A FLOOD OF PAPER MONEY
THEcurrency consisted of irredeemable paper, a part issued by national banks, a part by State banks, and a part directly from the government printing-presses. Its value, which had been as low as $35.09 in gold for $100 in paper, in July, 1864, was still less than $70 in gold after the stimulus of Lee’s surrender. Prices of commodities, which had fluctuated even more wildly than the gold premium, showed an average for leading articles, in the first quarter of 1865, representing 2.62 times the corresponding average just before the war.
Brave and energetic as had been the policy of Salmon P. Chase as Secretary of the Treasury in grappling with the problems of the war, he made two economic errors which greatly added to the difficulties that confronted his successor. He continued too long the policy of borrowing instead of taxing, thereby impairing the public credit and adding to the cost of his borrowings; and he opened the Pandora’s box of legal-tender paper money, which left its mark upon our political history for nearly half a century.
From a photograph by W. KurtzDAVID A. WELLS
From a photograph by W. Kurtz
DAVID A. WELLS