When the Kingston Trio came out with their rendition of "Greenback Dollar" with the lyrics saying "I don't give a dam about a greenback dollar I spend it just as fast as I can" today, half of that phrase is actually true. Too many of us continue to spend that greenback ever faster. But, what we do care about is why that ever disappearing dollar doesn't afford the things it used to. We do give a dam about every last dime that comes into our possession today.
To understand the seriousness of the United States financial status is to trace the history of the Greenback. The term greenback refers to legal tender, printed in green on one side and issued by the United States during the American Civil War. Currency up until that time was backed up by gold but when the Civil War broke out the demand for more currency was too much for the gold reserves the United States had. What President Lincoln did by issuance of the Greenback was to put the backing of greenback solely based on the credibility of the U.S. Government. It was largely what financed the Civil War while promoting and making the first industrial revolution possible in the process. Today our floundering US dollar is precariously close to falling off as the world's reserve currency. The main reason is that we still have our currency backed up by the credulity of our government, which by the way is also in dire straits today. The Federal Reserve continues to print out fresh "Greenbacks" and loans it to the US government with interest making bankers wealthier at the expense of the US economy.
When Lincoln assumed office he already understood that the outcome of the war would be largely determined by resources and understood the importance of raising enough funds to effectively carry out the war effort. With this in mind Lincoln on the day after his inauguration nominated Salmon P. Chase to be Secretary of the Treasury. As Secretary Chase alone was authorized to act on all matters pertaining to the country’s finances, Chase, like most everyone else at the time, underestimated the severity of the War in terms of its duration and cost.
Confronted with the expenses of war, the Lincoln Administration sought loans from New York bankers, most of whom were fronts for, or connected to, European banks. Given the very high interest rates of 24 to 36 percent, President Lincoln refused to accept the terms of the loans and called for other solutions. Colonel Edmund D. Taylor of Illinois made the suggestion that the U.S. government could issue its own money. Taylor is quoted as saying: "Just get Congress to pass a bill authorizing the printing of full legal tender treasury notes and pay your soldiers with them and go ahead and win your war with them also. If you make them full legal tender they will have the full sanction of the government and be just as good as any money; as Congress is given the express right by the Constitution." We have to remember too that this was in a time of war and the Federal Reserve didn't come into existence until 1913.
The idea to print Greenback based on the government's credibility was not Lincoln's idea originally, but with mounting pressure in Congress to accept the plan the President was quick to endorse it. The government could either print its own money or lead the country into to perpetual debt at the hand of European banks. On February 25, 1862, Congress passed the first Legal Tender Act, which authorized the printing of $150 million in Treasury notes.
Printed on only one side with green ink, the bills were soon known as "greenbacks". These United States Notes or "greenbacks" represented receipts for labor and goods delivered to the United States. They could be traded in the community for an equivalent value of goods or services. The union used this money to keep the economy stable and help to pay for the war. There are at least two types of notes that were called greenback referred to as: United States Notes and Demand Note.
What Abraham Lincoln did was prove that the US government could issue it's own currency and not the major banks that were intent on reaping billions of dollars in interest loans to the government in funding the civil War. The Greenback was proof that Lincoln understood the dangers of having currency loaned to the government at high interest rates would be putting the United states deeper in debt. Sounding familiar, it should because today with the Federal Reserve in play that is exactly what is driving this nations debt to all time highs. Jackson, Lincoln, Garfield and Kennedy all knew the dangers of money loaned to the government with high interest is the real cause of the United states national debt. A debt that will only continue to fester and push this countries ability to prosper further away from becoming a reality. In other words the United States economic and financial stability continues to be in very serious jeopardy. Today, it is also to note that this nations debt and without the gold standard in play is the main reason why disposable incomes are at all time lows.
After the battle of Gettysburg Congress repealed the Legal Tender Act and restored the previous gold and silver backed currency loaned by major Banks with interest to the US government. To the Bankers of the day most of these the power brokers were European. Just like the Rothschildes who controled the Bank of England have now gained a valued presence in many US Banks. They now control many US banking policies and literally have many members of Congress in their back pockets as well. And, it is still that way today.
With the understanding of our banking system we come away with the realization that too many Americans future is tied to the debt of this nation. A debt that only continues to grow. With past wars and the current involvement in Afghanistan, Iraq and other areas around the world along with the trillions of dollars in recent bailouts, that by the way really didn't solve our financial crisis, it only compounded it. All have pushed this nations debt even higher while too few have gotten wealthier in the process. When President Nixon took the dollar off of the gold standard in 1972 was and is like a death sentence of the US dollar.
Many of the baby boomer generation have recollections of their parents in the way they spent what money they earned. The spending habits just 50 years ago for many are far different than today. Where many had disposable incomes that enabled them to enjoy lifestyles that today too many just dream of. Take for instance, Tom Smith. Tom was born in 1950. His father had a white collar job earning middle class wages. His mother mainly stayed at home until he was about 11 then went on to teaching school. Tom grew up a suburban neighborhood. Was able to walk to both grammar and high school. Tom like all the other kids in town could partake in all manner of sports and other after school activities without having parents footing the bill. Not like today where school systems are so scraped for funding every child who now wants to partake in extracurricular activities parents have to pay up front fees leaving few children able to enjoy. Up until the time Tom went on to college his family enjoyed summers at their summer home in Wisconsin, the family had two cars and two boats that were moored at the family pier down the path from their summer home. All of these things Tom's family was able to afford because of the available disposable income that his parents had after all the bills were paid. For many of the children of the fifties their parents enjoyed similar lifestyles.
A much different set of circumstances exist today. More sober, more unsettling, and even a more sinister approach has taken over the majority of families spending habits has arisen. The greenback is not worth what it was compared to back in the early 1960's. To restore the value of the dollar and reestablish it's true worth is to have the gold standard reinstated whereby every fiscal transaction is geared to insure that more disposable incomes are available for all. The surest way is to like Lincoln have the Treasury and not the Federal Reserve print those all important greenbacks, interest free.
The sad reality is that of all the Presidents that ushered in mandates the circumvented The Bank of New York in Lincoln's and Garfield's case or Kennedy with the Federal Reserve and Jackson with the second Bank of the United States all of whom printed money contrary to the Constitution and loaned it back to the government with interest at over 20% Andrew Jackson was the only one to survive assassination.