THE  PAST

13

issue  of  notes  payable  on  demand,  out  of  funds  then
on  hand,  and  in  the  treasury,  is  totally  different  in
principle  from  the  issue  of  notes  promising  to  pay
one  year  after  date,  intended  to  supply  a  present
deficit  in  the  treasury,  and  to  be  reimbursed  thereafter ­
  out  of  accruing  revenue,”  and  that  “  To  issue
notes  for  circulation,  payable  on  demand,  under
cover  of  the  authority  to  borrow  money  in  the  form
of  treasury  notes,  is  deemed  an  abuse  of  authority
which  ought  to  be  corrected.”  11
(C)  The  declaration  of  war  against  Mexico  on
May  13,  1846,  followed  close  upon  the  tariff  reduction ­
  of  that  year. 12  To  provide  for  the  anticipated
deficit,  Congress  authorized  an  issue  of  treasury
notes  and,  alternately  as  to  any  part,  an  issue  of  six
per  cent,  stock  —  the  amount  of  both  issues  not  to
exceed  $10,000,000.  The  notes  were  identical  with
the  1837-42  issues,  the  same  plates  even  being  used
in  printing  them.  They  were  emitted  in  denominations ­
  of  not  less  than  $50,  reissuable  within  the
term  of  maturity.  The  notes  might  be  tendered  in
direct  payment  of  such  public  creditors  as  would  receive ­
  them,  or  might  be  used  by  the  Treasury  in
borrowing  money  to  be  so  applied.
The  Treasury’s  needs  continuing,  the  amount  of
notes  originally  authorized  was  increased  six
months  later  by  $5,000,000,  and  a  second  issue  of
$23,000,000  of  one  or  two  year  notes  was  authorized, ­
  subject  to  reissue  and  receivable  in  payment ­
  of  all  public  dues.  The  notes  might  be  called
upon  sixty  days  notice  and  were  fundable  into  six
11  Knox,  pp.  54-61.  12  Knox,  chap.  vii.