The currency that was unstinted in come and most by and large used was that issued by the democracy itself. The act of June 12, 1837, which authorized an issue of $ 500,000 of promissory notes, started the republic on its newspaper money career. President Sam Houston said the issue was necessary in order “ to avoid the absolute adjournment of the Government. ” The beginning notes appeared in the fall of 1837, were printed, bore 10 percentage interest, and were account payable twelve months from date. The name of the payee was written in on the face of the eminence, and the note was passed by endorsement. The denominations issued were $ 1 $ 2, $ 3, $ 5, $ 10, $ 20, $ 50, $ 100 and $ 500. These print notes were broadly called “ Star Money ” because of a belittled five-pointed star in the center of the upper part of the face of the note. In December 1837 an increase of $ 150,000 of the matter to notes and an issue of $ 10,000 of noninterest bearing “ change notes ” of low denominations were authorized. transfer notes were redeemable in notes of larger denominations. The print series of pastime notes was followed in January 1838 by an scratch series. A full of $ 1,165,139 in notes was issued in 1837 and 1838. Houston believed that the notes should not be issued to “ a greater sum than would meet the actual necessities of a circulate medium. ” This condition appears to have been much met in the font of the print interest notes, for they, in an sum of $ 514,500, circulated at, or closely at, equality in coinage. Their interest-bearing have caused them to have an investment character and accounted for their readier acceptance in the states. The engrave interest notes, however, depreciated ; their measure in coinage per dollar dropped from sixty-five cents in May 1838 to forty cents in January 1839. In Mirabeau B. Lamar ‘s administration, a fresh type of paper money was issued by an work of January 19, 1839. It provided for promissory notes collectible to bearer and without interest. Called at the clock “ crimson backs, ” they were in denominations of $ 5, $ 10, $ 20, $ 100, and $ 500, with change notes of $ 1, $ 2, and $ 3. The measure of the change notes was limited to $ 150,000, but there was no limit set on the red backs early than the amount of appropriations to be met. From January 1839 to September 1840, after which time no further new issues but only reissues were made, the net total of original issues of the crimson backs was $ 2,780,361. A frequently quoted sum is $ 3,552,800, but this calculate includes $ 772,439 of notes redeemed by giving new notes for honest-to-god. Overissue of the politics notes had already gone therefore far that when the loss backs first gear made their appearance, they were valued at lone thirty-seven and one-half cents in coinage. They continued to sink in value until in the winter of 1841–42 they had in some sections a market value of only two cents on the dollar. In the fall of 1840 the government began to pay out the notes at their market measure, and in February 1842 they lost their legal tender office in the payment of taxes. After the collapse of the loss backs, recognized even by the government in 1840, the people of Texas were in such huffy straits for a currentness that the prohibitive laws of 1837 were ignored, and state of matter savings bank notes and shinplasters again came into extensive habit. The mercantile tauten of McKinney, Williams and Company, of Galveston, was authorized in 1841 to issue $ 30,000 of its promissory notes as money. Best know of the bank notes circulated by a Texas firm were those of the defunct Northern Bank of Mississippi at Holly Springs. These were endorsed and reissued by R. and D. G. Mills ( see MILLS, ROBERT ) of Galveston and were called “ Mills ‘ Money. ” Counterfeits of state of matter deposit notes and notes of fail banks found their direction into Texas and were, as Houston said in 1842, “ no light evils. ”
Upon assuming the presidency for a second time, Houston advocated the issue of a new character of currency. Congress by an act of January 19, 1842, provided for the emergence of “ treasury bills. ” actually treasury notes under a new name, they were in denominations of $ 5, $ 10, $ 20, $ 50, and $ 100, with change notes in denominations of from twelve and one-half cents to $ 3. The treasury bills were account payable to a designated payee or to holy order. The beginning issues were printed, but the former ones were engraved. Although a terminus ad quem of $ 200,000 was set on the amount of these bills when issued and only a little sum was in circulation at any clock, they were at a discount when foremost put out. By the summer of 1842 they had sunk to angstrom low as twenty-five cents on the dollar. There was about no use made of them by the public except for requital of taxes. In July 1842 they were made receivable for taxes and postage at their market prize. Improving economic conditions, the economic administration of the government, and the annexation apparent motion led to a gradual rise in the respect of the bills in 1843 and 1844, and by 1845 they had reached equality in many parts of the republic. The year 1845 saw the end of the state of matter of monetary disorder. Specie was in such sufficiency by that clock time that it was potential to repeal the law that authorized the issue of the treasury bills. The need of funds by the government, however, resulted later in the authority of a reprint of the bills to an total not to exceed $ 10,000. The sum of the treasury bills issued was $ 150,490 ; that of interest notes was $ 1,165,139, and that of red backs, $ 2,780,361. These make a grand full of $ 4,095,990 in newspaper money issued by the democracy. These notes are entitled to a target among the classic historic examples of “ decree money. ” The inflation imposed a peculiarly bang-up asperity upon officials and employees of the government who received salaries of fix amounts in the newspaper money at its face value.