the act of July 12, 
 1882, enabling national banking associations to extend 
 their corporate existence, a period of more than sixteen 
 
144 UNITED STATES NOTES. 
 
 years, Inmdreds of bills of almost every conceivable form 
 to regulate the currency were introduced in Congress. 
 Throughout the country the subject was continually dis- 
 cussed, not only during political campaigns and at public 
 conventions, but in the smaller gatherings of the school 
 district and the meetings of individuals by the wayside. 
 Speeches and political pamphlets by the thousand, essays, 
 campaign papers innumerable, and caricatures of almost 
 every kind and description, upon the subject of the ex- 
 pansion and contraction of the currency, and its effect 
 npon business, were distributed broadcast in all directions. 
 Perhaps the most plausible argument which was pre-, 
 sented, over and over again, in every portion of the coun- 
 try during these continued discussions, was in reference 
 to the retirement of the national bank-notes, and the 
 substitution therefor of treasury notes, in order, as was 
 claimed, to save to the Government the interest upon the 
 bonds held by the national banks as security for their 
 circulating notes. Discussions of this subject in its vari- 
 ous forms, and statements of the profits of the circula- 
 tion of the national banks at different dates, may be 
 found in the reports of the Comptroller of the Currency 
 during the last nine years. 
 
 A recent and distinguished writer, discussing the policy 
 of the legal-tender issues, says : " Grave differences of 
 opinion exist, even to tliis day, concerning the neces- 
 sity and expediency of the legal-tender provision. The 
 judgment of many whose financial sagacity is entitled 
 to respect is that if the internal tax had been first 
 levied, and the policy adopted of drawing directly upon 
 the banks from tlie treasury for the amounts of any 
 loans in their hands, the resort by the Government to 
 
BLAINE ON LEGAL TENDER. 1*5 
 
 irredeemable paper miglit at least have been postponed 
 and possibly prevented. The premium on gold became 
 the measure of the depreciation of the government 
 credit, and practically such premiums were the charge 
 made for every loan negotiated. In his report of De- 
 cember, 1862, Secretary Chase justified the legal-tender 
 policy. He explained that by the suspension of specio 
 payments the banks had rendered their currency unde- 
 sirable for government operations, and consequently no 
 course other than that adopted was open. Mr. Chase 
 declared that the measures of general legislation had 
 worked well. ' For the fiscal year ending with June,' 
 he said, ' every audited and settled claim on the Gov- 
 ernment, and every quartermaster's chedc for supplies 
 furnished which had reached the treasury, had been 
 met.' For the subsequent months the Secretary ' was 
 enabled to provide, if not fully, yet almost fully, for the 
 constantly increasing disbursements.' 
 
 " The political effects of the legal-tender bill were of 
 large consequence to the Administration and to the suc- 
 cessful conduct of the war. If it had been practicable 
 to adhere rigidly to the specie standard, the national ex- 
 penditure might have been materially I'educed ; but the 
 exactions of the war would have been all the time grat- 
 ing on the nerves of the people and oppressing them 
 with remorseless taxation. Added to the discourage- 
 ment caused by our military reverses, a heavy financial 
 burden might have proved disasti'ous. The Adminis- 
 tration narrowly escaped a damaging defeat in 1862, 
 and but for the relief to business which came from the 
 circulation of legal-tender notes, the political struggle 
 might have been hopeless. But as trade revived under 
 
146 UNITED 8TATMS NOTES. 
 
 the stimulus of an expanding circulation, as the market 
 for every species of product was constantly enlarging 
 and prices were steadily rising, the support of the war 
 policy became a far more cheerful duty to the mass of 
 our people. 
 
 " This condition of affairs doubtless carried with it 
 many elements of demoralization, but the engagement 
 of the people in schemes of money-making proved a 
 great support to the war policy of the Government. 
 We saw the reproduction among us of the same causes 
 and the same effects which prevailed in England dur- 
 ing her prolonged contest with Ifapoleon. Money was 
 superabundant ; speculation was rife ; the Government 
 was a lavish buyer, a prodigal consumer. Every man 
 who could work was employed at high wages ; every 
 man who had commodities to sell was sure of high 
 prices. The whole community came to regard the prev- 
 alent prosperity as the outgrowth of the war. The 
 ranks of the army could be filled by paying extravagant 
 bounty after the ardor of volunteering was past, and the 
 hardship of the struggle was thus in large measure 
 concealed if not abated. Considerate men knew that 
 a day of reckoning would come, but they believed it 
 would be postponed until after the war was ended and 
 the Union victorious. 
 
 " The policy of the legal- tender measure cannot there- 
 fore be properly determined if we exclude from view 
 that which may well be termed its political and moral 
 influence upon the mass of our people. It was this 
 which subsequently gave to that form of currency a 
 strong hold upon the minds of many who fancied that 
 its stimulating effect upon business and trade could be 
 
POLITICAL EFFECTS OF LEGAL TENDER. 147 
 
 reproduced under utterly different circumstances. Ar- 
 gument and experience have demonstrated the fallacy 
 of this conception, and averted the evils which might 
 have flowed from it. But in the judgment of a large 
 and intelligent majority of those who were contempo- 
 rary with the war and gave careful study to its progress, 
 the legal-tender bill was a most effective and powerful 
 auxiliary in its successful prosecution." ' 
 
 ' Twenty Tears of Congress. James G. Blaine. Vol. I. , pp. 437- 
 429. Norwich, Conn. : Tlie Henry Bill PublisMng Company. l'^4. 
 
CHAPTER X. 
 
 THE gILVEE DOLLAR AND THE SILVEE CERTIFICATE. 
 
 The act of April 2, 1792, for establishing a mint and 
 regulating the coinage of the United States, authorized 
 the free coinage of a silver dollar of 412.5 grains, and 
 this provision remained in force until 1873. 
 
 The act of June 28, 1834, which reduced the gold 
 standard about six and one-fourth per cent., practically 
 demonetized the silver coinage. Previous to the date 
 of the passage of that act American gold and silver coins 
 of all denominations were equally a legal tender, and the 
 silver coins of less denomination than one dollar were 
 chiefly in use, only $1,369,517 in silver dollars having 
 been issued from the mint at that date. The act of 
 1834 overvalued the gold coinage, driving from the 
 country the full-weight silver coins previously in circula- 
 tion ; and it may be confidently stated that from 1834 
 to 1873 no silver dollar-pieces had been presented at 
 any custom-house in payment of duties. The entire 
 customs-duties of the country during this period were, 
 with the exception of silver used in change, paid in gold 
 coin, and from this fund the interest paid upon the pub- 
 lic debt has been chiefly derived ; and it is not probable 
 that during this time any of these silver dollar-pieces 
 were used in this country in the payment of debt, except 
 
BILVBB COIN THE BASIS UNTIL ISU. 149 
 
 in certain cases of special contract, while thousands of 
 millions in gold coin have been nsed to liquidate debts, 
 both public and private. The average amount in silver 
 dollar-pieces annually coined from 1834 to 1873 was 
 about $160,000. 
 
 From 1793 — the date of the first issue of silver coin 
 by the United States — to 1834 the silver and the gold 
 dollar were alike authorized to be received as legal ten- 
 der in payment of debt, but silver alone circulated. 
 Subsequently, however, silver was not used, except in 
 fractional payments, or, since 1853, as a subsidiary coin. 
 The silver coin, as a coin of circulation, had become 
 obsolete. The reason why, prior to 1834, payments 
 were made exclusively in silver, and subsequently to 
 that date in gold, is found in the fact that prior to 
 the legislation of 1834 the weight of fine silver in the 
 silver dollar was fixed at fifteen times the weight of fine 
 gold in the gold dollar ; but after that date, owing to a 
 reduction in the weight of gold required for the standard 
 gold dollar, the silver dollar was made to contain of fine 
 metal almost precisely sixteen times that of the new 
 gold dollar, the actual market value of gold'during the 
 entire period having been greater than fifteen and less 
 than sixteen times the value of silver of equal weight. 
 During the earlier period, therefore, the standard silver 
 coins were relatively the clieaper, and consequently cir- 
 culated to the exclusion of the gold ; while during the 
 later period the standard gold coins were the cheaper, 
 circulating to the exclusion of the silver. 
 
 The Coinage Act of 1873, by which the coinage of the 
 silver dollar was discontinued, became a law on Febru- 
 ary 12th of that year. The act of February 28, 1878, 
 
150 VINITED STATES NOTES. 
 
 which pj^ssed Congress by a two-thirds vote over the 
 veto of Pi-esident Hayes, again provided for the coinage 
 of a silver dollar of 412.5 grains, the silver bullion to be 
 purchased at the inarliet price by the Government, and 
 the amount so purchased and coined not to be less than 
 two millions of dollars per month. During the debate 
 on this bill the charge was repeatedly made, in and out 
 of Congress, that the previous act of 1873, discontinuing 
 the free coinage of the silver dollar, was paiSsed surrep- 
 titiously. This statement has no foundation in fact. 
 
 The report of the writer, who was then Deputy Comp- 
 troller of tlje Currency, transmitted to Congress in 1870 
 by the Secretary, three times distinctly stated that the 
 bill accompanying it proposed to discontinue the issue 
 of the silver dollar-piece.' Yarious experts, to whom it 
 had been submitted, approved this feature of the bill, 
 and their opinions were printed by order of Congress. 
 The House was informed by its members of this provi- 
 sion, and the bill was printed thirteen times by order of 
 Congress, and once by the commissioners revising the 
 statutes, and \^as considered during five successive, ses- 
 sions. If the question of the double standard did not 
 become prominent in the discussion upon the bill, ifc was 
 f oa- the reason that usage had established the gold dollar 
 as the nnit, the silver dollar, on account of its greater 
 relative value, having, with the Mexican dollar and the 
 pistareen, disa,pp6ared from the circulation of the coun- 
 try. The Coinage- Act of 1873 " and the Eevised Statutes 
 of 1874 simply registered in the form of ^ statute what 
 
 » Senate, Mis. Doo. No. 133, XLI. Cong. , 2d Sess. 
 = For the history of the Coinage Act of 1873, see pp. 170-175, Re' 
 port of the Compljroller of the Curienoy for 1876. 
 
GOmAQE ACT OF 1873. 151 
 
 had been really the unwritten law of the land for nearly 
 forty years. 
 
 It is not probable that any act passed by any Con- 
 gress ever received more care in its preparation, or was 
 ever submitted to the criticism of a greater number of 
 practical and scientific experts ' than was this Coinage 
 Act of ISTS. The statements in reference to the surrep- 
 titious or inadvertent passage of the bill was subsequently 
 repeated in the city of Paris by a member of the Silver 
 Commission. 
 
 A well-known scientific author " and wnter on finan- 
 cial subjects, in criticising the report of the Paris Silver 
 Commission, says : 
 
 " Another act which must have placed our commis- 
 sioners at a moral disadvantage was their filing the hu- 
 miliating plea that the act of 1873, demonetizing the 
 silver dollar, was passed through inadvertence. 
 
 " It is difficult to see what this plea meant, what re- 
 lation it had to the business of the conference, or what 
 object was tO' be gained by raising it. If a proposed 
 law can be debated in Congress for five years, be reported 
 several times from committees in various forms, be rec- 
 ommended by the Secretary of the Treasury in at least 
 one annual report, finally pass both Houses of Congress, 
 and be signed by the President, then remain on the 
 statute-books for two or three years without any one 
 knowing it, and all through 'inadvertence^' what shall 
 we say of our political system, or of the attention of 
 
 ' H. R., Ex. Doc. No. 307, XLL Cong., 3d Sess. 
 'The Silver Gommission and the Silver Question, by Professor 
 Simon Uewoomb : International Review, Ma^cl^ ''WHQ. 
 
152 UNITED BTATES NOTES. 
 
 our people or our legislators to public affairs ? Every 
 one who cares for the good name of his country will 
 certainly say, ' Try to keep the fact out of the newspa- 
 pers, and by no means confess it to our neighbors.' The 
 plea was as pointless as humiliating. Had our delegates 
 frankly said that at the time of the passage of the act 
 silver had long ceased to circulate in their country, ex- 
 cept as a subsidiary coin ; that, therefore, the legislation 
 discontinuing its coinage and legal tender was, at the 
 time, only a matter of form, the acceptance of a histori- 
 cal fact ; but that the extraordinary fall in the price of 
 silver which had occurred in the meantime had again 
 called public attention to the subject, and convinced us 
 that silver should be money of full power, and thus led 
 us to retrace our steps, the statement would have been 
 correct and frank, and would have produced a much 
 better effect than did the plea actually put forward." 
 
 The act of February 28, 1878, also authorized the 
 holder of these silver dollars to deposit the same with 
 the Treasurer, or any Assistant Treasurer, of the United 
 States, in sums not less than ten dollars, and receive 
 therefor certificates of not less than ten dollars each, 
 corresponding with the denominations of the United 
 States notes. It required that the coin deposited or rep- 
 resenting the certificates should be retained in the treas- 
 ury for the payment of the same on demand, and that 
 said certificates should be receivable for customs, taxes, 
 and all public dues, and also authorized their reissue. 
 This act did not authorize their use as clearinghouse 
 certificates, nor make them available as lawful reserve 
 for the national banks. The following table shows the 
 amount of standard silver dollars coined under the act of 
 
RAPID INOBEASE OF SILVER COIN AGE. 
 
 153 
 
 February 28, 1878, the amount in the treasury, and the 
 amount of silver certificates outstanding on July 1st, 
 from 1878 to 1884, and on October 1, 1887 : 
 
 Tears. 
 
 Coinage. 
 
 Amount in treas- 
 ury. 
 
 Silver certi- 
 ficates out- 
 standing. 
 
 1878 
 
 §8,573,500 
 
 35,801,000 
 
 63,734,750 
 
 91,372,605 
 
 119,144,780 
 
 147,255,899 
 
 175,355,829 
 
 273,660,157 
 
 $7,718,357 
 
 28,358,589 
 
 45,108,296 
 
 63,349,300 
 
 87,524,182 
 
 111,914,019 
 
 135,560,916 
 
 213,043,796 
 
 $1,850,410 
 
 1879 
 
 2,529,950 
 
 1880 
 
 12,374,270 
 
 1881 
 
 55,166,530 
 
 1882 
 
 66,096,096 
 
 1883 
 
 88,616,831 
 
 1884 
 
 96,427,011 
 
 1887, October 1 
 
 154,354,826 
 
 This table exhibits the rapid increase in the coinage 
 of the silver dollar and in the issue of silver certificates. 
 The law requires the purchase of not less than two 
 millions of silver bullion eacli month for coinage into 
 silver dollars. It provides for a forced coinage of silver 
 dollars at the expense of the gold coin in the treasury ; 
 and the various efforts to repeal this law have been fruit- 
 less. If not repealed the result will be, not long hence, 
 the demonetization of the gold coin which is now the 
 standard, and the substitution of the silver dollar in place 
 thereof. This law would doubtless have been repealed 
 long since if silver certificates had not been issued in place 
 of the silver dollar, the latter coin becoming unpopular 
 when forced upon a people so long accustomed to a paper 
 medium. The silver certificate, which is a substitute for 
 the cumbrous dollar, performs every service of the coin 
 itself, with a single exception. It is not a legal tender in 
 payments between individuals, but it is receivable in pay- 
 ment of all public dues, may be included in the reserves 
 of the banks, and used in tlie payment of clcaring-Iiouse 
 
 7* 
 
154 UNITED STATES NOTES. 
 
 balances. Even tlie legal-tender note is not and nevei 
 lias been autlioi-ized to be received in payment of customs 
 duties. 
 
 The cost of the transportation of gold coin between 
 remote points is so great tbat many millions of gold coin 
 Lave been exchanged during the last two years for paper 
 silver certificates, the treasury itself, without any spe- 
 cial authority of law, encouraging in this way the circula- 
 tion of this inferior medium, which is issued against 
 deposits of silver dollars only, thus rendering this Other- 
 wise undesirable silver coinage available for use by the 
 banks and the people. 
 
 In the opinion of those who believe in a single gold 
 standard, the silver certificate is a most dangerous 
 substitute for money. The recent decision of the Su- 
 preme Court places in Congress the power to increase- 
 the issue of legal-tender notes at all times, and there is 
 great danger that every commercial crisis or sudden 
 panic, or cry of hard times, may be succeeded by legis- 
 lation which shall increase the issue of the greenback 
 and reduce its value even below the level of the silver 
 certificate ; the former being a promise to pay dollars 
 either gold or silver, while the latter represents the 
 silver coin itself safely stored in the vaults of the 
 treasury. 
 
 The Government may at any time bring the nation 
 upon the silver standard by declining to make payments 
 or to redeem the legal-tender notes in gold, thus taking 
 from the holder the option of payment. In such an 
 event the hoard of coin will not be increased by customs 
 duties paid in gold as at present, but by the return of 
 silver dollars and silver certiKcates and legal-tender 
 
GOLD CERTIFICATES. 155 
 
 notes, thus demonetizing all of the gold coin of the 
 country, and advancing prices to the level of the silver 
 standard. 
 
 The act of July 12, 1882, authorized and directed the 
 Secretary of the Treasury to receive deposits of gold 
 coin in denominations of not less than $20 each, corres- 
 ponding with the denominations of the United States 
 notes. The coin deposited for the certificates is re- 
 quired to be retained for the payment of the same on 
 demand, and these certifica.tes, and also silver certificates, 
 are authorized to be counted as part of the lawful re- 
 serve of the national banks. The act also provides, not- 
 withstanding the fact that these issues are not a legal 
 tender, that no national banking association shall be a 
 member of any clearing-house in which such certificates 
 shall not be receivable in the settlement of clearing- 
 house balances. 
 
 The amount of gold certificates which have been is- 
 sued under the act of July 12, 1882, was, on Novem- 
 ber 1st, $21,790,000, and on April 1, 1884, $8T,874,500, 
 and on October 1, 1887, $95,630,083. 
 
 The act of August 4, 1886, authorized, for the first 
 time, the issue of silver certificates of tiie denomination 
 of five and two dollars and one dollar. The amount of 
 certificates of these denominations outstanding on Octo- 
 ber 1, 1887, was, one's, $17,595,173; two's, $10,987,553; 
 five's, $13,900,935. Total, $42,483,661, 
 
CHAPTER XL 
 
 THE LEGAL-TENDEE CASES IN THE STJPEEME COHKT OF 
 THE TOSriTED STATES. 
 
 On April 30, 1866, the Legislature of JSTew York pro- 
 A-ided by law for refunding to the banks and other 
 corporations in like condition, the taxes of 1863 and 1864 
 collected upon that part of their capital invested in securi- 
 ties of the United States exempt by law from taxation. 
 The Board of Supervisors of the County of 'New York 
 was charged with the duty of auditing and allowing, 
 with the approval of the Mayor of the city and the Cor- 
 poration Counsel, the amount collected from each corpor- 
 ation for taxes on the exempt portion of its capital, to- 
 gether with costs, damages, and interest. This act was 
 passed in conformity with the decisions of the United 
 States Supreme Court in Bank of Commerce m. New 
 York City (reported in 2 Black, 620), and in the Bank Tax 
 Case (reported in 2 Wallace, 200), which decided that a 
 tax on banking capital invested in Government securi- 
 ties — being a tax on the obligations of the United States, 
 by State authority — was void. The Bank of ISTew York 
 presented a claim to the said Board of Supervisors for 
 the refunding of those taxes which the bank had paid on 
 the United States notes commonly called "greenbacks" 
 during the years aforesaid. The Board refused the ap- 
 
LEGAL TENDERS NOT TAXABLE. 157 
 
 plication on the ground that " greenbacks " were not 
 " securities" of the United States Government, but were 
 practically and in effect " money," taxable as cash. The 
 Court of Appeals of the State of New York sustained 
 the action of the Board, but on appeal to the United 
 States Supreme Court (Bank vs. The Supervisors, 7 Wal- 
 lace, 26), that court, at its December term, 1868, re- 
 versed the opinion of the State court. 
 
 The court said: " The act of February, 1862, declares 
 that ' All United States bonds and other securities of the 
 United States held by individuals, associations, or cor- 
 porations within the United States, shall be exempt from 
 taxation by or under State authority.' We have already 
 said that these notes are obligations. They bind the 
 national faith. They are, therefore, strictly securities. 
 They secure the payment stipulated to the holders \)j 
 the pledge of the national faith, the only ultimate secu- 
 I'ity of all national obligations, whatever form they may 
 assume." 
 
 On June 20, 1860, a certain Mrs. Hepburn made a 
 promissory note, by which she promised to pay to Henry 
 Griswold, on February 20, 1862, eleven thousand two 
 hundred and fifty " dollars." At the time when the note 
 was made, and also at the time when it fell due, there was, 
 confessedly, no lawful money of the United States, or 
 money which could be lawfully tendered in payment of 
 private debts, but gold and silver coin. Five days after 
 the day when the note by its terms fell due, that is to saj', 
 on February 25, 1862, Congress passed the first legal-ten- 
 der act, commonly so called, by which the United States 
 notes issued thereunder were made a legal tender for 
 " all debts, public and private, within the United States," 
 
158 UNITED STATES NOTES. 
 
 except certain public debts. In March, 1864, Mrs. Hep- 
 burn, having been sued on the note in the Louisville 
 Chancery Court, in the State of Kentucky, tendered pay- 
 ment of the debt, piincipal and interest, in the United ' 
 States notes issued unxier this act. The amount teii- 
 -dered, 1^11,250 in legal-tender notes, at that time vras 
 worth only about $7,000 in coin. The tender was re- 
 fused. The notes were then tendered and paid into 
 court. It was declared by the Chancellor to be a satis- 
 faction of the debt. The case was appealed to the Court 
 of Errors of Kentucky. That court reversed the Chan- 
 cellor's decision, and ordered a contrary judgment to bo 
 entered. Whereupon Mrs. Hepburn took the case to 
 the United States Supreme Court, where it was first ar- 
 gued upon printed briefs at the December term, 1867, 
 and afterward reargued by very numerous and able 
 counsel at the December term, 1868, but not decided un- 
 til the December term, 1869 (Hepburn vs. Griswold, 8 
 "Wallace, 603). The court was comprised of Mr. Chief 
 Justice Chase and Associate Justices Nelson, Clifford, 
 Field, Grier, Davis, Miller, and Swayne. Mr. Justice 
 Grier resigned before the opinion of the court was an- 
 nounced, but agreed with the majority in the consultation 
 room, as was announced by the Chief Justice. The 
 Chief Justice delivered the opinion of the court. In 
 this opinion Justices Nelson, Clifford, and Field con- 
 c'-irred. The court held that the language of the act of 
 February 25, 1862, making the United States notes issued 
 thereunder " a legal tender in payment of all debts, pub- 
 lic and private, within the United States," included pre- 
 existing debts as well as debts which should be incurred 
 ftfter the passage of the act, and while it might be an 
 
LEGAL TBHIDEE ACT UNCONSTITUTIONAL. 159 
 
 exercise of rightful power in Congress^ under the powers 
 granted it by the Constitution, to declare war, suppress in- 
 surrection, raise and support armies and navies, borrow 
 money on the credit of the United States to pay the debts 
 of the Union, and to provide for the common defence and 
 general welfare — to emit bills of credit or United States 
 notes intended to circulate as money, and make the same 
 legal tender for debts to be incurred after the passage 
 of the act, yet inasmuch as the act by construction de- 
 clared these notes to be legal tender in payment of pre- 
 existing debts, that the act was inconsistent with the spirit 
 of the Constitution, and was not a law " necessary and 
 proper " for carrying into execution the powers vested 
 by the Constitution in Congress or in the Government 
 of the United States. The Constitution reads that 
 Congress shall have, besides certain powers granted in 
 express terms, " power to make all laws which shall be 
 necessary and proper for carrying into execution the fore- 
 going powers, and all other powers vested hj this Consti- 
 tution in the Government of the United States, or in any 
 department or offices thereof." The court held that the 
 legal-tender clause was unnecessary and improper ; that 
 the notes would have maintained themselves equally 
 well without it. The Chief Justice quoted the fact that 
 the three hundred millions of dollars in notes issued by 
 the national banking associations under the act of Feb- 
 ruary, 1863, and the fifty millions of fractional currency 
 issued under the act of Itfarch, 1863, were not made a 
 legal tender, and argued that it was the quality of re- 
 ceivability for public dues, and not the quality of legal 
 tender which made these United States notes circulate as 
 freely as they did. The Chief Justice declared that the 
 
160 UNITED STATES NOTES. 
 
 act was obnoxious to those clauses of the Constitution, 
 also, which forbade the impairment of the obligations 
 of contracts, the taking of private property for public 
 use without compensation, and the deprivation of any 
 person of his property without due process of law. 
 And that the Constitution was ordained to " establish 
 justice," which this act did not do, so far as regards 
 pre-existing debts. For all of which reasons, elabor- 
 ately stated, the court held the act unconstitutional and 
 therefore void. 
 
 Mr. Justice Miller, with whom concurred Justices 
 Davis and Swayne, delivered a dissenting opinion. He 
 held that what was " necessary and proper '' to carry 
 into execution the powers vested by the Constitution 
 in the Government of the United . States, cannot right- 
 fully be construed to mean only such legislation as 
 is indispensably necessary, but that Congress has the 
 choice of means, and is empowered to use any means 
 which are, in fact, conducive to the exercise of the 
 power granted or calculated to produce the end de- 
 sired, lie fortified this position by the clear, strong deci- 
 sions of the court delivered by Clnef Justice Marshall, 
 who announced this exposition of the Constitution in 
 United States vs. Fisher (2 Cranch, 358) and in McCul- 
 loch vs. The State of Maryland (4 Wheaton, 316). He 
 further said that, while the Constitution forbade any 
 State from impairing the obligation of a contract, it said 
 nothing about the power of Congress in the premises. 
 And that the provision that private property should not 
 be taken for public use without due compensation, nor 
 any person be deprived of his property without due 
 course of law, had no application to the indirect ef- 
 
DISSENTING OPINION OF JUSTICE MILLER. 161 
 
 feet of great public measures whereby lands, stocks, 
 contracts, etc., might depreciate in value, because, for in- 
 stance, such an effect would doubtless succeed an imme- 
 diate abolition of the tariff on iron by depreciating the 
 value of furnaces and the capital employed in its man- 
 ufacture, and yet no one would claim that such a re- 
 peal was therefore unconstitutional and void. That the 
 whole argument of the injustice of the law and of its 
 being opposed to the spirit of the Constitution was too 
 abstract and intangible for application to courts of jus- 
 tice. That the act was passed to save the life of the Gov- 
 ernment, to pay its soldiers and sailors, and other public 
 debts. That the legal-tender clause was considered 
 "necessary and proper" by Congress, and that the 
 courts had no right to interfere with that discretion. 
 " It would authorize this court to enforce theoretical 
 views of the genius of the Govermnent, or vague notions 
 of the spirit of the Constitution and of abstract justice, 
 by declaring void laws which did not square with those 
 views. It substitutes our ideas of policy for judicial 
 construction, an undefined code of ethics for the Consti- 
 tution, and a court of justice forthel^ational Legislature." 
 One Parker (Legal-Tender Cases, 12 "Wallace, 457) 
 was under contract to convey a lot of land to one Davis, 
 upon payment of a certain sum of money. The conti-act 
 was dated, and suit was brought upon it before the pas- 
 sage of any of the legal-tender acts. After their pas- 
 sage, to wit, in February, 1867, the Supreme Court of 
 Massachusetts decreed that Davis should pay into court 
 a certain sum of money, and that Parker should there- 
 upon execnt« a deed to him for the land in question. 
 Davis accordingly paid into court the given sura in 
 
i62 UNITED STATES NOTES. 
 
 United States notes. Parker r&f used to execute tke deed 
 on the ground that he was entitled to coin ; whereupon 
 the court changed the decree, and ordered that Parker 
 should execute the deed upon payment by Davis into 
 court of the specificed sum in United States notes. 
 
 From that decree the case was appealed to the United 
 States Supreme Court. The ease was argued at its De- 
 cember term, 1870, and decided on May 1, 1871 ; and 
 on January 15, 1872, the opinion of the court was de- 
 livered by Justice Strong, who, with Justice Bradley, had 
 been added to the court in 1870, by President Grant, 
 making a full bench of nine. The other justices had 
 sat in the case of Hepbui'n vs. Griswold. The court 
 overruled the latter ease and held the legal-tender acts 
 to be constitutional both as respects contracts made be- 
 fore their enactment as well as after. The court said, 
 in reference to the case of Hepburn m. Griswold: 
 " That case was decided by a divided court, and by a 
 court having a less number of judges than the law then 
 in existence provided that this court shall have. These 
 cases have been heard before a full court, and they have 
 received our most careful consideration." 
 
 Mr. Justice Bradley, in his separate concurring opinion, 
 said : " And in this case, with all deference and respect 
 for the former judgment of the court, I am so fully con- 
 vinced that it was erroneous and prejudicial to the rights, 
 interests, and safety of the general Government, that I, 
 for one, have no hesitation in reviewing and overruling 
 it. It should be remembered that this court, at the 
 very terra in which, and within a few weeks after, the 
 decision in H&pburn w. Gi'iswold was delivered, when 
 the vacancies on the bench were filled, determined to 
 
PBEYIOUS OPIWION OVEBBULED. 163 
 
 liear the question reavgaed. This fact must necessarily 
 have had the effect of apprising tlae country that the de- 
 cision was not fully acquiesced in, and of obviating any 
 injurious consequences to tlie business of the country by 
 its reversal."- 
 
 Justice Strong, in delivering the opinion of the court, 
 reiterated and enforced the arguments made by the 
 minority in Hepburn vs. Griswold. He held that the 
 distinction made by the Chief Justice in regard to the 
 constitutional validity of the act as to debts contracted 
 after its passage and debts contracted before, was not 
 well founded, and that the fundamental question was, 
 Can Congress constitutionally give to United States 
 notes the character and quality of money ? If they can, 
 then such notes can be made legally available to fulfil 
 all contracts solvable in money, without reference to 
 the time when such contracts were made, imless ex- 
 pressly otherwise provided. 
 
 It was not insisted that Congress might make money 
 of that M'hich possessed no value. " "What we do assert 
 is, that Congress has power to, enact that the Govern- 
 ment's promises to pay money shall be, for the time being, 
 equivalent in value to the representative of value deter- 
 mined by the coinage acts, or to multiples thereof." 
 And that, therefore, all contracts calling for " dollars " 
 simplj', can be legally fulfilled by a tender of the Gov- 
 ernment's promises to pay dollars, by force of the legal- 
 tender acts, without regai-d to date. And on this point 
 IJr. Justice Bradley, in his concurring opinion, after no- 
 ticing that life, liberty, and property are equally sub- 
 ject to be impaired:, from the exercise of undoubted 
 national powers in times of emergency or necessity, 
 
164 
 
 UNITED STATES NOTES. 
 
 says : " So with the power of the Government to borrow 
 money, a power to be exercised by the consent of the 
 lender, if possible, but to be exercised without his con- 
 sent if necessary. And when exercised in the form of 
 legal-tender notes or bills of credit, it may operate for 
 the time being to compel the creditor to receive the 
 a^edit of the Government in place of the gold which he 
 expected to receive from his debtor. All these are fun 
 damental political conditions on which life, property, and 
 money are respectively held and enjoyed under our sys- 
 tem of government, nay, under any system of govern- 
 ment. There are times when the exigencies of the 
 State rightly absorb all subordinate considerations of 
 private interest, convenience, or feeling ; and at such 
 times the temporary, though compulsory, acceptance by 
 a private creditor of the Government credit, in lieu of 
 his debtor's obligation to pay, is one of the slightest 
 forms in which the necessary bui-dens of society can be 
 sustained. Instead of being a violation of such obliga- 
 tion, it merely subjects it to one of those conditions 
 under which it is held and enjoyed." 
 
 The Chief Justice, with whom concurred Justices Nel- 
 son, Field, and Clifford, delivered a dissenting opinion, 
 He strenuously maintained his former views, as did also 
 Justices Field and Clifford, in separate opinions. The 
 burden of their argument was, that the Constitution for- 
 bade any State to make anything but gold and silver a 
 legal tender, and granted to the Government only the 
 I'ight to coin this gold and silver, and regulate the value 
 thereof and of foreign coin. And while the power to 
 emit treasury notes was conceded as one means of bor- 
 rowing money, yet that Congress had no right to make 
 
DISSENT OF CHIEF JUSTICE CHASE. 165 
 
 such notes money, or legal tender as money. Mr. Jus- 
 tice Clifford showed that the words " and emit bills on 
 the credit of the United States" were originally reported 
 in article seven, in the draft of the Constitution as sub- 
 mitted to the convention. Mr. Morris moved to strike 
 the clause out on the ground that it was unnecessary, 
 and a vicious suggestion of a power which would be 
 unquestionably used anyhow without it. Mr. Madison 
 thought it would be sufficient to let the clause remain, 
 as it did not contain the hurtful power to make such 
 bills legal tender, but finally voted in favor of striking 
 out the clause entirely as was done, as eliminating even 
 a ^^ pretext for a paper currency, and particularly for 
 maJcing the hiUs a tender either for pvhlio or pri/oate 
 debts^'' without disabling the Government from the use 
 of treasury notes. 
 
 One Juilliard, a citizen of Ifew York, made a sale of 
 cotton to one Greenman, the defendant, who is a citizen 
 of Connecticut, in April, 1879, for $5,122.90, payable on 
 delivery. The defendant tendered in payment $5,100 
 in United States notes of the series of 1878, which had 
 been redeemed and reissued under the act of May 31, 
 1878, and $22.90 in gold and silver coin. The coin 
 was accepted, but the tender of the United States notes 
 was rejected, and Juilliard claims judgment for $5,100 
 with interest and costs. The case was submitted in the 
 United States Circuit Cotirt at K'ew York in June with- 
 out assignment, and a fro forma decision was rendered 
 for the defendant, whereupon the plaintiff appealed to 
 the Supreme Court. 
 
 The opinion of the court in the first legal-tender case 
 submitted, which was concurred in by five judges out of 
 
166 UNITED STATES NOTES. 
 
 eight, was that at no time could Congress constitution- 
 ally give the quality of legal tender to United States 
 notes. Then came the decision of the United States 
 Supreme Court, after the number of judges had been in- 
 creased to nine, making these notes a legal tender for 
 all debts, whether contracted before the passage of the 
 legal-tender act or after that date. The constitutionality 
 of the legal-tender acts was based upon the war powers 
 of Congress, leaving the question still open whether said 
 notes could be issued in time of peace. 
 
 The decision of the Supreme Court delivered during 
 the present term, which has been concurred in by eight 
 judges, with but one dissentient, holds that under the> 
 Constitution Congress has power, if it deems it expe- 
 dient, to issue legal-tender notes to any amount either 
 in time of peace or war. 
 
 The opinion of the court and the dissenting opinion 
 are given in the Appendix. 
 
 Since these opinions were rendered, resolutions have 
 been introduced in the present Congress, both in the 
 Senate and the House, proposing an amendment of the 
 Constitution in regard to the issue of legal-tender paper 
 money. As the Constitution provides that amendments 
 to it shall be concurred in by a vote of two-thirds of 
 each House, and subsequently ratified by three-fourths 
 of the Legislatures of the several States, it is probable 
 that the questions presented in this vohime will con- 
 tinue to be discussed, both iu Congress and by the 
 people for many years to come. 
 
CHAPTER Xn. 
 
 THE DISTEIETTTION OF THE STJEPLUS AMONG THE STATES. 
 
 The following historical sketch is properly included in 
 this volume, not alone on account of the recent dis- 
 cussion of similar propositions and the introduction of 
 similar measures in Congress, but also for the reason, as 
 may be seen by reference to Chapter YI., that the dis- 
 tribution of the surplus was the immediate cause of the 
 issue of treasury notes during the period of the finan- 
 cial crisis of 1837. 
 
 The report of the Secretary of the Treasury, William 
 H. Crawford, for 1816, and his reports and those of his 
 successor, Hichard Kush, for succeeding years up to 1827, 
 had in the estimates made sho^\^l an available surplus 
 of revenues over all expenditures of from two to six 
 millions of dollars. This led to some discussion as to 
 the best method of employing this surplus. Secretary 
 Crawford suggested in 1816 that it be used in internal 
 improvements. 
 
 Ill 1827 the first proposition to distribute the surplus 
 was made in Congress. A bill for the distribution of 
 $5,000,000 annually for four years was introduced and 
 laid on the table. On motion of Mr. Dickerson, of Isevr 
 Jersey, the author of the measure, it was taken up for 
 discussion. lie stated its principal object to be to pro- 
 
168 UNITED STATES NOTES. 
 
 vide tlie States with money for educational and internal 
 improvements. But Congress adjourning soon after- 
 ward, it received but little attention. 
 
 The Secretary of the Treasury (Ingham), in his report 
 to Congress in .December, 1829, estimated that the reve- 
 nues of the Government for that year would amount, in- 
 cluding the balance on hand on January 1st, to $30,5T4,- 
 6G6, and the expenditui-es to $26,164,595, of which 
 $9,841,011 was on account of principal and $2,563,994 
 on account of interest of the public debt. He also esti- 
 mated that the public revenue for the next five years 
 would be such as to leave free for application to the pay- 
 ment of the public debt about twelve millions yearly. 
 The amount of debt becoming due or payable during 
 the next five years was $48,522,869. The surplus, after 
 paying this indebtedness, would be twelve millions. 
 The Secretary did not favor a sudden change in the 
 tariff, but recommended such gradual changes as would 
 reduce the revenues to correspond with the existing ex- 
 penditure. 
 
 President Jackson, in Iiis message to Congress in 
 1829, said : " After the extinction of the public debt, it 
 is not probable that any adjustment of the tariff, upon 
 principles satisfactory to the people of the Union, 
 will, until a remote period, if ever, leave the Govern- 
 ment without a considerable surplus in the treasury be- 
 yond what may be required for its current service. As, 
 then, the period approaches when the application of the 
 revenue to the payment of debt will cease, the disposi. 
 tion of the surplus will present a subject for tlie serious 
 deliberation of Congress, and it may be fortunate for 
 the country that it is yet to be decided. Considered in 
 
JACKSOJSr FAVOMS LISTRIBVTION IN 1829. 169 
 
 connection with the ciiiBculti«s which have lieretofore 
 attended appropi-iations for purposes of internal im- 
 provement, and with those which this experience tells 
 lis will certainly arise whenever power over such subjects 
 may be exercised by the general Government, it is hoped 
 that it may lead to the adoption of some plan which will 
 reconcile the diversified interests of the States, and 
 strengthen the bonds which unite them. Every mem- 
 ber of the Union, in peace and in war, will be benefited 
 by the improvement of inland navigation and the con- 
 struction of highways in the several States. Let us, 
 then, endeavor to attain this benefit in a mode which 
 will be satisfactory to all. That hitherto adopted has, 
 by many of our fellow-citizens, been deprecated as an 
 infraction of the Constitution, while by others it has 
 been viewed as inexpedient. All feel that it has been 
 employed at the expense of harmony in the legislative 
 councils. To avoid these evils, it appears to me that 
 the most safe, just, and federal disposition which could be 
 made of the surplus revenue, would be its apportionment 
 among the several States according to their ratio of rep- 
 resentation ; and should this measure not be found war- 
 ranted by the Constitution, that it would be expedient to 
 propose to the States an amendment authorizing it. I 
 regard an appeal to the source of power, in cases of real 
 doubt, and where its exercise is deemed indispensable to 
 the general welfare, as among the most sacred of all our 
 obligations." 
 
 It thus appears that President Jackson regarded as 
 unconstitutional the appropriation of money for in- 
 ternal improvements by Congress, and, in view of 
 the anticipated surplus, suggested that its distribution 
 8 
 
170 UNITED STATES NOTES. 
 
 among the States will enable them to make such im- 
 pi'ovements without the assistance of Congress. He in- 
 timated that such a distribution would be constitutional, 
 but if there was any doubt on this point, an amendment 
 would remove the difficulty. During the session of Con- 
 gress of 1829-30, the duties on tea, coffee, cocoa, salt, 
 and also on tonnage, were reduced, but the reductions 
 were not sufficient to exhaust the surplus after the debt 
 then maturing should be paid. 
 
 In his message for December, 1830, President Jack- 
 son referred to this subject as follows : " In my first 
 message I stated it to be my opinion that it is not prob- 
 able that any adjustment of the tariff, upon principles 
 satisfactory to the people of the Union, will, until a re- 
 mote period, if ever, leave the Government without a 
 considerable surplus in the treasury beyond what may 
 be requii'ed for its current services. I have had no 
 cause to change this opinion, but much to confirm it." 
 The Secretary of the Treasurjj^, in his report for 1832, 
 says : " After January 1, 1833, no part of the public 
 debt, except the remaining fragments of the unfunded 
 debt, of which only small portions are occasionally pre- 
 sented, will be redeemable before the following year ; 
 and, though there will be in the treasury during the 
 year ample means to discharge the whole debt, they can 
 be applied only to the purchase of stock at the market 
 prices." 
 
 The whole public debt was virtually extinguished by 
 January 1, 1835, on which date the balance of available 
 funds in the treasury was $5,586,232. It was estimated 
 that for the year 1836 the receipts from all sources 
 would be twenty millions ; the actual receipts wero 
 
WOODBURY OPPOSES DISTRIBUTION. 171 
 
 $35,430,087, the receipts from the sale of the public 
 lauds during that year having greatly increased. In 
 1834 these receipts were only $4,857,600, but in 1835 
 they were $14,757,600. The receipts from the sales of 
 public lands in 1834-5-6 were $44,492,381, and the 
 total receipts from this source, from 1796 to 1834, were 
 but $44,595,000. The balance left in the treasury at 
 the beginning of the year 1833 was $2,011,777; in 
 1834, $11,702,905 ; in 1835, $8,892,858, and on Janu- 
 ary 1, 1836, $26,749,803. In view of this large balance, 
 and its probable large increase by January 1, 1887, the act 
 of June 23, 1836, was passed, authorizing the distribu- 
 tion of the surplus among the States. 
 
 As has been seen, this method of disposing of the sur- 
 plus was favorably suggested by President Jackson in his 
 message for 1829, and again indorsed by him in his 
 message for 1830. In 1836, however, the views of the 
 President appear to have changed. Secretary Wood- 
 bury, in his report for 1835, disapproved of the distri- 
 bution of the surplus among the States, intimating that 
 it was unconstitutional. He said : " The people them- 
 selves, it is believed, can best manage all their own 
 money which they and their representatives think may 
 not be wanted for public purposes ; and it would seem 
 to be far preferable to leave it originally in their 
 possession, than to withdraw it for the expensive 
 operation of returning it substantially to the place 
 whence it came, and that probably in a manner not 
 conformable to the Constitution, till after the delay 
 of procuring an amendment to it ; and even then not 
 expedient, because calculated injudiciously to strengthen 
 the general Government, and to render the States more 
 
172 UNITED STATES NOTES. 
 
 dependent on a great central power for yearly and im- 
 portant resources. Indeed, a reduction in the price of 
 public lands, whose unusually large sales the past year 
 are the source of most of the present surplus, would, if 
 their sales should not thereby be much increased, seem 
 aTi other mode far more natural to obviate the present 
 difficulty. But, before adopting it, this and various 
 other considerations must be weighed, and it must be 
 fully considered whether all the revenue anticipated 
 from them at their present prices would not be neces- 
 sary, after the great reductions in the tariff in 1842, and 
 whetlier a resort to a liigher tariff would not then be- 
 come indispensable, if the average receipts from lands 
 or customs should, from any new legislation, become 
 then mucli diminished below tlie estimates which have 
 been submitted on the present occasion." 
 
 This change of opinion of the Administration from 
 1829 to 1836 was probably owing to the hostility of 
 the President to the Bank of the United States, result- 
 ing in the veto of the bill for renewal of its charter 
 on July 10, 1832, and the removal of the United 
 States deposits from the bank by order of the Secre- 
 tary of the Treasury of September 26, 1833. In 1835 
 and 1836 the revenues of the Government were de- 
 posited with the State banks, the favorites of the Ad- 
 ministration, and the distribution of the surplus at this 
 time among the States would have deprived these banks 
 of the deposits. In his message to Congress of 1836, 
 after the passage of the act of June of that year, regulat- 
 ing the pnblic deposits, and providing at the same time 
 for the disti-ibution of the surplus in the treasury on 
 January 1, 1837, President Jackson said : " Without de- 
 
JACKSON OPPOSES DISTRIBUTION IN 1836. 173 
 
 siring to conceal that tlie experience and observation of 
 the last two years have operated a partial change in my 
 views upon this interesting subject, it is nevertheless re- 
 gretted that the suggestions made by me in my annual 
 message of 1829 and 1830 have been greatly misunder- 
 stood. At that time the great struggle was begun 
 against that latitudinarian construction of the Constitu- 
 tion which authorizes the unlimited appropriation of 
 the revenues of the Union to internal improvements 
 within the States, tending to invest in the hands, and 
 place under the control, of the general Government all 
 the principal roads and canals of the country, in violation 
 of State rights and in derogation of State authority. 
 At the same time the condition of the manufacturing 
 interest was such as to create an apprehension that 
 the duties on imports could not, without extensive mis- 
 chief, be reduced in season to prevent the accumulation 
 of a considerable sui-plus after the payment of the na- 
 tional debt. In view of the dangers of such a surplus, 
 and in preference to its application to internal improve- 
 ments, in derogation of the rights and powers of the 
 States, the suggestion of an amendment of the Consti- 
 tution to authorize its distribution was made. It was 
 an alternative for what was deemed greater evils — a 
 temporary resort to relieve an overburdened treasury 
 until the Government could, without a sudden and de- 
 structive revulsion in tlie business of the coimtry, grad- 
 ually return to the just principle of raising no more 
 revenue from the people, in taxes, than is necessary for 
 its economical support. Even that alternative was not 
 spoken of but in connection with an amendment of the 
 Constitution." 
 
174 UinTED STATES NOTES. 
 
 In the meantime Jackson, in Lis attack on the Bank 
 o£ the United States, had been bitterly opposed by 
 Clay, Calhoun, Webster, and a majority of both Houses 
 of Congress, by whom many of his acts were re- 
 garded as an exercise of arbitrary power. In his first 
 message in 1829 he recommended that the Bank of 
 the United States should not be rechartered. In Jan- 
 uary, 1832, the bank's memorial for recharter was pi'e- 
 sented both in the House and Senate, and, after some de- 
 bate, the bill for the recharter passed both Houses. This 
 bill was vetoed, on July 10th, by the President, and the 
 recharter of the bank was made one of the issues of the 
 campaign of 1832. Henry Clay was defeated and Jack- 
 son re-elected, and the latter claimed that the result was 
 an indorsement of his policy against the bank. 
 
 During the summer of 1832, Jackson, as a measure of 
 hostility against the bank, conceived the project of the 
 removal of the United States deposits. Benton, in his 
 " Thirty Tears' View " (vol. i., p. 377), says : " General 
 Jackson was not the man to tolerate these illegalities, 
 corruptions, and indignities. He therefore determined 
 on ceasing to use the institution any longer as a place of 
 deposit for the public moneys ; and accordingly commu- 
 nicated his intention to the Cabinet, all of whom had been 
 requested to assist him in his deliberations on the sub- 
 ject. The major part of them dissented from his design ; 
 whereupon he assembled them on September 22d and 
 read to them a paper containing his views on this subject. 
 This paper concludes as follows : ' Under these convic- 
 tions he feels that a measure so important to the Ameri- 
 can people cannot be commenced too soon ; and he there- 
 fore names the first day of October next as a period 
 
PUBLIC MONEY IN THE PET BANKS. ITo 
 
 proper for the change of the deposits, or sooner, pro- 
 vided the necessary arrangements with the State banks 
 can be made.' " Secretary Duane refused to carry out 
 the wishes of the President witliout a previous refer- 
 ence to Congress. Eoger B. Taney, then Attorney- 
 General, was made Secretary of the Treasury, and 
 issued the order for the removal of the deposits on 
 September 26, 1833. 
 
 The opponents of the Administration, looking at the 
 snrplns revenue, regarded the propositions made for dis- 
 tribution of the surplus among the States favorably, as 
 tending to deprive the President of a portion of an 
 immense patronage. The deposit of the pnblic money 
 in the pet banks had been followed by great financial 
 distress, continuing during the year 1834 ; and previous 
 to and during that year propositions were frequently 
 made in the public press for distribution of the surplus 
 revenue among the States as a measure of relief. 
 These propositions were first in the form of a distribu- 
 tion of the revenue from public land, then a distribution 
 of the public lands themselves, and finally the distribu- 
 tion of both land and customs revenues. 
 
 During the session of 1835, on motion of Mr. Cal- 
 houn, a select committee, consisting of Calhoun, Web- 
 ster, Benton, Bibb, Southard, and King, were appoint- 
 ed to inquire into the extent of executive patronage, 
 the increase of public expenditures, arid the number of 
 persons employed or fed by the executive Government. 
 The committee assumed that there would be an annual 
 surplus of nine millions for the next eight years. It re- 
 garded the disposal of this surplus as a problem to be 
 solved with gi'eat difficulty, but one which was import- 
 
176 UNITED STATES NOTES. 
 
 ant to determine, lest the Execn.tive should greatly 
 increase his power by depositing the public funds with 
 the favorite banks. The committee accordingly "re- 
 ported a resolution so to amend the Constitution that 
 the money remaining in the treasury at the end of each 
 year, till January 1, 1843, deducting therefrom the sum 
 of $2,000,000 to meet current and contingent expenses, 
 shall annually be distributed among the States and Ter- 
 ritories, including the District of Columbia ; and, for 
 that purpose, the sum to be distributed to be divided 
 into as many shares as there are Senators and Represent- 
 atives in Congress, adding two for each Territory and 
 two for the District of Columbia ; and that there shall 
 be allotted to each State a number of shares equal to its 
 representation in both Houses, and to the Territories, 
 including the District of Columbia, two shares each. 
 Supposing the surplus to be distributed should average 
 $9,000,000 annually, as estimated, it would give to each 
 share $30,405, which, multiplied by the number of Sen- 
 ators and Eepresentatives from a State, will show the 
 amount to which any State will be entitled." 
 
 This resolution was opposed by Benton, who repre- 
 sented the Administration in the Senate. He argued 
 that the customs revenues could be largely reduced by 
 changes in their methods of collection ; that the reve- 
 nues from the sale of land could be made to disappear by 
 selling these lands at nominal prices to the people. If, 
 after this, there should still be a surplus, he advocated its 
 use in the construction of fortifications to protect the 
 coasts and frontiers of the country. The proposition of 
 the committee to amend the Constitution to authorize 
 the distribution was never brought to a vote. 
 
DEPOSIT OF BUBPLUa WITH TRM STATES. 177 
 
 In the spring of 1836 the following paragraph ap- 
 peared in the PhUadelpMa National Gazette: "The 
 great loss of the bank lias been in the depreciation of 
 the securities, and the only way to regain a capital 
 is to restore their value. A large portion of them 
 consists of State stocks, which are so far below their 
 intrinsic worth that the present prices could not have 
 been anticipated by any reasonable man. 'Eo doubt 
 can be entertained of their ultimate payment. The 
 States themselves, imaided, can satisfy every claim 
 against them ; they will do it speedily if Congress adopt 
 the measures contemplated for their relief. A division 
 of the public lands among the States, which would en- 
 able them all to pay their debts, or a pledge of the pro- 
 ceeds of sales for that purpose, would be abundant secur- 
 ity. Either of these acts would inspire confidence and 
 enhance the value of all kinds of property." A bill for 
 the distribution of the revenues was introduced in the 
 Senate, and supported both by Mr. Clay and Mr. Web- 
 ster. It was opposed by Mr. Benton, who introduced 
 an antagonistic bill devoting the surplus revenues to 
 public defences. The bill passed the Senate by a vote 
 of 25 to 20. 
 
 Being sent to the House for concurrence, it became 
 evident that it could not pass that body, as a majority 
 of its members regarded the project in its form of a 
 distribution as unconstitutional. The friends of the 
 measure in the Senate determined to change its form so 
 as to remove the difficulty. Instead of a distribution it 
 was to be a deposit, and the faith of the States was to 
 be pledged to the return of the money. There was an- 
 other bill in the Senate for regulating the deposit of 
 
178 UNITED STATES NOTES. 
 
 public moneys with, the State banks, and the proposi- 
 tion in the form of a deposit with the States became 
 sections thirteen and fourteen of this bill, which passed 
 with only six dissenting votes. It passed the House by 
 a large majority, 155 to 38. In the form of distribution 
 it had no chance of passing the House. " It was ap- 
 proved by the President," Benton says, " but with a re- 
 pugnance of feeling and a recoil of judgment which it 
 required great effort of friends to overcome." Probably, 
 if he had returned it with his veto, it would have had 
 two-thirds of each House in its favor. 
 
 The following is a copy of the thirteenth and fourteenth 
 sections of the act of June 23, 1836 : " An act to regulate 
 the deposits of the public money." " Section 13. That the 
 money which shall be in the treasury of the United States 
 on the first day of January, eighteen hundred and thirty- 
 seven, reserving the sura of five millions of dollars, shall 
 be deposited with such of the several States, in propor- 
 tion to their respective representation in the Senate and 
 House of Representatives of the United States, as shall, 
 by law, authorize their Treasurers, or other competent 
 authorities, to receive the same on the terms hereinafter 
 specified ; and the Secretary of the Treasury shall deliver 
 the same to such Treasurers, or other competent authori- 
 ties, on receiving certificates of deposit therefor, signed 
 by such competent authorities, in such form as may be 
 prescribed by the Secretary aforesaid ; which certificates 
 sliall express the usual and legal obligations, and pledge 
 the faith of the State for the safe-keeping and repayment 
 thereof, and shall pledge the faith of the States receiv- 
 ing the same, to pay the said moneys, and every part 
 thereof, from time to time, wlienever the same shall be 
 
• TBE ACT AS PASSED. 179 
 
 required by the Secretary of the Treasury, for the pur- 
 pose of defraying any wants of the public treasury, be- 
 yond the amount of the five millions aforesaid : Frovided, 
 that if any State declines to receive its proportion of the 
 surplus aforesaid, on the terms before named, the same 
 shall be deposited with the other States, agreeing to ac- 
 cept the same on deposit in the proportion aforesaid : 
 And provided, further, that when said money, or any 
 part thereof, shall be wanted by the said Secretary, to 
 meet appropriations by law, the same shall be called for 
 iu ratable proportions, within one year, as nearly as con- 
 veniently may be, from the different States with which 
 the same is deposited, and shall not be called for, in 
 sums exceeding ten thousand dollars, from any one 
 State, in any one month, without previous notice of 
 thirty days for every additional sum of twenty thousand 
 dollars which may at any time be required. Section 14. 
 And ie it further enacted, That the said deposits shall 
 be made with the said States in the following propor- 
 tions and at the following times, to wit : one-quarter 
 part on the first day of January, eighteen hundred and 
 thirty-seven, or as soon thereafter as may be ; one-quar- 
 ter part on the first day of April, one-quarter part on 
 the first day of July, and one-quarter part on the first 
 day of October, all in the same year." 
 
 In his message for December, 1836, President Jack- 
 son objected to the method of distribution provided 
 in the law, viz., according to representation, and ad- 
 vocated a method founded on the population of each 
 State. 
 
 On January 1, 1837, the surplus in the treasury, after 
 reserving the five millions required by law, was $37,- 
 
180 
 
 XJSITED BTATEB NOTES. 
 
 468,859.97, and the apportionment among the several 
 States is shown by the following table : 
 
 Number 
 of elec- 
 toral 
 votes. 
 
 Maine 
 
 New Hampshire 
 Massachusetts. . 
 Ehode Island . . 
 
 Vermont 
 
 Connecticut . . . . 
 
 New York 
 
 New Jersey . . . . 
 Pennsylvania. . . 
 
 Delaware 
 
 Maryland 
 
 Virginia 
 
 North Carolina . 
 South Carolina . 
 
 Georgia 
 
 Alabama 
 
 Mississippi 
 
 Louisiana 
 
 Missouri 
 
 Kentucky 
 
 Tennessee 
 
 Ohio 
 
 Indiana 
 
 Illinois 
 
 Arkansas 
 
 Michigan 
 
 Total 
 
 10 
 
 7 
 
 14 
 
 4 
 
 7 
 
 8 
 
 42 
 
 8 
 
 30 
 
 3 
 
 10 
 
 23 
 
 15 
 
 11 
 
 11 
 
 7 
 
 4 
 
 5 
 
 4 
 
 15 
 
 15 
 
 21 
 
 9 
 
 5 
 
 3 
 
 3 
 
 Amount to be 
 
 deposited during 
 
 the year 1837. 
 
 $1,274,451.02 
 
 892,115.71 
 
 1,784,231.43 
 
 509,780.41 
 
 892,115.71 
 
 1,019,560.81 
 
 5,352,694.28 
 
 1,019,660.81 
 
 3,823,353.06 
 
 382,335.31 
 
 1,274,451.02 
 
 2,931,237.34 
 
 1,911,676.53 
 
 1,401,896.12 
 
 1,401,896.12 
 
 892,115.71 
 
 509,780.41 
 
 637,225.51 
 
 509,780.41 
 
 1,911,676.53 
 
 1,911,676.53 
 
 2,676,347.14 
 
 1,147,005.92 
 
 637,225.51 
 
 382,335.31 
 
 382,335.31 
 
 First 
 instalment. 
 
 $318,612.75 
 223,028.93 
 446,057.86 
 127,445.10 
 223,028.93 
 254,890.20 
 1,338,173.57 
 254,890.20 
 955,838.26 
 95,583.83 
 318,612.75 
 732,809.03 
 477,919.13 
 350,474.03 
 350,474.03 
 223,028.93 
 127,445.10 
 159,306.38 
 127,445.10 
 477,919.13 
 477,919.13 
 669,086.78 
 286,751.48 
 159,306.38 
 95,583.83 
 95,583.83 
 
 «37,468,859.97 
 
 $9,367,214.98 
 
 The above table, with the exception of the last column, 
 is copied from the report of Mr. Woodbury to Con- 
 gress, of January 3, 1837. It will be noticed that 
 by the law authorizing the deposit of the surplus, 
 each State was required to authorize its Treasurer by 
 
mSST THREE INSTALMENTS PAID. 181 
 
 law to receive the deposit and to give certificates of 
 deposit therefor. Tlie necessary forms for carrying out 
 tliis plan were prepared by tlie Secretary of the Treas- 
 ury, and may be found in Ex. Doc. and Reports of 
 Committees, 1st Sess. 25th Congress, Doc. ~So. 30. All 
 of the States named in the foregoing table of apportion- 
 ment passed laws authorizing the receipt of the deposit, 
 and some took the opportunity of instructing their rep- 
 resentatives to protest against, or to endeavor to obtain 
 changes in, some of the features of the law. 
 
 The Legislature of the State of ISTew Hampshire, by 
 resolution, declared that any distribution of surplus was 
 unconstitutional. They instructed their delegates to 
 vote for a reduction of revenue and against any measure 
 for relinquishment, by the United States, of the sums on 
 deposit with the States. The Legislature of the State of 
 Indiana requested its Senators and Kepresentatives to 
 use their exertions to procure the passage of an act of 
 Congress for the relinquishment, on the part of the 
 United States, of all claims of surplus revenue deposits 
 under act of June 23, 1836. These resolutions show 
 conclusively that these States regarded the money re- 
 ceived as a deposit to be likely to be recalled, and not as 
 a gift. 
 
 The first three instalments were paid to the States 
 as nearly as possible on the following dates, viz-. : one- 
 fourth on January 1, 1837, one-fourth on April 1st, and 
 one-fourth on July 1st, following. The sums were paid 
 by transfers from the deposit banks. On Ifovember 1, 
 1836, the Secretary of the Treasury notified the banks of 
 the requisition which would be made upon them to meet 
 the instalments due to the several States on January 
 
182 
 
 UNITED STATES NOTES. 
 
 Ist. On February 18, 1837, he gave similar notification 
 in reference- to the next three instalments. Forms of 
 the letters sent to each of the deposit banks are given, 
 also, in Document 30, September 26, 1837, before re- 
 ferred to. The instalments payable on January 1st, 
 April 1st, and July 1st, were transferred to the States 
 on or near those dates. They amounted in all to 
 $28,101,64:5, and proportionate amounts were deposited 
 with and receipted for by each State. 
 
 In May, 1837, the financial pressure became so great 
 that the banks generally suspended specie payments. 
 The fifth section of the act of June 23, 1836, for regu- 
 lating the deposits of public money, provided that no 
 bank shall be selected or continued as a place of deposit 
 of public money which shall not redeem its notes and 
 bills on demand in specie. On May 1, 1837, the num- 
 ber of the deposit banks was eighty-eight, distributed 
 by States as follows : 
 
 Maine 8 
 
 New Hampsliire 4 
 
 Vermont 3 
 
 Massachusetts 6 
 
 Connecticut 3 
 
 Rhode Island 3 
 
 New York 16 
 
 New Jersey 3 
 
 Pennsylvania 3 
 
 Delaware 3 
 
 Maryland 2 
 
 District of Columbia 1 
 
 Virginia 3 
 
 North Carolina 1 
 
 South Carolina 3 
 
 Georgia 3 
 
 Alabama 1 
 
 Mississippi 3 
 
 Louisiana 3 
 
 Tennessee , 3 
 
 Kentucky 7 
 
 Ohio 9 
 
 Indiana 1 
 
 Illinois 1 
 
 Michigan 3 
 
 Total 88 
 
 The number of deposit banks on Is^ovember 1, 1836, was 
 eighty-nine. Their capital was $77,576,449; UnitedStates 
 
VAUr BUBEN CALLS 4iV HXTBA SESSIOJf. is3 
 
 deposits, $49,3YY,986 ; otlier deposits, only $26,573,479.' 
 The difiaculties arising from the necessity of discontinu- 
 ing as public depositories those banks which refused to 
 pay specie, made it apparent that it would be very in- 
 convenient, if not impossible, to transfer the fourth in- 
 stalment of the deposit with the States. 
 
 Further legislation was deemed necessary in this emer- 
 gency, and an extra session of Congress was called by 
 President Van Buren. Congress met on September Uh. 
 Among other reasons for the extra session, the President 
 in his message mentioned that " questions were also ex- 
 pected to arise in the recess in respect to the October 
 instalment of those deposits, requiring the interposition 
 of Congress." Secretary "Woodbury, in a report made on 
 the safe-keeping of the public moneys, on September 
 23d, in answer to a resolution of the House of Kepresenta- 
 tives, said : " This last mode [viz., deposit with selected 
 State banks] ceased by operation of law during the last 
 spring, except in relation to five or six deposit banks 
 which have continued to redeem their notes in specie. 
 The direct losses sustained under it appear to be large. 
 Biit, in the end, they are not considered likely to 
 amount to anything, though the disappointments, de- 
 lays, and injuries under it must, it is manifest, in sev- 
 eral cases be great. The indirect losses to the public 
 creditors and contractors have been considerable, and 
 are difficult to be computed." From this it will be seen 
 that only six out of the eighty-eight banks designated 
 as public depositories on May 1st could be used as such 
 in September. 
 
 ' For statement of resources and liabilities of these banks, see Re- 
 port of Comptroller of the Currency, p. 43. 1876. 
 
184 UNITED STATES NOTES. 
 
 Benton says, in relation to these payments: "The 
 deposit with the States had only reached its second 
 instalment when the deposit banks, unable to stand a 
 continued quarterly strain of near ten millions to the 
 quarter, gave up the effort, and closed their doors. 
 The first instalment had been delivered on January 1st, 
 in specie or its equivalent ; the second in April, also in 
 valid money ; the third one, demandable on July 1st, was 
 accepted by the States in depreciated paper ; and they 
 were very willing to receive the fourth instalment in 
 the same way. The Secretary's report shows that there 
 would be a deficiency in the revenues to meet expendi- 
 tures of over ten millions of dollars, which would render 
 it necessary either to recall some of the money deposited 
 with the States, or to postpone the payment of the fourth 
 instalment due on October 1st. The Secretary men- 
 tioned the inconvenience of paying the fourth instal- 
 ment, arising from the difficulty of transferring from the 
 West and Southwest, where the money received from 
 sales of public lands had accumulated. The lack of rev- 
 enue was his principal reason for urging the withholding 
 or postponement of the fourth instalment. Believing the 
 money would be immediately necessary to the Govern- 
 ment, he thought it would be less inconvenient to with- 
 hold payment than to pay and immediately recall." 
 
 On September 11, 1837, Mr. Silas Wright, from the 
 Senate Committee on Finance, reported a bill which pro- 
 vided " that the transfer of the fourth instalment of de- 
 posits directed to be made with the States, under the 
 thirteenth section of the act of June 23, 1836, be and 
 the same is hereby postponed until further provision by 
 law." The bill was brought up for consideration on the 
 
DEBATE m TEE SENATE. 185 
 
 14th, wlien he said that, according to the report of the 
 Secretary of the Treasury of the 28th ult., there was then 
 in the treasury subject to draft, available and unavail- 
 able, but $8,100,000. If the expenses of the month of 
 September were deducted, which were estimated at two 
 and a half millions, there would be in the treasury, sub- 
 ject to draft on October 1st, less than six millions, with- 
 out the transfer of a dollar to the States toward the Oc- 
 tober instalment. If the October instalment was to be 
 transferred to the States, all the means in the treasury 
 on the day when that instalment was made transferable 
 would not be equal to two-thirds of the amount, and 
 money must be borrowed upon the credit of the United 
 States to supply the deficiency. The largest portion of 
 the funds in the treasury was wholly unavailable ; they 
 were in the "Western and Southwestern banks, and expe- 
 rience had already shown fhat the drafts of the Treas- 
 urer upon these banks would not be received in payment 
 by the puhlic creditors, neither would the States other 
 than those in which- the banks were located take these 
 drafts, and give their obligations for a repayment of the 
 amount in money in pursuance of the provisions of the 
 deposit law. The transfer to the States, therefore, could 
 not be made, even to the amount of the funds in the 
 treasury subject to draft, by reason of the character of 
 the funds to be drawn upon. 
 
 The whole means in the treasury on the first day of 
 October next would be from three and a half to four 
 millions less than the transfer required. If Congress 
 should insist upon this transfer, it must authorize a loan 
 of money upon the public credit in order that that 
 money, when loaned, may be deposited with tlie States 
 
186 UNITED STATES NOTES. 
 
 for safe-keeping. Mr. "Webster thought that it was a 
 mere question of convenience, the distributed money 
 would go to all the people, and any deficiency in the 
 treasury must be supplied by all the people. He 
 thought the most convenient way was to pay the instal- 
 ment, and provide for the necessities of the treasury by 
 other means. Mr. Preston opposed the bill on the 
 ground that many States had already appropriated tlie 
 money, and had undertaken public works on the strength 
 of it, etc. Mr. Crittenden, of Kentucky, opposed it on 
 the same ground. By other Senators the deposit act 
 was treated as a contract which the United States was 
 bound to carry out. 
 
 Mr. Buchanan proposed an amendment, the effect of 
 which was to change the character of the deposit act 
 and make it a distribution measure. By the act it was 
 tlie du.ty of the Secretary of the Treasury' to call for a 
 return of the deposit when needed by the Federal 
 Treasury. The amendment superseded this, and enacted 
 that the deposits should remain until called for by Con- 
 gress. Mr. JSTiles pointed out the effect of this amend- 
 ment. He said tlie majority of those who voted for the 
 deposit act did so because it was a deposit and not a 
 distribution, and merely withdrew the public moneys 
 from the banks and deposited them with the States. 
 The amendment would change the deposit to a loan, or, 
 more properly, a grant, to the States. Mr. Buchanan's 
 amendment, however, passed by a vote of 32 to 12, and 
 thus the recall of the deposits already made was taken 
 from the hands of the States and placed with Congress. 
 
 In the House of Representatives the disposition to re- 
 gard the deposit act as a contract was even stronger than 
 
DEBATE IN THE HOUSE. 187 
 
 in the Senate. Mr. Caleb Gushing argued that it had 
 all the features of a contract, that it- was a " contract of 
 deposit." It was a contract in honor, and, as far as 
 there could be a contract between the United States and 
 the States, a contract in law. 
 
 On the other hand, it was argued very forcibly that 
 neither in honor nor in law was there any reason for 
 paying the fourth instalment when there was no surplus 
 in the treasury. Mr. Halsted, on the same side, said : 
 " In reference to the deposit act, if a contract, it was a 
 contract based alone upon the distribution of an existing 
 surplus, not wanted for the ordinary or extraordinary 
 expenditures of the Government. The structure was 
 reared upon that rock, and was so understood at the 
 time the statute was enacted. The money to be dis- 
 tributed was out of a surplus fund. Where was there 
 a surplus fund ? There was none." 
 
 The opponents of the bill, apart from the argument 
 of contract, mainly founded their arguments on the fact 
 that the States had been induced to undertake public 
 works and other engagements by the promise of the 
 money, and the inconvenience to which they would be 
 put by withholding the fourth instalment. It was justly 
 observed by their opponents that the States should have 
 regulated their action by the actual terms of the law of 
 Congress, to which they agreed when they accepted the 
 deposits. The opposition to the bill was persistent, the 
 debate was long, and many members were participants, 
 among whom was Adams, of Massachusetts, Fillmore and 
 Sibley, of New York, Bell, of Tennessee, and "Wise, of 
 Virginia. It finally passed the House by the close vote 
 of 119 to 117. A motion to reconsider was made by 
 
188 UNITED STATES NOTES. 
 
 Mr. Pickens, and carried. On reconsideration, Mr. Pick, 
 ens moved to amend so that, instead of postponing the 
 payment indefinitely nntil further action by Congress, 
 it be postponed to January 1, 1839, a day certain. This 
 amendment was agreed to and concurred in by the Sen- 
 ate, and the bill finally passed in that form. 
 
 The effect of the postponement of the payment to a 
 fixed day has been held by some to bind the United 
 States to such a payment; and the making the with- 
 drawal of the first three instalments received by the 
 States dependent on an act of Congress has, by the 
 same kind of construction, been regarded by some as 
 altering what was originally a deposit to a gift. 
 
 As January 1, 1839, approached, it became apparent 
 that there would be no funds in the treasury available 
 for the deposit of the postponed instalment. The Sec- 
 retary of the Treasury, in his report for December, 
 
 1838, stated that the available balance on January 1, 
 
 1839, would be $2,765,342 only, and at the date of the 
 report the treasury notes outstanding amounted to over 
 $7,754,560. He said : " It will be perceived by these 
 statements that no surplus balance will probably exist, 
 either on January 1, 1839, or during that year, to be 
 deposited with the several States for safe-keeping as a 
 fourth instalment under the deposit act of June 23, 
 1836." 
 
 Since January 1, 1839, there has never been a time 
 when the United States had in its treasury a surplus 
 over and above all its debts and estimated expenditures. 
 The amount deposited in the first three instalments with 
 the States has always been carried as funds of the treas- 
 ury unavailable ; and under the terms of the acts rela- 
 
LETTER OF SECRETARY BIX. 189 
 
 tive to its deposit, it could now be recalled at any time 
 by an act of Congress. 
 
 General John A. Dix, Secretary of the Treasury, 
 in a letter to the Chairman of the Committee of Ways 
 and Means, of January 18, 1861, called attention to 
 the fact that " there are deposited with twenty-six of 
 the States, for safe-keeping, over twenty-eight mil- 
 lions of dollars belonging to the United States, for 
 the payment of which the promise of these States is 
 pledged by written instruments on file in this depart- 
 ment. The annual statement of receipts and expendi- 
 tures for the year ending June 30, 1860, represents this 
 amount as part of ' the balance in the treasury ' on that 
 day. * * I refer to this final resource as an avail- 
 able one, should the public exigencies demand it. It is 
 not doubted that the greater portion of the amount so 
 deposited would be promptly and cheerfully paid should 
 an exigency arise involving the public honor or safety. 
 If, instead of calling for these deposits, it should be 
 deemed advisable to pledge them for the repayment of 
 any money the Government might find it necessary to 
 borrow, loans contracted on such a basis of security, su- 
 peradding to the plighted faitli of the United States 
 that of the individual States, could hardly fail to be ac- 
 ceptable to the capitalists." 
 
 It is easy to see that there can be no constitutional 
 authority for the claim that tliis money, already in the 
 possession of the States, irrevocably belongs to them, 
 since, according to the Constitution, it is still in the 
 treasury of the United States. The only method of tak- 
 ing money out of the treasuiy is by an appropriation by 
 Congress, upon which the Secretary of the Treasmy ia 
 
190 UNITED STATES NOTES. 
 
 authorized to issue his warrant, and no such method was 
 ever adopted in relation to this money. The whole ob- 
 ject and intention of the act was to deposit the surplus, 
 not distribute it, as it has been seen that a distribution 
 act was known at the time to be unconstitutional. Upon 
 the delivery of the money the Treasurer of each State 
 gave to the United States, not a receipt, but a certifioaU 
 of deposit, subject to the future requisition of the Gov- 
 ernment. The amount of the deposit has always been 
 held among the " unavailable funds of the treasury," 
 and is annually so reported among other like funds, as 
 may be seen by reference to page 383, Finance Report, 
 1882, and previous reports. But whether a deposit or a 
 distribution, no constitutional method has been taken to 
 authorize the payment of the money out of the treasury. 
 Moreover, it was a deposit of surplus and surplus only, 
 and when the surplus did not exist was suspended by 
 act of Congress until a certain date ; and when at that 
 date there was still no surplus, the deposit was again 
 withheld by the Executive, and, on the same principle, 
 has been withheld ever since. Congress at any time 
 can authorize the withdrawal of the whole amount from 
 the States, and it doubtless could authorize the perpet- 
 ual withholding of the fourth instalment in view of the 
 fact that at some time in the future, after the national 
 debt is paid, there may be a surplus similar to that 
 which existed January 1, 1877. 
 
 Benton, in his " Thirty Years' "View," thus refers to 
 the use made of the deposits by the different States : 
 " All sorts of plans were proposed for the employment 
 of the money ; and' combinations, more or less interested 
 or designing, generally carried the point in the universal 
 
TEE SURPLUS NOT SQUANDERED. 191 
 
 scramble. In some States a pro rata division of tlio 
 money per capita was made ; and tlie disti'ibutive share 
 of each individual, being but a few shillings, was re- 
 ceived with contempt by some, and rejected with scoi'n 
 by others. In other States it was divided among tlie 
 counties, and gave rise to disjointed undertakings of no 
 general benefit. Others, again, were stimulated, by the 
 unexpected acquisition of a large sum, to engage in large 
 and premature works of internal improvement, embar- 
 rassing the State with debt, and commencing works 
 which could not be finished." 
 
 This paragraph conveys a wrong impression. It is 
 generally believed that the moneys deposited by the 
 Government with the different States were, for the most 
 part, wasted or employed in works of internal improve- 
 ment which were unnecessary. The data for a full in- 
 vestigation of this subject are not at hand, but it is 
 known that the States of Massachusetts, Connecticut, 
 ISTew York, New Jersey, Pennsylvania, Delaware, Mary- 
 land, ITorth Carolina, Illinois, Indiana, Kentucky, Ohio, 
 and Missouri appropriated a considerable portion of the 
 income from this fund to the support of public schools ; 
 and that in some of these States the income from the 
 whple fund has been from the commencement, and still 
 is, devoted to the education of the people. In some in- 
 stances the States used the funds for internal improve- 
 ments, but provided by legislation for the appropriation 
 of an amount equal to the interest for the support of 
 public schools, which was similar to an investment in 
 the bonds of the State. 
 
 A claim has been made within a few months (1884) 
 upon the Secretary of the Treasury, under authority of 
 
192 UNITED STATES NOTES. 
 
 an act passed by the Legislature of the State of Yir» 
 ginia, for the deposit of the amount of the fourth in- 
 stahnent ($732,809.33) under the act of June 23, 1836. 
 A similar claim has also been made by the Treasurer of 
 the State of Arkansas, through Senator Garland, of 
 that State, to which the Secretary replied, on October 
 8, 1883 : " I find that the^tradition of this department 
 for over a dozen years has been to consider that act as 
 obsolete, or at least not imperatively effective during a 
 season of large public federal indebtedness. I can for 
 the present follow in the path of my predecessors in the 
 office of the Secretary of the Treasury." 
 
 A petition was subsequently made to the Supreme 
 Court of the United States, by the State of Yirginia, 
 through its properly authorized agent, for a vn-it of 
 mandamus upon the Secretary of the Treasury, to com- 
 pel him to pay to that State the amount of the fourth 
 instalment of surplus alleged to be due under the 
 provisions of the act of June 23, 1836. The court, on 
 March 17, 1884, held that there was no case for a man- 
 damus, and that the Secretary of the Treasury has no 
 authority under existing legislation, and without further 
 dh'ection from Congress, to use the surplus revenue in 
 the treasury, from whatever source derived, or when- 
 ever, since Januaiy 1, 1839, it may have accrued, for 
 the purpose of making the fourth instalment of deposit 
 required by the act of 1836. 
 
APPENDIX. 
 
 SDPEEME COtFET OF THE tWITED STATES. 
 
 No. 9.— October Term, 1883. 
 
 AuGtrsTUS D. JtmuABD, plaintiff in error, vs. Thomas S. 
 Gkeenman. In error to the Cirouit Court of the United States 
 for the Southern District of New York 
 
 Congress has the constitutional power to make tlie treasury 
 notes of the United States a legal tender in payment of private 
 debts in time of peace as well as in time of war. 
 
 Under the act of May 31, 1878, chapter 146, which enacts 
 that notes of the United States issued during the war of the 
 rebellion under acts of Congress declaring them to be a legal 
 tender in payment of private debts, and since the close of that 
 war redeemed and paid ia gold coin at the treasury, shall be 
 reissued and kept in circulation, notes so reissued are a legal 
 tender. 
 
 [March 3, 1884] 
 Mr. Justice Gbay delivered the opinion of the court. 
 Juilliard, a citizen of New York, brought an action against 
 Greenman, a citizen of Connecticut, iu the Circuit Court of the 
 United States for the Southern District of New York, ialleging 
 that the plaintiff sold and delivered to the defendant, at his 
 special instance and request, one hundred bales of cotton, of 
 the value and for the agi-eed price of $5,122.90, and that the 
 defendant agreed to pay that sum in cash on the delivery of 
 the cotton, and had not paid the same, or any part thereof, 
 except that he had paid the sum of $22.90 on account, and was 
 now justly indebted to the plaintiff therefor in the sum of 
 9 
 
194 APPENDIX. 
 
 $5,100, and demanding judgment for this sum with interest and 
 costs. 
 
 The defendant in his answer admitted the citizenship of the 
 parties, the purchase and delivery of the cotton, and the agree- 
 ment to pay therefor, as alleged ; and averred that after the 
 delivery of the cotton he offered and tendered to the plaintiff, 
 in full payment, $22.50 in gold coin of the United States, forty 
 cents in silver coin of the United States, and two United States 
 notes, one of the denomination of $5,000 and the other of the 
 denomination of $100, of the description known as United 
 States legal-tender notes, purporting by recital thereon to be 
 legal tender, at their respective face values, for all debts, public 
 and private, except duties on imports and interest on the 
 public debt, and which, after having been presented for pay- 
 ment, and redeemed and paid in gold coin, since January 1, 
 1879, at the United States sub-Treasury in New York, had been 
 reissued and kept in circulation under and in pursuance of 
 the act of Congress of May 31, 1878, chapter 146 ; that at the 
 time of offering and tendering these notes and coin to the 
 plaintiff the sum of $5,122.90 was the entire amount due and 
 owing in payment for the cotton, but the plaintiff declined to 
 receive the notes in payment of $5,100 thereof ; and that the 
 defendant had ever since remained, and still was, ready and 
 willing to pay to the plaintiff the sum of $5,100 in these notes, 
 and brought these notes into court, ready to be paid to the 
 plaintiff if he would accept them. 
 
 The plaintiff demurred to the answer upon the grounds that 
 the defence, consisting of new matter, was insufficient in law 
 upon its face, and that the facts stated in the answer did not 
 constitute any defence to the cause of action alleged. 
 
 The Circuit Court overruled the demurrer and gave judgment 
 for the defendant, and the plaintiff sued out his writ of error. 
 
 The amount which the plaintiff seeks to recover, and which, 
 if the tender pleaded is insufficient in law, he is entitled to 
 recover, is $5,100. There can, therefore, be no doubt of the 
 jurisdiction of this court to revise the judgment of the Circuit 
 Court (act of February 16, 1875, oh. 77, sec. 3 ; 18 Stat., 315). 
 
APPENDIX. 
 
 195 
 
 The notes of tte United States, tendered in payment of the 
 defendant's debt to the plaintiff, were originally issued under 
 the acts of Congress of February 25, 1862, oh. 33, July 11, 1862, 
 ch. 142, and March 3, 1863, ch. 73, passed during the war of 
 the rebellion, and enacting that these notes should " be lawful 
 money and a legal tender in payment of all debts, public and 
 private, within the United States," except for duties on imports 
 and interest on the public debt {12 Stat., 345, 532, 709). 
 
 The provisions of the earlier acts of Congress, so far as it is 
 necessary for the understanding of the recent statutes to quote 
 them, are re-enacted in the following provisions of the Eevised 
 Statutes : 
 
 "Sec. 3579. "When any United States notes are returned to 
 the treasury, they may be reissued, from time to time, as the 
 exigencies of the public interest may require. 
 
 " Sec. 3580. When any United States notes returned to the 
 treasury are so mutilated or otherwise injm-ed as to be unfit 
 for use, the Secretary of the Treasury is authorized to replace 
 the same with others of the same character and amounts. 
 
 " Sec. 3581. Mutilated United States notes, when replaced 
 according to law, and all other notes which by law are required 
 to be taken up and not reissued, when taken up shall be de- 
 stroyed in such manner and under such regulations as the 
 Secretary of the Treasury may prescribe. 
 
 " Sec. 3582. The authority given to the Secretary of the 
 Treasury to make any reduction of the currency, by retiring 
 and cancelling United States notes, is suspended." 
 
 " Sec. 3588. United States notes shall be lawful money and 
 a legal tender in payment of all debts, public and private, with- 
 in the United States, except for duties on imports and interest 
 on the public debt." 
 
 The act of January 14, 1875, chapter 15, "To provide for 
 the resumption of specie payments," enacted, that on and after 
 January 1, 1879, " the Secretary of the Treasury shall redeem 
 in coin the United States legal-tender notes then outstanding, 
 on their presentation for redemption at the office of the Assist- 
 ant Treasurer of the United States in the city of New York, in 
 
196 APPENDIX. 
 
 sums of hot less than fifty dollars ; " and authorized him to use 
 for that purpose any surplus revenues in the treasury and the 
 proceeds of the sales of certain bonds of the United States (18 
 Stat., 296). 
 
 The act of May 31, 1878, chapter 146, under ■which the notes 
 in question were reissued, is entitled "An act to forbid the 
 further retirement of United States legal-tender notes," and 
 enacts as follows : 
 
 "From and after the passage of this act it shall not be lawful 
 for the Secretary of the Treasury or other officer under him to 
 cancel or retire any more of the United States legal-tender 
 notes. And when any of said notes may be redeemed or be 
 received into the treasury under any law, from any source 
 whatever, and shall belong to the United States, they shall not 
 be retired, cancelled, or destroyed, but they shall be reissued 
 and paid out again and kept in circulation : Provided, that 
 nothing herein shall prohibit the cancellation and destruction 
 of mutilated notes, and the issue of other notes of like denomi- 
 nation in their stead, as now provided by law. All acts and 
 parts of acts in conflict herewith are hereby repealed" (20 
 Stat., 87). 
 
 The manifest intention of this act is that the notes which it 
 directs, after having been redeemed, to be reissued and kept in 
 circulation, shall retain their original quality of being a legal 
 tender. 
 
 The single question, therefore, to be considered, and upon 
 the answer to which the judgment to be rendered between 
 these parties depends, is whether notes of the United States, 
 issued in tiine of war, under acts of Congress declaring them to 
 be a legal tender in payment of private debts, and afterward in 
 time of peace redeemed and paid in gold coin at the treasury, 
 and then reissued under the act of 1878, can, under the Consti- 
 tution of the United States, be a legal tender in payment of 
 such debts. 
 
 Upon full consideration of the case, the court is unanimously 
 of opinion that it cannot be distinguished in principle from the 
 cases heretofore determined, reported under the names of the 
 
APPENDIX. 197 
 
 Legal-tender Cases, 12 Wall., 457 ; Dooly vs. Smith, 13 Wall., 
 604 ; Bailroad Company vs. Johnson, 15 Wall., 195 ; and Mary- 
 land vs. Eaih'oad Company, 22 Wall., 105; and all the judges, 
 except Mr. Jtistice Field, who adheres to the Yiews expressed 
 in his dissenting opinions in those cases, are of opinion that 
 they were rightly decided. 
 
 The elaborate printed briefs submitted by counsel in this 
 case, and the opinions delivered in the Legal-tender Cases, and 
 in the earlier case of Hepbm-n vs. Griswold, 8 Wall., 603, which 
 those cases overruled, forcibly present the arguments on either 
 side of the question of the power of Congress to make the 
 notes of the United States a legal tender in payment of private 
 debts. Without undertaking to deal with all those arguments, 
 the court has thought it fit that the grounds of its judgment in 
 the case at bar should be fully stated. 
 
 No question of the scope and extent of the implied powers of 
 Congress under the Constitution can be satisfactorily discussed 
 without repeating much of the reasoning of Chief Justice Mar- 
 shall in the great judgment in McCulloch vs. Maryland, 4 
 Wheat., 316, by which the power of Congress to incorporate a 
 bank was demonstrated and affirmed, notwithstanding the 
 Constitution does not enumerate, among the powers granted, 
 that of establishing a bank or creating a corporation. 
 
 The people of the United States by the Constitution estab- 
 lished a National Government, with sovereign powers, legis- 
 lative, executive, and judicial. "The Government of the 
 Union," said Chief Justice Marshall, " though limited in its 
 powers, is supreme within its sphere of action ; " " and its laws, 
 when made in pursiiance of the Constitution, form the supreme 
 law of the land." " Among the enumerated powers of Govern- 
 ment we find the great powers to lay and collect taxes ; to 
 borrow money ; to regulate commerce ; to declare and conduct 
 a war ; and to raise and support armies and navies. The sword 
 and the purse, all the external relations, and no inconsiderable 
 portion of the industry of the nation are entrusted to its govern- 
 ment" (4 Wheat., 405, 406, 407). 
 
 A constitution establishing a frame of government, declaring 
 
198 APPENDIX. 
 
 fundamental principles, and creating a national sovereignty, 
 and intended to endure for ages, and to be adapted to the 
 various crises of human affairs, is not to be interpreted with 
 the strictness of a private contract. The Constitution of the 
 United States, by apt words of designation or general descrip- 
 tion, marks the outlines of the powers granted to the National 
 Legislature, but it does not undertake with the precision and 
 detail of a code of laws to enumerate the subdivisions of those 
 powers or to specify all the means by which they may be 
 carried into execution. Chief Justice Marshall, after dwelling 
 upon this view, as required by the very nature of the Consti- 
 tution, by the language in which it is framed, by the limita- 
 tions upon the general powers of Congress introduced in the 
 ninth section of the first article, and by the omission to use any 
 restrictive term which might prevent its receiving a fair and 
 just interpretation, added these emphatic words : " In consider- 
 ing this question, then, we must never forget that it is a con- 
 stitution we are expounding " (4 "Wheat., 407. See also page 
 415). 
 
 The breadth and comprehensiveness of the words of the 
 Constitution are nowhere more strikingly exhibited than in re- 
 gard to the powers over the subjects of revenue, finance, and 
 currency, of which there is no other express grant than may be 
 found in these few brief clauses : 
 
 " The Congress shall have power to lay and collect taxes, 
 duties, imposts, and excises, to pay the debts and provide for 
 the common defence and general welfare of the United States ; 
 but all duties, imposts, and excises shall be uniform through- 
 out the United States ; 
 
 ' ' To borrow money on the credit of the United States ; 
 
 " To regulate commerce with foreign nations, and among the 
 several States, and with the Indian tribes ; 
 
 " To coin money, regulate the value thereof, and of foreign 
 coin, and fix the standard of weights and measures." 
 
 The section which contains the grant of these and other 
 principal legislative powers concludes by declaring that tho 
 Congress shall have power " to make all laws which shall be 
 
APPENDIX. 199 
 
 iecessary and proper for carrying into execution the foregoing 
 powers, and all other powers vested by this Constitution in the 
 Government of the United States, or in any department or 
 oi3cer thereof." 
 
 By the settled constructipn and the only reasonable inter- 
 pretation of this clause the words " necessary and proper " are 
 not limited to such measures as are absolutely and indispen- 
 sably necessary, without which the powers granted must fail of 
 execution; but they include all appropriate means which are 
 conducive or adapted to the end to be accomplished, and 
 which in the judgment of Congress will most advantageously 
 effect it. 
 
 That clause of the Constitution which declares that " the Con- 
 gress shall have power to lay and collect taxes, duties, imposts, 
 and excises, to pay the debts and provide for the common 
 defence and general welfare of the United States " either em- 
 bodies a grant of power to pay the debts of the United States, 
 or presupposes and assumes that power as inherent in the 
 United States as a sovereign government. But in whichever 
 aspect it be considered, neither this nor any other clause of the 
 Constitution makes any mention of priority or preference of 
 the United States as a creditor over other creditors of an indi- 
 vidual debtor. Yet this court, in the eai'ly case of United 
 States vs. Fisher (2 Cranch, 358), held that under the power to 
 pay the debts of the United States, Congress had the power 
 to enact that debts due to the United States should have that 
 priority of payment out of the estate of an insolvent debtor 
 which the law of England gave to debts due to the crown. 
 
 In deliveiing judgment in that case Chief Justice Marshall 
 expounded the clause giving Congress power to make all neces- 
 sary and proper laws as follows : "In construing this clause it 
 v.ould be incorrect and would produce endless difficulties if the 
 opinion should be maintained that no law was authorized which 
 was not indispensably necessary to give effect to a specified 
 power. Where various systems might be adopted for that pur- 
 pose it might be said with respect to each that it was not 
 necessary because the end might be obtained by other means. 
 
200 , APPENDIX. 
 
 Congress must possess the choice of means, and must be em. 
 powered to use any means which are, in fact, conducive to tha 
 exercise of a power granted by the Constitution. The Govern- 
 ment is to pay the debt of the Union, and must be authorized 
 to use the means which appear to itself the most eligible ta 
 effect that object " (2 Oi-anch, 396). 
 
 In MoOuUoch m. Maryland he more fully developed the same 
 view, concluding thus: "We admit, as all must admit, that 
 the powers of the Government are limited, and that its limits 
 are not to be transcended. But we think the sound construc- 
 tion of the Constitution must allow to the National Legislature 
 that discretion with respect to the means by which the powers 
 it confers are to be carried into execution, which will enable 
 that body to perform the high duties assigned to it in the 
 manner most beneficial to the people. Let the end be legiti- 
 mate, let it be within the scope of the Constitution, and all 
 means which are appropriate, which are plainly adapted to 
 that end, which are not prohibited, but consist with the letter 
 and spirit of the Constitution, are constitutional " {4 Wheat., 
 421). 
 
 The rule of interpretation thus laid down has been con- 
 stantly adhered to and acted on by this court, and was ac- 
 cepted as expressing the tme test by all the judges who took 
 part in the former discussions of the power of Congress to make 
 the treasury notes of the United States a legal tender in pay- 
 ment of private debts. 
 
 The other judgments delivered by Chief Justice Marshall 
 contain nothing adverse to the power of Congress to issue 
 legal-tender notes. 
 
 By the articles of confederation of 1777, the United States in 
 Congress assembled were authorized " to borrow money or 
 emit bills on the credit of the United States ; " but it was 
 declared that " each State retains its sovereignty, freedom, and 
 independence, and every powei", jurisdiction, and right which 
 is not by this confederation expressly delegated to the United 
 States in Congress assembled" (Art. 2 ; Art. 9, Sec. 5; 1 Stat., 
 4, 7). Yet, upon the question whether, under those articles. 
 
APPENDIX. 
 
 201 
 
 Congress, by virtue of the power to emit bills on the credit of 
 the United States, had the power to make bills so emitted a 
 legal tender, Chief Justice Marshall spoke very guardedly, say- 
 ing : " Congress emitted bills of credit to a large amount, and 
 did not, perhaps could not, make them a legal tender. This 
 power resided in the States " (Craig vs. Missouri, 4 Pet., 410, 
 435). But in the Constitution, as he had before observed in 
 McCuUoch cs. Maryland, "there is no phrase which, like the 
 articles of confederation, excludes incidental or implied powers, 
 and which requires that everything granted shaU be expressly 
 and minutely described. Even the tenth amendment, which 
 was framed for the purpose of quieting the excessive jealousies 
 which had been excited, omits the word 'expressly,' and de- 
 clares only that the powers ' not delegated to the United States, 
 nor prohibited to the States, are reserved to the States or to the 
 people ; ' thus leaving the question whether the particular power 
 which may become the subject of contest has been delegated to 
 the one government or prohibited to the other to depend on a 
 fair construction of the whole instrument. The men who drew 
 and adopted this amendment had experienced the embarrass- 
 ments resulting from the insertion of this word in the articles 
 of confederation, and probably omitted it to avoid those em- 
 barrassments " (4 "Wheat., 405, 406). 
 
 The sentence sometimes quoted from his opinion in Sturges 
 vs. Crowninshield had exclusive relation to the restrictions 
 imposed by the Constitution on the powers of the States, and 
 especial reference to the effect of the clause prohibiting the 
 States from passing laws impairing the obligation of contracts, 
 as wiU clearly appear by quoting the whole paragraph : " Was 
 this general prohibition intended to prevent paper money? 
 We are not allowed to say so, because it is expressly provided 
 that no State shall ' emit bills of credit ; ' neither could these 
 words be intended to restrain the States from enabling debtors 
 to discharge their debts by the tender of property of no real 
 value to the creditor, because for that subject also particular 
 provision is made. Nothing but gold and silver coin can b« 
 made a tender in payment of debts" (4 Wheat., 122, 204). 
 
202 APPENDIX. 
 
 Such reports as have come clown to us of the debates in the 
 convention that framed the Constitution afford no proof of any 
 general concurrence of opinion upon the subject before ua. 
 The adoption of the motion to strike out the words " and emit 
 bills " from the clause " to borrow money and emit bills on the 
 credit of the United States " is quite inconclusive. The philip- 
 pic delivered before the Assembly of Maryland by Mr. Martin, 
 one of the delegates from that State, who voted against the 
 motion, and who declined to sign the Constitution, can hardly 
 be accepted as satisfactory evidence of the reasons or the 
 motives of the majority of the convention (see 1 Elliot's 
 Debates, 345, 370, 376). Some of the members of the conven- 
 tion, indeed, as appears by Mr. Madison's minutes of the de- 
 bates, expressed the strongest opposition to paper money. 
 And Mr. Madison has disclosed the grounds of his own action 
 by recording that " this vote in the affirmative by Virginia was 
 occasioned by the acquiescence of Mr. Madison, who became 
 satisfied that striking out the words would not disable the 
 Government from the use of public notes, so far as they could 
 be safe and proper ; and would only cut off the pretext for a 
 paper currency, and particularly for making the biUs a tender 
 either for public or private debts." 
 
 But he has not explained why he thought that striking out 
 the words " and emit bills " would leave the power to emit bills, 
 and deny the power to make them a tender in payment of 
 debts. And it cannot be known how many of the other dele- 
 gates, by whose vote the motion was adopted, intended neither 
 to proclaim nor to deny the power to emit paper money, 
 and were influenced by the argument of Mr. Gorham, who 
 " was for striking out, without inserting any prohibition," and 
 who said : " If the words stand, they may suggest and lead to 
 the emission." "The power, so far as it will be necessary or 
 safe, will be involved in that of borrowing " (5 Elliot's De- 
 bates, 434, 435, and note). And after the first clause of the 
 tenth section of the first article had been reported in the form 
 in which it now stands, forbidding the States to make anything 
 but gold or silver coin a tender in payment of debts, or to pass 
 
APPENDIX. 203 
 
 itny law impairing the obligation of contracts, when Mr. Gerry, 
 as reported by Mr. Madison, " entered into observations incul- 
 cating the importance of public faith, and the propriety of the 
 restraint put on the States from impairing the obligation of 
 contracts, alleging that Congress ought to be laid under the 
 like prohibitions," and made a motion to that effect, he was 
 not seconded (ib., 546). As an illustration of the danger of 
 giving too much weight upon such a question to the debates 
 and the votes in the convention, it may also be observed that 
 propositions to authorize Congress to grant charters of incor- 
 poration for national objects were strongly opposed, especially 
 as regarded banks, and defeated (ib., 440, 543, 544). The 
 power of Congress to emit bills of credit, as well as to incor- 
 porate national banks, is now clearly established by decisions 
 to wliich we shall presently refer. 
 
 The words "to borrow money," as used in the Constitution, 
 to designate a power vested in the National Government, for 
 the safety and welfare of the whole people, are not to receive 
 that limited and restricted interpretation and meaning which 
 they would have in a penal statute, or in an authority conferred, 
 by law or by contract, upon trustees or agents for private pur- 
 poses. 
 
 The power " to bon'ow money on the credit of the United 
 States " is the power to raise money for the public use on ar 
 pledge of the public credit, and may be exercised to meet 
 either present or anticipated expenses and liabilities of the 
 Government. It includes the power to issue, in return for the 
 money borrowed, the obligations of the United States in any 
 appropriate form, of stock, bonds, bills, or notes ; and in what- 
 ever form, they are issued, being instruments of the National 
 Government, they are exempt from taxation by the governments 
 of the several States (Western vs. Charleston City Council, 2 
 Pet., 449 ; Banks vs. Mayor, 7 Wall., 16 ; Bank vs. Supervisors, 
 7 Wall., 26). Congress has authority to issue these obligation,? 
 in a form adapted to circulation from hand to hand in tho 
 ordinary transactions of commerce and business. In order to 
 promote and facilitate such circulation, to adapt them to use a? 
 
204 APPENDIX. 
 
 currency, and to make them more ctirrent in the market, it may 
 provide for their redemption in coin or bonds, and may make 
 them receivable in payment of debts to the Government. So 
 much is settled beyond doubt, and was asserted or distinctly 
 admitted by the judges who dissented from the decision in the 
 Ijegal-tender Cases, as well as by those who concurred in that 
 decision (Veazie Bank vs. Fenno, 8 Wall., 533, 548 ; Hepburn 
 vs. Griswold, 8 WaU., 616, 636 ; Legal-tender Cases, 12 "Wall., 
 543, 544, 560, 582, 610, 613, 637). 
 
 It is equally well settled that Congress has the power to in- 
 corporate national banks, with the capacity, for their own profit 
 as well as for the use of the Government in its money trans- 
 actions, of issuing bills which under ordinary circxmistances 
 l^ass from hand to hand as money at their nominal value, and 
 which, when so current, the law has always recognized as a 
 good tender in payment of money debts, unless speoiflcally 
 objected to at the time of the tender (United States Bank vs. 
 Bank of Georgia, 10 "Wheat., 333, 347; "Ward vs. Smith, 7 "Wall., 
 447, 451). The power of CongTess to charter a bank was main- 
 tained in McCulloch vs. Maryland, 4 Wheat., 316, and in Os- 
 born vs. "United States Bank, 9 Wheat., 738, chiefly upon the 
 ground that it was an appropriate means for carrying on the 
 money transactions of the Government. But Chief Justice 
 Marshall said : " The currency which it circulates, by means of 
 its trade with individuals, is believed to make it a more fit 
 instrument for the purposes of government than it could other- 
 wise be ; and, if this be true, the capacity to carry on this trade 
 is a faculty indispensable to the character and objects of the 
 institution " (9 Wheat., 864). And Mr. Justice Johnson, who 
 concurred with the rest of the court in upholding the power to 
 incorporate a bank, gave the further reason that it tended to 
 give effect to "that power over the currency of the country 
 which the f ramers of the Constitution evidently intended to give 
 to Congress alone " (ib., 873). 
 
 The constitutional authority of Congress to provide a cur- 
 rency for the whole country is now firmly established. In 
 Veazie Bank vs. Fenno, 8 Wall., 533, 548, Chief Justice Chase, 
 
APPENDIX. 205 
 
 in delivering the opinion of tlie court, said : "It cannot be 
 doubted that under the Constitution the power to provide a 
 circulation of coin is given to Congress. And it is settled by 
 the uniform practice of the Government, and by repeated deci- 
 sions, that Congress may constitutionally authorize the emission 
 of bills of credit." Congress, having undertaken to supply a 
 national currency, consisting of coin, of treasury notes of the 
 United States, and of bills of national banks, is authorized to 
 impose on all State banks, or national banks, or private bankers, 
 paying out the notes of individuals or of State banks, a tax of 
 ten per cent, upon the amount of such notes so paid out 
 (Veazie Bank vs. Fenno, above cited ; National Bank vs. United 
 States, 101 U. S., 1). The reason for this conclusion was stated 
 by Chief Justice Chase, and repeated by the present Chief 
 Justice, in these words : " Having thus, in the exercise of un- 
 disputed constitutional powers, undertaken to provide a cur- 
 rency for the whole country, it cannot be questioned that 
 Congress may, constitutionally, secure the benefit of it to the 
 people by appropriate legislation. To this end, Congress has 
 denied the quality of legal tender to foreign coins, and has 
 provided by law against the imposition of counterfeit and base 
 coin on the community. To the same end, Congress may re- 
 strain, by suitable enactments, the circulation as money of any 
 notes not issued under its own authority. Without this powei', 
 indeed, its attempts to secure a sound and uniform currency for 
 the country must be futile " (8 V/all., 549 ; 101 U. S., 6). 
 
 By the Constitution of the United States the several States 
 are prohibited from coining money, emitting bills of credit, or 
 making anything but gold and silver coin a tender in payment 
 of debts. But no intention can be inferred from this to deny 
 to Congress either of these powers. Most of the powers granted 
 to Congress are described in the eighth section of the first 
 article ; the limitations intended to be set to its powers, so as 
 to exclude certain things which might otherwise be taken to be 
 included in the general grant, are defined in the ninth section ; 
 the tenth section is addressed to the States only. This section 
 prohibits the States from doing some things which the United 
 
206 APPENDIX. 
 
 States are expressly prohibited from doing, as -well as from 
 doing some things which the United States are expressly au- 
 thorized to do, and from doing some things which are neither 
 expressly granted nor expressly denied to the United States. 
 Congress and the States equally are expressly prohibited from 
 passing any bill of attainder or ex post facto law, or granting 
 any title of nobility. The States are forbidden, while the Pres- 
 ident and Senate are expressly authorized, to make treaties. The 
 States are forbidden, but Congress is expressly authorized, to 
 coin money. The States are prohibited from emitting bills of 
 credit ; but Congress, which is neither expressly authorized nor 
 expressly forbidden to do so, has, as we have already seen, been 
 held to have the power of emitting bills of credit, and of 
 making every provision for their circulation as currency, short 
 of giving them the quality of legal tender for private debts- 
 oven by those who have denied its authority to give them this 
 quality. 
 
 It appears to us to follow, as a logical and necessary conse- 
 quence, that Congress has the power to issue the obligations of 
 the United States in such form, and to impress upon them such 
 qualities as currency for the ptirchase of merchandise and the 
 payment of debts, as accord with the usage of sovereign gov- 
 ernments. The power, as incident to the power of borrowing 
 money and issuing bills or notes of the Government for money 
 borrowed, of impressing upon those bills or notes the quality of 
 being a legal tender for the payment of private debts, was a 
 power universally understood to belong to sovereignty, in 
 Europe and America, at the time of the framing and adoption 
 of the Constitution of the United States. The governments of 
 Europe, acting through the monarch or the legislature, accord- 
 ing to the distribution of powers under their respective consti- 
 tutions, had and have as sovereign a power of issuing paper 
 money as of stamping coin. This power has been distinctly 
 recognized in an important modern case, ably argued and fully 
 considered, in which the Emperor of Austria, as King of Hun- 
 gary, obtained from the English Court of Chancery an injunc- 
 tion against the issue in England, without his license, of notes 
 
APPENDIX. , 207 
 
 purporting to be public paper money of Hungary (Austria vs. 
 Day, 2 Giflf., 628, and 3 D. F. & J., 217). The power of issuing 
 bills of credit, and making them, at the discretion of the legis- 
 lature, a tender in payment of private debts, had long been 
 exercised in this country by the several Colonies and States ; 
 and during the Revolutionary War the States, upon the recom- 
 mendation of the Congress of the Confederation, had made the 
 bills issued by Congress a legal tender (see Craig vs. Missouri, 
 4 Pet., 435, 453; Briscoe vs. Bank of Kentucky, 11 Pet., 257, 
 313, 334^336; Legal- tender Oases, 12 Wall., 557, 558, 622; 
 Phillips on American Paper Currency, passim). The exercise of 
 this power not being prohibited to Congress by the Constitu- 
 tion, it is included in the power expressly granted to borrow 
 money on the credit of the United States. 
 
 This position is fortified by the fact that Congress is vested 
 with the exclusive exercise of the analogous power of coining 
 money and regulating the value of domestic and foreign coin, 
 and also with the pai'amount power of regulating foreign and 
 interstate commerce. Under the power to borrow money on 
 the credit of the United States, and to issue circulating notes 
 for the money borrowed, its power to define the quality and 
 force of those notes as currency is as broad as the like power 
 over a metallic currency under the power to coin money and to 
 regulate the value thereof. Under the two powers, taken to- 
 gether. Congress is authorized to establish a national currency, 
 either in coin or in paper, and to make that currency lawful 
 money for all purposes, as regards the National Government or 
 private individuals. 
 
 The power of making the notes of the United States a legal 
 tender in payment of private debts being included in the 
 power to borrow money and to provide a national currency, is 
 not defeated or restricted by the fact that its exercise may 
 affect the value of private contracts. If, upon a just and fair 
 interpretation of the whole Constitution, a particular power or 
 authority appears to bo vested in Congress, it is no constitu- 
 tional objection to its existence, or to its exercise, that the prop- 
 erty or the contracts of individuals may be incidentally afiected. 
 
208 APPENDIX. 
 
 The decisions of this court, already cited, afford several ex^ 
 amples of this. 
 
 Upon the issue of stock, bonds, bills, or notes of the United 
 States, the States are deprived of their power of taxation to the 
 extent of the property invested by individuals in such obliga- 
 tions, and the burden of State taxation upon other private prop- 
 erty is correspondingly increased. The ten per cent, tax im- 
 posed by Congress on notes of State banks and of private 
 bankers not only lessens the value of such notes, but tends 
 to drive them, and all State banks of issue, out of existence. 
 The priority given to debts due to the United States over the 
 private debts of an insolvent debtor diminishes the value of 
 these debts, and the amount which their holders may receive 
 out of the debtor's estate. 
 
 So, tinder the power to coin money and to regulate its value. 
 Congress may (as it did with regard to gold by the act of June 
 28, 1834, oh. 95, and with regard to silver by the act of 
 February 28, 1878, ch. 20) issue coins of the same denomina- 
 tion as those already current by law, but of less intrinsic value 
 than, those by reason of containing a less weight of the precious 
 metals, and thereby enable debtors to discharge their debts 
 by the payment of coins of the less real value. A contract to 
 jjay a certain sum in money, without any stipulation as to the 
 kind of money in which it shall be paid, may always be satis- 
 fied by payment of that sum in any currency which is lawful 
 money at the place and time at which payment is to be made 
 {1 Haie, P. C, 192-194 ; Bac. Ab. Tender, B. 2 ; Pothier, Con- 
 tract of Sale, No. 416 ; Pardessus, Droit Commercial, Nos. 204, 
 205 ; Searight vs. Calbraith, 4 Dall., 324). As observed by Mr. 
 Justice Strong, in delivering the opinion of the court in the 
 Legal-tender Cases, " Every contract for the payment of money, 
 simply, is necessarily subject to the constitutional power of the 
 Government over the currency, whatever that power may be, 
 and the obligation of the parties is, therefore, assumed with 
 reference to that power" (12 Wall., 549). 
 
 Congress, as the legislature of a sovereign nation, being ex- 
 pressly empowered by the Constitution "to lay and collect 
 
APPENDIX. 209 
 
 taxes, to pay the debts and provide for the common defenoo 
 and general welfare of the United States," and " to borrow 
 money on the credit of the United States," and " to coin money 
 and regulate the value thereof and of foreign coin ;" and being 
 clearly authorized, as incidental to the exercise of those great 
 powers, to emit bills of credit, to charter national banks, and 
 to provide a national currency for the whole people, in the 
 form of coin, treasury notes, and national bank bills ; and the 
 power to make the notes of the Government a legal tender in 
 payment of private debts being one of the powers belonging to 
 sovereignty in other civilized nations, and not expressly with- 
 held from Congress by the Constitution ; we are irresistibly 
 impelled to the conclusion that the impressing upon the treas- 
 ury notes of the United States the quality of being a legal 
 tender in payment of private debts is an appropriate means, 
 conducive and plainly adapted to the execution of the un- 
 doubted powers of Congress, consistent with the letter and 
 spirit of the Constitution, and therefore, within the meaning of 
 that instrument, " necessary and proper for caiTying into execu- 
 tion the powers vested by this Constitution in the Government 
 of the United States." 
 
 Such being our conclusion in matter of law, the question 
 whether at any particular time, in war or in peace, the exigency 
 is such, by reason of unusual and pressing demands on the 
 resources of the Government, or of the inadequacy of the 
 supply of gold and silver coin to furnish the currency needed 
 for the uses of the Government and of the people, that it is, as 
 matter of fact, wise and expedient to resort to this means, is a 
 political question, to be determined by Congress when the 
 question of exigency arises, and not a judicial question, to be 
 afterward passed upon by the courts. To quote once more 
 from the judgment in McCuUoch vs. Maryland : ' ' Where the 
 law is not prohibited, and is really calculated to effect any of 
 the objects entrusted to the Government, to undertake here to 
 inquire into the degree of its necessity would be to pass the 
 line which circumscribes the judicial department, and to tread 
 on legislative ground" (4 Wheat., 423). 
 
210 APPENDIX. 
 
 It follows that the act of May 31, 1878, ch. 146, is constitu- 
 tional and valid ; and that the Circuit Court rightly held that 
 the tender in treasury notes, reissued and kept in circulation 
 under that act, was a tender of lawful money in payment of the 
 defendant's debt to the plaintiff. 
 
 Judgment afiSrmed. 
 
 Mr. Justice Yteud wrote a dissenting opinion, as follows : 
 From the judgment of the court in this case, and from aU 
 the positions advanced in its support, I dissent. The question 
 of the power of Congress to impart the quality of legal tender 
 to the notes of the United States, and thus make them money 
 and a standard of value, is not new here. Unfortunately, it 
 has been too frequently before the court, and its latest decision, 
 previous to this one, has never been entirely accepted and ap- 
 proved by the country. Nor should this excite surprise ; for 
 whenever it is declared that this Government, ordained to 
 establish justice, has the power to alter the condition of con- 
 tracts between private parties, and authorize their payment or 
 discharge in something different from that which the parties 
 stipulated, thus disturbing the relations of commerce and the 
 business of the community generally, the doctrine will not and 
 ought not to be readily accepted. There wiU be many who 
 will adhere to the teachings and abide by the faith of their 
 fathers. So the question has come again, and will continue to 
 come until it is settled so as to uphold and not impair the con- 
 tracts of parties, to promote and not defeat justice. 
 
 If there be anything in the history of the Constitution which 
 can be established with moral certainty, it is that the framers 
 of that instrument intended to prohibit the issue of legal-tender 
 notes both by the general Government and by the States ; and 
 thus prevent interference with the contracts of private parties. 
 During the Eevolution and the period of the old Confederation, 
 the Continental Congress issued bills of credit, and upon its 
 recommendation the States made them a legal tender, and the 
 refusal to receive them an extinguishment of the debts for 
 which they were offered. They also enacted severe penalties 
 
APPENDIX. 211 
 
 against those who refused to accept them at their nominal 
 vahie, as equal to coin, in exchange for commodities. And 
 previously, as early as January, 1776, Congress had declared 
 that, if any person should be "so lost to all virtue and regard 
 for his country " as to refuse to receive in payment the bills 
 then issued, he should, on conviction thereof, be " deemed, 
 published, and treated as an enemy of his country, and pre- 
 cluded from all trade and intercourse with the inhabitants of 
 the colonies." 
 
 Yet, this legislation proved ineffectual ; the umversal law of 
 currency prevailed, which makes promises of money valuable 
 only as they are convertible into coin. The notes depreciated 
 imtil they became valueless in the hands of their possessors. 
 So it always will be ; legislative declaration cannot make the 
 promise of a thing the equivalent of the thing itself. 
 
 The legislation to which the States were thus induced to re- 
 sort was not confined to the attempt to make paper money a 
 legal tender for debts ; but the principle that private contracts 
 could be legally impaired, and their obligation disregarded, 
 being once established, other measures equally dishonest and 
 destructive of good faith between parties were adopted. What 
 followed is thus stated by Mr. Justice Story, in his " Commen- 
 taries : " 
 
 "The history, indeed," he says, "of the various laws which 
 were passed by the States, in their colonial and independent 
 character, upon this subject, is startling at once to our morals, 
 to our patriotism, and to our sense of justice. Not only was 
 paper money issued and declared to be a tender in payment of 
 debts, but laws of another character, well known under the 
 appellation of tender laws, appraisement laws, instalment laws, 
 and suspension laws, were from time to time enacted, which 
 prostrated all private credit and all private morals. By some 
 of these laws the due payment of debts was suspended ; debts 
 were, in violation of the very terms of the contract, authorized 
 to be paid by instalments at different periods ; property of any 
 sort, however worthless, either real or personal, might be ten- 
 dered by the debtor in payment of his debts ; and the creditor 
 
212 APPENDIX. 
 
 ■was compelled to take the property of the debtor, ■which he 
 might seize on execution, at an appraisement ■wholly dispro- 
 portionate to its known value. Such grievances and oppres- 
 sions, and others of a like nature, ■were the ordinary results of 
 legislation during the Revolutionary War and the intermediate 
 period down to the formation of the Constitution. They en- 
 tailed the most enormous evils on the country, and introduced 
 a system of fraud, chicanery, and profligacy ■which destroyed 
 all private confidence and all industry and enterprise " (2 
 Story on the Constitution, § 1371). 
 
 To put an end to this vicious system of legislation ■which 
 only encouraged fraud, thus graphically described by Story, 
 the clauses -which forbid the States from emitting biUs of credit 
 or making anything but gold and silver a tender in payment of 
 debts, or passing any law impairing the obligation of contracts, 
 ■were inserted in the Constitution. 
 
 "The attention of the convention, therefore,'' says Chief 
 Justice Marshall, "'was particularly directed to paper money 
 and to acts which enabled the debtor to discharge his debt 
 other^wise than ■was stipulated in the contract. Had nothing 
 more been intended, nothing more ■would have been expressed, 
 but in the opinion of the convention much more remained to 
 be done. The same mischief might be effected by other means. 
 To restore public confidence completely, it ■was necessary, not 
 only to prohibit the use of particular means by ■which it might 
 be effected, but to prohibit the use of any means by which the 
 same mischief might be produced. The convention appears 
 to have intended to establish a great principle, that contracts 
 should be inviolable" (Sturges vs. Crowninshield, 4 Wheat., 
 122, 206). 
 
 It would be difficult to believe, even in the absence of the 
 historical evidence we have on the subject, that the framers of 
 the Constitution, profoundly impressed by the evils resulting 
 from this kind of legislation, ever intended that the new Gov- 
 ernment, or-dained to establish justice, should possess the power 
 of making its bills a legal tender, which they were un^willing 
 should remain ■with the States, and which in the past had 
 
APPENDIX. 213 
 
 proved so dangerous to the peace of the community, so dis- 
 turbing to the business of the people, and so destructive of 
 their morality. 
 
 The great historian of owe country has recently given to the 
 world a history of the convention, the result of years of labor 
 in the examination of all public documents relating to its for- 
 mation, and of the recorded opinions of its framers ; and thus 
 he writes : 
 
 "With the full recollection of the need or seeming need of 
 paper money in the Eevolution, with the menace of danger in 
 future time of war from its prohibition, authority to issue bills 
 of credit that should be legal tender was refused to the gen- 
 eral Government by the vote of nine States against New Jersey 
 and Maryland. It was Madison who decided the vote of Vir- 
 ginia, and he has left his testimony that 'the pretext for a 
 paper currency, and particularly for making the bills a tender, 
 either for public or private debts, was cut off.' This is the in- 
 terpretation of the clause made at the time of its adoption, alike 
 by its authors and by its opponents, accepted by all the states- 
 men of that age, not open to dispute because too clear for 
 argument, and never disputed so long as any one man who took 
 part in framing the Constitution remained alive. History can- 
 not name a man who has gained enduring honor by causing 
 the issue of paper money. "Wherever such paper has been em- 
 ployed it has in every case thrown upon its authors the burden 
 of exculpation under the plea of pressing necessity" (Ban- 
 croft's History of the Formation of the Constitution, vol. 2, 
 134). 
 
 And when the convention came to the prohibition upon the 
 States, the historian says that the clause, "No State shall make 
 anything but gold and silver a tender in payment of debts," 
 was accepted without a dissentient State. " So the adoption of 
 the Constitution," he adds, "is to be the end forever of paper 
 money, whether issued by the several States or by the United 
 States, if the Constitution shall be rightly interpreted and 
 honestly obeyed" (id., 137). 
 
 For nearly three-fourths of a century after the adoption of 
 
214 APPENDIX. 
 
 ths Constitution, and until the legislation during the recent 
 civil war, no Jurist and no statesman of any position in the 
 countiy ever pretended that a power to impart the quality of 
 legal tender to its notes was vested in the general Government. 
 There ia no recorded word of even one in favor of its possessing 
 the power. All conceded, as an axiom of constitutional law, 
 that the power did nob exist. 
 
 Mr. Webster, from his first entrance into public life in 1812, 
 gave great consideration to the subject of the currency, and in 
 an elaborate speech on that subject, made in the Senate in 
 1830, then sitting in this room, he said : " Currency, in a large 
 and perhaps just sense, includes not only gold and silver and 
 bank bills, but bills of exchange also. It may include all that 
 adjusts exchanges and settles balances in the operations of 
 trade and business ; but if we understand by cui-rency the legal 
 money of the country, and that which constitutes a legal tender 
 for debts, and is the standai-d measure of value, then undoubt- 
 edly nothing is included but gold and silver. Most unques- 
 tionably there is no legal tender, and there can be no legal 
 tender in this country, under the authority of this Government 
 or any other, but gold and silver, either the coinage of our own 
 mints or foreign coins at rates regulated by Congress. This is 
 a constitutional principle, perfectly plain and of the highest 
 importance. The States are expressly prohibited from making 
 anything but gold and silver a legal tender in payment of debts, 
 and although no such express prohibition is applied to Con- 
 gress, yet, as Congress has no power grafted to it in this respect 
 but to coin money and to regulate the value of foreign coins, it 
 clearly has no power to substitute paper or anything else for 
 coin as a tender in payment of debts and in discharge of con- 
 tracts. Congress has exercised this power fully in both its 
 branches ; it has coined money, and still coins it ; it has regu- 
 lated the value of foreign coins, and still regulates their value. 
 The legal tender, therefore, the constitutional standard of 
 value, is established and cannot be overthrown. To overthrow 
 it would shake the whole system " (4 Webster's Works, 271). 
 
 When the idea of imparling the legal tender quality to the 
 
APPENDIX. 215 
 
 notes of the United States issued trnder the first act of 1862 
 was first broached, the advocates of the measure rested their 
 support of it on the ground that it was a war measure, to 
 which the country was compelled to resort by the exigencies of 
 its condition, being then sorely pressed by the Confederate 
 forces, and requiring the daily expenditure of enormous sums 
 to maintain its army and navy and to carry on the Govern- 
 ment. The Bepresentative who introduced the bill in the 
 House declared that it was a measure of that nature, " one of 
 necessity and not of choice ; " that the times were extraordi- 
 nary and that extraordinary measures must be resorted to in 
 order to save our Government and preserve our nationality 
 (speech of Spaulding, of New York, Cong. Globe, 1861-62, Part 
 1, 523). Other members of the House frankly confessed their 
 doubt as to its constitutionality, but yielded their support of it 
 under the pressure of this supposed necessity. 
 
 In the Senate also the measure was pressed for the same 
 reasons. 'When the act was reported by the Committee on 
 Finance, its chairman, while opposing the legal tender provi- 
 sion, said : " It is put on the ground of absolute, overwhelming 
 necessity ; that the Government has now arrived at that point 
 when it must have funds, and those funds are not to be ob- 
 tained from ordinary sources, or from any of the expedients to 
 which we have heretofore had recourse, and therefore, this new, 
 anomalous, and remarkable provision must be resorted to in 
 order to enable the Government to pay off the debt that it now 
 owes and afford circulation which will be available for other 
 purposes" {Gong. Ghhe, 1861-62, Part 1, 764). 
 
 And upon that ground the provision was adopted, some of 
 the Senators stating that in the exigency then existing money 
 must be had, and they, therefore, sustained the measure, al- 
 though they apprehended danger from the experiment. " The 
 medicine of the Constitution," said Senator Sumner, "must 
 not become its daily food " (id., 800). A similar necessity was 
 m-ged upon the State tribunals and this court in justification 
 of the measure, when its validity was questioned. The dissent- 
 ing opinion in Hepbtim vs. Griswold referred to the pressure 
 
216 APPENDIX. 
 
 that was upon the Government at the time to enable it to radsa 
 and support an army and to provide and maintain a navy. 
 Chief Justice Chase, who gave the prevailing opinion in that 
 case, also spoke of the existence of the feeling when the bill 
 was passed that the provision was necessary. He favored the 
 provision on that ground when Secretary of the Treasury, al- 
 though he had come to that conclusion with reluctance, and 
 recommended its adoption by Congress. When the question as 
 to its validity reached this court, this expression of favor was 
 referred to, and by many it was supposed that it would control 
 his judicial action. But after long pondering upon the sub- 
 ject, after listening to repeated arguments by able counsel, ha 
 decided against the constitutionality of the provision ; and, 
 holding in his hands the casting vote, he determined the judg- 
 ment of the court. He preferred to preserve his integrity as a 
 judicial officer rather than his consistency as a statesman. In 
 his opinion he thus referred to his previous views : 
 
 "It is not surprising that amid the tumult of the late civil 
 war, and under the influence of apprehensions for the safety 
 of the Republic almost universal, different views, never before 
 entertained by American statesmen or jurists, were adopted 
 by many. The time was not favorable to considerate reflec- 
 tion upon the constitutional limits of legislative or executive 
 authority. If power was assumed from patriotic motives, the 
 assumption found ready justification in patriotic hearts. Many 
 who doubted yielded their doubts ; many who did not doubt 
 were silent. Some who were strongly averse to making gov- 
 ernment notes a legal tender felt themselves constrained to 
 acquiesce in the views of the advocates of the measure. Not a 
 few who then insisted upon its necessity, or acquiesced in that 
 view, have, since the return of peace, and under the influence 
 of the calmer time, reconsidered their conclusions, and now 
 concur in those wliich we have just announced. These conclu- 
 sions seem to us to be fully sanctioned by the letter and spirit 
 of the Constitution " (8 Wall., 625). 
 
 It must be evident, however, upon reflection, that if there 
 were any power in the Government of the United States to 
 
APPENDIX. 217 
 
 impart the quality of legal tender to its promissory notes, it 
 was for Congress to determine when the necessity for its exer- 
 cise existed ; that war merely increased the urgency for money ; 
 it did not add to the powers of the Government nor change 
 their nature ; that if the power existed it might be equally 
 exejcised when a loan was made to meet ordinary expenses in 
 time of peace as when vast sums were needed to support an 
 army or a navy in time of war. The wants of the Government 
 could never be the measure of its powers. But in the excite- 
 ment and apprehensions of the war these considerations were 
 unheeded ; the measure was passed as one of overruling neces- 
 sity ia a perilous crisis of the country. Now, it is no longer 
 advocated as one of necessity, but as one that may be adopted 
 at any time. Never before was it contended by any jurist or 
 commentator on the Constitution that the Government, in full 
 receipt of ample income, with a treasury overflowing, with 
 more money on hand than it knows what to do with, could 
 issue paper money as a legal tender. What was, in 1862, called 
 the "medicine of the Constitution," has now become its daily 
 bread. So it always happens that whenever a wrong principle 
 of conduct, political or personal, is adopted on a plea of neces- 
 sity, it will be afterward followed on a plea of convenience. 
 
 The advocates of the measure have not been consistent in 
 the designation of the power upon which they have supported 
 its validity, some placing it on the power to borrow money, 
 some on the coining power, and some have claimed it as an 
 incident to the general powers of the Government. In the 
 present case it is placed by the court upon the power to bor- 
 row money, and the alleged sovereignty of the United States 
 over the currency. It is assumed that this power, when exer- 
 cised by the Government, is something different from what it 
 is when exercised by corporations or individuals, and that the 
 Government has, by the legal tender provision, the power to 
 enforce loans of money because the sovereign governments of 
 European countries have claimed and exercised such power. 
 
 " The words to borrow money," says the court, " are not to 
 receive that limited and restricted interpretation and meaning 
 
 10 
 
218 APPENDIX. 
 
 ■which they -woTtld have in a penal statute or in an authority 
 conferred by law or by contract upon trustees or agents fol 
 private purposes." And it adds that " the power, as incident 
 to the power of borrowing money and issuing bills or notes of 
 the Government for money borrowed, of impressing Upon those 
 bills or notes the quality of being a legal tender for the pay- 
 ment of private debts, was a power universally understood to 
 belong to sovereignty, in Europe and America, at the time of 
 the framing and adoption of the Constitution of the United 
 States. The governments of Europe, acting through the mon- 
 arch or the legislature, according to the distribution of powers 
 under their respective constitutions, had and have as sovereign 
 a power of issuing paper money as of stamping coin," and that 
 " the exercise of this power not being prohibited to Congress 
 by the Constitution, it is included in the power expressly 
 granted to borrow money on the credit of the United States.'' 
 
 As to the terms to borrow money, where, I would ask, does 
 the court find any authority for giving to them a different in- 
 terpretation in the Constitution from what they receive when 
 used in other instruments, as in the charters of municipal bod- 
 ies or of private corporations, or in the contracts of individuals? 
 They are not ambiguous ; they have a well-settled meaning in 
 other instruments. If the court may change that iu the Con- 
 stitution, so it may the meaning of all other clauses, and the 
 powers which the Government may exercise will be found de- 
 clared, not by plain words in the organic law, but by words 
 of a new significance resting in the minds of the judges. Until 
 some authority beyond the alleged claim and practice of the 
 sovereign governments of Eui-ope be produced, I must believe 
 that the terms have the same meaning in all instruments wher- 
 ever they are used ; that they mean a power only to contract 
 for a loan of money, upon considerations t6 be agreed between 
 the parties. The conditions of the loan, or whether any particu- 
 lar security shall be given to the lender, are matters of arrange- 
 ment between the parties ; they do not concern any one else. 
 They do not imply that the borrower can give to his promise to 
 refund the money any security to the lender outside of property 
 
APPENDIX. 219 
 
 or riglits which he possesses. The transaction is completed 
 when the lender parts with his money and the borrower gives 
 his promise to pay at the time, and in the manner, and with the 
 securities agreed upon. Whatever stipulations may be made 
 to add to the value of the promise or to secure its fulfilment, 
 must necessarily be limited to the property, rights, and priv- 
 ileges which the borrower possesses. Whether he can add to 
 his promises any element which will induce others to receive 
 them beyond the security which he gives for their payment, 
 depends upon his power to control such element. If he has a 
 right to put a limitation upon the use of other persons' prop- 
 erty, or to enforce an exaction of some benefit from them, he 
 may give such privilege to the lender ; but if he has no right 
 thus to interfere with the property or possessions of others, of 
 course he can give none. It wiU hardly be pretended that the 
 Govermnent of the United States has any power to enter into 
 en engagement that, as security for its notes, the lender shall 
 have special privileges with respect to the visible property of 
 others, shall be able to occupy a portion of their lands or their 
 houses, and thus interfere with the possession and use of their 
 property. If the Government cannot do that, how can it stop 
 in and say, as a condition of loaning money, that the lender 
 shall have a right to interfere with contracts between private 
 parties ? A large proportion of the property of the world ex- 
 ists in contracts, and the Government has no more right to de- 
 prive one of their value by legislation operating directly upon 
 them, than it has a right to deprive one of the value of any 
 visible and tangible property. No one, I think, will pretend 
 that individuals or corporations possess the power to impart to 
 their evidences of indebtedness any quality by which the holder 
 will be able to affect the contracts of other parties, strangers to 
 the loan ; nor would any one pretend that Congress possesses 
 the power to impart any such quality to the notes of the 
 United States, except from the clause authorizing it to make 
 laws necessary and proper to the execution of its powers. That 
 clause, however, does not enlarge the expressly designated 
 powers ; it merely states what Congress could have done with- 
 
220 APPENDIX. 
 
 out its insertion in the Constitution. Without it Congress 
 could have adopted any appropriate means to borrow ; but that 
 can only be appropriate for that purpose which has some rela- 
 tion of fitness to the end, which has respect to the terms essen- 
 tial to the contract, or to the securities which the borrower 
 may furnish for the repayment of the loan. The quality of 
 legal tender does not touch the terms of the contract ; that is 
 complete without it ; nor does it stand as a secimty for the loan, 
 for a security is a thing pledged over which the borrower has 
 some control, or in which he holds some interest. 
 
 The argument presented by the advocates of legal tender is, 
 in substance, this : The object of borrowing is to raise funds ; 
 the addition of the quality of legal tender to the notes of the 
 Government will induce parties to take them, and funds will 
 thereby be more readily loaned. But the same thing may be 
 said of the addition of any other quality which would give to 
 the holder of the notes some advantage over the property of 
 others, as, for instance, that the notes should serve as a pass on 
 the public conveyances of the country, or as a ticket to places 
 of amusement, or should exempt his property from State and 
 municipal taxation, or entitle him to the free use of the tele- 
 graph lines, or to a percentage from the revenues of private 
 corporations. The same consequence, a ready acceptance of 
 the notes, would follow ; and yet no one would pretend that the 
 addition of privileges of this kind with respect to the property 
 of others, over which the borrower has no control, would be in 
 any sense an appropriate measure to the execution of the power 
 to borrow. 
 
 Undoubtedly the power to borrow includes the power to give 
 evidences of the loan in bonds, treasury notes, or in such other 
 form as may be agreed between the parties. These may be issued 
 in such amounts as will fit them for circulation, and for that 
 purpose may be made payable to bearer, and transferable by 
 delivery. Experience has shown that the form best fitted to 
 secure their ready acceptance is that of notes payable to bearer 
 in such amounts as may suit the ability of the lender. The 
 Government, in substance, says to parties with whom it deals ; 
 
APPENDIX. 221 
 
 Lend us your money, or furnish us with your products or your 
 labor, and we will ultimately pay you, and as evidence of it we 
 will give you our notes, in such form and amount as may suit 
 your convenience, and enable you to transfer them; we will 
 also receive them for certain demands due to us. In all this 
 matter there is only a dealing between the Government and the 
 individuaLs who trust it. The transaction concerns no others. 
 The power which authorizes it is a very different one from a 
 power to deal between parties to private contracts in which the 
 Government is not interested, and to compel the receipt of these 
 promises to pay in place of the money for which the contracts 
 stipulated. This latter power is not an incident to the former ; 
 it is a distinct and far greater power. There is no legal con- 
 nection between the two ; between the power to borrow from 
 those wiUing to lend and the power to interfere with the inde- 
 pendent contracts of others. The possession of this latter 
 power would justify the interference of the Government with 
 any rights of property of other parties, under the pretence 
 that its allowance to the holders of the notes would lead to 
 their more ready acceptance, and thus furnish the needed 
 means. 
 
 The power vested in Congress to coin money does not in my 
 judgment fortify the position of the court as its opinion affirmis. 
 So far from deducing from that power any authority to impress 
 the notes of the Government with the quality of legal tender, 
 its existence seems to me inconsistent with a power to make 
 anything but coin a legal tender. The meaning of the terms 
 ' "to coin money " is not at all doubtful. It is to mould metallic 
 substances into forms convenient for circulation and to stamp 
 them with the impress of the Government authority indicating 
 their value with reference to the unit of value established by 
 law. Coins are pieces of metal of definite weight and value, 
 stamped such by the authority of the Government. If any 
 doubt could exist that the power has reference to metallic sub- 
 stances only it would be removed by the language which im- 
 mediately follows, authorizing Congress to regulate the value 
 of money thus coined and of foreign coin, and also by clauses 
 
222 APPENDIX. 
 
 making a distinction between coin and the obligations of the 
 general Government and of the States. Thus, in the clause 
 authorizing Congress "to provide for the punishment of coun- 
 terfeiting the securities and current coin of the Unite.d States," 
 a distinction is made between the obligations and the coin of 
 tha Government. 
 
 Money is not only a medium of exchange, but it is a standard 
 of value. Nothing can be such standard which has not intrin- 
 sic value, or which is subject to frequent changes in value. 
 From the earliest period in the history of civilized nations, we 
 find pieces of gold and silver used as money. These metals are 
 scattered over the world in small quantities ; they are suscepti- 
 ble of division, capable of easy impression, have more value in 
 proportion to weight and size, and are less subject to loss by 
 wear and abrasion than any other material possessing these 
 qualities. It requires labor to obtain them ; they are not de- 
 pendent upon legislation or the caprices of the multitude ; they 
 cannot be manufactured or decreed into existence, and they do 
 not perish by lapse of time. They have, therefore, naturally, 
 if not necessarily, become throughout the world a standard of 
 value. In exchange for pieces of them, products requiring an 
 equal amount of labor are readily given. When the product 
 and the piece of metal represent the same labor, or an approxi- 
 mation to it, they are freely exchanged. There can be no ade- 
 quate substitute for these metals. Says Mr. Webster, in a 
 speech made in the House of Eepresentatives in 1815 : 
 
 " The circulating medium of a commercial community must 
 be that which is also the circulating medium of other commer- 
 cial communities, or must be capable of being converted into 
 that medium without loss. It must also be able, not only to 
 pass in payments and receipts among individuals of the same 
 society and nation, but to adjust and discharge the balance of 
 exchanges between different nations. It must be something 
 which has a value abroad as well as at home, by which foreign 
 as well as domestic debts can be satisfied. The precious 
 metals alone answer these purposes. They alone, therefore, 
 are money, and whatever else is to perform the functions of 
 
APPENDIX. 223 
 
 money must be their representative, and capable of being 
 turned into them at will. So long as bank paper retains this 
 quality if is a substitute for money ; divested of this, nothing 
 can give it that character " (3 Webster's Works, 41). 
 
 The clause to coin money must be read in connection vrith 
 the prohibition upon the Stabes to make anything but gold 
 and silver coin a tender in payment of debts. The two taken 
 together clearly show that the coins to be fabricated under the 
 authority of the general Government, and as such to be a legal 
 tender for debts, are to be composed principally, if not entirely, 
 of the metals of gold and silver. Coins of such metals are 
 necessarily a legal tender to the amount of their respective 
 values without any legislative enactment, and the statute of 
 the United States providing that they shall be such tender 
 is only declaratory of their effect when offered in payment. 
 When the Constitution says, therefore, that Congress shall have 
 the power to coin money, interpreting that clause with the pro- 
 hibition upon the States, it says it shall have the power to 
 make coins of the precious metals a legal tender, for that alone 
 which is money can be a legal tender. If this be the true im- 
 port of the language, nothing else can be made a legal tender. 
 We all know that the value of the notes of the Government in 
 the market, and in the commercial world generally, depends 
 upon their convertibility on demand into coin ; and as confi- 
 dence in such convertibility increases or diminishes, so does 
 the exchangeable value of the notes vary. So far from becom- 
 ing themselves standards of value by reason of the legislative 
 declaration to that effect, their own value is measured by tho 
 facility with which they can be exchanged into that which 
 alone is regarded as money by the commercial world. They 
 are promises of money, but they are not money in the sense of 
 the Constitution. The term money is used in that instrument 
 iQ several clauses; in the one authorizing Congress " to borrow 
 money;" in the one authorizing Congress "to coin money;" 
 in the one declaring that " no money " shall be drawn from the 
 treasury but in consequence of appropriations made by law ; 
 and in the one declaring that no State shall " coin money." 
 
224 APPENDIX. 
 
 And it is a settled rule of interpretation that the same terra 
 occurring in different parts of the same instrument shall ba 
 taken in the same sense, unless there be something in the con- 
 text indicating that a different meaning was intended. Now, 
 to coin money is, as I have said, to make coins out of metallic 
 substances, and the only money the value of which Congress 
 can regulate is coined money, either of our mints or of foreign 
 countries. It should seem, therefore, that to borrow money is to 
 obtain a loan of coined money, that is, money composed of the 
 precious metals, representing value in the purchase of property 
 and payment of debts. Between the promises of the Govern- 
 ment, designated as its securities, and this money, the Constitu- 
 tion draws a distinction, which disappears in the opinion of the 
 court. 
 
 The opinion not only declares that it is in the power of Con- 
 gress to make the notes of the Government a legal tender and 
 a standard of value, but that under the power to coin money 
 and regulate the value thereof, Congress may issue coins of the 
 same denominations as those now already current, but of less 
 intrinsic value, by reason of containing a less weight of the 
 precious metals, and thereby enable debtors to discharge their 
 debts by payment of coins of less real value. This doctrine is 
 put forth as in some way a justification of the legislation 
 authorizing the tender of nominal money in place of real money 
 in payment of debts. Undoubtedly Congress has power to 
 alter the value of coins issued, either by increasing or diminish- 
 ing the alloy they contain ; so it may alter, at its pleasure, their 
 denominations ; it may hereafter call a dollar an eagle, and it 
 may call an eagle a doUar. But if it be intended to assert that 
 Congress can make the coins changed the equivalent of those 
 having a greater value in their previous condition, and compel 
 parties contracting for the latter to receive coins with diminished 
 value, I must be permitted to deny any such authority. Any 
 such declaration on its part would be not only utterly inopera- 
 tive in fact, but a shameful disregard of its constitutional duty. 
 As I said on a former occasion : " The power to coin money; 
 as declared by this court, is a great trust devolved upon Con- 
 
APPENDIX. '225' 
 
 gress, oanying with it the duty of creating and maintaining a 
 uniform standard of value throughout the Union, and it would 
 be a manifest abuse of this trust to give to the coins issued 
 by its authority any other than their real value. By debasing 
 the coins, when once the standard is fixed, is meant giving to 
 the coins, by their form and impress, a certificate of their having 
 a relation to that standard different from that which, in truth, 
 they possess ; in other words, giving to the coins a false certifi- 
 cate of their value. Arbitrary and profligate governments 
 have often resorted to this miserable scheme of robbery, which 
 Mill designates as a shallow and impudent artifice, the ' least 
 covert of all modes of knaveiy, which consists in calling a 
 shilling a pound, that a debt of one hundred pounds may be 
 cancelled by the payment of one hundred shillings.' " No such 
 debasement has ever been attempted in this country, and none 
 ever will be so long as any sentiment of honor influences the 
 governing power of the nation. The changes from time to time 
 in the quantity of alloy in the difierent coins have been made 
 to preserve the proper relative value between gold and silver, or 
 to prevent exportation, and not with a view of debasing them. 
 Whatever power may be vested in the Government of the United 
 States, it has none to perpetrate such monstrous iniquity. One 
 of the great purposes of its creation, as expressed in the preamble 
 of the Constitution, was the establishment of justice, and not a 
 hne nor a word is found in that instrument which sanctions any 
 intentional wrong to the citizen, either in war or in peace. 
 
 But beyond and above all the objections which I have stated 
 to the decision recognizing a power in Congress to impart the 
 legal-tender quality to the notes of the Government, is my 
 objection to the rule of construction adopted by the court to 
 reach its conclusions, a rule which, fully carried out, would 
 change the whole nature of our Constitution and break down 
 the barriers which separate a government of limited from one 
 of unlimited powers. When the Constitution came before the 
 conventions of the several States for adoption, apprehension 
 existed that other powers than those designated might be 
 claimed ; and it led to the first ten amendments. When these 
 
 10* 
 
226 APPENDIX. 
 
 were presented to the States they were preceded by a preamble 
 stating that the conventions of a number of the States had, at 
 the time of adopting the Constitution, expressed a desire, " in 
 order to prevent misconception or alDUse of its powers, that 
 further declaratory and restrictive clauses should be added." 
 One of them is found in the tenth amendment, which declares 
 that " the powers not delegated to the United States by the 
 Constitution, nor prohibited by it to the Stateis, are reserved to 
 the States respectively, or to the people." The framers of the 
 Constitution, as I have said, were profoundly impressed with 
 the evils which had resulted from the vicious legislation of the 
 States making notes a legal tender, and they determined that 
 such a power should not exist any longer. They therefore 
 prohibited the States from exercising it, and they refused to 
 grant it to the new government which they created. Of what 
 purpose is it, then, to refer to the exercise of the power by the 
 absolute or the limited governments of Europe, or by the States 
 previous to our Constitution ? Congress can exercise no power 
 by virtue of any supposed inherent sovereignty in the general 
 Government. Indeed, it may be doubted whether the power 
 can be correctly said to appertain to sovereignty in any proper 
 sense as an attribute of an independent political community. 
 The power to commit violence, perpetrate injustice, take pri- 
 vate property by force without compensation to the owner, and 
 compel the receipt of promises to pay in place of money, may 
 be exercised, as it often has been, by irresponsible authority, 
 but it cannot be considered as belonging to a government 
 founded upon law. But be that as it may, there is no such 
 thing as a power of inherent sovereignty in the Government of 
 the United States. It is a government of delegated powers, 
 supreme within its prescribed sphere, but powerless outside of 
 it. In this country sovereignty resides in the people, and Con- 
 gress can exercise no power which they have not, by their 
 Constitution, entrusted to it ; all else is withheld. It seems, 
 however, to be supposed that, as the power was taken from 
 the States, it could not have been intended that it should dis- 
 appear entirely, and therefore it must in some way adhere to 
 
APPENDIX. 227 
 
 the general Govenunent, notwithstandiBg the tenth amend- 
 ment and the nature of the Constitution. The doctrine, that 
 a power not expressly forbidden may be exercised, would, as I 
 have observed, change the character of our Government. If I 
 have read the Constitution aright, if there is any weight to be 
 given to the uniform teachings of our great jurists and of com- 
 mentators previous to the late civil war, the true doctrine is 
 the very opposite of this. If the power is not in terms granted, 
 and is not necessary and proper for the exercise of a power 
 which is thus granted, it does not exist. And in determining 
 what measures may be adopted in executing the powers granted, 
 Chief-Justice Marshall declares that they must be appropriate, 
 plainly adapted to the end, not prohibited, and consistent with 
 the letter and spirit of tlie Constitution. Now, all through that 
 instrument we find limitations upon the power, both of the gen- 
 eral Government and the State Governments, so as to prevent 
 oppression and injustice. No legislation, therefore, tending to 
 promote either can consist with the letter and spirit of the Consti- 
 tution. A law which interferes with the contracts of others and 
 compels one of the parties to receive in satisfaction something 
 different from that stipulated, without reference to its actual 
 value in the market, necessarily works such injustice and wrong. 
 There is, it is true, no provision in the Constitution of the 
 United States forbidding in direct terms the passing of laws 
 by Congress impairing the obligation of contracts, and there 
 are many express powers conferred, sutsh as the power to de- 
 clare war, levy duties, and regulate commerce, the exercise 
 of which affects more or less the value of contracts. Thus war 
 necessarily suspends intercourse between citizens or subjects 
 of beUigerent nations, and the performance during its con- 
 tinuance of previous contracts. The imposition of duties upon 
 goods may affect the prices of articles imported or manufac- 
 tured, so as to materially alter the value of previous contracts 
 respecting them. But these incidental consequences arising 
 from the exercise of such powers were contemplated in the 
 grant of them. As there can be no solid objection to legis- 
 lation under them, no just complaint can be made of such con' 
 
228 APPENDIX. 
 
 Boquences. But far different is the case when the impairment 
 of the contract does not follow incidentally, but is directly and 
 in terms allowed and enacted. Legislation operating directly 
 upon private contracts, changing their conditions, is forbidden 
 to the States ; and no power to alter the stipulations of such 
 contracts by direct legislation is conferred upon Congress. 
 There are also many considerations, outside of the fact that 
 there is no grant of the power, which show that the framers of 
 the Constitution never intended that such power should be 
 exercised. One of the great objects of the Constitution, as al- 
 ready observed, was to establish justice, and what was meant 
 by that in its relations to contracts, as said by the late Chief 
 Justice in his opinion in Hepburn vs. Griswold, was not left to 
 inference or conjecture. And in support of this statement he 
 refers to the fact that when the Constitution was undergoing 
 discussion in the convention, the Congress of the Confedera- 
 tion was engaged in framing the ordinance for the government 
 of the Northwest Territory, in which certain articles of com- 
 pact were established between the people of the original States 
 and the ijeople of the Territory for the purpose, as expressed 
 in the instrument, "of extending the fundamental principles 
 of civil and religious liberty, whereon these republics [the 
 States united under the confederation], their laws and constitu- 
 tions are erected." That Congress was also alive to the evils 
 which the loose legislation of the States had created by inter- 
 fering with the obligation of private contracts and making notes 
 a legal tender for debts ; and the ordinance declared that in 
 the just preservation of rights and property no law " ought 
 ever to be made, or have force in the said Territory, that shall 
 in any manner whatever interfere with or affect private con- 
 tracts, or engagements, bona fide and without fraud, previously 
 formed." This principle, said the Chief Justice, found more 
 condensed expression in the prohibition upon the States against 
 impairing the obligation of contracts, which has always been 
 recognized " as an eificient safeguard against injustice ; " and 
 the court was then of opinion that "it is clear that those who 
 framed and those who adopted the Constitution intended that 
 
APPENDIX. 229 
 
 tiie spirit of tliis prohibition should pervade the entiro body of 
 legislation, and that the justice which the Constitution was 
 ordained to establish was not thought by them to bo com- 
 patible with legislation of an opposite tendency." Soon after 
 the Constitution was adopted the case of Calder vs. Bull came 
 before this court, and it was there said that there were acts 
 which the Federal and Siate legislatures could not do without 
 exceeding their authority ; and among them was mentioned a 
 law which punished a. citizen for an innocent act, and a law 
 which destroyed or impaired the lawful private contracts of 
 citizens. "It is against all reason and justice," it was added, 
 " for a people to entrust a legislature with such powers, and, 
 therefore, it cannot be presumed that they have done it " (3 
 Dallas, 388). And Mr. Madison, in one of the articles in the 
 Federalist, declared that laws impairing the obligation of con- 
 tracts were contrary to the first principles of the social com- 
 pact, and to every principle of sound legislation. Yet this 
 court holds that a measure directly operating upon and neces- 
 sarily impairing private contracts, may be adopted in the execu- 
 tion of powers specifically granted for other purposes, because 
 it is not in terms prohibited, and that it is consistent with the 
 letter and spirit of the Constitution. 
 
 From the decision of the court I see only evil likely to fol- 
 low. There have been times within the memory of all of us 
 V(hen the legal-tender notes of the United States were act 
 exchangeable for more than one-half of their nominal value. 
 The possibility of such depreciation will always attend paper 
 money. This inborn infirmity no mere legislative declaration 
 can cure. If Congress has the power to make the notes a legal 
 tender and to pass as money or its equivalent, why should not 
 a sufficient amount bo issued to pay the bonds of the United 
 States as they mature ? Why pay interest on the millions of 
 dollars of bonds now due, when Congress can in one day mako 
 the money to pay the principal ? And why should there bo 
 any restraint upon unlimited appropriations by the Government 
 for all imaginary schemes of public improvement, if the print- 
 ing-press can furnish the money that is needed for them ? 
 
INDEX. 
 
 Accumulation of notes in Treasury, 
 45. 
 
 Action of Parliament in 1730, 3 ; of 
 Parliament in 1740, 3 ; of Parlia- 
 ment in 1751, 3 ; of Colonies, 3 ; 
 of Continental CongresB, 9 ; of 
 Federal Convention, 13. 
 
 Action, Congressional. See Acts. 
 
 Action of States in regard to sur- 
 plus, 181. 
 
 Acts of Parliament prohibiting 
 paper money in Colonies, of 1730, 
 3; of 1740, 3; of 1731, H; for 
 issue of Treasury notes, of June 
 30, 1812, 29; of February 25, 
 1813, 29 ; of March 14, 1814, 30 ; 
 of December 26, 1814, 30 ; of Feb- 
 ruary 24, 1815, 33 ; of October 1. 
 1837, 42 ; of May 1, 1838, 45 ; of 
 March 2, 1839, 45 ; of March, 31, 
 1840, 46; of February 15, 1841, 
 49 ; of January 31, 1842, 51 ; of 
 August 31, 1842, 51 : of March 3, 
 1843, 51 ; of July 23, 1846, 64 ; of 
 January 28, 1847, 69 ; of Decem- 
 ber 23, 1857, 70 ; of December 17, 
 
 1860, 7.5. 
 
 Acts authorizing Treasury notes, of 
 
 March 2, 1861, 79. 
 Acts authorizing 7-30 notes, of July 
 
 17, 1861, 88; of August 5, 1861, 
 
 88 ; of June 30, 1864, 97 ; of March 
 
 3, 1865, 97. 
 Acts authorizing demand notes, of 
 
 July 17, 1861, 88 ; of August 5, 
 
 1861, 88. 
 
 Acts, miscellaneous, of June 22, 
 1860, 72 ; of February 8, 1861, 79 ; 
 postal note, 100 ; prohibiting shm- 
 jjlasters, 103; for retiring 7-30 
 
 notes, 113; authorizing four per 
 cent, certificates, 117; authorizing 
 additional issue bank circulation, 
 114; authorizing issue of legal ten- 
 ders, 136, 138 ; authorizing issue of 
 gold certificates, 115; authorizing 
 issue of legal-tender note cer- 
 tificates, 116 ; authorizing cancel- 
 lation of legal tenders, 140; repeal- 
 ing right to fund legal-tender 
 notes, 138; for resumption of 
 specie payments, 141 ; removing 
 restrictions as to limit of issue of 
 ]!Tational bank notes, 140 ; coinage 
 of 1792, 148 ; of 1873, 149 ; au- 
 thorizing silver dollars, 152 ; au- 
 thorizing silver certificates, 152; 
 regulating deposits "with State 
 banks, 173 ; authorizing deposit of 
 surplus money with the States, 172. 
 
 Adams, John Quincy, opposes post- 
 ponement bill, 187. 
 
 Additional issue of notes, 30. 
 
 Administration, Harrison's, 49 
 Van Buren's, 50 ; Tyler's, 53 
 Buchanan's, 71 ; Lincoln's, 117 , 
 Jackson's, represented by Benton 
 in Senate, 176 ; Hayes', 150. 
 
 Advances made by banks to Govern- 
 ment, 96. 
 
 Advantages to banks in placing 7-30 
 notes, 94. 
 
 Allegations of favoritism to banks, 
 29, 175. 
 
 Alley, John B. Remarks on legal- 
 tender biU, 125. 
 
 Amendment to Constitution to per^ 
 mit distribution of surplus, sug- 
 gested by Jackson, 169. 
 
 Amount of Treasury notes author 
 
232 
 
 INDEX. 
 
 ized in 1812, 25 ; of bank currency, 
 31 ; of Treasury notes outstand- 
 ing in 181i. 31 ; of notes author- 
 ized, 48 ; largest outstanding at 
 any one time, 45 ; amount out- 
 standing at advent of Harrison's 
 administration, 50; issued under 
 Actof February, 1841, 49; of notes 
 issued from 1837 to 1841, 49; 
 notes falling due during year 1843, 
 51 ; of loan of 1846, (J4 ; issues and 
 reissues under Act of 1847, 69; 
 Treasury notes outstanding in 1860, 
 71 ; in 1884, 71 ; of Treasury notes 
 issued under the Act of March 2, 
 1861, 79 ; of 7-30 notes taken by 
 New York bankers, 93; of fraction- 
 al currency issued, 104 ; of surplus 
 due from States caiTied as una- 
 vailable on Treasury books, 188 ; 
 authorized under various .Acts, 53. 
 
 Anticipation of revenues by u&e of 
 Treasury notes, 48. 
 
 Antipathy 40 paper m-oniey, 10. 
 
 Arixiety to obtain fractional cur- 
 rency, 104. 
 
 Apportionment of deposit ba^nka 
 among States, 182. 
 
 Apportionment of surplus revenue 
 among Starties, recomEQended by 
 Jackson, 169 ; opposed by Jackson, 
 171 ; basis of, 180. 
 
 Appropriation of public money for 
 improvements thought unconsti- 
 tutional, 169 ; required to take 
 surplus from Treasury, 189. 
 
 Approval of bills. See Acts. 
 
 Arguments for and against Treasury 
 notes in 1813, 23 ; in 1813, 29 ; in 
 1814-15, 31; in 1837, 41: iu 1838, 
 43 ; in 1840, 46 ; in 1843, 51 ; of 
 Committee of Ways and Means in 
 1844, against Treasury notes, 54 ; 
 in Federal Convention, 14; in 1863, 
 125 ; in legal-tender cases, 156- 
 160 ; relative to distribution of sur- 
 plus, for and against, in 1839, 171 ; 
 m 1835, 172 ; of Jackson's oppo- 
 nents, 175 ; of Benton, against, 177; 
 for and against postponement of 
 fourth instalment, 183-188. 
 
 Arrangements vpith New York banks 
 for placing 7-30 loan, 98. 
 
 Attorney General Bates' opinion as 
 to legal tender, 131. 
 
 Authority to issue bills. States de, 
 prived of, 10. 
 
 Authority to coin money, States de- 
 prived of, 10. 
 
 Available balance in Treasury at 
 various dates, 171. 
 
 Banks, land, proposed by John 
 Coleman, 1 ; defeat of land, 3 ; 
 paper "money, under auspices of 
 Treasury, 3 ; loan of merchants of 
 Boston, 3 ; second land, proposed 
 l)y Coleman, 3 ; plan of, 3 ; opposed 
 by Governor Belcher, 3; Huichi- 
 sou's specie, 3 ; charter of, by 
 States, 11 ; povner «f Ctmgi'e^ to 
 create, to circulate bills, 11 ; Na- 
 tional recommend'od, -31 ; ■ScooB-d, 
 of United States 41 ; National, 
 Hamilton's report on, 19; propo- 
 sition to tax circulation on, 51. 
 
 Banlcs of New York City strengthen 
 hands of Government, 143. 
 
 Banks, right to issue paper money 
 when chartered by States, 11-; to 
 circulate bills when chartered by 
 Congress, 1 1 ; bad condition of 
 currency of, in 1815, 31 ; ^great 
 increase in number of, 31 ; alleged 
 favoritism shown to, 39 ; resump- 
 tion of specie payments by, i'i ; 
 negotiations and agreements with, 
 95 ; advances agreed to be made 
 by, 86; Nationai. bHl for, 120 ; of 
 deposit iu 1837, 182 ; forms of let- 
 ters sent to, directing transfer of 
 deposits, 182 ; losses from failure to 
 pay specie, ISa ; specie payments 
 suspended by, in 1814, 31 ; in 1837, 
 40 ; iii 1857, 70 ; amounts due Gov- 
 ernment from insolvent, 43 ; re- 
 sumption of specie payments by, in 
 1837, 43 ; use of, as depositories of 
 Government money, 40, 173; favor- 
 ites of the administration, 172. 
 
 Bank circulation, Benton's propo- 
 sition to tax, 51. 
 
 Bank vs. Supervisors, legal-tender 
 ease, 156. 
 
 Bank Of Commerce vs. New York 
 City, 156. 
 
 Banking Act, free, of New York 
 State, 43. 
 
 Banking Act, National, 12b. 
 
 Bates, Attorney-iGenjeral, opinion 
 
INDEX. 
 
 233. 
 
 as to conBtiftutionality of legal- 
 tender bill, 13I-. 
 
 Baysurd, Thomas P., Delaware, re-- 
 marlM on legal-tender bill, 133. 
 
 Belcher, Governor, Masaachusetts, 
 intrigues of paper money adTocates 
 against, 4 ; proclamation' of, 5 ; 
 differences with Legislature, 6 ; 
 forced to retire^ 4; subsequently 
 Governor of New Jfersoy, 4; let- 
 ter to Hatchiaon, 6. 
 
 ^ell, John, Tennessee, opposes bill 
 for postponement of fourth instal- 
 ment of surplus, 187. 
 
 Benton, Thosi H:., Missouri, moves to 
 iaerease' denominationsi of Treas- 
 ury- notes-, 4-1 ; in favor of' Treas- 
 iiry notes, 41 ; infavor of Treasury 
 note bill of 1S38; 45 ; proposes to 
 tax bank circulation, 51 ; objects 
 generally to- issue of Treasury 
 notes, 41 : " Thirty years' view " 
 upon Jackson's course to-v?ard 
 Bank of -United States, 174,j made 
 member of committee to inquire 
 into Federal- expenditurei 175 ; 
 defends Jackson's administration, 
 17&; opposes bill- for distribution 
 01 surplus, 177 ; his description 
 of Jackson's- repugnance to sign 
 bill for distribution of surplus, 
 178- ; remarks on use of deposits 
 made -by- States, 190. 
 
 Bibb, Geoi M. , Secretary- of Treas- 
 ury, 52 ; member of committee to 
 inquire into extent of Executive 
 patronage, 175. 
 
 Bids, for 'Treasury notes,. 76; for 
 bonds, 80. 
 
 Bills, for Treasury notes 1813-; 15 ; 
 arguments for and against, 23-; 
 for Treasury notes 1813, 29-; for 
 TrDasury notes 1837, 41 ; for new 
 issue of Treasury notes 1638, 43 ; 
 for Treasury notes 1840, 46 ; 
 long debate on bill of 1840, 46; 
 loan introduced by JVlillard Pill- 
 more, ."iO; objections to Fillmore's 
 loan bill, 60; Fillmore's loan, 
 bitter debate on, 50 ; for issue and 
 reissue of Treasury notes intro- 
 duced 1843, .")! ; Treasury notes of 
 1843, 51 ; Treasury notes of 1846, 
 63; Treasury notes of 1847, 64; 
 Treasury notes of 1857, 70; 
 I7ation:i,l Bank, 120 ; legal-tender, 
 
 121; exchequer of ftesidemt Ty- 
 ler, 5B ; for • loan and issue of 
 Treasury notes, 63 ; legaL tender 
 (see Leral tenders) lor reoharter 
 of Biank of United States, 174 ; 
 for distribution of surplus rev- 
 enue, 167. 177 ; for postponement, 
 of payment of fourth instalment 
 of surplus^ 184. 
 
 Bills of credit, in Federal Conven- 
 tion, 13 ; authority of States to 
 issue; 13; power of Congress to 
 emit, 13-; discussion of light to 
 make legal tender, 14 ;, Hamilton's 
 opinion as to, 19; revolutionary, 
 Tjore interest, 44 ; definition of, by 
 Chief Justice Marshall, 44-; argu- 
 ment «f' committee of .ECouse in 
 1844 as to right to issue, 54e-61. 
 
 Blaine, James G., Maine, discusses 
 policy of legal tender issues in 
 "Twenty Years, in Congress," 
 144^147. 
 
 Blake^ Harrison G., Ohio, remarks 
 on legal-tender bill; l;^.- 
 
 Board of Saper-visors of New York 
 City claim greenbacks are, not 
 obligations, of the Ujiited' States, 
 156, 167; 
 
 Bollan, Thos., agent of Province of 
 Massachusetts in England, 7, 
 
 Bonds, U. S., discount during- period 
 1812-1815, 89 ; discount during 
 1860, ISfil, 79. 
 
 Bradley, Mr. Justice, of Supreme 
 Court, separate concurring opin- 
 ion in legal-tender case, ltt2. 
 
 Brown, Bedford, Senator from 
 North Carolina, in favor of Treas- 
 ury- note bill, 45. 
 
 Bubble Act enacted, by Parliament 
 in 1730, 7. 
 
 Buchanan, Jas., President, Treasury 
 notes of administration of, 7u; 
 amondmrnt to bill for postpone- 
 ment of fourth instalment of sia- 
 plus, 183. 
 
 Cabinet. Jaclwon's, dissent, frorri 
 his views, 174 ; paper read to, 174 ; 
 changes in, 1 75. 
 
 Calhoun, Jno. C , of South Carolina, 
 in favor of IVeasury note bill of 
 1838; 45 ) makes motion, in Senate 
 for select committee, 175. 
 
 Gambieling, Churchill C, of New 
 
234 
 
 INDEX. 
 
 York, introduces Treasury note 
 bill, 43 ; argument of, in favor of 
 bill, 43. 
 
 Capital, of Confederate States at 
 Montgomery, Ala., 83 ; Washing- 
 ton, D. C, in danger, 83 
 
 Capital of depository banks in 1836, 
 183. 
 
 Cases, legal-tender. Bank vs. Su- 
 pervisors, 157 ; Hepburu vs. Gr;s- 
 wold, l.'iS ; Parker vs. Davis, 1(,3 ; 
 Juilliard vs. Greenman, 105. 
 
 Certificates, tour per cent., denomi- 
 nations of, 117; convertible into 
 four per cent, bonds, 117 ; unneces- 
 sary, 117 ; eagerness of the peopiB 
 to obtain, 117.. 
 
 Certificates, gold, issued under act 
 of March 3, 1863, 11.5 ; used for 
 Clearing-house purposes, 114 ; do- 
 nominations of, 115 ; coin and 
 bullion deposited for, 115; issuedin 
 payment of ini.erest on public debt, 
 115; terms of issue, 115; amount 
 outstanding, 116 ; of act of July 
 la, 1883, 155 ; amount issued under 
 act of July 13, 1SS3, 155. 
 
 Certificates, legal-tender, bear no in- 
 terest, 116; used for Clearing house 
 purposes, 116; payable in U. S. 
 notes at place of issue, 116; held 
 in reserve by national banks, 1 10 ; 
 amount reduced after resumption 
 of specie payments, 110 ; amouut 
 outstanding, 118. 
 
 Certificates, loan, to be made a legal 
 tender, 43. 
 
 Certificates, silver, authorized by act 
 of February 38, 1878, 153 ; denom- 
 inations of, 153; coin deposited for, 
 to remain in Treasury, 153 ; to be 
 receivable for customs, taxes, and 
 dues, 153 ; may be reissued, 152 ; 
 amount outstanding, 1.53 ; act of 
 July 13, 1883, makes available for 
 reserve of national banks, and re- 
 servable for Clearing-house bal- 
 ances, 155 ; not a legal tender, 1.55. 
 
 Certificates, three per cent. , author- 
 ized, 113; excess of bank reserve 
 invested in, 114 ; advantage for 
 Clearing-house purposes, 114; 
 amount of first issue, 114; addi- 
 tional amount, 114 ; to be cancell- 
 ed, 114 ; terms of redemption, 11.5. 
 
 Chase, tSalmon P., Ohio, Secretary 
 
 of Treasury, 86 ; estimates in 1861, 
 86 ; recommends loan of one hun- 
 dren millions in Treasury notes 
 bearing 7-,''^ per cent, interest, 80 ; 
 signs circular to receive demand 
 notes for salary, 89 ; consults with 
 the banks, 94, 95 ; letter of, to the 
 Ways and Means Committee, 128 ; 
 proposes two plans for strength- 
 ening finances, 120; recommend- 
 ing further issue of legal-tender 
 notes, 137; gives notice of with- 
 drawal of right to fund legal-ten- 
 ders into 5-30's, 138 ; Chief-Jus- 
 tice, 15ii ; delivers opinion in first 
 legal-tender case, 158 ; dissenting 
 opinion in second legal-tender case, 
 104 ; justifies legal-tender policy, 
 145 ; opinion as to power of States 
 to create banks to issue bills, 13. 
 
 Cheves, Langdon, South Caiolina, 
 reports first bill for issue of 
 Treasury notes, 22. , 
 
 Circular, of Secretary Chase and 
 other officials agreeing to receive 
 demand notes in payment of sal- 
 aries, 89 ; announcing redemption 
 of small notes in coin, 93 ; of Gen- 
 eral Scott to army, 89 ; notifying 
 deposit banks of drafts to pay in- 
 stalments of surplus, 183. 
 
 Circulating medium, condition in 
 1814, 33 ; inquiry as to, 63 ; unfit- 
 ness of Treasury notes for use as, 
 39. 
 
 Cities omitted from law forbidding 
 issue of fractional notes. 
 
 Civil war, inauguration of, 83. 
 
 Claims of States for payment of 
 fourth instalment, 191. 
 
 Clay, Henry, Kentucky, opposes 
 issue of Treasury notes, 43, 45 ; 
 attacks Jackson, 174 ; defeated in 
 Presidential campaign of 183.', 
 174 ; supports bill for distribution 
 of revenues, 177. 
 
 Clearing-house, Assistant Treasurer 
 of D. S. at New York member of. 
 141. 
 
 Clifford, Mr. Justice, concurs with 
 Chief Justice in first legal-tender 
 decision, 158 ; concurs with Chief 
 Justice in dissenting opinion in 
 second legal-tender decision, 164. 
 
 Cobb, Howell, Georgia, Secretary 
 of Treasury, 70 ; estimates of, fci 
 
INDEX. 
 
 235 
 
 1857, 70; recommends Treasury 
 notes, 70 ; proposals inTited by, 
 for loan, 73 ; recommends that 
 Government lands be pledged for 
 payment of Treasury notes, 75; 
 resigns, 75. 
 Coin, gold and silver, only legal 
 tender, 18 ; subsidiary silver, 109 ; 
 
 fold, Secretary may sell bonds for, 
 or resumption purposes, 141. 
 
 Coinage of silver dollars, 150 ; Acts 
 regulating, 148, 149. 
 
 Coinage acts, of 1792, 148 ; of 1834, 
 148 ; of 1853, 149 ; of 1873, 149 ; 
 of 1878, 149. 
 
 CoUaraer, Jacob, Vermont, moves to 
 strike cut legal-tender clause, 135; 
 votes against legal-tender bill, 
 335. 
 
 Coleman, John, advocates land bank, 
 1 ; incorporates a second land 
 bank, 2 ; his scheme opposed by 
 Governor Belcher, 3. 
 
 Colonies, paper money in, 1 ; Par- 
 liament forbids issue of paper 
 money by, 3. 
 
 Colonists embittered against Eng- 
 land, 3. 
 
 Commissioners of Loans to coun- 
 tersign Treasury notes, 25. 
 
 Commissioners of 8inking Fund au- 
 thorized to pay notes, 26. 
 
 Committee of Ways and Means, 
 Mr. Cheves chairman of, 22 ; Mr. 
 Eppes chairman of, 33 ; Mr. Cam- 
 breling chairman of, 43 ; Mr. Jones 
 chairman of, 46 ; Millard Fillmore 
 chairman of, 50 ; instructed to in- 
 quire into issue of Treasury notes, 
 53 ; reports of, 33, 54 ; Gallatin's 
 letter to, 22; Dallas' report to, 
 31 ; Spencer's letter to, 53 ; Dix's 
 letter to, 77, 89 ; letter of Chase 
 to, 123. 
 
 Committee, Finance, of Senate, letter 
 of Secretary Chase to, 1 37. 
 
 Committee, select, to inquire into 
 extent of Executive patronage, 
 175 ; report of, 176. 
 
 Compound interest notes issued in 
 place of 7-30 notes, 110; form 
 of. 111 ; amount of, 85 ; amount 
 outstanding, 118 ; Secretary on, 
 110 ; Acts to retire, 113, 114 ; were 
 legal tender, 109. ' 
 
 Condition of postal currency bad, 104. 
 
 Congress, power to coin money 10 ; 
 authority to create banks, 11 ; 
 to authorize bills of credit (see 
 Legal tender) ; Acts of (see Acts); 
 reduction of revenues by, in 1845, 
 03; extra session of 1837, 183; 
 in 18G1, 84; considers Spencer's 
 issue of Treasury notes an evasion 
 of law, 54. 
 
 Conkling, Rosooe, New York, objects 
 to making U. S. notes a legal ten- 
 der, 129; remarks on legal-tejider 
 bill, 139. 
 
 Constit-ition, Federal, debate on, 10; 
 adopted, 19 ; original draft of, 13. 
 
 Constitutional right of Senate to 
 originate money bill, 41. 
 
 Constitutionality of issue of Treas- 
 ury notes discussed, in 1S12, 23 ; 
 in 1813, 29 ; in 1837, 41 ; in 1838, 
 45 ; by Committee of Ways and 
 Means, in 1844, 53; in 1861 and 
 1862, 124-136 (also see Cases, 
 Legal-tender). 
 
 Continental Congress, no legal-ten- 
 der notes issued by, 117 ; recom- 
 mends Legislatures of States to 
 pass tender laws, 119 ; authorized 
 issue of paper money, 9 ; fixed 
 total issue, 9 ; authorized a new 
 issue to redeem old, 90. 
 
 Continental money, first issue of, 
 9; depreciation or, 9; required to 
 be bought in for coin at market 
 value, 9 ; new issue of, 9 ; total 
 amount of, 10 ; loss on, 10 ; an- 
 tipathy to, 10 ; convention (see 
 Federal Convention). 
 
 Convention, Federal (see Federal 
 Convention). 
 
 Cooke, Jay, services in placing 7-30 
 loan, 99. 
 
 Co-operation of ITational banks in 
 placing 7-30 loan, 93. 
 
 Court, Supreme, of United States, 
 156 ; of Appeals, of State of New 
 York, 157; of Errors, of Ken- 
 tucky, 158 ; Supreme, of Massa- 
 chusetts, 101. 
 
 Counterfeiting, penalty for, 36. 
 
 Crawford, Wm. H. , Georgia, Secre- 
 tary of Treasury, resigns in 1814, 
 31 ; again Secretary in 1816, 167 ; 
 reports of, show surplus, 167 ; sug- 
 gests that surplus be used in 
 internal improvements, 167. 
 
336 
 
 INDEX. 
 
 Credit, reyolation^-y biUa g^ bore 
 i^teiest, 43,; of notes regeiyable 
 for dirties, good, 9Q ; motion of 
 Mr. Hull to revive, of TreMJiry 
 notes, 33. 
 
 Crisis, financial, of 1S14, 31 ; of 
 1837, 40; of 1857, 70. 
 
 Crittenden, Johii J,., Kentucky, op- 
 jposes use of Treasury not,ss in 
 1838,, 4^,; opposes postponenient 
 of distribution of surplus, 1 8!). 
 
 Cashing, Caleb, JNJassachusettr., a,r- 
 gument of, against Treasury notes 
 in 1838i, 44.; 0Bpps,es.p05tpcr.cin8;)t,. 
 of payment of fourfcli instalment, 
 1S7, 
 
 ]J^«LAS, Alexander J., Secretary o^ 
 "Jreasury, 31 ; succeed^ Crawford 
 in 18^4, 31 ; report to Committee 
 on Ways and Means, 31 ; recom-' 
 mends establishment of Kational 
 bani?, 31 ; mentions Treasury 
 notes, 33 ; reports in regard to, 37. 
 
 Danger of increasing Executive 
 power, 175. 
 
 Dates of maturity of Treasury notes, 
 u7 ; of first issues of paper rnonpy 
 in Colonies, 1 ; of issue and re- 
 demption of notes of 1813, £6, 
 
 Davis, Mr. Justice, dis.sents fr.om 
 Chief J ustice in first legal-tender 
 decision, 160. 
 
 Death of Pi esident Harrison, 49. 
 
 Debates, on striliing out "emit 
 bills," 14 ; on Treasury notes in 
 18ia, 23 ; on Treasury notes, 1813, 
 29 ; on Treasury notes, 1814, 29 ; 
 on Treasury notes, 1837, 41 ; on 
 Treasury notes, 1838, 43 ; on 
 Treasury noteSj 1840, 46 ; on con- 
 duct of Mexican War, 64.; on 
 legalrtender bill, 124-136; on de- 
 posit of surplus, 177 ; on post- 
 ponement of fourth instalment, 
 184-187. 
 
 Debt, national, highest amount, 85 ; 
 proportipn consisting of Treasv.ry 
 notes, 8.5 ; in 1813, 21 ; in IS-IO^ .'',0 ; 
 extinguished in 1835, 170. 
 
 Debta^ and dues, -wfhat notes receiv-. 
 able for (see Treasiiry. Kotes and 
 Legal Tender). 
 
 Decisions, Bank vs. Supervisors, 157 ; 
 Hepburn vs. Griswpld, 160 ; Park- 
 er vs. Davis, 163, 16S ; JiiiUiard vs. 
 
 Gf eenman, 1 66, 193 ; as, to claim 
 of Virginia for fourth instalnaent 
 of snrpLus, 193,; Briscoe w. Bankof 
 Kentucky, and other decisions, see 
 note page 44. 
 
 Declaration of war with England, 
 23; with;Mexico, 63; civil war, 83. 
 
 Deficiency in revenues, of Continen- 
 tal Congress. 9; in 1812, 21; in 
 1813, 39 ; ia 1 837, 41 ; from 1 837 to 
 1841, 49; in ii.M>, 63 ; dijring civil 
 war, 84, 85. 
 
 Demand notes, limitatipn of ainonnt, 
 89,; first issue of, 89 ; amount is- 
 sued, 90 ; difficulty of redemption 
 in gold coin, 90 ; retirement of, 
 90 ; action of JS'ew York banks 
 in regard to, 90; S^scretary's cir- 
 cular as to, 89; General Scott's 
 circular, S9.; refused by many, 89.; 
 at a premium, 9,3 ; denominations 
 of, 89. ■ ' 
 
 Denominations, of notes from 1812 to 
 181.5, 88 ; of notes of period of 
 1837, 43 ; Benton moves to mako 
 lowest $100, 41 ; of 7-30notes, 89; 
 of demand notes, 89 ; of frac- 
 tional currency, 1 C3 ; of compound 
 interest notes, 110; of 5 per cont. 
 Treasury notes, 1C9 ; of gold oer- 
 tjfipa.tes li5-]!55; of legal rtcnder 
 certificates, 110; of 4 per cent, 
 certificates, 117 ; of silver certifi- 
 cates, 152. 
 
 Deposit Act (sec Deposit of Surplus, 
 also page 40) regarded as contract, 
 187. _ 
 
 Deposit of public money with Stat3 
 banks, 40, 183. 
 
 Depository banks, regulation of, 4.0 ; 
 amounts due from, 43 ; number of, 
 183 ; all but six suspend, specie 
 payment, 183 ; losses, on account 
 of, 183. 
 
 Deposits of surplus with States, pro- 
 position for, in 1827, 1 67 ; Presi- 
 dent-Jackson' s luessago regardin.; 
 cqngtij^utionalitv, of, 168.; Jack- 
 son's message of 1880, 170 ; change 
 of Jackson's views in 1836, 173 ; 
 act of June 23, 1836, autlicrizing 
 178; Secretary Woodbury disap- 
 proves of, 171 ; approved by Presi- 
 dent wijih reluctance, 178; pro- 
 visions of law regulating, 179; 
 amount;! to, be dqpositedj ISO; 
 
INDEX, 
 
 237 
 
 postp.on?iin.ent of fo»rth in;stal- 
 ment of, 187; Mr. BnQhapan's 
 ameiidment relative to, 1S6 ; 
 favorably regarded tjy opponerits 
 of the admiaistration, 175 ; propo- 
 Bitioji^ for. made through press, 
 177'; suggested by Secretary Dix 
 tHat it aa. withdrawn, 189 ; "with- 
 drawal dependent on future act of 
 Con^'ress, 1 92 ; use of, by States, 
 19y. 
 
 Deposits, XT. S. change from Bap^ of 
 the United States, 175. 
 
 Depreciation of Colonial paper 
 money, 45 ; of Continental paper 
 mon^y, 9 ; h)ss from, 10 ; of notes 
 from 1812-1815, 395 ; of not33 of 
 1837, a. 
 
 Dessription, of notes of 1812, 25 ; of 
 notes of 1813, 30 ; of notes of ISli, 
 30 ; of notes of 1815, 34 ; of notes 
 of 1837, 42 ; of notes of 1838-1840, 
 45, 46 ; of endorsement on spurious 
 notes, 52; of notes of 1846, 64 ; of 
 notes of 1857-58, 71, 72 ; of 7-80 
 notes, 87 ; of fractional currency, 
 103 ; of compound interest note?, 
 110 ; of 5 per cent, notes, 109 ; of 
 demand notes, 93 ; of 3 per cent, 
 certificates, 114; of gold certifi- 
 cates, 115, 155; of le»al-tender 
 certificates, 116; of 4 per ce-t. 
 certificates, 117 ; of silver certiS- 
 cate-s 152, 155. 
 
 Dexter, Samuel, re^.rded the emis- 
 sion of bii s by banlis chartered by 
 States as unconstitutional, 12, 
 
 Diekirson, Mahlpn, New Jersey, au- 
 thor of bill to distribute surplus, 
 introduced and discussed in 1827, 
 167. 
 
 Differences between colonial gover- 
 nors and lej^siatures, 3. 
 
 DiSioultiea in transferring public 
 funds, 32 ; in paying fourth in- 
 stalment of surplas, 185 ; in effectr 
 ing loins, 23, 39, 50,, 73, 78. 
 
 Disappearance of silver change, 100. 
 
 Discount on U. S. loans, 39, i^, 
 
 Discussion, general, of the legal- 
 tender question, 144 ; of the coin- 
 age act. of 1873, 151. 
 
 Dissenting opinions of Justices 
 Miller, Davis, and Swayne in first 
 legal-tender case, 16 ; of Chief- 
 Justice Chase, Nelson, Field, and 
 
 Clifford in second legali-tender 
 case, 164 ; of Justice Field in 
 third legal-tender case, 166, 210. 
 
 Distribution' of revenues from public 
 lands, 175 ; of all revenues, 175 ; 
 annual, recommended, 17'6 ; op- 
 posed by Benton, 176 ; paragraph 
 in Philadelphia National Oazette 
 advocating, 177; hill for, intro- 
 duced in Senate, 177 ; regarded 
 as unoonstitational, 177 ; changed 
 to a deposit with Siiates, 178, 
 
 Dix, John A., Secretary of the 
 Treasury, 7'6 ; opens bids for 
 Treasury notes, 76; letter, to 
 Chainnaa of Ways and Means 
 Comniittee, 77 ; recommends withr 
 drawal of deposits made with 
 States, 78, 189; succeeded by 
 Chase, 80, 
 
 Bagehnecs of people to obtain 
 postal currency, 104 ; to obtain 
 4 per cent, certificates, 117. 
 
 Efiect of amendment of Mr. Bu- 
 chanan's to postponement bill, 
 186. 
 
 Ellsworth, Oliver, against paper 
 money in the Federal Convention, 
 15. 
 
 Emissions of paper money, colonial, 
 in the coloi^y of Massachusetts^ 1 ; 
 in other colonies, 1 ; by means of 
 banks, 3-5 ; attitnde of mother 
 country toward, 5 ; Gov, Belfihei 's 
 proclamation, 5 ; Parliament for- 
 bids, 7 ; legal'ts?^^'^ prohibited, 8 ; 
 by Continental Corgrpss, author- 
 ized, 9 ; depjecialiqn of, 9 ; aimount 
 of, 10 ; loss to people frqrtv, 10 ; ef- 
 fect of on Federal Constitution, 
 10-12 {see Treasury Niiteg). 
 
 England, declaration of war -vjrith, 
 23 ; treaty of peace with, 34, 
 
 Enterprises, private banking, re- 
 stricted by act of Parliament, 7. 
 
 Bppes, John W., Virginia, Chair- 
 man of Committee of Ways and 
 Means. S3 ; report on Treasuiy 
 notes in 1814, 32. 
 
 Estimates, of. amounts, of Conti- 
 nental currency, 10 ; of deficiency 
 for year 1813, 29 ; of balance in 
 Treasury, 1838, 43; of revonv.o 
 under tariff of 1843, 63; of rf- 
 ceipts and expenditures in 18Ui', 
 
238 
 
 INDEX. 
 
 70 ; of Secretary Chase of require- 
 ments for year 18t)l, 3, 80 ; of 
 surplus revenues, 167 ; of defi- 
 ciency in revenue for year 1841, 
 49 ; of amount of public debt in 
 the year 184] , 50 ; of deficiency in 
 the year 1846, 63. 
 
 Evils of paner money in colonies, 
 4. 
 
 Ewing Thomas, Ohio, appointed 
 Secretary of Treasury by Harrison, 
 49 ; report on expenditures of Gov- 
 ernment, 49 ; estimates of public 
 debt, 50; resigns, 50. 
 
 Excess of bank reserve invested in 
 3 per cent, certificates, 114. 
 
 Expectations of States receiving 
 deposits of surplus, 187. 
 
 Expedients to prevent depreciation, 
 of colonial paper money, 4 ; of 
 Continental money, 9. 
 
 Expense of printing and prepar- 
 ing Treasury notes, how paid, 26. 
 
 Expiration of authority to issue 
 Treasury notes in 1839, 45 ; in 
 1S42, 51. 
 
 Extra session of Congress, in Sep- 
 tember, 1837, 183 ; in July, 1861, 
 84. 
 
 Pac-simile of large notes of 1815, 
 35 ; of small notes of 1815, 36 ; or 
 $100 notes of 1840, 47; of note of 
 March 3, 1 843, end of text ; of 
 .$1C0 note of 1846, 65 ; of f 100 note 
 of 1847, 67; of 8100 note of 1857, 
 73 ; of $50 note of March 2, 1861, 
 81 ; of demand note, 91 ; of seven- 
 thirty note of March 3, 1865, 100 ; 
 of fractional currency, 105-108; 
 of compound interest note of 1864, 
 111, 112. 
 
 .Faith of Government pledged for 
 payment of Treasury notes, 24. 
 
 Favoritism, alleged, shovpn to banks, 
 23, 43; to deposit banks, \\%, 
 176. 
 
 Federal Constitution, original draft 
 of, 13 ; debate on clause relative to 
 emission of bills of credit, 14-18 ; 
 power to emit bills struck out, 16; 
 States deprived of authority to 
 is.sue bills, 13 ; comments of Mr. 
 Ju.stice Strong, 11; views of Daniel 
 Webster, 11, 18 ; power of State 
 to create banks to issue bills und^r, 
 
 11 ; opinion of Samuel Dexter, 12 
 opinion of Secretary Chase, 12. 
 
 Federal Convention, when held 13 
 debate in, on power to emit bills 
 14 ; motion of Gouverneur Morris 
 14 ; Mr. Butler seconds, 14 ; re- 
 marks of Mr. Madison, 14; re- 
 marks of Mr. Gorham, 14 ; remarks 
 of Messrs. Mason, Mercer, Ells- 
 worth, Randolph, Wilson, Butler, 
 Read, Langdon, 14-16 ; Mr. Mar- 
 tin delegate to, 16 ; report on pro- 
 ceedings of, by Mr. Martin, 17 ; 
 vo te of States, 16 ; vote of Virginia, 
 16. 
 
 Fessendeu, Wm. P., Maine, Chair- 
 man of Finance Committee of 
 Senate, 130 ; introduces legal-ten- 
 der bill, 130 ; opens debate, J 30 ; 
 Secretary of the Treasury, 110 ; 
 authorizes issue of compound in- 
 terest instead of seven -thirty 
 notes, 110 ; extract from report of, 
 110. 
 
 Field, Mr. Justice, of Supreme 
 Court of Unite'i States, concurs 
 with Chief Justice in first legal- 
 tender decision, 158 ; concurs in 
 dissenting ('pinion of Chief Justice 
 in second legal-tender decision, 
 164 ; dissents singly to the third 
 legal-tender decision, 166, 210. 
 
 Fillmore, Millard, New York, Chair- 
 man of Committee of Ways and 
 Means, 50 ; introduces a bill for a 
 loan, 50; concedes that the loun 
 shall be for short term, 50 ; intrC" 
 duces Treasury note bills, 51 ; op- 
 poses postponement of fourth 
 instalment, 187. 
 
 First issue of colonial paper money, 
 1 ; of Continental paper money, 9 , 
 or Treasury notes, 25. 
 
 First three instalments of snrpjus 
 money, payment of, 40, 181. 
 
 Fiscal operations of Govemmont 
 embarrassed in 1814, 32. 
 
 Five-dollar demand notes issued, 89. 
 
 Five Treasury note acts of period 
 of 1812, 38. 
 
 Folger, Charles J., New York, Sec- 
 retary of Treasury, 191 ; letter of, 
 relative to fourth instalment of 
 surplus, li-12 ; mandamus on, 192. 
 ] Form of Treasury notes (see Fao- 
 simile.) 
 
INDEX. 
 
 239 
 
 Forma uaed in making deposit with 
 States, 181 ; used in withdrawing 
 money from depository banks, 
 182. 
 
 Fort Sumter, attempt to relieve, 80 ; 
 attack on and surrender of, 83. 
 
 Forward, Walter, Pennsylvania, 
 Secretary of Treasury, 50 ; suc- 
 ceeds Mr. Ewing, 50; succeeded 
 by John C Spencer, 53. 
 
 Fourth iustalment of surplus, dif- 
 ficulty in paying, 183 ; bill to post- 
 pone payment of, 184 ; debate on 
 postponement of, 187, IbS ; post- 
 ponera.ent of, 188 ; demand for, 
 made by Virginia and Arkansas 
 193. 
 
 Fractional currency, necessity for, 
 lOi); Act of July 17, 1803, author- 
 izing postal, 100 ; denominations 
 of, 103 ; receivable in sums of ^5 
 for dues, etc. , 103 ; fac-similes of, 
 10.>-108; issue of, by privata per- 
 sons, corporations, etc., prohibited, 
 103 ; amount of limited, 103 ; ex- 
 changeable for United States notes 
 in sums not less than three dollars, 
 104 ; people anxious to obtain, 
 104; paid in sheets to army, 104 ; 
 totil amount issued, 104; wore 
 oat rapidly, 104 ; replaced hy sub- 
 sidiary silver coin, lO.i. 
 
 Funding, of legal-teader noterj pro- 
 vided for, 137, 1 36 ; of legal-teailer 
 notes to cease after certain date, 
 138 ; of seven-thirty notes, 98 ; of 
 one- and two-year notes into com- 
 pound interest notes, 110, 115 ; of 
 compound interest notes into three 
 per cent, certificates, 113, 115 ; of 
 Treasury notes of 181^-1815, 38. 
 
 Funds, public, difficulty in transfer- 
 ring, 33 ; kept with banks, 39, 40, 
 183 ; kept with Bank of United 
 States, 40; changed to State banks, 
 175 ; unavailable, 43, 78, 183; losses 
 of, through banks, 43, 183. 
 
 Gallatin, Albert, Secretary of 
 th3 Treasury, 31 ; first suggests 
 issue of Treasury notes, 8d; his 
 plan for Treasury notes, 23 ; letter 
 of, to Chairman of Ways and 
 Means Committee, 23. 
 
 General Scott, his circular to the 
 army as to demand notes, 8.). 
 
 General sentiment in favor of Treas- 
 ury notes in 1847, 64. 
 
 Gold and silver coin only can be 
 made a legal tender by States, 13 ; 
 only legal tender until passage of 
 legal-tender act in 1863, 19. 
 
 Gold coin, demand notes payable in, 
 90, 91 ; seven-thirty notes payable 
 in, 93 ; the standard after 1S73, 
 150 ; over-valued by Act of 1834 
 and took place of silver, 148. 
 
 Gorham, Nathaniel, Massachusetts, 
 remarks m B'ederal Convention, 14. 
 
 Gouvemeur Morris, remarks in Fed- 
 eral Convention, 14. 
 
 Government, Federal, operations of, 
 in 1814, 31 ; deprived of use of 
 specie, 14, 33 ; Treasury notes 
 based on faith of, 24; Treasury 
 notes 1812-1815 receivable for 
 dues to, 24, 29, 39 ; Treasury notes 
 1837 receivable for dues to, 43, 65; 
 Treasury notes of 1857 receivable 
 for dues to, 73 ; Treasury notes of 
 1861 receivable for dues to, 81 ; 
 loan certificates to be receivable 
 for dues to, 43 ; credit of, affected 
 by political complications, 73. 
 
 Government of Confederate States, 
 organization of, 83. 
 
 Governor Belcher, Massachusetts, in- 
 trigues of paper money ad vocates 
 against, 4 ; differences with Legis- 
 lature, 6 ; forced to retire, 4 ; 
 Governor of New Jersey, 4 ; letter 
 to Hutchison, 6. 
 
 Governors of Massachusetts, opposi- 
 tion to paper money, 3. 
 
 Gray, Mr. Justice, delivers opinion 
 of court in third legal tender de- 
 cision, 193. 
 
 Halsted, William, New Jersey, 
 claims that deposit act was not a 
 contract, 187. 
 
 Hamilton, Alexander, report on Na- 
 tional Bank, 1 9 ; opinion as tn 
 emission of bills of credit by Gov- 
 ernment, 19; never suggested 
 Treasury notes, 23. 
 
 Harrison, "William H., elected Presi- 
 dent by Whig party, 49 ; appoints 
 Ewing Secretary of Treasury, 49; 
 death of, 49 ; policy of administra- 
 tion changed by death of, 
 
 Hi-kman, John, Penns-lvania, votes 
 
MO- 
 
 INDEX. 
 
 for legal-tender bill as a necessity, 
 
 Hooper, Sapjuel, Massaclmsetts, pre- 
 pares National Bank bill, 130 ; re- 
 marks on legal-tender bill, 134:. 
 
 House of Eiepresentatives, refuses 
 to consider resolutions to make- 
 Treasury notes a legal tender, 33 ; 
 does not discuss proposition to 
 make loan certificates a legal ten- 
 der, 43 ; long session of, in 1840, 
 48 ; objects to Senate introducing 
 money bill, 41 ; action of (see Bills 
 and Acts). 
 
 Howell Cobb, Georgia, Secretary of 
 Treasury, 70 ; estimates for year 
 1857, 70 ; recomniends Treasury 
 notes, 70 ; invites proposals for 
 loan, 73 ; recommends that public 
 lands be pledged for payment of 
 Txeasury notes, 75. 
 
 Hutchison, Edward, Massachusetts, 
 forms specie bank, 3. 
 
 Hutchison, Thomas, Ma-ssachusetts, 
 letter to, from Governor Belcher, 6. 
 
 Increase of public debt, from 1837 
 to 1841, 50 ; from 1841 to 1844, 03 ; 
 from 1844 to 1861, 73 ; to Angubt 
 31, 186.5, 85. 
 
 Independent Treasury Act, repeal 
 of, .50. 
 
 Ingham, Samuel D., Secretary of 
 Treasury, 168 ; estimates for year 
 1839, 168; reports amount applica- 
 ble to payment of debt, 168 ; re- 
 ports, probable surplu.s, 168. 
 
 Interest, paper money issued by 
 States duriii<5 Revolution bore, 44 ; 
 on Continental money, 9 ; on Treas- 
 ury notes of 1813, 35; on notes 
 of 1813 1814, and 181.5, 39; small 
 notes 01 1815 bore no, 31; on notes 
 of 1837, 43 ; on notes of 1 838, 45 ; 
 nominal, of one mill per cent., 40 ; 
 on notes issued by Secretary Spen- 
 cer, .53 ; report on, by Committee 
 of Ways and Means, 56 ; on notes 
 of 1846, 64 ; on notes of 1847, 60 ; 
 on notes of 1857, 71 ; bids on notes 
 of 1860, 76 ; on notes of 1861, 8') ; 
 on notes of the civil war, 88, 100, 
 110; on certificates, 114, 116, 117. 
 
 Introduction of bills (see Bills.). 
 
 Issues, paper money, in Colonies, 
 object of, 1 ; by ineioas of loan 
 
 banks, 2 ; by merchants of Boston, 
 3; by Hutchison's specie bank, 3; 
 opposiiyjon to, by Parliament, 3 ; 
 Acts of Parliament prohibiting, 3, 
 7 ; depreciation of, 5 ; loss, and 
 money inflated, by, i 
 
 Issues of paper money by Conti- 
 nental. Congress, first issue of, 9 ; 
 depreciation of, 9-; bought in at 
 market value for coin, 9 ; new in 
 place of old, 9 ; total amount of j 
 10 ; losson, 10; antipathy to, 10. 
 
 Issues of paper money from. 1813 to 
 1815 (see .Notes, Treasury, from 
 1812 to 181.5). 
 
 Issues of paper money of period of 
 1837 (see Notes, Treasury, of pe- 
 riod of 1837). 
 
 Issues of paper money of Mexican 
 War (see Notes, Treasury, of Mex 
 ioan War). 
 
 Issues of paper money of Buchan- 
 an's Administration (see Notes, 
 Treasury, of Buchanan's Adminis- 
 tration). 
 
 Issues of paper money of Civil War 
 (see Notes, Tieaflury,of Ci\il War). 
 
 Jackson, Andrew, President of 
 United States, 163 ; message to 
 Congiess of 1S39, 168 ; thinks use 
 of surplus for internal improve- 
 ments unconstitutional, 169; ad- 
 vises apportionment of surplus 
 among States, 169 ; message of 
 1830, 170'; views as to surplus, 
 change in 1836, 171 ; causes of 
 change in his views, 173 ; message 
 of 1836, 173 ; attack on- Bank of 
 the United States, 174 ; declares 
 in 1S;;9 against recharter of bank, 
 174 ; determines to,, receive public 
 deposits from bank, 174; disa- 
 grees with his Cabinet, 174 ; reads 
 paper to. Cabinet, 1 74 ; makes 
 Taney Secretary of Treasury, 175 ; 
 orders removal of deposits, 175; 
 proposes method of distribution of 
 surplus, 179. 
 
 Jay Cooke, services of, in placing 
 seven-thirty loan, 99. 
 
 Justice Storj', comments on consti- 
 tutionality of issue of notes by 
 bank chartered by State, 11, 
 
 Justices of Supreme Court, in 1869, 
 158; in 1871, 163. 
 
INDEX. 
 
 241 
 
 Kellogg, Stephen W. , Massachu- 
 
 Bett4, remarks of, on legal-tender 
 
 ■bill, 125. 
 King of England, issue of paper 
 
 money in Colonies to be under 
 
 control of, 7. 
 
 Land Bank, proposed by John Cole- 
 man in 1715, 1 ; second, proposed 
 in 1739, 3 ; plan of, 3 ; opposed by 
 Governor Belcher, 3. 
 
 Langdon, John, New Hampshire, 
 remarks in Federal Convention, 
 16. 
 
 Laws (see Acts and BillsV 
 
 Legal tender, paper money prohib- 
 ited in Colonies, 8 ; gold and silver 
 coin, only, a, under Constitution 
 prior to 1863, 19; proposition to 
 make Treasury notes a, rejected, 
 33 ; proposition ta make loan cer- 
 tificates a, rejected, 43 ; Conti- 
 nental Congress liad no power to 
 make paper, 117 ; States pass ten- 
 der laws, 119 ; discussed in Fed- 
 eral Convention, 14. 
 
 Legal-tender Act, bill introduced in 
 Committee by Mr. Spaulding, 120 ; 
 letter of Attorney-General ]3ates 
 in regard to, 131 ; reported to 
 House, 131 ; hostility of the press, 
 V.l\. ; hostility of the banks, 131 ; 
 bill submitted to the Secretary, 
 131 ; again reported to House with 
 the Secretary's amendments, 1 'il ; 
 
 Eassed the House, 131 ; vote on 
 ill in House, 131 ; amendments in 
 Senate, 123; charactsr of debate, 
 133 ; Secretary Chase's lettsr to 
 Committee of Ways and Means, 
 133 ; bill thoroughly discussed 
 throughoat the country, 124; a 
 measure of necessity, 134: ; ex- 
 tracts from debate in Senate, 130- 
 135 ; Conference Committe3, 13 ■ ; 
 approved by President February 
 35, 1863, 136 ; of 1863, authorized 
 issue of 150 millions dollars in 
 notes, 136 ; of June 11, 1863, 138 ; 
 of March 3, 1863, 138 ; policy of, 
 discussed by Mr. Blaine, 146-147 ; 
 Secretary MoCulloch's opinion of, 
 139. 
 Legal-tender decisions. Bank v. Su- 
 pervisors, 156-167; Hepburn v. 
 Griswold, 1.57-161 ; Parker v. Da- 
 
 11 
 
 vis, 161-165; JuUliard v. Green- 
 man, 165, 19.1 ; dissenting opinions, 
 160. 164 166, 310. 
 
 Legal-tender notes, authorized by 
 act of February 35, 18B3, 136; 
 bore DO interest, 136 ; payable to 
 bearer at Treasury, 136; denomina- 
 tions not less than $5, 136 ; differed 
 from demand notes, fundable into 
 bonds, 136 ; receivable for all 
 debts, public and private, except 
 duties on imports, 137 ; descrip- 
 tion of, 137 ; act of June 11, 1863, 
 authorizes under $5, 138 ; whole 
 amount authorized, 138; restric- 
 tion on f imding, 138 ; effect of re- 
 striction, 138 ; highest amount 
 outstandiiig, 139 ; retirement of 
 under Secretary MoOalloch, 140; 
 increase under Secretaries Bout- 
 well and Richardson, 140 ; restric- 
 tion of amount in 1874, 140; re- 
 tirement after 1875, 140; amount 
 outstanding fixed in 1878, 141 ; 
 amounts at various dates, 143; 
 payment on presentation in coin, 
 143 ; orartifloates of deposit for 
 (see Certificates, Legal-tender). 
 
 Legal reserve of national banks, 
 gold certificates held as, 155 ; sil- 
 ver certificates held as, 155 ; cer- 
 tificates for legal-tender notes held 
 as, 116 ; three per cent, certificates 
 held as, 114. 
 
 Legislature of New York, action 
 remitting taxes on XJ. S. securi- 
 ties, 156. 
 
 Legislatures of States accept depos- 
 its of surplus money, 181. 
 
 Letter, of Governor Belcher ti 
 Thomas Hutchison, 6 ; of Mr. Bol- 
 lan, agent, 7 ; of Secretary Galla- 
 tin to Committee of Ways and 
 Means, 32 ; of Secretary Chase to 
 Committee of Ways and Means, 
 123; of Secretary Chase to Mr. 
 Spaulding, 134 ; of Secretary Spen- 
 cer to Committee of Ways and 
 Means, .53. 
 
 Lincoln, Abraham, President of the 
 United States. 117; signs legal- 
 tender act, 117. 
 
 Loans, temporary, of 1810, 23; of 
 1813, 39 ; policy of Congress as to, 
 in 1813-15, 33 ; authorized ini815to 
 fund Treasury notes, 34 ; discount 
 
242 
 
 INDEX. 
 
 on, from 18ia-15, 39 ; biU for, in- 
 troduced by Millard Fillmore, 50 ; 
 object defeated, 50; Treasury notes 
 a form of, 59 ; Treasury notes of 
 Mexican War fundable into, 69 ; of 
 1860, 73 ; of 1861, 79 ; on August 
 31, 1865, 85 ; temporary, 85 ; by the 
 New York banks, 95 ; seven-thirty 
 notes a popular, 99; for funding 
 legal-tender notes, 117; obtained 
 on security of Treasury notes, 35 ; 
 to aid in resumption of specie pay- 
 ments, 141. 
 
 Loan banks, bills issued by, 3. 
 
 Losses on colonial paper money, 4 ; 
 on Continental paper money, 10; 
 on fractional currency, 104. 
 
 Madison, James, remarks on Fed- 
 eral Convention, 14 ; note on vote 
 of Virginia, 16. 
 
 Mandamus on Secretary of Treasury 
 by State of Virginia, 193. 
 
 Marshall, Chief Justice, definition 
 of bills of credit, 44, 
 
 Martin, Luther, Maryland, delegate 
 to Federal Convention, 16; address 
 to Maryland Legislature, 17 (also 
 see note on page 16). 
 
 Mason, George, Virginia, remarks on 
 Federal Convention, 14. 
 
 Massachusetts, paper money issues 
 in, 1; loan banks, 3; specie banks, 
 3, 3 ; governors of, oppose paper 
 money, 3 ; makes Continental 
 money a legal tender, 119. 
 
 Maximum of public debt, 85 ; of le- 
 gal-tender notes, 138 ; of Treasury 
 notes prior to civil war, 53, 69, 79 ; 
 of fractional currency, 104. 
 
 McGullooh, Hugh, Secretary of the 
 Treasury, 189 ; opinion of Legal- 
 tender Act, 139 ; retires legal-ten- 
 der notes, 140, 
 
 Measures ("see Bills and Acts). 
 
 Xiltircer, John F. , Maryland, friendly 
 to paper money in Federal Con- 
 vention, 15 ; remarks of, 15, 
 
 Mexico, declaration of war with, 63, 
 
 Miller, Mr. Justice, dissents to first 
 legal-tender decision, 160. 
 
 Money, power of Congress to bor- 
 row, 59, 159; borrowed on security 
 of Treasury notes, 35 ; specie, stock 
 diminished, 31 : Continental, made 
 legal tender byStates, 119; colonial 
 
 paper, 3; surplus of United States 
 (see Deposit of Surplus); legal-ten- 
 der (see Legal-tender); power of 
 Congress to coin, 11. 
 
 Morrill, Justin S. , Vermont, remarks 
 on Legal-tender Act, 139. 
 
 Morris, Gouverneur, moves to strike 
 out "emit bills" from draft of 
 Constitution, 14. 
 
 National bank, Secretary Dallas 
 recommends establishment of, 31 ; 
 bill for, referred to committee, S3 ; 
 bill for, vetoed by President Tyler, 
 53. 
 
 National banks, bill for, prepared, 
 120 ; co-operation of, in placing 
 seven-thirty loan, 99. 
 
 National debt in 1813, 31 ; extin- 
 guished in 1835, 170 ; amount of, 
 in 1841, 50 ; amount of, in 1860, 
 73 ; maximum of, in 1865, 85 ; 
 form of, in 1865, 85, 
 
 Newcomb, Prof. Simon, criticism 
 npon Silver Commission, 151 (see 
 also nor.e at foot of page 151). 
 
 New York City banks, action of, aa 
 to demand notes, 90 ; first seven- 
 thirty loan negotiated by, 93 ; 
 total amount of seven-thirty notes 
 taken by, 93 ; arrangements of, for 
 placing seven-thirty loans, 93 ; re- 
 port of Loan Committee of, 94 ; 
 Secretary Chase's report in regard 
 to action of, 95 ; loans made by, 
 in 1861, 96. 
 
 Niles, John M., Connecticut, op- 
 poses Mr. Buchanan's amendment 
 to postponement bill, 186. 
 
 Niles' Register, extract from, relative 
 to Treasury notes of 1813, 2B ; 
 notice of distribution of surplus 
 sent to banks, 131. 
 
 Note of Madison on vote of Virginia 
 in the Federal Convention, 16. 
 
 Notes, compound interest (see Com- 
 pound interest notes). 
 
 Notes, Exchequer, recommended by 
 President Tyler, 53. 
 
 Notes, fractional (see Fractional 
 currency). 
 
 Notes, legal-tender (see Legal-ten- 
 der notes). 
 
 Notes, one- and two-year (see One 
 and two-year notes) . 
 
INDEX. 
 
 243 
 
 Notes, seven-thirty {see seven- 
 thirty notes). 
 
 Notes, Treasury (see Treasury 
 notes). 
 
 Objections to issue of Treasury 
 notes 1813-1815, 23, 39, 33 ; to isaao 
 of Treasury notes in 1837, 41, 44, 
 46, 53 ; of Committee on Ways and 
 Means to spurious notes, h'A \ to 
 logal-tender bill, 138 ; AVoodbury's 
 to distribution of surplus, 1 71 ; to 
 postponement of fourth instal- 
 ment, 186 ; to loan biU of 1841, 50. 
 
 Obligations of the United States, 
 legal-tender notes held not to be, 
 156 : legal-tender notes held to be, 
 157. 
 
 One and two year notes of 1803, 109 ; 
 bore interest at five per cent,, 110 ; 
 redeemed in compound interest 
 notes, 110. 
 
 Opinion of Hamilton on authority of 
 Government to emit paper money, 
 19 ; of Samuel Dexter as to right 
 of States to charter banks to issue 
 notes, 12 ; of Chiftf Justice Chase, 
 13 ; of Secretary MoCuUooh, as to 
 Legal-Tender Act, 139; of At- 
 torney-General Bates as to legal- 
 tender bill, 131. 
 
 Opinions of courts. (See Decisions.) 
 
 Opposition of President Jackson to 
 distribution of surplus, 171 ; to 
 bill postponing payment of fourth 
 instalment, 1 86 ; of newspapers 
 and banks to legal-tender bill, 121. 
 
 Outstanding Treasury notes, 71, 118. 
 
 Paper read by President Jackson 
 to his cabinet, 174. 
 
 Paper money of the colonies, first 
 issued in Massachusetts, 1 ; issued 
 in other colonies, 1 ; dates of first 
 issues, 1: issuea by loan banks, 
 3 ; rate of interest on, S ; payable 
 in silver issued by me?:chantl in 
 Boston, 3; prohibited by Parlia- 
 ment, 37 ; opposition of governors 
 to, 3 ; intrigues of advocates of, 
 4 ; depreciation of, 4 ; terms ap- 
 pUed to, 4; loss and misery in- 
 flicted by, 4 ; value in coin in dif- 
 ferent States, 5 ; disputes about, 
 7 ; attitude of mother country, 7. 
 
 Paper money of Revolution emit- 
 
 ted by Continental Congress, 9 ; 
 first issue of, 9 ; depreciation of, 
 9, 10; now issue bearing interest 
 payable in coin, 9 ; amount lim- 
 ited, 10 ; redeemable in coin at 
 market value, 9 ; ceases to circu- 
 late, 10 ; loss through, 10 ; made a 
 legal-tender in certain States, 119 ; 
 issued by States, 10. 
 
 Paper money under constitution, 
 power of States to emit, taken 
 away, 10, 13 ; power of States to 
 charter banks to issue, doubted, 11, 
 13 ; discussion on, in Federal con- 
 ventions (see also Notes). 
 
 Paris, Silver Commission meets at, 
 131. 
 
 Parker v. Davis, legal-tender case, 
 161. 
 
 Parliament, acts of, in reference to 
 paper money, 7. 
 
 Pay of signers of Treasury notes, 25. 
 
 Payment of fourth instalment of sur- 
 plus postponed, 188. 
 
 Payment, specie, suspended in 1814, 
 31; suspended in 1837, 40; re- 
 sumption of, in 1838, 43 ; suspen- 
 sion of, in 1857, 70 ; suspension of, 
 in 1861, 84 ; resumption of, on 
 January 1, 1879, 141. 
 
 Peace, treaty of, with England. 34. 
 
 Pelatiah Webster recites evils of 
 Colonial paper money, 4. 
 
 Pendleton, George H., Ohio, remarks 
 of, on legal-tender bill, 128. 
 
 People, seven-thirty loans taken by 
 the, 98 ; anxiety of, to obtain frac- 
 tional currency, 104 ; anxiety of, to 
 obtain four per cent, certificates, 
 117. 
 
 Pickens, Francis W. , South Carolina, 
 on postponement of fourth instal- 
 ment of surplus, 138. 
 
 Plan for Treasury notes. Secretary 
 Gallatin's, 21; Secretary Dallas', 
 33. 
 
 Plans of States to use surplus depos- 
 ited, 190. 
 
 Postage stamps used for change, 100. 
 
 Postal currency (see fractional cur- 
 rency). 
 
 Postmaster-General's report on use 
 of postage stamps for change, ICO, 
 
 Postponement of fourth instalment, 
 rendered necessary by financial 
 pressure, 183; extra session of 
 
244 
 
 INDEX. 
 
 Congress called to consider, 183 ; 
 President Van Buren on, 183 ; bill 
 for, introduced by Siiae Wright, 
 184 ; long debate on. in House and 
 Senate, 184, 187 ; bill for, amended, 
 187 ; bill for, passed, 188. 
 
 Power of Executive, select commit- 
 tee to inquire into, 175. 
 
 Prejudices against Treasury notes, 
 22. 
 
 Premium, on small Treasury notes 
 of 1815, 37 ; on Treasury notes of 
 1837, 45 ; on 5 per cent. U. S. 
 stock, 78 ; on demand notes, 93 ; 
 on gold, 97, 100; on four per 
 cent, bonds, 117. 
 
 Preparations of Secretary Woodbury 
 for distribution of surplus money, 
 181 , 183. 
 
 Presidents, Jackson, 168, 170, 173; 
 Harrison, 49 ; Tyler, C3 ; Van 
 Buren, 183 ; Lincoln 117 ; Hayes, 
 150. 
 
 Preston, William C, South Caro- 
 lina, opposed to Treasury note bill 
 of 1838, 45 ; opposes postpone- 
 ment of fourth amendment, 186. 
 
 Proclamation of Governor Belcher, 
 5. 
 
 Provincial Governors, trouble vrith 
 their Legislatures, 3. 
 
 Public advertisement for bids for 
 Treasury notes, 71, 76 ; for loans 
 80. 
 
 Public debt (see National debt). 
 
 Public lands, distribution of revenue 
 from, 175 ; distribution of, 175. 
 
 Q rOTATiONS of coin value of Colonial 
 paper money, 5 ; of bids for Treas- 
 ury notes in 1861, 76; of bonds, 
 notes and gold for 1862, 1863, 1804, 
 97. 
 
 Quotations from Governor Belcher's 
 proclamation, 5 ; from Chief Jus- 
 tice Story, 11 ; from Secretary 
 Chase, reports and letters, 12, 80, 
 95, l.':2, 124; from Daniel Webster, 
 18 ; from debate in I'ederal Con- 
 vention, 14 ; from Luther Martin, 
 16 ; from Niles' Register, 26 ; 
 from Secretary Dallas, 31 ; from 
 report of Committee on Ways and 
 Means, in Spencer's notes, 5, 3 ; 
 from Secretary Dix, 77, 189 ; from 
 General Scott's circular, 81 ; from 
 
 report of associated banks, 94 ; 
 from Secretary McCulloCh, 98, 
 189; from Postmaster-General's 
 report, 100 ; from debate on legal- 
 tender bill, ]24r-135; from James 
 G. Blaine, 144-147 ; fromProfessor 
 Keweomb, 151 ; from iKgal-tehder 
 deoisipns, 157, 162 ; ftoih Presi- 
 dent Jackson, 168, 170, 174 ; from 
 Secretary Woodbury, 171 ; from 
 Thomas H. Benton, ICO. 
 
 Randolph, Edmund, Virginia, re- 
 marks in Federal Convention, 15. 
 
 Rates of interest '(see Interest). 
 
 Read, remarks in Federal Conven- 
 tion, 10. 
 
 Reasons for failure of loan bill of 
 1841, go. 
 
 Rebellion, war of, inaugurated, 83. 
 
 Rebellions demonstrations among 
 colonists, 6. 
 
 Receipts, from sale of public lands, 
 171 ; from loans, 1812-1815, 39. 
 
 Re-charter of Bank of U. S. op- 
 posed by President Jackson, 174; 
 bill for, passes both Houses, 1 74 ; 
 bill for, vetoed, 174; made an 
 issue in campaign of 1833, l'i4. 
 
 Refusal oh Whigs to vote on 
 Treasury note bill in 1840, 1.'6. 
 
 Register of Treasury, notes first 
 signed by, 42. 
 
 Reissues of Treasury notes (seo 
 Treasury notes). 
 
 Removal of deposits from Bank of 
 U. S., 175. 
 
 Report of Hamilton on a National 
 bank, 19; of Secretary Dallas in 
 1814, S3; of Mr. Eppes, 32; of 
 Secretary Dallas in 1815, 37; of 
 Secretary Woodbury in 1 839, 45 ; of 
 t^ecretary Woodbury in 1840, 49 ; 
 of Secretary Bwing in 1841, 49; of 
 Conamittee of Ways and Means on 
 Spencer's notes, 54 ; of Secretary 
 Cobb in 1857, 70; of Secretary 
 Cobb in 1860, 73; of Secretary 
 Chase, for year lo6!, 86, 95 ; of 
 loan committee of associated 
 banks of New York City, 94 ; of 
 Secretary MbCr.lloch for 1865, 98; 
 of Postmaster-General in 18(;2, 
 100 ; of Deputy Comptroller of 
 Currency in 1870, KiO ; of Paris 
 silver commission, 151 ; of Secre- 
 
INDEX. 
 
 245 
 
 taries Crawford, Rush, and suc- 
 cessors, 167 ; of Secretary Ingham 
 In 1829, 168. 
 
 Reserve, National Bank (see Na- 
 tional Bank Reserve). 
 
 Resolution of Continental Con- 
 gress reoonunending that States 
 make paper issues legal tender, 
 117 ; of associated banks in New 
 York City, 90 ; making Treasury 
 notes a legal tender, 33, 
 
 Resumption of specie, payments, 
 in 1838, 48; on January 1, 1879, 
 141 ; act of 1875 requiring, 141. 
 
 Revenues from public lands, distri- 
 bution of, 175 ; surplus (see Sur- 
 plus Revenues) ; deposited with 
 State banks, 4(), 183. 
 
 Revenues for 1837, 41 ; expenditures 
 exceed, from 1837 to 1841, 49. 
 
 Richardson, Secretary, increase of 
 legal-tender notes under adminis- 
 tration of, 140. 
 
 Rush, Richard, Secretary of Treas- 
 ury, 167. 
 
 Scott, CtENBBAL, issues circular 
 about demand notes to army, 89. 
 
 Secession of Southern States, 83. 
 
 Secretaries of the Treasury, Hamil- 
 ton, 19 ; Gallatin, 28 ; Dallas, 31 ; 
 Crawford, 31, 167; Rush, 167; 
 Ingham, 168 ; Duane, 175 ; Taney, 
 175; Woodbury, 41, 43, 45, 49, 
 171, 180; Spencer, 53; Bwing, 
 49; Forward, 53; Bibb, 53; Cobb, 
 70, 75; Dix, 76, 77; Chase, 80, 95, 
 122: Fessenden, 110 ; Walker, 63; 
 MoCuUooh, 98, 139 ; Richard- 
 son, 140 ; Sherman, 141 ; Folger, 
 193. 
 
 Secretary of the Treasury author- 
 ized to borrow money on security 
 of Treasury notes, 35. 
 
 Series of fractional currency, 103, 
 104; of seven-thirty notes, 93, 97; 
 of colonial currency, 4 ; of Conti- 
 nental currency, 9. 
 
 Seven-thirty notes, first issue au- 
 thorized by acts of July 17, and 
 August 5, 1861, 89 ; suggested by 
 Gallatin, 88; mterest on first is- 
 sue paid in gold, 93 ; fundable 
 into bonds, 93 ; negotiation of 
 first Joan on, with New York 
 banks, 93, 96 ; act of June 30, 
 
 1864, authorizing second issue, 97 ; 
 act of March 3, 1865, authorizing 
 third issue, 97 ; denominations 
 of, 98 ; last two issues fundable 
 into bonds, 98 ; a popular loan, 
 98 ; services by Jay Cooke in 
 negotiating, 99 ; co-operation of 
 national banks, 99 ; form of, 100 ; 
 reverse described, 99. 
 
 Sherman, John, Secretary of Treas- 
 ury, favors legal tender clause, 132 ; 
 votes in favor, 135 ; member of 
 Conference Com., 136 ; sells bonds 
 to prepare for resumption, 141 ; 
 confidence of note holders in, 148. 
 
 Signers of Treasury notes, pay of, 25. 
 
 Silver certificates authorized, 153 ; 
 denominations of, 153; coin depos- 
 ited for, to be returned in Treasury, 
 153 ; amount outstanding, 153 ; 
 not a legal-tender, 155 ; count as 
 reserve of national banks, 155 ; 
 receivable for Clearing-house bal- 
 ances, 155, receivable for customs, 
 taxes, and all i>ublic dues, 153 ; 
 dangerous substitute for money, 
 154. 
 
 Silver coinage, acts regulating, 148, 
 149, 153. 
 
 Silver commission, report of, criti- 
 cised, 151. 
 
 Silver dollar, authorized by act of 
 April, 1793, 148 ; coinage discon- 
 tinued by act of 1873, 150; revived 
 by act of 1878, 1 52 ; weight of , 1 50 ; 
 amount coined per month, 150; 
 amount outstanding, 153 ; effect of 
 continued coinage, 153. 
 
 Small Treasury notes of 1815, descrip- 
 tion of, 34. 
 
 Spaulding, B. G., New York, brings 
 legal-tender bill before Committee 
 of Ways and Means, 130 ; intro- 
 duces bill in House, 124 ; letter of 
 Secretary Chase to, 124; extract 
 from speech of, on legal-tender 
 bill, 134. 
 
 Special session of Congress, in 1837, 
 183 ; in 1861, 84. 
 
 Specie, difficulty to procure, 31 ; de- 
 mand notes payable in, 53 ; legal- 
 tenders payable in, after January 
 1, 1879, 141; first instalment of 
 surplus paid to States in, 184. 
 
 Specie bank, Hutchison's, 3. 
 
 Specie payments suspended in 1814, 
 
246 
 
 INDEX. 
 
 31 ; suspended in 1SS7, 10 ; resump- 
 tion of, in 1838, 48 ; suspension of, 
 in 1857, 70 ; suspension of, in 1661, 
 84 ; lesumption of, by United 
 States on January 1, 1879, 141 ; 
 all but six deposit banks suspend, 
 183. 
 
 Spencer, John C. , Secretary of Treas- 
 ury. 53 ; issues Treasury notes at 
 nominal interest payable on de- 
 mand, 53 ; his notes investigated 
 by Committee of Ways and Means, 
 53. 
 
 State banks, pubKc funds deposited 
 with, 40; act regulating deposit 
 of lawful money with, 40, 178 ; de- 
 prived of deposits by distribution 
 of surplus, 181 ; forms of drafts 
 on, 182. 
 
 States recommended to make Con- 
 tinental money legal-tender, 119; 
 paper money issued by, during 
 Revolution, 10 ; deprived of au- 
 thority to issue paper money, 13 ; 
 right to charter banks to issue 
 notes, 11 ; lack of authority to 
 coin money, 11 ; deposit of surplus 
 with, 181 ; table showing appor- 
 tionment among, 180 ; to give au- 
 thority to Treasurers to receive de- 
 posit of surplus, 180 ; laws of, rela- 
 tive to deposit of surplus, 181 ; 
 use of deposits by, 190 ; amounts 
 deposited with, carried on Treas- 
 ury books as unavailable funds, 
 190 ; pubKc works undertaken by, 
 186 ; power to borrow money, 59. 
 
 States, Southern, secession of, 83. 
 
 Stevens, Thaddeus, Pennsylvania, 
 close debate on legal-tender bill, 
 126 ; extract from speech on legal- 
 tender bill, 126. _ 
 
 Story, Mr. Justice, comments on 
 power of States to charter banks 
 to issue notes, 11. 
 
 Sumter, Fort, effect of attack on, 
 83. 
 
 Supreme Court decisions in legal-ten- 
 der cases (see Decisions and Dis- 
 senting Opinions). 
 
 Surplus revenues, estimates from 
 1816 to 1839, 167, 168 ; proposition 
 to distribute among ime States, 
 ^69; Mr. Dickerson's proposition 
 in 1827, 167 ; estimate of amount 
 on January 1, 1836, 171 ; views of 
 
 President Jackson as to disposi- 
 tion of, 171-176 ; report of select 
 committee on, 175 ; bill to deposit 
 with States, 178; apportionment 
 among States, 180 (see Deposit 
 of Surphis wiih States). 
 Swayne, Mr. Justice, concurs in 
 dissenting opinion in first legal- 
 tender case, 160. 
 
 Talmadge, Nathaniel P., New 
 York, in favor of Treasury notes, 
 45. 
 
 Taney, Koger P., Secretary of 
 Treasury, 175 ; issues orders for 
 removal of deposits, 175. 
 
 Tariffof 1842, 63. 
 
 Taxation, reduction of remedy for 
 surplus, 173. 
 
 Tender (see Legal Tender). 
 
 Three per cent, certificates (see 
 Certificates), 
 
 Three-sixty-five notes proposed, 88. 
 
 Treasuries of colonies, issue of paper 
 money by, 1, 2. 
 
 Treasury notes of 1813-1815 author- 
 ized, 25, 29, 30, 33 ; signed by per- 
 sons designated by President, 25 ; 
 countersigned by Commissioners 
 of Loans, 35 ; money borrowed 
 upon security of, 26; receivable 
 for dues, duties, etc., 26; Niles' 
 register upon, 26 ; small notes 
 of 1815, 34 ; denomins-fcions of, 26, 
 30, 38 ; interest on, 39 ; penalties 
 for counterfeiting, 36. 
 
 Treasury notes of period of 1837 au- 
 thorized, 43, 45, 46, 51 ; signed by 
 Treasurer, 42 ; countersigned by 
 Register, 42 ; receivable for all 
 debts due Government, 42 ; inter- 
 est on, 42, 45, 52 ; denominations 
 of, 41, 52 ; payable one and two 
 years after date, 51 ; outstanding, 
 5i^. 
 
 Treasury notes issued by John C. 
 Spencer, 52, 54, 60. 
 
 Treasury notes of Mexican War, 
 authorized, 63, 64 ; signed by 
 Treasurer and Register, §i ; other 
 features of, 64; amounts issued, 
 64, 69 ; denominations ^f, 64, 69. 
 
 Treasury notes of Buchanan Admin- 
 istration, rtijommended by Sec- 
 retary Cobb, 70; authorized, 70; 
 features of law authorizing, 71 ; 
 
INDEX. 
 
 247 
 
 offered to lowest interest bidder, 
 71 ; amount issued, 71 ; denomina- 
 tions of, 71 ; act of December, 
 1860, 75 ; operations of Secretary 
 Dix, 76. 
 
 Treasury notes of Civil War (see 
 Seven-thirty notes. Compound in- 
 terest notes. One- and two-year 
 notes, and Notes). 
 
 Treasury notes, outstanding in 1884, 
 71, 118 ; forms of, 35, 36, 47, 65, 
 67, 73, 81, 91, 100, 10.5-lOS, 111- 
 112, 137, end of text ; no legal- 
 tenderuntill861, 117; depreciation 
 of, 33, 38, 44, 76, 77 ; premium on, 
 37,45. 
 
 Tyler, John, President, .53 ; vetoes 
 bill to create a National Bank, 53 ; 
 recommends bill for Exchequer 
 notes, 53. ' 
 
 Undebstandino of Treasury with 
 
 banks in 1862, 95. 
 United States, Bank of, question of 
 
 recharter, 174 ; Jackson's attack 
 
 on, 174 ; veto of recharter bill, 
 
 173 ; removal of deposits, 175 ; 
 
 charter expires, 40. 
 United State.i notes (see Treasury 
 
 notes, and Notes). 
 Use of postage stamps for change, 
 
 100. 
 United States Supreme Court (see 
 
 Courts). 
 
 Va-LLANDIQham, C. L., Ohio, op- 
 poses legal-tender bill, 1 29. 
 
 Van Buren, Martin, President of the 
 United States, 183 ; calls extra 
 session of Congress, 183. 
 
 Veto of biU recharterlng Bank of 
 United States, 174; of bill for 
 National Bank by President Tyler, 
 53; of act for coinage of silver 
 dollar by President Hayes, 150. 
 
 Vote of States in Federal Conven- 
 tion, 16; on first Treasury note 
 bill m House, 25; in House and 
 Senate on second Treasury note 
 
 bill, 29 ; on Treasury note bill of 
 1837 in House and Senate, 41, 43 ; 
 on Treasury note bill of 1838 in 
 House and Senate, 45 ; on Treas- 
 ury note bill of 1840 in House, 
 46 ; on legal-tender bill, 135 ; on 
 coinage act of 1873, 150 ; on de- 
 posits of surplus with the States, 
 178 ; on postponement of fourth 
 instalment, 187 
 
 War declared with England, 23; 
 declared with Mexico, 63; Jack- 
 son's, with Bank of United States, 
 174 ; Civil, inaugurated, 83. 
 
 War measure, issue of Treasury and 
 legal-tender notes a, 22, 64, 124. 
 
 Ways and Means Committee (see 
 Committee of Ways and Means). 
 
 Webster, Daniel, views on right of 
 State to charter bank to issue 
 notes, 11 ; on legal-tender under 
 Constitution, 18. 
 
 Webster, Petaliah, views as to evils 
 of paper money in Colonies, 4. 
 
 Whig party, opposition to Treas- 
 ury notes, 44, 49; support a loan 
 bill, 50. 
 
 Whigs refused to vote in House in 
 1840, 46. 
 
 Wilson James, Pennsylvania, op- 
 posed to paper money in Pederal 
 Convention, 15. 
 
 Wise, Henry A., Virginia, favors 
 paying fourth instalment, 187. 
 
 Withdrawal of deposits from Bank 
 of the United States, 175 ; from de- 
 posit banks, 181 ; from States, 190. 
 
 Woodbury, Levi, Secretary of Treas- 
 ury, 41 ; recommends Treasury 
 notes, 41 ; reports amount of 
 'Treasury notes outstanding, 46; 
 disapproves of distribution of 
 surplus among the States, 171 ; 
 method of distribution of surplus, 
 181. 
 
 Wright, Silas, New York, Chair- 
 man Senate Finance Committee, 
 184 ; reports bill for poBtponementi 
 of fourth instalmenti, 184. 
 
POLITICAL SCIENCE AND 
 ECONOMY. 
 
 INTRODUCTION TO THE STUDY OF INTERNATIONAL LAW. 
 Designed as an Aid In Teaching and In Historical Studies. 
 By THEODORE DWIOHT WOOLSEY. Sixth Edition, 
 Revised and Enlarged by Theodore Saillsbury Wooiseyi 
 Professor of International Law in Yale University. Crown 
 8vo, S2.50. 
 
 In this sixth edition of his father's book, Prof. Woolsey has en- 
 deavored to make such additions and changes as the progress of the 
 science since 1879, when the last edition was published, renders 
 necessary. The past decade has not been an eventful one. No great 
 war has furnished precedents for the breach of the law, or examples 
 of its observance. But few important treaty engagements have been 
 published. On the other hand, many valuable treatises on the whole 
 or a part of the subject have been written, the societies have been 
 active, and in the epoch which set in at the time of the Crimean war, 
 characterized, one may say, by the growth in importance of the 
 neutral interest and the spread of humaner principles of warfare, 
 advances still in the same direction. 
 
 Besides a few omissions, where the historical illustration of a. 
 principal has been somewhat extended, there has been set into smaller 
 type other matter which seemed of subordinate importance in the 
 volume used as a text-book. The additions and changes [indicated by 
 square brackets] are nearly all such as the author in his life-time 
 approved of. The two appendices, giving a partial bibliography of 
 the subject and a list and resume of the important treaties, have been 
 added to. The quotations in Latin have been translated. Soine 
 obscurities have been omitted or simplified. In a word, then, this 
 edition attempts to bring the discussion of the subject up to the 
 present time, in a form a little less scholastic than before, a change 
 which it is hoped both the student and the lawyer will appreciate. 
 
 A complete outline of that grand system of ethical jurisprudence 
 which holds, as it were, in one community the nations of Christendom. 
 Its appendix contains a most useful list of the principal treaties since 
 the Eef ormation. The work has no rival as a text-book. 
 
 THE ST. LOUIS REPUBLICAN.— "A compendiam treatise, Intended not for 
 Vawyers nor lor tUoBe having the profession of law In view, but for young men who 
 are cuItlvatlng^ihemselveB by the study of hiatorlcal and political Science. While 
 the worli: gives the state of the law of nations as It Is, it compares the actual law 
 with the standard of justice, and, by exhibiting the progress of science In a 
 historical way, brings It Into connection with the advances of hoinanlty and 
 civlUzaticn." 
 
POLITICAL SCIENCE AND ECONOMY. 
 
 POLITICAL SCIENCE ; Or, The State Theoretically and Practr 
 cally Considered. By THEODORE D. WOOLSEY, D.D., 
 LL.D., late President of Yale College. 2 vols., 8vo, $5.00. 
 
 THE BOSTON TRANSCRIPT.— "No work on Political Science haa ever been 
 pnbllsliea In America wMcli covers so wide a ground and which treats the sub- 
 ject so fairly and impartially, and with so thorough knowledge and jndgment." 
 
 THE CINCINNATI CAZETTE.— " This wors IS Indeed one of the most Im- 
 portant contrlbntlonB of the century to the science of natural and national law and 
 ethics." 
 
 THE N. Y. TRIBUNE.—" In the discussion of the manifold questions suggested 
 by tae general theme of the work Dr. Woolsey exhibits the same cautiousness of 
 Judgment, moderation of tone, and vigor of expression which characterize his 
 previous writings. His volumes abound with the signs of profound study and 
 copious erudition aa well as of original thought." 
 
 THE USE AND ABUSE OF MONEY. By Dr. W. CUNNINGHAM: 
 Trinity College, Cambridge. 12mo, $1.00 net. 
 
 A popular treatise, and tlie headings, Social Problems, Practical 
 Questions, and Personal Duty, give a broad view of the scope of the 
 book. The subject is Capital in its relation to Social Progress ; and 
 personal responsibility enters into the questions raised. The volume 
 contains a syllabus of subjects and a list of books for reference. 
 
 Approved by Lecturer of American Society for Extension of 
 University Teaching. 
 
 BOSTON BEACON.— "Strikingly free from theorizing and sentlmentallsm, 
 grapples boldly with current social problem, emphasizes the human element in 
 all Industrial and commercial dealings, and it la throughout marked with the 
 stamp of common sense." 
 
 AMERICAN POLITICAL ECONOMY. By FRANCIS BOWEN, 
 Professor of Natural Religion and Moral Philosophy in 
 Harvard College. 8vo, $2.50. 
 
 This treatise presents views compatible with the idea that " every 
 country has a political economy of its own, suitable to its own physical 
 circumstances of position on the globe, and to the character, habits, 
 and institutions of the people." 
 
 THE PHILADELPHIA AGE.— "If our members of Congress would vote them- 
 selves a copy of this book, and read it, fewer wild schemes would be concocted 
 by them, and a great saving of time and the people's money would be secured." 
 
 THE SPRINGFIELD REPUBLICAN.— "His arguments are worth considering, 
 and his whole book is of high value to any American to study economical quea- 
 
 tlona," 
 
SGBIBNER'S TEXT-BOOK CATALOGUE. 
 
 CONTEMPORARY SOCIALISM. By JOHN RAE, M.A. Crown 
 8vo, $2.50. New edition. (Revised and enlarged.) 
 A thorough history and analysis by a man of singularly candid and 
 liberal mind, equally without prejudice and fanaticism — has long been 
 needed and earnestly wished for by every student of socialism and 
 in all countries. 
 
 This second edition has not only been carefully revised but also 
 greatly enlarged. Chapters entirely new and others almost so have 
 been supplied on such topics as ' State Socialism," "The Progress 
 and Present Position of Socialism," "Russian Nihilism," Anarch- 
 ism," etc. Lasalle, Marx, The Christian Socialists, Henry George, 
 and the like, are discussed in the light of all evidence and argument 
 down to date. 
 
 THE LONDON SATURDAY REVIEW.— " A useful and ably written boot." 
 THE CONGREGATION ALIST.— "No subject more needs tborougli and Im- 
 partial discussion at present than tWs, and tbe worfe before na by Jolin Eae Is 
 eminently able and belplul. It is dlstlngnlabed In a remarkable degree by 
 breadtb of view and tbe grasp of underlying and widely reacbing principles, and 
 also by Ms minuteness of detail and tbe careful relation of facts and figures in 
 support of Its position." 
 
 PRINCIPLES OF POLITICAL ECONOMY. By ARTHUR 
 LATHAM PERRY, LL. D., Professor of History and Political 
 Economy in Williams College. 600 pages. Crown 8vo, 
 S2.00. 
 
 It is now twenty-seven years since Professor Perry first furnished 
 in his "Elements of Political Economy" and ordinary construction 
 of this science freed of all misleading terms and based on definitions 
 both simple and comprehensive. His original mode of treatment 
 " took at once " with the public, and especially with teachers and 
 pupils. 
 
 These facts justify new efforts along new lines. But Professor 
 Perry has special reasons for offering an entirely new book at the 
 present time. A chief one, significant also of the character of the 
 work, stands out plainly in the title. "Principles of Political 
 Economy" is thoroughly devoted to the Princ^lts of the Science, 
 History being used but incidentally to illustrate each topic as it comes 
 under review. . , j. v 
 
 In the second place a new plan of construction and entirely fresh 
 language will enhance the interest and success of classes. Every 
 principle is drawn out by the inductive method from facts of every- 
 day life, and stands in vital touch with such facts by way of illus- 
 trations. 
 
 A third and an urgent reason for presenting carefully-matured and 
 long-tested views the author finds in the clim-acter of recent national 
 legislation. . . , „ 
 
 Professor Perry subdivides " Principles of Political Economy 
 into seven chapters : Value, Material Commodities, Personal Services, 
 Commercial Credits, Money, Foreign Trade, and Taxation. He dis- 
 
HISTORY AND BIOGRAPHY. 
 
 AMERICAN HISTORY SERIES. A Connected History of the 
 United States from tlie Discovery of America to tlie Present 
 Day. Four distinct epoclis, eacli treated by a special and 
 eminent authority. Five vols., maps and planSi Sold sep- 
 arately. 12mo, eacli $1.25. 
 
 This series is eminently Imtory, as distinguished frjm the chroni- 
 cle of annals, and explains the significance as well as recounts the 
 course of events. Philosophic, rather than purely narrative, and 
 dealing with causes and inferences as fully as with incidents, it still 
 makes specially prominent the social picture of each epoch, and 
 occupies itself with the manners, habits, beliefs, aims, and conduct of 
 the great public, rather than the acts of individuals. A literary and 
 philosophical history of the people of the United States. 
 
 THE COLONIAL ERA. By Rev. GEORGE P. FISHER, D. D., 
 LL. D., Professor of Ecclesiastical History, Yale University. 
 12mo, S1.25. 
 
 This initial volume of the American History Series carries the 
 narrative down to 1756, thus embracing the beginnings of the deci- 
 sive struggle for dominion in America. To this point the Colonies are 
 treated of one by one. Though brief, the narrative is not a mere 
 sketch ; not only do the political events have a prominent place, but 
 manners, customs, and phrases of intellectual progress are noticed. 
 
 PROFESSOR MOSES COIT TYLER, ComeU University.—"! have been 
 greatly pleased with Profeasor Fisher's book on ' The Colonial Era.' It Is the 
 work o( a great historical scholar, well-gronnaed In this particular subject, and 
 with an almost unrivalled skill in grasping the essential facts of an historic situ- 
 ation, and stating them In lucid, flowing, and compact style." 
 
 PROF. JAMES MONROE, Oberlln.—" A marvel of Uterary success. So small 
 a compass yet attractive and readable." 
 
 EXPRES. o. K. ADAMS, Cornell University.— "THis best of what we know 
 ooneeniing the age." 
 
 NEW YORK TRIBUNE.— "The new historical series la well begun, and the 
 reading public will look for the appearance of the succeeding volumes with 
 
 Interest." 
 
 THE FRENCH WAR AND THE REVOLUTION. By WILLIAM 
 M. SLOANE, Ph.D., Professor of History in Princeton Uni- 
 versitv. 12mo, $1.25. 
 
 The French and Indian War and the Revolution are so closely 
 related logically as well as chronologically that their treatment as one 
 epoch is eminently fitting and Professor Sloane's volume has accord- 
 
HISTORY AND BIOGRAPHY. 
 
 ingly the unity of Professor Fisher's. In addition to heing a popular 
 narrative of the events of the era which succeeded the colonial, it is 
 a thoroughly philosophical account of political causes and effects and 
 a picture of the times as well, exhibiting the social and private life 
 as well as the public feeling of the Colonies during the agitated period 
 which closed with the birth of a new nation. 
 
 THE ADOPTION OF THE CONSTITUTION AND NATIONAL CONSOLIDA- 
 TION. By General Francis A. Walker, President of tlie MaflsacUnsetts 
 Institute of Technology. In Preparation. 
 
 FROM THE CONCLUSION OF PEACE IN 1815 TO THE END OP BECON- 
 STEUCTION. (2 vols.) By John W. Burgess, Ph.D., LL.D., Professor of 
 History, Political Science, and International Law in Columbia College. 
 In Preparation, 
 
 ARISTOTLE, AND THE ANCIENT EDUCATIONAL IDEALS. 
 [See PEDAGOGICAL, page 42.] 
 
 LOYOLA, AND THE EDUCATIONAL SYSTEM OF THE JES- 
 UITS. [See PEDAGOGICAL, page 42.] 
 
 ENGLISH COLONIZATION AND EMPIRE. By ALFRED 
 CALDECOTT, St. John's College, Cambridge. 12mo, with 
 maps and diagrams, $1.00 net. 
 
 The diffusion of European, particularly English, civilization. A 
 bird's-eye view of the British colonies from their origin until the 
 present time, with a summary of the wars and other great events 
 which have occurred in the progress of this work, and a careful 
 examination of the most important questions which now affect the 
 relation of the colonies and the parent nation. 
 
 THE DAWN OF HISTORY. An Introduction to Pre-Historic 
 Study. New and revised edition. Edited by C. F. KEARY. 
 12mo, $1.25. 
 
 This work treats successively of the earliest traces of mtn in the 
 remains discovered in caves or elsewhere in different parts of Europe ; 
 of language, its growth, and the story it tells of the pre-historio users 
 of it ; of the races of mankind, early social life, the religions, mythol- 
 ogies, and folk-tales of mankind, and of the history of writing. The 
 present edition contains more than a hundred pages of new matter, in 
 which are embodied the results of the latest researches. 
 
 BOSTON SAT. EVE. GAZETTE.— "A fascinating manual, wltliout a vestiga 
 of the dallnesB usually charged against scientific worKs. In its way, the work W 
 a model of what a popular scientific work should be.' 
 
SCRIBNBirS TEXT-BOOK CATALOGUE. 
 
 EPOCHS OF HISTORY. 
 
 CHARLES KENDALL ADAMS, PreSWmlt Of ConM tMverstty.—" A Series 
 of conclae and carefully prepared yoltunes on special eras of Metory. Each is 
 devoted to a group of events of saon Importance as to entitle It to be regarded aa 
 an epoch. EacJi Is also complete in Itself, and has no especial connection with 
 the other members of the series. The works are all written by authors selected 
 by the editor on account of some especial qualifications for a portrayal of the 
 period they respectively describe. The volumes form an excellent collection, 
 especially adapted to the wants of a general reader." 
 
 NOAH PORTER, PresjaemS 0/ rate CoZtege.—" The 'Epochs of History 'seem 
 to me to have been prepared with knowledge and artistic skill to meet the wants 
 of a large nnmber of readers. To the young they furnish an outline or compen- 
 dium which may serve as an introduction to more extended study. To those 
 who are older they present a convenient sketch of the heads of the knowledge 
 which they have already acquired. The outlines are by no means destitute of 
 spirit, and may be used with great profit for family reading, and in select classes 
 or reading clubs." 
 
 BISHOP JOHN F. HimsT, Ex-Presiaent of Dreie TTieological Seminary.— 
 - It appears to me that the idea of Morris in his Epochs Is strictly in harmony 
 with the philosophy of history— namely, that great movements should be treated 
 not according to narrow geographical and national limits and distinction, buf 
 universally, according to their place hi the general lite of the world. The hlstor 
 leal Maps and the copious Indices are welcome additions to the volumes." 
 
 THE NATION.—" The volumes contain the ripe results of the studies of men 
 who are authorities in their respective fields." 
 
 EPOCHS OF ANCIENT HISTORY. A series of books narrating 
 the History of Greece and Rome, and of their relations to 
 otiier countries at successive epochis. Edited by Rev. C. W. 
 COX, and CHARLES SANKEY, M.A. Eleven volumes, 
 16mo, witii 41 Maps and Plans. Sold separately. Price pet 
 vol., $1.00. Tlie set, Roxburgli style, gilt top, In box, $11.00, 
 
 TROT- ITS LEGEND, HISTORY, AND LITERATUEE. By S. G. W. Benjamik, 
 
 THE GREEKS AKD THE PERSIANS. By G. W. Cox. 
 
 THE ATHENIAN EMPIEB. By Q. W. COX. 
 
 THE SPAETAN AND THEBAN SUPREMACIES. By Chables Sankey. 
 
 THE MACEDONIAN EMPIRE. By A. M. CmiTEis. 
 
 EARLY ROME. By W. IHNE. 
 
 ROME ASH CARTHAGE. The Punic Wars. By R. Bosworth Smith. 
 
 THE GRACCHI, MARIUS AND SULLA. By A. H. Bebslbt. 
 
 THE ROMAN TRIUMVIRATES. By Chaeles Meeivale. 
 
 THE EARLY EMPIRE. By W. WOUE Capes. 
 
 THE AGE OP THE ANTONINES. By W. WOUE OAPBS. 
 
HISTORY AND BIOGRAPHY. 
 
 EPOCHS OF MODERN HISTORY. A series of books narrating, 
 the History of England and Europe at successive epoclis 
 subsequent to tlie Christian era. Edited by EDWARD E. 
 MORRIS. Seventeen volumes, 16mo, with 74 Maps, Plans, 
 and Tables. Sold separately. Price per vol., SI.OO. The 
 set, Roxburgh style, gilt top, in box, $18.00. 
 
 IHE BEQDnsnNO OF THE MIDDLE AGES. By E. W. Churob. 
 
 THE NOEMANS IN BUEOPE. By A. H. Johnson. 
 
 THE CEUSADES. By G. W. Cox, M.A. 
 
 THE EAELY PLANTAGENETS. By Wm. Stobm. 
 
 EDWAED in. By W. Wabbvbton. 
 
 THE HOUSES OP LAKCASTEE AKD TOEK. By James Gaikdneb. 
 
 THE ERA OP THE PEOTESTANT EEVOLTJTION. By Pkkdebio Sebbohu. 
 
 ■WMi Notes on BooSs In Engllsli relating to the Eeformatlon. By Prof, 
 
 Qeobge p. P18HEB, D.D. 
 
 THE EAELT TUDOES. Henry VH.; Heniy Vm. By C. E. Mobbrlt. 
 
 THE AGE OF ELIZABETH. By M. Cbeighton. 
 
 THE THIRTT TEAES' WAR, 1618-1648. By Samdel Eawson QAmnNKR. 
 
 THE PUHITAN EEVOLUTION. By Samuel Eawson Gabdineb. 
 
 THE ENGLISH EESTOEATION'AND LOUIS XIV. By Osmdnd Aiet. 
 
 THE FALL OF THE STUAETS. By Edward Hale. 
 
 THE AGE OF ANNE. By Edwabd E. Moreis. 
 
 THE EAELY HANOVEEIANS. By Edward E. Morris. 
 
 FEEDEEICK THE GEEAT. By F. W. IxJNGMAN. 
 
 THE PEENCH EEVOLUTION AND FIRST EMPIRE. By Willum O'Connor 
 
 Morris. With Appendix by Andrew D. White, LL.D. 
 THE EPOCH OF BEPOEM, 1830-1850. By JnanH MoCabtht. 
 
 THE HISTORY OF ROME, from the Earliest Time to the Period 
 of Its Decline. By Dr. THEODOR MOMMSEN. Translated, 
 with the author's sanction and additions, by W. P. Dicl<son, 
 D.D,, LL.D. With an Introduction by Dr. Leonhard Schmitz. 
 Reprinted from the Revised London Edition. Four volumes 
 crown 8vo, gilt top. Price per set, S8.00. 
 
 LONDON TIMES "A worfc of the very highest merit ; its learning Is exact 
 
 and profound ; Its narrative fall of genlns and skill ; Its descrlptlqns of men are 
 admirably vivid. We wish to place on record onr opinion that Dr. Mommaen's Is 
 by far the best history of the DeoUne and Fall of the Roman Commonwealth." 
 
 DR. SCH^fIITZ.—•' Since the days of Nlebnhr, no wort on EomanHlstory has 
 appeared that combines so mnch to attract, instmct, and charm the reader. Its 
 style — a rare quality In a German author— Is vigorous, spirited, and animated 
 Professor Mommsen's work can stand a comparison with the noblest productions 
 of modem history." 
 
SGBIBNEB'S TEXT-BOOK CATALOGUE. 
 
 AN ADDITION TO THEODOR MOMMSEN'S BISTORT OF ROME. 
 
 THE PROVINCES OF THE ROMAN EMPIRE. From Caesar ta 
 Diocletian. By THEODOR MOMMSEN. Translated with 
 the author's sanction and additions, by William P. Diclcson, 
 D.D., LL.D. With ten maps, by Professor Kiepert. 2 vols., 
 8vo, S6.00. 
 
 Contents: The Northern Frontier of Italy — Spain — The Gallic 
 Provinces — Roman Germany and the Free Germans — Britain — The 
 Danubian Lands and the Wars on the Danube — Greek Europe — Asia 
 Minor — The Euphrates Frontier and the Parthians— Syria and the 
 Land of the Nabatasans — Judea and the Jews — Egypt — The African 
 Provinces. 
 
 N. Y. SUN.— " Professor Mommsen'a work goes lorther :tlian any otiier ex- 
 tant, or now looked for, to provide us wltli a key to the mediaeval Ustory of the 
 Mediterranean world." 
 
 PROF. W. A. PACKARD, in Presbyterian Revieie.—" The author draws the 
 wonderfully rich and varied picture of the conquest and administration of that 
 great circle of peoples and lands which formed the empire of Some outside of 
 Italy, their agriculture, trade, and manufactures, their artistic and scientific life, 
 through all degrees of civilization, with such detail and completeness as could 
 have come from no other hand than that of this great master of historical research 
 In all Its departments, guided by that gift of historical Imagination, for which he 
 Is equally eminent." 
 
 THE HISTORY OF THE ROMAN REPUBLIC. Abridged from 
 the History by Professor Theodor Mommsen, by C. Bryans 
 and F. J. R. Hendy. 12mo, $1.75, 
 
 PROF. TRACY PECK, Tale University.— "It Is a genuine boon that the 
 essential parts of Mommsea's :Bome are thus brought within the easy reach of 
 all, and the abridgment seems to me to preserve unusually well the glow and 
 movement of the original. 1 trust that the excellence of the work will be appre- 
 ciated by teachers and scholars, and by all lovers of good books." 
 
 PROF. w. A. PACKARD, Frinceton CoUege " I have examined it with care 
 
 and find the work skilfully done. It will be a very welcome book, I am sure, to 
 teachers and students. I shall be glad to use it with my classes and believe It 
 will be widely adopted as a text book In our schools and colleges." 
 
 PROF. HENRY M. BAIRD, University of City of Netw TorTc " I am very glad 
 
 to see the great work of Theodor Mommsen brought into such a narrow compass 
 as to be available for use in Instruction. The single handy volume of the 
 abridgment will render available for our schools and colleges, a book whose 
 formidable bulk, In the original form, prevented its being read save by profes- 
 sional students or by those who had unlimited time at their disposal. I have con- 
 vinced myself that the condensation has been accurately and judiciously effected. 
 I heartily commend the volume as the most adequate embodiment, in a single 
 volume, of the main results of modern historical research In the Held of Koman 
 affairs."