arged. The gain of seigniorage from paper money is greater
and is just as easily secured as that from coinage of metals.
Governmental paper money is called "political money," in contrast
with commodity money. However, all coins that contain an element of
seigniorage, or monopoly value, are to that degree "political money."
The typical paper money is irredeemable; that is, it cannot be turned
into bullion money on demand. It is simply put into circulation,
usually with the "legal-tender" quality. Money has the _legal-tender_
quality (as the term is used in the United States) when, according to
law, it must be accepted by citizens as a legal discharge for debts
due them, unless otherwise provided in the contract. The prime purpose
of making money legal tender is to reduce the danger of dispute as to
payments; but another purpose often has been to force people to use a
depreciated money whether they would or not. The purpose of the issue
of political money is usually to gain the profit of seigniorage for
the public treasury, and often it has been the desperate expedient
of nearly bankrupt governments. Governmental paper money differs
from bank notes in that its value does not necessarily depend on the
promise of redemption by the issuer. It differs from promissory notes
and bonds in that its value is not based on the interest it yields,
but mainly on its monetary uses. The issue of paper money may save the
government the payment of interest on an equal amount of bonds. The
promise to receive paper in payment for taxes or for public lands may
help to maintain its value by reducing its quantity, but nothing short
of its prompt redemption in standard coins makes it truly redeemable.

Sec. 10. #Irredeemable paper money.# The most notable examples of paper
money in the eighteenth century were the American colonial currencies,
the continental notes, and the French assignats. In all the American
colonies before the Revolution, notes or bills of credit were issued
which were in most cases legal tender. Parliament forbade the issues,
but to no effect. Without exception they were issued in large amounts
and without exception they depreciated. The continental notes were
issued by the Continental Congress in the first year of the war
(1775), and for the next five years. The object at first was to
anticipate taxes, and it was expected that the states would redeem and
destroy the notes, but this was not done. The notes passed at par for