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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 ?
After the Greenbacks were introduced, Congress, on March 17, 1862, declared them to be a full legal tender for all debts public and private.
Perhaps you find greenbacks, which have been restored to their native habitat in more than 20 lakes and streams east of the Continental Divide; or perhaps you discover Colorado River cutthroat, which are being restored in their native habitat west of the Continental Divide; or brookies; or maybe you find nothing at all.
In the case of the Greenback Era, competition between the currencies was maintained for two reasons: there were more greenbacks than gold certificates in circulation (because the government lacked sufficient gold reserves), and people were willing to accept greenbacks because of the promise that they would be fully convertible to gold.
Ordinary national banks had to satisfy reserve requirements by holding "lawful money," whether greenbacks, gold coin, or Treasury gold or silver certificates.
Wesley was just inches away from an equaliser when his late effort hit the upright but it wasn't to be and the Greenbacks are now facing up to a relegation scrap.
The Greenbacks go to Kettering on Sunday but whether Nuneaton Town loanee Ben Ford will be with them is uncertain as the midfielder's monthlong stay at the Oval ends on Saturday.
The Greenbacks looked set for a cosy success when they stormed into a 3-1 interval lead against Star of the Midland Alliance, who lie second bottom of their table with just two wins in nine outings.
Haywood was presented with a club clock by chairman Peter Randle after the Greenbacks recent success over Hitchin Town to mark his dedicated and loyal service to the job.
1 THE Greenbacks suffered a second cup exit in the space of a week as they fell to Hednesford for the fifth time in six meetings in the FA Trophy.
That was borne out over the Bank Holiday weekend as the Greenbacks suffered a heart-breaking 1-0 defeat at Arlesey Town before being outclassed at the Oval in a 3-0 loss to Leamington.