- •Issued in commemoration op the completion op the first ten
- •In all departments of knowledge
- •Is feasible. As for the latter topic, I soon discovered that
- •Indianapolis Monetary Commission. Three of these articles
- •I. State of the finances, march, 1861
- •In addition to political availability, Mr. Lincoln thought
- •I Cf. Nicolay and hay, Abraham Lincoln, a History (New York, 1890), Vol. III.
- •Indispensable to success in the management of the then dis-
- •It was natural that there should be hesitation in New York
- •1 H. R. Miscellaneous Document No. 20, p. 3, 36th Cong., 2d Sess.
- •2 Ibid., loc. Cit.
- •1 Correspondence between Mr. George s. Coe, one of the bankers concerned, and
- •2 Letter of resignation, g. T. Curtis, Life of James Buchanan (New York, 1883),
- •3 Cf. Dix's letter to the chairman of the Committee on Ways and Means, h. R.
- •1 Report of the Secretary of the Treasury, December, 1861, p. 30.
- •2 On the condition of the finances at the commencement of the Civil War, cf.
- •3 Report of the Secretary of the Treasury, December, 1861, pp. 30-32.
- •Ing. Moreover, the credit of the government was improved
- •In order to escape payment of the higher duties imposed by
- •I Cf. American Annual Cyclopaedia, 1861, p. 296, and Hunt's Merchants' 1 Maga-
- •12 History op the greenbacks
- •It was found that the loan had been subscribed three times over
- •In need. Five million dollars were required to carry it along
- •000,000 To meet the expenditures of the coming twelve
- •000 Would defray the expenses of a peace footing, estimated
- •In 7 per cent., thirty-year bonds ; (3) the issue of not over
- •If Secretary Chase erred in thus proposing at the outset
- •2 Ibid., p. 14. 3 ibid., pp. 65 ff. And 71 ff.
- •5 Ibid., pp. 109 and 127. Ibid., p. 147.
- •1 12 Statutes at Large, p. 259. Act of July 17, 1861.
- •Interest;" (3) 7.3 per cent, three-year treasury notes, fundable
- •In 6 per. Cent, twenty-year bonds; or (4) treasury notes,
- •Vote for any bill that the administration and the leaders of
- •I Cf. " Comparative Bates of Duty, 1842-61," Hunt's Merchants' Magazine,
- •2 12 Statutes at Large, p. 292.
- •3 As examples of this disposition see the remarks of Senators McDougall, of
- •000,000. " : Mr. Chase, also, took a firmer stand, advocating
- •In his report of December, 1861, an increase of the customs
- •1 Report of the Secretary of the Treasury, December, 1861, p. 8. These issues were
- •2 " It is utterly out of the question, in our judgment," said the London Economist
- •Issue of clearing-house certificates. 1 But most of the paper
- •Imports due partly to the Morrill tariff, but chiefly to the
- •If the banks could collect specie in these two ways as
- •1 Chase's letter to Trowbridge, warden, op. Cit., pp. 386-8.
- •Ing (Boston, 1896), pp. 150-52.
- •2 Acts of July 17, 1861, sec. 1, 12 Statutes at Large, p. 259, and of August 5, 1861,
- •3 Text in American Annual Cyclopaedia, 1861, p. 299.
- •Vency of the government, and in so far injured its credit, and
- •I Letter to Trowbridge, warden, op. Cit., p. 388.
- •2 The banks were the more annoyed at Mr. Chase's refusal to make payments in
- •Issued an urgent address, appealing to the people to assist in
- •Into a common fund, and reviving the organization entered
- •Into to check the panic of the preceding November. The
- •000 In the specie holdings of the banks, and a like increase
- •In the coin held by the subtreasury. 3 At the same time the
- •Immediate action. With this view, on the 14th of January,
- •1 The text of the bill is given Congressional Globe, 37th Cong., 3d Sess., pp. 283, 284.
- •2 See, e. G., the speeches of Messrs. Spaulding, ibid., p. 287; Morrill, p. 296; Shef-
- •1 Mr. Shellabarger, Congressional Globe, 37th Cong., 3d Sess., p. 407.
- •2 Mr. Watts, ibid., p. 391. 3 Ibid., p. 409.
- •114 History op the greenbacks
- •1 Congressional Globe, 37th Cong., 3d Sess., p. 383.
- •2 Cf. Ibid., remarks of Messrs. Hooper, p. 386, Watts, p. 391, Riddle, p. 383, and
- •3 Report of the Secretary of the Treasury, December, 1862, p. 14.
- •Indebtedness and interest." 2
- •In coin. The third course necessarily involved all the disor-
- •Virtually a recommendation of this third course.
- •1 Ibid., p. 287. 2 Ibid., p. 391. 3 Sec. 3, Ibid., p. 284.
- •116 History or the greenbacks
- •Interest on bonds in "lawful money " instead of in coin, and
- •66, 5 Mr. Stevens imperturbably proposed a second. 8 As the
- •3.65 Per cent, interest in coin, a legal tender to the same
- •Ing "the negotiation of bonds to market value" were
- •1865 Must be added.
- •120 History of the greenbacks
- •1 Report of the Secretary of the Treasury, December, 1863, p. 2. On the arrange-
- •2 Report of the Secretary of the Treasury, December, 1863, p. 17. 3 ibid., p. 10.
- •122 History op the greenbacks
- •Increase the issues of United States notes, but it inserted
- •In the " act to provide ways and means for the support of
- •1 Report of the Secretary of the Treasury, December, 1864, pp. 19, 20.
- •2 See Chase's letter to Fessenden, schuckebs, op. Cit., p. 415 ; cf. Hunt's Mer-
- •126 History op the greenbacks
- •Internal revenue and a small increase of the temporary loan,
- •Important financial resource after June, 1863. In the fiscal
- •1 Cf. Report of the Secretary of the Treasury, December, 1864, pp. 13, 26.
- •2 Issues and redemptions of the principal of the debt are com piled from batlet,
- •Ing obligations for the fiscal years 1861-66
- •Ing obligations
- •In 1864 the proportion fell to a sixteenth, and thereafter the
- •I See Part II, chap, X, below.
- •Issuing irredeemable paper money was adopted because of the
- •In the first place, then, suspension of specie payments
- •In the medium of exchange were not slight, they were less
- •136 History op the greenbacks
- •It was this depreciation of the money unit that gave rise
- •Investigated in chap. IV.
- •Ing wealth is carried on by a succession of money payments.
- •1 Cf. Lacohlin, History of Bimetallism in the United States (4th ed., 1897), p. 86.
- •Incomes did not rise as quickly and in as great degree as
- •In the community which contributed of their property or
- •It altered only the division of these commodities and
- •138 History of the greenbacks
- •1. At any given time business men are bound to a con-
- •Increase their money expenditures. Laborers may demand
- •4. The readjustment in the scale of money payments,
- •Income had upon the consumption and production of wealth.
- •1 The rapidity and violence of these fluctuations may best be seen from the
- •In payment greenbacks worth considerably less than the
- •It. Business men consequently cast around for some means
- •II. Bank notes
- •In other parts of the United States left the notes of the state
- •Ing institutions elsewhere like the Chemical Bank of New
- •I bernard moses, " Legal tender Notes in California," Quarterly Journal of
- •Immunity from the penalties for suspension to such banks
- •1862, Relieving the banks from the penalties for suspension
- •1 See the New York city bank statements, ibid., p. 559; compare Report of the
- •2 Bankers' 1 Magazine, Vol. XVII, pp. 163, and 793, 794.
- •3 Knox, History of Bankingin the United States (New York, 1900), p. 642.
- •In discharge of its notes. After ascertaining that the courts
- •000,000 Of the nickel coins had been issued by June 30,
- •1862, And 48,000,000 more were added during the next
- •1 Knox, United States Notes, pp. 103 and 104.
- •2 Report of 1863, p. 189. 3 ibid.
- •1 Ibid.
- •2 Congressional Globe, 38th Cong., 1st Sess., p. 1228. 3 ibid., p. 1227.
- •170 History of the greenbacks
- •In October the director of the mint reported that the new
- •2 Bayley, National Loans of the United States, p. 157. These statements differ
- •Interest coupons. 1 One hundred and fifty millions of the
- •Itation of amount by the act of March 1, 1862. 3 This
- •000,000 In 1865.* Most of these notes were paid out to con-
- •1865, And 1866, as given in the current reports of the
- •184 History op the greenbacks
- •It was not until October, 1864, that a constitution and by-
- •In New York during the winter and spring of 1864.
- •1 See, e. G., Hunt's Merchants' 1 Magazine, Vol. Liu, p. 226.
- •2 Cf. New York Herald of August 20, and the money article of August 24, 1865 ;
- •In Washington, Baltimore, or Louisville the centers of
- •I See cobnwallis, op. Cit., pp. 4-7.
- •186 History op the greenbacks
- •Important of the New York markets. From January 13,
- •1862, To June 20, 1864, they are based upon sales at the
- •In the Appendix, 1 furnish a basis for studying the remarkable
- •II. Factobs which affected the gold pbice of the
- •188 History op the greenbacks
- •In analyzing the influences that made themselves felt on
- •Valuation of gold produced by speculation, commands scant
- •000, But after specie payments had been suspended in 1862
- •I Quotations of gold are from the New York Chamber of Commerce Reports
- •1863. L During the continuance of the war, however, this
- •Value of the currency, because holders of greenbacks who
- •Important consideration remained. Greenbacks were notes
- •Value like the value of the notes of a private person
- •I Whether the abrogation of the right of funding greenbacks in bonds delayed
- •In the House. When it was passed and sent to the Senate,
- •I See the editorial article in the issue of December 8, 1864, and the money article
- •Value of the currency ; for the fate of a loan indicated pub-
- •500,000 Was subscribed twice over and the sum advertised
- •1 See comments of New York papers of December 6 ; and Hunt's Merchant*'
- •Ing the government's notes. Hence every victory that
- •Indicator in the gold room more rapidly than by the daily
- •6Th a partial confirmation of the bad news continued the
- •1 See conflicting reports from the battles in the New York papers of May 4 to 8,
- •2 See the news columns of the papers of April 2, 1863.
- •204 History of the greenbacks
- •1 New York Times, money article, September, 3, 1862.
- •2 Ibid., money article for July 22, 1864.
- •Is shown by the events attending the presidential election of
- •1864. Mr. Lincoln was the Republican nominee. The
- •7, With the report that the cabinet had decided to notify the
- •Interest-bearing legal tenders and the notes and deposits of
- •1 See Part II, chap, II, sec. VI, above.
- •2 The most notable instance of this character was the fraudulent proclamation
- •III. The course op depreciation, january, 1862, to
- •In order to facilitate study of the progress of depreciation
- •7Th. Island No. 10 surrendered, Halleck telegraphed that
- •1 As most of the events referred to in the following review of the course of depre-
- •2. The fall from May, 1862, to February, 1863. In
- •Iu the Shenandoah valley, where he defeated the Union
- •Vania were sent to New York for safekeeping, and Governor
- •1 Cf. Elaine, Twenty Years of Congress, Vol. I, pp. 441-3.
- •2 Cf. Money article in New York Times, November 10, 1862.
- •216 History of the greenbacks
- •In January and February the fall of the currency was
- •It became known that Grant's first campaign against Vicks-
- •5,000 Prisoners. Early in February a Federal attack on
- •42 Per cent. From May to November the dominating causes
- •Invaded the North. Though his sortie was checked at
- •3. The rise from March to August, 1863. February
- •If June had shown the possibility of a rise in the face of
- •Vicksburg, and Port Hudson. These great successes, with
- •1 New York Times, money articles, July 15, 17, and August 25, 1863.
- •Ville, where Burnside's forces lay ; the highest, on the 27th,
- •222 History op the greenbacks
- •In April Congress still passed no revenue laws, and the
- •In the first half of May there was a rise. Sherman set-
- •In forcing Johnson back from Dalton, then from Resaca and
- •1 Editorial article, March 29, 1864.
- •2 The feeling of depression is shown by the New York Tribune's remark : "With
- •In the conviction that they were aiding the Rebellion as truly and
- •1 See money articles of this period.
- •2 June 15, 1864. More or less similar outbursts can be found in most of the New
- •Ized to dispose of any surplus gold not required for interest. 4
- •1 Congressional Globe, 38th Cong., 1st Sess., pp. 24, 173. When the committee was
- •2 Ibid., p. 539. 3 ibid., pp. 730, 2773.
- •5 New York Times, money articles, March 9, 11, 12, 15, 1864.
- •226 History op the greenbacks
- •169| On the 26th to 165f on the 29th of March. This day
- •In the spring of 1864, were urging him to suppress the gam-
- •Ishing the market demand for gold by selling customs-house
- •Ing more than a temporary effect upon the premium. What
- •If those who voted for the bill spoke doubtfully of it,
- •It, in Congress and out of Congress, now is that .... The gold
- •Infantry corps to the left was foiled by Ewell's fierce attacks,
- •Ing this prize, the Confederates operated in the Shenandoah
- •234 History op the greenbacks
- •2 The tariff act, the ways and means act, and the internal revenue act were all
- •3 See the reply of the Tribune, July 7.
- •5. The rise from August, 1864, to May, 1865. In Au-
- •In seizing the Weldon railway with his left and holding it
- •1 Part I, chap, V, sec. II, p. 125, above.
Internal revenue and a small increase of the temporary loan,
to meet all the requisitions upon the treasury." '
The war over, McCulloch set himself to reducing the
government finances to more manageable shape. In his
annual report for 1865 he estimated that at the close of the
current fiscal year the national debt would amount to about
$3,000,000,000. 2 To reduce this sum, the secretary
proposed that $200,000,000 be spent each year in payment
of interest and principal. 3 Such payments, he showed, would
extinguish the debt, if funded at 5^ per cent., in thirty-
two years.* But he laid chief stress upon the desirability of
reducing the volume of currency as a preliminary to resum-
ing specie payments at an early date.
The present legal-tender acts [he said] were war measures, and
while the repeal of those provisions which made the United States
notes lawful money is not now recommended, the Secretary is of
the opinion that they ought not to remain in force one day longer
than shall be necessary to enable the people to prepare for a
return to the constitutional currency. 5
1 Report of the Secretary of the Treasury, December, 1865, pp. 36, 37.
^ Ibid., p. 22. 3 ibid., p. 25. */&*., p. 23. *Ibid., p. 4.
HISTORY OP THE GREENBACKS
He therefore recommended that he be empowered to sell
bonds "for the purpose of retiring not only compound
interest notes, but [also] the United States notes." '
That Congress shared the secretary's desire to resume
specie payments speedily seemed to be sufficiently shown by
the prompt action of the House of Representatives upon a
resolution introduced by John B. Alley, of Massachusetts.
It ran as follows:
Resolved, That this House cordially concurs in the views of the
Secretary of the Treasury in relation to the necessity of a contrac-
tion of the currency with a view to as early a resumption of specie
payments as the business interests of the country will permit; and
we hereby pledge co-operative action to this end as speedily as
practicable.
This resolution was adopted without debate on December
18, by a vote of 144 to 6. 2 The story of how the fulfilment
of the promise of resumption was delayed for thirteen years
does not belong to the war history of the greenbacks.
IV. RECAPITULATION
The r6le played by the greenbacks as a financial resource
at different stages of the Civil War can best be shown by a
tabular recapitulation of the receipts of the treasury from
different sources during the fiscal years 1861-66.
The "net ordinary receipts" shown in this table are taken
from the reports of the secretary of the treasury. They
include, besides import duties and internal-revenue taxes,
proceeds of sales of public lands and all miscellaneous items.
The notable fact concerning them is the rapid increase from
year to year an increase for which the internal-revenue
system deserves the lion's share of credit. From a tenth
in 1862, the proportion of ordinary to total receipts rose
1 Report of the Secretary of the Treasury, December, 1865, p. 14.
2 Thirty-two members did not vote. Congressional Globe, 39th Cong., 1st Sess.,
p. 75.
How FURTHER ISSUES WERE AVOIDED
129
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Total net receipts .
Net ordinary rece
Customs
Internal revenu*
Net receipts from
Bonds
Short-time intei
gations
Non-interest-bes
[United States r
130 HISTORY OF THE GREENBACKS
to a quarter in 1864, and it would have been considerably
instead of slightly larger in 1865 had not customs duties
fallen off so largely in consequence of the tariff act of June
30, 1864, which discouraged legal importations and stimu-
lated smuggling. 1
By " net receipts from loans " is meant the receipts minus
sums employed in paying principal of the public debt.
These receipts are divided into three classes, according to
the kind of security upon which money was borrowed. Each
class is charged with all redemptions of securities falling
within it and credited with all new issues, including
premiums realized on sales. 2 When the redemptions exceed
the issues the fact is indicated by placing a minus sign
before the figures.
Two matters of interest are brought out by the exhibit.
The first is the correlative of the point already noticed;
as the revenue system became more efficient, a smaller pro-
portion of the means necessary to carry on the war had to
be borrowed. From nine-tenths in 1862 the proportion
fell to three-quarters in 1864 and 1865. The second matter
concerns the method of borrowing. At first reliance was
placed rather on issues of circulating currency than on sales
of bonds ; but with increasing experience the secretaries used
bonds and interest-bearing treasury notes more and green-
backs less. To make this clearer a supplementary table is
added giving the proportions of the net receipts from loans
obtained from the three classes of securities.
From this table it appears that the greenbacks were not an