¹ United States Constitution, Article I, Section 10.Google Scholar

² Act of Congress, 12 Statutes at Large, 592. (July 17, 1862.)Google Scholar

³ Dunscombe, Charles, The Present System of Banking Exposed, cited in U.S. Treasury, Report of the Comptroller of the Currency, (Washington, D.C., 1877), p. 31.Google Scholar

⁴ The following accounts give a comprehensive picture of the nineteenth century monetary system in the United States: Friedman, Milton and Schwartz, Anna Jacobson, A Monetary History of the United States, 1867–1960, NBER (Princeton, 1963),Google ScholarFriedman, and Schwartz, , Monetary Statistics of the United States, Estimates, Sources, Methods (New York, 1970),Google ScholarHammond, Bray, Banks and Politics in America from the Revolution to the Civil War (Princeton, 1957),Google ScholarHepburn, Alonzo Barton, A History of Currency in the United States, revised edition (New York, 1924).Google Scholar

⁵ For a more detailed analysis of this process, see Timberlake, Richard H. Jr, Origins of Central Banking in the United States, (Cambridge, 1978), pp. 126–31.Google Scholar The phenomenon of unaccounted money—its innovation, existence, and gradual disappearance—would not presuppose that other factors affecting the secular velocity of money were obsent. The “other factors” usually associated with the downward trend in velocity during the nineteenth century include: (1) The shift from agricultural production to manufacturing (rural to urban economy); (2) The increase in the proportion of output passing through markets; (3) The increase in real income over time, with money seen as a “superior” good; and (4) Sophistication in the use of money.

⁶ Hurst, James Willard, A Legal History of Money in the United States, 1774–1970 (Lincoln, Nebraska, 1973), p. 143.Google Scholar

⁷ Ibid., p. 141. The Briscoe case questioned whether a bank wholly owned by the state was not simply an agency of the state, and thus was issuing notes as prohibited by the Constitution. In arguing the negative to this question, Justice McLean stated that the notes were issued on the basis of credit the bank granted to its debtors, who were also note holders. In addition, the bank had enough specie reserves to redeem its obligations. The political power of the State of Kentucky thus was not an element in the bank's monetary functions.

⁸ Dunne, Gerald T., Monetary Decisions of the Supreme Court (New Brunswick, New Jersey, 1960), pp. 37–41. By implication, the money-creating powers that the Constitution forbade the states were also forbidden the federal government.Google Scholar

⁹ Hurst, Legal History, pp. 61 and 151. Hammond, Banks and Politics, pp. 605, 615–617.Google Scholar See also Rockoff, Hugh, The Free Banking Era: A Re-Examination (New York, 1975.)Google Scholar

¹⁰ Timberlake, Origins of Central Banking, pp. 120–23.Google Scholar

¹¹ Carothers, Neil, Fractional Money (New York, 1967; originally published in 1930.)Google Scholar

¹² Falkner, Roland P., “The Private Issue of Token Coins,” Political Science Quarterly, 16 (1901), 320–22.CrossRefGoogle Scholar

¹³ See the second head quotation of this article.Google Scholar

¹⁴ Carothers, Fractional Money, p. 343.Google Scholar

¹⁵ Friedman and Schwartz, Monetary Statistics, pp. 214–59.Google Scholar

¹⁶ Warburton, Clark, Depression, Inflation and Monetary Policy (Baltimore, 1966), p. 201, note f.Google Scholar See also Sylla, Richard, “Forgotten Men of Money: Private Bankers in Early U.S. History,” this JOURNAL, 36 (03 1976), 173–88; andGoogle ScholarDavis, Lance, “Comment on Paper by Sylla,” this JOURNAL, 36 (03 1976), 189–93.Google Scholar

¹⁷ Carothers, Fractional Money, pp. 193.Google Scholar

¹⁸ Falkner, “Private Issues of Token Coin,” p. 324.Google Scholar

¹⁹ Carothers, Fractional Money, pp. 95–97. No one was ever prosecuted under any of the laws forbidding the issue of private monies. The threat of litigation always stopped the practice.Google Scholar

²⁰ Dilliston, William, Bank Note Reporters and Counterfeit Detectors, (New York, 1949), p. 66.Google Scholar

²¹ Muscalus, John, Album of Georgia County and City Scrip (Bridgeport, Pennsylvania, 1975).Google Scholar All of Muscalus's works referred to here were published by the Historical Paper Money Research Institute, Bridgeport, Pennsylvania. Muscalus's numismatic works are unusual and extensive. Most importantly, they signal to students of monetary history the wealth of material on the use of various kinds of money that can be found in numismatic literature and archives.

²² Ibid., pp. 3–5.

²³ Muscalus, Parish Scrip Issued in Louisiana (1966).Google Scholar

²⁴ Muscalus, Illustrations of County Scrip Issued in Mississippi, North Carolina, Tennessee and Pennsylvania (1967); Muscalus, Pennsylvania Borough and City Scrip (1975).Google Scholar

²⁵ Ibid. As far as I can discover, the terms “scrip” and “shinplaster” have almost identical meanings. “Scrip” is defined as “paper money issued for temporary emergency use.” It is influenced by “scrip” and “subscription receipt, and issued as evidence of an obligation to pay.” The term “shinplaster” is “paper currency issued privately.” It is derived from “the comparison of such notes to small squares of brown paper soaked with vinegar or tobacco juice and used by poor people to treat sore legs.” See Webster's Third New International Dictionary (1976).Google Scholar

²⁶ Muscalus, The Extensive Use of Christ on Paper Money Circulated in the United States (1968).Google Scholar

²⁷ See Timberlake, Origins of Central Banking, pp. 93–99.Google Scholar

²⁸ U.S. Treasury Department, Report of the Comptroller of the Currency (Washington, 1872), pp. 29–30.Google Scholar

²⁹ Muscalus, Georgia Railroad Currency Comprehensively Illustrated (1975), pp. 18–21.Google Scholar

³⁰ Prices in 1873 were about 20 percent higher than they were in 1839.Google Scholar

³¹ Muscalus, Georgia Railroad Currency.Google Scholar

³² Muscalus, Transportation Currency: Bank Notes and Scrip Representative of Forty-five Varieties of Transportation Companies (1974).Google Scholar The existing notes found in collections cited here are not necessarily representative of all the notes originally issued. The smaller and fractional denominations received the most wear and tear from handling and thus had lesser chance of survival. Muscalus states at one point that “the actual number of different denominations and varieties of some denominations is much greater than can be assumed from just the titles shown for Mississippi, Georgia and Louisiana.” See Muscalus, Railroad Currency: Bank Notes and Scrip Representative of Over One Hundred Railroads, 1830s to 1900s (1971).Google Scholar

³³ Muscalus, John, Cook, Byron, and Montgomery, D. C. Jr, Mississippi Railroad Currency—Comprehensively Illustrated (1977).Google Scholar

³⁴ U. S. Treasury Department, Report of the Comptroller of the Currency (Washington, D.C., 1873), p. 45.Google Scholar

³⁵ Muscalus, Transportation Currency.Google Scholar

³⁶ Muscalus, The Capitol: Development Aspects and the Crawford Statue of Freedom on Paper Money (1971).Google Scholar

³⁷ Muscalus, Landseer's My Horse, Spaniel and Other Paintings on Paper Money (1967); Muscalus, St. John on Paper Money Issued in the United States (1968).Google Scholar

³⁸ Muscalus, Paper Money of the 6¼ and 12 ½ Cent Denominations (reprinted from The Nuministic Scrapbook Magazine, no date, but circa 1946).Google Scholar

³⁹ Muscalus, Kinds of Scrip Issued by School Districts in Financial Emergencies (1971).Google Scholar

⁴⁰ Freeman, Harley L., Florida Obsolete Notes and Scrip, Society of Paper Money Collectors (1967).Google Scholar

⁴¹ Erickson, Erling A., Banking in Frontier Iowa (Ames, Iowa, 1971), pp.52–53.Google Scholar

⁴² Ibid., p. 62.

⁴³ Ibid., pp. 70–71.

⁴⁴ Ibid., p. 71.

⁴⁵ Ibid., p. 72.

⁴⁶ A well-understood principle of law enforcement is that a law universally broken cannot be enforced, especially if the “crime” has no victims.Google Scholar

⁴⁷ For a thoroughgoing analysis of the velocity issue, see Schwartz, Anna J., “Monetary Trends in the United States and the United Kingdom,” this JOURNAL, 35 (03 1975), 138–45.Google Scholar