Indianapolis Monetary Commission. Three of these articles

have been entirely rewritten, and the fourth has been care-

fully revised.

Professor J. Laurence Laughlin and Dr. Herbert J.

Davenport, of the University of Chicago, and Professor T.

S. Adams, of the University of Wisconsin, have read differ-

ent parts of the book and made valuable suggestions and

criticisms. Miss Maude L. Radford, of University College,

Chicago, has looked over all the chapters and done what she

could to amend crudities of expression. My thanks are also

due to the late Professor Charles F. Dunbar, and to Colonel

Carroll D. Wright, for answers to troublesome inquiries by

letter.

W. C. M.

UNIVERSITY OF CALIFORNIA.

TABLE OF CONTENTS

PART I. HISTORY OF THE LEGAL-TENDER ACTS

CHAPTER I. The Suspension of Specie Payments - - 3

i. State of the Finances, March, 1861.

ii. Chase's Administration of the Treasury, March to June,

1861.

in. Financial Legislation of the Extra Session of Congress.

iv. The $150,000,000 Bank Loan.

CHAPTER II. The First Legal-Tender Act - 44

i. The Legal-Tender Bills,

ii. Debate in Congress,

in. Attitude of Secretary Chase,

iv. Passage of the Act.

CHAPTER III. The Second Legal-Tender Act - 82

i. Government Finances, January to June, 1862.

ii. The Second Legal-Tender Act.

in. The Postage Currency Act.

CHAPTER IV. The Third Legal-Tender Act - - 100

i. The Finances from July to December, 1862.

ii. The Joint Resolution of January 17, 1863.

in. The Third Legal-Tender Act.

CHAPTER V. How Further Issues of Greenbacks Were Avoided

in 1864 and 1865 - 119

i. The Congressional Pledge to Issue no More U. S. Notes.

ii. Financial Difficulties of 1864.

in. Secretary McCulloch and the Alley Resolution,

iv. Recapitulation.

PART II. ECONOMIC CONSEQUENCES OF THE LEGAL-

TENDER ACTS

CHAPTER I. Preliminary Sketch - ... 135

CHAPTER II. The Circulating Medium .... 141

i. Gold and Silver Coin.

ii. Bank Notes.

in. Old Demand Notes.

xiv TABLE OF CONTENTS

iv. " Shinplasters" and Fractional Currency,

v. Minor Coins,

vi. Treasury Notes,

vn. Recapitulation.

CHAPTER III. The Specie Value of the Paper Currency - 182

i. The Markets for Gold.

ii. Factors Which Affected the Gold Price of the Currency,

in. The Course of Depreciation, January, 1862, to December,

1865.

CHAPTER IV. Prices - 239

i. Falkner's Table of Relative Prices,

n. A New Table of Relative Prices by Quarters.

in. Relative Prices Paid by the Federal Government for

Supplies.

rv. Relative Prices of Various Necessities at Retail,

v. General Causes of Price Fluctuations Other than the

Currency,

vi. The Currency as a Cause of the Price Fluctuations.

CHAPTER V. Wages - 280

i. Falkner's Table of Relative Wages,

n. Scope of the Data Concerning Wages in Table XII of

the Aldrich Report.

in. New Tables of Relative Money Wages Based upon the

Data in Table XII of the Aldrich Report

iv. Relative Money Wages in the Coal, Iron, Glass, and

Pottery Industries.

v. Relative Salaries of School-Teachers.

vi. Relative Wages of Farm Laborers.

vii. Tables of Relative Money Wages Based upon the Mate-

rial in Vol. XX of the Tenth Census.

vin. Pay of Government Employees.

ix. Increase in Living Expenses.

x. Relative Real Wages,

xi. Conclusion.

CHAPTER VI. Rent 352

i. Urban Rents,

n. Farm Rents.

CHAPTER VII. Interest and Loan Capital - - 360

i. The Problem of Lenders and Borrowers of Capital. x

ii. Purchasing Power of the Principal of Loans,

in. The Rate of Interest. ^

TABLE OF CONTENTS xv

CHAPTER VIII. Profits - 380

i. Profits as a Share in the Distribution of the Product,

ii. Profits in Different Industries,

in. Statistical Evidence Regarding Profits.

CHAPTER IX. The Production and Consumption of Wealth - 392

i. Production,

ii. Consumption.

CHAPTER X. The Greenbacks and the Cost of the Civil War 403

i. The Problem and the Method of Solution,

ii. The Greenbacks and Expenditures.

m. The Greenbacks and Receipts,

iv. The Greenbacks and the Public Debt,

v. Conclusion.

STATISTICAL APPENDICES

APPENDIX A. Gold Value of the Paper Currency, 1862-65 - 423

TABLE 1. Monthly Highest, Average, and Lowest Gold

Price of $100 of Paper Money in the New

York Market.

TABLE 2. Daily Highest and Lowest Value in Gold of $100

in Currency.

APPENDIX B. Relative Prices of Commodities - 429

TABLE 1. Relative Prices of Farm Products.

TABLE 2. Relative Prices of Various Commodities at

Wholesale.

TABLE 3. Relative Prices paid by Federal Government

for Supplies.

TABLE 4. Relative Prices of Various Commodities at

Retail.

TABLE 5. Comparison of the Relative Prices of Twenty-

three Commodities at Wholesale and at Retail.

APPENDIX C. Relative Wages - 470

TABLE 1. Wage-Series from Table XII of the Aldrich

Report.

TABLE 2. Wage-Series from Vol. XX of the Tenth Census.

TABLE 3. Relative Salaries of School-Teachers.

INDEX - ... 559

XVI

TABLE OF CONTENTS

CHARTS-

CHART

Graphic Illustration of the Effect upon the

New York Banks of the $150,000,000 Loan -

CHART II. Fluctuations in the Gold Value of $100 in

American Paper Money from January,

1862, to December, 1865

CHART III. Relative Prices at Wholesale and the Value

of Gold Coin in Currency ....

31

211

277

PART I

HISTORY OP THE LEGAL-TENDER ACTS

CHAPTER I

THE SUSPENSION OF SPECIE PAYMENTS

I. State of the Finances, March, 1861:

Appointment of Secretary Chase Financial Difficulties Inherited

from the Buchanan Administration Morrill Tariff Act.

II. Chase's Administration of the Treasury, March to June, 1861 :

Improvement in the Credit of the Government Chase's Attempts

to Borrow.

III. Financial Legislation of the Extra Session of Congress:

Chase's Program Loan and Tax Laws Inadequacy of Taxes

Levied.

IV. The $150,000,000 Bank Loan:

Why Chase Applied to the Banks Plan of the Bank Loan Chase's

Refusal to Draw on Banks and his Issue of Treasury Notes

Effect of the Loan on Condition of the Banks Second $50,000,000

Loan Third $50,000,000 Loan Effect of Finance Report and

Trent Affair Depletion of Bank Reserves and Suspension of

Specie Payments.