Page:The History of Oregon Bancroft 1888.djvu/659

 and Clatsop tendered their state tax in this currency, which the state treasurer refused to receive. These counties did not pay their taxes.

It was contended by some that the constitution of Oregon prohibited the circulation of paper money. It did, in fact, declare that the legislative assembly should not have power to establish or incorporate any bank; and forbade any bank or company to exist in the state with the privilege of making, issuing, or putting into circulation any notes or papers to circulate as money. Such a conflict of opinions could not but disturb business. Place avarice and patriotism in opposition among the masses, and the latter is sure in time to give way. Throughout all, California held steadily, and loyally withal, to a metallic currency. Business was done upon honor; but there were those both in California and Oregon who, if patriotic on no other occasions, took advantage of the law to pay debts contracted at gold prices with greenbacks purchased for 40 or 90 cents on a dollar with coin. After much discussing and experimenting, Oregon finally followed the exam ple of California. In California and Oregon no public banks had ever existed, all being owned by private individuals, being simply banks of deposit, where the proprietors loaned their own capital, and, to a certain extent, that of their depositors. They issued no bills, and banked alone upon gold or its equivalent. They therefore refused to receive greenbacks on general deposit; and these notes were thrown upon the market to be bought and sold at their value estimated in gold, exactly reversing the money operations of the east. In New York gold was purchased at a premium with greenbacks; in California and Oregon greenbacks were purchased at a discount with gold; in New York paper money was bankable, and gold was not offered, being withdrawn from circulation; in San Francisco and Portland gold only was bankable, and paper money was offered in trade at current rates, and not de sired except by those who had bills to pay in New York. In Jan. 1803 the bankers and business men of Portland met and agreed to receive legal-ten ders at the rates current in San Francisco, as published from time to time in the daily papers of Portland by Ladd and Tilton, bankers. The merchants of Salem soon followed; then those of The Dalles. Finally the merchants published a black-list containing the names of those who paid debts in legal tenders, to be circulated among business men for their information. ''Or. Statesman, Jan. 5, 1863; Portland Oregonian'', Aug. 30, 1864; and bills of goods were headed Payable in U. S. gold coin. These methods protected merchants in general, but did not keep the subject out of the courts. Able arguments were advanced by leading lawyers to prove that the treasury notes were not money, as the constitution gave no authority for the issuance of any but gold and silver coin. To these arguments were opposed others, equally able, that the government had express power to coin money, and that money might be of any material which might be deemed most fit, as the word money did not necessarily mean gold, silver, or any metal. James Lick vs William Faulkner and others, in ''Or. Statesman'', Dec. 29, 1862. The supreme court of California held that legal-tenders were lawful money, but that it did not follow that every kind of lawful money could be tendered in the payment of every obligation. Portland Oregonian, Aug. 30, 1864.

In an action between Lane county and the state of