Bill (currency)

“ The main demand for currency is to meet the weekly wages bill. If wages increase, whether because more workpeople are employed, or because rates are higher, additional currency must be brought each week into circulation. ”

“ Specie payments having been resumed by the Government and banks, all notes or bills of paper issued by either of a less denomination than $20 should by law be excluded from circulation, so that the people may have the benefit and convenience of a gold and silver currency which in all their business transactions will be uniform in value at home and abroad. ”

“ At the adoption of the National Constitution, the people, to their wide-spread cost, had become familiar with bills of credit and their incidents, while all conversant with Colonial history must have known the part which bills of credit played for nearly a century, not only as a help to currency, but as a tender, constituting paper money. ”

“ Danger and toil have always attended the explorers in finance, and they always will. Nevertheless the path is the way of civilization. The greater the development of civilized life, the larger will be the values in paper and credit."
The pathway to our present monetary standard is lined with the wrecks of different forms of currency, country pay, debased coinage of the Boston mint, credit bills of the Colony of Massachusetts, fiat money of the Province of Massachusetts Bay, legalized fiat money, inflated currency, land bank bills, silver notes, treasury notes, continental currency. ”

“ You yourselves admit that the value of your irredeemable paper currency will depend upon its volume. Congress is to fix that volume, and by increasing or diminishing it, Congress is therefore to determine what every dollar in the land shall be worth. The value of every piece of property, of every article of merchandise, of every private fortune, of every chance the contractor has in his contract, of every dollar the laboring man has in the savings bank or the merchant on deposit, will be at the mercy of the Congress of the United States. ”

“ The Mode in which Credit is used as Money.—Economy in the employment of the precious metals is naturally suggested by ordinary experience; but the way in which states have profited by the expedient of depreciation affords a special inducement to follow what is practically the same course, and issue paper documents in place of the more costly metallic medium. In theory, as Ricardo explained, a paper currency is one in which the whole value has been appropriated as seigniorage. ”

“ It daily issues bills, checks, and obligations payable in 'gold' and payable in 'dollars' simply, i. e., in currency. It keeps its accounts of specie and currency distinct and reports each separately. It sells commodities for coin only, and buys and sells coin for currency. It estimates taxes on sales of gold according to the market value of the gold. In all returns of taxes and income it requires coin to be turned into the equivalent currency. It taxes all legacies of coin at their equivalent in currency, and receives only coin for duties. ”

“ The anomalous condition of our currency is in striking contrast with that which was originally designed. Our circulation now embraces, first, notes of the national banks, which are made receivable for all dues to the Government, excluding imposts, and by all its creditors, excepting in payment of interest upon its bonds and the securities themselves; second, legal-tender notes, issued by the United States, and which the law requires shall be received as well in payment of all debts between citizens as of all Government dues, excepting imposts; and, third, gold and silver coin. ”

“ When a bank failed, the mass of its circulation being in small notes, sunk upon their hands. The gain to the banks from the wear and tear of small notes, came out of them; the loss from the same cause, falling upon them. The ten or twelve percent. annual profit for furnishing a currency in place of gold and silver (for which no interest would be paid to the mint or the government) , chiefly falls upon them; for the paper currency is chiefly under twenty dollars. ”

“ It may be said, that a bank, whose bills would have a currency all over the States, would be more convenient than one whose currency is limited to a single State. So it would be still more convenient, that there should be a bank whose bills should have a currency all over the world. ”

“ But although the currency had contracted itself, what remained of it was sound, and when business grew again and demanded more, specie flowed in and served as a basis for new and sound issues of bank notes. The volume of the currency, specie payments being restored, regulated itself according to the requirements of business. The business men of the country knew in that respect what they could count upon. ”

“ We place gold, and all such substances, on the side of documents, as far as they operate by signature;—on the side of store as far as they operate by value. Then the currency represents the quantity of debt in the country, and the store the quantity of its possession. The ownership of all the property is divided between the holders of currency and holders of store, and whatever the claiming value of the currency is at any moment, that value is to be deducted from the riches of the store-holders. ”

“ Currency is a word much more comprehensive than the word money, as it may include bank bills and even bills of exchange as well as coins of gold and silver, but the word money, as employed in the grant of power under consideration, means the coins of gold and silver, fabricated and stamped as required by law, which, by virtue of their intrinsic value, as universally acknowledged, and their official origin, become the medium of exchange and the standard by which all other values are expressed and discharged. ”

“ No positive evidence has been found as to the course of prices in the State from 1820, but nothing indicates that the issues of the Bank of the Commonwealth raised prices in the interest of debtors. In general, the history of currency in this country shows that the doctrine that prices will respond promptly and proportionately to changes in the amount of the currency (or even, more strictly, of the money of account) , cannot be accepted without important limitations. ”

“ We will have the United States notes, the bank notes, and coin certificates, both gold and silver, together with the gold and silver itself, all in circulation. The actual amount of currency in circulation, I think, will be as large in specie times as now, and its equality and convertibility will rather increase than prevent the circulation of either. The depreciation of paper money is not necessarily caused solely by its excess, but by the uncertainty of its value and confidence in its redemption. ”

“ An examination of the assets side of the balance-sheet proves that most of it has been created by money lent to their customers by the banks, and that the cheque currency of to-day is, like the note currency of a former day, based on mutual indebtedness between the banks and their customers. ”

“ 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 together, 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 nation government or private individuals. ”

“ Different persons, doubtless, will devise different schemes of relief. One would be to suppress instantly the currency of all paper not issued under the authority of our own State or of the General Government; to interdict after a few months the circulation of all bills of five dollars and under; after a few months more, all of ten dollars and under; after other terms, those of twenty, fifty, and so on to one hundred dollars, which last, if any must be left in circulation, should be the lowest denomination. ”

“ The substitute for all kinds of bank notes as the money for the people should be a purely people’s money—a national currency whose basis of value would be the accumulated wealth of the country, and also its capacity for regularly increasing such wealth. Is there any reliance to be placed in a currency issued by an individual or a number of individuals through an incorporated bank, based upon his or their wealth, which is at all times liable to pass into the hands of other individuals? ”

“ The Sources of Currency Supply.—It is, then, clear that the larger part of the circulating medium of society is not money; that not all of the money that there is is bullion money; and that not even all of the bullion money need be ultimate money—redemption money of the highest rank. The sources of currency in society are various—some of it bullion, with a cost of production limit upon its supply, some of it government paper, substantially free of cost, some of it banking credit with certain peculiar and appropriate costs attending its issue. ”

“ How shall we get a currency? Throughout the history we have seen them struggling with the question: How shall we get enough money to do our business with? They have believed that somebody must provide a currency, that there would not be any, or would not be enough, if banks did not provide it. They have also believed that there was some great economy possible in the use of paper for money. ”

“ No second denomination is essential in any table. Any weight, for example, can be expressed in pounds and decimals of a pound, without reference to other units. The largest quantities can be so expressed, and the smallest. In currency we express a national debt reaching to billions in the selfsame unit which is used for small daily transactions, say in dollars or in francs. This shows the unlimited capacity of number for exact expression without any table of denominations at all. ”

“ Paper currency, it may be said, was authorized by that act, which is undoubtedly true; and it is also true that the bills or notes of the bank were made receivable in all payments to the United States, if the same were at the time payable on demand, but the act provided that the corporation should not refuse, under a heavy penalty, the payment in gold and silver, of any of its notes, bills, or obligations, nor of any moneys received upon deposit in the bank or in any of its offices of discount and deposit. ”

“ While we have no definite figures that justify a positive statement, it is generally estimated that about 90 per cent of all the business of the country is done with some form of credit instrument, checks, drafts, or bills of exchange.
Mr. Merchant: Then all forms of exchange, promissory notes, checks, drafts and bills of exchange are really mediums of exchange in precisely the same sense that gold coin and currency are mediums of exchange. ”

“ Although we have avoided the details of banking as much as possible, it cannot be overlooked, that the liability of the stock only, the unlimited power to issue notes, and the capacity of those notes to transfer property, constitute temptations, which human nature has never been a match for. The nation possessed a national currency ”

“ II.52 A second illustration is found in a debased currency. Suppose a government cuts each dollar in two, coining the halves into new "dollars"; and, recalling all paper notes, replaces them with double the original number—two new notes for each old one of the same denomination. In short, suppose money not only to be renamed, as in the first illustration, but also reissued; prices in the debased coinage will again be doubled just as in the first illustration. ”

“ The year 1775 witnessed the revival of paper money as a legal tender by authority of the provincial congress. The nature of this currency was akin to the old bills of credit which seemed to have bequeathed to the new currency the destiny of fate. The whole system of fiat money fell by its own weight in 1778. Mr. Jonathan Amory, the great Boston merchant, says, December 16, 1780: "Everybody asks silver or gold or paper, as they please, paper having been for a considerable time at 75 per cent; goods bring three for one." ”

“ They deduct always, upon whatever sum they advance, the legal interest till the bill shall become due. The payment of the bill, when it becomes due, replaces to the bank the value of what had been advanced, together with a clear profit of the interest. The banker, who advances to the merchant whose bill he discounts, not gold and silver, but his own promissory notes, has the advantage of being able to discount to a greater amount by the whole value of his promissory notes, which he finds, by experience, are commonly in circulation. ”

“ With growth and increasing prosperity, the revenue increased with such rapidity that the debt could be paid almost as fast as it became payable. The chief purposes for which the Bank of the United States had been founded in 1816 were to provide a sound and uniform paper currency convertible with specie, of uniform value throughout the Union, and to act as fiscal agent for the government, holding the revenue wherever collected and disbursing the expenditures wherever they were to be made. ”

“ This is done in a very convenient manner by lending their own promissory notes payable to bearer on demand—the borrower being willing to accept these as so much money, because the credit of the lender makes other people willingly receive them on the same footing, in purchases or other payments. These notes, therefore, perform all the functions of currency, and render an equivalent amount of money, which was previously in circulation, unnecessary. ”