The National Academy of Sciences’ Committee on Waterproofing the Fractional Currency, 1875

[The following narrative is taken from Frederick W. True’s Semi-centennial history of the National Academy of Sciences, A History of the First Half-Century of the National Academy of Sciences 1863-1913, pp. 261-264.]

In 1875 the Government was making use of a secret, patented process for water-proofing the paper on which the fractional currency and funded-loan bonds were printed. The principal feature of the process was that the paper was sized after having been printed upon. During the first session of the 44^th Congress, the committee of the House of Representatives on Expenditures in the Treasury Department requested the Secretary of the Treasury to submit answers to a series of questions relating to the printing of the securities of the United States. The last two questions in the series, which numbered twenty-two in all, were as follows:

“21. Does the amount given in answer to the fifteenth question, include the expense of labor in the use of the water-proofing process, and also the amount of royalty paid for its use?

“22. State if any commission, and composed of what persons, by name, has examined the value of the water-proofing process, as recommended in the report of the Committee on Banking and Currency, made February 16, 1875; and if so, please annex a copy of their report, if any has been made. If no report has been made to you in writing, has any and what oral report been made to you? And have you urged the parties having the matter in charge to make report to you.”

[House Misc. Doc. no. 163, 44^th Congress, 1^st Session, pp. 2, 3; ordered printed, April 3, 1876.]

These detailed inquiries were directed primarily at a committee of the Academy. In replying to them, on March 31, 1876, the Secretary of the Treasury, B. H. Bristow, remarked that no royalty was paid on the water-proofing material, which was purchased by the gallon, and that on July 30, 1875, he had requested the President of the Academy, Professor Henry, to appoint a committee to examine into the merits of the water-proofing process. He remarked that Professors J. E. Hilgard, C. F. Chandler, Henry Morton and William Sellers had been appointed, and continued as follows:

“On the 30^th of August last [1875] I requested those gentlemen to commence their investigations, and at the same time I instructed the Chief of the Bureau of Engraving and Printing to afford them every facility therefore in his power.

“I am advised that they called and examined the machinery for applying the ‘water-proofing’ to the paper, and the manner in which it was done, and that they were furnished with a sample of the material and with specimens of blank and printed paper, water-proofed and not water-proofed. Every facility to conduct their investigation was afforded them, and they were furnished with all the information possible upon the subject.

“During the autumn Professor Hilgard, chairman of the commission, called on me and submitted for my inspection a memorandum in writing of the principal points of his proposed report, which were deduced from his examination. He stated, as the result of his examination and tests, that he was convinced that the process in question was of great advantage and of great utility both as to durability and security, and that he would recommend that the Government should purchase the invention from the proprietor, with a view to a more economical application of the process.

“The general tenor of the report having been thus foreshadowed by the chairman of the commission, I saw no reason, at that time, and have had no cause since, to question the usefulness of the process, and I therefore continued its use until the Bureau was closed and work on the fractional currency stopped…

“Professor Henry has recently procured additional sheets of water-proofed and not water-proofed paper for the purpose of further testing the matter.

“On the first instant [March 1 1876] I requested him, by letter, to have the report of the commission made as soon as practicable, it having already been delayed a considerable time.”

[Loc. cit., p. 14.]

The committee of the House of Representatives was not satisfied with these answers and on May 2, 1876, called for all the papers in the case, the real state of which then became manifest. The report of the committee of the Academy had been finished and sent to the Secretary of the Treasury on April 29, 1876, who transmitted it with the other papers. [It forms part of House Misc. Doc. no. 163, part 2, pp. 22-28, 44^th Congress, 1^st Session.] Professor Hilgard’s memorandum was also included.

From these papers it appears that Professor Hilgard had changed his opinion regarding the water-proofing process on account of the results of certain experiments made by Professor Morton, and had affixed his signature to a report denying the value of the process instead of affirming it, as he had done in his memorandum. In the meantime, Professor Henry had made certain experiments, ad indicated above, and had reached the conclusion that the committee had not proved that the process was worthless. He therefore returned the report with the request that the committee would reconsider its decision. This the committee found itself unable to do and Professor Henry then transmitted the report to the Secretary of the Treasury, but attached a note to it expressing his own convictions in the matter.

The Secretary of the Treasury had secured an independent favorable opinion fro Prof. John M. Ordway. It followed therefore, that Hilgard, Morton, Chandler, and Sellers were not in favor of the continuance of the use of the process, while Henry and Ordway regarded it as valuable, or at least were not convinced of its worthlessness.