Greenback

Greenbacks, such as this $5 bill issued in March 1863, were a form of legal tender paper money created by the Union government to help finance the Civil War.  The colors, ornate designs, unique identification number, signatures and denomination-studded borders were designed to limit counterfeiting, a major weakness of similar bills, called Continentals, issued during the Revolution.  With the help of the newly formed Secret Service, counterfeiting was kept under control, but the other weakness of fiat money, rising prices, was not.

Greenbacks funded about 15% of the war effort but raised inflation rates to 14% in 1862 and 25% in 1863 and 1864. Inflation pushed up the cost of war material and reduced the welfare of workers, professionals, annuitants, bondholders and others whose incomes did not keep pace with the higher cost of living.  The chief justice of Wisconsin, for example, needed to sell assets and obtain bank loans because the state did not raise his salary, fixed at $2,500 in 1857, during the war.

The new money also initiated debates about the proper anchor for the US monetary system that permeated national politics into the early 20th century.  The Wonderful Wizard of Oz, conceived by L. Frank Baum in the 1890s, can be read as an allegory regarding those debates with the yellow brick road representing gold, Dorothy’s slippers (in the book) representing silver, and the Emerald City representing greenbacks.

Materials

Objects and Images Related to Abraham Lincoln

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Lincoln Campaign Flag Campaign flag from Abraham Lincoln’s 1860 campaign. Courtesy of Mark Shenkman.

National Bank Note $1 Seventh Ward National Bank of New York bank note, 1865.

Lincoln Memo to Chase Memo from President Abraham Lincoln to Secretary of the Treasury Salmon P. Chase listing assets Lincoln wanted converted into bonds.

Lincoln Securities Bond issued to Abraham Lincoln featuring his portrait, 1864. Courtesy of the Bureau of the Public Debt.

Greenback $5 "greenback," issued March 1863.

Paper Change Three cent fractional postage currency.

Spread of Slavery Map The spread of slavery meant lower profits and wages in the North.

Salmon P. Chase Salmon P. Chase, Secretary of the Treasury (March 1861 to June 1864)

$10,000 Bill $10,000 bill featuring the portrait of Secretary of the Treasury Salmon P. Chase.

William Fessenden William Fessenden, Secretary of the Treasury (July 1864 to March 1865)

Hugh McCulloch Hugh McCulloch, Secretary of the Treasury (March 1865 to March 1869; October 1884 to March 1885)

CSA Currency $10 Confederate States of America note, 1863.

Monthly Return of Clothing Monthly Return of Clothing, Camp and Garrison Equipage (receipt).

Jay Cooke Check Check dated August 16, 1873 and signed by financier and patriot Jay Cooke.

Civil War Bonds Bond circular advertising subscription and sale of Seven-Thirties, 1865.

The 14th Amendment The 14th Amendment of the Constitution, ratified July 9, 1868.

Political Cartoon Punch magazine cartoon, “Lincoln’s Two Difficulties,” 1862.