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The Legal Tender Qualities of Money
cinch
Posts: 127 ✭✭✭
Going through an old magazine for Rhode Island Hospital Trust Bank from January 1922, I came across this interesting article that lays out how different forms of currency are defined as "legal tender."
My website: RICurrency.com
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Interesting! Our money sure was a lot more complicated back then (but more artistic, too). At least it was a decimal system!
partially correct....number 12 should include fractional currency....still legal tender!
Fascinating read, thanks for sharing @cinch.
Several mention Duty on Imports and one even mentions Interest on the Public Debt, we’re these an everyday thing for citizens back then ?
The exceptions for import duties and interest on the public debt for the use of legal tender notes date back to their introduction during the Civil War. The legal tender notes helped the Union pay most of its bills, while still conserving gold for obligations that had to be paid in that medium. Import duties were the primary revenue source for the federal government, prior to the Civil War, so the government wanted to make sure that filled its coffers with specie, and not depreciated paper. Forbidding the use of legal tender notes to pay interest on the public debt was a concession to holders of government bonds, the support of which was important to finance the war. The restrictions remained in place until FDR's presidency, by which time the withdrawal of gold as circulating money, and the widespread acceptance of paper money, had rendered them unnecessary.
Thanks for the explanation @TitusFlavius
Treasury notes issued prior to the 1890 issue (back to 1812) were also legal tender but I think that the list is limited to notes then in circulation. I'm surprised that the 1890 and 1891 notes were still in circulation. Probably not many left by 1922.
A very interesting bit of background. Reminds us of how many different note issues were circulating back then.