Important consideration remained. Greenbacks were notes

of the government of the United States, and as such their

Value like the value of the notes of a private person

depended upon the credit of the issuer. If confidence in the

government's ability ultimately to redeem its notes had been

entirely destroyed, the paper money would have depreciated

to the level finally reached by the Confederate currency.

On the other hand, if the credit of the government had

suffered no diminution, its notes would have depreciated

I Whether the abrogation of the right of funding greenbacks in bonds delayed

resumption of specie payments after the war is a further question, discussion of

which is not in place here.

SPECIE VALUE OP THE PAPER CUBBENCY 199

little, if at all. Fluctuations between these two limits par

and zero followed the varying estimates which the com-

munity was all the time making of the government's present

and prospective ability to meet its obligations. It is there-

fore necessary to analyze the elements that entered into

these varying estimates.

First, it is plain that an increase in the amount of

the demand debt made speedy repayment more doubtful.

Hence the effect of every suggestion of an increase in the

amount of the paper currency was to decrease the value of

the greenbacks already in circulation. This is clearly

shown by the influence of the second and third legal-tender

acts.

June 11, 1862, the gold value of $100 in paper currency

was $96.22. J The next day it was officially announced that

the secretary of the treasury had requested Congress to

authorize a second issue of United States notes. 2 Immedi-

ately the value of the currency declined to $94.96. As the

probability increased that the request would be complied

with, the fall continued, until, on the day when the final vote

was taken on the second legal-tender act, July 8, the cur-

rency price was $89.79. 3

Even more striking was the fall caused by the third legal-

tender act. December 1, 1862, just before Congress con-

vened, currency was worth $76.94. Three days later a fall

to $74.63 was caused by a rumor that the annual finance

report would recommend another issue of United States

notes.* A denial produced a reaction to $76.63. But on

the 8th Thaddeus Stevens introduced a bill providing for

1 See the tables of daily prices in the Appendix, pp. 425-8. The figures in the

text for certain days are sometimes the highest or lowest prices, sometimes (as here)

the average of the two.

2 See the New York Times, June 12, 1862.

3 Congressional Globe, 37th Cong., 2d Sess., p. 3182.

* Bankers' 1 Magazine, New York, Vol. XVII, p. 560.

200 HISTORY OP THE GREENBACKS

an issue of $200,000,000,' which brought about a relapse

the next day to $75.19. When he admitted, a few days

later, that there was no chance of his measure passing, a

slight rise followed. 2 But January 8 the Committee of

Ways and Means submitted a measure authorizing the issue

of $300,000,000 of United States notes. 8 The currency fell

to $72.99. Six days later the House of Representatives

passed a joint resolution for the issue of $100,000,000 to

secure the immediate payment of the army and navy.* The

fall reached $67.57. The acquiescence of the Senate caused

a slight further decline.

Meanwhile the Ways and Means bill was under discussion