1886–1905 Peso Billete (paper Peso)
Decree 104 of January 19, 1886 adopted as the monetary unit the one peso note of Banco Nacional, effective May 1. Decree 448 of August 2, 1886 equated the peso note (billete de a peso) of Banco Nacional to silver coin 835 fine. The United States of Colombia became the Republic of Colombia August 5, 1886. The gold standard was formally suspended December 20, 1886.
In 1893 it was learned that secret note issues had pushed circulation past 12 million pesos back in 1889, and Congress decided to liquidate Banco Nacional. But the bank's existence was extended to January 1, 1896, while it issued another 5 million pesos to cover the costs of the 1895 civil war. The end of the bank was not, however, the end of forced paper. In 1898–1899 the Government put $22 million in notes of Banco Nacional into circulation (despite the fact that the bank no longer existed).
The period 1899–1903 witnessed revolution, civil war (the Thousand Days War of 1899–1902), inflation, and depreciation. There were numerous note issues of various kinds. Then calm slowly returned. A law of October 25, 1903 prohibited new paper money issues, permitted payment in gold to be stipulated in contracts, and reintroduced the gold peso (peso oro), equal to 100 paper pesos, effective January 1, 1904. Outstanding notes were absorbed by auction sales of gold.
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