The Fascinating Louisiana "Baby Bonds" (1870-1880)
These intriguing bonds issued during the 1870s and 1880s tell a story of clever financial maneuvering. After the Civil War, the federal government imposed a hefty tax on state banknotes. In response, the state of Louisiana created these small notes disguised as interest-bearing bonds, known as “Baby Bonds” due to the image of a baby featured on the front.
A clever tax workaround:
Although technically state bonds, their design closely resembled legal tender, making them widely accepted as currency throughout Louisiana. Valued at $5.00, these bonds avoided federal taxes while being treated as equivalent to government-approved money.
A design with history:
The right side of the bond includes a series of detachable coupons, each representing an annual 3% interest (7.5 cents every six months), payable until January 1, 1886. On the lower left, you’ll find the signature of Ed Burke, Louisiana’s Treasurer at the time, who later became infamous for his involvement in a massive financial scandal.
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Dimensions: 120 x 80 mm
These bonds are more than historical artifacts; they are a testament to ingenuity and economic challenges during a pivotal era in American history.