Legal Tender Act

The Legal Tender act gives the country much needed money at a time of war. Get the history of "Greenbacks"!

Episode Transcript

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We need money, we'll discuss sayswe take a byte out of history with
ingles markets. By the end ofeighteen sixty one, the US government knew
the Civil War would be a costlywar in both lives and money. Bombs
were suggested, but with so manyalready off to war, Congress decided to
print money instead. The Legal TenderAct was passed on February twenty fifth,
eighteen sixty two, allowing Congress toprint one hundred and fifty million dollars in

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paper notes that were not backed bygold or silver. The notes were called
greenbacks through the green tint for theprinting process, and some consider them the
first of the modern paper dollar thatwe still use today. Many fear they
would crash the economy, offering zeroconfidence to the new tender, but the
plan worked surprisingly well. The paperwas legal money, so businesses and creditors
had to accept it as payments.Another Tender Act was passed in eighteen sixty

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three, and by eighteen sixty five, half a billion dollars in green backs
had been issued. Inflation was keptat bay by the actions of Congress and
the introduction of income tax. Thishas been a byte out of history with
Ingles markets,