1. Repeal of the Greenback Conversion Clause.
- Author
-
O'Leary, Paul M.
- Subjects
BOND prices ,PAPER money ,WAR ,ACCOUNTS payable - Abstract
The article reports on conversion clause in the United States. American monetary history is full of strange happenings and queer events beginning with the resolution of Massachusetts Bay Colony in 1690 explaining the issue of the first paper money. It referred to "the sundry considerable debts" which had been contracted "for maintaining their Majesties" interests against hostile invasions of their French and Indian enemies," the actual fact being that the colony had sent an expedition against Quebec in the expectation that plunder would pay the costs thereof. It is true that the highest prices at which the five-twenty bonds sold on the New York market never exceeded 14 points above par in 1864 and 12 points above in 1865, whereas at the same time the premiums on gold were in the ranges 77-85 and 98-105, respectively. In the years following the war the gap between the premium on the bonds and on gold steadily narrowed. By late 1869 the gap had disappeared and from 1870 on the advantage clearly lay with the bonds, their market premium over par persistently exceeding the gold premium. Senator John Sherman pointed out on the floor of the Senate, March 6, 1876, that even the government's 5 per cent bonds had been "at par with gold for the past five years" while the greenbacks had been "from 6 to 22 per cent below gold."
- Published
- 1963
- Full Text
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