Here are most of the dates and amounts of those issues—all by acts of Congress readily traced: June 3, 1812, $5,000,000; February 25, 1813, $10,000,000; March 4, 1814, $10,000,000; December 26, 1814, $25,000,000; February 14, 1815, $25,000,000; October 12, 1837, $10,000,000; March 21, 1838, $10,000,000; May 31, 1840, $5,000,000; June 30, 1842, $5,000,000; August 31, 1842, $6,000,000; July 22, 1846, $10,000,000; June 28, 1847, $23,000,000; December 23, 1857, $20,000,000; December 17, 1860, $10,000,000.
Is that lie nailed? The above treasury notes were hampered in various ways. The money-lenders persuaded Congress that it would be “contrary to the laws of the Medes and Persians” if the notes drew no interest. So they were generally heavily handicapped in that way. Sometimes they only drew one mill per annum, sometimes nothing. When they drew none the Shylocks at once cried that the country was ruined. They liked them well enough plus interest, because they were sharp enough to get hold of them and pull in the interest, while they managed to cram the United States treasury full of their wild-cat stuff.
To thoroughly verify these serious statements, let us look at the statutes under which these issues were made and the particulars of their issue:
Act of June 3, 1812 (Statutes 2, p. 366).—This law authorized the issue of $5,000,000 treasury notes, to run one year, bearing five and two-fifths per cent. interest. They were made receivable for all debts due the government, and were to be paid to such public creditors and other persons as were willing to receive them. They might also be used to procure loans, or might be placed to the credit of the treasury in banks at par and accrued interest.
Act of February 25, 1813 (Statutes 2, p. 801).—This law authorized the issue of $10,000,000 treasury notes to mature in one year, bearing five and two-fifths per cent. interest per annum. Terms same as act of June 3, 1812.
Act of March 4, 1814 (Statutes 3, p. 100).—Authorized an issue of $10,000,000 on same terms as above. No charge to the government was to be made by the banks which credited the notes.
Act of December 26, 1814 (Statutes 3, p. 161).—Authorized the issue of $25,000,000 treasury notes in place of a loan of $25,000,000 previously authorized. Ten millions of these notes were to be applied to the payment of $10,000,000 previously borrowed. Otherwise they were like the above.
Act of February 14, 1815 (Statutes 3, p. 213).—This law authorized the issue of $25,000,000 treasury notes in addition to other issues. Up to this time the Secretaries of the Treasury, Mr. Gallatin and Mr. Crawford, had complained that the treasury notes so far issued were made too large for common circulation, though their standing among the people was good and the people were desirous of having them. They said treasury notes had taken the place of coin and equalized the exchange throughout the country. To meet the wishes of these secretaries and of Jefferson and Madison, as well as the people, these $25,000,000 treasury notes for circulation were authorized and issued. The most of them were required to be less than $100 in denomination, and to be payable to bearer, while those of $100 and over were to be made payable to order and to pay by indorsement, and were to bear five and two-fifths per cent. interest. The smaller ones were to bear no interest. They were also, for the first time, made receivable for six per cent. bonds. They were made to circulate as money, and to have the characteristics of coin, but they were not redeemable therein. They were legal tender to the United States. These notes, after being paid into the treasury, were to be reissued.
When these $25,000,000 treasury notes of small denominations were made to circulate as money, and to bear no interest, the indignation of all the banks in the country was aroused. They saw that if those notes went out among the people, and became the money of the country, there would be an end to the circulation of bank notes. Such was the truth. There was, therefore, a general combination in New England, New York, Delaware and Pennsylvania to kill them off. The old Bank of the United States, chartered in 1791, the charter of which expired and which was not renewed in 1811, was then, as the law allowed, closing up its affairs. The debts of the people to this bank were very large. The bank was pressing for payment. The people presented these treasury notes, which did not bear interest, in payment. The bank, to destroy the credit of the notes, and to force the recharter of a national bank, refused to receive the notes of the government in payment to the bank. As the bank would not receive the notes from the merchants, the merchants were reluctantly compelled to refuse to receive them for debts due and for goods sold. The New England banks, and those of Delaware, were also deeply involved in this conspiracy to destroy the credit of these treasury notes, as all such are now. The embargo and non-intercourse laws of Jefferson and Madison had destroyed the carrying trade of New England, and had caused a suspension of the New England banks in 1809 and 1810. The people of New England were, therefore, greatly opposed to the war with England. They did all they could to cripple the government in carrying it on. They refused all loans, even of bank notes, and were very hostile to all treasury notes, especially to those intended to take the place of bank notes, as were those of 1815.
By a general combination between State banks, the old national bank bondholders and bullion brokers, these notes of the United States were forced to a discount for a short time. One of the strongest arguments in favor of having all treasury notes made full legal tender is here presented. Had they been legal tender to the people, as well as to the government, all the efforts of the banks and brokers to reject them and reduce their value would have been fruitless. If the legal tender character were removed from the greenbacks the national banks would at once discredit them to-day.