The History Of The “Greenback” Repeats Itself – Or Does It?

The History Of The

The Following is a guest post from my friend Alan Amrich.  He has a wonderful grasp of U.S. Economics and history and his writing style is quite entertaining.  I am proud to share it with you!  Hope you enjoy it as much as I do.

The growing populist sentiment calling for a halt to the printing presses in Washington, incessantly cranking out billions of dollars in fiat currency, is not a new phenomenon. In fact, it’s as old as fiat currency itself in the United States — which incidentally turned 150 years old in February 2012. That’s right: the “greenback” made its first appearance in the American economy in 1862, in the midst of the Civil War, courtesy of that year’s Legal Tender Act of 1862.

Hmmm. The federal government, tied up in a costly commitment to the military and short of cash reserves in the Treasury, elects to simply print the money it needs and back the value printed on that money with its word of honor. Sound familiar? Just wait, it gets better…

After winning the Civil War, a political debate raged for more than a decade, over whether or not the temporary societal implement of paper money should have been phased out of existence. The debate generally pitted Democrats (who favored keeping and expanding fiat paper currency because its presence spurred inflation, which in turn reduced debt costs for Democrat constituencies of that era) against Republicans (whose own constituencies of that era were the creditors doing the lending).

Alright. So the Democrats, in effect, have no problem with the bigger government that’s essentially necessitated by an artificially-inflated supply of money in the economy. And the Republicans, in effect, want to cap the economy by preventing the ongoing presence of artificial money in the economy. But not for the sake of altruism: the GOP is simply looking out for the interests of their banker buddies on Wall Street. Where have we heard this before?

By the mid-1870s, America was in the grip of a depression, and a hard-hit faction of the Democratic Party splintered away and dubbed itself the Greenback Party. Over the course of three presidential elections, the Greenbacks ran candidates that stumped for more paper money, as well as other novel ideas (like a federal income tax). The Greenbacks actually managed to elect more than a dozen candidates to Congress, but never seriously threatened the Presidency. The movement faded away by the mid-1880s, and coincided with the rise of the Mugwumps — a political force of disenchanted Republicans that broke away from their own party and succeeded in swaying Washington policy to scale back paper currency circulation to match the value of the government’s gold reserves. It should be noted that the next three decades were among the most prosperous in the history of the US.

OK. Economic depression and fed-up citizens outright leaving their traditional political parties to fight for substantive change in federal monetary policy. Apparently, such a political environment — even in the America of 2013 — isn’t so strange in concept after all.  Unfortunately, the rest of the nineteenth century story will have a tougher time repeating itself in the America of 2013, courtesy of the presence of the Federal Reserve.

Monday Mention Madness


This week the link love is all about Real Estate posts.  Since I am a huge fan of real estate investing, I feel the need to give a shout out to those who share my passion!

For starters, Derek at wonders if it is time to sell real estate,thinking that the market may have peaked and values are elevated.  What do you think?

The PoP’s over at make a great case for seeing the value in small houses and even provides a blueprint layout of there humble abode, see here.

Brandon at wrote a great post about hard money lending, fix and flip, and refi’s.  Oh, and they have a great podcast that I am an avid listener of, check it out!

With the real estate market in full swing, had a very useful post about mistakes to avoid when buying.

I found this in the archives about the Australian real estate market.  I thought it was on fire, seems it is cooling off a bit.

The illustrates the importance of reading the bylaws before making a large real estate purchase.  Seems its kinda important!

Lastly, found this guest post on and it is a very comprehensive explanation of how investment properties can be a long-term source of income.

Happy Monday!



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  1. Jim – I appreciate the link love!! Thanks for sharing and enjoying our BiggerPockets Podcasts! Looking forward to getting to know you better in this crazy online world. Great blog!

  2. Brian says:

    Interesting story! I had no idea – thanks for the mention!

  3. Hey Alan–thanks for sharing from Fearless Men! You’ve got a list of good reads there. How’d you come across us?

  4. Nice guest post you have on here Jim! Thanks for taking the time out to write this Alan. I never knew the history of Greenbacks. I just remember growing up in SC and knowing that my grandmother would have books of them and in some places you could get stuff for them. Havent seen them in awhile now though. Great photo! I just signed up for BiggerPockets and Brandon is great!

    • Jim says:

      Yes, I found the history very interesting and felt the need to share it. I thoroughly agree with you about biggerpockets, I listen to their podcasts often, very enlightening!

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