Bill of Credit

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Bill of Credit

1. A bill issued by a government that may be traded as money and may be redeemed by the holder for actual money on a given day.

2. A request for payment by a third party. For example, if one writes a check to a seller, the seller demands payment from the bank out of the funds it holds on behalf of the buyer. In this case, the check is a bill of credit.
References in periodicals archive ?
They were particularly hostile to state emissions of paper money, which accounts for their adopting an express ban on state bills of credit and tender laws.
His reason, apparently, was that this phrase would wave a red flag before some of the Constitution's potential supporters, and it would do so needlessly, for officials in the future government could find ways to borrow money without resorting to bills of credit.
All of those voting to retain the language explicitly authorizing federal bills of credit did so because they believed (i) the federal government should have the power to issue bills of credit; and (ii) deleting the language would delete the power.
Rutledge also added the conditional ban on state "Paper Bills of Credit.
Perhaps the Committee's addition of a separate power to issue bills of credit was the reason the ban was omitted; if so, the Convention's deletion of that power may have implied the reinstitution of the ban.
The Committee of Detail's final draft provided that "No State, without the consent of the Legislature of the United States, shall emit bills of credit, or make any thing but specie a tender in payment of debts.
The suggestion that prohibiting state bills of credit would constitute an "absolute prohibition of paper money" implies that the speakers were imprecisely using the terms "bills of credit" and "paper money" interchangeably.
But bills of credit were only one kind of paper money, (290) and in any event, the items on this list of prohibitions overlap each other significantly.
When debate participants spoke less generally and focused specifically on the Constitution's provisions pertaining to paper money, almost everyone emphasized that the prohibition on bills of credit applied to the states.
At the North Carolina ratifying convention, Antifederalists argued that the ban could cause hardship because it might be construed to invalidate North Carolina bills of credit that were already in circulation.
313) Martin had been, in other words, one of the minority at the Convention who believed both that the federal government should have the power to issue bills of credit and that deleting the language would delete the power.
Even a satirist pretending to be Martin could not bring himself to repeat Martin's assertion that the federal government was barred from issuing bills of credit.