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in U.S. history, legal tender notes unsecured by specie (coin). In 1862, under the exigencies of the Civil War, the U.S. government first issued legal tender notes (popularly called greenbacks) that were placed on a par with notes backed by specie. By the end of the war such notes were outstanding to the amount of more than $450 million. They had been issued as temporary, and in accordance with the Funding Act of 1866 Secretary of State Hugh McCullochMcCulloch, Hugh
, 1808–95, American financier and public official, b. Kennebunk, Maine. Educated at Bowdoin College, he studied law in Boston and practiced two years at Fort Wayne, Ind.
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 began retiring them. The hard times of 1867 caused many, especially among Western debtor farmers, to demand that the currency be inflated rather than contracted, and Congress suspended the retirement. George H. PendletonPendleton, George Hunt,
1825–89, American political leader, b. Cincinnati. He was admitted to the Ohio bar in 1847 and served (1854–56) in the state senate. He was an antiwar Democrat in the House of Representatives (1857–65) and vice presidential candidate on
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 advanced the so-called Ohio Idea, recommending that all government bonds not specifying payment in specie should be paid in greenbacks. John ShermanSherman, John,
1823–1900, American statesman, b. Lancaster, Ohio; brother of William Tecumseh Sherman. He studied law, was admitted (1844) to the bar, and practiced law several years in Mansfield, Ohio, before he moved (1853) to Cleveland.
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, more conservative, was nevertheless willing to let the greenbacks stay in circulation on a redemption basis. The question was warmly debated in 1869 and was ended by a compromise, which left greenbacks to the amount of $356 million in circulation. The law creating them was declared constitutional in the later Legal Tender casesLegal Tender cases,
lawsuits brought to the U.S. Supreme Court involving the constitutionality of the Legal Tender Act of 1862, which was passed to meet currency needs during the Civil War.
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, and the matter rested until the Panic of 1873. The hard-hit agrarians then wanted to inflate the currency with more greenbacks. An inflation bill passed Congress in 1874, but so intense was conservative opposition that President Grant reversed his former position and vetoed the bill. Although the Greenback party worked hard to oppose them, the conservatives triumphed in Jan., 1875, with the Resumption Act, which fixed Jan. 1, 1879, as the date for redeeming the greenbacks in specie. The Secretary of the Treasury accumulated a gold reserve of $100 million, and confidence in the government was so great that few greenbacks were presented for surrender in 1879. Congress provided in 1878 that the greenbacks then outstanding ($346,681,000) remain a permanent part of the nation's currency.


See W. C. Mitchell, A History of the Greenbacks (1903, repr. 1960); D. C. Barrett, The Greenbacks and the Resumption of Specie Payments, 1862–1879 (1931, repr. 1965); I. Unger, Greenback Era (1964).

References in periodicals archive ?
The Dollar indices which track the performance of the green back versus a basket of six other currencies was down 0.
Below is a list of the places where PSE will be helping to mark Earth Day celebrations this week with the aim of helping customers put green back into their wallets as well as help save the earth.
Earlier, off-spinner Paul Griffiths pegged Green back with five for 56 after Gavin Shepherd's 62 got them off to a good start.
PERHAPS I should take everything I've just written about Robson Green back, because his programme was intensely interesting and worthwhile compared to Amanda Holden being invited to insult midwives past, present and future by trying to take on board three years of training in five weeks (Out Of My Depth, ITV1, Monday).
RIGHT: Fred Cowen's cafe was an institution in Acocks Green back in 1977.
This colourful bird has a jazzy red crown and a green back.
You will not have failed to notice that we have put the green back into grocery this week by devoting all our feature and comment pages to environmental and sustainable business issues.
Still, Wrexham hung on, and with captain Darren Ferguson and new signing Scott Green back in harness in midfield, the Dragons never looked like conceding a second equaliser.
And with Hasbro Interactive's "Get the Right Gift" promotion, gift-givers get some of that green back - a $25 rebate is offered when purchasing any three of the above games (a $15 rebate is offered when purchasing two games, and a $5 rebate with the purchase of one game).
Tenders are invited for Sliding Glass Cover Pin Board Green Back Ground Size 600 X 900 Mm, Having Soft Board Backing For Use Push Pins To Pin Notices.
The Brabazon course's tricky 10th hole was made famous when the late Seve Ballesteros drove the green back in 1978.
With Paul Green back to fitness, Trapattoni may chose to pick him instead as he started the first four of Ireland's European qualifiers.