i6 
WAR BORROWING 
nomination from $100 to $20 resulted in a com 
promise at $50. 
A month later the act of March 2, 1861 — the 
first of the emergency revenue measures 17 enacted 
on the eve of a great war to supply a depleted 
treasury — authorized the President of the United 
States to float a $10,000,000 loan or, if satisfactory 
terms were not obtainable, to issue treasury notes in 
lieu thereof, and also to substitute treasury notes 
for the whole or any part of the money which he 
was authorized to borrow by previous acts. 18 Such 
notes were to bear six per cent, interest, to be 
emitted in denominations of not less than $50 and 
to mature in two years unless called for earlier 
redemption. Notes were actually issued to the 
amount of $35,364,450, of which $22,468,100 was 
redeemable in two years and $12,896,350 sixty days 
after date. 
With the administration of Secretary Chase the 
older form of short-term obligations which had 
proved so ineffective in the first year of the war was 
abandoned for two related expedients: (a) inter 
est bearing obligations of somewhat longer term 
as the three-years seven and three-tenths per cent, 
notes, and (b) non-interest bearing demand notes. 19 
Both of these measures underwent development. 
The longer term notes became, with improvement in 
the investment market, funded loans. The non 
interest bearing demand notes degenerated into the 
17 Knox, chap. ix. 
18 Bayley, p. 371. 
19 Mitchell, “ A History of the Greenbacks ” (Chicago, 1903), 
part I.