Greenback (1860s money)


Greenbacks were paper currency issued by the United States during the American Civil War. They were in two forms: Demand Notes, issued in 1861–1862, and United States Notes issued in 1862–1865. They were legal tender by law, but were not backed by gold or silver, only the credibility of the U.S. government.

History

Pre-Civil War

Before the Civil War, the only money issued by the United States was gold and silver coins, and only such coins were legal tender; that is, payment in that form had to be accepted.
Paper currency in the form of banknotes was issued by privately owned banks; the notes being redeemable for specie at the bank's office. They were not legal tender. Such notes had value only if the bank could be counted on to redeem them. If a bank failed, its notes became worthless.
National governments had in the past issued paper money and made it legal tender, but usually with at least the pretense that the notes would be redeemable for specie at some time. Continental dollars issued by the Continental Congress during the American Revolution had no such backing. They soon became almost worthless largely due to massive British counterfeiting of them as an act of war.
During the early 19th century, the U.S. issued interest-bearing Treasury Notes in various denominations. These were not legal tender, but could be used to pay customs duties.

Civil War

When President Abraham Lincoln assumed office, he understood the importance of money for the war effort. With this in mind, Lincoln appointed Salmon P. Chase as Secretary of the Treasury. As Secretary, Chase alone was authorized to act on all matters pertaining to the country's finances. Chase, like almost everyone at the time, underestimated the duration and cost of the war. Within a few months it was clear that the costs of the war would run far beyond the government's limited income from tariffs and excises.
The Lincoln Administration sought loans from major banks, mostly in New York City. The banks demanded very high interest rates of 24 to 36 percent. Lincoln refused to borrow on such terms and called for other solutions.

Complete set of 1862–63 greenbacks

IssueDateDenominations
First10 March 1862$5, $10, $20
Second1 August 1862$1 & $2
Third10 March 1863$50 to $1,000

ObligationObligation text
FirstThis note is a legal tender for all debts, public and private, except duties on imports and interest on the public debt, and is exchangeable for U.S. six per cent twenty year bonds, redeemable at the pleasure of the United States after five years.
SecondThis note is a legal tender for all debts, public and private, except duties on imports and interest on the public debt, and is receivable in payment of all loans made to the United States.

ValueYearObligationFr.ImagePortraitPopulation
$11862SecondFr.16cSalmon P. Chase 2,607
$21862SecondFr.41Alexander Hamilton1,212
$51862FirstFr.61aFreedom Alexander Hamilton1,591
$101863FirstFr.95bAbraham Lincoln ; Eagle; Art375
$201863FirstFr.126bLiberty375
$501862ThirdFr.148aAlexander Hamilton 45
$1001863ThirdFr.167Vignette spread eagle 51
$5001862ThirdFr.183cAlbert Gallatin6
$1,0001863ThirdFr.186eRobert Morris 4

Footnotes