Refunding Certificate
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The Refunding Certificate was a type of
interest In finance and economics, interest is payment from a debtor 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 distinct f ...
-bearing
banknote A banknote or bank notealso called a bill (North American English) or simply a noteis a type of paper money that is made and distributed ("issued") by a bank of issue, payable to the bearer on demand. Banknotes were originally issued by commerc ...
that the United States Treasury issued in 1879. They issued it only in the $10 denomination, depicting
Benjamin Franklin Benjamin Franklin (April 17, 1790) was an American polymath: a writer, scientist, inventor, statesman, diplomat, printer, publisher and Political philosophy, political philosopher.#britannica, Encyclopædia Britannica, Wood, 2021 Among the m ...
. Their issuance reflects the end of a coin-hoarding period that began during the
American Civil War The American Civil War (April 12, 1861May 26, 1865; also known by Names of the American Civil War, other names) was a civil war in the United States between the Union (American Civil War), Union ("the North") and the Confederate States of A ...
, and represented a return to public confidence in paper money. When the Treasury issued the bonds,
silver Silver is a chemical element; it has Symbol (chemistry), symbol Ag () and atomic number 47. A soft, whitish-gray, lustrous transition metal, it exhibits the highest electrical conductivity, thermal conductivity, and reflectivity of any metal. ...
coins were in wide circulation and
gold Gold is a chemical element; it has chemical symbol Au (from Latin ) and atomic number 79. In its pure form, it is a brightness, bright, slightly orange-yellow, dense, soft, malleable, and ductile metal. Chemically, gold is a transition metal ...
coins were just beginning to appear at
bank A bank is a financial institution that accepts Deposit account, 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 m ...
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. 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 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. Consistent with the Treasury Department paper used in printing the Fourth and Fifth Issues of Fractional currency (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 Numismatics is the study or collection of currency, including coins, tokens, paper money, medals, and related objects. Specialists, known as numismatists, are often characterized as students or collectors of coins, but the discipline also inclu ...
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