The Refunding Certificate was a type of

interest In finance and economics, interest is payment from a borrower or deposit-taking financial institution to a lender or depositor of an amount above repayment of the principal sum (that is, the amount borrowed), at a particular rate. It is distin ...

-bearing

banknote A banknote—also called a bill (North American English), paper money, or simply a note—is a type of negotiable promissory note, made by a bank or other licensed authority, payable to the bearer on demand. Banknotes were originally issued ...

that the

United States Treasury The Department of the Treasury (USDT) is the national treasury and finance department of the federal government of the United States, where it serves as an executive department. The department oversees the Bureau of Engraving and Printing and ...

issued in 1879. They issued it only in the

$10 There are many $10 banknotes, bills or coins, including: * Australian ten-dollar note * Canadian ten-dollar note * Nicaraguan ten-cordoba note * United States ten-dollar bill * Hong Kong ten-dollar note * Hong Kong ten-dollar coin * One of the Nami ...

denomination, depicting

Benjamin Franklin Benjamin Franklin ( April 17, 1790) was an American polymath who was active as a writer, scientist, inventor, statesman, diplomat, printer, publisher, and political philosopher. Encyclopædia Britannica, Wood, 2021 Among the leading inte ...

. Their issuance reflects the end of a coin-hoarding period that began during the

American Civil War The American Civil War (April 12, 1861 – May 26, 1865; also known by other names) was a civil war in the United States. It was fought between the Union ("the North") and the Confederacy ("the South"), the latter formed by states ...

, and represented a return to public confidence in paper money. When the Treasury issued the bonds,

silver Silver is a chemical element with the symbol Ag (from the Latin ', derived from the Proto-Indo-European ''h₂erǵ'': "shiny" or "white") and atomic number 47. A soft, white, lustrous transition metal, it exhibits the highest electrical ...

coins were in wide circulation and

gold Gold is a chemical element with the symbol Au (from la, aurum) and atomic number 79. This makes it one of the higher atomic number elements that occur naturally. It is a bright, slightly orange-yellow, dense, soft, malleable, and ductile me ...

coins were just beginning to appear at

bank A bank is a financial institution that accepts deposits from the public and creates a demand deposit while simultaneously making loans. Lending activities can be directly performed by the bank or indirectly through capital markets. Because ...

s nationwide. The Treasury paid out in notes, the majority— (or 98.5%)—in the fourth quarter of 1879, as long lines of people gathered at Post Office branches and Treasury offices. The Refunding Certificate originally promised to pay 4% annual interest in

perpetuity A perpetuity is an annuity that has no end, or a stream of cash payments that continues forever. There are few actual perpetuities in existence. For example, the United Kingdom (UK) government issued them in the past; these were known as conso ...

. The obligation on these notes reads: :''"This certifies that the sum of Ten Dollars has been deposited with the Treasurer of the United States under Act of February 26th, 1879 convertible with accrued interest at 4 per cent per annum into 4 per cent bonds of the United States issued under the Acts of July 14, 1870 and January 20, 1871 upon presentation at the office of the Treasurer of the U.S. in sums of . Or multiples thereof."'' However, in 1907,

Congress A congress is a formal meeting of the representatives of different countries, constituent states, organizations, trade unions, political parties, or other groups. The term originated in Late Middle English to denote an encounter (meeting of ...

passed an act that ended the interest accrual of the certificates, and fixed the value of them at , over twice their face value. By January 1, 1885, all but (99.4%) in face value had been redeemed, and since that time most others have met the same fate. Consistent with the Treasury Department paper used in printing the Fourth and Fifth Issues of

Fractional currency __NOTOC__ Fractional currency, also referred to as shinplasters, was introduced by the United States federal government following the outbreak of the Civil War. These low- denomination banknotes of the United States dollar were in use between 2 ...

(1869–76), anti-counterfeiting devices of the period included embedding large silk fibers as well as the use of blue tinted paper.Blake, 1908, p. 39. Only a few 1879 Refunding Certificates were imprinted with the inscription ''Payable to Order''. Only two are known to still exist. Most were inscribed ''Payable to Bearer'' and even these are rare—only a few dozen are in numismatic collections.

Footnotes

References

* * *Standard Catalog of United States Paper Money 17th edition published by Krause Publications *Official 2006 Blackbook Price Guide to United States Paper Money (38th edition) *The Official RED BOOK A Guide Book of United States Paper Money
Harry Bass Foundation
{{Money and central banking within the contemporary United States (pre–1913) Paper money of the United States Works about Benjamin Franklin