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UNITED STATES NOTES

A HISTORY OF THE VARIOUS ISSUES OF
PAPER MONEY BY THE GOVERNMENT .

OF THE UNITED STATES

BY

JOHN JAY KNOX

LATE COMPTROLLER OF THE CURRENCY

WITH AN APPENDIX CONTAINING THE RECENT DECISION OF THE

SUPREME COURT OF THE UNITED STATES AND THE
DISSENTING OPINION UPON THE LEGAL

TENDER QUESTION

SECOND EDITION REVISED

NEW YORK
CHARLES SCRIBNER'S SONS

1885

COPYRIGHT, 1884, BY
CHARLES SCRIBNER'S SONS

TROW'S
PRINTING AND BOOKBINDING COMPANY,

NEW YORK

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 Banking in the United States.” The results of these investigations have appeared from time to time, in official reports, occasional addresses, and in articles contributed to various encyclopædias. The present volume is published 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 interesting 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 inay be deemed politic or advisable. A

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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 regarded 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 Continental Congress had so affected the minds of the wisest and best men of that time, that in the Federal Convention the general feeling was one of almost bitter opposition 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

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