“Greenbacks” is the name for paper money in the United States in 1880. Paper money hasn’t been around for very long, only about fifteen years or so. Since the War Between the States (or the War of Northern Aggression for you Southerners in the classroom. Or the Civil War. They’re all names for the same war, back in 1861-1865).
Anyway, before the War, everybody used gold and silver coins to buy and sell things. But they probably got pretty heavy in pocketbooks and purses.
However, the War cost money—a lot of money, and the United States didn’t have enough money from taxes. The Treasury Department decided to issue small rectangles of paper called “demand notes” (payable on demand) to people who lent the government money to pay the soldiers and finance the War. These “demand notes” were printed on green paper. So guess what! Their nickname became “greenbacks.”
After the War, some people wanted to keep the paper money in circulation permanently. But the Secretary of the Treasury said it had only been a War measure. The country must go back to the gold standard: silver and gold coins.
So the government started “retiring” (getting rid of) the paper money. But this caused problems too. The economy was not doing well, and they found an old law that allowed them to put some paper money back in circulation, which they did.
Back and forth the argument went, but as everyone knows, paper money is here to stay. In fact, in the future (in 1933), private citizens will have to trade in all their gold, and the gold standard will basically disappear. Thank you for your attention, and I hope I get an A on this report, Mr. Foster.
A note from the author: You know it’s true. It’s paper only nowadays. Oh, wait. It’s PLASTIC only!
Next time: What can Andi buy with all these greenbacks and gold and silver coins in 1880?