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 there 
after 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 reduc 
tion 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 denomi 
nations 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 re 
ceive 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 au 
thorized, subject to reissue and receivable in pay 
ment 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.