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KF5JRV > TODAY 25.02.26 09:28z 30 Lines 1797 Bytes #999 (0) @ WW
BID : 20714_KF5JRV
Subj: Today in History - Feb 25
Path: HB9ON<DK0WUE<K7EK<VE3CGR<GB7OSW<GB7BED<GB7YEW<GB7RJJ<PU2XTC<KF5JRV
Sent: 260225/0909Z 20714@KF5JRV.#NWAR.AR.USA.NA BPQK6.0.24
On February 25, 1862, the U.S. Congress passes the Legal Tender Act, authorizing the use of paper notes to pay the governmentâ€
Ös bills. This ended the long-standing policy of using only gold or silver in transactions, and it allowed the government to fi
nance the enormously costly Civil War long after its gold and silver reserves were depleted.
Soon after the war began, the federal government began to run low on specie. Several proposals involving the use of bonds were
suggested. Finally, Congress began printing money, which the Confederate government had been doing since the beginning of the w
ar. The Legal Tender Act allowed the government to print $150 million in paper money that was not backed by a similar amount of
gold and silver. Many bankers and financial experts predicted doom for the economy, as they believed there would be little con
fidence in the scheme. There were also misgivings in Congress, as many legislators worried about a complete collapse of the nat
ionâ€Ös financial infrastructure.
The paper notes, called greenbacks, worked much better than expected. The government was able to pay its bills and, by increasi
ng the money in circulation, the wheels of Northern commerce were greased. The greenbacks were legal tender, which meant that c
reditors had to accept them at face value. In 1862, Congress also passed an income tax and steep excise taxes, both of which co
oled the inflationary pressures created by the greenbacks.
Another legal tender act passed in 1863, and by warâ€Ös end nearly a half-billion dollars in greenbacks had been issued. The Le
gal Tender Act laid the foundation for the creation of a permanent currency in the decades after the Civil War.
73 de Scott KF5JRV
Pmail: KF5JRV@KF5JRV.#NWAR.AR.USA.NA
Email KF5JRV@gmail.com
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