3, 1863, another issue of one hundred and fifty millions was authorized, making the whole amount authorized four hundred and fifty millions, and contemplating a permanent circulation, until resumption of payment in coin, of four hundred millions of dollars." The same view was again expressed by the Chief Justice, in Veazie Bank v. Fenno, (8 Wallace, 537.)

issued.

Reduction, &c.

The amount in actual circulation, including demand notes, Highest amount reached its highest point about August 31, 1865, when it was $433,160,569. At the time of the proclamation of the President, April 2, 1866, declaring the rebellion ended in certain States therein named, it was $422,749,252. It was first reduced below four hundred millions of dollars September 1, 1866, near the time of the President's proclamation of August 20, 1866, declaring the insurrection at an end throughout the whole of the United States, when it was $399,603,592, and has never been so high since that date.

tion.

Congress passed the act of April 12, 1866, (chapter 39,) Limiting reducproviding "that of United States notes not more than ten millions of dollars may be retired and canceled within six months from the passage of this act, and thereafter not more than four millions of dollars in any one month," and the Secretary of the Treasury thereafter continued to reduce the amount in circulation.

ther reduction.

Afterwards Congress passed the following act, which Suspending fur became a law without the approval of the President on the 4th of February, 1868:

AN ACT TO SUSPEND FURTHER REDUCTION OF THE CURRENCY.

Be it enacted by the Senate and House of Representatives of the United States of America in Congress assembled, That from and after the passage of this act, the authority of the Secretary of the Treasury to make any reduction of the currency, by retiring or canceling United States notes, shall be, and is hereby, suspended; but nothing herein contained shall prevent the cancellation and destruction of mutilated United States notes, and the replacing the same with notes of the same character and amount.

At this time the amount outstanding was three hundred

The reserve of forty-four millions of notes.

Redemption of

notes in coin.

and fifty-six millions of dollars, and that is the limit below which the circulation of United States notes cannot be reduced without congressional enactment.

Between that amount and the four hundred millions authorized by law, the issue of the reserve of forty-four millions of dollars is left to the discretion of the Secretary of the Treasury, who has temporarily issued portions of it on the following and other occasions of pressing necessity:

During the month of September, 1869, about a million and a half of dollars of the three per cent. demand certificates came in suddenly for redemption, and were paid out of this reserve; but the amount so withdrawn was again restored thereto within two weeks;

In the great Chicago fire of 1871 about a million and a half of dollars in notes were burned and entirely destroyed in the office of the depositary at that place, and the Secretary increased the apparent circulation by that amount from the reserve, until, by the seventh section of the act of June 10, 1872, chapter 415, Congress authorized the accounting officers to allow a credit of the burned notes in the accounts of the depositary and in the books of the Department when the amount was restored to the re

serve.

The obligation of the Government to finally redeem all these notes in coin is expressed in the following language of the Chief Justice of the Supreme Court, in the case of The Bank v. The Supervisors, (7 Wallace, 29,) already referred to:

"Under the exigencies of the times it seems to have been thought inexpedient to attempt any provision for the redemption of the United States notes in coin.

"The law, therefore, directed that they should be made payable to bearer at the Treasury of the United States, but did not provide for payment on demand. The period of payment was left to be determined by the public exigencies.” ** "Every one of them expresses upon its face an engagement of the nation to pay the bearer a certain sum. The dollar note is an engagement to pay a dollar, and the dollar intended is the coined dollar of the United States; a certain quantity in weight and fineness of gold or silver, authenticated as such by the stamp of the Government. No other

dollars had before been recognized by the legislation of the national Government as lawful money."

of legal-tender

Until the year 1870 it was a mooted question whether Constitutionality the provisions of law making United States notes a legal provisions. tender for debts public and private were constitutional or not. Their constitutionality was sustained by the decisions of several State courts of different States; but, as to debts contracted before the passage of the laws, it was, in 1869, held otherwise by the Supreme Court of the United States, in Hepburn v. Griswold, (8 Wallace, 603.) At that time two vacancies existed on the bench of that court, and the decision was not regarded throughout the country as conclusive upon the point raised. The question was again, in 1870, brought before the full court, consisting of nine judges, in the two cases of Knox v. Lee and Parker v. Davis, (12 Wallace, 457,) heard together, was elaborately argued, and the constitutionality of the law fully sustained by a majority of the court-four judges dissenting.

Mr. Justice Strong, in delivering the opinion of the court, finally settled. says: "It will be seen that we hold the acts of Congress constitutional as applied to contracts made either before or after their passage. In so holding, we overrule so much of what was decided in Hepburn v. Griswold as ruled the acts unwarranted by the constitution so far as they apply to contracts made before their enactment. 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 this court shall have. These cases have been heard before a full court, and they have received our most careful consideration.

It may therefore be considered as finally settled, by the authoritative decision of the court of last resort, the Supreme Court of the United States, that the legal-tender acts, as they are commonly called, making United States notes a legal tender for debts, public and private, are constitutional and valid.

United States notes are not le

As to what are "debts" within the meaning of the legal- For what debts tender acts, and what debts may or may not be discharged by a tender of United States notes, there has been some con- gal tenders. flict of authorities in the different courts, the State courts

Different issues.

Exchangeable for bonds.

generally going further than the Supreme Court of the United States in sustaining the application of the law. The following principles may be taken as now well established:

United States notes are not a legal tender for taxes imposed under State authority, unless made so by the laws of the State, (Lane v. Oregon, 7 Wallace, 71;) nor in payment of a promissory note expressly payable by its terms in coin, (Vilhac v. Biven, 28 Cal., 410;) nor in discharge of a bond to pay a certain sum in gold and silver coin, (Bronson v. Rodes, 7 Wallace, 229;) nor in payment of the annual rent reserved by a lease made in 1791 in the words, "Fifteen pounds current money of Maryland, payable in English golden guineas, weighing five pennyweights and six grains, at thirty-five shillings each, and other gold and silver at their present established weight and rate, according to act of Assembly," (Butler v. Horwitz, 7 Wallace, 258;) nor in discharge of any contract made payable in specie or in commodities or obligations of any kind, but only for debts which are payable in money generally, (Trebilcock v. Wilson et ux., 12 Wallace, 687;) nor in satisfaction of an award against the United States, made payable in coin by the terms of the award, (Tyers v. United States, 5 Court of Claims Reports, 509.)

Under the three acts authorizing the issue of legal-tender notes, four different issues have been made. The first two differed from each other only slightly in the style and language of the notes. Those of the first were dated March 10, 1862, and bore on the face the words, "Act of February 25th, 1862." Those of the second were dated August 1, 1862, and bore on the face the words, "Act of July 11, 1862;" of this issue there were notes of the denominations of one dollar and two dollars, which were prohibited by the first, but allowed by the second act.

All these notes, of both issues, had printed upon the backs thereof the declaration contained in the laws authorizing them, that they were "exchangeable for United States six per cent. twenty-year bonds, redeemable at the pleasure of the United States after five years." This right to exchange notes for five-twenty bonds was, by the third section

of the act of March 3, 1863, chapter 73, limited to July 1, 1863, after which it ceased and determined. (See page 38.)

The next issue was under the act of 1863. The notes Next issue. were dated March 10, 1863, bore on the face thereof the words, "Act of March 3d, 1863," and on the back, like those of the former issues, the words, "This note is a legal tender for all debts public and private, except duties on imports and interest on the public debt," but omitted the declaration that they were exchangeable for five-twenty bonds. In other respects they did not much differ from the earlier printed notes.

The latest issue is that of the series of 1869, now most Latest issuo. in circulation. All others are being redeemed as rapidly as possible, and are never reissued when once paid into the Treasury. Each note of this series has upon its face the words, "March 3d, 1863," and, unlike those of any other issue, the words, "TREASURY NOTE," and, except the $1,000 note, "Series of 1869." They differ from the others also in general style, in the details of engraving, in the tinting, and otherwise, besides being printed on the distinctive paper designated by the Secretary of the Treasury, and made under the supervision of the Treasury Department.

2.

OLD DEMAND NOTES.

The act of July 17, 1861, chapter 5, authorized the issue Laws relating to of treasury notes, of denominations less than $50 and not less than $10, not bearing interest, payable on demand by the Assistant Treasurers of the United States at Philadelphia, New York, and Boston, not exceeding fifty millions in all. By section six the authority to issue and reissue these notes was limited, to cease and determine December 31, 1862. The amount to be issued was increased to sixty millions of dollars by the act of February 12, 1862. The act of August 5, 1861, permitted notes to be in denominations not less than $5, added the assistant treasury at Saint Louis and the depository at Cincinnati as places of redemption, and provided that the notes should be "receivable in