Paper Currency. 



House by Justin S. Morrill — both from Vermont. But the bill met 

 with popular favorand its passage authorized the issue of 8150,000,000 

 of legal tender notes. Another issue of $150,000,000 was authorized 

 on the 11th of July. On the 3d of March, 1863, $150,000,000 more 

 was authorized, making a total issue of $450,000,000. 



The first issue put gold at a premium. "With each issue the premium 

 advanced. The future seemed so uncertain that no one ventured to 

 guess what it might bring forth. Our credit was gone in every foreign 

 money market. In 1864, gold sold for one hundred and fifty per 

 cent premium. Congress realized that something must be done to 

 prevent the government's credit from being wholly thrown away. On 

 June 30 an act was passed declaring that at no time should the total 

 amount of United States notes exceed the amount already issued. 

 The total amount issued on January 30, 1864, which acted more or 

 less as currency, was $1,125,877,034 — $812,000,000 of which did not 

 bear interest. But inasmuch as the government could disregard its 

 promises, leaving the holders perfectly helpless, the declaration did 

 not strengthen its credit. The premium on gold continued to increase 

 till July, when it reached one hundred and eighty-five per cent pre- 

 mium. We say that gold was at a premium, because that form of ex- 

 pression is better understood. The correct statement is that the paper 

 currency was depreciated, and that " greenbacks " were worth only 

 thirty-five cents on the dollar. 



% the issuing of so much paper currency, the government went 

 deliberately to work to raise the price of every thing purchased to carry 

 on the war with, and to reduce the value of the equivalent it received 

 for its bonds, and the value of the revenue it received from nearly 

 every source. It has been estimated by competent authority, that from 

 the 15th day of April, 1861, when President Lincoln issued a call for 

 seventy-five thousand men — which was three days after the attack on 

 Fort Sumter — till about six months after General Lee's surrender at 

 Appomattox, on April 9, 1865, a period of say four years and a half, 

 the average expenses of the war were two millions of dollars each day. 



In the period mentioned, there were one thousand six hundred and 

 forty-two days, and if the expenses were two millions per day, the cost 

 of the war, for that period, was three thousand two hundred and eighty- 

 four millions of dollars ($3,284,000,000). A part of this expense was 

 provided for by making loans amounting to $2,565,000,000, for which 

 the government received a depreciated paper currency representing a 

 gold value, estimated on the basis of quarterly reports, of but 

 *1>T05,000,000. On the average, the bonds were sold for a fraction 



