Paper Money In The United States

To pay for the war, the Confederate government issued a vast array of paper currencies at least seventy different types of currency, totaling more than 1.5 billion dollars, an incredible sum at that time. Making things even more confusing, state governments issued their own currencies  as did banks, insurance companies, and businesses.

During the Civil War the Confederate’s finances were a disaster which cause many problems for the newly formed government. The new Confederate government had to create a treasury and a revenue- collecting bureaucracy from scratch. The desperate Confederate congress began taxing nearly everything, but enforcement of the tax was poor and evasion easy. The blockade of Southern ports enforced by the Union Navy also caused the prices on goods to go up. Dissent over the price of war increasingly erupted into mass demonstrations, rioting, looting, burning of house, and desertions from the military.

Financing the war was also a problem. Americans had been unaccustomed to paying taxes to the national government, but both sides had to end the tradition of hard money and minimal government by raising taxes, issuing war bonds, and printing paper money. Inflation was serious in the North and devastating in the South by 1865.

Paper money is also a source of debate, as different bills are worth different amounts in every state at the time. By banning the use of paper money, Jackson’s ideals were achieved, so that how much money is worth is no longer a debate, but constantly defined. The final reason that Andrew Jackson shouldn’t be removed from the $20 bill is that he saved many Native American lives. In 1832, Jackson went against the decision of the Supreme Court, in order to sign the Indian Removal Acts of 1832. This decision was extremely controversial and stained much of Jackson’s generally positive presidency.

Confederate money was also worthless because they had no assets to back themselves up. They only promise to pay the barrier offer if the war was won and they had independence. The war against the Confederates and inflation soon came after. By the end of 1863 the Confederate dollar which was called “Grey-Back" and was just six cents in gold. The real roads hooky economy and left the south in ruins.

The Union blockade did not take full effect for many months, allowing the Southerners time to export their cotton harvest, and reap the financial benefits. Alexander Stephens had a plan at the start of the war that he estimated would net around $800M for the Confederacy, providing a sound financial base for the war effort. Although somewhat optimistic, and affected by practical difficulties, it is fair to say that the cotton crop would have been far better exported than stockpiled or burnt. Secondly, the Confederate government displayed an unwillingness to tax her citizens, preferring instead to print money, and suffer the rampant inflation that resulted. The Union financed its war effort mainly from taxation and bonds, while 60% of Southern funds came from unbacked paper money. The problems associated with this are clear to see: prices rose 100-fold over the four years of war, wiping out southerners' savings, and devastating the economy. The government's reaction to this, the third mistake, was to impress public goods for military use. However, rather than curbing inflation, this merely acted as a disincentive to supply, making essential items increasingly scarce. This, coupled with the poor infrastructure and parochialism of some State governors, meant that the army went hungry in a nation with the capacity to produce plenty of food. Finally, it is argued that the Confederate government should have done more to improve infrastructure and

The war of 1812 stimulated the growth of manufacturing, but it produced chaos in banking and currency. Due to the expiration of the first national bank in 1811, state banks had begun operating. They issued a number of bank notes but did not always have enough of gold or silver to match the amount of money given out. This currency crisis made it difficult to perform honest business and easy to counterfeit. The government saw this bank chaos and issued for a second National Bank, which would be built on the same institution as Hamilton’s did. During the war one of the long lasting issues was Transportation, which sparked an old debate, should the government finance road building in states. The government later agreed to pay for roads from the

There have been many controversies since the United States declared independence in 1776. One of the many domestic issues that divided American citizens was developing the First National Bank in the late 1700s. Hamilton was in favor, while Jefferson opposed and American citizens chose their side based on what they believed what was best for the country. Hamilton proposed a Report on a National Bank in December of 1790 announcing what the National Bank would include. Hamilton’s proposal included, “The bank’s stock would be worth $10,000,000. 20,000 shares would be sold privately at $400 per share ... 5,000 shares or $2,000,000 of bank stock would be bought by the U.S. government. The bank would be run by a 25-man board of directors - 20 chosen by the shareholders and 5 by the government. The bank’s president would be elected by the board of directors. Notes and bills (money) issued by the bank would be redeemable on demand ... and would be accepted by the U.S. government for all payments due. The bank’s charter would run for 20 years and would be subject to renewal by Congress. The bank would be allowed to establish branch offices in other cities; its main branch would be in Philadelphia, the nation’s capital” (http://www.digitalhistory.uh.edu/teachers/lesson_plans/pdfs/unit3_ 4.pdf). Although the first part of the bank bill, establishing a national mint, did pass with ease, supporters and opposers debated the rest of the bill, which included the development of

The bank provided credit to growing enterprises, issued bank notes which served as a dependable medium of exchange throughout the country, and it exercised a restraining effect on the less well manages state banks. Nicholas Biddle, who ran the Bank, tried to put the institution on a sound and prosperous basis. But Andrew Jackson was always determined to destroy it (Brinkley, 249). The Bank had two opposition groups: the “soft-money” faction and the “hard-money” faction. Soft money advocates objected to the Bank of the United States because it restrained the state banks from issuing notes freely. Hard money advocates believed that coin was the only safe currency, and they condemned all banks that issued bank notes.

The Bank of the United States was designed to make money and build an economy. It was designed by men like Alexander Hamilton and Robert Morris, but did not benefit the common citizen as much as wealthy investors. Why did a fledgling government need to borrow millions from overseas in order to invest in a “national” bank, to turn around and then borrow the same money back and pay interest on it? The banking system developed by Alexander Hamilton and Robert Morris was prime pickings for speculators, and laid the groundwork for a history of unscrupulous activity regarding our nation’s money supply that continues to this day. The signatures on the Constitution were barely dry before corruption and

The bank symbolized the hopes and fears inspired by the market revolution. The expansion of banking helped to finance the nation’s economic development. But many Americans, including Jackson, distrusted bankers as “non-producers” who contributed nothing to the nation’s wealth but profited from the labor of others. The tendency of banks to over-issue paper money, whose deterioration in value reduced the real income of wage earners, reinforced this conviction. Jackson himself had long believed the “hard money” -gold and silver-was the only honest currency. Nonetheless, when he assumed office there was little reason to believe that the Bank War would become the major event of his presidency.1 Page 388 of Give Me Liberty

The political debate over the currency—tight money versus easy money—had equally bewildered early historians. Many Gilded Age farmers favored inflation to counteract the growing value of their debts after wheat and cotton prices nose-dived; some businessmen also liked easy money because low interest rates enabled them to expand operations. This issue tended to pit Westerners and Southerners, who needed cash for economic development, against the East, but it also had a powerful moral component. Those who favored a currency based on some intrinsic value such as gold stood divided from those who saw money as a flexible device for regulating the nation’s economic health. In the broadest sense, the currency debate highlighted the complexity of the national economy and the growing difference of opinion over the role of government in it. In 1964 Irwin Unger elucidated the subject in a Pulitzer Prize-winning analysis, The Greenback

Even his Farewell Address alluded to the bank as “an insidious "money power" that threatened to subvert American liberty” (The Gilder Lehrman Institute of American History). Jackson’s war on the bank had devastating effects on America’s economy that eventually led to the Panic of 1837 and a financial depression that continued until the mid-1840s. Jackson’s war on the bank also included attacks on chartered corporations, which hurt those companies and their workers (Miller Center). Andrew Jackson was also known for being highly against the usage of paper currency, even going as far as to “order the issuance of a ‘Specie Circular’ in 1836 requiring payment in coin for western public lands” (Miller Center). Why would we want to honor Andrew Jackson on a currency he openly

1862 - President Lincoln signed into law a revenue-raising measure to help pay for Civil War expenses. The measure created a Commissioner of Internal Revenue and the nation 's first income tax (Internal Revenue Service, 2013).

The American civil war began in 1861 and ended in 1865. It was a War in which people were probably suffering the most. With a total death people close to 620,000 and million more injured. This event was a decisive one, according to the United States history. Through the North to the South, and the East to the West, that period of battle and civil War let engraved marks in population minds, which turn out is a watershed for Slaves and Freeman. One of the important turning points of the civil War was the importance to finance it. It cost a lot to both part of the United States to entertain war and battle during approximately four years. For example, the national debt rose from $65 million in 1860 to $2.6 billion in 1866. Nevertheless civil