Thursday, July 30, 2015

Earliest Currency

Wampum Belt given Wm Penn in 1682
Isaac B. Werner lived on the prairie for several years without incurring indebtedness.  He swapped labor with neighbors and grew crops for his own consumption, as well as selling and bartering his produce.  However, he needed a horse of his own in order to be able to break enough sod to plant sufficient acreage in crops to prosper as a farmer.  He borrowed money for the first time to buy his horse Dolly  (See "Isaac's Dolly Varden," 12-28-2012 in the blog archives), with extra cash to buy implements.  Thereafter, cash received and paid became the controlling issues of his life, finding sufficient cash to pay interest on his notes but rarely having anything to apply to repayment of principle.

Massachusetts Colonial Currency
Because of their relationship with Great Britain, the colonies designated their money using British terms--pounds, shillings, pence; however, the value assigned to those terms varied from one colony to another.

Apart from the traditional measures of exchange, there was also the use of commodities, not only crops like tobacco and skins such as beaver pelts but also wampum.  The image above depicts the belt of Wampum given to William Penn by the Indians.  Wampum beads were made of various things, but the rarity of the material contributed to the determination of value.  Often sea shells were the material used, found even in the wampum of inland tribes and obviously of greater value than such things as bones and seeds available in their region.

Colonial bills of credit were not backed by gold or silver.  Rather, they were simply promises to pay, and when colonial governments had nothing with which to pay their debts the bills lost value or became worthless.

South Carolina Colonial Currency
During the Revolutionary War, the colonies were expected to help pay for the costs of the army, but most regarded the allocated amount as a "request" rather than an obligation and did not submit full or even partial payments.  The colonial government borrowed money that they had little or no way to repay, offering small likelihood of repayment of the bills of credit they printed.  They turned to the wealthy Robert Morris of Philadelphia, who used his own money to help resolve the indebtedness of the fledgling nation.  He is a hero of the Revolutionary period that few Americans know anything about.  (See "More Money Comments," 7-23-2015 to view a bill with the image of Robert Morris.)

Continental Currency
Benjamin Franklin printed 1779
Then, as now, counterfeiting was a security issue, and the British further weakened the Continental government's credit by counterfeiting their bills in massive quantities.  Morris also paid the counterfeited bills if presented to him for payment, as leaving them in circulation weakened the Continental government just as much as if they were authentic.

After the US Constitution was ratified, a coinage system was established with the passage of the "Mint Act" in 1792.  Paper money was not issued until 1861, but silver certificates and Treasury notes were issued prior to that time,

National Bank Note from Emporia, KS
Between 1793 and 1861 private banks could be granted state charters which allowed them to print and circulate their own money, and approximately 1,600 banks did so.  It is estimated that 7,000 varieties of "state bank notes" were put into circulation.

From 1863 to 1929 the federal government allowed private banks to print National bank notes on paper authorized by the US government, and although thousands of banks issued these notes, the same basic design was used by all of the banks.  The image of the National Bank Note at right was printed by the First National Bank of Emporia, KS.

In 1913 the Federal Reserve System was established and Federal Reserve Bank notes were issued, and for a time both the national bank notes and the Federal Reserve bank notes were issued.  Today, only Federal Reserve currency is produced.

Once Isaac B. Werner went into debt to buy Dolly, more loans followed in the 1880s and early 1890s.  The money was quickly spent on machinery, seed, horses, and interest.  In fact, Isaac was only able to pay interest most of the time, renewing his notes at ever increasing interest rates.  This was the period during which private banks could print "national bank notes."  Isaac did most of his banking in St. John, but it is uncertain exactly what currency he received from the banks when his loans were funded. 

Thursday, July 23, 2015

More Money Comments

President Wilson appeared on the $100,000 gold certificate
Following my posting of the first two blogs about American currency, a reader commented that she saw no need to alter the image on the current $10 bill, and she challenged me to provide information about the expense of changing existing currency.  (As an aside, it has been interesting to me that the comments opposing the proposed changes to the $10 bill have come from women, and none of the comments have been particularly supportive of the need to put a woman's image on our currency.)  Because of the challenge to provide information about the cost of changing the image, I have done further research.

At I learned that in 1996 the Bureau of Engraving and Printing changed our currency to make counterfeiting more difficult by imbedding polyester thread and microprinting around the portraits.  This was done to defeat the use of copying machines by counterfeiters.  That website predicted that suggestions to change the images on paper currency were unlikely to be implemented because of the expense of "several hundred thousand dollars for the necessary additional printing and processing equipment."  Further, there would be costs of preparing new printing plates for both sides of the bills.  Yet, it seems that changing the $10 bill is under consideration. 
Portraits are not the only images to have appeared.
It is the Secretary of the Treasury that usually selects the designs, unless specified by an Act of Congress, that decision being made with the advice of the Bureau of Engraving and Printing and the Commission of Fine Arts.  Historically, the older design in circulation has not been recalled when new currency is issued, so if the image of Alexander Hamilton is replaced with a woman's image on the new $10 bills, Hamilton's image will continue in circulation on the old bills for years to come.

Except for the modification to protect against counterfeiting, the fronts and backs of our current currency have remained basically the same since 1928. The law prevents living persons from appearing on government securities, and the tradition has been to depict noteworthy persons and events, generally political figures.  Today those are Washington ($1), Jefferson ($2), Lincoln ($5), Hamilton ($10) Jackson ($20), Grant ($50), and Franklin ($100).  In 1969 production officially ended on the $500, $1,000, $5,000, $10,000, and $100,000 bills, on which McKinley, Cleveland, Madison, Chase, and Wilson appeared (listed in ascending order); however, printing of high denomination bills ended at the close of 1945.  

Symbolic images of women have appeared
The termination of printing high denomination bills was motivated by such considerations as risks from counterfeiting, and use in the  illegal drug trade and money laundering, but electronic money transactions by banks and the Federal Government also made such large denominations unnecessary.  As you might suspect, rarity has made these bills very collectible, and valuable.  Gamblers in Las Vegas, Nevada once saw a display of one hundred $10,000 bills at Binion's Horseshoe Casino, but the display was eventually dismantled and the bills were sold to collectors.  

Robert Morris, Revolutionary War financier
Some high denomination notes were redeemed, some are in institutional collections, and some are in private collections.  By executive order of President Richard Nixon, the Federal Reserve began taking high denomination bills out of circulation in 1969, and four decades later only 336 $10,000 bills, 342 $5,000 bills, and 165,372 $1,000 were known to exist.

As Treasury Secretary Jacob J. Lew considers whether to replace the image of Hamilton on the $10 bill with the image of a woman, he must evaluate breaking with precedent, expending a significant amount more than would be spent without the change, and satisfying one group while angering another.     

(Robert Morris is a little known hero of the Revolution as a result of using his own wealth to repay debts incurred by the fledgling government.  Lady Liberty, as well as female depictions of Justice and Victory have appeared.  Treasury Secretary William Marcy appears with Lady Liberty above.)

Thursday, July 16, 2015

Survey Results for $10 Bill Image

Alexander Hamilton
I have just finished "The Quartet" by Joseph J. Ellis, in which he describes his conclusion that four men were key to making the transition from a confederation to a nation in the drafting and passage of our American Constitution.  Those four men were George Washington, Alexander Hamilton, John Jay, and James Madison.  While the analysis by Ellis of the importance of those four may not be broadly shared by all historians, he certainly made a strong case for the key roles they played.

Last week's blog did not bring much of an outcry to secure Hamilton's place on the $10 bill.  One follower did write:  "What is wrong with the ten the way it is?  ...people need to forget changing the gender on the money.  How many people actually use paper money?"

Another follower suggested adding a $25 bill to accommodate the call for a woman's image on our paper currency.  A couple of people suggested using Lady Liberty.

In fact, if there is a great outcry to remove Hamilton and put a woman on the $10 bill, it was not reflected in replies from blog followers.  The follower who asked why any change was needed did suggest Sacagawea might be an appropriate choice if the change to a woman's image were necessary.  The detail at left of Sacagawea with Lewis and Clark is from a painting by Edgar Samuel Paxson located in the Montana State Capitol.   I did not receive any chorus of supporters demanding that Hamilton remain on the bill, nor did names of female  replacements flood the comments on facebook or this blog. 

My survey indicated that people who read my blog really don't give much attention to the faces that appear on our paper currency  Perhaps if I had included the cost involved in making a change, I might have received more responses!

Sunday, July 12, 2015

For my International Followers

Federer in 2015 Men's Finals
Here's something especially for all my international followers, for tennis is certainly an international sport.  On this lazy Sunday morning we are watching the Men's Finals 2015 at Wimbeldon.  The outcome is still undecided, and I'm not sure which man our cat is cheering for, but he definitely likes the volleys.  

Yesterday we watched Serena Williams win a very exciting Women's Final Match, but Remington the cat seems to be more interested in the Men's match...perhaps because he is a tom cat.

Bravo to the outstanding matches this year!

Dvokovic in 2015 Men's Finals

Thursday, July 9, 2015

You Can't Please Everybody!

Did you realize there is no woman pictured on U.S. paper currency?  If you haven't realized that, others have, and for the first time in more than a century plans are underway to select a woman to appear on the $10 bill, the next denomation scheduled for an update.  While some are pleased to see that a woman will finally be recognized, not everyone is happy.  In fact, former Federal Reserve Chairman Ben S. Bernanke is among those "appalled" that the founding father currently pictured on the $10 bill is being replaced.

Do you know whose image appears on that bill?  The answer is Alexander Hamilton, whose portrait at right was done by well-known artist John Trumbull.  Do you know the historic role Hamilton played?

This country will never be prosperous again until Silver is reinstated...
Hamilton was an active participant among America's Founding Fathers, but probably his most important role was serving as the 1st U.S. Treasury Secretary.  Bernanke supports leaving Hamilton on the bill because in his opinion, Hamilton was "...without doubt, the best and most foresighted economic policymaker in U.S. history."

Hamilton was an often-cited hero of the Progressive Movement in urging a return to bi-metalism.  For a discussion of that movement, visit "The People's Party Urged Silver," at 7-15-2013 in the blog archives.  In Hamilton's role as the Treasury Secretary, he submitted to the House of Representatives in 1791 his Report on the Establishment of a Mint.  In forming his ideas, he looked to European economists, as well as other founding fathers, such as Thomas Jefferson and New Yorker and Pennsylvania representative to the Continental Congress, Goueurnor Morris.  Although he is said to have favored the single gold standard, what he actually initiated was a bimetallic currency, and the initial bimetallism established under Hamilton is what made him a hero to the Progressives.  The caption under the above political cartoon from the 1890s reads "This country will never be prosperous again until Silver is reinstated to full and unlimited coinage."  
Here is my challenge to you:  First, let me know with your comments (here, on face book, or by e-mail) how you feel about replacing Hamilton on the $10 bill.  Second, if you favor the idea of a woman on the $10 bill, (or on a different choice of US paper currency), what woman from our American history would you prefer.  I hope some of you will participate in this will be fun to see how you feel! 

Thursday, July 2, 2015

Cottonwood Forest

The old cottonwood trees are dying
Isaac B Werner had catalpa trees (See "Isaac's Catalpa Trees," 5-30-2012 in the blog archives), Osage orange trees (See "Planting Osage Orange Trees," 3-15-2012), and maples, but the greatest number of trees were cottonwood trees that he planted with cuttings (See "Isaac Plants Cottonwood Trees," 12-2-2011).  Cottonwood trees were abundant in Isaac's community, but today the old favorites are dying.  I love cottonwood trees--the sounds of rustling taffeta as the breeze ruffles their leaves, the golden leaves against the bright blue of an autumn sky.  And, unlike most people, I also love the springtime snow fall of the cottonwood seeds drifting gently by.  Of course, that cottony fluff also clogs air conditioner compressors and collects in messy drifts to gather dust.  For me, the magic of the falling cotton is worth the resulting nuisance.

Cottonwood seeds on ground
Seeds still on branch
As our cottonwood trees at the farm age and fall to the ground (See "Threats to Timber Claims," 2-19-2015), we miss having them and have wanted to replant some.  However, all that we could find available from commercial tree nurseries were "cottonless" cottonwoods.  I considered the idea of trying to grow cottonwood trees from cuttings like Isaac did, but any tender cuttings on our old trees were too high for me to reach.

Our 'forest' of cottonwood seedlings
Spring of 2015 provided many successive days of rain at about the time the cottonwood seeds were falling, and it was the perfect environment for the seeds to collect along the edges of standing water, germinate, and produce seedlings. 

I noticed some little seedlings along the edges of the standing water, but never having noticed cottonwood seedlings before, I wasn't sure what the seedlings were.  I left them to grow so I could get a better look at their leaves.  For a time I was the only one who thought they were cottonwood seedlings, and even I wasn't sure.  Eventually the leaves began to take the recognizable shape and I was no longer the butt of jokes.  We had a wealth of seedlings from which to transplant potential trees.

I have now lifted a dozen of the seedlings into pots to see if 
Cottonwood seedlings in pots
they can survive being transplanted.  If they thrive, we will find a place for them, and the farm will once again have young cottonwood trees growing.  I'm sure most of our friends think we are a little crazy, planting what many have come to consider a trash tree, and what is worse, choosing trees that will produce the nuisance of cotton every spring.  But, judging from the number of followers of my blog who have expressed their affection for cottonwood trees, at least some of you will understand and will be cheering for our success in propagating these trees so popular with the early settlers of the prairie!