The act of February 5, 1840, authorized the secretary of the treasury to issue in denominations of $100, $500, and $1,000, 8% coupon bonds, to an amount not exceeding $1,500,000. Interest was to be payable semi-annually in gold or silver, and the revenue from the license tax and the tax on personal property was set apart for this purpose. The bonds were to be used in the payment of the appropriations for 1840, and were receivable for any debt to the government.1

The appropriations of the Fourth Congress were the largest of any during the history of the republic, and this issue of bonds was a measure adopted by the Lamar administration to meet the appropriations. Treasury notes had depreciated to 16 2/3 cents on the dollar, and it was thought the interest provision would result in a higher rating for the bonds, and in their supplanting the notes.2 The provision that the interest should be paid in specie was nothing short of a farce, in view of what had been the specie receipts of the government, and it is incredible that either legislators or receivers of the bonds could have had any faith in it. No change, moreover, was made in the laws defining the tender for the taxes pledged. By the appropriation act of February 5, 1841, it was provided that no further issues of these bonds should be made after March 1, 1841, and the act of January 19, 1842, deprived them of their tender power in payment of debts to the government, except for land dues and patent fees.3

The amount issued was $849,900.4 They were depreciated from the beginning, the discount being from 85% to 75%.5 There were received in the collection of revenue . and destroyed, $41,200, leaving $808,700. with accumulated interest, to be paid.6

1 Gammel, op. cit., vol. 2, p. 241.

2 Report of the Auditor and Comptroller, December 27, 1849.

3 Gammel, op. cit., vol. 2, pp. 574, 727. An act of December 10, 1840, stopped the further issue of the bonds, but that of December 24, 1840, again authorized them for meeting the appropriations. Ibid., pp. 584, 473.

4 Report of the Auditor and Comptroller, December 27, 1849.

5 Ibid.

6 Report of the Auditor and Comptroller, November 12, 1851.

The average par value which the government received from them was estimated by the auditor and comptroller in the report of December 27, 1849, at 20 cents on the dollar, and this was the rating adopted by the state legislature.1 They came within the provisions of the acts of Congress of September 9, 1850, and February 28, 1855, however, and were therefore subject to prorata payment out of the$7,750,000 reserved in the United States Treasury. Interest was allowed to July 1, 1850, and the original principal and interest to this date, $1,417,680, was adjusted in 1856 at the rate of 76 9/10 cents on the dollar.2 The scaled amount was $1,090,195.92.