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Bills of credit

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Legal writers, as opposed to economic historians, incorrectly assume that the constitutional phrase "Bills of Credit" was simply a synonym for paper money, but it refers to only one, though a very important, type of paper currency. The Constitution explicitly prohibits the states from issuing bills
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to include the Contract Clause into the United States Constitution, so that the individual states could not issue bills of credit or "make any Thing, but gold and silver Coin a Tender in Payment of Debts." This restriction of bills of credit was extended to the Federal government, as the power to
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Article I, Section 10, Clause 1 prohibits the states from issuing Bills of Credit. The prohibition of states issuing Bills of Credit came in direct response to how states managed their financial policy during the era of the Articles of Confederation. While all states in theory recognized the
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Colonial decisions on the issuance of bills of credit were also frequently the subject of disputes between differing factions within the colony, and with royally appointed governors. Between 1690 and 1750 the matter was regularly debated in the
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Banks, rather than by all collectively. They were backed in a similar way to National Bank Notes, using U.S. bonds, but issued by Federal Reserve banks instead of by chartered National banks. Federal Reserve Bank Notes are no longer issued.
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as obligations of the United States. United States Notes are examples of Bills of Credit as they used to be inserted by the Treasury into circulation free of interest (production of these notes was halted in 1971 during termination of the
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British colonies in North America would issue bills of credit in order to deal with fiscal crises, although doing so without receiving them as revenue in like amounts would increase the money supply, resulting in price
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frequently issued bills of credit referred to as Continentals. Because of inflation they rapidly declined in value, leading to the unfavorable comparison that something was "not worth a Continental".
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in the United States. They had the same value as other kinds of notes of similar face value. Federal Reserve Bank Notes differ from Federal Reserve Notes in that they are backed by one of the twelve
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and debt. They were issued in denominations of $ 10, $ 20, $ 50, $ 100, $ 500 and $ 1000. While they were legal tender at face value, they were redeemable after three years with six percent annual
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as their official currency, in reality, nearly every state issued its own Bills of credit, which further devalued the Continental and led to its eventual collapse as a currency.
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The painful experience of the runaway inflation and collapse of the Continental dollar prompted the delegates to the
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issued bills of credit beginning in the 1710s, but successfully managed to avoid significant inflationary effects.
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or currency substitutes. Bills of credit are mentioned in Article One, Section 10, Clause One (also known as the
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issued by a government that represent a government's indebtedness to the holder. They are typically designed to
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at face value, and were issued in denominations of $ 10, $ 20, $ 50, $ 100, $ 500 and $ 1000.
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Federal Reserve Bank Notes, issued between 1915 and 1934, are bills of credit that are
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that the United States Treasury issued in 1879. They issued it only in the
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and coining money. States are only permitted to make gold and silver coin
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Paper Money and the Original Understanding of the Coinage Clause
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The United States Government has, at numerous times throughout
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Compound interest treasury notes were emissions of the
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Archived from 244:Interest-bearing notes are a grouping of 239: 152:Learn how and when to remove this message 2145:Scene at the Signing of the Constitution 303:The Refunding Certificate was a type of 298: 267: 225:United States Department of the Treasury 128:Relevant discussion may be found on the 2254:Maryland Tobacco Inspection Act of 1747 533:: Honest Money League of the Northwest. 416:U.S Constitution, Article 1, Section 10 59:Use in the American Colonies (pre-1775) 14: 2742: 520: 435:Friedberg, Arthur L.; S., Ira (2006). 425:U.S Constitution, Article 1, Section 8 218: 198:American Revolutionary War (1775–1783) 2174: 628: 2222:Monetary policy of the United States 2206:central banking in the United States 2124:Constitution Day and Citizenship Day 105: 74:and a drop in value relative to the 2504:New York Clearing House Association 2112:Rotunda for the Charters of Freedom 1639:Incorporation of the Bill of Rights 547:. United States Treasury Department 24: 2316:Article I of the U.S. Constitution 1203:Drafting and ratification timeline 948:District of Columbia Voting Rights 25: 2781: 656:Constitution of the United States 593: 278:United States Treasury Department 256:at five percent annually, were a 2410:Second Bank of the United States 1059:Convention to propose amendments 600: 437:Paper Money of the United States 264:Compound interest treasury notes 110: 2568:Compound interest treasury note 2353:First Bank of the United States 620:, by Westel Woodbury Willoughby 559: 525:The Contraction of the Currency 379:"Definition of Bills of Credit" 326: 213: 192: 2755:Banknotes of the United States 2292:Continental currency banknotes 1674:Separation of church and state 537: 514: 482: 453: 428: 419: 410: 401: 371: 13: 1: 2660:Specie Payment Resumption Act 2405:Banking in the Jacksonian Era 1178:Virginia Ratifying Convention 616:"Bills of Credit" section of 365: 84:Province of Massachusetts Bay 2722:National Monetary Commission 2139:National Constitution Center 1937:Daniel of St. Thomas Jenifer 1236:Assemble and Petition Clause 291:In the absence of efficient 7: 2698:Sherman Silver Purchase Act 2430:New York Safety Fund System 2304:U.S. Finance Superintendent 2280:Second Continental Congress 2010:Charles Cotesworth Pinckney 1064:State ratifying conventions 1001:Equal Opportunity to Govern 996:Electoral College abolition 923:Congressional Apportionment 521:Backus, Charles K. (1878). 10: 2786: 579: 349:Confusion with paper money 332:Federal Reserve Bank Notes 288:compounded semi-annually. 204:American Revolutionary War 62: 53: 48:United States Constitution 2606:2nd Industrial Revolution 2604: 2596:Public Credit Act of 1869 2482:Independent U.S. Treasury 2452: 2270:1st Industrial Revolution 2268: 2230: 2217: 2097: 2069: 2049: 2028: 1997: 1971: 1950: 1924: 1888: 1837: 1806: 1790: 1769: 1748: 1727: 1711: 1702: 1581: 1463:Privileges and Immunities 1276:Congressional enforcement 1211: 1198:Rhode Island ratification 1089:Articles of Confederation 1076: 1054: 1031:Parental Rights amendment 956: 913: 838: 810: 789: 726: 722: 713: 662: 589:. New York: Norton. 1984. 174:Constitutional Convention 30:are documents similar to 2521:Legal Tender Act of 1862 2334:U.S. Treasury Department 1694:Unitary executive theory 1468:Privileges or Immunities 1183:New York Circular Letter 1173:Massachusetts Compromise 315:denomination, depicting 181:Usage throughout history 2636:National Gold Bank Note 2591:Contraction Act of 1866 2340:U.S. Treasury Secretary 1614:Dormant Commerce Clause 1458:Presidential succession 1193:Fayetteville Convention 1188:Hillsborough Convention 1124:Three-fifths Compromise 1104:Philadelphia Convention 1094:Mount Vernon Conference 981:Campaign finance reform 573:, vol. 31, pp. 1044–45 65:Early American currency 2347:U.S. Treasury security 2248:Tobacco Inspection Act 1777:William Samuel Johnson 1649:Nondelegation doctrine 1221:Admission to the Union 1168:Anti-Federalist Papers 1119:Connecticut Compromise 273: 240:Interest-bearing notes 96:Province of New Jersey 2691:Juilliard v. Greenman 2684:Refunding Certificate 2550:National banks system 2544:Interest bearing note 2423:McCulloch v. Maryland 2310:Bank of North America 2286:U.S. dollar banknotes 2232:Commercial Revolution 1984:Richard Dobbs Spaight 1453:Presidential Electors 1428:Original Jurisdiction 1368:Full Faith and Credit 1241:Assistance of Counsel 1162:The Federalist Papers 991:Crittenden Compromise 587:New Jersey: A History 545:"Legal Tender Status" 299:Refunding Certificate 271: 2716:Aldrich–Vreeland Act 2631:Currency Act of 1870 2298:Bank of Pennsylvania 2153:A More Perfect Union 2129:Constitution Gardens 2050:Convention Secretary 1712:Convention President 1684:Symmetric federalism 1679:Separation of powers 1413:Necessary and Proper 1408:Natural-born citizen 1353:Freedom of the Press 1291:Copyright and Patent 1281:Contingent Elections 1099:Annapolis Convention 565:Natelson, Robert G. 234:Bretton Woods system 208:Continental Congress 167:American Continental 121:factual accuracy is 2728:Federal Reserve Act 2650:Coinage Act of 1873 2624:Hepburn v. 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Note 2397: 2394: 2391: 2388: 2385: 2383: 2380: 2377: 2374: 2371: 2368: 2365: 2362: 2360: 2357: 2354: 2351: 2348: 2345: 2341: 2337: 2336: 2335: 2332: 2328: 2325: 2323: 2319: 2318: 2317: 2314: 2311: 2308: 2305: 2302: 2299: 2296: 2293: 2290: 2287: 2284: 2281: 2278: 2277: 2275: 2271: 2267: 2260: 2259:Currency Acts 2257: 2255: 2252: 2249: 2246: 2243: 2240: 2239: 2237: 2233: 2229: 2223: 2220: 2219: 2216: 2211: 2207: 2203: 2196: 2191: 2189: 2184: 2182: 2177: 2176: 2173: 2161: 2158: 2155: 2154: 2150: 2147: 2146: 2142: 2140: 2137: 2135: 2132: 2130: 2127: 2125: 2122: 2120: 2117: 2113: 2110: 2109: 2108: 2105: 2104: 2102: 2096: 2090: 2087: 2085: 2084:Jacob Shallus 2082: 2080: 2079: 2075: 2074: 2072: 2068: 2058: 2055: 2054: 2052: 2048: 2042: 2039: 2037: 2034: 2033: 2031: 2027: 2021: 2020:Pierce Butler 2018: 2016: 2013: 2011: 2008: 2006: 2005:John Rutledge 2003: 2002: 2000: 1996: 1990: 1987: 1985: 1982: 1980: 1977: 1976: 1974: 1970: 1964: 1963:James Madison 1961: 1959: 1956: 1955: 1953: 1949: 1943: 1940: 1938: 1935: 1933: 1932:James McHenry 1930: 1929: 1927: 1923: 1917: 1914: 1912: 1909: 1907: 1904: 1902: 1899: 1897: 1894: 1893: 1891: 1887: 1881: 1878: 1876: 1873: 1871: 1868: 1866: 1863: 1861: 1860:George Clymer 1858: 1856: 1855:Robert Morris 1853: 1851: 1848: 1846: 1843: 1842: 1840: 1836: 1830: 1827: 1825: 1822: 1820: 1817: 1815: 1812: 1811: 1809: 1805: 1799: 1796: 1795: 1793: 1789: 1783: 1782:Roger Sherman 1780: 1778: 1775: 1774: 1772: 1768: 1762: 1759: 1757: 1754: 1753: 1751: 1749:Massachusetts 1747: 1741: 1738: 1736: 1733: 1732: 1730: 1728:New Hampshire 1726: 1720: 1717: 1716: 1714: 1710: 1707: 1705: 1701: 1695: 1692: 1690: 1687: 1685: 1682: 1680: 1677: 1675: 1672: 1670: 1667: 1665: 1662: 1660: 1657: 1655: 1654:Plenary power 1652: 1650: 1647: 1645: 1642: 1640: 1637: 1635: 1632: 1630: 1627: 1625: 1624:Equal footing 1622: 1620: 1617: 1615: 1612: 1610: 1607: 1605: 1602: 1600: 1597: 1595: 1592: 1590: 1587: 1586: 1584: 1580: 1574: 1571: 1569: 1566: 1563: 1559: 1555: 1551: 1548: 1546: 1545:Trial by Jury 1543: 1541: 1538: 1535: 1531: 1529: 1526: 1524: 1521: 1519: 1516: 1514: 1511: 1509: 1506: 1504: 1501: 1499: 1496: 1494: 1491: 1489: 1486: 1484: 1481: 1479: 1476: 1474: 1471: 1469: 1466: 1464: 1461: 1459: 1456: 1454: 1451: 1449: 1446: 1444: 1441: 1439: 1436: 1434: 1431: 1429: 1426: 1424: 1421: 1419: 1416: 1414: 1411: 1409: 1406: 1404: 1401: 1399: 1398:Ineligibility 1396: 1394: 1393:Import-Export 1391: 1389: 1386: 1384: 1381: 1379: 1376: 1374: 1371: 1369: 1366: 1364: 1361: 1359: 1356: 1354: 1351: 1349: 1348:Free Exercise 1346: 1344: 1341: 1339: 1338: 1337:Ex Post Facto 1334: 1332: 1329: 1327: 1324: 1322: 1321:Establishment 1319: 1317: 1314: 1312: 1309: 1307: 1304: 1302: 1299: 1297: 1294: 1292: 1289: 1287: 1284: 1282: 1279: 1277: 1274: 1272: 1271:Confrontation 1269: 1267: 1264: 1262: 1259: 1257: 1254: 1252: 1249: 1247: 1244: 1242: 1239: 1237: 1234: 1232: 1229: 1227: 1224: 1222: 1219: 1218: 1216: 1214: 1210: 1204: 1201: 1199: 1196: 1194: 1191: 1189: 1186: 1184: 1181: 1179: 1176: 1174: 1171: 1169: 1166: 1164: 1163: 1159: 1155: 1154:Syng inkstand 1152: 1150: 1147: 1145: 1142: 1140: 1137: 1135: 1132: 1130: 1127: 1125: 1122: 1120: 1117: 1115: 1112: 1110: 1109:Virginia Plan 1107: 1106: 1105: 1102: 1100: 1097: 1095: 1092: 1090: 1087: 1085: 1082: 1081: 1079: 1075: 1065: 1062: 1060: 1057: 1056: 1053: 1047: 1044: 1042: 1039: 1037: 1036:School Prayer 1034: 1032: 1029: 1027: 1024: 1022: 1019: 1017: 1014: 1012: 1009: 1007: 1004: 1002: 999: 997: 994: 992: 989: 987: 984: 982: 979: 977: 974: 972: 969: 967: 964: 963: 961: 959: 955: 949: 946: 944: 941: 939: 936: 934: 931: 929: 926: 924: 921: 920: 918: 916: 912: 902: 899: 897: 894: 892: 889: 887: 884: 882: 879: 877: 874: 872: 869: 867: 864: 862: 859: 857: 854: 852: 849: 847: 844: 843: 841: 837: 831: 828: 826: 823: 821: 818: 817: 815: 813: 809: 803: 800: 798: 795: 794: 792: 788: 782: 779: 777: 774: 772: 769: 767: 764: 762: 759: 757: 754: 752: 749: 747: 744: 742: 739: 737: 734: 733: 731: 729: 725: 721: 718: 716: 712: 706: 703: 701: 698: 696: 693: 691: 688: 686: 683: 681: 678: 676: 673: 671: 668: 667: 665: 661: 657: 650: 645: 643: 638: 636: 631: 630: 627: 621: 619: 614: 613: 609: 598: 588: 584: 583: 572: 568: 562: 546: 540: 532: 528: 527: 524: 517: 508: 506:0-931960-66-5 502: 499:: BNR Press. 498: 494: 491: 485: 477: 475:0-931960-66-5 471: 468:: BNR Press. 467: 463: 456: 448: 446:0-87184-518-0 442: 438: 431: 422: 413: 404: 388: 384: 380: 374: 370: 363: 361: 357: 346: 343: 339: 324: 322: 318: 314: 310: 306: 296: 294: 289: 287: 283: 279: 270: 261: 259: 255: 251: 247: 237: 235: 230: 226: 223:In 1862, the 211: 209: 205: 190: 188: 178: 175: 170: 168: 156: 153: 145: 135: 131: 125: 124: 117: 108: 107: 99: 97: 93: 89: 85: 79: 77: 73: 66: 51: 49: 45: 41: 37: 33: 29: 19: 2689: 2641: 2622: 2615: 2540:(1863; 1864) 2464:Free banking 2421: 2416:Suffolk Bank 2322:Section VIII 2261:(1751; 1764) 2241: 2151: 2143: 2076: 1875:James Wilson 1838:Pennsylvania 1735:John Langdon 1493:Speedy Trial 1335: 1226:Appointments 1160: 943:Equal Rights 839:20th century 617: 608:Money portal 586: 570: 561: 549:. Retrieved 539: 526: 523: 516: 493: 490: 484: 461: 455: 436: 430: 421: 412: 403: 391:. Retrieved 387:the original 382: 373: 360:legal tender 352: 338:legal tender 335: 327:20th century 302: 290: 275: 258:legal tender 243: 222: 214:19th century 201: 193:18th century 184: 171: 163: 148: 139: 120: 80: 68: 27: 26: 2724:(1909–1912) 2706:(1890–1891) 2686:(1879–1907) 2680:(1878–1964) 2668:(1875–1878) 2655:Free silver 2643:Knox v. Lee 2638:(1870–1875) 2609:(1870–1914) 2587:(1865–1889) 2581:(1864–1873) 2570:(1863–1864) 2564:(1863–1933) 2552:(1863–1913) 2546:(1863–1865) 2534:(1862–1876) 2528:(1862–1971) 2517:(1861–1862) 2515:Demand Note 2506:(1853–1863) 2495:(1851–1873) 2484:(1846–1913) 2478:(1842–1865) 2472:(1836–1865) 2466:(1836–1865) 2457:(1840–1870) 2438:, 1832–1836 2432:, 1829–1842 2418:, 1818–1858 2412:, 1816–1836 2401:(1812–1913) 2395:(1793–1857) 2389:(1793–1857) 2378:(1792–1873) 2366:(1792–1873) 2355:(1791–1811) 2338:1789–1913; 2320:1787–1788; 2312:(1781–1791) 2306:(1781–1785) 2300:(1780–1781) 2294:(1775–1779) 2282:(1776–1780) 2273:(1760–1840) 2235:(1607–1760) 2036:William Few 1916:Jacob Broom 1896:George Read 1770:Connecticut 1704:Signatories 1554:Legislative 1528:Territorial 1448:Presentment 1433:Origination 1388:Impeachment 1343:Extradition 1311:Engagements 1301:Due Process 1251:Citizenship 938:Child Labor 551:3 September 393:16 November 282:paper money 250:US Treasury 202:During the 2744:Categories 2393:Large cent 2148:(painting) 2100:and legacy 1958:John Blair 1807:New Jersey 1761:Rufus King 1659:Preemption 1573:War Powers 1508:Suspension 1326:Exceptions 1016:Human Life 915:Unratified 715:Amendments 366:References 2387:Half cent 2376:Half dime 2327:Section X 1669:Saxbe fix 1558:Executive 1513:Take Care 1503:Supremacy 1378:Guarantee 1306:Elections 1077:Formation 790:1795–1804 307:-bearing 246:Civil War 142:June 2024 130:talk page 72:inflation 46:) of the 36:circulate 32:banknotes 2750:Currency 2436:Bank War 2210:pre–1913 1951:Virginia 1925:Maryland 1889:Delaware 1791:New York 1568:Vicinage 1562:Judicial 1286:Contract 1256:Commerce 1144:Printing 958:Proposed 670:Preamble 663:Articles 309:banknote 305:interest 286:interest 254:interest 123:disputed 40:currency 2372:(1792–) 2288:(1775–) 2098:Display 2070:Related 2029:Georgia 1550:Vesting 1518:Takings 1403:Militia 1261:Compact 1213:Clauses 1139:Signing 1084:History 580:Sources 94:. The 54:History 2730:(1913) 2718:(1908) 2712:(1900) 2700:(1890) 2694:(1884) 2674:(1878) 2662:(1875) 2646:(1871) 2627:(1870) 2426:, 1819 2250:(1730) 2156:(film) 1540:Treaty 1443:Postal 1438:Pardon 503:  472:  443:  356:credit 2204:and 553:2015 501:ISBN 470:ISBN 441:ISBN 395:2017 313:$ 10 206:the 88:coin 705:VII 685:III 354:of 38:as 2746:: 1560:/ 1556:/ 901:27 896:26 891:25 886:24 881:23 876:22 871:21 866:20 861:19 856:18 851:17 846:16 830:15 825:14 820:13 802:12 797:11 781:10 700:VI 690:IV 680:II 569:, 529:. 381:. 362:. 2212:) 2208:( 2194:e 2187:t 2180:v 1564:) 1552:( 1536:) 776:9 771:8 766:7 761:6 756:5 751:4 746:3 741:2 736:1 695:V 675:I 648:e 641:t 634:v 555:. 511:. 509:. 478:. 449:. 397:. 155:) 149:( 144:) 140:( 136:. 126:. 20:)

Index

Bill of credit
banknotes
circulate
currency
Contract Clause
United States Constitution
Early American currency
inflation
pound sterling
Province of Massachusetts Bay
coin
Siege of Louisbourg
Province of New Jersey
disputed
talk page
reliably sourced
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American Continental
Constitutional Convention
American History
American Revolutionary War
Continental Congress
United States Department of the Treasury
United States Notes
Bretton Woods system
Civil War
US Treasury
interest
legal tender

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