Bill of credit

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BILL OF CREDIT. It is provided by the Constitution of the United States, art. 1, s. 10, that no state shall " emit bills of credit, or make anything but gold and silver coin a tender in payment or debts." Such bills of credit are declared to mean promissory notes or bills issued exclusively on the credit of the. state, and for the payment of which the faith of the state only is pledged. The prohibition, therefore, does not apply to the notes of a state bank, drawn on the credit of a particular fund set apart for the purpose. 2 M'Cord's R. 12; 2 Pet. R. 818; 11 Pet. R. 257. Bills of credit may be defined to be paper issued and intended to circulate through the community for its ordinary purposes, as money redeemable at a future day. 4 Pet. U. S. R. 410; 1 Kent, Com. 407 4 Dall. R. xxiii.; Story, Const. Sec. 1362 to 1364 1 Scam. R. 87, 526.
2. This phrase is used in another sense among merchants it is a letter sent by an agent or other person to a merchant, desiring him to give credit to the bearer for goods or money. Com. Dig. Merchant, F 3; 5 Sm. & Marsh. 491; R. M. Charlt. 151; 4 Pike, R. 44; 3 Burr. Rep. 1667.

A Law Dictionary, Adapted to the Constitution and Laws of the United States. By John Bouvier. Published 1856.

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(235) In the ensuing state-by-state vote, nine states voted for the motion to remove the bill of credit language, and two states voted against it.

As noted earlier, the phrase "bill of credit" was, technically, only one kind of paper money--a circulating instrument representing a government debt.

(250) Even though the Convention later dropped the Committee's federal bill of credit language, it never restored Rutledge's proposed prohibition.

Another excerpt from the Convention records--overlooked by previous commentators--can be read to support the view that the Framers were using "bill of credit" as a synonym for all paper money.