GREENBACKS AND BONDS. 535 



and capitalists held the coin. Importers and the govern- 

 ment were compelled to have it. The brokers saw their 

 opportunity, and they not only discounted the notes and 

 bonds of the government 20 per cent, as was predicted by 

 Mr. Spaulding and Thaddeus Stevens, but demanded and 

 obtained them at a discount of 50 and 60 per cent. Gold 

 rapidly rose until in 1864 it reached 2.85. The bonds and 

 notes of the United States were exchanged at an enormous 

 rate of discount. Six per cent, interest exchanged for 

 greenbacks at the discounts amounted to 16 and 18 per 

 cent. This was immediately converted into more United 

 States bonds, and thus by compounding semi-annually the 

 capitalists succeeded in obtaining control over the entire 

 public debt. This policy of creating two classes of cred- 

 itors, and of the government knowingly and inexcusably 

 placing itself in an attitude of helplessness in the hands 

 of the money kings, was a folly unprecedented in the finan- 

 cial history of any nation. But, notwithstanding the 

 mutilated form in which the greenback went out from the 

 Treasury Department, they performed a marvelous work. 



The producing forces of the nation were set to work, 

 and there was no longer any difficulty in rendering the 

 resources of the people available to the government Of 

 this period, and the immediate effects of the greenback, 

 Judge Kelley thus pictures the change which followed the 

 passage of the bill. His picture will apply to what we 

 might again realize by a full legal tender, and a restoration 

 of a sufficient volume of currency to meet the demands of 

 industry : 



"But the patriots (Lincoln and Stevens) to whom I 

 have referred had studied the constitution of the United 

 States. They knew that it imposed upon them the duty 

 of saving the nation. They knew that money was the 

 sinew of war, and that it must be had. They knew that 



