Greenbacks - Encyclopedia

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GREENBACKS, a form of paper currency in the United States, so named from the green colour used on the backs of the notes. They are treasury notes, and were first issued by the government in 1862, "as a question of hard necessity," to provide for the expenses of the Civil War. The government, following the example of the banks, had suspended specie payment. The new notes were therefore for the time being an inconvertible paper currency, and, since they were made legal tender, were really a form of fiat money. The first act, providing for the issue of notes to the amount of $150,000,000, was that of the 25th February 1862; the acts of 11th July 1862 and 3rd March 1863 each authorized further issues of $150,000,000. The notes soon depreciated in value, and at the lowest were worth only 35 cents on the dollar. The act of 12th April 1866 authorized the retirement of $10,000,000 of notes within six months and of $4,000,000 per month thereafter; this was discontinued by act of 4th February 1868. On 1st January 1879 specie payment was resumed, and the nominal amount of notes then stood at $346,681,000, which is still outstanding.

The so-called Greenback party (also called the Independent, and the National party) first appeared in a presidential campaign in 1876, when its candidate, Peter Cooper, received 81,740 votes. It advocated increasing the volume of greenbacks, forbidding bank issues, and the paying in greenbacks of the principal of all government bonds not expressly payable in coin. In 1878 the party, by various fusions, cast over 1,000,000 votes and elected 14 Congressmen; and in 1880 there was fusion with labour reformers and it cast 308,578 votes for its presidential candidate, J. B. Weaver, and elected 8 Congressmen. In 1884 their candidate Benjamin F. Butler (also the candidate of the Anti-Monopoly party) received 175,370 votes. Subsequently the party went out of existence.

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