James Ford Rhodes (1848–1927). History of the Civil War, 1861–1865. 1917.
|the Senate that “the medicine of the Constitution must not become its daily bread.” Sumner, Sherman and many others, perhaps most of the senators and representatives favoring it, regarded the measure as only “a temporary expedient.” But the apparent ease of solving a financial difficulty by making irredeemable paper a legal-tender acted like a stimulant which called for repeated doses; additional legal-tender, which became known as greenbacks, were authorized and issued until January 3, 1864, when the amount reached but a little short of 450 millions. 1 The act of February 25, 1862, under which the first legal-tenders were issued, authorized also the issue of 500 millions 5–20 six per cent bonds, into which these legal-tender notes might be funded; interest on these bonds was payable in coin, for which the duties on foreign imports, payable in the same medium, were pledged.
| It is impossible to read the debates covering the legal-tender act without recognizing the patriotic note. The advocates felt that it was necessary to avoid bankruptcy and to carry on the military and naval operations. True enough, we see its ill effects in increasing the cost of the war and in debauching the public mind with the idea that the government could create money by its fiat; and we know not what would have been the result of the alternative scheme. But as the legal-tender clause was opposed to sound principles of finance and to valuable precedent, it might have been worth while to try the other plan first. It was generally conceded that Treasury notes must be issued; the difference arose on the proposition to make them a full legal-tender. With the issue of the amount deemed necessary, and made legal-tender only as between the government and the public, even as Pitt had restricted that quality
|Note 1. $449,338,902. Knox United States notes, 139. [back]