Earth Rising

I found this information on the Internet. Someone asked me a question about the history of the term greenback. I thought someone would find the following information interesting. "There was no central bank in 1861. The Second Bank of the United States had been shut down by President Andrew Jackson. No national currency existed, and gold, silver, and copper were scarce, so only a limited number of coins could be minted. The existing supply of money was grossly inadequate to provide the enormous amount of funds the wartime government required. "To make matters worse, the banking system was in chaos. In the years immediately before the Civil War, roughly sixteen hundred state-chartered banks dotted the American landscape, each issuing its own notes. Roughly seven thousand varieties of banknotes were in circulation. Some were issued by legitimate state-chartered banks, but many were of dubious quality or simply counterfeit. Notes issued by banks that had been closed for years or were in default, as well as those bearing the names of fictional banks, were all part of the bewildering currency melange of the 1850s. Even notes of legitimate banks tended to lose a significant portion of their value when they were presented at a great distance from issuing banks. The banking system was haphazard and virtually unregulated. "Because the notes of state-chartered banks were generally accepted only in the state of the issuing bank, the government had difficulty in procuring goods and services for the military, just as it did during the War of 1812. Taxes paid in notes issued by a bank in one state generally could not be used to purchase supplies in another state. ... [So a bill was introduced for] a new United States currency ... to be accepted for all private transactions, but not redeemable for specie. ... The idea immediately drew fire on the House floor. The horrible precedent of the Continentals [during the Revolutionary War] was frequently cited, with one congressman saying 'the wit of man has never discovered a means by which paper currency can be kept at par value, except by speedy, cheap certain convertibility into gold and silver.' [But] desperate for cash, ... late in February 1862, Congress passed the Legal Tender Act. ... "The new 'legal tender' was printed with green ink on one side, and the notes were quickly nicknamed 'greenbacks.' (Confederate currency, printed with blue-gray ink, was known as 'blue backs.') ... The $450 million worth of greenbacks that were issued covered nearly 15 percent of the cost of the war ... and created 25 percent annual inflation. ... The Confederacy fared much worse ... with 9,000 percent inflation, caused primarily by far greater resort to the printing press." Robert D. Hormats, The Price of Liberty, Times Books, Copyright 2007 by Robert D. Hormat, pp. 75-78.