What is a Greenback?

   Greenback is the popular name for the United States notes issued during the Civil War which were based on the credit of the country and not secured by gold or silver on deposit. They were made legal tender for all debts except for tariff duties and interest on the public debt. The highest amount outstanding at any one time was $449,338,902 on Jan. 3, 1864. The attempt of the government to retire the greenbacks after the war was a deflationary policy; it aroused a strong inflationary movement, which found expression in the greenback party. By May, 1878, the amount outstanding had been reduced to $346,681,016, when Congress forbade any further retirement of the notes from circulation as a concession to the Greenback movement. The greenbacks had depreciated greatly during the war, but the Resumption Act which took effect on Jan. 1, 1879, restored them to parity by making them redeemable in coin. Since that date there has been no change in the volume of greenbacks in circulation, although losses have somewhat reduced the amount; new notes are constantly issued to replace old ones.