(navigation image)
Home American Libraries | Canadian Libraries | Universal Library | Community Texts | Project Gutenberg | Biodiversity Heritage Library | Children's Library | Additional Collections
Search: Advanced Search
Anonymous User (login or join us)
Upload
See other formats

Full text of "A history of the greenbacks with special reference to the economic consequences of their issue: 1862-65"

i in m "M 

liBtf 



1 IllTll 

iSliiiiiiiiii , 
Mwaffi 



A HISTORY OF 























THE DECENNIAL PUBLICATIONS OF 
THE UNIVERSITY OF CHICAGO 



THE DECENNIAL PUBLICATIONS 



ISSUED IN COMMEMORATION OP THE COMPLETION OP THE FIRST TEN 
YEARS OP THE UNIVERSITY'S EXISTENCE 



EDITED BY A COMMITTEE APPOINTED BY THE SENATE 

EDWARD CAPP3 

STARR WILLARD CUTTING ROLLIN D. SALISBURY 

JAKES ROWLAND ANQELL WILLIAM I. THOMAS 8HAILER HATHEW9 

CARL DARLING BUCK FREDERIC IVES CARPENTER OSKAR BOLZA 

JULIUS STIEGLITZ JACQUES LOEB 



THESE VOLUMES ARE DEDICATED 

TO THE MEN AND WOMEN 

OF OUR TIME AND COUNTRY WHO BY WISE AND GENEROUS GIVING 

HAVE ENCOURAGED THE SEARCH AFTER TRUTH 

IN ALL DEPARTMENTS OF KNOWLEDGE 



HISTORY OF THE GREENBACKS 




GREENBACKS 



WITH SPECIAL REFERENCE TO THE ECONOMIC 
CONSEQUENCES OF THEIR ISSUE: 1862-65 



WESLEY CLAIR MITCHELL 

OF THE DEPABTMENT OF POLITICAL ECONOMY 



THE DECENNIAL PUBLICATIONS 
SECOND SERIES VOLUME IX 




CHICAGO 

THE UNIVERSITY OF CHICAGO PRESS 
1903 




Copyright 1903 

BT THE UNIVERSITY OF CHTCAOO 



TO J. W. M. AND L. M. M. 



PREFACE 

APOLOGIES must be made both for the bulkiness and 
for the fragmentary character of the following monograph. 
These defects are due to the same cause: an attempt to 
utilize all the well-authenticated statistical material bearing 
upon the subjects treated. The amount of labor entailed by 
this attempt was so large that I have been unable to carry 
the discussion beyond the first four years in tjie history of 
the greenbacks. Even within this brief period two impor- 
tant topics are passed over. Nothing is said of the effects 
of the greenbacks upon foreign trade, and no comparisons 
are made between American and foreign experiences with 
paper money. The former topic is omitted from lack of 
time to get the refractory statistical data relating to it into 
significant shape; indeed, my dealings with the figures incline 
me to doubt whether any other than a speculative treatment 
is feasible. As for the latter topic, I soon discovered that 
foreign comparisons presented too large a subject to be dealt 
with as a side issue in such a monograph as the present. 
Moreover, the consequences of the abandonment of the specie 
standard in which I have been most interested are such as 
can be traced only when one has much fuller information 
regarding prices, wages, and the like than are available to 
the student of foreign experiments with inconvertible paper 
currencies. 

All of the statistical data employed in the course of the 
discussion are presented at length in the Appendix in such 
form that they can be readily verified, or employed in new 
combinations. The tables have passed through the hands 
of two computers. While I can hardly hope that no errors 



Xll 



PREFACE 



of transcription, computation, or printing remain uncor- 
rected, I should be surprised to find any of sufficient 
consequence to affect the validity of the conclusions drawn. 

Four of the chapters have appeared at various dates as 
articles in the Journal of Political Economy, and one has 
been reprinted in Sound Currency and the Report of the 
Indianapolis Monetary Commission. Three of these articles 
have been entirely rewritten, and the fourth has been care- 
fully revised. 

Professor J. Laurence Laughlin and Dr. Herbert J. 
Davenport, of the University of Chicago, and Professor T. 
S. Adams, of the University of Wisconsin, have read differ- 
ent parts of the book and made valuable suggestions and 
criticisms. Miss Maude L. Radford, of University College, 
Chicago, has looked over all the chapters and done what she 
could to amend crudities of expression. My thanks are also 
due to the late Professor Charles F. Dunbar, and to Colonel 
Carroll D. Wright, for answers to troublesome inquiries by 
letter. 

W. C. M. 

UNIVERSITY OF CALIFORNIA. 



TABLE OF CONTENTS 

PART I. HISTORY OF THE LEGAL-TENDER ACTS 

CHAPTER I. The Suspension of Specie Payments - - 3 

i. State of the Finances, March, 1861. 
ii. Chase's Administration of the Treasury, March to June, 

1861. 

in. Financial Legislation of the Extra Session of Congress. 
iv. The $150,000,000 Bank Loan. 

CHAPTER II. The First Legal-Tender Act - 44 

i. The Legal-Tender Bills, 
ii. Debate in Congress, 
in. Attitude of Secretary Chase, 
iv. Passage of the Act. 

CHAPTER III. The Second Legal-Tender Act - 82 

i. Government Finances, January to June, 1862. 
ii. The Second Legal-Tender Act. 
in. The Postage Currency Act. 

CHAPTER IV. The Third Legal-Tender Act - - 100 

i. The Finances from July to December, 1862. 
ii. The Joint Resolution of January 17, 1863. 
in. The Third Legal-Tender Act. 

CHAPTER V. How Further Issues of Greenbacks Were Avoided 

in 1864 and 1865 - 119 

i. The Congressional Pledge to Issue no More U. S. Notes. 

ii. Financial Difficulties of 1864. 
in. Secretary McCulloch and the Alley Resolution, 
iv. Recapitulation. 

PART II. ECONOMIC CONSEQUENCES OF THE LEGAL- 
TENDER ACTS 

CHAPTER I. Preliminary Sketch - ... 135 

CHAPTER II. The Circulating Medium .... 141 

i. Gold and Silver Coin. 
ii. Bank Notes. 
in. Old Demand Notes. 



xiv TABLE OF CONTENTS 

iv. " Shinplasters" and Fractional Currency, 

v. Minor Coins, 

vi. Treasury Notes, 

vn. Recapitulation. 

CHAPTER III. The Specie Value of the Paper Currency - 182 
i. The Markets for Gold. 

ii. Factors Which Affected the Gold Price of the Currency, 
in. The Course of Depreciation, January, 1862, to December, 
1865. 

CHAPTER IV. Prices - 239 

i. Falkner's Table of Relative Prices, 
n. A New Table of Relative Prices by Quarters. 
in. Relative Prices Paid by the Federal Government for 

Supplies. 

rv. Relative Prices of Various Necessities at Retail, 
v. General Causes of Price Fluctuations Other than the 

Currency, 
vi. The Currency as a Cause of the Price Fluctuations. 

CHAPTER V. Wages - 280 

i. Falkner's Table of Relative Wages, 
n. Scope of the Data Concerning Wages in Table XII of 

the Aldrich Report. 
in. New Tables of Relative Money Wages Based upon the 

Data in Table XII of the Aldrich Report 
iv. Relative Money Wages in the Coal, Iron, Glass, and 

Pottery Industries. 

v. Relative Salaries of School-Teachers. 
vi. Relative Wages of Farm Laborers. 

vii. Tables of Relative Money Wages Based upon the Mate- 
rial in Vol. XX of the Tenth Census. 
vin. Pay of Government Employees. 
ix. Increase in Living Expenses. 
x. Relative Real Wages, 
xi. Conclusion. 

CHAPTER VI. Rent 352 

i. Urban Rents, 
n. Farm Rents. 

CHAPTER VII. Interest and Loan Capital - - 360 

i. The Problem of Lenders and Borrowers of Capital. x 
ii. Purchasing Power of the Principal of Loans, 
in. The Rate of Interest. ^ 



TABLE OF CONTENTS xv 

CHAPTER VIII. Profits - 380 

i. Profits as a Share in the Distribution of the Product, 
ii. Profits in Different Industries, 
in. Statistical Evidence Regarding Profits. 

CHAPTER IX. The Production and Consumption of Wealth - 392 
i. Production, 
ii. Consumption. 

CHAPTER X. The Greenbacks and the Cost of the Civil War 403 
i. The Problem and the Method of Solution, 
ii. The Greenbacks and Expenditures. 
m. The Greenbacks and Receipts, 
iv. The Greenbacks and the Public Debt, 
v. Conclusion. 

STATISTICAL APPENDICES 

APPENDIX A. Gold Value of the Paper Currency, 1862-65 - 423 
TABLE 1. Monthly Highest, Average, and Lowest Gold 

Price of $100 of Paper Money in the New 

York Market. 
TABLE 2. Daily Highest and Lowest Value in Gold of $100 

in Currency. 

APPENDIX B. Relative Prices of Commodities - 429 

TABLE 1. Relative Prices of Farm Products. 

TABLE 2. Relative Prices of Various Commodities at 
Wholesale. 

TABLE 3. Relative Prices paid by Federal Government 
for Supplies. 

TABLE 4. Relative Prices of Various Commodities at 
Retail. 

TABLE 5. Comparison of the Relative Prices of Twenty- 
three Commodities at Wholesale and at Retail. 

APPENDIX C. Relative Wages - 470 

TABLE 1. Wage-Series from Table XII of the Aldrich 

Report. 

TABLE 2. Wage-Series from Vol. XX of the Tenth Census. 
TABLE 3. Relative Salaries of School-Teachers. 



INDEX - ... 559 



XVI 



TABLE OF CONTENTS 



CHARTS- 
CHART 



Graphic Illustration of the Effect upon the 
New York Banks of the $150,000,000 Loan - 
CHART II. Fluctuations in the Gold Value of $100 in 
American Paper Money from January, 
1862, to December, 1865 

CHART III. Relative Prices at Wholesale and the Value 
of Gold Coin in Currency .... 



31 



211 



277 



PART I 
HISTORY OP THE LEGAL-TENDER ACTS 



CHAPTER I 
THE SUSPENSION OF SPECIE PAYMENTS 

I. State of the Finances, March, 1861: 

Appointment of Secretary Chase Financial Difficulties Inherited 
from the Buchanan Administration Morrill Tariff Act. 
II. Chase's Administration of the Treasury, March to June, 1861 : 
Improvement in the Credit of the Government Chase's Attempts 
to Borrow. 

III. Financial Legislation of the Extra Session of Congress: 
Chase's Program Loan and Tax Laws Inadequacy of Taxes 
Levied. 

IV. The $150,000,000 Bank Loan: 

Why Chase Applied to the Banks Plan of the Bank Loan Chase's 
Refusal to Draw on Banks and his Issue of Treasury Notes 
Effect of the Loan on Condition of the Banks Second $50,000,000 
Loan Third $50,000,000 Loan Effect of Finance Report and 
Trent Affair Depletion of Bank Reserves and Suspension of 
Specie Payments. 

I. STATE OF THE FINANCES, MARCH, 1861 

ON the day after his inauguration President Lincoln 
sent to the Senate the nomination of Salmon P. Chase, of 
Ohio, as secretary of the treasury. Political considerations 
were of chief weight in determining this appointment. Mr. 
Lincoln perceived that the support of the various elements 
of which the young Republican party was compounded would 
be necessary to secure the success of his administration. So 
Seward, the recognized leader of the radical wing of the 
party, was made secretary of state; and Chase, the most 
prominent representative of the conservative wing composed 
of anti-slavery Democrats, became secretary of the treasury. 1 

In addition to political availability, Mr. Lincoln thought 
Chase possessed peculiar personal qualifications for the 

i Cf. NICOLAY AND HAY, Abraham Lincoln, A History (New York, 1890), Vol. III. 
p. 354. 

3 



HISTORY OF THE GREENBACKS 



position. True, his thirty years' connection with the Cin- 
cinnati bar, and the term in the Senate and two terms as 
governor of Ohio, that constituted his experience of public 
affairs, had brought him little familiarity with fiscal ques- 
tions. But they had shown that he had a clear intellect, 
administrative ability, and untiring industry. And, above 
all, they had given him a name for strict integrity that 
would be of especial weight in gaining the public confidence 
indispensable to success in the management of the then dis- 
credited treasury. Though Mr. Chase brought with him 
little knowledge of financial administration, his mind was 
deeply impressed with certain financial theories. From his 
former Democratic affiliations he had imbibed the " hard- 
money " principles of Jackson and Benton and their dislike 
for paper currencies. Personal observation of the unsound 
methods of banking then prevalent in the western states had 
strengthened these convictions and inspired in him an 
indiscriminating distrust of the issues of all banks whatso- 
ever. The early suspension of specie payments and issue of 
an irredeemable currency of legal tender paper in the Civil 
War occurred, then, under the administration of a secretary 
of the treasury who cherished a strong predilection for 
metallic money. 1 

It was with great reluctance that Mr. Chase resigned his 
seat in the Senate to undertake the arduous task of manag- 
ing the treasury in the face of threatening war. 2 The diffi- 

1 Three considerable biographies of Chase have been published, one by 
ROBERT B. WARDEN, An Account of the Private Life and Public Services of 
Salmon Portland Chase, Cincinnati, 1874 ; 8vo, pp. xxiii + 838 (valuable chiefly 
for copious extracts from Mr. Chase's private papers) ; the second by J. W. 
SCHUCKERS, Life and Public Services of S. P. Chase, New York, 1874 ; 8vo, pp. xv + 
669; the third by PROFESSOR A. B. HART, Salmon Portland Chase ("American 
Statesmen" Series), Boston and New York, 1899; 8vo, pp. xi + 465. See also HUGH 
McCtTLLOCH, Men and Measures of Half a Century (New York, 1888) , chap, xvi, and 
W. M. EVARTS, Eulogy on Chase, appended to SCHCCKERS'S Life. 

2 Cf. Chase's letter to the governor of Ohio, SCHTJCKERS, op. cit., p. 207, and letter 
of F. A. Conkling to E. G. Spaulding, October 17, 1875, in SPAULDING, History of the 
Legal Tender Paper Money Issued during the Great Rebellion, 2d ed. (Buffalo, 1875), 
Appendix, p. 84. 



SUSPENSION OF SPECIE PAYMENTS 5 

culties of his position were increased by the disorganized 
condition in which the federal finances had been left by the 
preceding administration. When Mr. Buchanan was inaug- 
urated his secretary of the treasury, Howell Cobb, of Georgia, 
found himself embarrassed by a redundant revenue, to 
reduce which Congress had just passed the tariff act of 
March, 1857, lowering the duties upon imports. Unfortu- 
nately the financial crisis of 1857 and the commencement of 
the Mormon troubles followed hard upon the date when the 
new tariff took effect ; the one, in conjunction with the new 
tariff, decreased the treasury receipts from customs by a 
quarter, the other increased the expenses of the War Depart- 
ment. So, instead of a surplus the fiscal year 1858 pre- 
sented a deficit in the revenue. 1 

To meet the shortage Congress authorized the issue of 
$20,000,000 of one-year treasury notes. 2 As the deficit 
recurred the next year, a fifteen-year loan of $20,000,000 
was made; 3 and in March, 1859, when the one-year treasury 
notes began to fall due, it was necessary to extend their 
term to July, I860. 4 Even by that time the financial situa- 
tion had not improved sufficiently to enable the government 
to pay the notes out of revenue, and another loan of 
$21,000,000 had to be authorized to procure the necessary 
funds. 5 

Early in September, 1860, Secretary Cobb invited bids 
for $10,000,000 of this loan, a sum sufficient to meet the 
notes coming due before January, 1861. When the bids 
were opened, October 22, it was found that the whole sum 
had been taken at par or at a small premium. Payment of 
the subscriptions was to be made thirty days later. But in 

1 Report of the Secretary of the Treasury, December, 1858, pp. 3, 4. 

2 Act of December 23, 1837, 11 Statutes at Large, p. 257. 

3 Act of June 14, 1858, *6td., p. 365. < Act of March 3, 1859, ibid., p. 430. 
6 Act of June 22, 1860, 12 Statutes at Large, p. 79. 



6 HlSTOBY OF THE GREENBACKS 

November Mr. Lincoln's election was followed by threats of 
secession from the southern press. A sudden business 
revulsion resulted, for everyone was anxious to prepare his 
affairs for the coming storm. 1 The subscribers to the loan 
were timid and embarrassed. To encourage them, Cobb 
offered an additional thirty days for making payments to all 
who would deposit one-half of their bids on the appointed 
day. Though most of the bidders accepted the offer, some 
preferred to forfeit the 1 per cent, deposits sent in with the 
bids rather than to take the bonds. From the $10,000,000 
offered the treasury realized only $7,022,000. 2 

Convinced by this ill-success that an attempt to negotiate 
the remaining Si 1,000,000 of the loan would fail, Cobb 
requested Congress to substitute treasury notes for the bonds 
and to pledge the public lands unconditionally for their 
redemption. Further, he asked authority for a new loan of 
$10,000,000 to supply the deficit in the revenues due to the 
contraction of business. 3 Six days after sending this report 
to Congress Cobb resigned, giving as his reason that 
Georgia required his services.* Going home, he entered the 
campaign to persuade his state to secede, and a little later 
became vice-president of the Confederacy. 

President Buchanan appointed as Cobb's successor Philip 
F. Thomas, of Maryland. Despite the change in secretaries, 
Congress acted on the second of Cobb's recommendations by 
authorizing the issue of $10,000,000 of one-year treasury 
notes at par to those bidders who would accept the lowest 
rates of interest. 5 The day after the act was approved, 

1 Report of the Secretary of the Treasury, December, 1860, p. 7 ; cf. W. G. SUMNEB, 
A History of American Currency (New York, 1875), p. 189. 

2 Report of the Secretary [of the Treasury, December, 1860, pp. 8, 9, and 480-83; 
Senate Executive Document No. 2, p. 11, 37th Cong., 1st Sess. 

3 Report of the Secretary of the Treasury, December, 1860, p. 9. 

*E. McPHERSON, Political History of the Rebellion, 4th ed. (Washington, 1882), 
p. 28. 

5 Act of December 17, 1860, 12 Statutes at Large, p. 121. 



SUSPENSION OF SPECIE PAYMENTS 7 

Thomas invited proposals for one -half of this loan. The 
response showed how low the national credit had sunk; 
$1,831,000 was offered at 12 per cent, or less; $465,000 
more at rates between 15 and 36 per cent. All offers at 12 
per cent, or under were accepted. 1 

To explain why the government was compelled to pay 
such high rates of interest is not difficult. Public confi- 
dence in the Buchanan administration was shaken; particu- 
larly, confidence in the management of the Treasury Depart- 
ment which for four years had been contracting debts to 
meet annually recurring deficits. The check to business 
following the election in November had intensified the 
uneasiness. One secretary of the treasury had resigned to 
aid the secession movement; his successor was distrusted 
as a southern sympathizer. South Carolina had already 
adopted the ordinance of secession; other states were on the 
eve of following her example. At Washington there was 
disorganization and indecision. Under such circumstances 
it was natural that there should be hesitation in New York 
about lending to the government. 

But the needs of the government were imperative. The 
full amount of the five millions offered was required to 
meet the treasury notes and interest on the debt due 
January 1. Foreseeing the failure of the public sub- 
scription, Mr. Cisco, the head of the subtreasury at New 
York, induced the New York banks to take at 12 per cent, 
interest whatever part of the $5,000,000 might not be bid 
for. Their offer was accepted by Secretary Thomas. 2 After 
the banks had paid a part of the money into the treasury 
they became convinced that Thomas intended "to transfer 
the money into the confederate region where it would be 
captured." Accordingly, they withheld payment of the 

1 H. R. Miscellaneous Document No. 20, p. 3, 36th Cong., 2d Sess. 

2 Ibid., loc. cit. 



HISTORY OF THE GREENBACKS 



next instalment and sent representatives to confer with Mr. 
Buchanan. 1 The result was that Thomas resigned, ostensi- 
bly because he could not agree with the president "in the 
measures .... adopted in reference to the .... condition 
of things in South Carolina." '' He was succeeded January 11 
by General John A. Dix a man who commanded the full 
confidence of the North and the balance of the loan was 
paid. 

Dix found the treasury empty, $350,000 of unpaid war- 
rants accumulated, and a deficit in the revenue which was 
expected to reach nearly $27,000,000 by the end of June. 3 
To meet immediate requirements he offered the remaining 
half of the $10,000,000 treasury-note loan authorized the 
preceding December. An improvement in the credit of the 
government was indicated by the fact that whereas 12 per 
cent, interest had been paid for the first $5,000,000, the 
second was borrowed at an average rate of 10f per cent.* 

But the sum thus realized did not last long and further 
borrowing became necessary. Judging from Cobb's failure 
that it would be impossible to negotiate the balance of the 
$21,000,000 loan of June 22, 1860, under the terms of the 
law which forbade the sale of stock below par, Dix applied to 
Congress to authorize a new bond issue. He even suggested 
calling on the states to return the $28,000,000 of surplus 
revenue deposited with them in 1836. 5 Congress, however, 
would only pass a $25,000,000 loan act. 6 Dix then urged 

1 Correspondence between Mr. George S. Coe, one of the bankers concerned, and 
E. G. Spaulding, in H. KINO, Turningon the Light (Philadelphia, 1895), pp. 186-9. 

2 Letter of resignation, G. T. CURTIS, Life of James Buchanan (New York, 1883), 
Vol. II, p. 404. 

3 Cf. Dix's letter to the chairman of the Committee on Ways and Means, H. R. 
Miscellaneous Document No. 20, 36th Cong., 2d Sess. 

* Cf. J. J. KN-OX, United States Notes, 2d ed. (London, 1885), p. 76. 

&H. R. Miscellaneous Document No. 20, p. 6, 36th Cong., 2d Sess. 

Act of February 8, 1861, 12 Statutes at Large, p. 129. The bonds were to bear 6 
per cent, interest and " to be reimbursed within a period not beyond twenty years 
and not less than ten years." Sec. 2. 



SUSPENSION OF SPECIE PAYMENTS 9 

that the states be permitted to add the pledge of their faith 
to that of the federal government for the repayment of the 
loan ; but the House refused to consider a bill for this pur- 
pose. 1 Nevertheless, when bids for $8,000,000 of the new 
loan were invited in February, the whole sum was subscribed 
on terms that made the average rate of interest 6.63 per 
cent., indicating a further improvement in the national 
credit. 2 

Such small loans, however, could afford but temporary 
relief. The real difficulty was the insufficient revenue. To stop 
the necessity of borrowing by increasing the treasury receipts 
was the nominal purpose of the last important law passed 
during the Buchanan administration. Bills to raise duties 
on imports had been presented at every session of Congress 
since 1858; but all had failed of adoption, until, shortly 
before the presidential election of 1860, the Morrill tariff 
act passed the House. It was not taken up by the Senate until 
the following session, and even then its progress for a time 
was blocked. But finally, after many of the southern sena- 
tors had left Washington, it was passed and became a law 
two days before the close of Mr. Buchanan's term. 3 

As a revenue measure the new schedule was foredoomed 
to failure. The heaviest duties were levied on articles largely 
produced in the United States ; sugar and molasses were lightly 
taxed, while coffee, tea, and wool worth less than 18 cents 
per pound, were entirely free. Revenue was thus sacrificed 
to protection. During the quarter, January-March, the 
customs receipts were $9,800,000; in the succeeding three 

1 Congressional Globe, 36th Cong., 2d Sess., pp. 871, 872. 

2 Bids were received for $14,460,260 at the rates ranging from 75 to 96.10. Of these 
bids $8,006,000 were accepted, all below 90.15 being refused. Senate Executive Docu- 
ment No. 2, pp. 19-30, 37th Cong., 1st Sess. The average rate was 90.478. BATLEY, 
National Loans of the United States, p. 151. 

3 Act of March 2, 1861, 12 Statutes at Large, p. 178. Cf. F. W. TAUSSIG, Tariff 
History of the United States, 2d ed. (New York, 1893), p. 158. Sec. 1 of the act author- 
ized a loan of $10,000,000. 



10 HISTORY OP THE GREENBACKS 

months, when the new tariff was in effect, they were $5,500,- 
000 a decrease of over 40 per cent. 1 Thus, instead of 
improving the position of the treasury, the new tariff served 
only to increase the financial embarrassment." 

u. CHASE'S ADMINISTRATION OF THE TREASURY, MARCH TO 

JUNE, 1861 

It was at a time, then, when the revenue of the govern- 
ment was insufficient to pay its expenses even on a peace 
footing, and when distrust and frequent borrowing had much 
impaired its credit, that Mr. Chase, with small experience of 
financial operations, undertook to raise the means for waging 
a most expensive war. From April to June the ordinary 
receipts of the treasury were $5,800,000, its expenditures 
$23,500,000. 3 To fill the deficit there was but one recourse - 
borrowing. Disadvantageous as were the terms on which 
the recent loans had been made, it was to a new loan that 
Mr. Chase was forced to resort. 

On the whole, he was in a more favorable position for 
borrowing than Cobb, Thomas, or Dix had been. True, the 
political situation had become more grave. Mississippi, 
Florida, Alabama, Georgia, Louisiana, and Texas had fol- 
lowed South Carolina's example in seceding from the Union, 
and when the new administration was installed at Washing- 
ton it saw itself confronted by a rival government in Mont- 
gomery. But to offset this, Buchanan, who had become 
thoroughly discredited in the North, had given place to 

1 Report of the Secretary of the Treasury, December, 1861, p. 30. 

2 On the condition of the finances at the commencement of the Civil War, cf. 
R. J. WALKER, American Finances and Resources (London, 1864) ; VON HOCK, Die 
Finanzen und die Finanzgeschichte der Vereinigten Staaten (Stuttgart, 1867), pp. 
437-40; M. B. FIELD, Memories of Many Men and of Some Women (London, 1874), 
pp. 250-52; JOHN SHERMAN, Recollections of Forty Tears in the House, Senate and 
Cabinet (Chicago, 1895), Vol. I, pp. 251-4; KNOX, op. cit., pp. 70-83; J. G. ELAINE, 
Twenty Years of Congress (Norwich, Conn., 1884), Vol. I, pp. 396-401; A. S. BOLLES, 
Financial History of the United States from 1861 to 1885 (New York, 1886), pp. 4-6. 

3 Report of the Secretary of the Treasury, December, 1861, pp. 30-32. 



SUSPENSION or SPECIE PAYMENTS 11 

Lincoln, in whom the people reposed greater confidence. In 
raising his first loan Mr. Chase had the benefit of this feel- 
ing. Moreover, the credit of the government was improved 
by a temporary increase of revenue. The Morrill tariff act, 
approved March 2, was to go into operation April 1. Import- 
ers took advantage of the intervening thirty days to pass 
their goods through the custom-houses as rapidly as possible 
in order to escape payment of the higher duties imposed by 
the new schedule, thus increasing the receipts from customs 
for the months of February and March. 1 

Under the existing laws the secretary had authority to 
borrow some $41,000,000. (1) Of the $21,000,000 loan 
of June 22, 1860, Cobb had negotiated $7,022,000, leaving 
a balance of $13,978,000 which could be issued in 6 per 
cent, twenty-year bonds a resource available under the 
law, however, only when the bonds could be sold at par. (2) 
The two $5,000,000 treasury-note loans raised by Secretaries 
Thomas and Dix had exhausted the authority to borrow under 
the act of December 17, 1860 ; but (3) Dix had issued only 
$8,006,000 of the $25,000,000 of 6 per cent, stock provided 
for by the act of February 8, 1861. The disposal of the 
remainder of this stock $16,994,000 was not hampered 
by the customary provision forbidding sales below par. (4) 
Finally, the opening sections of the Morrill tariff act author- 
ized a loan of $10,000,000 upon 6 per cent, ten-twenty -year 
bonds at par, or upon 6 per cent, treasury notes ; but the pro- 
ceeds of this loan could not be applied to the service of the 
current fiscal year which would end June 30, 1861. However, 
this act made the authority to borrow, existing under other 
laws, more available, by permitting the president "to substitute 
treasury notes of equal amount for the whole or any part of 
any of the loans for which he is now by law authorized to 

i Cf. American Annual Cyclopaedia, 1861, p. 296, and Hunt's Merchants' 1 Maga- 
zine, Vol. XLIV, p. 666. 



12 HISTORY OP THE GREENBACKS 

contract and issue bonds." The treasury notes so issued 
were to bear interest at 6 per cent., be receivable for govern- 
ment dues, convertible at par into 6 per cent, bonds, and 
could be made redeemable at any time within two years ; but, 
like the bonds, they could not be issued to creditors or sold 
for coin at less than par. 1 

Mr. Chase began by advertising, on March 22, $8,000,000 
of the 6 per cent, stock which, under the act of February 8, 
could be sold to the highest bidder. 2 Ten days were allowed 
for making proposals. When the bids were opened, April 2, 
it was found that the loan had been subscribed three times over 
at rates ranging from 85 to par. 3 This indicated an encoura- 
ging improvement in the credit of the government, for the 
offers for an equal amount of the same stocks made to General 
Dix less than two months before varied from 75 to 96.10 and 
amounted to $14,460,250, as compared with $27,182,000. 
But Mr. Chase thought the treasury notes, which he had 
authority to issue in lieu of the bonds, could be sold at better 
prices. 4 Consequently he accepted only the bids at 94 and 
above, amounting to $3,099,000, and on April 6 invited bids 
for the balance $4,901,000 in treasury notes. 5 Unfortu- 
nately, the departure of the expedition to relieve Fort 
Sumter became known in the meantime. The news created 
much uneasiness, and when the bids were opened April 11, 
but one-fifth of the sum had been taken. Financiers who were 
interested in the success of the loan procured a delay, however, 

i Act of March 2, 1861, Sec. 4, 12 Statutes at Large, p. 178. On Chase's authority 
to borrow, see his report of July 4, 1861, Senate Executive Document No. 2, p. 11, 37th 
Cong., 1st Sess. 

2 Senate Executive Document No. 2, p. 31, 37th Cong., 1st Sess. 
3 Schedule of bids, ibid., pp. 32-49. 

* Since the treasury notes bore 6 per cent, interest and were receivable for all 
government dues, large importers derived a profit from investing in them the money 
held in readiness for the payment of customs duties. Cf. American Annual Cyclo- 
paedia, 1861, p. 297. 

5 Senate Executive Document No. 2, pp. 11 and 50, 37th Cong., 1st Sess. 



SUSPENSION OF SPECIE PAYMENTS 13 

and by dint of their efforts subscriptions were secured for 
$5,340,000, of which sum $2,500,000 were taken by a single 
New York bank. 1 

The means thus provided were soon exhausted by the 
large government disbursements, and it became necessary to 
borrow again. On May 11 the balance of the 6 per cent, 
stock of the February loan $8,994,000 was advertised 
for sale. 2 Bids came in very slowly, and a failure of the 
subscription seemed probable. Such an event would have 
seriously affected the price of all government securities. In 
self-defense, the Chamber of Commerce of New York and the 
banks of New York and Boston came to the aid of the 
treasury. A card was issued signed among others by J. 
J. Astor, August Belmont, James Gallatin, A. T. Stewart, 
Moses Taylor, and George S. Coe, calling attention to 
the government loans and inviting " all capitalists and 
moneyed institutions to avail themselves of these opportuni- 
ties for investment." 3 To give the committees appointed 
by the chamber and the banks more time to secure subscrip- 
tions, Mr. Chase postponed the opening of the bids four 
days, and also offered to consider bids for treasury notes at 
par in place of bonds, should that form of security be pre- 
ferred by any subscriber.* Finally, bids ranging from 60 to 
93 were obtained for $7,441,000 of the stock, and bids at 
par for $1,684,000 of the treasury notes. All the latter bids 
were accepted, and of the former all those at 85 or above 
an amount of $7,310,000. 5 From this loan of $8,994,000 
the treasury realized the sum of $7,922,553.45. 6 

1 Ibid., p. 51. Of course only $4,901,000 of the bids the amount advertised 
were accepted. The treasury realized $7,814,809.80 from $8,000,000 of securities sold. 
Ibid., p. 11. See American Annual Cyclopaedia, 1861, p. 296, on the difficulty 
experienced in negotiating the treasury notes. 

2 Senate Executive Document No. 2, p. 52, 37th Cong., 1st Sess. 

3 American Annual Cyclopaedia, 1861, p. 297; cf. " Federal Finances Examined" 
(anon.), Hunfa Merchants'' Magazine, Vol. XLVII, p. 504 ; and ibid., Vol. XLIV, p. 791. 

* Senate Executive Document No. 2, p. 53, 37th Cong., 1st Sess. 
5 Ibid., pp. 58 and 60. Ibid., p. 11. 



14 HISTORY OP THE GREENBACKS 

Requiring still more money, the secretary asked for pro- 
posals for the balance of the 6 per cent, twenty-year loan of 
June 22, 1860, amounting to $13,978,000.' As 6 per cent, 
government bonds could then be bought in the market at 84, 
the offer of this stock which the act forbade to be sold below 
par was a mere formality; but, by advertising the bonds, 
Mr. Chase complied with the terms of the law, and was ena- 
bled to issue treasury notes for the full sum. 2 Three bids, 
aggregating $12,000, were received; but they had been made 
under misapprehension and were withdrawn. 8 On account 
of this loan, however, Mr. Chase issued, by the end of June, 
$2,584,550 in treasury notes at par. 4 

Finally, just before Congress met, the treasury was again 
in need. Five million dollars were required to carry it along 
until new means of securing funds could be devised. As 
the two-year treasury notes were selling at a discount of 2 
to 2 per cent., they were not directly available. But the 
banks agreed to advance the amount required for sixty days 
and take 6 per cent, treasury notes as collateral security. 5 

Two points in this review of the operations of the secre- 
tary of the treasury from March to July are of significance: 

1. When hostilities opened the federal government was 
receiving less than a quarter of its revenue from taxation ; 
for the remaining three-quarters it was depending upon hand- 
to-mouth borrowing. 6 From March 7, 1861, when Mr. Chase 
was installed, to July 1, there had been an addition of $14,- 
412,529.40 to the public debt. 7 

1 Senate Executive Document No. 2, 37th Cong., 1st Sess., p. 11. 

* Cf. Applet/on 1 * Annual Cyclopaedia, 1861, p. 297. 

3 Senate Executive Document No. 2, p. 11, 37th Cong., 1st Sess. 

* Of this sum $1,710,650 was sold for coin, and $873,900 was paid to creditors. 
Ibid., pp. 60-62. 

5 Cf. American Annual Cyclopaedia, 1861, p. 297 ; and Hunt's Merchants' Maga- 
zine, Vol. XLVII, p. 505. 

6 From April to Jane, 1861, the receipts from customs, sales of public land, and 
miscellaneous sources, were $5,800,000, from loans $17,600,000. Report of the Secretary 
of the Treasury, December, 1861, p. 30. 

? Senate Executive Document No. 2, p. 18, 37th Cong., 1st. Sess. 



SUSPENSION OF SPECIE PAYMENTS 15 

2. Mr. Chase had of his own accord inaugurated the 
policy of issuing interest-bearing treasury notes running one 
or two years, in preference to long-time bonds, whenever 
they would fetch a higher price, disregarding the fact that 
such a course exposed the treasury to the danger of being 
called upon to redeem its notes while hard pressed for funds 
to meet current demands. 1 

III. FINANCIAL LEGISLATION OF THE EXTRA SESSION OF 
CONGEESS 

Such was the situation when Congress convened in extra 
session July 4. Emphasizing the need of extraordinary 
measures, President Lincoln's message recommended that 
"at least 400,000 men and $400,000,000" be placed "at 
the control of the government." 2 The financial program 
of the administration was outlined in a report submitted by 
Secretary Chase. 3 

It was estimated that the government would require $320,- 
000,000 to meet the expenditures of the coming twelve 
months. Of this sum the secretary thought that "not less than 
$80,000,000 should be provided by taxation, and that $240,- 
000,000 should be sought through loans." The $80,000,- 
000 would defray the expenses of a peace footing, estimated 
at $66,000,000, the interest on the public debt, $9,000,000, 
and provide an annual sinking fund of $5,000,000. By 
revising the Morrill tariff, Chase thought the customs could 
be made to yield a revenue of $57,000,000. An additional 
$3,000,000 from sales of public lands would leave $20,000,- 
000 of the $80,000,000 to be raised by direct tax or by inter- 
nal duties as Congress might decide. 

To secure $240,000,000 by borrowing new loans to the 

1 Mr. James Gallatin, president of the Gallatin Bank of New York, advised 
strongly against this policy. See his Two Letters to the Hon. S. P. Chase, etc., New 
York, 1861. 

2 Lincoln's Complete Works, ed. NICOLAT AND HAY, Vol. II, p. 60. 

3 Senate Executive Document No. 2, 37th Cong., 1st Sess. 



16 HISTORY OF THE GREENBACKS 

full amount would be necessary ; for the $21,393,450 which 
the secretary still had authority to borrow under existing 
laws ' was available only when creditors were willing to 
accept payment in 6 per cent, treasury notes at par, which, 
Mr. Chase admitted, was " not to be expected." He sug- 
gested (1) a national loan of $100,000,000 in 7.3 per cent, 
treasury notes, running three years ; (2) a loan of like amount 
in 7 per cent., thirty-year bonds ; (3) the issue of not over 
$50,000,000 of 3.65 per cent, one- year treasury notes to 
meet any need unprovided for by the proceeds of taxation 
and the other loans. But, said Mr. Chase, "the greatest 
care will .... be requisite to prevent the degradation of 
such issues into an irredeemable paper currency, than which 
no more certainly fatal expedient for impoverishing the 
masses and discrediting the government of any country can 
well be devised." 2 

If Secretary Chase erred in thus proposing at the outset 
to rely upon borrowing to secure three-quarters of the means 
for waging the war because he doubted the readiness of the 
people to submit to heavy taxation, Congress was neither 
wiser nor bolder than he. With his report were submitted 
drafts of bills embodying its suggestions. 3 After one hour's 
debate, entirely taken up by Mr. Vallandigham in an attack 
upon the policy of the president, the House passed the 
$250,000,000 loan bill by a vote of 150 to 5.* In the Senate 
a few verbal amendments were made; 5 these were quickly 
concurred in by the House, 6 and eight days after its intro- 
duction the bill was approved by the president. 7 

J The issue of $2,584,550 treasury notes under the act of June 22, 1860 (p. 12, 
above), had reduced the balance of thatloan remaining to be borrowed to $11,393,450. 
Besides this there was the $10,000,000 loan authorized by the act of March 2, 1861. 
Senate Executive Document No. 2, p. 12, 37th Cong., 1st Sess. 

2 Ibid., p. 14. 3 ibid., pp. 65 ff. and 71 ff. 

* Congressional Globe, 37th Cong., 1st Sess., p. 61. 

5 Ibid., pp. 109 and 127. Ibid., p. 147. 

1 12 Statutes at Large, p. 259. Act of July 17, 1861. 



SUSPENSION OF SPECIE PAYMENTS 17 

So hurriedly, indeed, was the work done that a supple- 
mentary act had immediately to be passed. 1 Together, these 
two laws authorized the secretary to borrow $250,000,000, 2 
for which he could issue in such proportions as he might 
deem advisable, (1) 7 per cent, twenty-year bonds at par; 
(2) 6 per cent, twenty-year bonds "at any rate not less than 
the equivalent of par for the bonds bearing 7 per centum 
interest;" (3) 7.3 per cent, three-year treasury notes, fundable 
in 6 per. cent, twenty-year bonds; or (4) treasury notes, 
either bearing interest at 3.65 per cent, and payable in one 
year, or bearing no interest and payable on demand. These 
demand notes were to be receivable for all public dues and 
of denominations as low as $5 ; but their issues were not to 
exceed $50,000,000. Finally, 6 per cent, treasury notes, 
" payable at any time not excee'ding twelve months from 
date," might be issued to the amount of $20,000,000. To 
facilitate the negotiation of the loan, it was provided that 
any part, not above $100,000,000, might be borrowed 
abroad, and the principal and interest made payable in 
Europe ; and that the secretary might " deposit any of the 
moneys obtained on any of the loans .... in such solvent 
specie-paying banks as he may select." 

Legislative indorsement was also promptly given to Sec- 
retary Chase's suggestion of increased taxation. August 5 
a revenue act was approved which (1) raised the tariff by 

1 Ibid., p. 313. Act of August 5, 1861. 

2 The amount of securities, however, that might be issued under these acts was 
not definitely limited ; for Sec. 1 of the act of August 5 provided that holders of 
the three-year 7.30 notes might exchange them for 6 per cent, twenty-year bonds. 
12 Statutes at Large, p. 313. The total issues under the acts were as follows : 

6 per cent, bonds $189,321,350 

Demand treasury notes, no interest 60,030,000 
7.30 treasury notes 139,999,750 

$389,351,100 

E. A. BATLET, National Loans of the United States, p. 78. Of the 6 per cent, bonds 
only $50,000,000 was sold for money; the remainder, $139,321,350, was issued in 
exchange for 7.30 notes. Ibid., p. 153. 



18 HISTORY OF THE GREENBACKS 

imposing duties on tea, coffee, sugar, and molasses 
important revenue articles admitted free or at low rates by 
the Morrill act; 1 (2) apportioned between the states a direct 
tax of $20,000,000, of which, however, there was small 
hope of collecting the quotas of the disloyal states, amount- 
ing to $5,000,000; (3) levied a tax of 3 per cent, upon the 
excess of incomes above $800. 2 While certain features of 
this scheme of taxation encountered opposition, members of 
Congress evinced a striking readiness to waive objections and 
vote for any bill that the administration and the leaders of 
the houses held to be a "war necessity."' 

The striking feature of the plan of finance thus recom- 
mended at the commencement of the war by the secretary 
of the treasury, and adopted by Congress, was the reliance 
upon borrowing to meet all the extraordinary military and 
naval expenditures. The taxes imposed were expected to 
yield revenue sufficient only to defray the ordinary expenses 
of government, to pay interest on the public debt, and to 
provide a small sinking fund. Nothing shows more forcibly 
the inadequacy of this policy than the quickness with which 
the necessity for increased taxation made itself apparent. 
The heavy expenses of the months following the adjourn- 
ment of the extra session begot a general conviction that a 
firmer foundation for the financial operations of the govern- 
ment was indispensable. When Congress reassembled in 
December it was met by a strong popular demand for a vig- 
orous tax policy. " The country presents," said the Boston 
Advertiser, "the spectacle of a people praying to be taxed." 4 
An examination of the newspapers of the time shows how 

i Cf. " Comparative Bates of Duty, 1842-61," Hunt's Merchants' Magazine, 
Vol. XLV, pp. 506, 507. 

2 12 Statutes at Large, p. 292. 

3 As examples of this disposition see the remarks of Senators McDougall, of 
California, and Wilkinson, of Minnesota. Congressional Globe, 37th Cong., 1st Sess., 
p. 399. 

< February 4, 1862. 



SUSPENSION OF SPECIE PAYMENTS 19 

literally this was true. 1 Urged forward by public opinion, 
the same Congress that had in August deemed $80,000,000 
a sufficient revenue to raise by taxation, resolved in January 
with but six dissenting votes in both branches, to levy taxes 
that would " secure an annual revenue of not less than $150,- 
000,000. " : Mr. Chase, also, took a firmer stand, advocating 
in his report of December, 1861, an increase of the customs 
duties on tea, coffee, and sugar, and direct taxation aggre- 
gating $50,000,000. 3 With increasing experience his appre- 
ciation of the "great importance" of raising the "largest 
possible amount" of revenue by taxation became keener. 
" It is hardly too much," he declared to Congress in 1863, 
"perhaps hardly enough, to say that every dollar raised [by 
taxation] for extraordinary expenditures or reduction of debt 
is worth two in the increased value of national securities." * 
In the same report he explained his failure to recommend 
heavy taxation to the extra session of Congress in July, 
1861, by pleading the impossibility of foreseeing at that 
time the magnitude and length of the war. 5 

IV. THE $150,000,000 BANK LOAN 

While these bills were pending in Congress and before 
the resources provided by them could be availed of, it was 
necessary to provide funds for the immediate wants of the 

1 Cf. New York Times, June 20 and July 23, 1861, and January 13, 1862 ; New York 
Herald, December 31, 1861, and January 7, 8, and 9, 1862; New York Tribune, June 26, 
1861, and February 3, 1862; New York Commercial Advertiser, January 3, 11, and Feb- 
ruary 26, 1862; Springfield (Mass.) Republican, January 7, 15, and 21, 1862; Boston 
Daily Advertiser, January 11, 13, and 24, 1862; Boston Journal, Januarys, 1862 ; Boston 
Post, January 28, 1862 ; Philadelphia Press, January 18 and February 5, 1862 ; National 
Intelligencer (Washington), January 11, 1862. Cf. the letters urging heavy taxation 
received by the Ways and Means Committee, SPAULDING, op. cit., pp. 23, 24; Speech, 
ROSCOE CONKLING, Congressional Globe, 37th Cong., 2d Sess., p. 633; " Memorial of 
the New York Chamber of Commerce," Senate Miscellaneous Document No. 95, 37th 
Cong.,2d Sess., and EDWARD EVERETT in Atlantic Monthly, March, 1862, Vol. IX, pp. 
393-7. 

2 Congressional Globe, 37th Cong., 2d Sess., pp. 344, 349, 376. 

3 Report of the Secretary of the Treasury, December, 1861, pp. 13 and 15. 

* Ibid., 1863, p. 12. 8 Ibid., p. 10. Cf. chap, ii, p. 72, below. 



20 HISTORY OF THE GREENBACKS 

treasury. Mr. Chase accomplished this by issuing "for 
payment to public creditors or for advances of cash," $14,- 
000,000 in two-year 6 per cent, treasury notes, and $13,- 
000,000 in 6 per cent, notes running but 60 days. 1 

This, however, was but a temporary makeshift and the 
more serious task remained of providing for the regular and 
continuous expenses of the war. For this purpose the 
secretary at once set about negotiating a large loan under 
the ampte powers conferred upon him by the extra session 
of Congress. Borrowing abroad was out of the question; 
for European capitalists were unwilling to lend. 2 Reliance 
upon a popular loan seemed hazardous, not only because of 
the ill success of recent ventures, but also because the 
market for bonds was stocked with the securities of several 
states which were negotiating war loans. 3 Circumstances 
seemed, then, to indicate the banks as the most available 
source from which to obtain means. 

Fortunately the course of events had been such as to 
render the banks, at least in the northern Atlantic states, 
unusually strong. In the previous November the sudden 
panic following Mr. Lincoln's election had caused the banks 
to curtail discounts. A severe pressure for money followed 
and a suspension of specie payments was averted in New 
York only by the combination of bank reserves and the 

1 Report of the Secretary of the Treasury, December, 1861, p. 8. These issues were 
made in accordance with the acts of June 22, 1860 (12 Statutes at Large, p. 79), and 
March 2, 1861 (ibid., p. 178). 

2 " It is utterly out of the question, in our judgment," said the London Economist 
of August 24, 1861, " that the Americans can obtain, either at home or in Europe, any- 
thing like the extravagant sums they are asking for. Europe won't lend them; 
America cannot." Economist, 1861, pp. 927, 928. Cf. ELAINE, Twenty Years of Con- 
gress, Vol. I, pp. 409, 410. 

3 New York and Pennsylvania had authorized loans of $3,000,000 each ; Connecti- 
cut, New Jersey, Indiana and Ohio loans of $2,000,000; Massachusetts, Maine, Illinois, 
and New York city had each offered loans of $1,000,000, Iowa of $800,000, Michigan of 
$500,000, and Rhode Island of $100,000. Bankers' Magazine (New York), Vol. XVI, 
" Notes on the Money Market," and APPLETON'S American Annual Cyclopaedia for 
1861, pp. 297, 307, 308. 



SUSPENSION OF SPECIE PAYMENTS 21 

issue of clearing-house certificates. 1 But most of the paper 
held by the banks was good ; liquidation proceeded favorably 
and the threatened danger passed. The acute pressure was 
followed by general stagnation. In the unsettled state of 
the country there was a general disposition to avoid new 
undertakings and to keep old ones on a most conservative 
basis. The result was that the banks could make no new 
loans. 2 

During the winter difficulty was experienced in making 
collections in the southern states. In the spring many firms 
resorted to intentional failures to rid themselves of northern 
obligations, 3 and in May a law was enacted directing that 
such debts should be paid, not to the creditors, but into the 
Confederate treasury. 4 The cessation of remittances from 
the South caused in May and June a series of failures 
affecting especially large jobbing houses. 5 But, owing to 
the very conservative nature of the business that had been 
done in the preceding half year, the crash did not become 

1 Bankers' 1 Magazine (New York), Vol. XV, p. 500; Hunt's Merchants' Magazine, 
Vol. XLIV, pp. 75-92, 196, and 327 ; SUMNEK, History of American Currency, New York, 
1875, p. 189; DUNBAB, Chapters on the Theory and History of Banking, New York, 
1891, pp. 68-73. The Boston banks rejected the use of clearing-house certificates, but 
allowed 50 per cent, of balances at the clearing house to be paid in a bank's own 
notes. DUNBAB, op. cit., p. 79; cf. "Report of the Massachusetts Bank Commis- 
sioners," Executive Document No. 25, pp. 48-50, 37th Cong., 3d Sess. 

2 " Inactivity, or increasing stagnation," wrote Mr. James Gallatin to Chase in 
March, " is the characteristic of our business affairs." Two Letters to the Honorable 
S. P. Chase (Hew York, 1861), p. 5; cf. Hunt's Merchants' Magazine, Vol. XLIV, 
pp. 787 ff. 

3 Hunt's Merchants' Magazine, Vol. XL VI, p. 316; American Annual Cyclopaedia, 
1861, p. 313. 

* See text of the act in American Annual Cyclopaedia, 1861, p. 310; J. C. SCHWAB, 
The Confederate States of America (New York, 1901), p. 113. 

5 Hunt's Merchants' Magazine, Vol. XLV, p. 105. The indebtedness of the South 
to the North was estimated on the basis of R. G. Dun & Company's annual circular 
for 1861 at $300,000,000. Ibid., Vol. XLVI, p. 317. The losses of northern creditors 
were usually reckoned at $200,000,000. Cf. "Report of the Massachusetts Bank 
Commissioners," October, 1861; Executive Document No. 25, p. 50, 37th Cong., 
3d Sess.; New York Tribune, September 18, 1861; President's Message, December 
3, 1861, in A. Lincoln, Complete Works, ed. NICOLAY AND HAY, Vol. II, p. 99. 
Schwab considers this estimate exaggerated, op. cit., p. 111. 



22 HISTORY OP THE GREENBACKS 

general. It had the effect, however, of making the times 
yet more dull ; the transactions of the New York clearing 
house declined from $129,000,000 in the second week of 
March, to $80,000,000 in the corresponding week of August. 1 
The banks were not seriously weakened by the failures, 2 but 
found it still more difficult to lend their capital. From 
December, 1860, to August, 1861, bank loans in New York 
diminished $23,000,000; in Boston the fall from January 
to July was $2,000,000 and in Philadelphia $3,000,000. 8 

This decrease of loans was accompanied by a slight 
decline in circulation, a more decided increase in deposits, 
and a marked gain in the amount of specie held. Small 
imports due partly to the Morrill tariff, but chiefly to the 
depression of trade and heavy exports of grain the 
result of good crops at home and poor crops abroad 
combined to turn the balance of payment toward the United 
States.* During the spring and summer months sterling 
exchange sold from two to three points below par in New 
York. 5 Not only was the usual drain of specie to Europe 
stopped, but the current was kept flowing in this direction, 
so that, though the receipts from California declined and 
considerable amounts were sent into the interior, specie accu- 
mulated in the vaults of the New York banks to an unprece- 

iSee table of clearings in H. R. Executive Document No. 25, p. 107, 37th Cong., 
SdSess. 

2 The Massachusetts commissioners stated in October that the losses of the 
Boston banks by the repudiation of southern debts would not exceed in amount the 
undivided profits on hand. Executive Document No. 25, p. 50, 37th Cong., 3d Sess. 

3 See table, p. 30, below. 

* So large was the exportation of breadstuffs during the summer and autumn of 
1861 that it more than offset the effect of the blockade in decreasing shipments of 
cotton. The movement is somewhat concealed by the usual statements of commerce 
by years ending June 30; but appears clearly in the official table of imports and 
exports of merchandise at the port of New York by months. From January to April 
imports exceeded exports, but from May to December there was an excess of exports, 
amounting to five million dollars in June, two in July, two in August, four in 
September, five in October, six in November, and six in December. See tables in 
Hunt's Merchants' Magazine, Vol. XLVI, pp. 277-81. 

5 Bankers' 1 Magazine (New York), Vol. XVI, p. 736. 



SUSPENSION OF SPECIE PAYMENTS 28 

dented degree. August 17 the ratio of the specie held by 
the associated banks of New York to their deposits and 
circulation was 50 per cent. ; for Boston it was 27, and for 
Philadelphia 39 per cent. 1 Thus the banks were unusually 
strong; but they were making little profit because the stag- 
nation of trade gave them few opportunities of lending to 
business men. 

Consequently, when Mr. Chase appealed to them to assist 
the government, the banks were both able and willing to 
render efficient aid. A conference of representatives of the 
New York, Boston, and Philadelphia banks, 2 held August 
10-17 in New York, at the secretary's invitation, drew up in 
consultation with him a "plan for assisting the United 
States government." 3 Fifty million dollars was to be 
advanced to the treasury by the associated banks of the 
three cities. In return they were to receive at par a like 
amount of treasury notes running three years and bearing 
interest at 7.30 per cent. Further, the banks were given 
the option of taking a second $50,000,000 of the notes on 
the same terms October 15, and a third $50,000,000 
December 15.* Mr. Chase considered the plan highly 
advantageous to the government. In the face of war he 
was borrowing money at "a rate of interest only 1.3 per 
cent, higher than the ordinary rate of 6 per cent." Besides 
he received $50,000,000 immediately to meet the pressing 

i See table, p. 30, below. 

2 " It was greatly desired," said one of the most prominent of the New York 
bankers, " to include also the banks of the West, but it was found impracticable to 
secure the co-operation of the state banks of Ohio and Indiana ; and the state banks 
of Missouri, the only other organization under a compacted system, were surrounded 
by combatants." Letter of George S. Coe to E. G. Spaulding, October 8, 1875, 
SPAULDING, op. cit., Appendix, p. 90. 

3 Report of the Secretary of the Treasury, December, 1861, pp. 8, 9. A detailed 
account of the conference is given by A. S. BOLLES in Lippincotfs Monthly Magazine, 
Vol. XXXVIII, pp. 200-206; reprinted in Bankers' Magazine, Vol. XLI, pp. 363-7. 

^ For text of this agreement see Bankers' Magazine (New York), Vol. XVI, pp. 
162, 163. 



24 HISTORY or THE GREENBACKS 

demands upon the treasury. 1 To the banks the plan offered 
profitable employment for their idle capital. J 

The banks which thus undertook to lend the government 
$150,000,000 in four months' time had an aggregate capital 
of but $120,000,000. Although unusually strong in specie 
at the time the agreement was made, their combined coin 
reserves amounted only to $63,200,000.* This sum would 
hardly more than pay the first instalment of the loan. To 
prevent its being exhausted at the very beginning, it was 
necessary that the banks should be able to replace very 
rapidly the specie which they paid to the government. 
They counted on doing this in two ways: First, they would 
sell the securities received from the goverment to the public 
for cash. It was part of the agreement that the treasury 
should help in this by opening public subscriptions to the 
loan in all parts of the country. Second, the specie given 
to the government would be speedily paid out again in dis- 
bursements for the immense purchases of war supplies. The 
coin would thus be restored to the channels of trade, and 
naturally flow again into the banks. 

If the banks could collect specie in these two ways as 
rapidly as they paid it out to the government, they could 
continue to supply the treasury with funds indefinitely. But 
the moment even a brief delay occurred in the return of 
specie to the banks trouble would come. The reserves 
would be depleted by the drafts of the treasury, and suspen- 
sion would be inevitable. Such a delay would happen if 
anything occurred to make the public slow in buying the 

1 Chase's letter to Trowbridge, WARDEN, op. cit., pp. 386-8. 

2 At first the banks decided to divide the $50,000,000 among themselves in 
proportion to their respective capitals. This would have given the fifty-four New 
York banks $29,500,000, the forty-six Boston banks $15,500,000, and the nineteen 
Philadelphia banks $5,000,000. But the Boston banks finally decided that they could 
not take more than $10,000,000; so that the New York institutions had to make up 
their subscriptions to $35,000,000. Hunt's Merchants' 1 Magazine, Vol. XLV. p. 331. 

3 See table, p. 30, below. 



SUSPENSION OP SPECIE PAYMENTS 25 

7.30 treasury notes from the banks, or to interrupt the 
government's payments of specie out of the subtreasury, or 
to prevent men from depositing again in the banks the coin 
received from the government. The situation, both of the 
banks and of the treasury, was thus very precarious. The 
plan might work well in fair weather, but in the first storm 
it was likely to collapse. Mr. Chase, however, seems to have 
been unconscious that danger lurked in the scheme. 

At the very outset the banks encountered an unforeseen 
obstacle. The independent subtreasury system required all 
dues to the United States to be paid into the treasury in 
coin. 1 This would compel the banks to send the specie lent 
the government to the subtreasuries, there to lie in the 
vaults until paid out in disbursements to public creditors. 
But provision had been made by Congress with the special 
intent of removing this difficulty. 2 The law of August 5 
had relaxed the rigor of the subtreasury system so far as to 
permit the secretary "to deposit any of the moneys obtained 
on any of the loans .... in such solvent, specie-paying 
banks as he may select," and allowed " moneys so deposited" 
to "be withdrawn from such deposit for deposit with the 
regular authorized depositaries, or for the payment of public 
dues." 3 Under this law the banks expected that the loan to 
the government would be managed in the same manner as a 
loan to a private person ; they would credit the United States 
with a deposit of $50,000,000 upon their books, against 
which the secretary of the treasury could draw as he had 
occasion. But Mr. Chase's instinctive distrust of bank 
issues permitted no modification of the subtreasury system. 

1 Acts of July 4, 1840, sees. 19 and 20, 5 Statutes at Large, p. 385 ; and of August 6, 
1846, sees. 18, 19 and 20, 9 Statutes at Large, p. 59. 

2 See the letter of Mr. E. G. Spaulding, who drafted the section in question, op. 
cit., Appendix, p. 51; and remarks of W. P. Fessenden, chairman of the senate 
finance committee, Congressional Globe, 37th Cong., 1st Sess., p. 396. 

3 Sec. 6, 12 Statutes at Large, p. 313. 



26 HISTORY OP THE GREENBACKS 

He declined to make payments in bank checks on the ground 
that, though the eastern institutions were ready to pay such 
checks in coin, their western correspondents on whom they 
might draw would possibly ask creditors of the government 
to accept bank notes in satisfaction. He therefore insisted 
that the loan be paid in specie into the vaults of the sub- 
treasury. Much against their will, the banks complied. 1 

Nor was this the only point in which the banks found the 
policy of the treasury an obstacle to the success of the loans. 
Beside borrowing from the banks to secure funds, Mr. 
Chase took advantage of his discretionary power to issue 
non-interest-bearing treasury notes. 2 Though payable on 
demand in gold at the subtreasuries, and receivable for taxes 
and customs dues, these notes were accepted with reluctance. 
To facilitate their circulation, the secretary and other treasury 
officials signed a paper agreeing to take them in payment of 
their salaries, and General Scott issued a circular setting 
forth the superior convenience of paper money to soldiers 
desiring to send home a portion of their pay. 3 But the 
banks feared the government paper money would drive their 
own issues from circulation, and declined to receive the 
demand notes except on "special deposit." Should they 
receive the notes as current funds, bankers said, they would 

1 Secretary Chase's reasons for refusing to draw directly on the banks are given in 
a letter to Mr. Trowbridge,(WAEDEN, Life of Chase, p. 387). The side of the banks is 
represented in G. S. Coe's letter to Spaulding (History of the Legal Tender Paper 
Money, 2d ed., Appendix, pp. 91,92) ; J. E. Williams's letter to Chase of October 4, 
1861 (ibid., pp. 97-9), and his War Loans of the Associated Banks to the Government 
in 1861, (New York, 1876) ; JAMES GALLATIN, The National Finances, Currency, Bank- 
ing, etc. (New York, 1864). Most writers have concurred in the opinion that Mr. 
Chase's refusal was an error. Cf. Our National Finances, What Shall be Done? 
[anon.] (Boston, 1862); SPAULDING, op. cit., Introduction to 2d ed., pp. 1-4, and 
Appendix, pp. 51-3; F. A. CONKLING, ibid., Appendix, p. 85; J. S. GIBBONS, The 
Public Debt of the United States (New York, 1867), pp. 135, 136; H. V. POOR, Money 
and its Laws, 2d ed. (New York, 1877), pp. 562-4; HORACE WHITE, Money and Bank- 
ing (Boston, 1896), pp. 150-52. 

2 Acts of July 17, 1861, sec. 1, 12 Statutes at Large, p. 259, and of August 5, 1861, 
sec. 5 (ibid., p. 313). 

3 Text in American Annual Cyclopaedia, 1861, p. 299. 



SUSPENSION or SPECIE PAYMENTS 27 

be under obligation to redeem them in coin on demand, and 
this would increase the burden which their reserves had to 
carry, and so endanger the maintenance of specie payments. 
Furthermore, the existence of a large amount of obligations, 
which the treasury might be called upon to redeem in coin 
at any moment of panic, was a standing menace to the sol- 
vency of the government, and in so far injured its credit, and 
made more difficult the rapid sale of the securities held by 
the banks to the public, on which the success of the loans 
depended. But it was in vain that the banks appealed to 
Mr. Chase to cease his issues. He replied: " If you can 
lend me all the coin required, or show me where I can 
borrow it elsewhere at fair rates, I will withdraw every note 
already issued, and pledge myself never to issue another; 
but if you cannot, you must let me stick to United States 
notes." 1 Unable to induce the secretary to alter this reso- 
lution, the banks again reluctantly yielded. 2 

But though the position of the banks was weakened by 
Mr. Chase's refusal to allow the proceeds of the loan to 
remain on deposit until paid out to the creditors of the 
government, and by his issue of paper money, all went well 
for a time. Mr. Chase appointed agents in over two hundred 

i Letter to Trowbridge, WARDEN, op. cit., p. 388. 

2 The banks were the more annoyed at Mr. Chase's refusal to make payments in 
checks drawn upon them and at his issue of treasury notes, because when the 
arrangement regarding the loan was made they had understood him to agree to 
conform his action in these respects to their wishes. See J. E. Williams's letter of 
October 4, 1861, to Chase and George S. Coe's letter of October 8, 1863, to Spaulding in 
SPAULDING, op. cit., Appendix, pp. 97-9 and 92 respectively. Mr. Chase, however, 
said in his report of December, 1861, that " it was .... understood that the secre- 
tary of the treasury should issue a limited amount of United States notes, payable 
on demand" (p. 9). 

On the inconvenience caused the banks by the issue of the demand notes, see 
"Objections to Government Demand Notes, by a New York Bank Officer," Bankers' 1 
Magazine (New York), Vol. XVI, pp. 333-7; GEORGE MARSLAND, "The Banks and the 
Greenbacks," Bankers'" Magazine (New York), Vol. XXXI, pp. 173-81; BOLLES, Finan- 
cial History of the United States, 1861-85, pp. 34 and 37 ; H. V. POOR, Money and its 
Laws, 2d ed. (New York, 1877), pp. 564 ff. ; J. K. UPTON, Money in Politics, 2d ed. (Bos- 
ton, 1895), pp. 72 ff. ; R. M. BRECKENRIDGE, "The Demand Notes of 1861," in Sound 
Currency, (New York, October, 1898), Vol. V, pp. 336, 337. 



HISTORY OF THE GREENBACKS 



towns to receive subscriptions for 7.30 treasury notes/ and 
issued an urgent address, appealing to the people to assist in 
making the "national loan" successful. 2 His efforts were 
warmly seconded by the newspaper press, which explained 
the advantages of the loan to investors, and represented sub- 
scription as an act of patriotism. On their side the New 
York banks strengthened themselves by putting their coin 
into a common fund, and reviving the organization entered 
into to check the panic of the preceding November. The 
"loan committee," then appointed under the chairmanship 
of Moses Taylor, was entrusted with the superintendence of 
the execution of the contract with the government. It was 
part of the arrangement that the stock of specie should not 
be allowed to fall below one-fourth of the net liabilities, 
exclusive of circulation and the credit given the treasury. In 
case any bank failed to maintain this proportion of reserve, 
the loan committee was directed to charge interest on the 
deficit, and to pay the interest received to the institutions 
holding the highest percentage of specie. 3 

The associated banks agreed to divide the subscriptions 
to the loan between themselves in proportion to their respect- 
ive capitals. Each bank was to pay 10 per cent, of its sub- 
scription into the subtreasury at once, and to place the bal- 
ance to the credit of the government upon its books.* 
Against these credits Mr. Chase was to draw only as fast as 

'See list in Bankers'" Magazine, (New York), Vol. XVI, pp. 308-10. Aside from 
treasury officials there were 148 agents. H. R. Executive Document No. 66, p. 2, 
38th Cong., 1st Sess. 

2 Text is to be found in Bankers' Magazine, Vol. XVI, pp. 290-2. The notes were 
offered at par, and were to draw interest from August 19, but on taking the bonds 
subscribers were required to pay interest from that date to day of subscription, so 
that the interest received by the purchaser began with the date of his purchase. 

3 Cf. note 1, p. 32, below. The best authority for the banking operations is the 
"Report of the New York Loan Committee," June 12, 1862, published in the Bankers' 
Magazine, Vol. XVII, and in H. R. Executive Document No. 25, 37th Cong., 3d Sess., 
pp. 125-42. 

4 See text of agreement of banks with government, and proceedings of the meet- 
ing of bankers in reference to it. Bankers' Magazine, Vol. XVI, pp. 161-70. 



SUSPENSION OF SPECIE PAYMENTS 29 

he needed funds for disbursement. It was anticipated that 
his drafts would be about 10 per cent, of the loan a week. 1 
Consequently, the effect of the transaction may be traced in 
the weekly bank returns of the three cities. In New York 
the first instalment of the loan, $3,500,000, was paid into the 
subtreasury August 19, 1861. 2 Comparing the reports of 
August 17 and August 24, one finds a decrease of $2,600,- 
000 in the specie holdings of the banks, and a like increase 
in the coin held by the subtreasury. 3 At the same time the 
balance of the government loan was added to the line of dis- 
counts, increasing the loans reported by $29,000,000. 
Finally, the sum placed upon the books of the banks to the 
credit of the government to be drawn against produced a 
nominal increase of $26,500,000 in the deposits. 4 Similar 
changes are seen on comparing the situation of the Boston 
and Philadelphia banks on August 17 and 81. In Boston 
payments to the subtreasury diminished reserves less than 
$300,000, while discounts and deposits were increased 
$3,600,000 and $4,200,000, respectively, in consequence of 
the government loans. The Philadelphia banks lost $600,- 
000 in specie during the two weeks, and increased their dis- 
counts $4,600,000 and their deposits $3,700,000. 

But the situation immediately began to change. The 
banks paid over the loan in instalments of about $5,000,000 
at intervals of six days. 5 Each payment thus made into the 
subtreasuries decreased the sum credited to the government 
as a deposit. Loans also declined, for as fast as the 7.30 

1 American Annual Cyclopaedia, 1861, p. 64. Cf. Chase's letter of October 2, 
1861, to Larz Anderson, in SCHUCKEES, Life of Chase, pp. 430, 431. 

2 "Report of the New York Loan Committee," Bankers' 1 Magazine, Vol. XVII, 
p. 139. 

3 For this and the similar subsequent comparisons see the table showing the 
condition of the banks of New York, Boston, and Philadelphia, p. 30, and the accom- 
panying chart. 

*C/. "Report of the Bank Commissioners of Massachusetts, October, 1861," 
H R. Executive Document No. 25, p. 56, 37th Cong., 3d Sess. 

s Letter of G. S. Coe, in SPACLDINO, op. cit.. Appendix, p. 92. 



30 



HISTORY OF THE GREENBACKS 



u.z 
GJ 



S 1-1 



t>. 
t3 



K S 

^ M 



w :S 

u ^5 

a 






"SB 

H Si* 

S s 

H a S 



Compiled from 



t^C 
v.- 



.- i- -c -^ vr -r -^ -^ -^ i - -^ ^- T -r i 






X X X OS X X X X X X X X X X X 00 X X X X X X X X X X X X X X t- O 



iM-*SSM--*Q'--*'<r-<J'COecc 



SUSPENSION OF SPECIE PAYMENTS 



31 



CHART I 



GRAPHIC ILLUSTRATIOH OF THE EFFECT UPON THE NEW YORK BANKS OF THE 
$150,000,000 LOAN 



1861 



1862 




32 HISTORY OP THE GREENBACKS 

notes were sold to the public through the treasury agencies 
the proceeds were remitted to the banks and deducted by 
them from the loan to the government. From August 31 
to September 28 the decline of bank loans was $15,000,000 
in New York, $2,000,000 in Boston, and $2,000,000 in 
Philadelphia. The corresponding decline in deposits 
amounted to $23,800,000, $2,400,000, and $2,700,000 re- 
spectively. 

The point of crucial importance for the success of the 
bank loan, however, was the change in the stocks of specie 
held. The payments into the subtreasuries drained the 
bank reserves of about $5,000,000 a week. This loss was 
offset in part by the re-deposit in the banks of money paid 
out by the government to army contractors and other 
creditors, and in part by sums received from the treasury on 
account of sales of 7.30 notes to the public through the sub- 
scription agencies though it was not until September 3 
that the banks received any reimbursement from this latter 
source. 1 For the first five weeks the withdrawal of specie 
from the banks so far exceeded receipts as to cause a rapid 
reduction of reserves. From August 17 to September 21 
the New York banks lost $13,000,000 of specie. Whither 
the money had gone is shown by the contemporaneous gain 
of $11,000,000 in the coin held by the New York subtreas- 
ury. During the same time the Philadelphia banks lost 
$2,000,000, or over 30 per cent, of their specie. In Boston 
the reserves increased slightly for the first three weeks and 
the subsequent loss was less serious than in the other cities, 
a trifle less than 20 per cent. In New York the loan com- 
mittee found that the loss of coin reduced the reserves of 
some of the associated banks below the stipulated propor- 
tion of 25 per cent, to net deposits, making necessary a 

1" Report of the New York Loan Committee," H. R. Executive Document 
No. 25, 37th Cong., 3d Sess., p. 128. 



SUSPENSION OF SPECIE PAYMENTS 33 

reapportionment of the specie for the first time on Sep- 
tember 2. 1 

After September 21, however, the tide turned. " The 
disbursements of the government for the war were so 
rapid," said Mr. Coe, a New York bank president, "and 
the consequent internal trade movement was so intense, 
that the coin paid out upon each instalment of the 
loan came back to the banks through the qommunity 
in about one week." 2 Such fresh deposits, together 
with the reimbursements received through the treasurer 
from the public subscriptions to the loan, came to exceed 
the payments of specie into the subtreasury, and the 
reserves consequently rose again. By the middle of Octo- 
ber the New York banks held $5,500,000 more specie than 
on September 21. Meanwhile government disburdsements 
had reduced the specie holdings of the subtreasury by 
$6,000,000. In about the same period the reserves of 
Boston banks gained $1,500,000 and those of the Phila- 
delphia banks $1,700,000. 

Encouraged by the gain in specie, the banks agreed to 
take a second $50,000,000 of the 7.30 three-year treasury 
notes October 1, fifteen days earlier than the time agreed 
upon in August, although they had not yet completed their 

1 The apportionment was at first managed by charging interest upon the defi- 
ciency of reserve ; but on September 21 this account was closed, and " thereafter 
the specie apportionment was made by requiring the banks to exchange loan certifi- 
cates for specie whenever their specie was less than 25 per cent, of their net deposits, 
exclusive of the amount to the credit of the government." From September 21 to 
December 30 a daily apportionment of specie was made in this fashion. The com- 
mittee issued loan certificates drawing 7 per cent, interest to banks whose reserves had 
fallen below the limit, for 90 per cent, of the amount of 7.30 notes, or assistant treas- 
urer's receipts for payments on the loan, deposited with them. An issue of $10,000,000 
of such certificates had been authorized by the banks April 24, 1861. This was 
increased to $15,000,000 December 18, to $20,000,000 December 28, and to $25,000,000 
January 20, 1862. The total issues were $22,585,000, and the largest amount outstand- 
ing was $21,960,000 from February 3 to February 7, 1862. The interest amounted to 
$396,436.32. Certificates were issued to thirty-nine of the fifty associated banks, 
thirty-one of which paid more interest than they received. All the certificates were 
redeemed by April 28, 1862. Ibid., pp. 126-33. 

2 Letter of October 8, 1875, in SPADLDING, op. ctt., Appendix, p. 93. 



34 HISTORY OF THE GREENBACKS 

payments upon the first loan. 1 There was but one ominous 
sign the popular subscription under the management of 
the treasury department had not been an unqualified success. 
In the hope of stimulating the lagging subscriptions, the 
Boston banks had issued a card September 11, saying: 

The banks are meeting their engagements and furnishing the 
$50,000,000 with no practical inconvenience to themselves or the 
mercantile community; and if no more money was required no 

difficulty would be experienced But ivho is to furnish the 

next $ 50,000,000 ? Are the banks expected to do so? If they are, 
the men of means, large and small, must take and pay for the first 
$50,000,000 during the present month or early in October other- 
wise it cannot be accomplished. 2 

But, despite such appeals and the efforts of the secre- 
tary and the press, subscriptions became so slow, after about 
$45,000,000 of the first loan had been sold to the public, 
that the treasury agencies were closed and the banks under- 
took to dispose of the second $50,000,000 themselves without 
the aid of the government. 3 

Changes in the accounts of the banks, similar to those 
resulting from the first loan, followed the taking of the sec- 
ond. On comparing the reports for September 28 and Octo- 
ber 12, one sees an increase of loans amounting to $30,000,- 
000 in New York, $3,300,000 in Boston, and $3,600,000 in 
Philadelphia. At the same time, the credit given the gov- 
ernment upon the books of the banks created a corresponding 
increase of deposits amounting to $32,600,000, $5,500,- 

i Qf. Bankers' Magazine (New York), Vol. XVI, p. 397, and " Report of the New 
York Loan Committee," ibid., Vol. XVII, p. 140. 

2 Bankers' Magazine (New York), Vol. XVI, pp. 366, 367. 

3 Chase's letter to Trowbridge, WAEDEN, op. cit., p. 387. The banks continued, 
however, to receive drafts from the treasury on account of the sales made to the 
public by the treasury agencies on their account. The final cash reimbursement was 
not received in New York until January 13, 1862. Executive Document No. 25, p. 128, 
37th Cong., 3d Sess. Of the $45,000,000 sold, $24,700,000 were disposed of by private 
agents and the balance by department officials. It was by his success in obtaining 
subscriptions for over $5,000,000 of 7.30s that Jay Cooke attracted Mr. Chase's atten- 
tion. See H. R. Executive Document No. 66, 38th Cong., 1st Sess. 



SUSPENSION OF SPECIE PAYMENTS 35 

000, and $4,600,000 respectively. But, instead of falling 
off as in August, the reserves of the banks increased, main- 
taining a high level throughout October, November, and the 
first half of December. Of course, as successive $5,000,- 
000 instalments were paid into the subtreasuries by the 
banks, their deposits declined again after October 12, as they 
had after August 31, and the loans were reduced by con- 
tinued receipts from the proceeds of the popular subscrip- 
tion. By November 16 (the last report made before the 
taking of the third loan) the fall of deposits in New York 
was $18,000,000, and of loans $19,000,000. The corre- 
sponding figures for Philadelphia were $1,300,000 and 
$2,700,000; and for Boston (October 12 to November 9) 
$1,100,000 and $2,300,000. 

All this time, while supplying the federal treasury with 
specie on so large a scale, the banks had also to furnish the 
usual accommodations to the mercantile community. But 
they were able to serve both the government and the public 
with comparative ease. For, as the Massachusetts bank 
commissioners reported in October, 1861, " the prostration 
of business robbed them of their usual customers, and the 
operations of the government, which have given rise to a 
new activity exerted in the public service, have caused the 
making of very little business paper, such as banks are 
in the habit of discounting. Public contractors are usually 
paid in cash at intervals shorter than the average length of 
bank accommodations, and they have little occasion to bor- 
row money." 1 

The last instalment of the first $50,000,000 was paid into 
the subtreasuries by the banks October 24, and payment on 
the second loan was begun five days later. 2 The operation 

1 Executive Document No. 25, 37th Cong., 3d Sess., p. 56. 

2 "Report of the New York Loan Committee," Bankers' 1 Magazine (New York), 
Vol. XVII, pp. 139, 140. 



36 HISTORY or THE GREENBACKS 

proceeded smoothly, the decline of the reserves being insig- 
nificant, and the banks determined to take a third $50,000,- 
000 of government securities November 16, a month before 
the date set in the agreement of August. But, because of 
the difficulty experienced in disposing of the three-year 
7.30 treasury notes to the public, they declined to accept 
more of these securities, and received instead twenty-year 
6 per cent, bonds at a rate equivalent to par for 7 per cent., 1 
in the expectation that such bonds could be sold at a profit 
in Europe. 3 At the same time, the banks were given the 
option of taking on January 1, 1862, a fourth loan of 
$50,000,000 upon the same terms as the first and second. 3 
In pursuance of this arrangement, the government was given 
credit upon the books of the banks for $45,795,478.48 the 
proceeds of the $50,000,000 bonds at the given rate 4 
which increased once more the sum of loans and deposits. 5 
For several weeks after the third loan was taken every- 
thing went well. The banks continued to pay regular instal- 
ments on the second loan into the subtreasuries of New 
York, Boston, and Philadelphia, and did not make the first 
payment on the third until December 10. 6 Meanwhile the 
specie reserves increased slightly in each of the three cities, 
so that by December 7 New York banks held as much coin as 
at any time since August, and the Boston and Philadelphia 

1 This rate is 89.322463831 Executive Document No. 25, p. 129, 37th Cong., 3d Sess. 
This arrangement was made under authority of sec. 7 of the act of August 5, 1861, 12 
Statutes at Large, p. 313. 

2 See the letter from a New York bank president published in the New York 
Tribune, December 25, 1861, p. 7. 

3 Report of the Secretary of the Treasury, December, 1861, p. 10. 

* Ibid., loc. cit. Cf. Executive Document No. 25, p. 129, 37th Cong., 3d Sess. 

5 For New York the gain from November 16 to November 30 was $25,500,000 in 
loans and $25,100,000 in deposits. For Philadelphia the corresponding figures are 
$2,400,000 and $3,400,000. The Boston banks gained $3,600,000 in loans from the second 
to the fourth week in November and $3,500,000 in deposits. 

6 " Report of the New York Loan Committee," Bankers' Magazine, Vol. XVII, 
p. 140. 



SUSPENSION OF SPECIE PAYMENTS 37 

banks were actually stronger in specie than at the time when 
the first government loan was made. 

About this time, however, two untoward events occurred. 
The first was the publication, December 10, of the annual 
report of the secretary of the treasury. In his report to 
the extra session of Congress in the preceding July, Mr. 
Chase had estimated that receipts from customs dues and 
sales of public land would yield during the current fiscal 
year (July 1, 1861, to June 30, 1862), a revenue of $60,- 
000,000, while the expenditures of the government would 
probably reach $318, 519,582. l Enormous as this budget 
seemed, the succeeding months proved its inadequacy. The 
December report showed that the estimate of expenses should 
be increased $214,000,000, while the estimate of revenue from 
customs and land sales should be reduced $25,000,000. 2 But 
more than this, it had been generally felt that the plan of 
borrowing from banks could be only a temporary makeshift 
to serve until a permanent policy was matured. It was hoped 
that the report of December would present a definite plan of 
finance based upon adequate taxation. But Mr. Chase pro- 
posed taxes yielding only $50,000,000, 3 and put his main 
reliance upon a scheme for reorganizing the banks of the 
country in such a way as to compel them to buy a large 
amount of government bonds. 4 The disappointment caused 
by the report was keen. 5 

The second event was the Trent affair. November 8, 
1861, Captain Wilkes, of the American warship SanJacinto, 
removed two commissioners of the Confederate States 

1 Senate Executive Document No. 2, pp. 5 and 8, 37th Cong., 1st Sess. 

2 Report of the Secretary of the Treasury, December, 1861, pp. 11, 12. 

3 Ibid., p. 15. 

* Ibid., pp. 17-20. 

5 Cf. " Federal Finances Examined" (anon.) Hunt's Merchants' Magazine,Vol. 
XLVII, December, 1862, p. 507; Appleton ' Annual Cyclopaedia, 1861, p. 66; ELAINE, 
Twenty Years of Congress, (Norwich, Conn., 1884), Vol. I, p. 407. 



38 HISTORY OF THE GREENBACKS 

Messrs. Mason and Slidell by force from the British 
steamer Trent, plying between Havana and Southampton. 
In the United States lively satisfaction was felt in this cap- 
ture, and Wilkes was dined by clubs and thanked by Con- 
gress. But when the news reached England, November 27, 
there was great indignation over what was felt to be a wan- 
ton insult to the British flag ; and the government dispatched 
a queen's messenger to Washington to demand the surren- 
der of the prisoners and an apology. If this demand were 
not complied with in seven days the English ambassador was 
instructed "to repair immediately to London." This was a 
plain threat of war. Intelligence of the action taken by the 
English cabinet was received in New York on December 16. 
As the report had gone out that the Confederates would not 
be released it seemed highly probable that the federal gov- 
ernment would be involved in a second war. 1 

The receipt of the news on the 16th caused a panic in the 
New York markets. On the stock exchange government secu- 
rities fell 2-2 per cent. Shares of all kinds participated in 
the decline, 2 and sterling exchange rose two points. 3 Wall 
street was filled with rumors of an agreement among the banks 
to suspend specie payments, and men with balances in banks 
began to turn them into special deposits. 4 Next day a meet- 
ing of the associated banks was called to consider the situa- 
tion. A motion was made to suspend specie payments at 
once, but the proposal failed of adoption. Instead, in the 
hope of quelling the panic, the banks unanimously adopted a 
series of vigorous resolutions, declaring that there was 
"nothing in the position of the loans to the government to 

' Cf. J. F. RHODES, History of the United States, Vol. Ill (New York, 1895), pp. 
52(M3. 

2 Bankers' 1 Magazine (New York), Vol. XVI, pp. 558 and 491; and stock quota- 
tions, ibid., p. 559. 

3 Ibid., Vol. XVI, p. 736. 

* Ibid., Vol. XVI, pp. 491 and 558. 



SUSPENSION or SPECIE PAYMENTS 39 

cause uneasiness," and that they saw " no reason, justifica- 
tion, or necessity for a suspension of specie payments. " 

But these resolutions availed little. While the banks 
continued to pay specie into the subtreasury at the usual 
rate, the money paid out by the goverment to contractors 
and others, owing to the alarmed state of the public mind 
and the fear of a suspension, did not flow back as before into 
their reserves. 2 This cut off the chief source from which the 
reserves had been recruited. Meanwhile the banks of Boston 
and the West began to draw heavily upon their balances in 
New York, so that the deposits fell off $17,000,000 in three 
weeks. 3 To meet this double drain coming from the sub- 
treasury and the interior banks the New York institu- 
tions had no available resource. Over $50,000,000 of their 
resources seem to have been locked up in government securi- 
ties, 4 which could not be- sold to obtain specie ; for the fall 
in the price of stocks made it impossible to dispose of 7.30 
treasury notes at home except at a heavy sacrifice, 5 and the 
danger of war with England cut off all hope of negotiating 
the 6 per cent, bonds in Europe. 6 The result of the situa- 
tion was a rapid depletion of the reserves. The week that 
Mr. Chase's report on the finances was published the New 
York banks lost $2,900,000 of specie. The next report 
made after the receipt of warlike news from England 

1 See copy of the resolutions in Hunt's Merchants' Magazine, Vol. XL VI, p. 101. 
Cf. the comment in the New York Tribune, December 23, p. 8, and December 30, p. 8; 
New York Herald, December 19, p. 6 ; and New York Times, December 30, p. 4. 

2 Cf. letter from a New York bank president in New York Tribune, December 25, 
1861, p. 7. 

3 Cf. New York Tribune of December 23, p. 8, and of December 30, p. 8. The 
table, p. 30, above, shows that the Boston banks increased their specie, while those 
of New York were losing rapidly. 

Cf. Bankers' Magazine (New York), Vol. XVI, p. 560. 

5 Most of the 7.30 notes sold by public subscription had been taken by "small 
investors, and they were already again offering them in the market to an extent which 
reduced the price to 96 for those that were indorsed and 98 for clean notes." 
American Annual Cyclopaedia, 1861, p. 299. 

* Letter from bank president in New York Tribune, December 25, 1861, p. 7. 



40 HISTORY OF THE GREENBACKS 

exhibited a further loss of $2,600,000. During the next 
seven days the rate of depletion was even more rapid, and 
the loss for the week amounted to $7,400,000. 

Under such a drain the complete exhaustion of the 
reserves was evidently a question of only a short time. 
Saturday, December 28, the banks held another meeting 
to decide what measures should be taken. After a "rather 
stormy" session of six or seven hours, the resolution to sus- 
pend specie payments upon the following Monday, Decem- 
ber 30, was carried by a vote of 25 of the institutions 
represented to 15. 1 

1 <\f. " Remarks made by Mr. James Oallatin at the Meeting of Bank Officers, 
.... December 28, 1861," Bankers' Magazine (New York), Vol. XVI, pp. 625-31 ; H. W. 
DOMETT, History of the Bank of New York, 2d ed. (New York, 1884), p. 97, and 
accounts of the meeting in the New York daily papers of December 30, 1861. 

It is to be noted that suspension was rather a measure of precaution to prevent 
further depletion of the reserves than one of necessity ; for on the day when suspen- 
sion was decided upon the New York banks held $4,600,000 more specie than they had 
at the commencement of the year. Their attitude was expressed in Mr. Gallatin's 
remarks : " The government must suspend specie payments or we must, and it is 
only a question of a few more days 1 time as to who 'suspends first and who shall hold 
the specie now in our vaults. If we hold it, the people and the government will be 
alike benefited. If government takes it, the whole will be expended and hoarded by 
a few people." Bankers' 1 Magazine (New York), Vol. XVI, p. 627. 

At the time of suspension the account of the banks with the government stood 
as follows (ibid., p. 560) 

Subscribed to Received back Due to Oov- 

Loan Paid in from Government ernment 

Banks of New York - - - $102,056,835 $81,056,835 $27,125,000 $21,000,000 
Banks of Boston - - - 29,159,095 23,159,095 7,750,000 6,000,000 

Banks of Philadelphia - - 14,579,548 11,579,548 3,875,000 3,000,000 

$145,795,478 $115,795,478 $38,750,000 $30,000,000 

The government made its last cash payment to the banks January 13, 1862, and 
the banks paid the last instalment of money due upon the second loan January 15, 
and on the third loan February 4. January 24 the banks still owed the government 
$9,375,000. (Cf. " Report New York Loan Committee," Bankers' 1 Magazine, Vol. XVII, 
pp. 139, 140, and comment on the money market, ibid., Vol. XVI, pp. 560 and 655.) 

There was a vexatious delay in the delivery to the banks of the securities they 
had purchased. The 7.30 treasury notes for the portion of the first loan which was 
not sold to the public ($5,625,000) were not received by the banks till January 24, 
1862. The notes for the second loan were delivered in four instalments between 
January 22 and February 5; and the 6 per cent, bonds for the third loan in nine 
instalments between January 27 and March 5. " Report of the New York Loan Com- 
mittee," loc. cit. 

" As fortunately as unexpectedly," reported the New York Loan Committee 
June 12, 1862, in regard to the operation, " it has resulted profitably for the associ- 
ates, and has probably enabled them to employ their means to nearly as much 



SUSPENSION OF SPECIE PAYMENTS 41 

" The suspension of the banks [of New York] was received 
in commercial and monetary circles without surprise." ' The 
banks of Philadelphia, which had lost nearly $2,000,000 of 
specie in a fortnight, followed suit; and so did those of 
Boston, although the latter had managed to increase their 
reserves $1,600,000 between December 7 and 21, and had 
then lost but $1,100,000 by the 28th, thus suspending with 
$2,300,000 more specie than on August 17, when the con- 
tract for the first government loan was taken. With the 
exception of the banks of Ohio, Indiana, and Kentucky, and 
a few scattered institutions,the suspension of specie payments 
immediately became general. 2 

The suspension of the national treasury followed of neces- 
sity hard upon that of the banks. As Mr. Chase said, after 
the banks had ceased paying in specie, it was "certain that 
the government could no longer obtain coin on loans in any 
adequate amounts." J Consequently the treasury was obliged 
to cease redeeming in coin the demand treasury notes in 
circulation. 4 

The responsibility for the suspension of the banks and 

advantage as would have been done but for the political disturbances of the country. 
Most of the government securities which have been sold by the associates have 
been sold by themselves at different times, and it is not possible for your committee 
to state the amount of interest for the capital invested which has been received 
thereon; but the associates still hold a large amount of them, the market value of 
which is much higher than the price at which they were taken." Loc. cit., p. 148. 
Moreover, the banks drew interest at 7.3 per cent, upon the entire $30,000,000 of the 
first loan from August 19, upon the second from October 1, and upon the third 
from November 16. As they paid up these loans at the rate of about $5,000,000 per 
week, not completing the payments on the first loan till October 24, 1861, on the 
second till January 15, 1862, and on the third till February 4, 1862, they were fora 
considerable time paid interest on funds that had not left their possession. On that 
portion of the first loan sold to the public, the banks received interest from August 
19, 1861, to the dates of sale, amounting altogether to $621,290. " Report of the New 
York Loan Committee," Bankers' 1 Magazine, pp. 139-42, and Report of the Secretary 
of the Treasury, 1861, p. 9. 

1 New York Tribune, December 31, 1861, p. 8. 

2 Cf. Part II, chap, ii, sec. ii, below. 

3 Letter to Trowbridge, WARDEN, Life of Chase, p. 388. 

*On the subsequent history of these treasury notes see Part II, chap, ii, sec. iii, 
and chap, iii, sec. ii, below. 



42 HISTORY OF THE GREENBACKS 

government has frequently been placed upon Mr. Chase for 
his issue of demand treasury notes and his refusal to draw 
directly upon the banks in making payments.' Examination 
of the condition of the banks, as shown in their weekly 
reports, however, hardly bears out this opinion. Doubtless 
the position of the banks would have been stronger had the 
secretary conformed his policy to their wishes. But, inas- 
much as no serious trouble had been experienced up to the 
second week of December, despite Mr. Chase's refusal to do 
as the banks desired, it seems unreasonable to attribute the 
sudden loss of specie in the last three weeks of December, 
which caused suspension, to the policy pursued by him 
throughout especially when the result is so adequately 
accounted for by the depression due to the unfavorable 
treasury report and to the fear of a war with England. 
These events made clear the weakness inherent in the plan 
of the bank loan. Suspension was inevitable whenever any- 
thing occurred to check the re- deposit in the banks of money 
paid out by the treasury, or to prevent the banks from 
replenishing their reserves by selling the securities received 
from the government. A severe blow to the national credit 
would inevitably produce such effects. It so happened that 
the publication of the disappointing treasury report and the 
Trent affair were the first occurrences of this nature momen- 
tous enough to arouse general uneasiness. Had there been 
no threat of war with England, and had the condition of the 
federal finances revealed in the report of December been less 
gloomy, the banks would probably have been able to carry 
out their program of taking a fourth $50,000,000 of treasury 
notes on January 1. Suspension would then have been 
postponed, but, in all probability, not prevented. To 
assume that the banks could have continued indefinitely to 
carry their double burden supplying both government and 

1 For examples see the citations in note 1, p. 26, and note 2, p. 27 , above. 



SUSPENSION OF SPECIE PAYMENTS 43 

public with loans is to assume that no serious reverse 
would have befallen the national credit; for, as has been 
twice said, a disturbance of public confidence would have led 
to the withdrawal of deposits and the hoarding of specie ; 
the government securities held by the banks would have 
become unsalable and suspension would have followed. 

As it was, the specie standard was abandoned within six 
months after the Civil War had fairly begun. The country 
was left at the beginning of the new year, 1862, with a 
mixed circulation of paper money which neither the issuing 
banks nor the federal treasury were prepared to redeem in 
coin. How Congress met the situation thus created forms 
the subject of the following chapter. 1 

1 General accounts of the $150,000,000 bank loan and the suspension of specie pay- 
ments are to be found in Report of the Secretary of the Treasury, December, 1861, 
pp. 8-10; letter of Chase to Trowbridge, in WARDEN, Life of Chase, pp. 386-8; 
SCHTJCKERS, Life of Chase, pp. 225-31; "Report of the Loan Committee of the New 
York Banks," Executive Document No. 25, 37th Cong., 3d Sess., pp. 125-42, and Bank- 
ers' 1 Magazine (New York), Vol. XVII, pp. 136-49 (details of the management of the 
loan by the New York banks) ; GEORGE S. COE, letter of October 8, 1875, to E. G. 
Spaulding, in latter's History of the Legal-Tender Paper Money, 2d ed. (Buffalo, 
1875), Appendix, pp. 89-96; republished under title, "Financial History of the War, 1 ' 
in Bankers' Magazine, Vol. XXX, pp. 536-44 (written from point of view of the banks, 
as is the next also) ; J. E. WILLIAMS, The War Loans of the Associated Banks to the 
Government in 1861 (New York, 1876) ; American Annual Cyclopaedia, 1861, article 
"Finances of the United States," and pp. 61-6 (impartial); "Federal Finances 
Examined " (anon) ; Hunt's Merchants' Magazine, Vol. XLVII, pp. 506 ff. (criticism 
of Mr. Chase) ; VON HOCK, Die Finanzen und die Finanzgeschichte der Vereinigten 
Staaten (Stuttgart, 1867), pp. 442-6 (deficient in information) ; W. A. BERKEY., The 
Money Question, 4th ed., Grand Rapids (Mich.), 1878, pp. 154-8 (version of the 
" greenback " party) ; BOLLES, Financial History of the United States, 1860-85, pp. 
20-42 (loosely written) ; W. G. SUMNER, History of Banking in the United States, 
(New York, 1896) [Vol. I of History of Banking in all Nations], pp. 458-61. 



CHAPTER II 
THE FIRST LEGAL-TENDER ACT 

I. The Legal-Tender Bills: 

Spaulding's Legal -Tender Bill Discussion in Committee The 
Bankers' Convention Revision of Spaulding's Bill. 
II. Debate in Congress: 

Constitutional Argument Argument from Experience Eco- 
nomic, Moral, and Fiscal Objections Argument from Necessity 
Alternatives Proposed A Temporary Measure. 

III. Attitude of Secretary Chase: 

Chase's Reluctant Assent to Legal-Tender Clause Later Denial 
of Necessity for It Opinions of Financial Critics. 

IV. Passage of the Act: 

Three Substitutes for Legal-Tender Bill Vote in House Senate 
Amendments Votes in Senate Conference Committee Pro- 
visions of Law Attitude of the Business Public and of the Press. 

I. THE LEGAL-TENDER BILLS 

ON the very day that the New York banks suspended 
specie payments, a proposal was made in Congress that the 
United States resort to the issue of an irredeemable paper 
currency of legal-tender notes. This bill, so promptly pre- 
sented, originated in the following manner: 

In his report of December 9 Mr. Chase had estimated the 
probable deficit for the coming six months at $214,000,000. 
To secure this sum he proposed an increase of only 
$50,000,000 in taxation and for the remainder reliance upon 
loans. With the purpose of making it easier to borrow he 
suggested a national reorganization of the state banking 
system requiring all banks to purchase United States stocks 
to hold as security for their circulating notes 1 a proposal 

i Report of the Secretary of the Treasury, December, 1861, pp. 11-20; Notes 
Explanatory of Mr. Chase's Plan of National Finance (Washington, 1861). p. 15. 

44 



THE FIRST LEGAL-TENDER ACT 45 

out of which the national banking system developed some 
two years later. 

According to the usual course of business this report was 
read in the House of Representatives and referred to the 
Committee of Ways and Means. The large amount of 
work which devolved upon this committee had made neces- 
sary a division of labor among its members. The chairman, 
Mr. Thaddeus Stevens, of Pennsylvania, whose radical anti- 
slavery opinions, imperious temper, and vigorous use of 
invective had made him the Republican leader of the House, 
devoted himself to pushing the appropriation bills. To the 
remaining eight members fell the task of preparing new 
measures. They organized in two subcommittees, one of 
which, presided over by the leading tariff advocate of the 
day, Justin S. Morrill, of Vermont, undertook to frame a 
program of war taxation, leaving the other subcommittee to 
consider the loan bills. 1 

It was to this second subcommittee that Mr. Chase's 
national currency scheme was submitted. The chairman 
was Elbridge G. Spaulding, a Buffalo banker who had been 
state treasurer of New York and had served two terms in 
Congress. His colleagues were a retired Boston merchant, 
Samuel Hooper, who had entered politics as a Republican 
after accumulating a fortune in business, and Erastus 
Corning, an Albany millionaire possessing executive ability 
but no talent for speech-making. These three gentlemen 
immediately adopted the secretary's plan and began to draft 
a bill for a national currency secured by a pledge of govern- 
ment bonds. But on Saturday, December 28, they learned 
that the New York banks had decided to suspend specie 
payments on the following Monday. Suspension would of 
course drive gold from circulation and leave the country 

i E. G. SPACLDINO, History of the Legal-Tender Paper Money Issued During the 
Great Rebellion (Buffalo, 1869), pp. 7, 8. 



46 HISTORY OF THE GREENBACKS 

with no other currency than the $33,000,000 demand notes 
issued by the treasury, the notes of the suspended state 
banks, and small change of silver and minor coins. Even 
when redeemable in specie the bank notes, issued by 
some 1,600 different institutions according to no general 
plan and varying widely in value, made a very unsatisfactory 
currency. Moreover, bank notes could not legally be 
accepted and paid out by the federal treasury under the 
provisions of the subtreasury law. Mr. Chase's plan for 
reorganizing the banking system would perhaps furnish a 
sounder circulation, but the banking bill contained sixty 
sections and was certain to encounter opposition from the 
friends of state banks that would delay its enactment sev- 
eral months. "So long a delay," thought Mr. Spaulding, 
"would be fatal to the union cause." Accordingly, he 
"changed the legal tender section, intended originally to 
accompany the bank bill, into a separate bill, .... and on 
his own motion introduced it into the House by unanimous 
consent on the 30th of December." 1 

After being twice read in the House of Representatives, 
this bill was referred back to the Committee of Ways and 
Means. Upon its wisdom the members of the committee 
were equally divided. Of the subcommittee, Spaulding 
and Hooper favored the bill, while Corning opposed it. 
Thaddeus Stevens at first objected to the legal-tender clause 
as unconstitutional ; but he soon overcame his scruples and 
decided to vote for the bill. Morrill, of Vermont, and 
Horton, of Ohio, joined Corning in opposition. Maynard, 
of Tennessee, and Stratton, of New York, took no part in 
the discussion; but the former was inclined to support the 
proposal, while Stratton was undecided. There was thus a 
deadlock in the committee four members favored and four 

i SPAULDING. op. cit., p. 14. This was H. R. bill No. 182. It authorized the issue of 
$50,000,000 of legal-tender treasury notes. For text see SPACLDIXG, pp. 14, 15. 



THE FIRST LEGAL-TENDER ACT 47 

opposed the bill. The ninth member, John S. Phelps, of 
Missouri, was not in Washington at the time. But finally 
the wavering member, Stratton, consented to vote for the 
bill in order that it might go before Congress for considera- 
tion. 1 Thus, after a narrow escape from defeat in the com- 
mittee, the legal-tender bill was formally reported to the 
House by Mr. Spaulding, January 7, 1862. 2 

Mr. Spaulding's reasons for urging a legal-tender bill 
upon Congress at this juncture were given in a letter to a 
gentleman who ventured to suggest that heavy taxation was 
preferable to the issue of irredeemable paper as a method of 
securing revenue. Spaulding wrote: 

The treasury-note bill .... is a measure of necessity and not one 

of choice We will be out of means to pay the daily expenses 

in about thirty days, and the committee do not see any other way 
to get along till we can get the tax bills ready, except to issue tem- 
porarily Treasury notes We must have at least $100,000,000 

during the next three months, or the Government must stop 
payment. 

And the letter closed with an intimation that unless the 
gentleman could suggest some other plan for raising the 
said $100,000,000 it would best become him not to criticise 
the bill. 8 

By the publication of copies of the legal-tender bill in 
various newspapers, the country was quickly informed of the 
radical step which Congress was considering. When the 
bankers of New York, Boston, and Philadelphia who had 
been supplying the government with funds heard of the 
proposal, a number of the most prominent went to Washing- 
ton to persuade Secretary Chase that the situation could be 

i SPAULDING, History, p. 16. 

2 This second bill (H. R. bill No. 187) differed from the first in increasing the 
issue of legal-tender notes from $50,000,000 to $100,000,000 and in making the demand 
notes authorized in July, 1861, also a legal tender. For text see ibid., pp. 16, 17. 

3 Letter of E. G. Spaulding to Isaac Sherman, January 8, 1862, SPAULDING, 
History, pp. 17, 18. 



48 HISTORY OP THE GREENBACKS 

met with a remedy less heroic than the issue of an irredeem- 
able paper currency. January 11, 1862, these gentlemen 
had an informal conference with Mr. Chase, the members of 
the House Committee of Ways and Means, and of the Senate 
finance committee. 1 

As spokesman for the banks, Mr. James Gallatin, presi- 
dent of the Gallatin Bank of New York, pointed out the evil 
consequences that would follow the emission of legal-tender 
paper money, and submitted an alternative plan for relieving 
the necessities of the treasury. The main features of his 
proposal were: first, heavy taxation; second, the sale of 
long-time bonds at their market value. Adequate taxation, 
he argued, would give the long-needed assurance that the 
treasury had ample revenue to pay interest on loans. Bonds 
could then be sold on better terms, especially after the 
futile attempt to fix a minimum value for them by legislation 
forbidding sales below par should have been abandoned. 2 

Simple and efficient as this plan seems, it did not meet 
with the approval of the secretary or the congressional 
committees. Mr. Spaulding, who replied to Gallatin, stated 
the grounds of their dissent as follows: 

Mr. Spaulding objected to any and every form of " shinning " by 
government through Wall or State streets to begin with; objected 
to the knocking down of government stocks to 75 or 60 cents on the 

i SPAULDING, op. cit., pp. 18-20. The bankers who took part in this conference 
seem to have had no official position as delegates of the association of banks. However, 
they were men of such prominence that much weight was attached to the opinions they 
expressed on financial topics. According to Spaulding, Coe, Vermilye, Martin, and 
Gallatin came from New York ; Haven, Walley, and Bates from Boston ; and Rogers, 
Mercer, and Patterson from Philadelphia (ibid., p. 19). But that the views of these 
gentlemen were not shared by all their associates appears from the letters received 
about this time by Mr. Spaulding from other bankers (ibid., p. 23-5). See also the 
New York Herald financial column dated January 13, 1862. 

2There were four other points in Mr. Gallatin's plan: (1) cessation of issue of 
demand notes beyond the $50,000,000 already authorized ; (2) the issue of $100,000,000 
of two-year treasury notes receivable for government dues except customs ; (3) sus- 
pension of the subtreasury act so as to allow banks to become government deposi- 
tories; (4) authorization of temporary loans secured by pledges of government 
stock. Ibid., p. 20. 



THE FIRST LEGAL-TENDER ACT 49 

dollar, the inevitable result of throwing a new and large loan on 
the market, without limitation as to price; claimed for treasury 
notes as much virtue of par value as the notes of banks which have 
suspended specie payments, but which yet circulate in the trade of 
the North; and finished with firmly refusing to assent to any 
scheme which should permit a speculation by brokers, bankers, 
and others in government securities, and particularly any scheme 
which should double the public debt of the country, and double 
the expenses of the war by damaging the credit of the government 
to the extent of sending it to " shin " through the shaving shops of 
New York, Boston, and Philadelphia. 1 

This reply of Mr. Spaulding to Mr. Gallatin is interesting 
because it shows plainly the curious inconsistency in the 
position taken by the promoters of the legal-tender bill from 
beginning to end of the discussion. They professed to 
advocate the issue of paper money upon the ground of sheer 
necessity. By this means alone, said Mr. Spaulding, in the 
letter quoted above, could the immediate wants of the 
treasury be met. To substantiate this argument it was of 
course necessary to show that no other feasible method of 
obtaining funds existed. When, then, bankers declared that 
there was an alternative, that the government could secure 
means by adopting a policy of vigorous taxation and selling 
its bonds at their market value, the only logical answer for 
the friends of the legal-tender bill was to show that the 
bankers were mistaken. But such was not the answer that Mr. 
Spaulding made. He replied instead that selling bonds below 
par was more objectionable than issuing paper money. And in 
this view the committee of Congress apparently concurred. 
Thus, when the delegates of the banks called attention to 
the possibility of borrowing, the argument for the legal- 
tender bill was shifted from the ground of necessity to that 
of expediency. The choice lay not between irredeemable 
paper money and federal bankruptcy, but between irredeem- 

i SPAULDING, p. 21. 



50 HISTORY OF THE GREENBACKS 

able paper money and borrowing at high rates of interest. 
The financial leaders of the government deliberately pre- 
ferred the former course. Whether their choice was wise or 
not, even from the strictly financial point of view; whether 
the increase of debt, which Mr. Spaulding saw would result 
from selling bonds below par, was avoided by the issue of 
paper money; whether "the knocking down of government 
stocks to 75 or 60 cents on the dollar" was prevented, are 
questions that must be left for the chapter on the effect of 
paper issues upon the cost of the war. 1 

As has been said, Mr. Spaulding's reply convinced the 
congressional committees that the legal- tender bill was a 
better method of relieving the embarrassment of the treasury 
than the bankers' proposal to sell bonds at their market 
value. Subsequently, however, the delegates of the banks 
succeeded in formulating a plan which received the indorse- 
ment of the secretary of the treasury. New loans of $250,- 
000,000 or $300,000,000 and the enactment of the national 
banking bill advocated in Mr. Chase's report were its chief 
points. The issue of demand notes in excess of the $50,- 
000,000 already authorized, and the making those already 
issued a legal tender, was to be avoided as unnecessary. 2 
But this plan also was rejected by the committees of Con- 
gress as inadequate to the crisis. Plainly, it would be of 
small avail to authorize bonds at par when capitalists would 
buy them only at a discount, and to sales below par the commit- 
tees would not agree. Consequently, the attempt of the repre- 
sentative bankers of New York, Boston, and Philadelphia to 
give the government the benefit of their advice came to 
nought. The plans suggested by them are of interest, how- 
ever, because they show that in the opinion of experienced 

iPart II, chap, z, below. Cf. HENRY ADAMS, Historical Essays (New York, 
1891), pp. 289-93 and 63, 64 below. 
2 SPAULDING, pp. 21, 22. 



THE FIRST LEGAL-TENDER ACT 51 

men the legal-tender act was not the only escape from the 
difficulties into which the treasury had drifted. 

After the convention of bankers had broken up, Mr. 
Spaulding added another section to the legal-tender bill, 
recast it in pursuance of suggestions from Secretary Chase, 1 
and introduced it again into the House of Representatives, 
where it was made the special order for January 28, 1862. 
As it came before Congress the measure provided for the 
issue of $100,000,000 of United States notes to be "a legal 
tender in payment of all debts, public and private," and 
exchangeable for 6 per cent, twenty-year bonds of which the 
secretary was authorized to issue $500,000,000. 2 Upon the 
appointed day the House resolved itself into a committee of 
the whole upon the state of the Union, and Mr. Spaulding 
made an elaborate introductory speech, explaining and rec- 
ommending the bill. 3 But opposition to the making of 
treasury notes a legal tender developed at once, and it was 
not until after four weeks of earnest discussion that the fate 
of the bill was decided. What motives actuated Congress 
in its final decision can best be learned by study of the 
debate. 

II. DEBATE IN CONGRESS* 

Logically, the first point in the case of the promoters 
of the treasury-note bill was the proof that Congress had 
power under the constitution to make paper money a legal 
tender in the payment of debts. Foreseeing that this power 

i SPAULDING, pp. 26, 27. 

2H. R. bill No. 240, ibid., p. 27; full text in Congressional Globe, 37th Cong., 2d 
Sess., p. 522. 

3 Congressional Globe, loc. cit., pp. 523-6; SPAULDING, pp. 28-42. 

1 In the following section I have attempted to give an analysis of the whole dis- 
cussion in both houses of Congress, rather than to show the attitude of prominent 
individuals. Accounts of the debate from the latter point of view are numerous. 
See, e. g.: SPAULDING, pp. 28-152; J. G. ELAINE, Twenty Years of Congress (Nor- 
wich, Conn., 1884), Vol. I, chap, xix; J. J. KNOX, United States Notes, 2d ed. 
(London, 1885), pp. 119-37; A. S. BOLLES, Financial History of the United States, 
1861-1885 (New York, 1886), Book I, chap, iv; J. F. RHODES, History of the United 



52 HISTORY OP THE GREENBACKS 

would be challenged, Mr. Spaulding read an unofficial 
opinion of the attorney-general, Edward Bates, which was 
interpreted, not quite fairly, to mean that Congress could 
make treasury notes a legal tender since it was not forbidden 
to do so by the constitution. 1 To this it was answered that 
under the tenth amendment Congress possessed no powers 
except those explicitly or implicitly granted it, and therefore 
that no authority for making paper money a legal tender could 
be inferred from the silence of the constitution on the point. 2 
So conclusive was this reply that the supporters of the 
bill found it necessary to seek other ground for their con- 
tention by deducing the right to make paper bills legal 
tender from some of the powers expressly delegated to Con- 
gress. Appeal was made to the clause authorizing Congress 
"to make all laws necessary and proper for carrying into 
execution " the powers specifically granted it. Mr. Spauld- 
ing coupled this clause with the authorization to levy war. 
"This bill," he argued, "is a necessary means of carrying 
into execution the powers granted in the constitution ' to 
raise and support armies ' and ' to provide and maintain a 
navy.' '' Thaddeus Stevens added the necessary clincher 
by saying: " Whether such necessity exists is solely for the 
decision of Congress." 4 Two attempts were made to over- 
states, from 1850 (New York, 1895), Vol. Ill, pp. 561-7; J. K. UPTON, Money in Poli- 
tics, 2d ed. (Boston, 1895), pp. 75-^89; J. L. LAUGHLIN, Report of the Monetary Com- 
mission (Chicago, 1898), pp. 408-10; F. A. WALKEH, Money (New York, 1891), pp. 
369-73; F. A. WALKER and HENRY ADAMS, " The Legal-Tender Act," North American 
Review, April, 1870; "The Greenbacks in Congress," Sound Currency, Vol. Ill, No. 
4, January, 1896. 

1 Congressional Globe, 37th Cong., 2d Sess., Part I, p. 525; SPAULDING, pp. 15, 16. 
Bates 's real meaning seems to be that Congress is no more prohibited from making 
bills of credit a legal tender than it is from issuing them, and the latter right no 
one contests. 

2 Ibid. See remarks of Messrs. Pendleton, p. 550; Cowan, p. 791; Sheffield, p. 640; 
Thomas, p. 681 ; Collamer, p. 768; Pearce, p. 803; Crisfleld, Appendix, p. 48; Bayard, 
p. 795; Conkling, p. 635; Wright, p. 662. 

3 Ibid., p. 524. Similar arguments were made by Messrs. Blake, p. 686; Howe, 
Appendix, p. 54 ; Stevens, p. 688. 

*Ibid. 



THE FIBST LEGAL-TENDER ACT 53 

throw this position. Such an argument, said Mr. Crisfield, 
amounts to a claim of unlimited authority; for, if one 
granted it, by asserting that the act was necessary " to insure 
public safety," Congress could enact any law, no matter how 
injudicious, provided it were not expressly forbidden by the 
constitution. 1 Mr. Pendleton took different ground. Granted, 
he argued, that Congress could make treasury notes a legal 
tender if this were necessary to pay the army, it still 
remained to prove that this necessity existed. He himself 
was unable to see the necessity in the pending case. There- 
fore, to him the bill was unconstitutional. 2 

A second form of the "necessary means" argument was 
made by Mr. Bingham, of Ohio. Congress, he said, has 
power to regulate commerce, and the determination of what 
shall be lawful tender in discharge of debts is a necessary 
incident of this regulation. 3 But it was answered, first, that 
it was a mere subterfuge to pretend that regulation of com- 
merce was the object of the bill; 4 second, that the power of 
Congress over commerce extended only to "commerce with 
foreign nations, and among the several states, and with the 
Indian tribes," while a legal-tender act affected only transac- 
tions between individuals; 5 and third, that the substitution 
of a paper for a metallic standard, so far from "regulating 
and promoting" commerce, tended rather to "disturb and 
destroy" it. 6 

Senators Howard and Sherman elaborated a third varia- 
tion of the argument. Making treasury notes a legal tender 
they held was one of the necessary and proper means for 
borrowing money. 7 Senator Collamer anticipated this con- 
tention, and replied that where power was granted to do a 

i Congressional Globe, 37th Cong., 2d Sess., Appendix, p. 48. 2 Ibid., p. 550. 

3 Ibid., p. 637; cf. remarks of Mr. Kellogg, p. 679. 

4 Mr. Crisfield, Appendix, p. 49. 5 Mr. Collamer, p. 769. 

6 Mr. Crisfield, Appendix, p. 49. ' Mr. Sherman, p. 790; Mr. Howard, p. 796. 



54 HISTORY OP THE GREENBACKS 

certain thing in a certain way it was not permissible to seek 
inferential authority to accomplish the same end in a differ- 
ent manner. Now Congress was empowered to raise money 
first, by levying taxes, second, by negotiating loans. The 
issue of legal-tender notes, being neither a tax nor a loan, 
came under neither of these express grants ; and not coming 
under the express grants, no authority could be inferred for 
it as a means of raising money. 1 

The last argument for the constitutionality of the bill 
the one that found no adequate answer was Charles Sum- 
ner's. He called attention to the fact that Congress had 
long been conceded the right to issue treasury notes. Review- 
ing the financial history of the American colonies, he showed 
that ten of the thirteen had at different times issued paper 
money, usually making it a legal tender. In America, he 
argued, " the legal tender was a constant, though not insepa- 
rable incident of the bill of credit." The conclusion was 
that the unquestioned power of issuing treasury notes carried 
with it the right to make the notes a legal tender. 2 

But, after spending much time and ingenuity in debating 
the constitutional questions raised by the legal-tender clause, 
the members of Congress apparently concluded that they had 
multiplied words to little purpose. While a few declared 
that constitutional scruples would prevent them from voting 
for the bill, 3 the more general feeling was that it would be 
unreasonable to decide a question of such importance upon a 

1 Congressional Globe, 37th Cong., 2d Sess., p. 767. 

2 Ibid., pp. 797, 798. An amusingly fantastic argument for the constitutionality 
of the bill was made by Senator McDougall of California, who attempted to deduce 
the right to issue legal-tender treasury notes from the power to coin money, by 
showing that the word "coin" was etymologically equivalent to the word " stamp," 
and therefore that the right of coinage must include the right to stamp paper notes. 
Unfortunately for the argument, the canon of interpretation which insists that 
words are used in the constitution in strict accordance with their etymological 
significance did not commend itself to the lawyers of the Senate. Ibid., Appendix, 
p. 60, for his argument; with which compare the remarks of Mr. Thomas, p. 681. 

3. p., Senators Collamer, ibid., pp. 767, 770; Powell, p. 804; Saulsbury, p. 804. 



THE FIRST LEGAL-TENDEB ACT 55 

doubtful technicality which could be settled only by the 
courts. If the measure was expedient there need be little 
hesitation at such a crisis in construing liberally the powers 
of Congress. 1 The fate of the bill was affected, then, much 
less by the inconclusive constitutional argument than by the 
debate upon the merits of the issue of legal-tender notes as 
a financial policy. 

Considering the bill thus upon its merits, the opposition 
called attention prominently to the lessons of experience. 
Could it be shown that the resort to an inconvertible paper 
currency had always been attended in the past with evil 
results, a strong presumption would be created against 
the wisdom of a repetition of the experiment. Consequently 
rhetoric was employed to picture in vivid colors the unhappy 
consequences that had followed the issue of paper money by 
France during the Revolution, 2 by England in the Napol- 
eonic wars, 3 by Austria,* and Turkey, 5 by Rhode Island 6 in 
colonial days, by the Continental Congress in the War of Inde- 
pendence, 7 and finally by the Confederate States, then fairly 
launched upon the paper-money policy. 8 

To break the force of these historical parallels, which told 
so heavily against the bill, its supporters sought to show that 
causes, which under different conditions had led to deprecia- 
tion, would not be operative in the case of the United States 
in 1862. Thus, it was said, the continental notes of the 
American Revolution depreciated because of the poverty of the 
country, which offered no security for their redemption ; the 
vastly greater wealth of the nation in 1862 would prevent a 
repetition of the experience. 9 The depreciation of the issues 

1 Remarks of Fessenden, Congressional Gto6e,37th Cong., 2d Sess., p. 767; Wilson, 
p. 788; Alley, p. 659; Sherman, p. 791; Pike, p. 658; Campbell, p. 686. 

2 Mr. Cowan, ibid., p. 792; cf. Sumner, p. 798; Pike, p. 657. 

3 Mr. Morrill, p. 631 ; cf. Spaulding, p. 526; Stevens, p. 689. 

Mr. Morrill, p. 631. 5 Mr. Simmons, p. 794. 6 Mr. Sheffield, p. 164. 

^ Mr. Collamer, pp. 767-8; Sumner, p. 798; cf. Kellogg, p. 680; Pike, p. 656. 
8 Mr. Horton, p. 665. 9 Mr. Kellogg, p. 680. 



56 HISTORY OF THE GREENBACKS 

of Louis XIV was explained on the ground that France was 
then exhausted by heavy taxation to maintain a profligate 
court. 1 The cases of the French Revolution and the Con- 
federate States were accounted for by the fact that these 
governments were revolutionary. 2 Some gentlemen even 
denied that depreciated currencies had proved evils. " It 
would be far from a blunder," said Senator Howe, " to say 
that the ' golden age ' of England was during that long period 
when the only currency she knew was one of irredeemable 
paper;" 8 and Mr. Kellogg declared the paper issues of the 
Revolution had increased confidence, clothed the army, and 
revived commerce. 4 Another supporter of the bill tried to 
evade the historical argument by maintaining that the true 
lesson of experience was that of moderate issues. 5 But no 
one seems to have taken these ingenious pleas very seriously, 
for it was easy to show that one of the striking lessons of 
experiments with paper money is that such moderation, 
which the issuer at first intends to observe, has almost 
invariably been soon forgotten. 6 

If the argument from experience was strongly against the 
bill, the cognate economic argument was hardly less so. The 
opponents of paper issues assumed the offensive, declaring 
emphatically that the proposed legal-tender notes were cer- 
tain to depreciate in value. Mr. Love joy said: 

It is not in the power of this Congress .... to accomplish an 
impossibility in making something out of nothing. The piece of 
paper you stamp as five dollars is not five dollars, and it never will 
be, unless it is convertible into a five dollar gold piece ; and to .pro- 
fess that it is, is simply a delusion and a fallacy. 7 

' Mr. Howe, Appendix, p. 55, Congressional Globe, 37th Cong., 2d Sess. 

2 Mr. Kellogg, p. 680; Howe, Appendix, p. 55. 

3 Appendix, p. 55 ; cf. Spaulding, p. 526. 

* Ibid., p. 681. 5 Mr. Pike, p. 657. 

Messrs. Thomas, p. 682; Cowan, p. 793; Morrill, pp. 631, 886 ; Pomeroy, p. 884; 
Collamer, p. 770; Lovejoy, 691. 
' Ibid., p. 691. 



THE FIRST LEGAL-TENDER ACT 57 

Various shifts were tried to meet this attack. Mr. Kellogg 
boldly asserted that the legal tender quality of the notes 
would prevent fluctuation of their value ; J but more faith was 
put in the reply that the total wealth of the country was 
security for the notes, and this security being ample the 
value of the paper would not decline. 2 The rejoinder to this 
was first, that the security for the notes was not the total 
wealth of the people, but only such part of it as the govern- 
ment could obtain by taxation; and second, that though the 
security for ultimate redemption might be ample, the notes 
would nevertheless depreciate in value if the holders were 
unable to secure immediate payment. 3 

A different argument to show the improbability of 
depreciation was based by Thaddeus Stevens upon the quan- 
tity theory of money as expounded by McCulloch. "The 
value of legal tender notes," said he, " depends on the 
amount issued compared with the business of the country. 
If a less quantity were issued than the usual and needed cir- 
culation, they would be more valuable than gold." 4 The 
opponents of the bill replied, not by attacking the quantity 
theory, but by insisting that all experience showed that, after 
one issue of paper money had been made, other issues were 
sure to follow, until the currency became redundant and 
depreciated. "The experience of mankind," said Mr. 
Thomas, " shows the danger of entering upon this path ; that 
boundaries are fixed only to be overrun ; promises made only 
to be broken." 5 " The same necessity," added Mr. Pomeroy, 
" which now requires the amount of inconvertible paper now 
authorized, will require sixty days hence a similar issue, and 
then another, each one requiring a larger nominal amount to 

1 Congressional Globe, 37th Congress, 2d Sess., p. 681 ; cf. the answer of Senator 
Collamer, p. 767. 

2 Messrs. Spaulding, p. 524; Howe, Appendix, p. 55; Kellogg, pp. 680, 681. 
Cf. Mr. Morrill, p. 630, Thomas, p. 682. 

Ibid., p. 668. 5 Ibid., p. 682. 



58 HISTORY OF THE GREENBACKS 

represent the same intrinsic value." * To such assertions, 
backed by the weight of historical evidence, the supporters 
of the bill could respond only that the case of the United 
States would be an exception; the American government 
would not yield, as other governments had done, to the 
temptation to make further issues. 2 

Some of the more astute friends of the bill admitted the 
probability of a redundant currency, and relied, not on limi- 
tation of issues, but on a funding scheme to prevent depre- 
ciation. Section one of the bill provided that holders of 
legal-tender notes could at any time exchange them at par 
for 6 per cent, twenty-year bonds. 3 Under this arrange- 
ment, it was supposed, the value of the notes could never be 
less than that of the bonds, and, as bonds could by law not 
be sold for less than par, it followed that the notes could not 
greatly depreciate. 4 Unfortunately for the argument, even 
while Congress was debating the bill, bonds were selling in 
New York at ninety cents upon the dollar in notes of the 
suspended banks. 5 Hence the force of Mr. Merrill's remark: 
" By making our notes a legal tender we make them better 
for a moment than we can make our bonds, and men might 
be willing to exchange bonds for the notes; but notes for 
bonds never." 6 

Having proved to their satisfaction that the legal-tender 
notes would depreciate, the opponents of the bill pursued 
their advantage by dwelling upon the evil consequences that 
would result. Coin would disappear from circulation, said 
they, prices would rise suddenly, fixed incomes would decline, 

1 Congressional Globe, 37th Cong., 2d Sess., p. 884. Mr. Pomeroy, however, sap- 
ported the bill when amended to provide for payment of interest in coin. Cf. also 
Collamer, p. 770; Lovejoy, p. 691; Horton, p. 664; Cowan, p. 793; Morrill, p. 631. 

2 Cf. the remarks of Messrs. Pike, p. 657 ; Hooper, p. 617 ; Stevens, p. 688. 

3 See text of bill, ibid., p. 522, and Mr. Stevens 's explanation, p. 688. Cf. 
Spaulding, p. 526. 

Mr. Hooper, ibid., p. 617. 5 Mr. Pendleton, p. 551. Ibid., p. 630. 



THE FIBST LEGAL-TENDER ACT 59 

creditors be defrauded, and the widows and orphans would 
suffer. 1 Senator Collamer showed how depositors in savings 
banks would lose by depreciation, 2 and Senator Fessenden 
how labor would be injured by a rise of prices exceeding the 
rise of wages. 3 Finally, Mr. Crisfield represented forcibly 
the instability of a paper standard of value and the conse- 
quent danger to business.* 

To all of this the promoters of the bill found it hard to 
reply. On the other hand they sought support in the 
contention that the country needed more money, 5 and that 
the government should regulate the paper currency fur- 
nished by the banks. 6 Of course the rejoinder was, first, 
that, granted the existence of the doubtful need of more 
money, the issue of a depreciated paper currency was a very 
bad method of supplying it; and, second, that if the bank- 
note currency required regulation the proper means was a 
reorganization of the banking system, not a legal-tender act. 

Not content with showing the economic evils of a depre- 
ciated paper currency, the opponents of the bill denounced 
it roundly as immoral. To pay contractors and soldiers in 
depreciated money, they declared, was dishonorable. "The 
bill says to the world," asserted Mr. Horton, "that we are 
bankrupt, and we are not only weak, but we are not honest." T 
The injustice, however, extended not only to creditors of the 
government, but to all persons who would be compelled to 
accept in payment money of less value than that which they 
had contracted to receive. 8 And by thus encouraging the 

1 Cf. the remarks of Messrs. Pendleton, Congressional Globe, X7th Cong., 2d 
Sess., p. 551; Morrill, p. 630; Horton, p. 664; Sheffield, p. 641; Fessenden, p. 765. 

2 Ibid., p. 770. Cf. the reply of Senator McDougall, Appendix, p. 60. 

3 Ibid., p. 766. *Ibid., Appendix, p. 50. 

s Cf. the remarks of Messrs. Alley, p. 659; Hooper, p. 617; Kellogg, p. 681. 

B Senator Doolittle, Appendix p. 57. 

7 Ibid., p. 664 ; cf. also Simmer, p. 798; Fessenden, p. 765; Crisfield, Appendix, 
pp. 49, 50; Pearce, p. 804. 

* Cf. Messrs. Pendleton, p. 549; Thomas, p. 682. See Sherman's attempted reply, 
p. 790. 



60 HISTORY OF THE GREENBACKS 

debtor to defraud his creditor, urged Senator Fessenden, the 
bill would lower the moral standards of the people. 1 To these 
charges, also, the promoters of the bill had little to say. 

Upon the fiscal aspect of the bill the case of the opposition 
was hardly less clear. First, they declared, the resort to an 
irredeemable paper currency was a practical confession of 
bankruptcy, and would therefore injure the credit of the 
government, and make less favorable the conditions on 
which it could borrow. "We .... go out to the country," 
said Fessenden, " with the declaration that we are unable to 
pay or borrow at the present time, and such a confession is 
not likely to increase our credit." ' Second, it was pointed 
out that the depreciation of the currency would cause the 
prices of everything which the government had to buy to rise, 
and thus would vastly increase the cost of the war. As Senator 
Cowan put it, the government "might as well lose 25 per cent, 
on the sale of her [s/c] bonds, as to be obliged, in avoiding 
it, to pay 25 per cent, more for everything she buys." ! 

This discussion of the economic, moral, and fiscal conse- 
quences of issuing a legal-tender paper currency produced 
in Congress the feeling that under ordinary circumstances 
such a proposal would be indefensible. The vigor with 
which the opposition had presented the case against the bill 
made a deep impression. On the other hand, the reasoning 
by which the supporters of the bill had sought to establish 
the constitutional power of Congress to make treasury notes 
a legal tender was felt to be inconclusive. The force of the 
telling argument from experience had not been broken; the 
probability of depreciation had not been disproved; no ade- 
quate reply had been found to the indictment of the bill on 

i Congressional Globe, 37th Cong., 2d Sess., p. 765; cf. Messrs. Conkling, p. 635; 
Horton, p. 664. 

2/6td., p. 765. Cf. Messrs. Vallandingham, Appendix, p. 44; Sheffield, p. 641; 
Collamer, p. 769; Horton, p. 664; Crisfield, Appendix, p. 49; Willey, p. 796; Sumner, 
p. 798; Thomas, p. 682. 

3 Ibid., p. 793; cf. the remarks of Sheffield, p. 641, and Morrill, p. 630. 



THE FIRST LEGAL-TENDER ACT 61 

moral grounds; and, finally, it had not been denied that 
resort to paper issues would injure the credit of the govern- 
ment and increase the cost of the war. So generally was 
the objectionable character of the measure realized that 
Senator Fessenden could say : 

All the opinions that I have heard expressed agree in this : that 
only with extreme reluctance, only with fear and trembling as to 
the consequences, can we have recourse to a measure like this of 
making our paper a legal tender in payment of debts. 1 

And yet an argument was found that overcame the 
"extreme reluctance" of a majority of the members and 
induced them to vote for the bill. This argument was the plea 
of absolute necessity. As has been seen, it was to necessity 
that Mr. Spaulding had appealed in justification of his first 
draft of the legal-tender bill. 2 In opening the debate in 
Congress he repeated the argument with emphasis. " The 
bill before us," said he, "is a war measure, a measure of 
necessity and not of choice, presented .... to meet the 
most pressing demands upon the Treasury." The cry of 
necessity was taken up by the other supporters of the bill, 
who relied upon it to meet all the objections urged by the 
opposition. 4 How effective a plea it was is shown by the 
influence it had upon those who appreciated the ills of a 
paper currency. " Beneficent as this measure is, as one of 
relief," said Mr. Alley, "nothing could induce me to give it 
sanction but uncontrollable necessity." 5 "I shall .... sup- 
port the bill," said Mr. Doolittle, "as a measure of war neces- 
sity, with more misgivings as to its effect at home and 
abroad, than of any other measure for which I have given 
my vote in this body." 1 

1 Congressional Globe, 37th Cong., 2d Sess., p. 763. 

2 Mr. Spaulding's letter quoted, p. 44, above. 

3 Congressional Globe, 37th Cong., 2d Sess., p. 523. 

< Cf. the remarks of Messrs. Campbell, p. 686; Walton, p. 692; Edwards, p. 684; 
Stevens, p. 687 ; and of Senators Sherman, p. 789 ; Howe, Appendix, p. 55 ; McDougall, 
Appendix, p. 58. 

5/6d., p. 659. Ibid., Appendix, p. 58. 



62 HISTORY OP THE GREENBACKS 

That the assertion of necessity might carry the added 
force of official sanction, Secretary Chase was induced to 
send a note to the chairman of the Committee of Ways and 
Means to be read to the House. He wrote: 

I have felt, nor do I wish to conceal that I now feel, a great aver- 
sion to making anything but coin a legal tender in payment of 
debts. It has been my anxious wish to avoid the necessity of such 
legislation. It is, however, at present impossible, in consequence of 
the large expenditures entailed by the war, and the suspension of 
the banks, to procure sufficient coin for disbursements, and it has 
therefore become indispensably necessary that we should resort to 
the issue of United States notes. 1 

This letter made the bill an " administration measure," and 
so was an important factor in its success. Desire to support 
the government at all costs led members to whom an irre- 
deemable currency was very repugnant to vote for the bill 
when the secretary of the treasury declared it to be nec- 
essary. " I have .... had great doubt as to the propriety 
of voting for this bill . . . ." said Mr. Hickman, "but, being 
assured .... that the Treasury, and perhaps the Admin- 
istration, regard this as a governmental necessity, I am dis- 
posed to waive the question of propriety or expediency, and 
to vote for it as a necessity." 2 

1 Congressional Globe, 37th Cong., 2d Sess., p. 618. Cf. Mr. Chase's letter to 
Spaulding, in the latter's History, p. 59; and McCtJLLOCH, Men and Measures of Half 
a Century (New York, 1889), pp. 170, 171. 

2 Congressional Globe, 37th Cong., 2d Sess., p. 690. Cf, Sumner's conclusion: 
"Surely we must all be against paper money we must all insist upon maintaining 
the integrity of the Government and we must all set our faces against any proposi- 
tion like the present, except as a temporary expedient, rendered imperative by the 
exigency of the hour. If I vote for this proposition it will be only because I am 
unwilling to refuse to the Government, especially charged with this responsibility, 
that confidence which is hardly less important to the public interests than the 
money itself. Others may doubt if the exigency is sufficiently imperative, but the 
secretary of the treasury, whose duty it is to understand the occasion, does not 

doubt. In his opinion the war requires this sacrifice Your soldiers in the 

field must be paid and fed. Here there can be no failure or postponement. A rem- 
edy which at another moment you would reject is now proposed. Whatever may be 
the national resources, they are not now within reach, except by summary process. 
Reluctantly, painfully, I consent that the process should issue" (pp. 799, 800). See 
also McDougall, Appendix, p. 58. 



THE FIRST LEGAL-TENDER ACT 63 

In replying to the plea of necessity, the opposition can- 
didly admitted it would be better to issue a forced currency 
than to stop payment, provided there were no alternative. 
"If the necessity exists," said Senator Fessenden, "I have no 
hesitation upon the subject and shall have none. If there is 
nothing left for us to do but that, and that will effect the 
object, I am perfectly willing to do that." 1 But that such 
was the case was emphatically denied. " It has been 
asserted .... with the utmost apparent sincerity," said 
Mr. Horton, "that this is a measure not of choice, but of 
necessity. But Mr. Chairman, that assertion is only reiterated, 
not proved. Where is the proof that this is a matter of neces- 
sity? There may be proofs abundant, but they have not 
been produced." 2 

Not only did the opposition deny the necessity, but they 
were ready also with suggestions of other means of securing 
the needed funds. One suggestion was adequate war taxa- 
tion. "Not a dollar of tax has been raised," said Mr. 
Thomas, "and yet we are talking of national bankruptcy, 
and launching upon a paper currency. I may be very dull, 
but I cannot see the necessity, or the wisdom, of such a 
course." 3 It was by this time generally acknowledged that 
the omission to impose heavy taxes at the extra session of 
July, 1861, was a serious blunder which Congress should 
repair as soon as possible. 4 But the supporters of the bill 
argued 5 that the pending situation could not be met by taxa- 
tion, for the needs of the treasury were too pressing to wait 
until new taxes could be assessed and collected. 

1 Congressional Globe, 37th Cong., 2d Sess., p. 764. 

2 Ibid., p. 663; cf. pp. 664, 665. 

3 Ibid., p. 682; cf. the remarks of Roscoe Conkling, p. 633; Wright, p. 663; Collamer, 
pp. 770, 771; Bayard, p. 796. 

* A joint resolution to raise $150,000,000 per annum by taxation had been adopted 
by a vote of 134 to 5 in the House, January 15, and 39 to 1 in the Senate on the 17th. 
Ibid., pp. 349, 376. 

5.E. g., see remarks of Mr. Walton, ibid., p. 692. 



64 HISTORY OP THE GREENBACKS 

To this the rejoinder was made: If it will take too long to 
wait for the proceeds of taxes, let the government supply its 
immediate wants by selling bonds at their market value, and 
in the meantime frame a permanent system of taxation that 
will yield an adequate revenue. 1 This plan was the same that 
the delegation of bankers had urged upon the secretary and 
the committees of Congress, 2 and it encountered the same 
opposition. Senator Howe was unwilling, as Mr. Spaulding 
had been, that government bonds should be sold below par. 
"The experience of half a century," said he, "has demon- 
strated that the use of money is not worth more than six 
per cent.; that sum the Government ought to pay." 3 
Senator Fessenden replied: " Money in the market is always 
worth what it will sell for. It is an article of merchandise 
like anything else, and the Government has no reason to 
suppose, unless it can offer much better security, that it 
should get money at a better rate than anybody else." 

But there were other men who, while apparently ready to 
admit that government need not always insist on receiving 
quite par for its bonds, still believed that under existing cir- 
cumstances the discount demanded by lenders would be 
ruinously high. "I maintain," said Thaddeus Stevens, " that 
the highest sums you could sell your bonds at would be 75 
per cent, payable in currency, itself at a discount. That 
would produce a loss which no nation .... could stand a 
year." 6 

Of course it was not possible without offering a loan to 
determine precisely at what rates the government could sell 
its bonds; but the opponents of the bill believed that Mr. 

1 See the speeches of Mr. Lovejoy, p. 691 ; and Senators Cowan, p. 793, and 
Bayard, p. 796. 

2 See p. 48, above. 

3 Congressional Globe, 37th Cong., 2d Sess., Appendix, p. 56. 
*Ibid., p. 763. 

5 Ibid., p. 689; c/. the remarks of Messrs. Edwards, p. 683, and Pike, p. 656. 



THE FIRST LEGAL-TENDER ACT 65 

Stevens and Mr. Spaulding exaggerated when they predicted 
that the price realized would range between 50 and 80. l 
Should a plan of finance based upon taxation heavy enough to 
inspire confidence in the management of the treasury be 
adopted, they were convinced that the government could 
secure loans without serious sacrifice. 2 And further, their 
fiscal argument showed that an increase in the cost of the war 
would not be avoided by the rival plan of issuing an incon- 
vertible paper currency. 3 

Still a third alternative was proposed by the opposition 
the issue of treasury notes without the legal-tender quality. 
This suggestion was embodied in the three rival plans intro- 
duced into the House as substitutes for the bill. 4 The dis- 
cussion of their merits naturally elicited debate upon the 
efficacy of the legal-tender clause. The supporters of the 
bill were ready enough with assertions of the importance of 
the clause to the success of the measure; 5 but they found it 
difficult to explain precisely what its value was. One said, 
"By making these notes a legal tender we prevent the 
money sharks from robbing our soldiers of their hard earn- 
ings." Another argued that unless the United States notes 
were made a legal tender, the banks would seek to depre- 
ciate them in order to retain the field of circulation for their 
own issues. 7 A third declared, "If we make the government 
issues a legal tender, the demand for specie will be so limited 
that they will maintain their value." 8 Finally, Senator 
Sherman argued that the banks would not receive the gov- 
ernment notes unless compelled to do so by the legal-tender 
clause, and that if not received by the banks as current funds 

1 Cf. Mr. Spaulding, Congressional Globe, 37th Cong., 2d Sess., p. 524. 

2 Cf. the remarks of Roscoe Conkling, p. 634, and of Senator Cowan, p. 793. 

3 P. 60, above. < P. 75, below. 

5.E. 0., Mr. Pike, Congressional Globe, 37th Cong., 2d Sess., p. 657. 
Mr. Blake, p. 686; cf. the similar remarks of Messrs. Edwards, p. 683, and 
Shellabarger, p. 690; Campbell, p. 687; and of Senator Henry Wilson, p. 788. 
7 Mr. Kellogg, p. 681. 8 Mr. Campbell, p. 687. 



6(5 HISTORY OF THE GREENBACKS 

the notes would become hopelessly depreciated. 1 In response 
Senator Fessenden pointed to the clause authorizing the sub- 
treasuries to receive the notes on deposit at 5 per cent, 
interest. This clause would make discrimination against the 
notes impracticable, he argued; for should the banks refuse 
to receive notes as deposits they would lose business, because 
the holders would prefer to deposit with the subtreasuries, 
which would pay 5 per cent, interest instead of with banks. 2 

If these attempts to prove the utility of the legal-tender 
clause seem rather weak, so do the criticisms urged by the 
opposition. The advocates of the rival bills proposing to 
issue treasury notes without the legal-tender quality might 
have been expected to dwell upon the fact that their plans 
left the standard of value undisturbed, and so avoided a 
depreciation that would unsettle business, lower real wages, 
defraud creditors, and increase the cost of all supplies gov- 
ernment had to buy. Instead, they attempted only to show 
that the legal-tender clause would impair faith in the paper 
currency. "The fair inference is in the mind of every man, 
however stupid," said Senator Cowan, "that you yourselves 
first doubted the validity of it, and that, therefore, you 
attempted to give it this quality of paying debts perforce, 
to compensate it for the lack of essential value." 5 

From this review it is clear that the position of those who 
urged the argument of necessity for the legal-tender bill in 
Congress betrayed the lack of consistency noticed in Mr. 
Spaulding's reply to the bank delegates. 4 When the oppo- 
sition suggested that the wants of the treasury could be met 
either by borrowing or by issuing treasury notes not a legal 
tender, it was incumbent on those who mantained the posi- 
tion that the bill was "a measure not of choice but of neces- 

1 Congressional Globe, 37th Cong., 2d Sess., pp. 790, 791. 2 Ibid., p. 766. 

3 Ibid., p. 792; cf. the remarks of Messrs. Crisfield, Appendix, p. 50; and of Sena- 
tors Fessenden, p. 766 ; and Simmons, p. 794. 
P. 49, above. 



THE FIRST LEGAL-TENDEB ACT 67 

eitj " to deny the possibility of securing funds by these 
methods. But such a denial was not attempted. Instead 
they tried to show that the issue of an irredeemable paper 
currency was a better method of securing means than bor- 
rowing at a discount or issuing treasury notes not a legal t 
tender. It is curious to note the naivete" with which the 
most strenuous promoters of the legal-tender bill asserted in 
one breath that it was a measure of sheer necessity, and in 
the next breath admitted the existence of alternatives. Mr. 
Spaulding himself said after emphasizing the necessity: 
" We have this alternative, either to go into the market and 
sell our bonds for what they will command, or to pass this 
bill." 1 And Thaddeus Stevens, who began by asserting the 
necessity, shifted, before concluding, to this position: "Here, 
then, in a few words lies your choice. Throw bonds at 6 or 
7 per cent, on the market, .... or issue United States 
notes." 2 Obvious as is the contradiction, the opposition failed 
to call attention prominently to it. By thus allowing the 
logic of the argument from necessity to pass unchallenged, 
they left room for the impression to arise that the paper 
issues of the Civil War can hardly be made the subject of 
serious criticism, because "necessity knows no law." 

But while Mr. Spaulding and his fellows were strenuous 
in protesting the necessity of the legal-tender act as a 
measure of immediate relief, they were careful to state that 
it was intended to be temporary, and not to inaugurate a 
regular paper-money policy. "When peace is secured," 
said Mr. Spaulding, "I will be among the first to advocate a 
speedy return to specie payments." 3 Fessenden dwelt on 
the point at length. He said : 

i Congressional Globe, 37th Cong., 2d Sess., p. 524. 

2/6td., p. 689; cf. the remarks of Mr. Blake, p. 686, and the divergent views as to 
the nature of the alleged necessity expressed by Mr. Hooper, p. 617, and by Senator 
Sherman, p. 791. 

3 Ibid., p. 526. This promise was well kept. See the prefaces of SPAULDINQ'S 
History. 



68 HISTORY OP THE GREENBACKS 

The .... secretary of the treasury .... has declared that 
in his judgment [the bill] is, and ought to be, but a temporary 
measure, not to be resorted to as a policy, but simply on this single 
occasion, because the country is driven to the necessity of resorting 
to it. I have not heard anybody express a contrary opinion, or, at 
% least, any man who has spoken on the subject in Congress. The 
chairman of the committee of Ways and Means, in advocating the 
measure, declared that it was not contemplated, and he did not 
believe it would be necessary, to issue more than the $150,000,000 
of treasury notes made a legal tender provided by this bill. All the 
gentlemen who have spoken on the subject, and all pretty much 
who have written on the subject, except some wild speculators in 
currency, have declared that as a policy, it would be ruinous to any 
people ; and it has been defended, as I have stated, simply and 
solely upon the ground that it is to be a single measure, standing 
by itself, and not to be repeated. 1 

Similar and hardly less emphatic statements were made by 
other members of Congress. 2 If any one possessed such 
ideas of the beneficence of an irredeemable paper currency 
as afterward animated members of the Greenback party, he 
kept them to himself. 

III. ATTITUDE OF SECRETARY CHASE 

In discussions of the financial policy pursued by the 
federal government the impression soon gained currency 
that the legal-tender acts were unavoidable necessities. This 
impression was deepened by the fact that when the unhappy 
consequences of the laws began to make themselves felt, 
members and friends of the administration took the ground 
that, however deplorable in its effects, such legislation had 
been inevitable from the beginning of the war. 3 After peace 

1 Congressional Globe, 37th Cong., 2d Sess., p. 764. 

2 CJ. remarks of Morrill, ibid., p. 631 ; Pomeroy, p. 884. 

3 Cf. Lincoln's message to Congress, December 1, 1862, Complete Works, ed. 
NICOLAY AND HAT, Vol. II, p. 264; letters of Seward and Stanton in SPAULDING'S 
History, introduction to 2d ed., pp. 27, 29. A number of letters of like tenor from 
other men of prominence are given in Spaulding's Introduction and Appendices. 



THE FIRST LEGAL-TENDER ACT 69 

was restored this became the common doctrine of the Repub- 
lican party. It is a very notable fact, however, that 
Secretary Chase the one man most conversant with the 
financial situation of the government in the winter of 1861- 
62 came afterward to the conclusion that the passage of 
the legal-tender bill was a blunder. His attitude toward the 
measure is worthy of careful attention. 

Apparently the sudden suspension of specie payments 
bewildered Mr. Chase for a time. It seemed to make neces- 
sary a recasting of his financial program, 1 and for the 
moment he was at a loss what to do. The only man in 
official circles who had a definite plan in mind was Spauld- 
ing, and while others hesitated, he pushed forward the simple 
though crude expedient of issuing legal-tender notes most 
vigorously. All Chase's traditions and all his official utter- 
ances committed him to opposition. But not knowing pre- 
cisely how to avoid the measure, he promoted the meet- 
ing between the bankers from New York, Boston, and 
Philadelphia, and the financial committees of House and 
Senate, in the hope that some feasible plan for raising funds 
without resort to legal-tender notes might be agreed upon. 2 
His hopes were destroyed by the unwillingness of the 
Congressmen to consent to the sale of bonds at their market 
price an unwillingness shared in some measure by most 
of the opponents of the legal-tender bill in Congress. 3 After 
this disappointment the secretary of the treasury appears to 
have surrendered the lead to the Committee of Ways and 
Means. He could formulate no plan which commanded the 

1 Cf. Report of the Secretary of the Treasury, December, 1862, p. 7. 

2 See sec. i of the present chapter. 

3 All of the substitutes for the legal-tender bill proposed in the House provided 
that the bonds to be issued should not be sold below par. See p. 75 below. There 
were few men who sympathized with Senator Cowan's vigorous declaration that he 
preferred a " shave of forty per cent." upon bonds to an inconvertible paper cur- 
rency. Congressional Globe, 37th Cong., 2d Sess., p. 793. 



70 HISTORY OF THE GREENBACKS 

confidence of others, and so acquiesced unwillingly in what 
the energetic Mr. Spaulding proposed. 1 

When Spaulding sent him the legal-tender bill for revi- 
sion, Chase returned it with a letter, dated January 22, 
expressing his exceeding regret that it was found necessary 
to resort to a legal-tender act, but expressing also his hearty 
desire " to co-operate with the committee [of Ways and 
Means]." 5 This letter was regarded by a majority of the 
committee as "non-committal on the legal-tender clause." 
So they sought and " after considerable delay " obtained a 
more explicit approval of the bill as a measure of necessity, 
part of which was read to Congress. 3 

Chase's feeling at this time is best indicated by the 
frank letter which he sent to Spaulding February 3: 

Mr. Seward said to me on yesterday that you observed to 
him that my hesitation in coming up to the legal-tender propo- 
sition embarrassed you, and I am very sorry to observe it, for my 
anxious wish is to support you in all respects. 

It is true that I came with reluctance to the conclusion that the 
legal-tender clause is a necessity, but I came to it decidedly, and I 
support it earnestly. I do not hesitate when I have made up my 
mind, however much regret I may feel over the necessity of the 
conclusion to which I come. 4 

It is clear from these letters that Spaulding and not 
Chase was the real financial leader in the critical months of 
January and February, 1862. 5 Spaulding's position was 
recognized by a colleague in the House, who referred to him 
as "the able and distinguished Representative who has 

1 It should be noted that Chase was daily receiving letters from business men 
whose views he was bound to consider, urging him to agree to the treasury-note bill. 
But a small minority of his correspondents seem to have stood out against the legal- 
tender clause. Cf. HART, S. P. Chase, pp. 250, 251. 

2 SPAULDING, p. 27. 

3 Ibid., p. 45 and p. 62 above. 

* SPAULDING, History, p. 59. Cf. Chase's letter of similar tenor written the next 
day to Bryant. WARDEN, Life of Chase, p. 409. 
5 Cf. Chase's report of December, 1862, pp. 8, 9. 



THE FIRST LEGAL-TENDER ACT 71 

originated this measure and carried it triumphantly over the 
Administration and through Congress." 1 

But while harried by the unaccustomed perplexities of his 
position, Chase yielded to Spaulding and gave an official 
sanction to the bill, it did not commend itself to his calmer 
judgment. His later views are stated at length in a dissent- 
ing opinion which he rendered, as Chief Justice, upon the 
" Legal Tender Cases," in December, 1870. Of his own 
course as secretary of the treasury, he said: 

He thought it indispensably necessary that the authority to 
issue these notes should be granted by Congress. The passage of 
the bill was delayed, if not jeoparded, by the difference of opinion 
which prevailed on the question of making them a legal tender. It 
was under these circumstances that he expressed the opinion, when 
called upon by the Committee on Ways and Means, that it was 

necessary Examination and reflection under more propitious 

circumstances have satisfied him that this opinion was erroneous, 

and he does not hesitate to declare it Was the making of 

the notes a legal tender necessary to the carrying on the war? 
In other words, was it necessary to the execution of the power to 
borrow money? .... If the notes would circulate as well without 
as with this quality it is idle to urge the plea of such necessity. 
But the circulation of the notes was amply provided for by making 
them receivable for all national taxes, all dues to the government, 
and all loans. This was the provision relied upon for the purpose 
by the secretary when the bill was first prepared, and his reflec- 
tions since have convinced him that it was sufficient In their 

legitimate use the notes are hurt, not helped, by being made a legal 
tender. The legal-tender quality is only valuable for purposes of 
dishonesty. Every honest purpose is answered as well and better 
without it. 

We have no hesitation, therefore, in declaring our conviction 
that the making of these notes a legal tender, was not a necessary 
or proper means to the carrying on war or to the exercise of any 
express power of the government. 2 

i Mr. Pomeroy. Congressional Globe, 37th Cong., 2d Sess., p. 884. 
212 WALLACE, 576-9. 



72 HISTORY OF THE GREENBACKS 

Competent critics have usually been inclined to accept 
Chase's later in preference to his earlier opinion. They 
have held that the treasury crisis which rendered the argu- 
ment of necessity plausible need not have occurred had 
Congress adopted a more vigorous policy of taxation at its 
extra session in July and August, 1861. Tax laws then 
enacted might not have added greatly to the revenue before 
the close of the year, but they would have strengthened the 
credit of the government and so enabled it to borrow more 
freely and on better terms. 

But though this failure to tax adequately was unfortu- 
nate, it was not unnatural. The secretary of the treasury, 
with whom the initiative rested, was inexperienced and was 
devoting a large part of his attention to military matters. 1 
Moreover, the Union leaders feared that the temper of the 
North was not firm enough to submit cheerfully to the 
onerous burden of a heavy federal income tax or high internal 
duties. Such taxation had been unknown for more than a 
generation; the Republican party was young, composed of 
heterogenous elements not yet completely fused, and led by 
men not sustained by consciousness of unhesitating popular 
support. Realizing their dependence upon public opinion 
for success, it is not strange that Mr. Lincoln's administra- 
tion hesitated to take steps likely from all precedent to 
prove unpopular. 2 

Perhaps even more important in explaining the failure 
to tax heavily at the outset of the war was the confident 
expectation of its early end. Even in February, 1862, 
Justin Morrill, one of the firmest opponents of the legal- 
tender clause, could say in rhetorical strain: 

The ice that now chokes up the Mississippi is not more sure to 
melt and disappear with the approaching vernal season, than are 

1 Cf. HABT, S. P. Chase, pp. 211-14. 

2 Cf. M. B. FIELD, Memories of Many Men and of Some Women, 1874, pp. 255, 278; 
HABT, op. cit., p. 237. 



THE FIRST LEGAL-TENDER ACT 73 

the rebellious armies upon its banks when our western army shall 
break from its moorings, and, rushing with the current to the Gulf, 

baptize as it goes in blood the people to a fresher allegiance 

We can close this war by the 30th day of July next as well as in 
thirty years. 1 

Had such optimistic expectations been realized, Chase's plan 
of raising by taxation means sufficient only for ordinary 
expenditures, interest, and a sinking fund need have caused 
no serious disorder in the finances. 2 

But, granting that a mistake was made in not levying 
heavier taxes at the extra session of Congress, the question 
still remains: Was the issue of legal-tender treasury notes 
necessary to relieve the treasury from the embarrassments 
existing in January and February, 1862? Certainly there 
was no such pressing necessity as Spaulding, for example, 
asserted in the first panic. His letter of January 8, quoted 
above, declares that the government "will be out of means 
to pay the daily expenses in about thirty days" 3 But it 
was forty-eight days before the legal-tender act was passed, 
and over thirty-four days more before the first notes were 
issued. None of the legal-tender notes were paid out until 
April, 4 three months after the treasury had suspended specie 
payments. Whatever were the immediate needs of the 
treasury, then, they were supplied from other sources. 5 Had 
these three months been utilized energetically in passing a 

1 Congressional Globe, 37th Cong., 2d Sess., p. 630. Of, the similar remarks of 
Fessenden, ibid., p. 765, Chandler, p. 774, and Simmons, p. 794. The most impressive 
evidence of confidence in an early peace, however, is the issue of General Order No. 
33 by the adjutant general, April 3, 1862, stopping the enlistment of fresh troops. 
See RHODES, History of the United States, Vol. Ill, p. 636. 

2 Cf. Chase's discussion of the question in his report of December, 1863, pp. 10-12. 

3 SPAULDING, p. 17; cf. his opening speech in the House, Congressional Globe, 
37th Cong., 2d Sess., p. 524. 

*The New York Times of April 7, 1862, reports that "the first instalment of 
United States notes .... was received at the subtreasury in this city Saturday 
morning (April 5)." Cf, R. A. BAYLEY, National Loans of the United States (Wash- 
ington, 1881), p. 157. 

5 See chap, iii, sec. i, p. 88, below. 



74 HISTORY OP THE GREENBACKS 

few simple sections of an internal revenue tax act, imposing 
duties on whiskey, beer, and tobacco, and in organizing 
machinery for the sale of bonds, there seems to be slight 
reason for believing that the government would have failed 
to obtain sufficient funds, particularly when account is taken 
of the improvement of credit caused by the military suc- 
cesses of the winter and spring. 1 

After all, discussion of the " necessity " of the legal- 
tender act is rather beside the point. For no one, not even 
Stevens and Spaulding, denied the possibility of borrow- 
ing, provided the government was ready to sell its bonds at 
their market price. The real question is, was the making 
of United States notes a legal tender preferable to selling 
bonds at a discount? Upon this question the following 
chapters will throw some light by showing what were the 
consequences of the course pursued, both for the people and 
for the government. 2 

IV. PASSAGE OF THE ACT 

The debate upon the legal-tender act, a logical analysis 
of which has been presented in a preceding section, began 
in the House of Representatives January 28, 1862. Mr. 
Stevens and Mr. Spaulding pushed the measure vigor- 

1 Cf. Part II, chap, iii, sec. iii, below. 

2 On the question of necessity see SIMON NEWCOMB, Critical Examination of Our 
Financial Policy (New York, 1865), chap, vii; J. K. UPTON, Money in Politics, 2d 
ed. (Boston, 1895), p. 103; W. G. SDMNER, History of American Currency (New York, 
1875), pp. 197-209; S. T. SPEAR, The Legal-Tender Acts (New York, 1875), chap, xii; F. 
W. TAUSSIO, p. 537 of The United States of America* ed. N. S. Shaler, Vol. II (New 
York, 1894) ; C. F. DOR, Die Papier-wahrungswirthschaft der Union, Berlin, 1877; C. 
VON HOCK, Die Finanzen und die Finanzgeschichte der Vereinigten Staaten (Stutt- 
gart, 1867), pp. 471, 472; < 'H AKI.KS A. MANN, Paper Money the Root of Evil (New 
York, 1872), pp. 147, 148; NICOLA Y AND HAY, A. Lincoln: A History (New York, 1890), 
Vol. VI, chap, xi ; GEORGE B. BUTLER, The Currency Question, New York, 1864 ; J. 
F. RHODES, History of the United States, Vol. Ill, pp. 556, 557; HUGH McCuLLOCH, 
Men and Measures of Half a Century (New York, 1888), p. 175; HART, S. P. Chase, 
1899, pp. 248-51; HENRY C. ADAMS, Public Debts (New York, 1887), pp. 126-33; HENRY 
ADAMS, " The Legal Tender Act," Historical Essays, New York, 1891 ; and especially 
DON C. BARRETT, " The Supposed Necessity of the Legal Tender Paper," Quarterly 
Journal of Economics, Vol. XVI, pp. 323-54. 



THE FIRST LEGAL-TENDER ACT 75 

ously. Three bills were proposed as substitutes by the 
opposition. One, introduced by Mr. Vallandingham, pro- 
vided (1) for the issue of $150,000,000 of treasury notes, 
receivable for government dues, bearing no interest, 
exchangeable for bonds, but not a legal tender; (2) for the 
sale of $200,000,000 of 6 per cent., twenty-year bonds at 
rates not less than par. 1 A second, offered by Roscoe 
Conkling, proposed (1) to sell $500,000,000 of 6 per cent, 
twenty-year bonds at rates not less than the equivalent of 
par for 7 per cent, stocks; (2) to allow the secretary of the 
treasury at his discretion to issue $200,000,000 of one-year 
treasury notes, either bearing no interest or interest at 2^ 
per cent., and not legal tender, in place of an equivalent 
amount of bonds. 2 Finally, Mr. Horton's and Mr. Merrill's 
substitute, favored by one-half of the Committee of Ways 
and Means, authorized (1) the issue of $100,000,000 treasury 
notes, bearing interest at 3.65 per cent., receivable for gov- 
ernment dues except duties on imports, exchangeable at par 
for all bonds issued, and not a legal tender ; (2) the sale of 
$200,000,000 of 7.3 per cent., ten-year bonds, and of 
$300,000,000 of 6 per cent., twenty -four-year bonds at 
prices not less than par; (3) the payment of interest on the 
bonds in coin. 3 

Nine days after the debate began a vote was taken on the 
substitution of the third of these measures for the legal- 
tender bill. It resulted 55 yeas to 95 nays. 4 Then the 
vote was taken on the legal-tender bill itself, and it was 
passed by 93 to 59 a majority of 34. 5 An analysis of the 
vote upon the legal-tender clause shows that it was not a 
strict party division. Of the 95 votes for the legal-tender 

1 Congressional Globe, 37th Cong., 2d Sess., p. 614. 

2 Ibid., p. 615. 3 Ibid., p. 693; SPAULDING, pp. 92-4. 
* Congressional Globe, 37th Cong., 2d Sess., p. 695; SPAULDING, p. 94. 

5 Congressional Globe, loc. cit. ; SPADLDING, pp. 95, 98. 



76 HISTORY OF THE GREENBACKS 

clause 8 were cast by Democrats and 3 by "old line Whigs." 
With the 25 Democrats who voted against the clause were 7 
" old line Whigs " and 23 Republicans. Nor is a marked 
sectional division of the vote apparent. Of the membei's 
from New England States 16 voted for and 11 against the 
legal-tender clause; of the delegations from the Middle 
States the corresponding votes were 36 and 18; of the 
Southern States 7 and 10 ; of the Central States 27 and 13 ; 
and of the Western States 9 and 3. The most noticeable 
feature of the vote was the number and standing of the regular 
supporters of the administration who on this occasion sided 
with the opposition. Among them were Roscoe Conkling, 
Justin S. Morrill, Valentine B. Horton, Edward H. Rollins, 
Benjamin F. Thomas, and Owen Lovejoy. 

As the bill went to the Senate, it provided for the issue 
of $150,000,000 of United States legal-tender notes; but 
of this sum $50,000,000 were intended to take the place 
of the like sum of "old demand notes" authorized at the 
extra session of Congress in July, 1861. 1 A very import- 
ant amendment was made by the Senate finance committee. 
In order to "raise and support the credit of the government 
obligations," they proposed to pay the interest on the public 
debt in coin. The committee had considered the advisa- 
bility of making customs duties payable in specie to 
obtain the coin necessary for interest; but they finally pre- 
ferred to set aside the proceeds of sales of public lands, 
confiscations of rebel property and import duties as a fund 
to be used for the purpose. To provide for the possible 
case when this fund would be insufficient, the secretary of 
the treasury was authorized to sell bonds at their market 
price to get coin. 2 

1 For the text of the bill as it passed the House see SPAULDINO, pp. 96-8. 

2 See Senator Fessenden's speech explaining the House bill and the committee's 
amendments. Congressional Globe. 37th Cong., 2d Sess., p. 763. 



THE FIRST LEGAL-TENDER ACT 77 

In this modified form the bill passed the Senate by a 
vote as devoid of partisan or of sectional character as had 
been the vote in the House. A motion to strike out the 
legal- tender clause failed by a majority of 5 17 yeas to 
22 nays. 1 Of the yeas nine were Republicans Senators 
Anthony of Rhode Island, Collamer and Foot of Vermont, 
Fessenden of Maine, King of New York, Cowan of Pennsyl- 
vania, Foster of Connecticut, and Willey of Virginia. On 
the other hand, three Democrats Senators McDougall of 
California, Rice of Minnesota, and Wilson of Missouri 
voted for the clause. But when it was seen that the bill 
would pass, legal-tender clause and all, the final vote was 
30 for and 7 against it. 2 Of the seven, three were Republi- 
cans, three Democrats, and one an "old line Whig." 

The House refused to concur in the Senate amendment 
for the payment of interest on the public debt in coin. Mr. 
Spaulding declared that such an arrangement would create 
intolerable discrimination between different classes of govern- 
ment creditors. To pay the army in depreciated paper 
money and the money lender in coin was unjust to the sol- 
dier risking his life on the field of battle. 3 "It makes," 
said Mr. Stevens, " two classes of money one for the banks 
and brokers, and another for the people." * Further, argued 
Mr. Hooper, the refusal to use United States notes for 
interest would be an admission in advance of a difference in 
value between paper and coin, the effect of which would be 
to discredit the government's issues. 5 Mr. Pomeroy replied 
first, that so far from exaggerating the depreciation of paper 
currency, the amendment would diminish it ; for coin inter- 
est would tend to increase the value of bonds and so indi- 
rectly of the notes which were to be exchangeable for bonds 

1 1bid., p. 800. 2 Ibid., p. 804. 

3 Ibid., pp. 881-3. < Ibid., p. 900. 

^ Ibid., p. 899. 






78 HISTORY OF THE GREENBACKS 

at par ; and second, that only by paying interest in coin could 
the government borrow on favorable terms. 1 

To terminate the disagreement conference committees 
were appointed for the Senate, Fessenden, Sherman, and 
Carlisle ; 2 for the House, Stevens, Horton, and Sedgwick 8 
and a compromise was agreed upon. Interest was to be paid 
in coin, but the method of obtaining the coin was changed. 
Instead of pledging receipts from customs, sales of public 
lands and confiscations, with an ultimate resort to selling 
bonds at the market price, it was decided to make import 
duties payable in specie.* Both Senate and House con- 
curred in this change, 5 and the bill received the approval of 
President Lincoln, February 25, 1862. 6 

In its final form the act authorized the issue of $150,000,- 
000 of United States notes in denominations not less than 
five dollars. Fifty millions of this sum was in place of the 
"old demand notes," which were to be withdrawn as rapidly as 
practicable. The notes were declared to be "lawful money 
and a legal tender in payment of all debts, public and pri- 

1 Congressional Globe, 37th Cong., 2d Sess., p. 884; cf. similar arguments of 
Messrs. Morrill, p. 886, and C. B. Calvert, p. 886. 

2 Ibid., p. 899. 3 ibid., p. 909. 

*Text of report, ibid., p. 938. 5 Ibid., pp. 929 and 939 respectively. 

6 12 Statutes at Large, p. 345. In the version of the financial history of the war 
later current with the greenback party, this limitation of the legal-tender quality of 
United States notes, by using coin for interest on the public debt and for customs 
dues, was represented as a serious blunder, marring the otherwise perfectly symmetri- 
cal paper-money system. E.g., see G-. F. WILSON, A Practical Consideration of the 
Currency of the United States, 1874, p. 5; PLINY FREEMAN, Correspondence on 
National Finance, 1875; H. C. BAIRD, Money and Its Substitutes, 1876, p. 14; PETEB 
COOPER, Political and Financial Opinions, 1877, p. 9. Indeed, the charge was often 
more serious. It was said that the " conspiracy " of bank delegates who visited 
Washington in January, 1862, " corruptly or not " used their influence to induce the 
secretary of the treasury and the Senate to " mutilate " the House bill by inserting 
the " exception clause " limiting the full legal -tender power of the United States 
notes. See, e. g., J. G. DREW, Our Money Muss, 1874; W. A. BEEKET, The Money 
Question, 1876, pp. 176-9; NEVAH, The "Legal-Tender" Acts, [date ?], pp. 3-7; JESSE 
HARPER, Thirty Tears' Conflict, 1881, p. 13; HENRY S. FITCH, Speech in the State 
Convention of the National Currency Party of California, 1877, pp. 9-21 ; MRS. S. E. V. 
EMERY, Seven Financial Conspiracies, 1887, chap. ii. Thaddeus Stevens in a 
measure countenanced such views. See his speech of June 23, 1864, Congressional 
Globe, 38th Cong., 1st Sess., pp. 3212 ff. 



THE FIRST LEGAL-TENDER ACT 79 

vate, within the United States, except duties on imports and 
interest on the public debt," which were expressly made 
payable in coin. Further, the notes were exchangeable at 
any time in sums of fifty dollars or multiples of fifty for 6 
per cent, five-twenty bonds, $500,000,000 of which were 
authorized by the second section. Sec. 4 provided that 
holders of the notes might deposit them with any designated 
depository of the United States, and receive 5 per cent, 
interest. But such deposits could not be made for less than 
thirty days and ten days' notice was required for withdrawal. 
The sum of these temporary deposits was limited to $25,000,- 
000. By sec. 5 the coin received from duties on imports was 
set apart as a special fund to be applied, first, to the payment 
in specie of interest on the public debt ; second, to the pur- 
chase of 1 per cent, of the entire debt yearly to be set aside 
as a sinking fund ; third, to the general expenses of the 
government, if any residue remained. 

The attitude of the general public toward the legal-tender 
act was divided between doubt and hesitation on the part of 
a few who appreciated clearly the evils of an irredeemable 
paper currency, and cheerful acceptance on the part of those 
who felt that scruples, justifiable under ordinary circum- 
stances should not be allowed to interfere with decisive 
action in the face of such a crisis. Organized opposition to 
the bill by the business community ceased with the failure 
of the bankers' convention. The opinions expressed by 
practical financiers showed marked diversity a fact that 
was not without influence upon the fate of the bill in Con- 
gress. Senator Sumner said of the advice given by business 
men : " Some tell us that the legal tender will be most bene- 
ficent ; others insist that it will be dishonorable and perni- 
cious. Which shall we follow?" 1 On the other hand, 

i Congressional Globe, 37th Cong., 2d Sess., p. 798; cf. remarks of Senator 
Fessenden, ibid., p. 766. 



80 HISTORY OF THE GREENBACKS 

Senator Henry Wilson received a letter signed by several 
Massachusetts firms of high standing, saying they did "not 
know a merchant in the city of Boston engaged in active 
business" who was not in favor of the legal-tender clause. 1 
Of greater weight was the resolution adopted by the New 
York Chamber of Commerce that "the present financial 
condition of the government and of the country requires 
the immediate passage of the [legal-tender] bill." 5 Mr. 
Stevens and Mr. Spaulding said that similar encouragement 
was received by the promoters of the bill from the boards of 
trade in Boston, Philadelphia, Buffalo, Cincinnati, Louis- 
ville, St. Louis, Chicago, and Milwaukee. 8 " I have never 
known any measure," said Mr. Spaulding, " receive a more 
hearty approval from the people."* 

Newspapers showed similar differences of opinion. When 
the proposal was made to issue legal-tender treasury notes, 
the New York Tribune said, " We ponder and hesitate." 5 
Mr. Greeley believed that "heavy taxing, light stealing, and 
hard fighting," would remove the alleged necessity for the 
bill, 6 and advocated "a stirring appeal to the people for a 
Patriotic Loan of Two or Three Hundred Millions." 7 But 
by the middle of February he concluded that, "there has 
been so much delay and hesitation and vacillation, that it is 
possible that no other means of giving immediate relief to 
the Treasury now remains." 8 He finally acquiesced with an 
ill grace in the enactment of the bill, and supported very 
vigorously the amendments of the Senate making interest 
payable in coin. 9 More decided opposition to the legal- 



., p. 789; cf. Senator Simmons, p. 794. 

2 Proceedings of the Chamber of Commerce of the State of New York for the Year 
Ending December 31, 1862, p. 12. 

3 Congressional Globe, 37th Cong., 2d Sess., pp. 900 and 882. < Ibid., p. 882. 
5 New York Tribune, January 13, 1862. 6 ibid., January 22, 1862. 

^ Ibid., February 1, 1862. 8 ibid., February 10, 1862. 

9 Ibid., February 18, 1862; cf. the issues of February 19 and 26. 



THE FIRST LEGAL-TENDER ACT 81 

tender clause was made by the New York World 1 and 
Journal of Commerce, 2 the Springfield (Mass.) Republican* 
and the Boston Daily Advertiser* On the other hand the 
New York Herald espoused the cause of the bill. With 
heavy taxation and the provision for exchanging notes for 
bonds, it thought the greatest depreciation could "not 
exceed 10 per cent, and that not before a lapse of two 
years" especially not after the interest had been made 
payable in coin. 5 Somewhat similar was the attitude of the 
New York Times, which thought the legal-tender clause was 
necessary to protect the notes from bank competition and 
hostility; 6 of the Philadelphia Press, which regarded the 
issue of irredeemable paper as an unavoidable evil which it 
was "not manly to bemoan;" 7 of the New York Commercial 
Advertiser, which acquiesced " in the measure, as the best 
on the whole that could be done under the existing circum- 
stances;" 8 of the National Intelligencer of Washington, 
which thought the measure would be of great assistance to 
the government provided the notes were fundable in bonds 
bearing interest [in coin ; 9 of the Boston Post, which advo- 
cated "a national issue of paper, legal-tender, as the best 
thing to be done under the circumstances;" 10 and of the 
Boston Journal, which declared that people who feared the 
bill would be a step toward an irredeemable currency were 
"too timid for the times." 11 

1 E. g., see the issues of January 6 and 10. 

2 Extract from the New York Journal of Commerce, reprinted in the Baltimore 
Sun, January 16, 1862. 

3 See the issues of January 7, 8, 15, 18, 21, 29, and of February 5, 8, and 18, 1862. 

* See the issues of January 24, 28, and 31, and of February 5, 6, 11, 13, 17, and 22, 1862. 

5 See the issues of January 11, 20, 21, 23, 30, 31, and of February 5, 10, 13, and 15, 1862. 

6 See the issues of January 13, 16, 18, 22, 23, 27, 29, and of February 3, 5, 7, 10, 12, 
and 14, 1862. 

7 See the issues of January 18, February 8, 14, and 21, 1862. 

8 See the issues of February 7 and January 29, 1862. 

9 See the issues of January 11, 25, and of February 1 and 10, 1862, 

10 See the issues of January 14, 21, 28, and of February 1, 1862. 
i ' See the issues of January 8 and of February 3 and 7, 1862. 



CHAPTER III 
THE SECOND LEGAL-TENDER ACT 

I. Government Finances January to June, 1862: 

Deficit in the Revenues Existing Authority to Borrow Second 
Issue of Old Demand Notes Temporary Loan Certificates of 
Indebtedness Receipts, January to March Relief Afforded by 
Issues of Greenbacks Small Amount of "Conversions" Receipts 
April to June Position of Treasury, June 30, 1862. 
II. The Second Legal-Tender Act: 

Chase's Request for Second Issue of Greenbacks Chandler's 
Attempt to Forestall its Consideration Debate in House and 
Senate Provisions of the Act. 
III. The Postage-Currency Act: 

Embarrassment of Treasury from Disappearance of Small Change 
Remedies Proposed by Chase Passage of Postage Currency Act. 

I. GOVERNMENT FINANCES JANUARY TO JUNE, 1862 

" WITHIN sixty days," Justin Morrill had prophesied in 
discussing the first legal-tender act, " we must have at least 
twice the amount of notes which is proposed now." ' His 
prophecy was fulfilled, but not until double the time set had 
elapsed. 

During this interval between the first and second legal- 
tender acts, Secretary Chase perforce depended mainly upon 
loans. At the time of suspension "expenditures had 
already reached an average of nearly a million and a quar- 
ter of dollars each secular day ; while the revenue from all 
sources hardly exceeded one-tenth of that sum." 2 In the 

1 Congressional Olobe, 37th Cong., 2d Sess., p. 886. Cf. the similar predictions 
cited in note 1, p. 58, above. 

2 Report of the Secretary of the Treasury, December, 1862, p. 7. The advocates of 
the legal-tender bill in their anxiety to prove the necessity of the measure seem to 
have exaggerated the expenses of government. January 28 Spaulding set the amount 
at "more than $1,600,000" per day (Congressional Olobe, 37th Cong., 2d Sess., p. 524), and 
by February 6 Stevens declared daily expenditures had reached "about $2,000,000" 
(ibid., p. 687). But on June 7 Chase still put the sum at $1,000,000, with the admis- 

82 



THE SECOND LEGAL-TENDER ACT 83 

quarter January to March the ordinary income of the govern- 
ment from customs, sales of public lands, and miscellaneous 
sources was hardly $15,000,000. Though in the next quarter 
the income from these sources increased $4,000,000 and was 
supplemented by the first receipts from the direct tax 
imposed the summer preceding, the total came to but 
$21,000,000.' This made total receipts for the six months 
of $36,000,000 from ordinary sources, while expenditures 
were probably between $325,000,000 and $350,000,000. 2 
Of course the difference between these sums had to be 
borrowed. 

When the banks and the treasury ceased paying in specie 
Chase found that his authority to borrow was confined 
practically to the loan acts passed at the summer session of 
Congress. These acts, it will be remembered, permitted 
the secretary to borrow $250,000,000 and to issue a variety 
of bonds and treasury notes as security. 3 Under this 
authority Mr. Chase had already arranged with the asso- 
ciated banks for three loans amounting to $150,000,dOO. 
$30,000,000 of the bank subscriptions, however, had not yet 
been paid into the treasury. 4 This balance formed his first 
immediate resource. His second was found in the fact that 
of the $50,000,000 of demand notes authorized, but $33,- 
500,000 had been issued. 5 This left a sum of $16,500,000 
which he could pay out at once. Finally, after the funds 

sion, however, that this amount would probably be exceeded in the near future 
(H. R. Miscellaneous Document No. 81, p. 2, 37th Cong., 2d Sess.). In fact, the daily 
expenses did not reach quite two millions a day even for the fiscal year of 1862-3. 
(Cf. Report of the Secretary of the Treasury, December, 1863, p. 29.) 

1 Report of the Secretary of the Treasury, December, 1862, p. 37. 

2 Expenditures unlike receipts are not given by quarters in the reports of 
the secretary of the treasury, except for the three months, July to September. The 
above figures are the result of a rough estimate made after considering the expendi- 
tures from July to September, 1861, the total for the fiscal year 1862, and the ratio of 
increase from 1862 to 1863. 

3 See chap, i, p. 17, above. * Ibid., p. 40, note. 
5 Report of the Secretary of the Treasury, December, 1862, p. 9. 



84 HISTORY OF THE GREENBACKS 

obtained from the $150,000,000 bank loan and the $50,000,- 
000 of demand notes had been exhausted, there still 
remained $50,000,000 of the $250,000,000 which the secre- 
tary had been authorized to borrow. But this $50,000,000 
was not for the moment available. For, though it could be 
borrowed on either 7.30 three-year notes at par, or on 6 
per cent, bonds at 89.3 + , the equivalent of par for 7 per 
cent, stocks, the sixes already issued were selling in the 
market at 89 and the seven-thirties at 98. 1 

Under these circumstances Mr. Chase continued to draw 
upon the banks from week to week until their last instalment 
upon the $150,000,000 loan was paid on February 4. 2 At 
the same time he issued demand notes freely, and also 
persuaded a few government creditors much in need of 
funds to accept 7.30 notes at par in satisfaction of their 
claims. 3 But these resources were not adequate for the 
needs of the treasury, and on February 7, the day after 
the legal-tender bill had passed the House of Representa- 
tives, Chase was obliged to request authority to issue 
another $10,000,000 of the demand notes to tide over the 
time until the Senate could act upon the pending measure.* 
The short bill which he sent with his letter was passed at 
once by the Senate without debate or even reference to 
committee, and on the following Monday it was acted upon 
by the House with similar dispatch. 5 

Ten millions, however, was a small sum compared with 
the needs of the treasury, and Chase found it necessary to 
resort to various new devices to obtain additional means. 

1 See the table of prices of government stocks in the American Annual Cyclo- 
paedia, 1862, p. 474. 

2 Chap, i, p. 40, note, above. 

3Thaddens Stevens said in the House on February 6 that such issues of seven- 
thirties had then reached about $10,000,000. Congressional Globe, 37th Cong., 2d Sess., 
p. 687. 

*See his letter to Fessenden, ibid., p. 705. 

5/Wd., p. 726; 12 Statutes at Large, p. 338. 



THE SECOND LEGAL-TENDER ACT 85 

One plan that ultimately had marked success was suggested 
by Mr. John J. Cisco, the chief of the New York sub- 
treasury. 1 February 8 he published a notice stating that he 
had been " authorized by the Secretary of the Treasury to 
receive on deposit United States notes as a temporary loan " 
at 5 per cent, interest, with the condition that sums 
deposited could be withdrawn at any time after ten days' 
notice. 2 About $2,000,000 were deposited in this fashion 
within a fortnight; but Secretary Chase seems to have 
entertained some doubts of his authority to make such an 
arrangement, and accordingly he requested the Senate 
finance committee to insert an amendment in the legal- 
tender bill then in their hands granting him power to 
accept such deposits to an amount not exceeding $25,000,- 
000. 3 Senator Sherman and others demurred on the ground 
that if men could draw 5 per cent, interest on notes 
deposited but temporarily with the subtreasuries they would 
be slow to lock up their capital by funding notes in 6 per 
cent, bonds. 4 But after Fessenden and Chandler had 
explained that the secretary believed that the plan would 
induce banks to accept the notes more freely and that 
whatever sums were deposited would constitute a loan 
to the government at 5 per cent., the measure was finally 
passed by a vote of 21 to 18. 5 No objection was raised 
to the plan in the House, and with some minor changes the 
amendment was incorporated into the legal-tender act as 
sec. 4. 6 

i SCHUCKEBS, Life of Chase, p. 269. 

2 See financial columns of the New York papers and the Annual American 
Cyclopaedia, 1862, p. 454, for text of the notice. The object of this plan was at first 
rather to secure a readier acceptance of the old demand notes by the banks than to 
raise a loan at 5 per cent. Cf. Fart II, chap, ii, sec. iii, below. 

3 Congressional Globe, 37th Cong., 2d Sess., p. 772. 

*See the discussion of the amendment, ibid., pp. 772, 773, 802, 803. 

&J6id., p. 803. 

612 Statutes at Large, p. 346. 



86 HISTORY OF THE GREENBACKS 

The opportunity afforded by this measure of obtaining 5 
per cent, interest on current funds proved very attractive to 
the banks. March 7 a meeting of the New York Clearing 
House Association voted to employ such certificates of 
deposit in payment of balances at the clearing house, and 
their agents arranged with Mr. Cisco to issue for the pur- 
pose certificates payable .to the order of any bank in the 
association. 1 As the New York banks wished to take out 
$20,000,000 of these certificates, Mr. Chase saw that the 
$25,000,000 limit imposed by the act of February 25 would 
not allow him sufficient margin for similar issues in other 
cities. Consequently he asked the finance committee of the 
Senate to add an amendment raising the limit to $50,000,000 
to the bill that had just been sent up by the House providing 
for the purchase of coin for interest on the public debt. This 
request was acceded to, though not without further objec- 
tions from Senator Sherman, and the new limit was provided 
for by sec. 3 of the act which was approved March 17. 2 By 
the end of the month the treasury had received over 
$20,000,000 on account of the "temporary loan," as it was 
called, and had redeemed less than $1,500,000.* 

Another shift for obtaining means was the issue of 
"certificates of indebtedness." During the winter a floating 
debt had been gradually accumulating, variously estimated 

1 Bankers' Magazine, Vol. XVI, pp. 809-11. 

212 Statutes at Large, p. 370; Congressional Globe, 37th Cong., 2d Sess., pp. 1156, 
1162-4, 1235. 

3 BAYLEY, National Loans of the United States, p. 158. The table compiled by Pro- 
fessor D. C. Barrett from Senator Chandler's speech of June 17, 1862, and published in 
the Quarterly Journal of Economics, Vol. XVI, p. 327, does not agree with Bayley's 
figures. According to Bayley's table the amount of the temporary loan outstanding 
March 31 was $18,876,404.43; according to Barrett the amount on April 1 was $12,227,- 
185. Chandler's figures, on which Barrett relies, are inconsistent the totals do not 
agree with the several items. Perhaps the reason is that he includes in the totals 
the deposits received under Cisco's notice of February 8, before congressional 
authorization had been given to the temporary loan. Moreover, if his figures are 
for the end of the day they would include the notes deposited April 1, but these 
deposits could not have been a large sum, for the net increase that week was, accord- 
ing to Barrett, only $746,691. 



THE SECOND LEGAL-TENDER ACT 87 

at from $80,000,000 to $180,000,000.' Mr. Chase did not 
have sufficient ready money to pay even those creditors 
whose claims had been audited. As a measure of relief he 
requested authority to issue to creditors who might desire 
to receive them, certificates of indebtedness bearing 6 per 
cent, interest and payable in one year or earlier at the 
option of the government. 2 This request was granted by 
the prompt passage of the act of March I. 8 March 17 
authority was granted to issue such certificates in payment 
of disbursing officers' checks as well as in payment of 
audited accounts.* Army contractors and similar creditors 
found great relief in these provisions, for the delay in 
obtaining payment for supplies had interfered with their 
operations seriously, the more so because banks showed a 
disinclination to lend on their claims even after the claims 
had been approved by the treasury. Under the new system 
contractors could at any time obtain 6 per cent, obligations of 
government which could be sold in the market at a slight 
discount, or used as first-class collateral in securing loans 
from a bank. 5 

By these various shifts Mr. Chase obtained means suffi- 
cient to tide the treasury over the trying quarter between 
suspension of specie payments and the time when the 
resources provided by the legal-tender act became available. 
The following brief recapitulation may give a clearer idea 
of the situation. Against expenses of perhaps $112,500,000 
to $137,500,000 the ordinary receipts were: 

1 January 16 the financial column of the New York Herald gave $80,000,000 as the 
current, estimate. January 28, Spaulding put the floating debt at $100,000,000 (Con- 
gressional Globe, 37th Cong., 2d Sess., p. 523) ; February 6 Stevens declared it to be 
$180,000,000 (ibid., p. 687). 

2 Congressional Globe, 37th Cong., 2d Sess., pp. 945, 954, 955. 
3 12 Statutes at Large, p. 352. 

*Ibid., p. 870. 

& Cf. Annual American Cyclopaedia, 1862, p. 456. 



88 HISTORY OP THE GREENBACKS 

From customs $14,618,558.44 

From sales of public lands 27,019.74 

From miscellaneous sources (estimated) 232,946.91 



$14,878,525.09 

Meanwhile the issues of government securities were: 

Oregon war debt - $ 297,000.00 

6 per cent, twenty-year bonds - 20,374,753.43 

7.30 three-year notes - 11,170,598.24 

Old demand notes - - 25,900,000.00 

Temporary loan (less withdrawals) - 18,876,404.43 

Certificates of indebtedness 5,629.000.00 

1 $81,247,756.10 

The operations of the next three months, April to June, 
require less notice because no new measures were adopted. 
There was an increase of about one-half in ordinary 
receipts, but it was still necessary to borrow about nine- 
tenths of the funds required. In borrowing Secretary 
Chase made use of all the resources employed the quarter 
before except the issue of 6 per cent, twenty-year bonds. 
On the other hand he was able to employ also the means 
provided by the legal-tender act. He did this chiefly by 
paying out the new legal-tender notes which differed from 
the " old demand notes " in not being receivable for duties. 
Of these new notes which were almost immediately 
christened the "greenbacks" $99,500,000 were issued by 
the end of June. 

The other grand resource provided by the legal-tender 
act proved for the time being a vain reliance. An issue of 

1 For the revenues of the quarter see Report of the Secretary of the Treasury, 
December, 1862, p. 37. The receipts from miscellaneous sources are taken as a 
quarter of the amount for the whole year. The issues of securities are compiled 
from BAYLEY, National Loans of the United States. The Oregon war issues were 
authorized by the act of March 2, 1861 (12 Statutes at Large, p. 198), for the payment 
of expenses incurred by Oregon and Washington during the Indian troubles of 1855 
and 1856. All of the 6 per cent, bonds and about $2,500,000 of the seven-thirties were 
issued to the associated banks for the loans negotiated before suspension. 



THE SECOND LEGAL-TENDER ACT 89 

),000,000 of 6 per cent, bonds had been authorized 
called " five-twenties" from the fact that they were redeem- 
able after five and payable after twenty years and it 
had been provided that the legal-tender notes might be 
exchanged for these bonds at the desire of the holders. 1 
Much had been hoped from this "funding provision" by 
the supporters of the bill. Thaddeus Stevens expressed 
their theory most concisely: 

My distinguished colleague from Vermont [referring to Justin 
Morrill] fears that enormous issues [of legal-tender notes] would 
follow to supply the expenses of the war. I do not think any more 
would be needed than the $150,000,000. The notes bear no interest. 

No one would seek them for investment This money would 

scon lodge in large quantities with the capitalists and banks 

Where could they invest it ? In United States loans at 6 per cent., 
redeemable in gold in twenty years, the best and most valuable 
permanent investment that could be desired. The Government 
would thus again possess such notes in exchange for bonds, and 
again re-issue them. I have no doubt that the $500,000,000 of 
bonds authorized would be absorbed in less time than would be 
needed by Government; and thus $150,000,000 would do the work 
of $500,000,000 of bonds. When further loans are wanted you 
need only authorize the sale of more bonds; the same $150,000,000 
of notes will be ready to take them. 2 

Experience proved that such expectations as Mr. Stevens 
indulged were far too sanguine. While the government was 
in the midst of an enormously expensive war of which the 
end could not be foreseen, its credit was not high enough to 
make men desire its 6 per cent, coin interest bonds on the 
conditions permitted by the first legal-tender act. Conse- 
quently conversions of greenbacks into bonds were slow 
less than $14,000,000 of the five-twenties were disposed of 
in the first three months after they were ready for issue. 3 

1 Sec. 2, 12 Statutes at Large, p. 345. 

2 Congressional Globe, 37th Cong., 2d Sess., p. 688. Cf. the remarks of Spaulding, 
ibid., p. 526; Sherman, p. 791 ; and Pomeroy, p. 884. 

s BATLEY, National Loans of the United States, p. 156. 



90 HISTORY OF THE GREENBACKS 

Instead of its being necessary, as Mr. Stevens forecast in 
February, to issue more bonds to take up the legal-tender 
notes constantly offered for conversion, it became necessary 
to issue more greenbacks to compensate for the small demand 
for bonds. 1 

The treasury operations for the quarter April to June 
may best be presented in a summary like the one given 
above for January to March. 

RECEIPTS FBOM ORDINARY SOURCES 

From customs $18,930,170.16 

From sales of public lands 49,558.54 

From miscellaneous sources (estimated) 232,946.91 

From direct tax - 1,795,331.73 



$21,008,007.34 

ISSUES OF GOVERNMENT SECURITIES 

Oregon war debt $ 198,850.00 
6 per cent, twenty-year bonds 

7.30 three-year notes 13,997,936.64 

Old demand notes 30,000.00 

Temporary loan (less withdrawals) - 39,049,712.14 

Certificates of indebtedness - 44,252,979.73 

$97,529,478.51 

Legal-tender notes (greenbacks) 98,620,000.00 

Five-twenties of 1862 - - 13,845,500.00 



2 $209,994,978.51 

The free issue of greenbacks put the treasury by the end 
of the quarter in a very much better position than it had 
been in at the beginning. The floating debt that had accu- 
mulated during the preceding three months was all cleared 
away and current expenses were paid promptly. On July 
1, said Mr. Chase in his December report: 

1 For the subsequent history of the "conversion " scheme, see chap, iv, pp. 104, 
107, 108, 115, 116, below. 

2 For authorities see above, p. 88, note. 



THE SECOND LEGAL-TENDEB ACT 91 

Not a single requisition from any department upon the treasury 
remained unanswered. Every audited and settled claim on the 
government, and every quartermaster's check for supplies fur- 
nished, which had reached the treasury, had been met. And there 
remained in the treasury a balance of $13,043,546.81 - 1 

II. THE SECOND LEGAL-TENDER ACT 

While it is true, as has just been shown, that the treas- 
ury worked into comfortable condition during the quarter 
April to June, 1862, and possessed abundant funds to meet 
all current demands, Mr. Chase foresaw that this pleasant 
situation could not continue long without further grants 
from Congress. The credit was due in large measure to the 
rapid issues of greenbacks, and when the whole amount of 
these notes authorized by the act of February, 1865, had 
been put into circulation stringency would recur. This 
matter he called to the attention of Congress by a letter 
written June 7 to Thaddeus Stevens, chairman of the Com- 
mittee of Ways and Means. 2 

According to the terms of the first legal-tender act, he 
reminded Congress, $150,000,000 of United States notes 
might be issued, but $60,000,000 of this sum must be used 
to replace the old demand notes authorized by the acts of 
July 17, 1861, and February 12, 1862. The new issues, 
therefore, were confined to $90,000,000. This limit, he said, 
had already been reached, and accordingly further issues 
could be made only as equal sums of the old notes were 
retired. Moreover, no more temporary deposits could be 
received, because the amount on hand had reached $50,000,- 
000 the full sum authorized by Congress despite a 
reduction in the rate of interest from 5 to 4 per cent. Thus 
the only available resources were receipts from customs, and 

1 Report of the Secretary of the Treasury, December, 1862, p. 10. 

2H. R. Miscellaneous Document No. 81, 37th Cong., 2d Sess. The date of the 
letter as given by this document is April 7, but this is an error of the press. See the 
remarks of Mr. Stevens, Congressional Globe, 37th Cong., 2d Sess., p. 2768. 



92 HISTORY OP THE GREENBACKS 

sales of five-twenty bonds for greenbacks, or "conversions." 
But these resources were far from adequate to meet the 
expenditures. 

No safe reliance [said Mr. Chase] can be placed on conversions 
so far as experience has afforded any grounds of estimate, for more 
than $150,000 daily; and the daily average revenue from customs, 
during the past month, has been about $230,000. 

The aggregate daily receipts from both these sources, therefore, 
cannot be estimated at more than $380,000, and may very possibly 
fall short of that sum; while the average daily expenditure cannot 
be estimated at less than $1,000,000, and will, probably, unless very 
considerable retrenchments are made, exceed that sum. 

To meet the deficit the secretary proposed two measures: 
first, the "removal of the restriction upon temporary 
deposits;" second, the issue of another $150,000,000 of legal- 
tender notes. The first measure would enable him to take 
full advantage of the disposition of business men to lend their 
means to the government temporarily at a low rate of interest. 
Mr. Chase thought that not less than $30,000,000 would be 
added at 4 per cent, to the $50,000,000 of deposits already 
received. To provide for the prompt redemption of such 
of these deposits as were withdrawn, he proposed that a 
reserve of 33^ per cent, be provided out of the new issues of 
greenbacks. 

Another suggestion, indicative of the state into which 
the circulating medium of the country had already fallen, 
was that $25,000,000 of the new United States notes should 
be of denominations less than five dollars. 

Payments to public creditors, and especially to soldiers [Mr. 
Chase said in explanation], now require large amounts of coin to 
satisfy fractional demands less than five dollars. Great inconveni- 
ences in payment of the troops are thus occasioned. With every 
effort on the part of the treasury to provide the necessary amount 
of coin, it is found impracticable always to satisfy the demand. 
When the amount required is furnished, the temptation to disburs- 
ing officers to exchange it for any small bank notes that the soldiers 



THE SECOND LEGAL-TENDER ACT 93 

or the public creditors will take, is too great to be always resisted. 
And even when the coin reaches the creditors it is seldom held, but 
passes, in general, immediately in to the hands of sutlers and others, 
and disappears at once from circulation. 1 

With this letter Mr. Chase sent a bill embodying his 
recommendations. "The condition of the treasury," he 
said, in conclusion, " renders prompt action highly desirable." 

This communication was laid before the House June 11. 
The request for a second issue of legal-tender notes imme- 
diately alarmed the opponents of paper money. With the 
hope of preventing its consideration, Senator Chandler, of 
Michigan, introduced a resolution : " That the amount of 
legal tender treasury notes already authorized by law, shall 
never be increased." 2 Speaking in support of this resolu- 
tion he said that the effect which the passage of a second 
legal-tender bill would have was shown by the fact that the 
mere publication of Secretary Chase's request, " without any 
action of Congress on the subject, has created such a panic, 
and has so convinced the money center of the world that we 
are to be flooded with this paper, that gold has risen in price 
from 2| to 7 per cent, premium." If full use were made of 
other resources, he continued, the disastrous consequences 
of fresh paper money emissions could be avoided. By pay- 
ing 5 per cent, interest an indefinitely large sum could be 
obtained on temporary deposit and the lagging conversions 
of greenbacks into bonds could be stimulated by an appeal 
to the patriotism of the people. 3 

Senator Fessenden, chairman of the finance committee, 
replied in a moderate vein. Reliance upon temporary 
deposits, he pointed out, would be very hazardous, because 
if any severe shocks occurred to the credit of the govern- 
ment, large sums might be withdrawn within a few days, 

1 Cf. Part II, chap, ii, sec. iv, below. 

2 Congressional Globe, 37th Cong., 2d Sess., p. 2746. 3 Ibid., pp. 2774, 2775. 



94 HISTORY OP THE GREENBACKS 

and Mr. Chase be left without funds. He regretted that 
the secretary had found it necessary to request the issue of 
more notes, and he was not convinced that such a course 
would be wise. But until the secretary's reasons were fully 
known he thought it would be wrong to resolve not to grant 
his request. Therefore, he moved that the resolution be 
referred to his committee for consideration. This was done, 
and nothing more was heard of the matter by the Senate. 1 
Meanwhile Mr. Chase's bill was introduced into the 
House. 2 As before, Mr. Spaulding fathered the measure. 
The tone of the debate was quite different from that upon 
the first legal-tender act. The advocates of paper money 
spoke in a less apologetic tone, boldly assuming the 
offensive. The first experiment, they held, had demon- 
strated the wisdom of their policy. Mr. Spaulding declared 
that the act of February 25 had " worked well," and had 
"exceeded the most sanguine expectations of its warmest 
advocates." 3 Some members who had voted against the 
first bill were won over by such claims to vote for the 
second. Senator Simmons, for instance, said the first issue 
" has given great practical relief to the country, and inas- 
much as it has done so, I .... give my consent to author- 
ize a further issue." 4 Other members agreed to the bill 
because of the hopelessness of opposition. Owen Lovejoy, 
who had spoken vigorously against the bill in February, 
explained that he still thought the policy pernicious but that 
he would not "persist in any factious opposition to what is 
a foregone conclusion." 5 On the other hand, there were 
members who had voted for the first bill as a measure of 

i Congressional Globe, 37th Cong., 2d Sess., pp. 2774, 2775. 

2/6td., p. 2665. The bill as reported from the Committee of Ways and Means 
differed from the bill submitted by Chase in not authorizing the issue of notes less 
than five dollars. See the text, p. 2766. 

3 Ibid., p. 2766. Cf. on the other side Mr. Sheffield, p. 2888. 
* Ibid., p. 3077. Ibid., p. 2885. 



THE SECOND LEGAL-TENDER ACT 95 

temporary necessity, but who opposed the second on the 
ground that it inaugurated a regular policy of depending 
on inconvertible paper. 1 Thus the character both of the 
support and of the opposition shifted somewhat. 

In the debate one point especially received relatively 
more attention than in February. Mr. Hooper based his 
argument for the bill on the country's need of a currency of 
uniform value. It was a question, said he, between bank 
notes and government notes, and he preferred the latter. 2 
"If anybody," said Mr. Lovejoy, "is to have the advantage 
of a depreciated currency the advantage, in other words, of 
not paying interest on what they [st'c] owe I say let the 
government have that advantage ; and let the bankers share 
with the rest of us." 3 In order to secure this advantage to 
the government, Senator Sherman proposed an amendment 
to the bill imposing a tax upon bank notes.* 

But it was again the argument of necessity that did duty 
as the chief reason for the bill. In opening the debate Mr. 
Spaulding reiterated it explicitly. "The ground upon 
which the secretary of the treasury, and upon which the 
Committee of Ways and Means, rest this issue of notes," he 
said, "is the necessity of the case." ' By the opposition the 
alleged necessity was once again emphatically denied. Mr. 
Pomeroy made an elaborate attempt to show that Secretary 
Chase had underestimated the probable receipts of the gov- 
ernment, and that the daily deficit instead of being $620,- 
000 was only $166,166. 6 Mr. Pike, who had voted for the 

' Cf. the remarks of Mr. Pike, ibid., p. 2798, and Senator Davis, p. 3078. 

2 Ibid., p. 2882. 3 ibid., p. 2885. 

*Ibid., pp. 3071, 3072. This proposition was opposed by Senators Collamer, p. 
3073; Simmons, pp. 3076, 3077; and Davis, p. 3078. 

5/6id., p. 2768. Cf. remarks of Messrs. Daily, ibid.. Appendix, p. 298; and 
Edwards, ibid., p. 2888. 

6 Mr. Pomeroy estimated " conversions " at $275,000 instead of $150,000 daily, and 
further added $333,000 per day as the expected receipts from the internal revenue 
act then just enacted. Ibid., p. 2797. As a matter of fact this act yielded about 
$103,000 instead of $333,000 daily in the fiscal year, 1863. .Report of the Secretary of 
the Treasury, 1863, p. 28. 



96 HISTORY OP THE GREENBACKS 

first bill on the ground of necessity, refused to vote for 
the pending measure, which could be advocated only upon 
" the mere ground of convenience." * And Mr. Morrill 
declared that after the recent victories of the federal armies 
and the passage of the tax bill there was not only no neces- 
sity, but no excuse, for the issue of more paper. 8 

Nor were these gentlemen who denied the necessity at a 
loss for an alternative. "The true policy," said Mr. Morrill, 
" is to put upon the market the small amount which will be 
required .... in the bonds of the Government, at what- 
ever they would bring." 5 Mr. Sheffield concluded his 
speech by saying: "I am persuaded that it would be far 
better for the people of the country to sell bonds at a large 
discount than to further disturb the relation between price 
and value by a further issue of these notes." * Mr. Horton 
put these suggestions into formal shape by presenting, as a 
substitute for the bill, a measure authorizing the secretary 
of the treasury to borrow $100,000,000 on 6 per cent., 
twenty-five year bonds. 5 

As in the first debate, the supporters of the bill implicitly 
gave away the argument of necessity in the answer made to 
the proposal of borrowing. Instead of showing that it was 
impracticable to sell bonds, they responded that, as a method 
of securing revenue, it was better to issue inconvertible paper 
money than to borrow below par. "When money can be 
obtained at par on six per cent, bonds," said Mr. Spaulding, 
"I would prefer to have that done to the issuing a very 
large amount of legal tender notes." ' Mr. Edwards fol- 
lowed suit, "I would gladly give my consent," said he, "to 
.... the sale of bonds .... if I were assured those 
bonds could be sold at par." 7 

i Congressional Globe, 37th Cong., 2d Sess., p. 2798. 

'tlbid.. p. 2885. See also Mr. Baker, ibid., p. 2881. 

3/6td., p.2885. *Ibid., p. 2888. *Ibid., p. 2794. &Ibid., p. 2767. 

1 1bid., p. 2888. Cf, on the other side Mr. Pomeroy, ibid., p. 2796. 



THE SECOND LEGAL-TENDEB ACT 97 

The legal-tender debate in June and July was by no 
means so exhaustive as had been the debate in January and 
February. Apparently members felt it would be a fruitless 
waste of time to discuss again the questions debated at such 
length five months before. An attempt was made, however, 
to learn whether this was the last issue that would be asked 
for. Mr. Stevens, the chairman of the Committee of Ways 
and Means, to whom the question was put, replied frankly 
that he did not know where the issues would stop. 1 To 
offset this damaging admission the supporters of the bill 
praised the paper currency, 2 and asserted that there was no 
reason why a new issue should increase depreciation. 3 

The measure came to a vote in the House June 24. It 
passed by 76 yeas to 47 nays. Of those who voted in the 
affirmative five had opposed the legal-tender clause in the 
first act. On the contrary, of the nays, seven had sup- 
ported the legal-tender clause in February. The large 
majority of members, however, voted upon the second act as 
they had upon the first. The yeas included four Democrats 
and the nays fifteen Republicans, so that the division was 
not a party vote/ 

In the Senate the vote was 22 to 13. Four senators 
voted for the bill who had opposed the legal-tender clause 
of the first act, and three senators John Sherman among 
them who had supported the first act opposed the second. 
Twenty-one Republicans voted in the affirmative and nine 
in the negative. Of the four democratic votes one was in 
favor of the bill. As in the case of the first act the vote was 
devoid of sectional and of party character. 5 

1 Ibid., p. 2886. 

2 Mr. Spaulding, e. g., said the act of February 25, 1862, " had given the country a 
sound national currency, in which the people have had entire confidence." Ibid., p. 
2767. 

3 Mr. Hooper said he had "no apprehension of any depreciation of the currency 
being produced by the passage of the bill." Ibid., p. 2883. 
* Ibid., p. 2903. 5 ibid., p. 3079. 



98 HISTORY OF THE GREENBACKS 

President Lincoln approved the second legal-tender act 
July 11, 1862. The law authorized the issue of $150,- 
000,000 United States notes. In addition the limit upon 
the amount of temporary deposits that might be received 
was raised from $50,000,000 to $100,000,000. In order to 
provide for the prompt payment of these deposits the 
secretary was directed to retain as a reserve fund not less 
than $50,000,000 of the newly authorized notes. 1 

III. THE POSTAGE CURRENCY ACT 

It has been seen that Secretary Chase's letter requesting 
authority for a second issue of greenbacks referred to the 
difficulty experienced by disbursing officers in making 
change for sums of less than $5. To relieve this difficulty 
it was provided in the act of July 11 that $35,000,000 of 
the new issues should be of lower denominations than $5, 
but it was also provided that no note should " be issued for 
the fractional part of a dollar." 2 

Hardly had this act been approved by President Lincoln 
when Mr. Chase found it necessary to request authority to 
use paper money, not only in payments of one and two dol- 
lars, but also in payments of 50, 25, and even 10 cents. 
July 14 he wrote a letter to Thaddeus Stevens, saying: 

The depreciation of the currency, resulting, in great measure, 
from the unrestricted issues of non-specie-paying banks and 
unauthorized associations and persons, causes the rapid disappear- 
ance from circulation of small coins. To supply the want of these 
coins, tokens and checks for sums less than one dollar are being 
issued by hotels, business houses, and dealers generally; and the 
most serious inconveniences and evils are apprehended unless 
these issues can be checked and the small coins of the Government 
kept in circulation, or a substitute provided. 3 

1 12 Stattdes at Large, p. 532. 2 Ibid., loc. cit. 

3 Congressional Globe, 37th Cong., 2d Sess., p. 3406. On the disappearance of 
subsidiary silver from circulation see Part II, chap, ii, sec. iv, below. 



THE SECOND LEGAL-TENDER ACT 99 

Chase proposed two methods of meeting this situation. 
One was to diminish the weight of the subsidiary coins to 
such a point that as bullion they would be worth less than 
their face value as money; the other was to authorize the 
use of postage and other stamps in payments of fractional 
parts of a dollar. For the convenience of the Committee of 
Ways and Means the secretary submitted two bills embody- 
ing these suggestions. The second expedient seemed 
preferable to the committee, and accordingly the bill 
providing for the use of stamps as currency was introduced 
by Mr. Hooper July 17 and passed at once by a vote of 62 
to 40, with no debate aside from an objection raised on 
constitutional grounds against the clause forbidding the 
issue of small notes by state banks. 1 The Senate passed the 
bill the same day without debate or division, 2 and President 
Lincoln signed it before night. 

The act directed the secretary of the treasury "to furnish 
to the Assistant Treasurers, and such designated depositaries 
of the United States as may be by him selected, in such 
sums as he may deem expedient, the postage and other 
stamps of the United States, to be exchanged by them, on 
application, for United States notes." 

Such stamps were not made a legal tender between indi- 
viduals, but their currency was assured by providing that 
they should be receivable in payment of all dues to the 
United States less than $5, and that they should be 
redeemed in greenbacks on demand by the treasury officials. 
The second section forbade any "private corporation, bank- 
ing association, firm, or individual" to put in circulation 
notes or tokens of any character for sums less than a dollar. 8 

i Congressional Globe, 37th Cong., 2d Sess., pp. 3405, 3406. 

2/6id., p. 3402. 

3 12 Statutes at Large, p. 592. On the authorization of fractional currency to 
take the place of postage currency, see Part I, chap, iv, p. 118, below. On the circula- 
tion of both these forms of small change see Part II, chap, ii, sec. iv. 



CHAPTER IV 

THE THIRD LEGAL-TENDER ACT 

I. The Finances from July to December, 1862: 

Receipts and Expenses July to September Increase of Deficit in 
October and November Proposals of the Finance Report; No 
Further Issues of Greenbacks, But Reliance Upon Loans. 
II. The Joint Resolution of January 17, 1863: 

Arrears in Pay of Army Congressional Inquiries and Chase's 
Rejoinders Resolution for Additional Issues of Greenbacks. 

IIL The Third Legal-Tender Act: 

Provisions of Ways and Means Bill Character of Debate 
Repeal of Funding Provisions Substitutes Proposed Senate 
Amendments Provisions of the Act. 

I. THE FINANCES FROM JUNE TO DECEMBER, 1862 

ON July 1, 1862, the beginning of the new fiscal year, 
the treasury was in easy circumstances, as has been shown. 
All audited claims had been met, and there was a balance 
of $13,000,000 on hand. 1 But in the next quarter the 
treasury began to run behind again. The futile ending 
of McClellan's campaign in the Peninsula, from which so 
much had been hoped, showed that the end of the war was 
not at hand, and on July 1 President Lincoln issued a 
call for 800,000 additional troops. 2 Enlarging the army of 
course promised an increase of demands on the treasury. 
During the quarter July to September, however, the war- 
rants drawn against the treasurer for other purposes than 
payment of the public debt were slightly less than the 
quarterly average for the fiscal year 1862 had been viz., 
$111,000,000 as compared with $119,000,000. 3 But at the 

1 Pp. 90, 91, above. 

2 Complete Works, ed. NICOLAT AND HAY, Vol. II, pp. 194, 195. 

s See the statements of expenditures in the Report of the Secretary of the 
Treasury, December, 1862, pp. 41, 43. 

100 



THE THIRD LEGAL-TENDER ACT 101 

same time some $45,500,000 more had to be used in redeem- 
ing old demand notes, greenbacks, certificates of indebted- 
ness and certificates of deposits. 1 

To help in meeting these total expenditures of $156,- 
500,000 there was a slight increase in the receipts from taxa- 
tion and miscellaneous sources. This revenue rose from 
about $21,000,000 in the preceding quarter, to $24,000,- 
OOO. 2 For the rest Mr. Chase had to borrow. As conver- 
sions of greenbacks into five-twenty bonds amounted to but 
$2,500,000, he relied mainly on issues of greenbacks and 
various short-time obligations. 3 Altogether he succeeded in 
obtaining $114,500,000 from loans, but the necessity of pay- 
ing $45,500,000 of the principal of the debt reduced the net 
increase of means from loans to $69,000,000. This sum, 
with the receipts from ordinary sources, gave the secretary 
$93,000,000 to meet warrants of $111,000,000.* The dif- 
ference between these sums swallowed up the balance of 
$13,000,000 on hand July 1 and left an accumulation of 
unpaid warrants amounting to $5,000,000. 

Unpromising as the situation of the treasury was at the 
end of September, it became worse during October and 
November. The increase of the army began to be felt by 
the treasury. The expenditures during these two months 
other than those for payment of debt were almost as great as 
the total for the three months preceding viz., $109,000,000 
as compared with $111,000,000. 5 Mr. Chase was not able to 
raise money fast enough to meet these expenses, and though 
he borrowed $85,500,000, 6 the accumulation of unpaid 
requisitions at the end of November reached $48,000,000. 7 

1 Ibid., p. 43. 
2/Wd., pp.37, 43. 

3 $3,500,000 of seven-thirty notes, $72,500,000 of greenbacks, $12,000,000 of certificates 
of indebtedness and $23,000,000 of certificates of deposit were issued. Ibid., p. 43. 
* Exclusive of payments of the principal of the debt. 
5 Ibid., p. 10. Ibid., p. 3. 7 ibid., p. 10. 



102 HlSTOBY OF THE GREENBACKS 

When the secretary prepared his annual report to Con- 
gress early in December, he estimated that the expenditures 
for the remainder of the fiscal year would be $485,000,000. 
The addition of the $48,000,000 of accumulated floating 
debt made the total to be provided $533,000,000. Against 
this sum Mr. Chase expected to receive $125,000,000 from 
taxes of all kinds and miscellaneous sources. This left 
$408,000,000 to be raised from loans. Under existing laws 
the secretary expected to secure $27,000,000 from issues of 
greenbacks, $36,000,000 from postage currency, $13,000,000 
from certificates of indebtedness, and $20,000,000 from 
temporary deposits. These sums, with an estimated sale of 
five-twenty bonds amounting to $35,000,000, made a total of 
$131,000,000; which, subtracted from the $408,000,000 to 
be borrowed, left loans of $277,000,000 to be provided for 
by new legislation. 1 

In discussing how this sum should be procured Secretary 
Chase took emphatic ground against any considerable 
increase in the emission of greenbacks: 

i Report of the Secretary of the Treasury, December, 1862, pp. 3-5, 11, 12. The 
figures in the report give estimated receipts and expenditures for the whole 
fiscal year, while the figures above are confined to the months December, 1862, 
to July, 1863. In obtaining the latter figures from the former it is necessary 
to cast out the expenses actually paid from July to November. This can be done 
with certainty for the months July to September because a full statement is 
given of the receipts and expenditures of that quarter. But for October and 
November the statements show only receipts from loans ($86,000,000), and expendi- 
tures for objects other than payment of the principal of the debt ($109,000,- 
000). It is, therefore, necessary to estimate the receipts from ordinary sources and 
the amount paid on the principal of the debt. Such an estimate is not difficult to 
make, because the figures actually given show that the latter sum exceeded the 
former by $20,000,000. The difference between the stated expenditures and receipts 
is $23,000,000. But it is also stated that the accumulation of unpaid requisitions rose 
from $5,000,000 at the end of September to $48,000,000 at the end of November. Since 
the treasury thus fell behind $43,000,000 on all expenditures and only $23,000,000 on 
stated expenditures it must have been because expenditures not stated exceeded 
receipts not stated by $20,000,000. With this guide and that afforded by the figures 
for the quarter July to September, I have estimated the receipts from customs, etc., 
during October and November at $18,000,000 and the payments on the principal of the 
debt at $38,000,000. The figures for the amounts to be borrowed given in the text, 
however, agree with those in the secretary's report and are not affected by any 
inaccuracy of these guesses, for, if the estimated receipts from taxation are too 
small they are compensated for by correspondingly deficient estimates of expendi- 
ture on the principal of the debt. 



THE THIRD LEGAL-TENDER ACT 103 

The easiest mode [of obtaining the $277,000,000] doubtless 
would be an issue of the required amount in United States 
notes; but such an issue, especially in the absence of proper 
restrictions on corporate circulation, would, in the judgment of the 
Secretary, be as injurious as it would be easy. The addition of so 
vast a volume to the existing circulation would convert a currency, 
of which the benefits have thus far greatly outweighed the incon- 
veniences, into a positive calamity. Its consequences would be 
inflation of prices, increase of expenditures, augmentation of debt, 
and ultimately, disastrous defeat of the very purposes sought to 
be attained by it. 1 

While the secretary thus opposed further issues of 
greenbacks, he had no suggestions to make of increased 
taxation. Instead, he proposed to secure the additional 
$277,000,000 solely by borrowing. In order to facilitate 
the negotiation of loans as well as to provide a better 
currency, he urged again upon Congress the plan proposed 
in his report of the year before for reorganizing the banking 
system. Banks that desired to issue circulating notes were 
to be required to purchase United States bonds to be held 
as security. This plan, he thought, would make a market 
for not less than $250,000,000 of bonds "within a very few 
years." 2 Moreover, the steady sale of bonds to banks would 
strengthen the credit of the government and enable it to 
borrow from others on better terms. 3 

If reliance were to be placed upon loans, the question as to 
what form of security had best be offered became important. 
Mr. Chase opposed any increase beyond five years in the length 
of time that bonds should run before they became redeem- 
able, and any increase in the rate of interest beyond 6 per 
cent. As an alternative he preferred the issue of 7.30 three- 
year notes, "convertible into five-twenty sixes at or before 
maturity, and of smaller notes bearing an interest of 3.65 
per cent." 4 

i/6td., p. 12. 2 ibid., p.18. 

3 Ibid., pp. 18, 24, 26. Ibid., p. 25. 



104 HISTORY OP THE GREENBACKS 

No prudent legislator [said he] at a time when the gold in the 
world is increasing by a hundred millions a year, and interest 
must necessarily and soon decline, will consent to impose on the 
labor and business of the people a fixed interest of 6 per cent, on a 
great debt, for twenty years, unless the necessity is far more urgent 
than is now believed to exist. 1 

Accordingly, he recommended no change in the law 
providing for the issue of bonds beyond the necessary 
increase in amount and the repeal of two clauses which in 
his view limited the sale of the five-twenties already author- 
ized. 2 These clauses, however, or rather Mr. Chase's inter- 
pretation of them, require some attention. 

The first legal-tender act of February 25, 1862, as will 
be remembered, had authorized the issue of $500,000,000 
6 per cent, five-twenty bonds, which the secretary was 
permitted to sell "at the market value thereof." The law 
also provided that holders of greenbacks might exchange 
them in sums of $50 or multiples of $50 for these bonds at 
par. 8 Under this authorization the secretary had been able 
to dispose of but relatively few of the five-twenty bonds. 
Up to the first of December "conversions" amounted to less 
than $24,000,000.* Mr. Chase now declared that these 
small sales were due to the clauses restricting sales to the 
"market value" of the bonds and permitting "conversions" 
of greenbacks into five-twenties at par. 

Considerable amounts [he explained] are seldom taken, except 
with a view to resales at a profit, and resales at any profit are 
impossible under the law. Negotiations below market value are not 
allowed, and if not allowed the taker of the bonds can expect no 
advance, unless a market value considerably below par shall 
become established. The act makes advance above par impossible, 
by authorizing conversion of United States notes into bonds at 
that rate. 5 

i Report of the Secretary of the Treasury, December, 1862, p. 25. 

3 Ibid., p. 26. 3 12 Statutes at Large, pp. 345, 348. 

* Report of the Secretary of the Treasury, December, 1862, p. 12. 5 Ibid., p. 52. 



THE THIRD LEGAL-TENDER ACT 105 

What this peculiar explanation meant Congress did not 
understand, and, as will soon appear, the secretary was asked 
to interpret it. 

II. THE JOINT RESOLUTION OF JANUARY 17, 1863 

This report was laid before the House of Represen- 
tatives December 5 and referred to the Committee of Ways 
and Means, which at once set about drafting finance bills 
along the general lines indicated by the secretary. 1 But 
this was a task that necessarily required some time. It was 
not until the 8th of January that Mr. Stevens was able to 
report the loan bill and the bill for reorganizing the banks 
of issue. 2 

Meanwhile the treasury continued to run behind as it 
had done in October and November, and the accumulation 
of requisitions which could not be paid for lack of funds 
became larger. This state of affairs attracted much atten- 
tion in Congress because the pay of the army fell into 
arrears. Members began to receive letters from constituents 
who were serving in the field, complaining that their 
families at home were suffering from lack of the money 
which the government owed but did not pay them. 3 Such 
complaints found a ready response. December 11 the 
House adopted a resolution asking the secretary of war to 
report " what regiments remain unpaid and how long have 
the soldiers of such regiments remained without pay." * As 
Mr. Stanton did not reply promptly, 5 the House adopted 
another resolution December 15, directed to the secretary of 
the treasury: 

1 Congressional Globe, 37th Cong., 3d Sess., p. 15. 

2 Ibid., pp. 235-7. It was the Senate banking bill introduced by Sherman 
January 26, " a little different from the bill introduced in the House of Representa- 
tives " (p. 505), that was finally passed. Cf. SPAULDING, op. cit., p. 186. 

s See, e. g., the remarks of Mr. Gurley, Congressional Globe, 37th Cong., 3d Sess., 
p. 344. 

* Ibid., pp. 75, 76. 5 No answer had been received up to January 12. Ibid., p. 283. 



106 HISTORY OF THE GREENBACKS 

Whereas grievous delays happen in the payment of money due 
soldiers: Therefore, in order to ascertain if any and what legisla- 
tion may be necessary to remedy such delays, 

Resolved, That the Secretary of the Treasury be requested to 
furnish to this House the reasons why requisitions of paymasters 
in the Army are not promptly filled. 1 

Mr. Chase answered that the unpaid army requisitions 
then in the treasury amounted to $28,700,000. Payments 
of requisitions designated by the war and navy departments 
as most urgent were being made at the rate of about 
$1,000,000 daily from the proceeds of customs, internal 
revenue taxes, conversions, temporary deposit loans, and 
new issues of greenbacks. These resources, he concluded 
were insufficient, but he could not obtain more funds until 
Congress should adopt the measures recommended in his 
report. 2 

The House replied to this communication the day before 
adjourning for the holidays by passing a joint resolution 
declaring that in the opinion of Congress " immediate steps 
ought to be taken by the Treasury Department to pay the 
sums due the soldiers .... and that to this end a prefer- 
ence be given to this class of Government creditors over 
every other." 3 After the recess Henry Wilson, of the 
Committee on Military Affairs, reported this resolution to 
the Senate with an amendment which authorized the issue of 
an additional $50,000,000 of greenbacks to enable the 
secretary to carry out its directions. Senator Fessenden, 
however, pointed out that before such a measure was 
adopted Mr. Chase ought to be consulted, and for this 
purpose he requested and the Senate consented that the 
matter be referred to the Committee on Finance.* 

1 Congressional Globe, 37th Cong., 3d Sess., p. 93. 

*H. R. Executive Document No 16, 37th Cong., 3d Sess., Dated December 18, 1862. 
3 Adopted December 22, 1862. Congressional Globe, 37th Cong., 3d Sess., p. 167. 
For the text see p. 199. 
*Ibid., pp. 199, 200. 



THE THIRD LEGAL-TENDEB ACT 107 

When the resolution was sent to Chase he declared that 
the means provided by it would be insufficient. The exist- 
ing resources of $1,000,000 a day did not cover current 
expenditures, and the addition of $50,000,000 of greenbacks 
would not suffice for the arrears in the pay of the army and 
navy, which probably approached $60,000,000. Therefore, 
as a substitute for the joint resolution, he sent in a bill 
providing for the sale at the best rates obtainable of $100,- 
000,000 of 6 per cent, ten-year bonds, the issue of $50,000,- 
000 of United States notes, and of a like sum of two-year 
4 per cent, treasury notes. 1 On recommendation of the 
Committee on Finance the Senate postponed indefinitely the 
resolution adopted by the House and passed in its place the 
bill prepared by Chase. 2 

While the joint resolution was pending in the Senate, 
the House followed up its inquiry into the non-payment of 
the soldiers by requiring Secretary Chase to explain why he 
had not availed himself of the authority conferred upon him 
by the act of February 25, 1862, to sell $500,000,000 of 6 
per cent, five-twenty bonds. 3 In replying, Chase laid the 
blame for the failure to use this authority, as he had done in 
his annual report, upon the clause specifying that the bonds 
should be sold at "the market value thereof." "The market 
value," he said, "can only be ascertained by the daily quo- 
tations of sales in New York." But he could not sell large 
amounts of securities at these market quotations, for heavy 
purchasers as a rule bought to sell again, and resales at a 
profit were impossible unless bonds could be bought from the 
government at prices less than those ruling in the market. 4 

The question whether Chase or Congress was respon- 

i The text of his letter is published ibid., p. 270. 

2/btd., p. 270; January 12. 

3 Resolution adopted January 8. Ibid., p. 237. 

* H. R. Executive Document No. 29, 37th Cong., 3d Sess. 



108 HISTORY OP THE GREENBACKS 

sible for the emptiness of the treasury thus turned upon 
the meaning of the phrase "market value" of bonds. Chase, 
who construed it to mean the quotations of the New 
York stock market, was no doubt right in saying that sales 
of large amounts at these quotations were impossible. His 
critics in Congress, however, regarded his interpretation as 
a legal quibble which ought not to stand in the way of 
supplying the pressing needs of soldiers. "Everybody 
knows," said Mr. Gurley, impatiently, that the market 
value of bonds "is the price they will bring when placed upon 
the market; .... no far fetched construction of this sort 
should prevent their sale." ! 

Though the majority of congressmen probably shared 
Mr. Gurley's feeling that in his fear of exceeding the powers 
conferred upon him the secretary had been over-nice, the 
needs of the hour were too urgent to permit of further fen- 
cing. The great Ways and Means bill which had been 
reported from the committee while this dispute about the 
pay of soldiers was going on, contained a section which 
authorized the issue of $300,000,000 additional greenbacks 
" if required by the exigencies of the public service, for the 
payment of the army and navy and other creditors of the 
Government." 2 Debate upon it began January 12 with an 
elaborate speech by Mr. Spaulding. 3 The same day the 
joint resolution giving soldiers preference over all other 
government creditors which the House had passed December 
22 was rejected by the Senate in favor of Chase's substitute. 4 
Just before adjournment, still on this same day, the latter 
bill was referred to the Committee of Ways and Means in 
the House. 5 Though this committee felt that steps should 
be taken at once for the relief of the soldiers, they did not 
approve of Secretary Chase's proposals. The Ways and 

1 Congressional Globe, 37th Cong., 3d Sess. p. 343. Cf. pp. 389, 390, 927. 

2 Ibid., p. 284. 3 n>id., p. 284-9. * Pp. 106, 107, above. 
Congressional Globe, 37th Cong., 3d Sess., p. 291. 



THE THIRD LEGAL-TENDER ACT 109 

Means bill which they had framed would grant abundant 
power to borrow money, but they knew that it could not be 
passed much before the end of the session. Consequently 
they determined to put the simplest of the proposals of the 
Ways and Means bill into a separate measure and ask for 
immediate action. With this view, on the 14th of January, 
Thaddeus Stevens introduced a " Joint Resolution to provide 
for the immediate payment of the Army and Navy of the 
United States." It was very brief, merely authorizing the 
issue of $50,000,000 additional greenbacks to be included in 
the issue provided for by the pending bill. On Lovejoy's 
motion the amount was doubled. Then without any discus- 
sion the resolution was passed. 1 The next day the Senate 
acted upon it with similar expedition, 2 and President Lincoln 
signed it on the 17th. 3 In notifying the House of his approval 
of the measure the president expressed his "sincere regret 
that it has been found necessary to authorize so large an ad- 
ditional issue of United States notes," and urged prompt 
enactment of Chase's plan for a national banking system. 4 

A third issue of greenbacks was thus determined upon 
with much less discussion than had been bestowed upon the 
first and second issues. The opening for it was made by 
Secretary Chase's peculiar interpretation of the loan sections 
of the first legal-tender act. Had he taken the "market 
value" of bonds to mean what Congress seems to have 
intended the price which they would bring when sold on 
the market it is probable that he could have negotiated a 
much larger amount of the five-twenties in the summer and 
autumn of 1862. Then the pay of the army would not have 
fallen into arrears and the occasion for the joint resolution 
of January 17 would not have presented itself. 

1 Congressional Globe, 37th Cong., 3d Sess., p. 314. 

2 Ibid., p. 323. 3 12 Statutes atLarge, p. 822. 
* Congressional Globe, 37th Cong., 3d Sess., pp. 392, 393. 



110 HISTORY OP THE GREENBACKS 

III. THE THIRD LEGAL-TENDER ACT 
The greenbacks authorized by the joint resolution, how- 
ever, formed but a third of the issues proposed by the Ways 
and Means bill reported by the committee. This bill author- 
ized the secretary of the treasury to borrow $900,000,000, 
intended partly to supply the wants of the current fiscal year 
and partly of the year that would begin July 1, 1863. To 
secure this sum the secretary might sell "upon the best 
terms he can obtain, not less than par," twenty-year bonds, 
bearing interest at 6 per cent., in coin. He might also issue 
$300,000,000 of three-year treasury notes bearing coin 
interest at 5.47^ per cent. ; i. e., a cent and a half per day 
on $100. Further, " if required by the exigencies of the 
public service," he might issue $300,000,000 of green- 
backs. To prevent the avenues of circulation from being 
closed against government paper money by enlarged issues 
of bank notes, a tax of 2 per cent, per annum was pro- 
posed on the circulation of banks beyond certain limits, 
which varied from 25 per cent, of the capital in the case 
of institutions with a capital of over $2,000,000 to 90 per 
cent, of the capital of banks with capitals of $100,000 or 



Rather curiously, the discussion of this sweeping measure 
centered not in the question how best to borrow the 
$900,000,000 needed, nor in the policy of issuing more legal- 
tender notes, but in the proposed tax on bank notes. Con- 
gressmen acquiesced with little dispute in the recommenda- 
tions concerning the loans ; 2 but they discussed at much length 
and with much warmth the alleged attack upon the banks. 
Of strenuous opposition to the increase of the irredeemable 
currency there was none. It was clearly enough seen that 

1 The text of the bill is given Congressional Globe, 37th Cong., 3d Sess., pp. 283, 284. 

2 See, e. g., the speeches of Messrs. Spaulding, ibid., p. 287; Morrill, p. 296; Shef- 
field, p. 367; Hooper, p. 384; Riddle, p. 383; Lovejoy, p. 345; Gurley, p. 342; Walker, 
p. 339. 



THE THIRD LEGAL-TENDEB ACT 111 

the bill would cause further depreciation, 1 injure the govern- 
ment's credit, 2 increase the cost of the war, work injury to 
recipients of fixed wages particularly soldiers to savings 
bank depositors and all creditors, and that it would still 
further excite the "spirit of speculation." 3 But this recital 
of the ill effects which would follow the bill apparently had 
little influence. Even Amasa Walker then serving his 
short term in the House who saw these evils most clearly, 
could lightly waive them aside. "One thing is certain," 
said he, " we are in such an emergency at the present time 
that it is not worth while for us to be very particular." 4 He 
frankly admitted that he could see no alternative. 5 Simi- 
larly Justin S. Morrill, who had opposed the first and second 
legal-tender acts, felt constrained to vote for the bill because 
he knew of no better way of securing funds. "The patient 
has got accustomed to opiates," said he, "and the dose can- 
not now be withheld without peril." 6 Mr. Horton took the 
same stand. He had opposed the whole paper-money sys- 
tem, but now that the country was "launched .... on 
this current of paper money," there seemed to him to be 
no turning back. 7 While even these staunch opponents of 
irredeemable currency admitted the necessity of the bill, 
Mr. Spaulding and his associates proclaimed it as they had 
done in the case of the first and second issues. "I have an 
aversion," said Mr. Spaulding, "to any considerable further 
issue of legal tender notes, and can only consent to it as an 
imperative necessity. I think too large an issue will tend 
to inflate prices; but I do not see how it can be avoided." 8 
In the recognition of the ill effects of an irredeemable 
paper currency and the assertion of necessity the discussion 

1 Senator Sherman, ibid., p. 841. 

2 Amasa Walker, ibid., p. 339. 

3 See remarks of Messrs. Walker, loc. cit. ; Ward, ibid., p. 337; and Pike, p. 347. 

* Ibid., p. 392. 5 ibid., p. 339. Ibid., p. 294. 

7 Congressional Globe, 37th Cong., 3d Sess., p. 387. 8 Ibid., p. 289. 



112 HISTORY OF THE GREENBACKS 

of the third legal-tender act was but a repetition of the two 
former debates. One new topic, however whether or no 
the currency was "inflated" attracted much attention. 
The apologists of the legal-tender system were anxious to 
minimize the evils incident to it, and especially to show that 
the government notes were not redundant and had not 
depreciated. Mr. Chase had set the example by attributing 
the premium on gold to the anxiety of timid investors, for- 
eign and native, to sell American securities even at heavy 
sacrifice for coin which could be exported or hoarded. 
Speculators, he said, had made the most of this situation to 
effect a great rise of gold. That the high premium was 
"not due wholly, or even in greatest part, to the increase of 
the currency," he sought to show by estimates of the mone- 
tary circulation before and after suspension. According to 
his figures the circulation of the loyal states had increased 
between November 1, 1861, and November 1, 1862, but from 
$355,000,000 to $377,000,000. Nearly or quite all of this 
moderate gain of $22,000,000 he thought was required by 
the greater activity of business and the greater government 
transactions. That this was the case seemed to him suf- 
ficiently well attested by the fact that the prices of various 
staple products such as wheat, mess pork, corn, hay, beef, etc., 
had risen little if at all. Moreover, he showed that the fluctu- 
ations in the premium had not coincided with changes in the 
volume of the circulation. Finally, he argued, "if there be 
a considerable real depreciation of the circulation which 
is by no means admitted " it is due not to redundancy of 
greenbacks, but to the needless increase in the note and 
deposit currency of banks. 1 

Mr. Chase's arguments reappeared during the debate in 
a number of variations. One gentleman declared that a 

i Report of the Secretary of the Treasury, December, 1862, pp. 12-15. Cf. Part 
II, chaps, ii, iii and i v. below, on the circulating medium, the premium on gold and 
the prices of commodities. 



THE THIRD LEGAL-TENDEB ACT 113 

bushel of wheat sold for a gold dollar in Europe and a paper 
dollar in America, and that as the wheat had everywhere 
the same intrinsic value there could be in reality no such 
difference between the value of paper money and coin as 
the premium on gold indicated. 1 Another member pro- 
pounded the doctrine that the rate of interest is an infallible 
test of the adequacy of the money supply. Since the rate 
of interest in the money market was high he refused to 
believe that the currency was unduly expanded. 2 Mr. 
Edwards declared that "a more fallacious idea was never 
put forth" than that "the difference between gold and the 
currency issued by the Government is the measure of 
depreciation." In his opinion the difference was due to 
the fact that gold was and greenbacks were not receivable 
at the customs houses. Gold had become "an article of 
merchandise." The supply of it was not equal to the 
demand, and in the scramble it had become "a monopoly in 
the hands of a few who hoard it because they know they 
can get a good price for it from the customer who is obliged 
to buy it." 8 

To refute such proofs that the currency was not redun- 
dant, Amasa Walker declared, on the authority of Calhoun, 
that the amount of currency required by the community was 
just one dollar for every twenty-five dollars of property. He 
estimated the property of the loyal states at $12,500,000,000. 
The proper amount of currency was therefore one-twenty- 
fifth of this sum, or $500,000,000. But there was in circu- 
lation some $850,000,000 of currency. That is, by his 
estimate, there was a redundancy of $350,000,000.* 

1 Mr. Shellabarger, Congressional Globe, 37th Cong., 3d Sess., p. 407. 

2 Mr. Watts, ibid., p. 391. 3 Ibid., p. 409. 

* Ibid., p. 339. Mr. Walker included bank deposits in his estimate of the volume 
of the currency. Calhoun's statement of the theory is not quite so bold and dogma- 
tic as Mr. Walker represented it. See Works of John C. Calhoun (New York, 1853), 
Vol. II, p. 347. 



114 HISTORY OP THE GREENBACKS 

Replying to Walker, Mr. Riddle raised no objection to 
the method of his argument, but declared that an important 
element had been omitted in the calculation the govern- 
ment required much more currency in time of war than in 
time of peace. "So far from there being a redundancy of 
the currency," he concluded, "I believe there is a defici- 
ency." 1 The commonest rejoinder to the statement of 
redundancy, however, was the assertion that prices of com- 
modities had not risen materially. 8 

But the matter was carried farther. Not satisfied with 
denying the depreciation of the paper currency, some mem- 
bers asserted that further inflation was necessary to facili- 
tate borrowing. This argument, too, seems to have been 
derived from a passage in Mr. Chase's report: 

The government can resort to borrowing only when the issue 
[of United States notes] has become sufficiently large to warrant 
a just expectation that loans of the notes can be had from those 
who hold or can obtain them at rates not less advantageous than 
those of coin loans before suspension. 3 

This language can hardly mean anything else than that the 
government should continue to issue its notes until their value 
had been so depressed that holders would be ready to 
exchange $100 of currency for an annual gold payment of 
$6. Congressmen at least took this view. Mr. Horton 
declared a further issue of currency necessary "in order to 
fund a large amount of debt."* Similarly Mr. Hooper 
opposed selling bonds below par and preferred to adhere to 
the policy of previous legislation, which, according to him, had 
been "to issue legal-tender notes in sufficient amount .... 
to float .... bonds and keep them at par." 5 Mr. Spaulding 

1 Congressional Globe, 37th Cong., 3d Sess., p. 383. 

2 Cf. ibid., remarks of Messrs. Hooper, p. 386, Watts, p. 391, Riddle, p. 383, and 
Walker's rather feeble reply, p. 407. 

3 Report of the Secretary of the Treasury, December, 1862, p. 14. 

Congressional Globe, 37th Cong., 3d Sess., p. 387. & Ibid., p. 412. 



THE THIRD LEGAL-TENDER ACT 115 

urged the same argument. The treasury found difficulty, 
said he, in borrowing currency to pay for the necessary 
loans; consequently more currency should be issued. 1 
Finally, Mr. Watts declared that he would issue legal-tender 
notes, "until the rate of interest should come down to such 
a reasonable notch that the government could afford to go 
with some prospect of ultimately paying the amount of its 
indebtedness and interest." 2 

Such talk marks the extreme length to which the idea 
that government should not sell bonds below par was carried. 
When the treasury was unable to get funds by selling bonds 
at par there were three possible courses: (1) to make the 
securities offered more attractive to investors by raising the 
rate of interest or lengthening the time for which they would 
run ; (2) to make no change in the terms of the bonds but to 
accept the market price for them ; (3) to decrease the value 
of the currency to a point where $100 in greenbacks was 
worth less in the minds of the public than the promise of a 
gold income of $6 for a term of years and final repayment 
in coin. The third course necessarily involved all the disor- 
ders caused by a depreciation of the money that served the 
community in its economic relations as a standard of value. 
But the demand for fresh issues to facilitate borrowing was 
virtually a recommendation of this third course. 

One amendment to the bill, destined in later years to be 
the subject of much criticism was made during the discus- 
sion in committee of the whole. Despite Secretary Chase's 
urgent recommendation, the "conversion" clause, permitting 
holders of greenbacks to exchange them at par for 6 per 
cent, bonds was retained in the bill as reported by the Com- 
mittee of Ways and Means. 3 Near the end of the debate, 
however, Mr. Horton moved to strike out this clause. "It 
simply leaves the option in the hands of the secretary of the 

1 Ibid., p. 287. 2 Ibid., p. 391. 3 Sec. 3, Ibid., p. 284. 



116 HISTORY or THE GREENBACKS 

treasury," he said in explaining the proposed amendment, 
"instead of the holders of the currency." * Very little atten- 
tion was paid to the change. Shellabarger and Stevens 
showed a disposition to question its wisdom, but it was 
accepted in committee of the whole without a division,' and 
when Shellabarger called for the yeas and nays upon it in 
the House they were not ordered. 3 

Three substitutes were proposed for the bill brought in 
by the Committee of Ways and Means. Thaddeus Stevens 
proposed one, of which the characteristic features were the 
issue of $300,000,000 in United States notes, payment of 
interest on bonds in "lawful money " instead of in coin, and 
repeal of the legislation authorizing the acceptance of deposit 
loans. 4 When this substitute was rejected by a vote of 39 to 
66, 5 Mr. Stevens imperturbably proposed a second. 8 As the 
House was disposed to insist upon payment of interest in 
coin a measure which seemed to Mr. Stevens to destroy 
"the simplicity and harmony " of the paper-money system 7 
he accepted this principle and proposed that any part of 
$900,000,000 might be borrowed on treasury notes bearing 
3.65 per cent, interest in coin, a legal tender to the same 
extent as greenbacks and redeemable at the pleasure of the 
government. 8 This proposition was defeated by a yea and 
nay vote of 37 to 91. 9 The third substitute, introduced by 
Mr. Hooper, reproduced with a few modifications of wording 
a bill submitted by Secretary Chase at their request to the 
Committee of Ways and Means, but not accepted by them. 10 
As Chase observed in his letter to the committee, "the pro- 
vision in respect to loans is very general." In order to 
secure $900,000,000 the bill authorized the secretary of the 
treasury to issue 6 per cent, bonds running twenty years or 

i Conffressional Globe, 37th Cong., 3d Sess., p. 455. Ibid., loc. cit. 

> Ibid., p. 522. * For text see ibid., p. 284. s n>id., p. 487. 

Ibid., p. 490. 1 1bid., p. 145. For text see ibid., p. 520. 

Ibid., p. 522. 10 See Hooper's explanations, ibid., p. 485. " Ibid., loc. cit. 



THE THIKD LEGAL-TENDER ACT 117 

less, or 6 per cent, treasury notes running not more than 
three years, or United States notes, without specifying any 
limit to the amount of these various securities to be issued 
beyond the provision that the aggregate of bonds, treasury 
notes, and United States notes should not exceed $900,000,- 
000. l This bill met a fate similar to Stevens's by an equally 
emphatic majority 32 to 67. 2 After these substitutes had 
been rejected the bill of the committee was passed without a 
division and sent to the Senate. 3 

In the Senate the finance committee proposed several 
amendments, of which the most important was the reduction 
of the issue of greenbacks from $300,000,000 to $150,000,- 
000. 4 Why the House Committee of Ways and Means had 
set the issue at $300,000,000 is not clear. Mr. Hooper, 
after a conference with Chase, told the House that the secre- 
tary seemed not to consider so large an issue necessary. 5 Yet 
the amount was not reduced, nor was there any discussion of 
the subject. However, no objection was raised to the Sen- 
ate's amendment reducing the issue by one-half. Appar- 
ently, the House was proceeding on Amasa Walker's maxim 
that in such an emergency it was "not worth while .... 
to be very particular." 6 Had it not been for the action of 
Senator Fessenden's committee the amount of greenbacks 
authorized during the war would have been $600,000,000 
instead of $450,000,000. 

The debate in the Senate was brief, and even more largely 
devoted to the clause taxing bank notes than had been the 
case in the House. The final vote was yeas 32, nays 4. 7 
March 3, 1863, the bill received President Lincoln's 
approval. 

This law authorized the secretary of the treasury to bor- 

1 For the text see ihnl., p. 484. 

2 Ibid., p. 487. 3 ibid., p. 522. * Ibid., p. 927. 
6 Ibid., p. 366. Ibid., p. 392. 7 ibid., p. 945. 



118 HISTORY OF THE GREENBACKS 

row on the credit of the United States $900,000,000. He 
could sell 6 per cent, coin-interest, ten-forty bonds on such 
terms as he might "deem most advisable." Of this sum 
$400,000,000 might be in three-year treasury notes bearing 
not more than 6 per cent, interest payable in " lawful money." 
These notes were to be a legal tender for their face value, 
excluding interest, of denominations not less than ten dollars 
and could be sold " on the best terms that can be obtained," 
or paid to creditors willing to accept them at par. Further, 
the secretary was empowered "if required by the exigencies 
of the public service, for the payment of the army and navy, 
and other creditors of the government, to issue .... the 
sum of $150,000,000 of United States notes, including the 
amount of such notes [$100,000,000] heretofore authorized 
by the joint resolution approved January 17, 1863." The 
clauses in the first and second legal-tender acts restrict- 
ing "the negotiation of bonds to market value" were 
repealed ; and holders of United States notes who desired to 
"convert" them into five-twenty bonds were required to 
present their notes for this purpose on or before July 1, 1863, 
after which date the right to exchange should " cease and 
determine." Finally, to take the place of the unsatisfactory 
postal currency, the secretary was authorized to issue notes 
for fractional parts of a dollar to an amount not exceeding 
$50,000,000, and a tax of 5 per cent, each half-year was 
imposed on fractional notes issued by any bank, corporation 
or individual. 1 

1 12 Statutes at Large, p. 709. 



CHAPTER V 

HOW FURTHER ISSUES OF GREENBACKS WERE AVOIDED 
IN 1864 AND 1865 

I. The Congressional Pledge to Issue no More U. S. Notes : 

Avoidance of Greenback Issues in Latter Part of War Due 
Chiefly to Increase of Taxation Success of 5-20 Loan in 1863 
Finance Report of 1863 Greenbacks in First Session of Thirty- 
eighth Congress. 
II. The Financial Difficulties of 1864: 

Chase's Difficulties from January to June Change of Secretaries 
Financial Straits During the Summer Fessenden's Report in 
December Improvement in the Situation. 

III. Secretary McCulloch and the Alley Resolution : 

7-30 Loan of 1865 Finance Report The Alley Resolution. 

IV. Recapitulation: 

Government Receipts of 1861-66 Decreasing Relative Importance 
of Loans Financial Role of the Greenbacks. 

I. THE CONGRESSIONAL PLEDGE TO ISSUE NO MORE 
U. S. NOTES 

SINCE no further issues of greenbacks were authorized 
after March 3, 1863, it may seem that discussion of the war 
legislation regarding them should end with the last chapter. 
But in passing upon the paper-money policy it is quite as 
necessary to understand how the issue of more greenbacks 
was avoided in the latter half of the war as it is to discover 
why such issues were made in 1862 and 1863. For thfs 
purpose a brief review of the treasury policy in 1864 and 
1865 must be added. 

Of course, the demands made upon the treasury in these 
later years were much heavier than they had been during 
the first half of the war. The expenditures other than pay- 
ments of principal of the debt rose from $470,000,000 in 
1862 and $719,000,000 in 1863 to $865,000,000 in 1864 and 

119 



120 HISTORY OF THE GREENBACKS 

$1,297,000,000 in 1865. 1 If recourse to United States notes 
was avoided in the second half of the struggle despite these 
enormously increased disbursements, the chief reason must be 
found in the more efficient revenue system. The slowness of 
the secretary to recommend and of Congress to enact heavy 
taxes in the earlier stages of the war has been commented 
upon. 2 There was no great hesitation in raising the customs 
dues on imported articles, but the results from the fiscal point 
of view were not of great moment, because Congress seemed 
more inclined to strengthen the protective than the revenue 
features of the tariff. The direct tax imposed by the summer 
session in 1861 was of slight avail. In no year during the war 
did the receipts from this source reach $2,000,000. Internal 
taxes were not levied until July 1, 1862, when a very elaborate 
system was created, according to which almost everything 
that seemed to Congress susceptible of yielding a revenue 
was subjected to a duty. 3 This system was amended and 
extended by the acts of June 30, 1864, and March 3, 1865. 4 
At first the results of this system did not meet expectations. 
Chase estimated for the first year of its operation that the 
receipts would be $85,500,000, and they proved to be but 
$37,500,000 less than half the anticipated sum. 6 But 
as the tax officials became more familiar with their duties 
and the imperfections shown by experience to exist in the 
first legislation were remedied, receipts increased very 
rapidly. In 1864 they were $110,000,000, in 1865 $209,- 
000,000, and in 1866 $309,000,000. 

Such large receipts from taxation not only provided an 
increasing proportion of the sums needed to meet expendi- 
tures, but also improved the credit of the government as a 

1 For these and similar figures given below see the table of receipts and expendi- 
tures for past years published in every Report of the Secretary of the Treasury. 
iCf. Part I, chap, i, p. 18, and chap, ii, p. 72, above. 

3 12 Statutes at Large, p. 432. * 13 Statutes at Large, pp. 223, 469. 

^Report of the Secretary of the Treasury, December, 1863, p. 3. 



HOW FUBTHEB ISSUES WERE AVOIDED 121 

borrower. At the same time more efficient methods of 
negotiating loans were devised. The happiest of Mr. Chase's 
financial expedients was the arrangement into which he 
entered with Jay Cooke in October, 1862, for selling the 
five-twenties authorized by the first legal-tender act. The 
system of agencies which Mr. Cooke organized was so suc- 
cessful in obtaining subscriptions that the fiscal year, 1863, 
which had opened badly, ended most fortunately, despite 
the untoward military events of May and June, when Grant 
seemed to the public to be making little advance against 
Vicksburg, and Lee and Bragg were invading the North. 
The accumulation of unpaid requisitions that was already a 
cause of solicitude when Chase sent his report to Congress 
in December, 1862, had mounted by the close of the session 
to $72,000,000. But when the third legal-tender act, with 
its ample provision for loans and repeal of the funding 
clause, had become a law, the lagging sale of bonds became 
so rapid that "within two months after the adjournment of 
Congress the whole mass of suspended requisitions had been 
satisfied, all current demands promptly met, and full provi- 
sion made for the pay of the army and navy." At the end 
of the fiscal year there was a balance of over $5,000,000 
in the treasury. 1 

Encouraged by Cooke's continued success, Mr. Chase in 
his report of 1863 took ground against further issues of 
greenbacks. " The limit prescribed by law to the issue of 
United States notes," said he, "has been reached, and the 
Secretary thinks it clearly inexpedient to increase the 
amount." 2 Instead, he recommended such modifications of 
the internal revenue system as should increase the receipts 
to $150,000,000." If this recommendation should be fol- 
lowed he entertained "little doubt of being able to obtain 

1 Report of the Secretary of the Treasury, December, 1863, p. 2. On the arrange- 
ment with Jay Cooke see H. R. Executive Document JVo.ee,37th Cong., 1st Sess. 

2 Report of the Secretary of the Treasury, December, 1863, p. 17. 3 ibid., p. 10. 



122 HISTORY OP THE GREENBACKS 

whatever funds will be needed, through loans, at reasonable 
rates of interest, for bonds or treasury notes." ' 

Apparently Congress concurred in the secretary's belief 
that further issues of United States notes would be detri- 
mental. Justin S. Merrill seems to have expressed the 
general feeling: 

To force the Treasury to issue legal tender notes in any way 
beyond the present limits though the wages of labor, though 
the pay of salaried men and of the soldier, should be increased 

would result in disappointment and disaster Let us have 

taxes ; let us have loans ; something, at all events, which will 
reduce the amount of legal tenders now outstanding. 2 

Not only did the thirty-eighth Congress decline to 
increase the issues of United States notes, but it inserted 
in the " act to provide ways and means for the support of 
the Government," approved June 30, 1864, the following 
proviso: 

.... nor shall the total amount of United States notes, issued 
or to be issued, ever exceed four hundred millions of dollars, and 
such additional sum, not exceeding fifty millions of dollars, as may 
be temporarily required for the redemption of temporary loan [sic]. 3 

This important clause, pledging that no more United States 
notes would be issued, attracted slight attention. But one 
feature of the debate is of interest- Thaddeus Stevens, con- 
sistent to the last, made " one more effort to save the national 
credit," as he put it, by proposing to pay the interest on the 
new loans in paper money instead of in coin. 4 Again he 
failed. 

II. FINANCIAL DIFFICULTIES OF 1864 

The pledge thus given by the first session of the thirty- 
eighth Congress was kept despite the financial embarrass- 
ments of the summer of 1864, and the enormous expen- 

1 Report of the Secretary of the Treasury, December, 1863, p. 18. 

2 Congressional Globe, 38th Cong., 1st Sess., p. 1716. 

3 Sec. 2, 13 Statutes at Large, p. 219. 

* Congressional Globe, 38th Cong., 1st Sess., pp. 3212 ff. 



How FURTHER ISSUES WERE AVOIDED 123 

ditures of 1865. During the year ending June 30, 1864, the 
expenditures exceeded Mr. Chase's anticipations by $116,- 
000,000. 1 Though there was a similar excess of the actual 
over the estimated receipts from taxation and miscellaneous 
sources of $104,000,000, 2 it was still necessary to borrow 
immense sums. Over $320,000,000 of the five-twenties were 
sold by Mr. Cooke and the treasury agencies, but the sub- 
scription books closed January 21. In arranging for a new 
loan Mr. Chase made three changes. He offered bonds that 
would run twice the time of the five-twenties, but he reduced 
the rate of interest from 6 to 5 per cent., and instead of 
employing Jay Cooke again as general agent he tried to sell 
the bonds through national banks and other agencies under 
supervision of the treasury department. 3 In consequence 
of these changes and the slow progress of the northern armies 
in the winter and spring of 1864 the "ten-forty loan," as it 
was called, was as marked a failure as the five-twenty loan 
had been a success. By the end of the fiscal year only $73,- 
000,000 had been sold.* 

This failure left a deficit which Mr. Chase could find no 
better way of filling than by issuing more legal-tender notes. 
The new issues, however, were of a type different from the 
greenbacks in that they ran for definite terms and bore 
interest which it was hoped would lead holders to retain 
them as an investment instead of putting them into circula- 
tion as money. During the half year January to June, 
1864, issues of such interest-bearing legal-tender notes in 

1 Compare Reports of the Secretary of the Treasury, December, 1863, p. 5, and 
1864, p. 6. 

2 Ibid., 1864, loc. cit. 

3 See Chase's letter to Fessenden, SCHUCKERS, op. cit., p. 416. In explaining this 
change of plan Chase wrote : " I have not forgotten the calumnies for which my 
employment of a general agent was made the occasion, and I confess it was princi- 
pally with a view of avoiding these calumnies that I abandoned the general agency 
system." 

* BATLEY, op. cit., p. 164. 



124 HISTORY OP THE GREENBACKS 

excess of redemptions were made to the amount of $163,- 
000,000.' Despite all Chase's efforts to obtain funds, how- 
ever, demands upon the treasury piled up more rapidly than 
they could be met. Though on the 1st of July there was a 
nominal balance of $19,000,000 on hand, there were also 
unpaid requisitions that on the 5th amounted to $72, 000, 000. " 

At this uneasy juncture a change of secretaries occurred. 
In May, John J. Cisco, the experienced chief of the New 
York subtreasury, had sent in his resignation to take effect 
June 30. Chase and Senator Morgan, of New York, came 
into conflict over the appointment of his successor. Though 
the cause of disagreement was finally removed by Cisco's 
consenting to remain in office, Chase could not resist the 
temptation to impress upon the president the necessity of 
deferring to the wishes of his secretary of the treasury by 
sending him a note of resignation. Three or four times 
before when Mr. Chase had tried 'similar tactics to carry a 
point, Mr. Lincoln had begged him to reconsider the step. 
Consequently, Chase was disagreeably surprised when, on 
June 30, he received a note from the president accepting his 
resignation. 3 After the vacant position had been refused by 
Governor David Tod, of Ohio, W. P. Fessenden, of Maine, 
chairman of the Senate finance committee, reluctantly con- 
sented to assume its responsibilities. 

The new secretary found himself in a very difficult posi- 
tion. Beside the $72,000,000 of unpaid requisitions, there 
were outstanding $162,000,000 of certificates of indebted- 
ness. Receipts from customs were hardly more than enough 
to pay interest on the debt, and from internal revenue duties 

1 There were three varieties of these issues : the one-year and the two-year notes 
of 1863, and the compound interest notes. See BAYLEY, op. cit., pp. 161-3; Report of 
the Secretary of the Treasury, December, 1864, p. 3. On their circulation as money 
see Part II, chap, ii, sec. vi, below. 

2 Report of the Secretary of the Treasury, December, 1864, p. 19. 

3 See the letters published in WARDEN, op. cit., p. 614 ; cf. SCHUCKEES, op. cit., 
chap, xlv, and pp. 505-10; HAET, op. cit., pp. 315-18. 



How FURTHER ISSUES WERE AVOIDED 125 

not more than $750,000 a day was expected. Meanwhile the 
daily expenses were estimated at not less than $2,250,000.' 
Nor was the prospect bright for securing funds by borrow- 
ing. Three days before Fessenden came into office a loan 
on seventeen year 6 per cent, bonds offered by Chase at 
104 or above was withdrawn from lack of takers. 2 A promis- 
ing attempt to secure $50,000,000 from the banks of New 
York, Boston, and Philadelphia, was blocked by the sub- 
treasury law which was held to prevent the secretary from 
drawing upon any but national banks. 3 Fessenden then 
decided upon a popular subscription for seven-thirty notes 
authorized by the act of June 30, 1864. Although he 
incurred considerable expense in advertising this loan the 
sums realized were not large. 4 The unpaid requisitions 
now amounted to more than $130,000,000, and the secretary 
" resolved to use all the means at his command to pay so 
much, at least, as was due to .... soldiers, who were suf- 
fering from the long delay in satisfying their just claims." 
For this purpose he was compelled, much against his will, 
to issue over $80,000,000 of legal-tender compound-interest 
notes. He also used over $20,000,000 of seven-thirties in 
paying the army, and raised $33,000,000 more on the sev- 
enteen-year bonds which Mr. Chase had been unable to sell. 5 
But all these shifts did not bring in sufficient means, and 
the quarter ending with September showed a deficit of 
$130,000,000. 6 

Still, when Secretary Fessenden prepared his report to 
Congress he did not recommend an increase in the issues of 
greenbacks. To push the circulation of government notes 

1 Report of the Secretary of the Treasury, December, 1864, pp. 19, 20. 

2 See Chase's letter to Fessenden, SCHUCKEBS, op. cit., p. 415 ; cf. Hunt's Mer- 
chants' 1 Magazine, Vol. LI, pp. 42 and 129. 

* Report of the Secretary of the Treasury, December, 1864, p. 20 ; Hunt ' Merchants' 
Magazine, Vol. LI, pp. 129, 130. 

* Revort cited in preceding note, p. 20. 8 Ibid., p. 21. 6 Ibid., p. 39. 



126 HISTORY OP THE GREENBACKS 

"far, if at all, beyond its present limit," he said, "could 
only be justified by absolute necessity." ' The operations 
of the treasury during his brief incumbency had satisfied 
him " not only of the ability of the people to furnish, at a 
short notice, such sums as may be required, but [also] of 
the entire confidence felt in the national securities." 2 
What sort of loans should be offered he left for Congress to 
decide, but he felt that as an aid in negotiations the secre- 
tary should be granted a discretionary power to increase the 
currency. 3 For the rest, he recommended that the internal 
revenue duties be increased and extended to a point where 
they would yield $300,000,000 a year. 4 

Even before this report was sent to Congress the financial 
situation seems to have improved. This improvement was 
doubtless due in large measure to the successes of the Union 
armies that began to hold out an increasingly definite promise 
of peace. Under such circumstances borrowing became easier. 
During the quarter October to December Fessenden secured 
$20,000,000 from compound interest notes, $36,000,000 
from ten-forties, $54,000,000 from seven-thirties, and $77,- 
000,000 from five-twenties. In the next three months he 
raised $56,000,000 on ten-forties and $185,000,000 on 
seven-thirties. Meanwhile the redemptions of greenbacks 
were slightly, and of certificates of indebtedness largely, in 
excess of issues, and while considerable amounts of compound 
interest notes were paid out they were more than offset by 
redemptions of one and two-year notes of 1863. 5 

III. SECRETARY McCULLOCH AND THE ALLEY RESOLUTION 

When President Lincoln entered upon his second term 
Fessenden was allowed to lay down his uncongenial burden. 
His successor, Hugh McCulloch, was strongly recommended 

i Report of the Secretary of the Treasury, December, 1864, p. 17. 

2/6id., p. 21. 3 ibid., p. 22. 

/bid., p. 14. 5 cf. BAYLEY, op. cit., pp. 157-63. 



How FURTHER ISSUES WERE AVOIDED 127 

by his success as president of the Bank of the State of 
Indiana and his services as the first comptroller of the 
treasury in organizing the national banking system. 

Though the war was obviously nearing its end, the task of 
the new secretary was by no means easy. The armies could 
not well be disbanded until the government was provided 
with funds sufficient to meet all arrears of pay, including 
bounties and cost of transportation. To secure means, Mr. 
McCulloch arranged for a popular subscription for seven- 
thirty notes, and employed Jay Cooke as general agent. As 
before, Cooke was eminently successful. By the end of 
July $530,000,000 of seven-thirties had been sold, and 
McCulloch had, in his own words, " the unexpected satis- 
faction of being able, with the receipts from customs and 
internal revenue and a small increase of the temporary loan, 
to meet all the requisitions upon the treasury." ' 

The war over, McCulloch set himself to reducing the 
government finances to more manageable shape. In his 
annual report for 1865 he estimated that at the close of the 
current fiscal year the national debt would amount to about 
$3,000,000,000. 2 To reduce this sum, the secretary 
proposed that $200,000,000 be spent each year in payment 
of interest and principal. 3 Such payments, he showed, would 
extinguish the debt, if funded at 5^ per cent., in thirty- 
two years.* But he laid chief stress upon the desirability of 
reducing the volume of currency as a preliminary to resum- 
ing specie payments at an early date. 

The present legal-tender acts [he said] were war measures, and 
while the repeal of those provisions which made the United States 
notes lawful money is not now recommended, the Secretary is of 
the opinion that they ought not to remain in force one day longer 
than shall be necessary to enable the people to prepare for a 
return to the constitutional currency. 5 

1 Report of the Secretary of the Treasury, December, 1865, pp. 36, 37. 

^ Ibid., p. 22. 3 ibid., p. 25. */&*., p. 23. *Ibid., p. 4. 



HISTORY OP THE GREENBACKS 



He therefore recommended that he be empowered to sell 
bonds "for the purpose of retiring not only compound 
interest notes, but [also] the United States notes." ' 

That Congress shared the secretary's desire to resume 
specie payments speedily seemed to be sufficiently shown by 
the prompt action of the House of Representatives upon a 
resolution introduced by John B. Alley, of Massachusetts. 
It ran as follows: 

Resolved, That this House cordially concurs in the views of the 
Secretary of the Treasury in relation to the necessity of a contrac- 
tion of the currency with a view to as early a resumption of specie 
payments as the business interests of the country will permit; and 
we hereby pledge co-operative action to this end as speedily as 
practicable. 

This resolution was adopted without debate on December 
18, by a vote of 144 to 6. 2 The story of how the fulfilment 
of the promise of resumption was delayed for thirteen years 
does not belong to the war history of the greenbacks. 

IV. RECAPITULATION 

The r6le played by the greenbacks as a financial resource 
at different stages of the Civil War can best be shown by a 
tabular recapitulation of the receipts of the treasury from 
different sources during the fiscal years 1861-66. 

The "net ordinary receipts" shown in this table are taken 
from the reports of the secretary of the treasury. They 
include, besides import duties and internal-revenue taxes, 
proceeds of sales of public lands and all miscellaneous items. 
The notable fact concerning them is the rapid increase from 
year to year an increase for which the internal-revenue 
system deserves the lion's share of credit. From a tenth 
in 1862, the proportion of ordinary to total receipts rose 

1 Report of the Secretary of the Treasury, December, 1865, p. 14. 

2 Thirty-two members did not vote. Congressional Globe, 39th Cong., 1st Sess., 
p. 75. 



How FURTHER ISSUES WERE AVOIDED 



129 



- :- 

3 i 

w 

H > 





hl-U 


O 


O50-* 


o-* N!o3T 


I 


PH 


S 


S333 


5S -"17 


iH 


."3 2 


pj 


O3OOJ 


wos c-oo-* 




^3 Win 

a !2 


15 

<o 


ssl 


OM CQM 
rtrt | | 




ft~S 


O 


Oi-lO 


iHOO iHNC^ 


g 


si 





CM TH 


S8 5! J^ 


T-( 


.02 


O 


oaia 


ON i-lt-JJ 




a ii 


s 


s*a 


ii N J; 




fe"S 





-. 3-. [- 


lH C OOCO t 


1 


ft 8 


8 


833 


"*o a>^-^> 


S 


.oS 


* 


-*OTC- 


t-jq O>CDO5 




S Jl 


15 


3^ 


11 s"2, 




fe"S 


O 


003093 


e<j^ i-it-oo 





OH 


1 


i- :- ' ~ 


3^ SS3 


IH 


1^5 


IM 


H.-I5D 


^HlO -*M?? 




111 

3fi 


i 


(NCSt- 

a 5009 


U3H 1-INcS 




fe"a 





t-lH 


eow eoc-^T 


<M 


^s 





S3 


S3 3^S 


H 


J02 


** 


rt 


K5D 'W5a> 




a ll 


i 


r. 

Bv 


JO> -* OCOO 
CC 10 TH ko ^ 




^s 


O 


* 


t-e> U3 


S 


P4 





S3 


& I 




."02 


m 


into 


on co 




~ -r.-, 
*-! H^ 

^^ 


S 


53 


33 I 










Efllj 

: : u : 








en 1 

. ; 


i ; :| 

g 3:9? 

5 s :'?o 






Total net receipts . 


Net ordinary rece 
Customs 
Internal revenu* 


Net receipts from 
Bonds 
Short-time intei 
gations 
Non-interest-bes 
[United States r 



130 HISTORY OF THE GREENBACKS 

to a quarter in 1864, and it would have been considerably 
instead of slightly larger in 1865 had not customs duties 
fallen off so largely in consequence of the tariff act of June 
30, 1864, which discouraged legal importations and stimu- 
lated smuggling. 1 

By " net receipts from loans " is meant the receipts minus 
sums employed in paying principal of the public debt. 
These receipts are divided into three classes, according to 
the kind of security upon which money was borrowed. Each 
class is charged with all redemptions of securities falling 
within it and credited with all new issues, including 
premiums realized on sales. 2 When the redemptions exceed 
the issues the fact is indicated by placing a minus sign 
before the figures. 

Two matters of interest are brought out by the exhibit. 
The first is the correlative of the point already noticed; 
as the revenue system became more efficient, a smaller pro- 
portion of the means necessary to carry on the war had to 
be borrowed. From nine-tenths in 1862 the proportion 
fell to three-quarters in 1864 and 1865. The second matter 
concerns the method of borrowing. At first reliance was 
placed rather on issues of circulating currency than on sales 
of bonds ; but with increasing experience the secretaries used 
bonds and interest-bearing treasury notes more and green- 
backs less. To make this clearer a supplementary table is 
added giving the proportions of the net receipts from loans 
obtained from the three classes of securities. 

From this table it appears that the greenbacks were not an 
important financial resource after June, 1863. In the fiscal 
year, 1862, more than a fifth, and in 1863 nearly half of the 

1 Cf. Report of the Secretary of the Treasury, December, 1864, pp. 13, 26. 

2 Issues and redemptions of the principal of the debt are com piled from BATLET, 
op. cit. Premiums are as given by DE KNIGHT, History of the Currency of the 
Country and of the Loans of the United States, Treasury Department Document No. 
1943, pp. 121, 122. 



How FURTHER ISSUES WERE AVOIDED 



131 



TABLE III 

PROPOBTION OF THE NET RECEIPTS FROM LOANS DERIVED FROM BONDS, SHORT- 
TIME INTEREST-BEARING OBLIGATIONS, AND FROM NON-INTEREST BEAR- 
ING OBLIGATIONS FOR THE FISCAL YEARS 1861-66 





1861 


1862 


1863 


1864 


1865 


1866 


Net receipts from loans 


100% 


100% 


100% 


100% 


100% 


100% 


Bonds 


101.3 


13 8 


28 9 


67 1 


39 3 


119 9 


Short-time interest-bear- 
ing obligations 


1.3 


49 6 


28 6 


26 7 


60 4 


7.2 


Non-interest-bearing obli- 
gations 




36.6 


42.5 


6.2 


.3 


-27.1 


[United States notes] 


[-...] 


[22.8] 


[48.5] 


[6.3] 


[-.2] 


[-28.6] 



loans were represented by issues of United States notes, but 
in 1864 the proportion fell to a sixteenth, and thereafter the 
redemptions were greater than the issues. This statement, 
however, does not by any means show the real financial 
effect of the greenback policy. More important than the 
nominal amount of the issues was the influence of the paper 
money upon the price of supplies bought by the government. 
But this is a large subject that must be reserved for a future 
chapter. 1 

i See Part II, chap, x, below. 



PART II 
ECONOMIC CONSEQUENCES OF THE LEGAL-TENDER ACTS 



CHAPTER I 

PRELIMINARY SKETCH 

THE preceding chapters have shown that the policy of 
issuing irredeemable paper money was adopted because of the 
financial embarrassments of the federal government. But the 
policy thus adopted for purely fiscal reasons had serious 
consequences of quite other than a fiscal nature. It caused 
a grave disturbance of established economic relations and 
affected for good or ill the economic circumstances of 
almost every person in the country. The purpose of the 
present part is to trace out these consequences in as clear a 
fashion as the available materials permit. Of necessity the 
analysis must be intricate and tedious, because to be faith- 
ful it must deal with a bewildering complexity of conditions 
and must attempt to distinguish between the effects of a mul- 
tiplicity of economic causes. Perhaps the best way to give 
a degree of coherence to the details will be to preface the 
analysis with a sketch of the general nature of the economic 
disturbances that characterized the period. 

In the first place, then, suspension of specie payments 
threw the monetary circulation of the loyal states into dis- 
order by causing the withdrawal of gold and silver coin from 
common use as money. The inconveniences that attended 
this withdrawal and the various substitutes that were 
employed to take the place of specie as media of exchange 
form the subject of the next chapter. 

But, though the inconveniences caused by these changes 
in the medium of exchange were not slight, they were less 
serious than were the results produced by the change in the 
standard of value. For about nine years before suspension 

135 



136 HISTORY OP THE GREENBACKS 

the money unit of the United States in which all prices 
were reckoned and debts discharged, had been, in fact, if 
not in legal theory, the gold dollar. 1 The legal- tender 
acts substituted the greenback for the gold dollar as this 
unit. Now the gold dollar had contained 23.2 grains of 
pure metal, but the greenback dollar that took its place was 
at no time during the war worth so much as this. A year 
after the passage of the first legal-tender act a greenback 
dollar would purchase but 14.5 grains of gold. Though 
from this point its value advanced until in August, 1863, it 
was worth 18.4 grains, the rally was followed by a serious 
relapse that culminated in July, 1864, when the paper 
dollar was worth but 9.0 grains. Another advance carried 
the value to 17.1 grains in May, 1865, and another relapse 
reduced it to 15.9 grains at the end of the year. The course 
and causes of these fluctuations in the gold value of the 
standard money are dealt with in chap. iii. 

It was this depreciation of the money unit that gave rise 
to the most complicated and interesting economic develop- 
ments of the war period. Of course, in exchanging com- 
modities for money men were unwilling to give as much for 
a dollar worth 9 grains of gold as they had given for the dol- 
lar worth 23.2 grains. What is tantamount to giving less 
goods for the dollar, they demanded more dollars for the 
goods. The decline in the specie value of the greenbacks, 
therefore, produced an extraordinary rise of prices, which is 
investigated in chap. iv. 

From the very organization of a modern industrial 
society, such a rise of prices must produce far-reaching dis- 
turbances. The complex process of producing and distribut- 
ing wealth is carried on by a succession of money payments. 
Business-men buy materials for money prices, lease land for 
money rents, borrow capital expressed in money for the pay- 

1 Cf. LACOHLIN, History of Bimetallism in the United States (4th ed., 1897), p. 86. 



PRELIMINARY SKETCH 137 

ment of money interest, hire labor for money wages, sell 
their products for money, and in money reckon their profits. 
At bottom, of course, this highly developed system of money 
payments is only a mechanism for distributing among the 
members of society the economic satisfactions which are the 
real goal of effort. But under the present regime the eco- 
nomic satisfactions which any individual can obtain what 
may be called his "real income" depend proximately on 
the purchasing power of his money income. The rise of 
prices that resulted from depreciation decreased, of course, 
the purchasing power of a given money income. As a result 
the economic satisfactions received by all those whose money 
incomes did not rise as quickly and in as great degree as 
prices, were diminished. 

But the matter could not rest there. Men did not long 
remain content with the same money return, when the 
economic satisfactions it enabled them to command had 
declined so considerably. As prices rose, then, all classes 
in the community which contributed of their property or 
their services to the process of production insistently 
demanded a larger sum of money for their co-operation. 
The economic situation apparently favored their success. 
For depreciation of the currency of itself did not decrease 
the amount of commodities produced and services offered 
the source from which the real income of all classes in the 
community is drawn nor did it affect directly the relative 
supply of and demand for the various factors of production; 
it altered only the division of these commodities and 
services among the various classes that shared in them. 
Those persons whose money incomes had not advanced pari 
passu with prices received a less proportion than before, 
and those whose money incomes had increased more rapidly 
than prices commanded a larger proportion. But it was the 
former distribution of wealth that was the outcome of the 



138 HISTORY OF THE GREENBACKS 

existing economic conditions. The change in the distribu- 
tion, caused by depreciation of the standard of values, was 
from the standpoint of the situation before suspension an 
artificial disturbance. Under the operation of free competi- 
tion, a readjustment of the nominal amounts of money pay- 
ments the mechanism by which real income is distributed 
was therefore to be expected, in the direction of restoring 
the relative distribution of wealth between different classes 
prevailing before the disturbance had occurred. 

A further consequence of depreciation, therefore, was to 
start a readjustment of money incomes, whether derived from 
rents, interest, or wages. But this process of readjusting the 
whole system of money payments so as to restore real incomes 
was certain to encounter serious obstacles. 

1. At any given time business men are bound to a con- 
siderable extent by legal contracts calling for the payment 
or receipt of specified sums for specified goods or services. 
They are under engagement to pay set amounts for rent 
and interest ; they owe others and others owe them accounts 
payable in legal money ; they have agreed to buy materials 
at fixed prices, or to supply others with their own products; 
they have borrowed and lent money; when due the loans 
are to be paid in the standard currency ; they have contracted 
with others to give or receive their services at certain 
salaries, etc. Whether the purchasing power of dollars 
rises or falls, such contracts are fulfilled by the payment of 
the specified number of dollars. Until the termination of 
the contracts there is no alteration in the nominal amount 
of the money to be paid. In this way the scale of money 
payments existing before depreciation is legally petrified 
and enforced for a while in the new situation where the same 
sum of money means less economic satisfactions. 

2. Rapid readjustment is further hindered by the fact 
that the nominal amount of many money payments is a con- 
ventional sum, not subject as a rule to bargaining between 



PRELIMINARY SKETCH 139 

the parties. The fee of the bootblack, the barber, the notary, 
the physician ; the price of a newspaper, a cigar, a ride in 
the street-car, in some places the monthly wage of a farm 
hand these and many other payments are not easily changed 
in amount. 

3. Even where legal contracts are not in the way, and the 
prices paid are mostly the subject of bargaining, the change 
in the amount of payments produces friction. The complex 
system of money payments, by which the distribution of 
wealth is effected, is an organic whole, and a change in one 
part encounters serious opposition unless all the other parts 
are similarly altered. A change in the scale of money pay- 
ments that affects all simultaneously and in the same propor- 
tion would proceed smoothly and work hardship to no one. 
But changes do not occur in this manner. They always start 
somewhere, and extend spasmodically over the rest of the 
field. Persons whose products or services do not at once 
rise in price, oppose, so far as they can, changes which 
increase their money expenditures. Laborers may demand 
an increase of wages because the price of food has risen. But 
the employer cannot accede to the request, without injuring 
himself, until the price of his products has advanced. If he 
sell to other dealers, they object strenuously to paying 
higher prices unless sure the increase can be shifted onto 
others. And consumers exceedingly dislike paying more 
for their goods especially if their own money incomes have 
not risen. So at every step the advance in the scale of 
money payments is impeded. 

4. The readjustment in the scale of money payments, 
then, that is necessitated by an alteration in the standard 
money works itself out in a period of economic stress and 
strain. During the Civil War the tenseness of the situation 
was increased by the constantly varying degrees of deprecia- 
tion. There was not a single shift from a higher to a lower 
level; the standard of value was fluctuating all the time. 



140 



HlSTOBY OF THE GREENBACKS 



Before a readjustment of money payments to a scale that, at 
the existing value of a dollar, would restore real incomes 
approximately to what they had been could be worked out, 
the value of the dollar had changed again and a new adjust- 
ment on a new basis began. 1 The price level was constantly 
changing, and each new change unsettled real incomes afresh 
and precipitated a new struggle for a readjustment of money 
payments. While the war continued no adjustment could 
be even tolerably stable, for the next week's war news might 
raise or lower the value of the government's notes which 
served as the community's money several per cent., and so 
produce new confusion. 

A study of the economic consequences of the issue of legal- 
tender paper currency as a measure of "war necessity" 
becomes, then, primarily an examination of the intricate 
effects of the changes in the purchasing power of the standard 
money upon the distribution of what Marshall calls the 
"national dividend." The most important problem is to dis- 
cover how the real incomes of laborers, landlords, capitalists, 
and active business managers were affected. Beyond this 
problem lies the question what effect these changes in real 
income had upon the consumption and production of wealth. 
Such in brief are the subjects discussed in chaps, v-ix. 

1 The rapidity and violence of these fluctuations may best be seen from the 
following tabular statement of the percentage of alternating depreciation and 
appreciation in the specie value of the greenback dollar : 



Month 


Average 
Gold Value 
of $1 in 
Paper 
Money 


Rise (+), 
or 
Fall (-) 


Per Cent, of Appreciation or Depre- 
ciation in Gold Value of the Cur- 
rency 


December, 1861 


$1.00 






February, 1862 


.966 


0.034 


Fall of 3.40 per cent, in 2 months 


April, 1862 


.985 


+ .019 


Rise of 1.97 per cent, in 2 months 


February, 1863 


623 


.362 


Fall of 36.75 per cent, n 10 months 


August, 1863 


.795 


+ .172 


Rise of 27.61 percent, n 6 months 


July, 1864 


.387 


.408 


Tall of 51 .32 per cent, in 11 months 


May, 1865 


.737 


+ .350 


Rise of 90.44 per cent, n 10 months 


December, 1865 


.684 


.053 


Fall of 7.19 per cent, in 7 months 











CHAPTER II 
THE CIRCULATING MEDIUM 

I. Gold and Silver Coin: 

Money in Use Before Suspension Disappearance of Gold After 
Suspension in East Continued Use in California. 

II. Bank Notes: 

Exceptions to Rule of Suspension Obstacles to Free Circulation 
of Bank Notes Redemption in Greenbacks Increase of Note 
Issues. 

III. Old Demand Notes : 

Attitude of Banks Demand Notes at a Discount Temporary 
Loan Scheme Effect of Legal -Tender Act. 

IV. "Shinplasters" and Fractional Currency: 

Disappearance of Silver Coin Issues of "Shinplasters" Postage 
Currency Fractional Currency. 

V. Minor Coins : 

The Premium on Nickel Cents Its Cause New Bronze Cents 
Other Minor Coins. 

VI. Treasury Notes : 

Greenbacks One and Two Year Notes of 1863 Compound 
Interest Notes Use of Certificates of Indebtedness and Seven- 
thirties as Currency. 

VII. Recapitulation : 

Chaotic Condition of Circulating Medium Uncertainty Regard- 
ing Volume. 

I. GOLD AND SILVEB COIN 

BEFORE the banks and the treasury suspended specie pay- 
ments, December 30, 1861, 1 the monetary circulation of the 
United States consisted of (1) gold coin, (2) subsidiary sil- 
ver coins for fractional parts of a dollar, (3) one-cent pieces 
of a copper and nickel alloy, (4) treasury notes of the gov- 
ernment payable on demand, and (5) circulating notes issued 

i See Part I, chap, i, pp. 40, 41. 

141 



142 HISTORY OP THE GREENBACKS 

by banks chartered under state laws. 1 The specie in circu- 
lation was estimated by the director of the mint in October, 
1861, at from $275,000,000 to $300,000,000, of which he 
thought not more than $20,000,000 was at the South ; a the 
demand notes outstanding were $33,500,000," and the bank 
notes reported as issued by the 1,289 institutions in the 
loyal states amounted to about $129,000,000.* 

Suspension threw this whole system into disorder. Gold 
coin, the only full legal-tender money in use, was withdrawn 
from general circulation as soon as the banks and the treasury 
ceased paying it out, and the country was left dependent upon 
a currency of paper money which the issuers were not pre- 
pared to redeem in specie. 

It is not quite accurate to say that gold coin ceased to 
circulate. The banks continued to hold large amounts of 
specie in their reserves, 5 while the government paid interest 
on a large portion of its debt in gold and required the use 
of gold by importers in payment at the customs houses. 
More than this, there was a section of the country where the 
greenbacks did not succeed in displacing coin even in com- 
mon business transactions. 

In 1862 there were but very few banks in states west of 
Kansas and Nebraska. 6 Indeed, in California, the wealthiest 
and most populous of the far western states, the existence 
of banks of issue was expressly prohibited by the state 

1 Silver dollars had not been in common use for many years, because they were 
worth more as bullion than as money. See the table showing the average value of 
an American silver dollar each year from 1834 to 1862 in H. R. LINDEKMAN'S Money 
and Legal Tender in the United States (New York, 1879), p. 161, and compare 
L A uc ; H 1. 1 N , History of Bimetallism in the United States, chaps, iv, v. 

2 Finance Report, 1861, p. 62. 3 ibid., 1862, p. 9. 

* Compiled from the "Synopsis of the Returns of the Banks in the Different 
States," published in the Finance Report for 1862, pp. 189 ff. 

5 According to the "Annual Reports on the Condition of the Banks," the amount 
of specie held by institutions in the loyal states increased from $76,400,000 at the 
beginning of 1862 to $81 ,500,000 at the beginning of 1863. H. R. Executive Document 
No. 25, 37th Cong., 3d Sess., p. 209; and No. 20, 38th Cong., 1st Sess., p. 211. 

6 See the bank reports cited in preceding notes. 



THE CIRCULATING MEDIUM 143 

constitution. 1 "Suspension" was, therefore, a much less 
momentous occurrence for these communities than for those 
of the East, where business centered around highly developed 
banking systems. West of the Rocky Mountains men con- 
tinued to buy and sell for coin, giving little thought to the 
fact that bank notes in circulation elsewhere were no longer 
redeemed in specie. 

But when Congress, by the act of February 25, 1862, 
provided for the issue of $150,000,000 of United States 
notes and made them a legal tender between individuals, the 
currency troubles of the rest of the country were brought 
home even to Californians. Under this law it was techni- 
cally possible for a person who had bought goods from a San 
Francisco jobbing merchant to compel his creditor to accept 
in payment greenbacks worth considerably less than the 
expected gold. Elsewhere this situation had been prepared 
for by the use of notes of suspended banks for three months 
before the first United States notes were issued, and men 
adjusted their business transactions to suit the currency. 
But on the Pacific coast people had been accustomed to a 
circulation of specie only and were very loath to surrender 
it. Business men consequently cast around for some means 
by which they could maintain the circulation of gold and 
prevent debtors from forcing them to accept greenbacks. 
One means to this end was the formation among the mer- 
chants of San Francisco in November of an agreement "not 
to receive or pay out legal-tender notes at any but the mar- 
ket value, gold being adhered to as the standard." Firms 
that refused to enter into this agreement, or to abide by it, 
were to be listed in a black book and required in future deal- 
ings to pay cash gold for goods which they purchased. 

Loyal observance of such a voluntary agreement, how- 
ever, was difficult to maintain, and vigorous efforts were 

1 Article IV, sees. 34, 35. There were, however, a few deposit banks. See J. J. 
KNOX, A History of Banking in the United States (New York, 1900), pp. 843-5. 



144 HISTORY OF THE GREENBACKS 

accordingly made to secure such action from the state legis- 
lature as would secure the same end by legal means. After 
several other proposals had been rejected, a "specific con- 
tract act" was finally passed and approved April 27, 1863. 
It provided in substance that contracts for the payment of 
specific kinds of money should be enforceable by legal 
process. After the constitutionality of this law had been 
affirmed by the state courts, business-men were able to 
protect themselves against tenders of greenbacks effectively 
by inserting in all their contracts clauses specifying that 
payment should be made in gold coin. This became the 
general practice, and consequently the people of California 
maintained a large circulation of specie during all the seven- 
teen years that the rest of the United States were using 
paper money. Greenbacks were not prevented from circu- 
lating, but when they were passed it was usually at their 
gold, not at their nominal, value. 1 

II. BANK NOTES 

As has been said, the withdrawal of gold from circulation 
in other parts of the United States left the notes of the state 
banks and the federal treasury the only monetary circulation, 
aside from "deposit currency," available for use in large 
transactions. But neither the bank nor the treasury notes 
were at that time a legal tender, and consequently the circu- 
lation of both was for a time beset with difficulties that 
require discussion in some detail. 

Though all the banks, with the exception of the banks of 
the states of Ohio, Kentucky, and Indiana, and a few scatter- 
ing institutions elsewhere like the Chemical Bank of New 
York, had followed the example of the New York banks very 

i BERNARD MOSES, " Legal tender Notes in California," Quarterly Journal of 
Economics, Vol. VII, pp. 1-25 ; J. A. FERRIS, The Financial Economy of the United 
States Illustrated (San Francisco, 1867), Nos. V, XV. 



THE CIRCULATING MEDIUM 145 

promptly in suspending specie payments, 1 the suspension 
was perhaps nowhere complete. Banks very generally con- 
tinued for some time to supply coin to their customers who 
required it for the payment of duties or any other necessary 
purpose. 2 Indeed, in those states where the banking laws 
imposed penalties for refusal to pay notes in coin the banks 
were obliged to redeem their notes whenever the holder 
insisted upon their so doing. Such was the case in New 
York. The state superintendent of banking was required 
by law to close any institution that failed to redeem its notes 
in coin within fifteen days after the notes had been pro- 
tested. 3 As the superintendent had no discretion in the 
matter, the banks were at the mercy of any note holder who 
chose to insist upon redemption in gold. Certain speculators 
in currency took advantage of the situation to collect bank 
notes systematically and send them in to the issuing institu- 
tions for payment in coin, which they then sold at a premium. 4 
Fear of such operations made the banks unwilling to pay out 
their notes freely. Instead of notes they issued many certi- 
fied checks, which for a time formed a prominent part of the 
circulating medium. 5 

For such reasons there was a marked contraction in the 
bank-note circulation in the first months of 1862. January 
4, the New York city banks had outstanding $8,600,000 of 
notes; by March 1 this circulation had fallen to $5,400,000. 
The hesitation of the banks ceased, however, when the 
treasury notes in circulation were made legal tender, for this 
measure provided funds other than coin which note holders 

1 Bankers' Magazine (New York), Vol. XVI, p. 650. 

2 Ibid., Vol. XVI, p. 648 (Rhode Island) ; p. 649 (Philadelphia) ; Vol. XVII, p. 760 
(Boston) ; H.R. Executive Document No. 25, 37th Cong., 3d Sess., p. 80 (Con- 
necticut) ; p. 28 (New Hampshire) ; New York Herald, January 5, 1862. This and the 
subsequent references to newspapers give the date of the "financial column." 

3 See text of the law, Bankers' Magazine, Vol. XVI, p. 811. 
* New York Herald, January 20, 1862. 

'> Hunt's Merchants' Magazine, Vol. XL VI, p. 309. 



146 HISTORY OP THE GREENBACKS 

pressing for redemption could be compelled to accept. 
Accordingly, the banks began to pay out their notes again, 
and by May 3 their circulation was practically as large as it 
had been January 4. 1 

The situation in Ohio, Kentucky, and Indiana where the 
state banks did not suspend specie payments immediately, 
did not long maintain its peculiarity. These banks were 
deterred from following the example of eastern institutions 
by clauses in their charters which forbade the redemption 
of their notes in anything but coin. In Ohio, however, 
the legislature enacted a law January 16, which granted 
immunity from the penalties for suspension to such banks 
as should advance coin to be used in paying the interest on 
the state's foreign debt. 2 Similarly in Kentucky, "the banks 
of issue having consented to loan to the citizens of the state 
$1,000,000 .... the legislature passed an act on March 8, 
1862, relieving the banks from the penalties for suspension 
of specie payments and authorizing them to pay out United 
States legal-tender notes." 3 

The Bank of the State of Indiana and its branches, under 
the presidency of Hugh McCulloch, held out somewhat 
longer. December 31 McCulloch issued a statement that 
under no circumstances would the bank fail to redeem the 
pledge it had given to pay its notes in coin. 4 In pursuance 
of this policy the managers of the branches were instructed 
" to redeem promptly in coin all notes that might be pre- 
sented ; to anticipate and prevent their return, as far as might 
be practicable, by taking them up at commercial points with 
other cash means ; [and] to make arrangements with deposi- 
tors by which deposits of gold should be paid in gold, 

1 See the New York city bank statements, ibid., p. 559; compare Report of the 
Secretary of the Treasury, December, 1862, p. 15. 

2 Bankers' 1 Magazine, Vol. XVII, pp. 163, and 793, 794. 

3 KNOX, History of Bankingin the United States (New York, 1900), p. 642. 
Bankers' Magazine, Vol. XVI, p. 650. 



THE CIRCULATING MEDIUM 147 

deposits of bank notes .... in bank notes." 1 By this 
course "in a few weeks the larger part of the circulating 
notes of the branches were at rest in their vaults, and the 
business of the branches was reduced to what could be safely 
done upon their capitals and deposits." When, however, 
the legal-tender act had been passed the question arose 
whether the bank might not legally use United States notes 
in discharge of its notes. After ascertaining that the courts 
would give prompt trial to a case involving this important 
question, Mr. McCulloch, in order to make a test case, 
directed that greenbacks be tendered in payment of a note. 
The supreme court of Indiana decided that the legal-tender 
act was constitutional, and that the bank might redeem its 
notes in notes of the government. When this decision was 
rendered, the bank at once commenced paying out its notes 
again. 2 

The same question regarding the availability of green- 
backs for redemption of bank notes that under state laws 
were payable only in coin, had to be faced in other states. 
In New York the question was peculiarly pressing because 
the legislature was powerless under the constitution to pass 
such measures of relief as were enacted in Ohio and Ken- 
tucky. 8 To determine whether banks could avail themselves 
of the act of Congress making treasury notes a legal tender, 
test cases were arranged by the superintendent of the bank- 
ing department and a decision obtained in June, 1863, from 
the court of appeals maintaining the constitutionality of the 
law. 4 This and similar decisions rendered in other states 

i H. McCtJLLOCH, Men and Measures of Half a Century, p. 136. vibid., pp. 136-8. 

8 Article VIII, sec. 5 of the constitution provided that "the legislature shall have 
no power to pass any law sanctioning in any manner .... the suspension of specie 
payments by any person, association, or corporation issuing bank notes of any 
description." Bankers' Magazine, Vol. XVIII, p. 811. 

4 See Annual Report of the Superintendent of the Banking Department of the 
State of New York, January 7, 1864; Bankers' Magazine, Vol. XVIII, pp. 811-13. The 
full text of the court's opinion is published //-/</.. pp. 345 tl'. 



148 HISTORY OP THE GREENBACKS 

removed the last doubt about the right of banks to use the 
greenbacks instead of gold coin as reserves and put them in 
a position to issue their own notes freely. 

The increase in the circulation of the state banks after the 
passage of the legal-tender act was very general. Secretary 
Chase estimated that the notes issued by banks in the loyal 
states amounted to $167,000,000, November 1, 1862, as com- 
pared with $130,000,000 a year before. 1 The Annual Report 
on the Banks in the United States for 1863, though not with- 
out omissions, made the circulation in the same states about 
the first of the year nearly $181,000,000. 2 Bank deposits 
increased with like rapidity. According to the bank reports, 
the deposits in the loyal states were $257,000,000 in Jan- 
uary, 1862, and $367,000,000 in January, 1863. 3 After 
April 1, 1863, however, the increase of circulation seems to 
have been checked by the tax imposed of 1 per cent, a year 
on certain proportions of the notes outstanding and 2 per 
cent, on amounts in excess of the specified proportions.* 

Shortly thereafter the organization of new national banks 
and the conversion of state into national banks introduced a 
new element into the circulating medium. As the issue of 
national bank notes proceeded for several years more rapidly 
than the withdrawal of the state-bank issues, there was again 
an increase in the total bank circulation. 5 But aside from 
this increase the change was merely the substitution of a 
more uniform and better-secured kind of notes for the 
diverse issues of the state banks. 

1 Report of the Secretary of the Treasury, December, 1862, p. 14. 
*H. R. Executive Document No. 20, 38th Cong., 1st Sess., p. 210. 

3 Ibid., loc. cit., for 1863, and H. R. Executive Document No. 25, 37th Cong., 3d 
Sess., p. 208, for 1862. 

* Act of March 3, 1863, sec. 7; 12 Statutes at Large, p. 712. 

5 See the statement of bank notes outstanding in the Statistical Abstract of the 
United States, 1878, p. 14. 



THE CIRCULATING MEDIUM 149 

III. OLD DEMAND NOTES 

The circulation of the demand treasury notes was for a 
time beset by more difficulties even than was the circulation 
of bank notes. The first issues of these notes by Secretary 
Chase in the late summer and autumn of 1861 was opposed 
by the banks which subscribed to the $150,000,000 loan. 
When the secretary insisted on making the issues, however, 
they yielded, and with few exceptions made no difficulty 
about receiving such of the notes as were brought to them 
by depositors. 1 The situation changed, however, when the 
treasury, by suspending specie payments, gave notice that 
these notes would not be redeemed in coin. 2 At this time 
there were $33,460,000 in circulation. 3 Early in January 
the New York banks held a meeting to discuss what policy 
should be pursued with regard to them. Opinion was 
divided, and the meeting ended with the adoption of a 
vague resolution: 

That before we consent to receive such notes, we must require 
that such legal provision be made by Congress as shall insure their 
speedy redemption, and that a committee of this association be 
appointed to consider that subject and report to an adjourned 
meeting. 4 

1 Cf. Part I, chap, i, pp. 26, 27, above. 

2 It has been stated in an official document that " the demand notes were paid in 
gold when presented for redemption," and that such payment with their receivability 
for all public dues, " prevented their depreciation." Information Respecting United 
States Bonds, Paper Currency, Coin, etc., revised ed., United States Treasury Depart- 
ment Circular No. 123, July 1, 1896, p. 7. This has been the common view and is found, 
e. g., even in the work of so recent a writer as Professor A. B. HAKT (Life of Chase, p. 
242). But none the less it is certainly an error. Mr. Chase himself said : " The banks 

of New York suspended on the 30th of December, 1861 and the government 

yielded to the same necessity in respect to the United States notes then in circulation." 
Report of the Secretary of the Treasury, 1862, p. 7 : cf. American Annual Cyclopaedia, 
1861, p. 300, and Hunt's Merchants' Magazine, Vol. XLVII, p. 509. More than this, 
the "old demand notes," as the issue came to be called, did depreciate in value, 
which could hardly have happened had they been " paid in gold when presented for 
redemption;" cf. Part II, chap, iii, sec. ii, below. 

3 Report of the Secretary of the Treasury, December, 1862, p. 9. 
* Bankers' Magazine, Vol. XVI, p. 647. 



150 HISTORY OF THE GREENBACKS 

Of course, this resolution procured no action by Congress, 
and the committee was unable to frame a policy acceptable 
to all the banks. Some institutions took the notes without 
question as current funds, while others did not. 1 The Ameri- 
can Exchange Bank, for example, issued a circular dated 
January 1, 1862, informing its dealers and correspondents 
that it would not accept treasury notes from them, unless 
they would sign a contract to accept payment in the same 
notes at par." 

But so long as a portion of the subscriptions to the 
$150,000,000 loan remained unpaid, almost all of the banks 
were ready to receive demand notes at least in small quanti- 
ties, because they could be used in making payments into 
the subtreasury. 8 

After the last instalment of the loan had been paid on 
the morning of February 4, the disinclination to receive the 
notes as current funds became much stronger. Banks could 
no longer find an outlet for them at the subtreasury, and 
they could not be certain that depositors would accept such 
notes in payment of checks, since the notes were not yet 
legal-tender. The metropolitan banks seem to have been 
rather more liberal than those of Boston, Philadelphia, and 
other cities. 4 But even in New York there was apparently a 
considerable number of large institutions that discriminated 
against the treasury notes and accepted them only as 

1 New York Herald, January 2, 5, and 6, 1862. 

* Bankers' Magazine, Vol. XVI, p. 647. Compare the similar circulars received 
by Chicago banks from their New York correspondents, Hunt's Merchants'' Magazine, 
Vol. XLVI, p. 293. 

3 New York Herald, February 4, 1862, and Hunt's Merchants' Magazine, Vol. 
XLVI, p. 309. The banks of Boston acted in similar fashion. Though these banks 
were forbidden by their charters to pay out any notes except their own, a resolution 
was adopted, January 10, that banks concerned in the government loan should accept 
treasury notes " receivable for government dues to the extent of 25 per cent, of their 
subscriptions to said loan, including such notes as they may have on hand." Bankers' 
Magazine, Vol. XVI, p. 648. 

New York Herald, January 24 and 29, 1862. 



THE CIRCULATING MEDIUM 151 

"special deposits," repayable in kind. 1 Refusal to take the 
notes on the part of even a few banks in the clearing-house 
association made serious trouble for the other institutions 
that desired to receive them without question. For, if one of 
the more liberal banks accepted demand notes on deposit as 
current funds, it had to make provision for meeting checks 
drawn against this deposit and presented at the clearing- 
house by other institutions. At the clearing-house, however, 
the demand notes would not be accepted in payment of a 
balance, and the bank that had taken such notes from its 
customers had therefore to provide other funds for meeting 
the checks, or, if it did not have sufficient currency of other 
kinds, to take out loan certificates on which 7 per cent 
interest was charged. 2 

This situation seems to have given much concern to the 
treasury authorities. Though the treasury notes were com- 
monly accepted in business transactions between individuals 
without question, 3 men could not use them freely at the 
banks, and consequently persons who received large quanti- 
ties were compelled to sell them at a slight discount. 4 It 
was the desire to prevent such discrimination against the 
treasury notes that Mr. Chase gave as his reason for urging 
the retention of the legal-tender clause in the bill introduced 
by Mr. Spaulding. 5 

While the bill was still pending, another scheme for the 
same purpose was devised. Mr. Cisco, the head of the New 

1 Ibid., February 4 and 5, 1862. Hunt's Merchants' Magazine states that this 
course was pursued by a majority of the banks. Vol, XL VI, p. 309. 

2 Hunt's Merchants' Magazine, Vol. XL VI, p. 309. Cf. the remarks of Senator 
Simmons in the Congressional Globe, 37th Cong., 2d sess., p. 794. 

3 New York Herald, February 9 ; Shipping and Commercial List, February 19, 
1862. 

* According to the New York Tribune, February 13, 1862, the selling price was 
one-fifth of one per cent, below par, while notes could be bought of the street brokers 
at half this discount. 

5 Letter of January 29, 1862, to Thaddeus Stevens. Congressional Globe, 37th 
Cong., 3d Sess., p. 618; cf. remarks of Mr. Bingham, ibid., p. 639. 



HISTORY OP THE GREENBACKS 



York subtreasury, suggested, and Chase authorized, the 
acceptance of the treasury notes on deposit at the sub- 
treasuries at 5 per cent, interest. 1 It was apparently their 
expectation that the banks would now accept the notes with 
the intention of depositing them at the subtreasury and so 
drawing interest upon a part of their current funds. 2 But 
the plan was received less kindly than had been hoped. On 
February 8 about half a million was deposited with Mr. 
Cisco, and by the llth another million had been added. 3 
But these deposits seem to have come mainly from savings 
banks and out-of-town institutions. 4 Most of the city banks 
looked upon the plan as a bid to induce the public to deposit 
with the subtreasury instead of with themselves. 5 

For the time, therefore, this plan accomplished little, and 
the demand notes continued to rule at a slight discount until 
the passage of the legal-tender act. 6 The first reports of 
the law that reached New York indicated that the treasury 
notes already in circulation, as well as the new issues, had 
been made a legal tender. 7 An amendment to this effect 
had, indeed, been made by the Senate on motion of John 
Sherman ; 8 but it had not been agreed to by the House of 
Representatives, 9 and at the recommendation of the com- 
mittee of conference the Senate receded from it. 10 Though 
the report was false, it changed the attitude of the hesitating 
banks toward the notes. The new law provided that customs 
should be paid, not in paper money, but in coin. From this 

i Qf. SCHUCKEHS, Life of Chase, p. 269. 

^Cf. Hunt's Merchants' Magazine, Vol. XL VI, p. 310; New York Herald, Febru- 
ary 9, 1862. 

3 New York Herald, February 8 and 11, 1862. * Ibid., February 14. 

5 Hunt's Merchants' Magazine. Vol. XL VI, p. 310. 

New York Tribune, February 13, and Shipping and Commercial List, February 
19, 1862. 

'New York Times, February 26; Herald, March 3. 

* Congressional Globe, 37th Cong., 2d Sess., p. 771. 

Ibid., p. 888. w Ibid., p. 929. 



THE CIRCULATING MEDIUM 153 

rule, however, an exception was made in favor of the old 
demand notes, because the act under which they were issued 
declared them " receivable in payment of public dues." 1 If 
made legal tender, then, the old notes would differ from the 
new only in possessing a virtue lacked by the latter availa- 
bility for use at the customs house in place of coin. As but 
$60,000,000 of the demand notes had been authorized, and 
as they were to be replaced as rapidly as feasible by the new 
issues, it seemed likely that there would be a strong demand 
for them from importers who had duties to pay. Conse- 
quently even the banks that had hitherto refused to receive 
the notes as current funds now refused to pay them out, and 
instead of being at a discount of ^ to ^ they rose to a pre- 
mium of ^ to --. 2 This advance to a premium, however, 
proved premature. When after three or four days it was 
found that the retirement of the old notes could not com- 
mence until the new notes were printed, that printing would 
require at least a month, and that in the meantime the treas- 
ury must continue to pay out the old notes, they fell again 
to par. 3 And when on the 4th of March the full text of the 
legal-tender act was received, and it was found that the 
legal-tender clause included only the new issues, some of the 
banks reverted to their former policy and began again to 
discriminate against the government notes. Accordingly 
the notes fell once more to a discount. 4 

The discovery that the old demand notes had not been 
made legal tender seems to have been as much of a surprise 
to many members of Congress as it was to business men in 
New York. Steps were taken at once to remedy the omis- 

1 Act of August 5, 1861, Sec. 5, 12 Statutes at Large, p. 313. 

2 New York Times, February 26 and 27, 1862; Herald, February 27 and 28; Com- 
mercial Advertiser, February 26, 27, 28, and March 1 ; Shipping and Commercial List, 
March 1. 

3 New York Herald, March 1 and 3; Times, March 3. 

* New York Herald, March 4; Commercial Advertiser and Shipping and Com- 
mercial List, March 5. 



154 HISTORY OF THE GREENBACKS 

sion. A clause making the treasury notes already in circu- 
lation a legal tender was inserted in the bill to authorize the 
purchase of coin for the payment of interest on the public 
debt, which Thaddeus Stevens introduced into the House 
March 6. 1 When this bill received President Lincoln's 
signature, March 17, a there was no longer any reason for 
discriminating against the demand notes, and they returned 
for a short time to par. 3 

Meanwhile the New York banks had taken action that 
put an end to all opposition on their part to the use of the 
treasury notes. At a meeting held March 7, 1862, they 
determined to make their clearings in certificates issued by 
the assistant treasurer for deposit of the demand notes with 
him at 5 per cent, interest. 4 This arrangement, which went 
into effect March 10, made treasury notes the standard for 
all banking operations in current funds. 5 Foreseeing that 
when the new notes were ready for issue the old notes receiv- 
able for customs would be more valuable, Mr. Cisco pub- 
lished a notice March 14, that all certificates of deposit 
issued in the future would be paid in any notes that were 
legal tender. 6 The new respect in which the old demand 
notes were coming to be held was shown by the fact that 
this notice caused a falling off in the daily deposits. The 
check was only temporary, however, for the new notes 
became themselves available for deposit early in April. 

From the 7th of March, then, the old demand notes were 
current funds in New York and passed without question at 
par. But soon after the appearance of the greenbacks their 

l Congressional Globe, 37th Cong., 2d Sess., pp. 1103 and 1116. 

212 Statutes at Large, p. 370. 

3 In fact, the notes returned to par as soon as it was known that the clause had 
been introduced, because it was a foregone conclusion that the measure would 
become a law. New York Commercial Advertiser, March 8. 

* Bankers' Magazine, Vol. XVI, pp. 809-11. 

6 Cf. New York Times, March 10. 

6 See the text in Annual American Cyclopaedia, 1862, p. 456. 



THE CIRCULATING MEDIUM 155 

position changed again. The first greenbacks in New York 
came in a remittance of $4,000,000 received by the assistant 
treasurer April 5. 1 A large sum was paid out the same day, 
and from this time on issues were so rapid that $90,000,000 
was outstanding before the 7th of June. 2 All through April 
the old demand notes circulated side by side with the new 
notes at par. 3 But, as the supplies of the latter currency 
became sufficient for the wants of business, a difference 
became apparent between the treatment of the two issues. 
Owing to their receivability for customs, the old demand 
notes were preferred, and as early as the second week in May 
they began to be quoted regularly at a premium which, 
slight at first, gradually rose as the volume in circulation 
became smaller and the premium on gold for which they 
served as a substitute at the customs-house became higher. 
The possibility of obtaining this premium caused holders of 
old demand notes to hoard them just as they had hoarded 
gold in January. When Mr. Chase wrote his letter of June 
7 requesting authority for a second issue of greenbacks, he 
said that the $56,500,000 of the old demand notes then 
outstanding were "held by banks and capitalists, and not 
used as circulation." 4 They were sold from time to time to 
importers and used in the payment of duties. As they 
came into the treasury through the customs-houses, the old 
demand notes were canceled and replaced by greenbacks. 
By this process the amount outstanding had been reduced 
to $3,300,000 by June 30, 1863. 5 This withdrawal from 
circulation in May, 1862, closed the brief but eventful 
history of the old demand notes as a part of the circulating 
medium. 

1 See the financial columns of the New York papers under this date. 

2 H.R. Miscellaneous Document No. 81, 37th Cong., 2d Sess., p. 1. 

3 Hunt's Merchants' 1 Magazine, Vol. XLVII, p. 33. 

* H.R. Miscellaneous Document No. 81, 37th Cong., 2d Sess., p. 1. 
& Report of the Secretary of the Treasury, December, 1863, p. 45. 



156 HISTORY OP THE GREENBACKS 

From what has been said it is clear that the business 
public must have suffered considerable inconvenience from 
the uncertainty regarding the currency between the time of 
suspension and of abundant issues of the greenbacks. Gold 
had ceased to be used in ordinary transactions; notes of 
state banks, always inconvenient, were in many cases not 
issued freely for prudential reasons and had to be replaced 
in considerable measure by certified checks, and the treasury 
notes were most of the time discriminated against by many 
banks. The appearance of the greenbacks in large amounts 
afforded relief from such difficulties, though the wide and 
rapid fluctuations in their value gave rise to other embarrass- 
ments of a more serious character. 

IV. "SHINPLASTERS" AND FRACTIONAL CURRENCY 

One difficulty with the currency, however, the greenbacks 
could not meet. While they served as a convenient medium 
of exchange in large transactions, they did not supply the 
want of small change, for the first legal-tender act had for- 
bidden the issue of notes of less than five dollars. 1 Hardly 
had the perplexities of business men who handled currency 
in large amounts been relieved by the free issues of the 
greenbacks, when yet greater inconveniences began to be 
felt by everyone from the lack of fractional coins. 

When specie payments were suspended the subsidiary 
silver coins did not disappear from circulation at once, as did 
gold, for reasons found in existing coinage laws. While a 
dollar contained 371.25 grains of pure silver, only 345.6 
grains were put into two half-dollars, four quarters, or ten 
dimes. 2 In January, 1862, one grain of gold was selling for 
15.35 grains of silver. 3 At this ratio a silver dollar was worth 

1 Sec. 1, 12 Statutes at Large, p. 345. 

2 Act of February 21, 1853, 10 Statutes at Large, p. 160; cf. L.VCGHLIN, History of 
Bimetallism in the United States, chap, v, sec. 4. 

3 See the table in LACGHLIN, op. cit., Appendix II, F. 



THE CIRCULATING MEDIUM 157 

$1.04 in gold, while two halves, four quarters, or ten dimes 
were worth but 97.05 cents. While, therefore, there was a 
profit in treating gold coin as bullion instead of as money, 
the moment a fractional premium appeared upon it in paper, 
there was no profit in exporting or in melting subsidiary 
silver coins until the premium on gold had risen sufficiently 
above 3.1 per cent, to give brokers compensation for collect- 
ing the coins and shipping them to Canada. For, when gold 
stood at 103-^, a paper dollar was worth 97 cents in gold 
just as much as ten dimes. It was therefore a matter of 
indifference to the possessor of subsidiary silver coins whether 
he paid it over as current funds in purchasing commodities 
or sold it for paper money. But when gold rose above 
103y^, a paper dollar became worth less than ten dimes, and 
a person who had the latter could make them go farther in 
the payment of debts by selling them for paper money and 
giving it to his creditor than by handing him the silver 
itself. Since, however, some trouble and expense were 
involved in melting or exporting coins of small denomina- 
tions, it was a nice question how high the premium on gold 
must rise above 3 T \ before the silver would disappear from 
circulation. 

For the first week after payments in specie had been 
stopped the premium on gold varied from 1 to 3 per cent. 1 
But on the 8th of January it rose to 3^ and on the 9th to 
4. At the latter premium a paper dollar was worth 95.92 
cents in gold, or 1.13 cents less than ten dimes. According 
to the money column of the New York Herald, this slight 
difference sufficed to induce brokers to begin the purchase 
of silver coins. "An inquiry has sprung up for silver," 
reports the financial writer on the 9th, " which has been 
held at 1 per cent, premium." It is not improbable, how- 

1 For this and subsequent references to premium on gold see tables in Appendix 
A, below. 



158 HISTORY OP THE GREENBACKS 

ever, that purchases of silver on so slight a margin were 
prompted rather by anticipations of the profit that could be 
made if the premium on gold continued to advance, than by 
the opportunity for immediate profit. If so, the buyers of 
silver were disappointed, for after rising to 5 on the 10th of 
January, the premium fell again below 4. During February 
the average premium was 3.5, during March 1.8, during 
April 1.5, and during May 3.3. At such low prices for 
gold, or, more accurately, at such high prices for paper 
money, there was no profit in buying subsidiary silver 
coins for export or melting, and consequently they continued 
to circulate as money. But in June, when the hopes of a 
speedy end of the war were being dispelled, the paper 
money fell in value, that is, the premium took an upward 
turn. From 3^ on the first Monday of the month, the 
premium rose to 4-,^ on the second Monday, 6| on the third, 
7 on the fourth, and 9^ on the fifth. 1 With gold at the 
last-named premium, a paper dollar was worth 91.69 cents 
in gold a price which afforded an ample margin of profit 
for the purchase for export of silver coins worth 97.05 
cents. 

Accordingly, the newspapers late in June and early in 
July began to remark a rapid disappearance of small change 
from circulation. For example, the Springfield Republican 
of July 2, 1862, said: "The ruling premium of 5 to 6 per 
cent, on silver coin, as compared with the paper currency in 
use, is fast driving it out of circulation. Laboring people 
and those of small means are constantly to be seen at 
brokers' offices selling $10 to $50 of silver change at 2| per 
cent, premium, which the brokers ship to Europe where they 
can realize 6 or 7 per cent, in comparison with our irredeem- 
able paper currency." Similarly, the New York Times 

i These figures are averages of the highest and lowest prices of gold recorded 
each day. 



THE CIRCULATING MEDIUM 159 

of July 18 declared that "the annoyances suffered in this 
city and throughout the country during the last two or 
three weeks, on account of the scarcity of specie, have been 
unspeakable, and in many lines of business the loss of 
custom and profit has been heavy." 1 Though over $45,- 
000,000 of subsidiary coins had been struck under the act of 
1853, 2 of which perhaps three-fifths circulated in the loyal 
states, 3 nearly the whole amount seems to have been with- 
drawn from use as currency between the middle of June and 
the middle of July. Apparently, the brokers who purchased 
the coin exported a large portion of it. Over $3,750,000 
were carried to Canada in 1862 by a single express com- 
pany. 4 American coin became a drug in the Canadian mar- 
ket and was accepted only at a discount. 5 Considerable 
amounts were shipped also to South America and a sum 
large in the aggregate was no doubt kept for a long time 
in small hoards. 6 

Of course, the disappearance of the silver coins from 
circulation caused serious inconvenience in retail trade. 
Various shifts were tried to supply their place. In 
Philadelphia, and perhaps elsewhere, old Spanish quarter- 
dollars were brought again into use. These coins had formed 
a considerable portion of the small change before an abun- 
dant supply of American silver was furnished under the act 
of 1853. From long wear they had become light in weight. 
The act of February 21, 1857, provided that they should be 
accepted by the government offices for 20 instead of 25 cents. 7 

1 Compare New York Tribune, July 9 and 16 ; Commercial Advertiser, July 10 and 
16 ; Chicago Post, July 15 ; and other references in the following notes. 

2 Report of the Director of the Mint, October, 1862, p. 49. 

3 Cf. Hunt's Merchants' Magazine, Vol. XL VII, p. 155. 
* Annual American Cyclopaedia, 1862, p. 468. 

' Cf. Bankers' Magazine, Vol. XVIII, pp. 83, 482; Vol. XIX, p. 699. 

6 KNOX, United States Notes, p. 100. 

T 11 Statutes at Large, p. 163, and LINDEEMAN, Money and Legal Tender, p. 32. 



160 HISTORY OP THE GREENBACKS 

When the American silver was withdrawn a few of these old 
coins, because of the less amount of silver left in them, 
came out of retirement and passed current again as quarters 
of a dollar. 1 

Another method of meeting the situation was to decline 
to make change for paper bills at all, or else to charge a 
premium for the silver returned. This plan is said to have 
been adopted for a time by transportation companies and 
many retail shops in New York city. 2 A third device was to 
cut dollar bank bills into halves or quarters and pass these 
pieces for 50 and 25 cents. In Hartford, Conn., it was said 
that some $20,000 of the bills of the ^Etna Bank were 
floating about cut in two. 8 A more ingenious scheme was 
hit upon by the Farmers' Bank of Mount Holly, N. J., 
which paid out notes for $1.25, $1.50, and $1.75 to enable 
people to make change within 25 cents by returning a 
dollar bill. 4 Much commoner, however, was the issue of 
notes for fractional parts of a dollar, colloquially called 
"shinplasters." Though the laws of many states forbade 
any bank to put into circulation notes less than one dollar, 
a few institutions adopted this plan, relying on the obvious 
need of fractional currency to secure immunity from 
prosecution. 5 But most of the "shinplasters" seem to have 
been issued by individuals or firms not engaged in banking. 
In Chicago, for instance, the city railway company supplied 
25-cent tickets which the conductors gave in exchange for 
paper bills and accepted for fares. 6 In Boston, Young's 
Hotel started a system of checks for 15, 25, and 50 cents 

1 Springfield Republican, July 15, 1862. 

2 New York Tribune, July 9 and 16. 

3 Bankers' Magazine, Vol. XVII, p. 404. On similar practices elsewhere see ibid., 
p. 821. 

*/6td.,p. 316. 

5 For example of such illegal issues by a banker of Beading, Pa., see ibid,, 
p. 475. 

Chicago Post, July 15, 1862. 



THE CIRCULATING MEDIUM 161 

with the proprietor's signature attached an example that 
saloons, restaurants, and retail shops were quick to follow. 1 
Many of these issues were made by irresponsible persons 
and consequently resulted in loss to those who accepted 
them. 2 Partly to protect the public from such losses and 
partly to obtain a "loan without interest," several towns and 
cities provided for municipal issues of small notes. The 
city council of Newark, N. J., for instance, voted July 11, 
"to issue promissory notes to the amount of $50,000 in 
denominations ranging from ten cents to fifty cents" and 
redeemable by the city in sums of $10 or more. 3 This 
example was followed by Jersey City, Wilmington, and 
Albany, and a proposition of similar character was dropped 
in Philadelphia only because it was found to be contrary to 
state law. 4 

These various substitutes for the silver coins furnished a 
fractional currency that, although unsatisfactory, had to be 
tolerated for a time as a makeshift. Secretary Chase, 
however, took steps promptly to relieve the general 
embarrassment. He called the attention of Congress to the 
matter in a letter written July 14, and Congress responded 
by authorizing the use of " the postage and other stamps of 
the United States" as currency. 5 

Though this act was approved by the president only 
three days after Chase's letter was written, some time 
elapsed before it afforded substantial relief. The chief 
immediate effect was to cause the use of ordinary letter 
postage stamps for small change. In New York where as a 
rule about $3,000 of stamps were sold daily, the sales ran up 

1 Springfield Republican, July 15, 1862. 

2 Of. quotations from the Philadelphia Ledger in the Bankers' Magazine, Vol. 
XVII, p. 823. 

3 New York Times, July 13, 1862. 

* See Bankers' Magazine, Vol. XVII, pp. 823, 566, 316, and 161 respectively. 
6 Act of July 17, 1862, 12 Statutes at Large, p. 592. See Part I, chap, iii, sec. iii. 



162 HlSTOBY OF THE GREENBACKS 

to $10,000 on the day after the bill was approved, and next 
day to $16,000.' Such stamps, however, were exceedingly 
inconvenient for use as currency because of their small size 
and their propensity for sticking together and getting 
crumpled. To take their place Secretary Chase caused a 
series of special stamps in denominations of 5, 10, 25, and 
50 cents to be prepared. 2 They were about 2 by 3 inches 
in size, printed on both sides and not gummed.* The first 
issues were made late in August. 4 

In order to force the withdrawal of the "shinplasters," 
attorneys of the national and local governments in some 
districts published notices warning the public that the 
penalties imposed by federal and state laws upon the issue of 
small notes by unauthorized persons would be vigorously 
enforced by prosecutions. 5 Municipal "shinplasters," how- 
ever, were not affected by the Postage Currency Act, which 
forbade such issues only to "private corporations," firms, 
and individuals. 6 Town and city notes continued therefore 
to circulate unhindered for a considerable time. 

The difficulties with the fractional currency do not seem 
to have come to an end even by the close of 1862. The vari- 
ous substitutes for coin could not be dispensed with until the 
"postage currency" became abundant enough to supply the 
demand for small change, and at first the issues were rather 
slow. By the end of September but $787,700 had been 
placed in circulation, and in the next two months the total 

1 Bankers' Magazine, Vol. XVII, p. 159. 

2 Report of the Secretary of the Treasury, December 1862, p. 28. 

3 Representations of this " postage currency " are given by Kxox, United States 
Notes, pp 105-8. 

KNOX, ibid., p. 104; Bankers' 1 Magazine, Vol. XVII, p. 239. 

5 For example, see the notice given in New York city, Bankers' Magazine, Vol. 
XVII, p. 256, and compare the action taken by the bank commissioners of Illinois, 
t&td., p. 567. 

6 Sec. 2, 12 Statutes at Large, p. 592. See also the correspondence between the 
chairman of the finance committee of Wilmington and the commissioner of internal 
revenue. Bankers' Magazine, Vol. XVII, p. 566. 



THE CIRCULATING MEDIUM 163 

reached less than $4,000,000.* In December Mr. Chase 
reported that it had been " found impossible to keep pace 
with the public demand for this currency," and that, although 
the daily issue had " been rapidly increased to $100,000," 
and was then being " extended as fast as practicable to twice 
that amount," the supply was still " largely deficient." 

In the West the St. Louis Republican of December 10 
stated that " there is still much complaint of the scarcity of 
small change," 3 and in the East the Springfield Republican 
of the same date reported that " shinplasters " were still in 
circulation. In the same month the city council of New York 
passed an ordinance providing for the issue of 5, 10, 25, and 
50-cent notes, which the Bankers 1 Magazine declared to be 
" a necessity growing out of the scarcity of change in this 
city." * Ordinary postage stamps also continued in use side 
by side with the deficient " postage currency " despite the 
efforts of the post-office department to prevent it. The post- 
master-general in his report dated December 1, 1862, said : 

Postmasters were specially instructed to discontinue sales of 
stamps to persons evidently designing them for use as currency; 
but, notwithstanding the precaution taken and the checks adopted, 
.... the demand has until quite recently been largely in advance 
of the daily manufacture .... the majority of applications .... 
from postmasters were only partially filled, generally but one-half the 

number asked for having been sent The aggregate value of 

the postage stamps and stamped envelopes sold at 29 of the larger 
post-offices during the third quarter of 1862 was $1,400,937.48, and 
during the corresponding quarter of 1861 was $606,597.40, showing 

an excess in favor of 1862 of $794,340.08 Nearly the entire 

excess .... has been or is now in use as currency. 5 

1 Report of the Secretary of the Treasury, December, 1862, pp. 43 and 12. 

2 Ibid., pp. 28, 29. 

3 Quoted in Bankers 1 Magazine, Vol. XVII, p. 568. 

4 Vol. XVII, p. 562. Mayor Opdyke, however, did not agree with this view, and 
vetoed the measure. New York Tribune, December 22, 1862. 

5ff. R. Executive Document No. 1, 37th Cong., 3d Sess., Vol. IV, pp. 131, 132. 



164 HISTORY OP THE GREENBACKS 

In the winter months, however, the supply of " postage 
currency" became more adequate to the needs of retail trade. 
Nearly $7,000,000 had been issued by the end of December, 
1862, and $12,000,000 more were added in the next three 
months.' When people could obtain this federal currency, 
they manifested a strong disposition to reject postage stamps 
and " shinplasters " even those issued by the towns. The 
Springfield Republican of January 29 said : 

There is a general agreement throughout the country to banish 
all private and corporate shinplasters and use only the government 
postage currency for change after the first of February. In Boston, 
already, none but those of the Parker House remain in circulation, 
and these are refused at many stores, and are being fast retired. 
.... A few choice shinplasters may be temporarily retained in 
special localities, till sufficient of the postal currency works in to 

accommodate public wants There are large amounts of the 

postal currency in circulation, and much is hoarded that will come 
out as soon as the other sort is banished. 2 

As late as March the Philadelphia Ledger said : 

Now Philadelphia is tolerably well supplied with small cur- 
rency authorized by the government, while at New York and other 
eastern points they are suffering great inconvenience and much loss 

by an immense circulation of all sorts of trash So intolerable 

has the nuisance become, everybody is denying them, causing quite 
a panic among the poorer classes those least able to bear the loss. 

.... Nobody but the brokers will deal in them now The 

corporation issues of Newark and Jersey City .... more popular 
than others .... are included in the general decree of banish- 
ment The people will take nothing but government postage 

currency for small change. There appears to be no lack of it now. 3 

To protect holders of postage stamps that had been used 
as currency from losses similar to those suffered by holders 

1 BAYLEY, National Loans of the United States, p. 159. 

2 Compare the notice published by the same newspaper at the head of its 
editorial section January 23, that " no shinplasters or postage stamps except in the 
sheet" would be received in remittances after that date. See also notice of 
January 27. 

3 Quoted in Bankers' Magazine, Vol. XVII, p. 823. 



THE CIRCULATING MEDIUM 165 

of shinplasters the postmaster-general was obliged to order 
the redemption of such stamps as were evidently uncanceled. 1 
May 27, 1863, issues of the postage currency ceased, after 
$20,000,000 had been placed in circulation. Its place was 
taken by the " fractional currency " authorized by the act of 
March 3, 1863. 2 The new notes were made of thinner but 
stronger paper, could not be counterfeited easily, and were 
not injured by wetting. 3 But aside from the technical 
superiority of the new issues as currency, the change was one 
only in name. The title "postage currency" had been a 
misnomer, for the notes were not like ordinary postage 
stamps. Issues of the new notes commenced October 10, 
1863. By the 30th of June, 1864, about $7,750,000 of the 
fractional currency had been put in circulation, while $5,000,- 
000 of the postage currency had been withdrawn, so that the 
whole amount outstanding was not quite $23,000,000.* The 
same process of withdrawal of the old and substitution of 
the new notes was continued during the next year. The 
amount of postage currency decreased from $15,000,000 to 
$10,000,000, while the amount of the fractional currency 
increased from $7,750,000 to $15,000,000. Thus at the end 
of the war the aggregate fractional currency of both kinds in 
use was $25,000,000. 6 

V. MINOB COINS 

The difficulties with the circulating medium did not stop 
with the subsidiary coins of silver, but extended even to the 
minor coins of base metals. The act of February 21, 1857, 
had provided for replacing the old copper cents of 168 
grains by coins weighing 72 grains and composed of 88 

1 Report of the Postmaster-General, cited above, p. 133, and Annual American 
Cyclopaedia, 1862, p. 463. 

2 12 Statutes at Large, p. 711. 3 Bankers' Magazine, Vol. XVIII, p. 364. 

* Report of the Secretary of the Treasury, December, 1864, p. 45. 
5 Report of the Secretary of the Treasury, December, 1865, p. 53. 



166 HISTORY OP THE GREENBACKS 

parts copper and 12 parts nickel. 1 Of these new cents there 
had been issued 116,066,000 by June 30, 1862." The work 
of exchanging the new for the old coins was still going on, 
but the director of the mint reported in October, 1862, that 
the number of old cents was rapidly diminishing and that 
they would soon disappear altogether from circulation. 3 The 
new cents, together with such of the old as still remained in 
use, were the only minor coins, for the making of half-cents 
had been stopped by the act of 1857, and two, three, and 
five-cent pieces were not authorized until 1864, 1865, and 
1866, respectively. 4 

The withdrawal of the silver coins from circulation in 
June and July caused a marked extension in the use of the 
nickel cents as substitutes. To make them serve more 
conveniently in the place of silver, cents were sometimes 
done up in rolls of twenty-five and passed from hand to 
hand, frequently without opening. 5 The demand for these 
coins at the mint suddenly became very great. As many as 
3,600,000 pieces were struck at Philadelphia in July, and 
there was a great rush to procure them. 6 " Large amounts," 
said the director of the mint in October, " have been sent to 
every part of the country, and orders beyond our ability to 
fill are constantly forwarded to the mint." 7 The number of 
cents coined increased from 10,000,000 in the fiscal year 
1861 and 12,000,000 in 1862, to 48,000,000 in 1863. 8 

It is a curious but well-attested fact that the nickel cents 
went to a premium almost as soon as the subsidiary silver 
coins. The New York Commercial Advertiser of July 10 

> Sec. 4, 11 Statutes at Large, p. 163. 

2 Reports of the Director of the Mint, October, 1857 and 1862, pp. 49 and 75 
respectively. Here and in other citations of the Reports of the Director of the Mint 
the pages refer to the finance reports. 

a Ibid., p. 46. * Coinage Laws of the United States, 1792 to 1894, 4th ed., p. 89. 

& Springfield Republican, July 15, 1862. 

Bankers' Magazine, Vol. XVII, p. 390. 

t Report, p. 46. 8 Report of the Director of the Mint, October, 1865, p. 237. 



THE CIRCULATING MEDIUM 167 

reported that while gold was at 17 per cent, premium in 
paper, silver was at 10 and nickel at 4 per cent. A similar 
condition was noted by the Springfield Republican July 15, 
and the director of the mint in his annual report for 1863 
said that "for the past two years" cents had "commanded a 
premium" and were then "scarcely to be had." 1 

The cause for this premium on cents in 1862 must 
have been different from the cause for the premium on gold 
and silver coins. The latter were at a premium because the 
bullion in them was of more value than the corresponding 
sums of paper money. According to the director of the 
mint, however, the cent in 1862 cost "the government 
scarcely half a cent," 2 and again in 1863 he reported that 
nickel cents contained a "half cent's worth of metal, more 
or less, according to market fluctuations." 3 These state- 
ments of cost to the government, however, do not necessarily 
show the market value of cents as bullion, because a large 
part of the metal used in their manufacture was imported, 4 
and the duties which private men would have to pay were 
remitted to the mint. But these duties were not heavy 
enough to make a very great difference. Under the tariff 
act of July 14, 1862, imported nickel paid a tax of but 10 
per cent, ad valorem, and under the act of June 30, 1864, 
this rate was increased to but 15 per cent. 5 Meanwhile 
copper in pigs, bars, or ingots paid two cents a pound 
according to the act of March 2, 1861, and 2-| cents accord- 
ing to the act of June 30, 1864. 6 

Consequently, even if the director's estimates of cost be 
taken to mean cost on a specie basis and 10 per cent, be 
added for the duties, 100 of the 1-cent coins would have had 

1 P. 189. a Report, p. 49. 3 Report, p. 188. 

*Ibid., p. 189, and letter of the director of the mint to Chase, March 16, 1864, in 
Congressional Globe, 38th Cong., 1st sess., p. 1228. 

& 12 Statutes at Large, p. 550, and 13 Statutes, p. 211. , 

6 12 Statutes at Large, p. 182, and 13 Statutes, p. 206. 



168 HISTORY OP THE GREENBACKS 

a market value as bullion of not more than 55 cents in gold. 
On this estimate cents would not have gone to a premium in 
paper currency for the same reason that gold and silver did, 
until the specie value of a paper dollar was less than 55 cents 
that is, until gold was at a premium of almost 82 per cent. 
But so high a premium was not reached until April, 1864. 
In July, 1862, when a premium is said to have been paid for 
cents, the average value of paper dollars was 86.6 cents in 
gold, and the metal in 100 nickel cents was worth at most 
about 63^ cents in paper. If men were ready to pay a pre- 
mium for cents, then, it must have been because of their 
anxiety to procure a part of the insufficient supply for use 
as small change not because they could make a profit by 
melting or exporting the coins. 

This need for 1-cent pieces continued to be felt even 
after the issue of the postage and fractional currency, for 
the lowest denominations of the latter were 5 and 3 cents 
respectively. 1 That the supply of cents was not sufficient to 
meet the demand is clear. Before suspension they were 
"considered redundant in quantity," according to the 
director of the mint, and it "was part of the hourly finesse 
of buyers and sellers to get rid of them." 2 Although 116,- 
000,000 of the nickel coins had been issued by June 30, 
1862, and 48,000,000 more were added during the next 
year, the supply was still so short in comparison with the 
demand that not less than three hundred varieties of illegal 
cent tokens of the same size, but less weight than the mint 
cent, and containing no nickel, were issued by private 
parties in direct violation of the law and " until suppressed 
were freely used as coin by the public." 3 Since the supply was 
thus deficient, it is perhaps not surprising that business houses 
were willing to pay a slight premium for their small change. 

1 KNOX, United States Notes, pp. 103 and 104. 

2 Report of 1863, p. 189. 3 ibid. 



THE CIRCULATING MEDIUM 169 

As the amount of cents called for continued to be so 
great, and as nickel was a costly ingredient, the director of 
the mint proposed in October, 1863, to substitute bronze for 
the alloy of nickel and copper. 1 No action was taken upon 
this recommendation at the time, and on March 2, 1864, the 
director wrote a letter to Secretary Chase, calling attention 
again to the subject: 

This change in the material of the cent .... has become 
a necessity from the advance[d] price of nickel (for a supply 
of which we are at present entirely dependent upon the foreign 
market, paying for it in gold or its equivalent), and the great 
uncertainty of procuring an adequate supply for the future from 
any source at a price within the legal limit, .... if nickel is 
retained it will be impossible to meet the enormous demand for 
cents, and the increasing cost of production may compel a cessa- 
tion of that coinage. The demand for cents is now far beyond our 
ability to supply it. 2 

Chase sent this letter with one of his own, supporting the 
director's recommendations, to Fessenden. 3 When the pro- 
posal to drop nickel as an ingredient in the coinage became 
known, it encountered serious opposition from the friends of 
Mr. Joseph Wharton, from whose works in Pennsylvania and 
New Jersey came the entire domestic supply. 4 To remove 
their objections Mr. Pollock, the director, wrote a second 
letter March 16, recommending as a compromise that the old 
alloy of 88 per cent, copper and 12 per cent, nickel be 
retained, but that the weight of the cent be reduced from 72 
to 48 grains. 5 Mr. Clark, from the Senate finance committee, 

1 Ibid. 

2 Congressional Globe, 38th Cong., 1st Sess., p. 1228. 3 ibid., p. 1227. 

* Mr. Wharton himself prepared a little pamphlet, Project for Reorganizing the 
Small Coinage of the United States of America, in which he offered to provide all the 
nickel that would be necessary for making not only one- and two-cent pieces, bnt also 
other coins less than twenty-five cents at $2.50 per pound. At this price he estimated 
that one- and two-cent pieces could be made at a profit of 33VS per cent, to the gov- 
ernment. The pamphlet bears the date April 15, 1864, 

Congressional Globe, 38th Cong., 1st Sess., p. 1228. 



170 HISTORY OF THE GREENBACKS 

however, brought in a bill for a bronze cent of 48 grains 
and a 2-cent piece of the same composition, but twice the 
weight. 1 This measure was at once passed by the Senate 2 
and a month later by the House after very brief discussion. 8 
In October the director of the mint reported that the new 
coinage law had been "highly successful." "The demand 
for the one and two-cent pieces," he added, " has been unpre- 
cedented, and every effort has been made to meet it." In 
explaining why the demand continued greater than the 
supply, despite daily issues largely in excess of any former 
period, he said: 

Large quantities are hoarded and thus kept from circulation. 
They have also been bought and sold by small brokers at a 
premium. This has induced individuals to collect them for the 
purpose of sale, thus producing a scarcity and inconvenience to the 
public that ought not to exist. 4 

The letters of Mr. Pollock to Secretary Chase and these 
remarks in the October report indicate that the time had at 
last come when the bullion value of nickel cents was approxi- 
mating their nominal value as currency. Indeed, as early as 
March, 1864, Lyman Trumbull, of Illinois, remarked in the 
Senate : 

The cent as a general thing does not circulate in the country 
now, I think. We see some few of them here, but in my travels I 
very seldom see a cent. I do not know how it may be in other por- 
tions of the country. 5 

At this time, March 21, gold was at 162 and paper was 
accordingly worth 61.7 in specie. If cents were being 
hoarded, it must have been because the advance in the price 
of nickel, of which Mr. Pollock complained, had carried the 
bullion value of 100 coins above 62 cents in gold. But 

i Congressional Globe, 38th Cong., 1st Sess., p. 1227. 2/6td., p. 1228. 

3 Ibid., p. 1763; act of April 22, 1864; 13 Statutes at Large, p. 54. 

< Report, October, 1864, p. 213. 

5 Congressional Globe, 38th Cong., 1st Sess., p. 1227. 



THE CIBCULATING MEDIUM 171 

whether there was a profit in melting or exporting the minor 
coins in March, 1864, there apparently was one in June and 
the following months. The monthly average price of gold 
was above 200 from June until February of the next year, 
inclusive. During this period the average specie value of 
paper dollars varied from 38.7 cents in July to 48.7 cents in 
February. Even had there been no advance in the gold 
price of nickel, there would have been a margin of profit in 
collecting coins which would pass current as money at a gold 
equivalence of considerably less than 50 cents, but could be 
sold as bullion for perhaps 55 or more. Consequently, it is 
not improbable that some of the brokers who bought nickel 
cents at a premium in the summer of 1864 purchased them 
to melt or export, not to sell again for change. On the other 
hand, it should be pointed out that the expense of collecting 
and handling one-cent pieces would be much greater in 
proportion to their bullion value than in the case of silver 
coins. 

The situation was, of course, somewhat different with the 
cents struck under the new coinage law. These coins con- 
tained no nickel and weighed but two-thirds as much as the 
previous issues. During the fiscal year 1865 the government 
made a profit of about $400,000 from their manufacture. 1 If 
any premium was paid for them, it must consequently have 
been from the desire to obtain change. As the nickel cents 
appear, from what Senator Trumbull and the director say, to 
have gone out of circulation in large measure, the scarcity of 
change less than three cents the smallest fractional note 
must have been severe. Of the bronze cents 5,874,000 were 
struck before July 1 and of the two-cent pieces 1,822, 500. 2 

1 Report of the Director of the Mint, September, 1865, p. 232. 

2 No separate statement is made by the director of the mint of the coinage of 
nickel and bronze cents in the fiscal year of 1864, but the above figures are obtained 
by subtracting from the total coinage of cents up to June 30, 1864, the total number 
of copper and nickel cents struck as given in Coinage Laws of the United States, 1792 
-1894, 4th ed., p. 89. 



172 HISTORY OF THE GREENBACKS 

Though the coinage during the fiscal year 1865 was very 
rapid an average of 2,250,000 two-cent pieces and 4,500,- 
000 cents each month 1 the supply could not have been 
sufficient to meet the demand. 

One more change was made in the circulation of minor 
coins before the end of the war. From a price of 226 the 
last day of 1864 gold fell to 200 by the 1st of March, and 
the rapid progress of the northern armies then promised a 
still further fall, which was realized in April and May, when 
the average price was 148.5 and 135.6 respectively. This 
fall in gold or rise of paper money seemed to show that the 
day was close at hand when minor coins would remain in 
circulation without difficulty. 2 Accordingly a bill was passed 
without discussion by Congress, 3 authorizing the issue of a 
three-cent piece, made of copper and nickel, in the propor- 
tion of 75 parts of the first and 25 parts of the second. 
This coin was to be legal tender in payments of sixty cents, 
and the one and two-cent pieces in payments of four cents. 
At the same time it was provided that thereafter no frac- 
tional notes should be issued of denominations less than five 
cents, and that any such notes outstanding should be 
destroyed when paid into the treasury. 4 

When the director of the mint prepared his report at the 
end of September, 1865, he made no further complaints 
about the premium on minor coins. Paper dollars had then 
a value of more than sixty-nine cents in gold, and even the 
three-cent pieces, containing 25 per cent, of nickel, seemed to 
have been worth more as currency than as bullion. " The 
coinage of the cent and the two-cent piece from the bronze 
alloy," the director said, "has been very large, but not in 

1 Report of the Director of the Mint, 1865, p. 235. 

2 Hunt's Merchants' Magazine for May, 1865, includes "coppers" in its statement 
of " the active circulation of the country," Vol. LIT, p. 381. 

3 Congressional Globe, 38th Cong., 2d Sess., pp. 1391 and 1403. 
* Act of March 3, 1865; 13 Statutes at Large, p. 517. 



THE CIRCULATING MEDIUM 173 

excess of the demand. They have been distributed to almost 
every part of the United States, and many into states, west 
and south, that heretofore refused to use such coin as cur- 
rency." 1 He closed by suggesting that the policy pursued 
in issuing a three-cent piece be followed further by making 
five-cent coins also of 25 per cent, nickel, and that, to make 
room for their circulation, all fractional notes below ten cents 
be withdrawn. 

VI. TREASUEY NOTES 

As was said above, the first greenbacks were issued early 
in April, 1862. From this time on until specie payments 
were resumed, January 1, 1879, they served as the standard 
of value in all business transactions and also as an impor- 
tant part of the circulating medium. United States notes to 
the amount of $98,600,000 were issued before July 1, 1862. 
From this time on for two years the treasury was paying out 
large sums in these notes, but was also redeeming those paid 
in to it and then reissuing them. During the next fiscal year 
the issues were $291,300,000 as compared with the redemp- 
tions of $2,100,000; during 1864, $86,400,000, as compared 
with $42,600,000, and during 1865, $4,200,000, as compared 
with $4,300,000. Thus $431,000,000 were left outstanding 
at the close of the war. 2 The greenbacks served as a 
medium of exchange, not only in large, but also in small 
transactions, for while the first act provided that $5 should 
be the lowest denomination, the second and third acts per- 
mitted any denomination not less than a dollar. The amount 
of the several denominations in use is indicated by the fol- 
lowing table: 

IP. 232. 

2 BAYLEY, National Loans of the United States, p. 157. These statements differ 
slightly from those given year by year in tho contemporaneous reports of the secre- 
tary of the treasury. 



174 



HISTORY OP THE GREENBACKS 



TABLE IV 

UNITED STATES NOTES OP THE SEVERAL DENOMINATIONS OUTSTANDING AT THE CLOSE 
Or EACH FISCAL TEAR FROM 1862 TO 1866 1 

(In millions of dollars) 





1862 


1863 


1864 


1865 


1866 


One dollar 




16 


16 8 


17 8 


17 2 


Two dollars 




17.0 


17.7 


19.6 


18.8 


Five dollars 


17.1 


79.9 


95.5 


96.0 


95.4 


Ten dollars 


15.4 


90.0 


108.7 


109.5 


109.0 


Twenty dollars 


15.0 


74.9 


86.6 


86.1 


85.1 


Fifty dollars 


13.0 


23.0 


29.9 


29.7 


29.3 


One hundred dollars . 
Five hundred dollars . 
One thousand dollars. 


13.0 
13.0 
10.0 


30.8 
26.5 
29.5 


34.2 
25.4 
37.1 


as. 8 

24.8 
35.8 


33.3 
35.4 
57.1 


Total 


96.6 


387.6 


451.9 


453.1 


480.7 


Denomination un- 
known, in reserve. . . 






4.6 


22.0 


79.9 


Net 


96.6 


387.6 


447.3 


431.1 


400.8 















But the greenbacks were by no means the only form of 
government obligations employed as currency. Three other 
sorts of treasury notes were made a legal tender to the same 
extent as United States notes, but differed from the latter 
in that they bore interest. The third legal-tender act, 
approved March 3, 1863, authorized the issue of $400,000,- 

000 treasury notes, bearing not more than 6 per cent, inter- 
est, redeemable in not more than three years, and a legal 
tender for their face value, excluding interest. 2 Under this 
act Mr. Chase issued $166,500,000 of two-year 5 per cent, 
notes between July 1, 1863, and June 30, 1864, and 
$44,500,000 of one-year 5 per cent, notes between January 

1 and June 30, 1864. 8 

How far these notes were employed as currency is alto- 
gether uncertain. It was apparently the expectation of the 

i Report of the Secretary of the Treasury, December, 1896, p. 62, 
212 Statutes at Large, sec. 2, p. 710. 
3 BAYLEY, op. cit., p 161. 



THE CIBCULATING MEDIUM 175 

treasury that banks and capitalists into whose hands they 
came would retain the notes to secure the interest. This 
would probably have happened very generally had the inter- 
est been paid only at maturity. But when, in the autumn 
of 1863, Mr. Chase borrowed money for paying the troops 
from the banks, to be repaid in 5 per cent, notes, the banks 
stipulated that the notes given them should bear half-yearly 
interest coupons. 1 One hundred and fifty millions of the 
$166,500,000 of two-year notes issued were of this form. 2 
They were found in practice to be a most unsatisfactory form 
of currency. After Secretary Chase had ruled that the interest 
coupons must be detached in the presence of an officer of 
the treasury or of a national bank, 3 the notes were usually 
paid out with no regard to the interest until the date on 
which the next coupon was payable approached, then hoarded 
for a time, and as soon as the interest had been collected, 
once more thrown into circulation. 4 This tended, of course, 
to cause periodical expansions and contractions of the cur- 
rency embarrassing alike to the business public and to the 
treasury. The circulation was also rendered irregular by 
fluctuations in the current rates of interest on short-time 
loans in the New York market. When money was at 5 per 
cent, or less, men found it advantageous to retain the gov- 
ernment notes in their own hands ; but when the rates rose 
to 7 or 8, few would choose to keep their funds in a short- 
time 5 per cent, security. 5 

Appreciating these evils, Mr. Chase and Mr. Fessenden, 
who succeeded him as secretary of the treasury on July 5, 
1864, determined to withdraw the coupon notes as rapidly 

1 Hunt's Merchants 1 Magazine, Vol. L, p. 455. 

2 Report of the Treasurer, November, 1864, p. 75. 

3 Hunt' s Merchants' Magazine, Vol. L, p. 455. 

* Report of the Secretary of the Treasury, 1864, p. 18 ; Hunt's Merchants' Magazine, 
Vol. L, pp. 215, 216, and Vol. LI, p. 447. 

'> Hunt's Merchants' Magazine, Vol. L, pp. 215 and 455. 



176 HISTORY or THE GREENBACKS 

as possible. Before December, Secretary Fessenden re- 
ported, about $90,000,000 of the $150,000,000 issued had 
been retired. 1 Their place was occupied by another form 
of interest-bearing, legal-tender treasury notes issued under 
the authority of the acts of March 3, 1863, and June 30, 
1864. 2 The new notes ran three years and bore interest 
at 6 per cent., compounded half-yearly but payable only at 
maturity. Some $17,000,000 were issued before the close of 
the fiscal year 1864, and $180,000,000 during the next year. 3 
These issues were called compound-interest notes. They were 
commonly regarded as the least injurious form of treasury 
notes devised during the war because of the inducement which 
the compound interest gave for keeping them as an invest- 
ment. 4 Of course, this inducement became stronger the longer 
the note had been issued. Thus a $10 note the smallest de- 
nomination was worth $10.60 at the end of the first year, 
$11.25 at the end of the second, and $11.94 at the end of 
the third. Anyone who paid the note away at the end of 
the first year would therefore lose 60 cents, at the end of the 
second $1.25, and at the end of the third $1.94. 

Nevertheless the compound-interest notes served to in- 
crease the currency inflation to an uncertain extent, both 
directly and indirectly. The comptroller of the currency 
thought that in October, 1865, perhaps $10,000,000 of these 
notes were in actual circulation as money, 5 and in December 
the secretary of the treasury thought it was "safe to esti- 
mate" that $30,000,000 of the one- and two-year notes of 
1863 and the compound-interest notes together were so 
used. 6 Perhaps the indirect use was really more important. 

i Report, p. 18. C/. Chase's letter of April 17, 1865, to Colonel J. D. Van Buren 
in SCHCCKEES'S Life, p. 413. 

212 Statutes at Large, p. 710, and IS Statutes, p. 218; c/. BAYLET, p. 84. 

3 BATLEY, p. 163. The form of these notes is given by KNOX, p. 111. 

* Report of the Secretary of the Treasury, 1864, p. 18. 

5 H. R. Executive Document No. 4, 39th Cong., 1st. Sess., p. 5. Report, p. 9. 



THE CIRCULATING MEDIUM 177 

This was found in practice of banks of holding compound- 
interest notes as reserves in place of greenbacks that bore no 
interest. The comptroller of the currency stated that the 
amount held by national banks October 2, 1865, was $74,- 
250,000. J Similar use was made of the one- and two-year 5 
per cent, notes left outstanding. 2 In so far as interest- 
bearing, legal-tender notes were kept in this fashion, they 
set free greenbacks for circulation among individuals. 

The list of government obligations employed as cur- 
rency is not yet complete. Two other forms, although not a 
legal tender, were used as a circulating medium. The issue 
of certificates of indebtedness, bearing interest at 6 per cent, 
and payable in one year, had been authorized without lim- 
itation of amount by the act of March 1, 1862. 3 This 
method of postponing claims which they had not the funds 
to meet at once was availed of on a large scale by the secre- 
taries of the treasury during the entire war. Fifty millions 
of such certificates were issued in the fiscal year of 1862, 
$157,000,000 in 1863, $169,000,000 in 1864, and $131,- 
000,000 in 1865.* Most of these notes were paid out to con- 
tractors and by them used either as collateral for procuring 
bank loans or directly as currency. Much of the time certifi- 
cates of indebtedness were at a small discount, but despite 
this they passed freely from hand to hand as current funds. 5 

Similar use was made of the "seven- thirties." This was 
the name given to the three-year treasury notes bearing 7.3 
per cent, interest issued under the acts of July 17, 1861, 
June 30, 1864, and March 3, 1865. 6 Interest on notes 

1 See reference in note 5 on preceding page. They were not, however, a legal 
tender in payment of bank notes. 13 Statutes at Large, p. 219. 

% Bankers' Magazine, Vol. XVIII, p. 827; Hunt's Merchants' Magazine, Vol. 
XLIX, p. 384. 

312 Statutes at Large, p. 352. * BAYLEY, p. 159. 

5 Of. Hunt's Merchants' Magazine, Vol. LII, p. 382. 

12 Statutes at Large, p. 259 ; 13 Statutes, pp. 218 and 468. 



178 HISTORY OP THE GREENBACKS 

issued under the first of these laws was paid in gold, but the 
second and third issues were payable, principal and interest, 
in lawful money. In the summer and autumn of 1864 Sec- 
retary Fessenden offered 7.30 notes of the second issue in 
small denominations to army officers and soldiers in pay- 
ment of their wages. Over $20,000,000 were thus paid 
out in place of greenbacks. 1 In December, 1865, Secretary 
McCulloch reported that many seven-thirties of these small 
denominations were in circulation as money. 2 

VII. RECAPITULATION 

Perhaps the clearest view of the confused state of the 
monetary circulation of the United States during the Civil 
War can be obtained from a summary statement of the 
various coins, government obligations used as currency, and 
bank notes outstanding at the close of the several fiscal 
years, so far as the amounts can be ascertained. Such a 
statement is presented on the following page, with a few 
explanatory notes. 

This table is intended rather as an indication of the vari- 
ous kinds of currency in use than as a quantitative statement 
of the circulating medium. Few of the items can be regarded 
as showing with any degree of definiteness amounts in use 
as money. The specie circulation, for example, is computed 
on the basis of the statistics of coinage and the director of 
the mint's estimate that in 1861 there were from $275,000,- 
000 to $300,000,000 of specie in the country and that in 
1862 there were $45,000,000 of silver coinage. 3 A different 

1 Report of the Secretary of the Treasury, 1864, p. 21. 

2 Report, 1865, p. 9. Under the act of Jane 30, 1864, it was provided that such of 
the notes as should be made payable principal and interest at maturity should be a 
legal tender (13 Statutes at Large, p. 218). As, however, the secretary preferred to 
attach interest coupons of which only the last was payable with Ithe note at matur- 
ity, they did not possess this property. Cf. W. F. DE KNIGHT, History of the Cur- 
rency of the Country and of the Loans of the United States (Treasury Department 
Doc. No. 1943), 1897, p. 96, and form of the 7-30's as given on the following pages. 

3 Report of 1861, p. 62 ; Report, 1862, p. 49. 



THE CIRCULATING MEDIUM 



179 



TABLE V 

CCBBENCY OF THE LOYAL STATES AT THE CLOSE OF EACH FISCAL YEAB FROM 1860 

TO 1866 

(In millions of dollars) 





I860 


1861 


1862 


1863 


1864 


1865 


1866 


I. Specie: 1 
1. Gold coins 


184.6 


245.3 


22.0 


22.0 


22.0 


22.0 


22 


2. Silver dollars . . . 
















3. Subsidiary silver 
4. Minor coins 


39.6 
.9 


42.2 
1.0 


3.0 
1.2 


3.0 
1.6 


3.0 
2.1 


3.0 
3.3 


3.0 
3 9 


II. Postage and frac- 
tional currency : 2 
1. Postage currency 








20.2 


15.2 


9.9 


7.0 


2. Fractional curr. 










7.7 


15.1 


20.0 


III. Non-interest bear- 
ing, legal-tender, 
treasury notes : 
1. Old demand 
notes 2 






53 


3.4 


.8 


5 


3 


2. Greenbacks 3 . . . . 






96 6 


387.6 


447.3 


431 1 


400 8 


IV. Banknotes:* 
1. Notes, state b'ks 
2. Notes, nat'l b'ks 


207.1 


202.0 


183.8 


238.7 


179.2 
31.2 


142.9 
146.1 


20.0 
281.5 


V. Interest -bear ing, 
legal- tender, 
treasury notes: 2 
1. One-year, 5 per 
cent., treasury 
notes of 1863 










44 5 






2. Two-year, 5 per 
cent., treasury 
notes of 1863 










109.0 


42.3 


3.5 


3. Compound inter- 
est notes 










15.0 


193 8 


159.0 


VI. Government obli- 
gations not a 
legal tender: 2 
1. Certificates of in- 
debtedness 






49.9 


156 8 


160 7 


115 8 


26 4 


2.7-30 treasury 
notes of 1864 












234 4 


~] 


3.7-30 treasury 
notes of 1865 












437 2 


[806.3 


VII. Coin, bullion, and 
paper money in 
the Treasury 5 . . . 


6.7 


3.6 


23.8 


79.5 


35.9 


55.4 


80.8 



1 See explanations in text below. 

2 Compiled from the annual Reports of the Secretary of the Treasury. 

3 See Table IV above. 

* Statistical Abstract of the United States, 1878, p. 14. 

* " Information Respecting U. S. Bonds, Paper Currency, Coin," etc. (revised ed., 
Treasury Department Circular No. 123, July 1, 1896), p. 52. 



180 HISTORY OF THE GREENBACKS 

result would have been reached had Mr. Chase's guess at the 
amount of coin been taken in place of the director's. 1 Of 
course, the coins put down as circulating after 1862 were 
used only on the Pacific coast. The common guess is that 
about $25,000,000 were employed there, and this sum has 
been divided between gold and subsidiary silver again by 
guesswork. 2 The figures for the minor coins show the 
amounts struck under the acts of 1857 and the laws of 1864, 
1865, and 1866, as given in the current reports of the 
director of the mint. But, as has been shown, it is probable 
that a considerable part of these coins were withdrawn from 
circulation at least during the summer, autumn, and winter 
of 1864. On the other hand, some of the old copper cents 
made before 1857 remained still in circulation in 1862 and 
large amounts of cent tokens were privately issued in 1863. 

The figures for the postage and fractional currency are 
drawn from the public debt statements of the annual reports 
of the secretary of the treasury. They are subject to a con- 
siderable but indefinite error, particularly in the later years, 
on account of the large number of these little notes lost and 
destroyed. It must also be remembered that the place in 
the currency which they were intended to fill was largely 
occupied from July, 1862, to perhaps February or March, 
1863, by shinplasters and postage stamps. 

The next four items in the table are less uncertain. It 
is well ascertained that the old demand notes were not com- 
monly used as currency after May, 1862. From that time 
on they were seldom paid out except as a substitute for gold 
at the customs-houses. The circulation of greenbacks during 
the war is subject to small doubt, although different official 

1 Chase made the coin of the loyal states November 1, 1861, not less than $210,000,- 
000 (Report, 1862, p. 13). The director of the mint made this same sum somewhere 
between $255,000,000 and $280,000,000. See note 3, p. 178, above. 

2Cy. "Information Respecting United States Bonds, Paper Currency, Coins, 
etc." (revised ed., Treasury Department Circular No. 123, July 1, 1896), p. 52, note 1. 



THE CIRCULATING MEDIUM 181 

documents do not give precisely identical figures, and the 
same is true regarding the notes of state and national banks. 

In the next two divisions interest-bearing government 
obligations which were and which were not a legal tender 
the amount outstanding is stated with accuracy by the regis- 
ter of the treasury, but no reliable estimate can be made 
of the amount that was in actual use as currency at the 
different dates. 

Statements of the volume of the monetary circulation of 
the United States during the Civil War have been published 
from time to time in official documents 1 and frequently 
accepted uncritically as the basis of argument in currency 
discussions. The preceding review of the situation, indefi- 
nite and tedious as it is, has at least the negative merit of 
showing that such statements are subject to a much wider 
margin of error than is commonly the case and few would 
be found to claim a high degree of accuracy for statements 
of this sort under the most favorable circumstances. To cast 
up the totals of the above table would be not only useless, 
but positively misleading, because several of the items are 
mere guesses, and in the case of others where the amounts 
are reasonably certain, not all of the sums set down were in 
use at any time as currency. Nor could any estimate be 
made on the basis of the totals that would command confi- 
dence. But, while the amount of currency in circulation is 
not and cannot be known, it is evident from the discussion 
that not least among the unhappy consequences of the legal- 
tender acts was the disorder into which the circulating 
medium was thrown a disorder that caused much incon- 
venience to the business public. The more serious effects 
produced by the disturbance of the standard of value remain 
to be discussed in other chapters. 

i See for example the Statistical Abstract for 1878, p. 14, and the circular of the 
Treasury Department referred to above. 



CHAPTER III 

THE SPECIE VALUE OP THE PAPER CURRENCY 

I. The Markets for Gold: 

First Dealings in Gold The Stock Exchange The Gold Ex- 
change The "Open Board" The Evening Exchange Nature 
of the Business in Gold Tables of the Premium. 
II. Factors which Affected the Gold Price of the Currency: 

Various Theories of the Premium The Supply of and Demand 
for Gold Effect of Receivability for Taxes, Convertibility into 
Bonds and of the Legal-Tender Clause on the Value of Greenbacks 
Effect of Additional Issues Of Finance Reports Of "War 
News" Of Political Events Of Foreign Affairs The Premium 
and the Quantity Theory Speculation. 

III. The Course of Depreciation, January, 1862, to December, 1865: 
1. January to April, 18622. The Fall from May, 1862, to Febru- 
ary, 18633. The Rise from March to August, 18634. The Fall 
from September, 1863, to July, 1864 Chase's Campaign against 
the Gold Speculators 5. The Rise from August, 1864, to May, 1865 
6. The Decline from June to December, 1865. 

THE MARKETS FOB GOLD 1 

A PBEMIUM appeared upon gold a8 soon as it became known 
that the treasury and the New York banks had determined 
to suspend specie payments. This premium represented the 
difference between the community's valuation of gold coin, 
on the one hand, and of the paper currency, on the other. 
In January, 1862, the latter consisted of bank and treasury 
notes that had been put into circulation as tacit or explicit 
promises to pay gold coin. Of course, men did not esteem 
such promises as equivalent to gold itself after the promisors 
had given public notice that they were unable to redeem 

i See K. CORN WALLIS, The Gold Room and the New fork Stock Exchange and 
Clearing House ("Atlas Series," No. 8), New York, 1879; JAMES K. MEDBEERY, Men 
and 'Mysteriesof WallStreet (Boston, 1870), chapters xii, xiii; HORACE WHITE, Money 
and Banking (Boston, 1896), pp. 174-90; and farther references in footnotes below. 

182 



SPECIE VALUE OP THE PAPER CURRENCY 183 

their promises for the present, and when no one knew how long 
such redemption would be postponed. Hence, when men who 
required gold coin for any purpose sought to procure it in 
exchange for paper money, they had to pay more than 
$100 of paper for $100 of gold. Whatever excess they paid 
was, of course, a premium on gold. 

For about a fortnight after suspension there was no 
organized market for gold in New York. People desiring 
to buy gold naturally went to the dealers in foreign coin 
who displayed the precious metals in their shop windows, 
and people who had specie to sell took it to the same places. 
But very soon the business became too large to be con- 
ducted in this fashion. The small offices of the money 
brokers were overcrowded, and traders blocked the sidewalks 
of narrow Wall street to such an extent that the police were 
given special orders to keep the crowds moving. This state 
of affairs led to an organization of the traffic and the forma- 
tion of gold exchanges. 

From the published tables of the premium it appears 
that regular dealing in gold began on the New York stock 
exchange January 13, 1862. Here it was regarded as the 
gentlemanly and patriotic thing to sell gold, and the majority 
of members of the exchange who engaged in the traffic at 
all were on the "bear" side of the market. A second and 
less decorous market was formed in a dingy cellar in William 
street, dubbed the "coal hole." A number of men who 
were devoting themselves exclusively to dealing in gold took 
refuge in this place when their business grew too large to be 
conducted in their private offices or in the street. As the 
number of brokers increased, the "coal hole" was found too 
small and the company moved to more commodious quarters, 
first in Gilpin's News Room at the corner of William street 
and Exchange place; later in the rooms of the old stock 
board at No. 24 Beaver street; and finally in New street, 



184 HISTORY OP THE GREENBACKS 

next door to the stock exchange. For some time the mem- 
bers of this exchange, that came to be known as the " Gold 
Room," contented themselves with a very loose organization. 
It was not until October, 1864, that a constitution and by- 
laws were adopted and regular officers elected. 

Besides the stock exchange and the " Gold Room," there 
were two other markets for gold in New York the "open 
board" and Gallagher's evening exchange. The "open 
board" of stock brokers was a more popular organization, 
running as a rival of the "regular board" i. e., the stock 
exchange with which it was amalgamated in 1869. The 
"evening exchange" was a characteristic excrescence of the 
times. Speculation was carried to an unprecedented extent 
in New York during the winter and spring of 1864. 
Though the regular exchange was kept open long hours, 
crowds of men thronged the corridors of the Fifth Avenue 
hotel speculating at night. A certain Mr. Gallagher seized 
upon the opportunity in March, 1864, to open a luxuriously 
appointed room opposite the hotel, where gold and railway 
and petroleum stocks could be bought and sold till mid- 
night. So injurious was this continual round of feverish 
business deemed that after the disclosure of the Ketchum 
gold-certificate forgeries 1 in August, 1865, the city banks, the 
stock exchange, the "open board," and the gold exchange 
united in an effort to suppress the evening exchange by 
forbidding their members to frequent it. As a result Gal- 
lagher was forced to close his rooms. 2 

The volume of transactions in these markets became very 
great. Importers came to buy gold, not only for payment of 
customs dues and for making payments to foreigners, but 
also for protection against fluctuations in the value of the 
currency between the time goods were bought and sold. 

1 See, e. g., Hunt's Merchants' 1 Magazine, Vol. LIU, p. 226. 

2 Cf. New York Herald of August 20, and the money article of August 24, 1865 ; 
Tribune, news columns of March 22, 1864. 



SPECIE VALUE OP THE PAPER CUEEENCY 185 

Bankers doing business in foreign exchange had to purchase 
gold for remittances. Exporters and apparently many men 
engaged in domestic trade or manufactures bought or sold 
like importers to guard against changes in the value of the 
currency. But the volume of speculative dealings probably 
far exceeded these transactions growing out of the needs 
of business. Indeed, gold became as favorite an article to 
speculate in as petroleum stocks or railway shares. Many 
persons whose occupations presented no need for such opera- 
tions bought and sold gold clergymen, physicians, law- 
yers, small merchants, anyone who had sufficient funds to 
provide the necessary 10 per cent, margins. Members of 
Congress, clerks in the government departments, and news- 
paper reporters frequently tried to obtain pecuniary advan- 
tage from their positions by operating through gold brokers 
on the information that came to them before it was given to 
the public. Most large operators in gold had correspondents 
in Washington, Baltimore, or Louisville the centers of 
war news charged with sending them early dispatches con- 
cerning any event that could affect the credit of the govern- 
ment. In the "gold room" itself the struggle between oppo- 
site parties of speculators partook largely of the sectional 
feeling of the time ; and when the air was full of exciting 
war news, the "bulls" would often sing "Dixie," and the 
"bears" try to drown their voices by chanting "John 
Brown" in chorus. 1 

The price of gold in currency, as determined by transac- 
tions in these New York markets, was regularly reported by 
telegraph in all considerable towns of the United States, and 
everywhere accepted as authoritative. There is no necessity 
for taking account of the premium on gold in other places, 
because local markets were dominated by the New York 
quotations. The money columns of the daily newspapers 

i See COBNWALLIS, op. cit., pp. 4-7. 



186 HISTORY OP THE GREENBACKS 

and the weekly or monthly issues of the financial journals 
gave full reports of current fluctuations, and more permanent 
records were made by the compilation of a number of tables 
showing the highest and lowest prices each day for a series 
of years. Such tables may be found in Hunt's Merchants 1 
Magazine, the Commercial and Financial Chronicle, the 
Bankers 1 Magazine, and the annual Reports of the Chamber 
of Commerce of the State of New York. 1 

All of these tables appear to be constructed in the same 
general manner from the recorded transactions of the most 
important of the New York markets. From January 13, 
1862, to June 20, 1864, they are based upon sales at the 
stock exchange. On June 21 the "gold bill" went into 
effect and stopped all dealing in gold outside the private 
offices of brokers. 2 From this time until the repeal of the 
"gold bill" by the act of July 2, there was no organized 
market, and the quotations are those ruling on the street. 
After the repeal, transactions in gold on the stock exchange 
were infrequent, and most of the business was done in the 
"gold room." From July, 1864, on, therefore, the tables 
are based upon the latter market. 3 

In studying the fluctuations in the gold value of the paper 
currency it is necessary to go back to these records of the daily 
premium. As the differences between the tables mentioned 
are slight, it matters little which set is accepted as a basis for 
the investigation. I have decided to use the tables published 
in the chamber of commerce reports, not only because of the 
official character of the source from which they are taken, 
but also because they contain fewer obvious errors of the 
press than some of the others. To adapt them better to the 

1 SCHTJCKEBS, op. ctf ., pp. 631-4, publishes similar tables for the years 1862-65 pre- 
pared by Messrs. B. K. Jamison & Co., bankers, of Philadelphia. 

2 See p. 231, below. 

9 Compare the explanations made regarding the Commercial and Financial 
Chronicle tables; e. gr., Vol. I, p. 168. 



SPECIE VALUE OF THE PAPEB CUKBENCY 187 

purposes of the present chapter I have altered their form. 
As published, the tables show the highest and lowest price 
paid each day in currency for $100 in gold. This form of 
statement gives the impression that the fluctuations were due 
to extraordinary changes in the valuation at which gold was 
held by the community, whereas in fact they were due mainly 
to changes in the community's valuation of the notes of the 
government. When the market quotation was 200 the ex- 
planation, of course, was not that men esteemed gold twice 
as highly as they had done in 1861, but rather that they 
esteemed the paper currency but half as highly as they had 
when it was redeemable in specie. A much juster impression 
of the significance of the change in the relative values of gold 
and paper money is therefore given by quoting currency at a 
discount in gold than by quoting gold at a premium in paper ; 
by saying, to use a numerical example, that $100 in green- 
backs was worth $50 in gold, than by saying that $100 in 
gold was worth $200 in greenbacks. For this reason the 
chamber of commerce tables for the years 1862 to 1865 have 
been converted into tables showing the highest and lowest 
daily prices of currency in gold. These tables, given in full 
in the Appendix, 1 furnish a basis for studying the remarkable 
changes in the gold value of the currency during the Civil 
War. 

II. FACTOBS WHICH AFFECTED THE GOLD PBICE OF THE 

OUBBENCY 

So rapid and so violent were the fluctuations in the gold 
markets that, despite the absorbing interest of military 
events, they attracted much attention from the treasury offi- 
cials and the general public. Various attempts were made 
to account for the changes. Perhaps the simplest theory 
was that a nominal advance of gold had been produced by 

Pp. 425-8, below. 



188 HISTORY OP THE GREENBACKS 

the nefarious acts of disloyal speculators, who took advan- 
tage of the fact that "gold had become a mere commodity" 
to monopolize the supply and raise the price. This theory 
logically involved the conclusion that the currency had not 
depreciated, but that gold had risen in value a conclusion 
that was commonly accepted and defended by instancing the 
case of various commodities that had not advanced in price. 1 
One buoyant adherent of this view went so far as to con- 
gratulate the country upon the increase in its wealth pro- 
duced by the advance of gold. 2 

The plausibility of such views diminished in proportion 
as the rise in the price of commodities progressed, and after 
the winter of 1862-63 few were found to deny that the 
paper money had depreciated. It then became common 
to ascribe depreciation to inflation of the currency, which 
some charged on the banks, some on the treasury, and some 
on both. In view of the dominance of the quantity theory of 
the value of money among economists of the time, inflation 
was the most natural explanation of the rise of prices. But 
the fluctuations in the premium on gold were so much more 
rapid and violent than the changes in the volume of the cir- 
culating medium that not even academic economists could 
regard the quantity theory as an adequate explanation of all 
the phenomena. 3 Sometimes they charged the fluctuations 
that did not accompany changes in the quantity of money 
to mere speculation, sometimes to a variety of other causes. 
Indeed, in discussing the question, it was common to begin 
by demonstrating that the premium and the volume of the 

i Compare the congressional speeches cited above, pp. 113, 114 ; and Report of the 
Secretary of the Treasury, December, 1862, pp. 12-15. 

28. P. TOWNSEND, The Great Speech of the Late Political Campaign, etc. (New 
York: J. A. Houston, 1862), p. 10. 

3 PRESIDENT J. T. CHAMPLIN of Colby University, for example, who enunciated a 
stiff form of the quantity theory in his little text-book, Lessons on Political Economy, 
1868, admitted that the value of a paper dollar depends " partly upon the prospect 
of its being ultimately redeemed in real values " (p. 125). 



SPECIE VALUE OP THE PAPER CURRENCY 189 

currency did not vary concomitantly, as they legitimately 
should have done, and then to launch into a tirade against 
the unpatriotic gold gamblers. 1 

Men who observed the transactions of the gold markets 
with care and did not allow their conclusions to be controlled 
by preconceived theories, as a rule gave less simple explana- 
tions of the changes. The momentary credit of the govern- 
ment, the course of military events, the policy of the banks, 
the export of specie, the demand for gold from importers, 
the probability of fresh issues of legal-tender paper, treasury 
sales of gold, speculative manipulation of the markets, the 
chance of resumption of specie payments these and similar 
matters were declared to affect the premium. Some writers 
jumbled such matters together indiscriminately and implied 
that the price of gold depended in the same manner on all ; 
others attempted to show the logical connection between 
one set of factors and another; but perhaps no one who 
studied the situation with care failed to see that the oscilla- 
tions of the indicator in the gold room generally followed 
the news dispatches from Washington and the front. 2 

Anyone who undertakes nowadays to investigate the 
grounds for these divergent opinions regarding the premium 
on gold must make a patient study of the transactions in 
the gold market from day to day in order to discover what 
considerations influenced those who bought and sold. For 

i Cf., e. g., FESSENDEN and McCuLLOCH in the Finance Report of 1864, pp. 22, 23 
and 52, 53, respectively. Perhaps as near an approach as any to a strict quantity 
theory of the premium is found in Hunt's Merchants' Magazine, Vol. L, p. 299. 

2 See as examples A. B. JOHNSON, The Advanced Value of Gold, Suspended Specie 
Payments, etc. (Utica, N. Y., 1862) ; ALEXANDER DELMAR, Gold Money and 
Paper Money (New York, 1863) ; HENRY C. CAREY, The Way to Outdo England 
without Fighting Her, 1865, Letters XII-XVI, and other of Carey's pamphlets on the 
currency ; CARL, VON HOCK, Die Finanzen und die Finanzgeschichte der Vcreinigten 
Staaten (Stuttgart, 1867), pp. 585-90; H. M. FITZHUGH, Cash and Credit (Baltimore, 
1868); CHARLES A. MANN, Paper Money the Root of Evil (New York, 1872), pp. 
166-79; CHARLES MOEAN, Money, Currencies and Banking (New York, 1875), p. 21; 
R. E. THOMPSON, Social Science and National Economy (Philadelphia, 1875), p. 205; 
CARL SCHTJRZ, Honest Money and Labor: An Address (New York, 1879), p. 35"; GEORGE 
M. WESTON, Money (New York, 1882), pp. 77-80. 



190 HISTORY OP THE GREENBACKS 

this purpose it is necessary to have recourse to the financial 
columns of the newspapers, in which the fluctuations of the 
premium were reported and attempts made to account for 
them. Such reading, however, merely supplies a mass of 
material of uneven value and contradictory meaning that 
requires careful analysis before much can be made of it. 
And at best the investigator is forced to admit that his con- 
clusions regarding many of the fluctuations are open to 
doubt, either because some of the factors affecting the situa- 
tion are unknown to him, or because it is difficult to assign 
their relative importance to the different factors that were 
active at the same time. The difficulties arise mainly in 
explaining the quantitative effects of given causes ; one often 
feels that for aught one knows a certain event might have 
produced equally well half or double the actual effect. But, 
as in the case of most economic questions, the qualitative 
analysis is less uncertain ; one can see why the known factors 
should have produced a certain sort of consequences, though 
one would be puzzled to say why these consequences were of 
the given magnitude. 

In analyzing the influences that made themselves felt on 
the stock exchange and in the gold room, after this fashion, 
one naturally begins by distinguishing two broad classes. 
Since the price quoted showed the ratio between gold and 
paper currency, and changed whenever anything occurred 
to alter the supply of, or the demand for, either, the 
factors to be taken account of may be ranged under these 
heads: (1) factors affecting the valuation of gold, (2) factors 
affecting the valuation of greenbacks. 

But brief attention need be given to the first category. 
The common assertion that the high premium was due, not 
to depreciation of the currency, but to an advance in the 
valuation of gold produced by speculation, commands scant 
respect in face of the evidence borne by exports of precious 



SPECIE VALUE OP THE PAPER CUBEENCY 191 

metals and by the price tables. Gold has a world-market per- 
haps more truly than any other commodity, and the fact is 
well ascertained that in the early sixties its value in Euro- 
pean markets was declining. If, then, the value of gold 
had been notably augmented in the United States by 
"speculation " or any other cause, the export of the precious 
metals would inevitably have declined and imports might 
have begun. But such was by no means the case. In the 
fiscal year 1861 imports of gold exceeded exports by $14,900,- 
000, but after specie payments had been suspended in 1862 
exports exceeded imports by $21,500,000, in 1863 by 
$56,600,000, in 1864 by $89,500,000, in 1865 by $51,900,- 
000, and in 1866 by $63,000,000. 1 As was remarked at the 
time, gold really became redundant in the United States 
when it had been withdrawn from current circulation as 
money, and when bankers were asked for exchange they 
could "find no commodity so cheap as gold to ship and 
draw against." 1 

Equally decisive is the testimony of the price tables. If 
the "gold-room gambling" actually caused a rise of gold, 
prices of commodities reckoned in gold must have fallen. 
But, as will be shown at length in the next chapter, this did 
not happen. On the contrary, the price of gold in currency, 
momentary fluctuations apart, rose less than the currency 
prices of most commodities. This evidence of the price- 
tables accords perfectly with the evidence of the gold-export 
tables and effectually disproves the theory which explains 
the premium as a consequence of an advance of gold engin- 
eered by mercenary speculators. 

The demonstration, however, that gold did not appreciate 
in value in the United States during the war, does not exclude 
the possibility of temporary fluctuations in the premium 

1 Statistical Abstract of the United States, 1901, p. 73. 

2 Hunt's Merchants 1 Magazine, Vol. XL VIII, p. 224. 



192 HISTORY OP THE GREENBACKS 

caused by changes in the supply and demand for gold in the 
local market. Indeed, it is certain that such changes exercised 
a perceptible influence upon the gold quotations, especially in 
quiet times. New York's supply of gold came mainly from 
inland towns and from California. Receipts reported from the 
latter source, it is true, fell from $32,600,000 in 1861 to 
$10,400,000 in 1863, because of danger of capture by Con- 
federate cruisers that haunted the track of the Aspinwall 
steamers. But this simply meant that gold destined for export 
was shipped directly from California under a foreign flag, 
instead of being brought through New York as heretofore. 
While the shipments from California to New York declined 
$22,200,000 between 1861 and 1863, the shipments to Eng- 
land increased $24,400,000.' 

Demand for gold in New York was mainly either for pay- 
ment of customs duties or for export. According to the official 
tables, the monthly customs receipts varied during the war 
from $2,500,000 in December, 1862, to nearly $14,000,000 
in April, 1864, while the exports of specie and bullion 
varied from less than $500,000 in March, 1865, to nearly 
$10,000,000 in June, 1862. 2 If the fluctuations in the 
amount of gold used for these two purposes each month 
from January, 1862, to December, 1865, be compared with 
the corresponding changes in the average value of the 
premium each month, only twenty-two of the forty-seven 
cases are found to present concomitant variations. But while 
this comparison shows that the demand for gold for such 
purposes was not the dominant factor in the market, it does 
not show that this demand had no effect. On the contrary, 
there can be little doubt that when the market was free 

1 See tables of exports of specie from San Francisco in Commercial and Finan- 
cial Chronicle, Vol. II, p. 135 ; and compare Hunt's Merchants' Magazine, Vol. LIV, 
p. 96. 

2 See the tables published in the Commercial and Financial Chronicle, Vol. II, 
pp. 230, 231. 



SPECIE VALUE OP THE PAPER CURRENCY 193 

from more powerful influences, purchases of gold for the 
payment of duties sometimes caused relatively slight 
increases of the premium ; and that the export demand had 
similar effects is sufficiently shown by the fact that news 
that the Bank of England had raised its discount rate could 
send up the premium because it made probable larger 
exports to London. 1 

It was a fact noted at the time that what influence this 
market demand and supply had upon the premium was often 
in the direction of moderating instead of increasing the 
fluctuations. When the premium rose sharply, gold that 
had been hoarded would be sent to be sold on the stock 
exchange in order to benefit by the high price. At this 
high price, however, importers would find it unprofitable to 
buy the gold they required to pay customs duties or remit 
abroad. Thus, demand would decrease while the supply 
increased. Precisely the opposite results were noticed 
when the price fell rapidly. To an extent, therefore, the 
supply and demand for gold, instead of controlling, were 
themselves controlled by the fluctuations of the premium. 2 

Aside from fluctuations caused by changes in the 
actual supply of and demand for gold, it was possible for 
a strong clique of dealers to produce fluctuations by 
"cornering" the local supply at a time when many men had 
entered into contracts that required the purchase of gold in 
large amounts within a limited time. Such attempts at 
"manipulating" the market appear to have been frequent, 
but their effect was necessarily temporary. Unless the 
clique could persuade the public that there was some real 
reason for a low valuation of the government's notes in 
comparison with gold, they could not long maintain an 

1 See, e. g., money articles of New York Times, February 3, 1864 ; May 17, 1864. 

2 See Hunt ' Merchants 1 Magazine, Vol. LIV, pp. 96, 97 ; money articles of New 
York Times for June 16, 17, and July 24, 1862. 



194 HISTORY OP THE GREENBACKS 

artificial rise. Black Friday itself the culmination of the 
greatest of these raids upon the market was followed by a 
fall more rapid than the rise had been. While, then, specu- 
lative manipulation of the gold supply was at times the domi- 
nant influence in the market, the abiding forces that governed 
the premium are to be looked for elsewhere. They are found 
in the second-mentioned category of influences, viz., the con- 
siderations which entered into the community's valuation of 
the paper currency. 

What, then, were these considerations? Obviously, the 
utility of the material of which the currency was made was 
not one of them ; for the bits of engraved paper were them- 
selves nearly worthless. Congress, however, attempted by 
inserting certain provisions in the legal-tender acts to give 
these bits of paper a high value in exchange. United States 
notes were made receivable for all taxes except duties on 
imports; they were exchangeable at par for bonds bearing 
an interest of 6 per cent, in gold ; and they were declared a 
legal tender in the payment of debts. 1 

Had the issues of greenbacks not exceeded the sums 
required for the payment of internal revenue taxes, etc., the 
first of these provisions might have been efficacious, at least in 
some measure. But the volume of paper money available for 
such uses was many times too great to be absorbed by them. 2 
After the war, writers of the greenback party fell into the 
habit of declaring that the failure of the clause making green- 
backs receivable for taxes to prevent their depreciation, was 
due to the exception of customs dues, which continued to be 
payable in gold. 3 This contention was supported by 
referring to the case of the old demand notes that 

1 Act of February 25, 1862, sec. 1 ; 12 Statutes at Large, p. 345. 

2 It has already been shown that several other forms of paper issues were made 
legal tender to the same extent as the greenbacks. See Part II, chap, ii, sec. vi, above. 

3 This exception was made, it will be remembered, in order to obtain coin for 
the payment of interest OB the debt. See Part I, chap, ii, sec. iv, p. 76, above. 



SPECIE VALUE OF THE PAPEB CUBEENCY 195 

commanded a premium in greenbacks from early in May, 
1862, because they were receivable for all dues to the 
government without exception. 1 Had the greenbacks been 
unlimited legal tender like the old demand notes, ran the 
argument, they would have maintained as high a value. 2 It 
is not true, however, as was so frequently asserted, that the 
old demand notes did not depreciate after suspension. 
Their availability for customs, in conjunction with their 
relatively small amount, caused them to be preferred above 
greenbacks, but the premium which they bore was not equal 
to the premium upon gold, until practically all had been 
withdrawn from circulation. The degree of their deprecia- 
tion as compared with that of greenbacks is shown by the 
following table, based upon the weekly quotations given in 
Hunt's Merchants' Magazine. 

While this table shows that receivability for customs 
limited the maximum depreciation of the old demand notes 
to less than 10 per cent, in gold, it does not at all follow 
that the greenbacks would have remained as near par had 
they been endowed with the same property. Indeed, this 
property had so powerful an effect in buoying up the demand 
notes precisely because it was not shared with other forms 
of paper money. Only $60,000,000 of the demand notes 
were issued, and the first legal-tender act provided that they 
should be canceled and replaced by United States notes as 
rapidly as feasible. In contrast, more than seven times this 
amount of greenbacks were issued and they were paid out 
again about as rapidly as they were paid in. 

The second congressional provision for sustaining the 
value of the greenbacks the privilege of exchanging them 
at par for bonds bearing 6 per cent, interest in coin, redeem- 

1 See Part II, chap, ii, sec. iii, above. 

2 See citations from greenback literature given by R. M. HRKCKEN RIDGE, " The 
Demand Notes of 1861," Sound Currency, Vol. V, p. 331. 



196 



HISTORY OP THE GREENBACKS 



TABLE VI 

i:i:i. \ I l\ K DEPRECIATION OF UNITED STATES NOTES AND OF OLD DEMAND NOTES 
AT VARIOUS DATES IN 1862 AND 1863 ' 





CURRENCY 


GOLD 




CURRENCY 


GOLD 




VALUE OF 


VALUE OF 




VALUE OF 


VALUE OF 


DATE 










DATE 














Old De- 


<" 


Old De- 






Old De- 




Old De- 




Gold 


mand 


l^ur- 


mand 




Gold 


mand 


Cur- 


mand 






Notes 


rency 


Notes 






Notes 


rency 


Notes 


1862 










1862 










Apr. 12 


loij 


100 


98.1 


98.1 


Oct. 4 


122| 


119* 


81.5 


97.3 


19 


101ft 


100 


98.4 


98.4 


11 


128J 


123| 


78.1 


96.6 


26 


101ft 


100 


98.4 


98.4 


18 


130* 


129 


76.8 


99.1 


May 3 


1025 


100 


97.4 


97.4 


25 


i:)ii 


127 


76.6 


97.2 


10 


103ft 


100* 


96.8 


97.0 


Nov. 1 


130ft 


126J 


76.7 


97.0 


17 


103ft 


lOOf 


97.0 


97.6 


8 


132* 


126 


75.6 


95.3 


24 


103J 


1001 


96.6 


97.2 


15 


1311 


126J 


75.8 


95.9 


31 


103ft 


1001 


96.6 


97.2 


22 


i:*>$ 


124J 


76.6 


95.1 


June 7 


104ft 


101 


96.1 


97.1 


29 


129* 


124fr 


77.5 


96.4 


14 


1051 J 


103 


94.6 


97.5 


Dec. 6 


131* 


125 


76.2 


95.2 


23 


107| 


103 


93.1 


95.9 


13 


131ft 


126^ 


76.0 


96.2 


26 


109J 


104* 


91.7 


95.8 


20 


132ft 


127J 


75.5 


96.3 


July 5 


109H 


105i 


91.2 


96.0 


27 


132i 


129 


75.6 


97.5 


12 


114ft 


1071 


87.6 


93.9 


1863 










19 


**! 6 

118| 


4 

108 


84.5 


91.2 


Jan. 3 


134* 


129 


74.6 


96.2 


26 


117* 


106* 


85.3 


90.8 


10 


137}| 


135 


72.6 


98.0 


Aug. 2 


115* 


105* 


86.9 


91.4 


17 


147i 


143 


67.9 


97.1 


9 


1121 i 


105* 


88.7 


93.6 


24 


149ft 


144| 


67.0 


97.0 


16 


H4ft 


107 


87.3 


93.8 


31 


159J 


153 


62.5 


95.7 


23 


115* 


108 


86.6 


as. 5 


Feb. 7 


157* 


155 


63.6 


98.6 


30 


1151* 


108i 


86.4 


93.6 


14 


155| 


151 


64.3 


97.0 


Sept. 6 


119 


108 


84.0 


90.8 


21 


162| 


162 


61.5 


99.5 


13 


118* 


108| 


84.7 


92.1 


28 


172 


171 


58.1 


99.4 


20 


iielf 


112J 


85.5 


96.2 


Mar. 7 


155^ 


153 


64.5 


98.6 


26 


120| 


116i 


83.1 


96.8 


14 


158i 


153 


63.2 


96.7 



able in five and payable in twenty years was never very 
effective and was repealed after a year and a half's trial. 
There has already been occasion to remark that the right of 
conversion was little exercised in 1862, and that, in the hope 

i Quotations of gold are from the New York Chamber of Commerce Reports 
referred to above; quotations of old demand notes from HunCs Merchants' 
Magazine, Vol. XL VII, pp. 33, 338; Vol. XLVIII, pp. 69, 305. The statements of the 
premium on gold in the latter source differ slightly from those used; they are not 
taken because of inconsistencies and obvious misprints. See, e. g., last reference. 
Quotations of old demand notes cease in Hunt's Merchants 1 Magazine after March 
14, when all but about $5,375,000 had been retired. The daily papers, however, con- 
tinued to quote them for a few weeks longer. 



SPECIE VALUE OP THE PAPEB CUBBENCY 197 



of getting better terms for bonds, discretionary power was 
granted Secretary Chase to abrogate the right after July 1, 
1863. l During the continuance of the war, however, this 
repeal of the funding provision made little difference in the 
value of the currency, because holders of greenbacks who 
desired to invest them in government securities could still get 
five-twenty bonds at rates not far from par. Up to the 
close of subscriptions for the five-twenties of 1862 under the 
agency of Jay Cooke these bonds could be bought at par from 
the government. After this date, January 21, 1864, they 
could be bought in the New York stock market at the fol- 
lowing rates: 

TABLE VII 

MONTHLY HIGHEST AND LOWEST PRICES OP FIVE-TWENTY COUPON BONDS IN THE 
NEW YORK STOCK MARKET IN 1864 AND 1865 2 



Month 


18* 


14 


181 


IS 




Lowest 


Highest 


Lowest 


Highest 


January 


101^ 


104% 


106% 


110 


February 


103% 


107 


108% 


112 


March 


107 


110^ 


104% 


HIM 


April 


105 


114 


105^ 


109M 


May 


105^ 


107^ 


102}4 


107 


June 


101 


106% 


102 


104M 


July 


101U 


109 


103% 


106 


Autrust 


106^ 


113 


105 V 


106% 


September 


105 


111% 


105% 


108^ 


October 


106^ 


los y z 


101% 


105U 


November 


100U 


107M 


99M 


103 


December 


106^ 


110 


100 


105^ 













This table shows that, after allowance is made for accumu- 
lated interest, the five-twenties at no time in 1864 or 1865 
rose more than a few per cent, above par in the paper cur- 
rency. This few per cent, marks the maximum difference 
which continuation of the right of exchanging United States 

1 See Part I, chap, iv, pp. 104, 107, 115, above. 

2 From the Financial Review, 1873, p. 17 (supplement of the Commerical and 
Financial Chronicle) . 



198 HISTORY OP THE GREENBACKS 

notes at par for five-twenties could possibly have added to the 
value of the former. Of course, the reason why the conversion 
scheme was not more effective, while it lasted, in preventing 
depreciation of the currency is found in the fact, that while 
the government was waging a war of enormous cost and 
uncertain issue, investors did not put a high value upon its 
bonds. To attempt to maintain the credit of one set of 
promises to pay by means of a second set could avail little 
when the ability of the promisor to keep either set was 
regarded as doubtful. 1 

As for the legal-tender clause the third provision against 
depreciation it could compel a creditor to receive paper 
money as the equivalent of gold only for debts already con- 
tracted. It could not control contracts to be made in the 
future. Sellers were free to charge higher prices for their 
goods when they knew the payment would be in greenbacks ; 
and they did so. Not only did the legal-tender clause fail 
to prevent depreciation, but, had it been the only support 
of the value of the greenbacks, the depreciation might have 
been as great as was the depreciation, for example, of the 
Russian legal-tender paper money in the first quarter of 
last century. 

But, though these artificial provisions proved futile, one 
important consideration remained. Greenbacks were notes 
of the government of the United States, and as such their 
value like the value of the notes of a private person 
depended upon the credit of the issuer. If confidence in the 
government's ability ultimately to redeem its notes had been 
entirely destroyed, the paper money would have depreciated 
to the level finally reached by the Confederate currency. 
On the other hand, if the credit of the government had 
suffered no diminution, its notes would have depreciated 

i Whether the abrogation of the right of funding greenbacks in bonds delayed 
resumption of specie payments after the war is a further question, discussion of 
which is not in place here. 



SPECIE VALUE OP THE PAPER CUBBENCY 199 

little, if at all. Fluctuations between these two limits par 
and zero followed the varying estimates which the com- 
munity was all the time making of the government's present 
and prospective ability to meet its obligations. It is there- 
fore necessary to analyze the elements that entered into 
these varying estimates. 

First, it is plain that an increase in the amount of 
the demand debt made speedy repayment more doubtful. 
Hence the effect of every suggestion of an increase in the 
amount of the paper currency was to decrease the value of 
the greenbacks already in circulation. This is clearly 
shown by the influence of the second and third legal-tender 
acts. 

June 11, 1862, the gold value of $100 in paper currency 
was $96.22. J The next day it was officially announced that 
the secretary of the treasury had requested Congress to 
authorize a second issue of United States notes. 2 Immedi- 
ately the value of the currency declined to $94.96. As the 
probability increased that the request would be complied 
with, the fall continued, until, on the day when the final vote 
was taken on the second legal-tender act, July 8, the cur- 
rency price was $89.79. 3 

Even more striking was the fall caused by the third legal- 
tender act. December 1, 1862, just before Congress con- 
vened, currency was worth $76.94. Three days later a fall 
to $74.63 was caused by a rumor that the annual finance 
report would recommend another issue of United States 
notes.* A denial produced a reaction to $76.63. But on 
the 8th Thaddeus Stevens introduced a bill providing for 

1 See the tables of daily prices in the Appendix, pp. 425-8. The figures in the 
text for certain days are sometimes the highest or lowest prices, sometimes (as here) 
the average of the two. 

2 See the New York Times, June 12, 1862. 

3 Congressional Globe, 37th Cong., 2d Sess., p. 3182. 
* Bankers' 1 Magazine, New York, Vol. XVII, p. 560. 



200 HISTORY OP THE GREENBACKS 

an issue of $200,000,000,' which brought about a relapse 
the next day to $75.19. When he admitted, a few days 
later, that there was no chance of his measure passing, a 
slight rise followed. 2 But January 8 the Committee of 
Ways and Means submitted a measure authorizing the issue 
of $300,000,000 of United States notes. 8 The currency fell 
to $72.99. Six days later the House of Representatives 
passed a joint resolution for the issue of $100,000,000 to 
secure the immediate payment of the army and navy.* The 
fall reached $67.57. The acquiescence of the Senate caused 
a slight further decline. 

Meanwhile the Ways and Means bill was under discussion 
in the House. When it was passed and sent to the Senate, 
the notes were depressed to $65.90. 5 Three weeks later the 
measure came back with the Senate amendments, one of 
which reduced the new issue of legal-tender notes from 
$300,000,000 to $150,000,000. A drop of $1.46 followed 
the House's refusal to agree to the change. During the 
next two days it was thought in New York that the Senate 
would yield, and the decline of the currency continued to 
$60.98. When this idea was dissipated there was another 
reaction. But February 26 the House yielded and passed 
the bill. 6 This action made the increase of notes certain, and 
their value fell to $57.97. After this extreme depression 
came a slight reaction to $58.48 on the day the bill became 
a law. 7 

1 Congressional Globe, 37th Cong., 3d Sess., pp. 23, 145 ; New York Times, Decem- 
ber 9, 1862. The references to the daily papers are, unless otherwise specified, to the 
date of the money articles. 

2 Congressional Globe, loc. cit., p. 146. 

3 Ibid., p. 235. See sec. 3 of the bill, p. 284. 

Ibid., p. 314. 5 January 26. Ibid., p. 522. 

For Senate amendments see ibid., pp. 926, 927 ; for action of the House, pp. 
1039,1312. 

' March 3, 1863. The probability of further issues of greenbacks was, however, 
by no means the only depressing influence affecting the value of the currency while 
either the second or third legal-tender bills was pending in Congress. See pp. 213, 
216, below. 



SPECIE VALUE OF THE PAPER CURRENCY 201 

Not only the amount of notes which the government 
issued, but also the condition of the resources at its dis- 
posal for meeting obligations, affected the probability of a 
speedy redemption of the paper currency. This explains 
why almost every important public event was reflected in the 
fluctuations of the gold market. Few things could happen 
to the government that would not directly or indirectly 
influence its credit, and therefore the value of its notes. 
Consequently notice must be taken of the effect of financial, 
military, political, and diplomatic events upon the course of 
the depreciation. 

Since the first condition of redeeming the paper currency 
was financial strength, the condition of the treasury was 
narrowly watched by the gold market. For example, the 
annual reports of the secretary of the treasury were anxiously 
awaited each December and their appearance caused a rise 
or fall of the currency according as the condition of the 
finances presented seemed hopeful or gloomy. In Decem- 
ber, 1862, the day before the report was published, a rumor 
was circulated in New York that another issue of greenbacks 
would be proposed. The currency fell from $76.34 to 
$74.63, but rose again to $76.63, when the report appeared 
recommending a national bank currency as preferable to 
government notes. Next year the report was responsible 
for a slight decline; for, though Secretary Chase declared 
specifically against an increase of the greenbacks, the esti- 
mated expenditures so far exceeded receipts that he was 
obliged to ask for a loan of $900,000,000. Again in 1864 
the report caused a fall, for even the New York Tribune 
admitted that it was disappointing. 1 By December, 1865, 
the gold market had become much steadier, but Secretary 
McCulloch's report recommending a speedy resumption of 

i See the editorial article in the issue of December 8, 1864, and the money article 
for December 7. 



202 HISTORY OP THE GREENBACK^ 

specie payments was warmly received and caused a rise of 
the currency from $67.34 on the 5th to $68.14 on the 6th. 1 

Ability of the government to borrow also influenced the 
value of the currency ; for the fate of a loan indicated pub- 
lic confidence or distrust, and success provided means for 
continuing the war without the issue of more legal-tender 
notes. Thus, in the spring of 1863, Mr. Jay Cooke's suc- 
cess as agent of the government in obtaining subscriptions 
for five-twenty bonds at the rate of $2,000,000 a day caused 
the currency to rise from a level of about $65, prior to 
March 23, to $71.68 on the 25th, when the favorable 
result of his operations seemed assured. 2 In October, 1863, 
the report that a foreign loan had been obtained caused a 
rise from $68.49 on the 21st to $70.05 on the 22d. Next 
day the report was discredited, and the currency fell back to 
$68.26. 3 Again, in September, 1864, a loan of some $32,- 
500,000 was subscribed twice over and the sum advertised 
awarded at a premium of 4 per cent, and upwards. This news 
caused a rise from $42.37 on the 9th to $45.87 on the 10th. 4 

Changes in the officials of the Treasury Department con- 
stituted another important factor. The resignation of the 
assistant treasurer in New York caused a fall June 2, 1864, 
from $53.05 to $52.63. July 1, of the same year, Secretary 
Chase's resignation depressed the currency to $40. A few 
hours later, upon the receipt of a dispatch announcing Sen- 
ator Fessenden's appointment to the vacant post, there was 
a reaction to $45.05. Mr. McCulloch's nomination the fol- 
lowing March occasioned an advance from $50.25 on the 7th 
to $51.05 on the 8th. 

1 See comments of New York papers of December 6 ; and Hunt's Merchant*' 
Magazine, Vol. LJV, p. 77. 

> New York Times, money article for March 24, 1863. 

New York rimes, money articles for October 22 and 23," 1863. 

* Hunt's Merchants' Magazine, Vol. LI, p. 292; Report of the Secretary of the 
Treasury, December, 1864, p. 21. 



SPECIE VALUE OP THE PAPEB CUEBENCY 203 

Even more striking than the influence of financial events 
upon the currency was the effect of the " war news." While 
the war continued there could be no thought of redeem- 
ing the government's notes. Hence every victory that 
made the end of hostilities seem nearer raised the value of 
the currency, and every defeat depressed it. The failures 
and successes of the Union armies were recorded by the 
indicator in the gold room more rapidly than by the daily 
press. A few instances may be cited. 

Chancellorsville, fought May 3, 1863, was one of the most 
disastrous battles of the war. But the first reports that 
reached New York were favorable, and caused a rise of the 
currency to $67.45. Next day, however, adverse rumors 
began to arrive, and the quotations were lower. On the 
6th a partial confirmation of the bad news continued the 
fall. When all uncertainty about the disaster was removed 
on the 7th, the currency dropped to $64. 62. 1 

Following up the advantage gained at Chancellorsville, 
General Lee crossed the Potomac and invaded the North. 
With the progress of his movement the currency fell from 
$71.17 on the 10th of June, 1863, to $67.40 on the 16th. 

Similarly the battle of Chickamauga caused a decline 
from $74.77 on the 19th of September, 1863, to $71.81 on 
the 21st; in April, 1864, the currency fell from $57.43 on 
the 23d to $54.79 on the 25th, because of the report that 
the Confederates had captured Plymouth, N. C. ; General 
Butler's failure to take Fort Fisher was the occasion of a 
drop from $46.24 to $44.64, December 28, 1864: the knowl- 
edge of the ill success of the Yazoo river expedition brought 
a fall of over $4, from $67.34 March 31 to $63.34 April 1, 
1863. 2 

The power of victories to raise the value of the currency 

1 See conflicting reports from the battles in the New York papers of May 4 to 8, 
1863. 

2 See the news columns of the papers of April 2, 1863. 



204 HISTORY OF THE GREENBACKS 

was most strikingly illustrated by the series of triumphs in 
July, 1863. On the first three days of that month the battle of 
Gettysburg was being fought. The 4th was the national holi- 
day ; the 5th Sunday. When the gold market opened on the 
6th, currency, which on the 1st had been at $68.97, rose to 
$72.46. Next day news came of the capture of Vicksburg; 
currency reached $75.47. Despite the draft riots in New 
York city, the reaction was small, and when the capture of 
Port Hudson was announced, July 15, there was a further 
advance to $77.59. With the increase of confidence the 
currency continued to appreciate, until upon the 20th it was 
worth $81.14. Thus the gain was $12.17 in twenty days, due 
to favorable war news. 

Grant's series of victories at Chattanooga caused a rise of 
$4.99 in four days. The victory of Sheridan over Early at 
Opequan Creek and two days later at Fisher's Hill led to an 
advance from $44. 10 to $46.30. Sherman's capture of Atlanta, 
announced in New York September 3, 1864, occasioned a 
rise from $39.29 on the preceding day to $42.37. Later, 
after Sherman had started north from Georgia, no news came 
from his army for some time, and fears were entertained for 
his safety until March 14, 1865, when a dispatch was received 
stating that he had reached Laurel Hill, N. C., and that all 
was well. This news caused the currency to appreciate from 
$52.22 to $56.26. More examples might readily be given. 

Many of the fluctuations of the currency were due to mis- 
taken reports of military events. Thus, September 3, 1862, 
an absurd story that Stonewall Jackson was marching on 
Baltimore with 40,000 men caused a fall from $85.84 the 
price of the previous day to $84.75.' A rumor that Atlanta 
had been evacuated by the Confederates produced a rise from 
$38.80 to $39.92 on July 22, 1864. 2 Another false report of 

1 New York Times, money article, September, 3, 1862. 

2 Ibid., money article for July 22, 1864. 



f 
SPECIE VALUE OF THE PAPEB CUBBENCY 205 

the fall of Petersburg led to an advance from $48.78 to 
$51.28. * A similar story of the evacuation of Richmond was 
the occasion of the change from $56.54 to $58.74 on the 16th 
of March, 1865. 2 Peace rumors were especially frequent. The 
"peace mission" of the two Blairs was followed with much 
anxiety. A report that the elder Blair was in Richmond 
caused a rise from $46.54 to $48.08 January 19, 1865. 3 On 
the last day of the month news came that three Confederate 
commissioners were within the Union lines. 4 Currency rose 
from $47.39 to $49.50; but fell back again to $46.62 on the 
announcement, a few days later, that the conference would 
accomplish nothing. 

Being of less frequent occurrence, political changes 
played a less prominent r6le in the gold market than finan- 
cial and military affairs. The best example of their influence 
is shown by the events attending the presidential election of 
1864. Mr. Lincoln was the Republican nominee. The 
Democratic party, which did not hold its convention until 
August 31, finally nominated General McClellan. News 
of this choice caused the currency to fall from $42.73 to 
$41.15. The canvass that followed was spirited, and for a 
time the result seemed doubtful to many. The Pennsylvania 
state election in October was looked to for an indication of 
the probable outcome. For a day or two after the votes had 
been cast it was uncertain which party had won. October 
11 the New York World claimed that the Democrats had 
made large gains and would carry the state. Because of 
this report the currency fell from $50.41 to $49.17. 
Curiously, the Republican triumph in November had the 
same effect upon the currency as this promise of Democratic 
success had exercised. It seems to have been argued that 

1 September 28, 1864; see New York Herald, money article. 

2 New York Herald, money article, March 16, 1865. 

3 Ibid., January 19, 1865. * Ibid., January 31, 1865. 



206 HISTORY OP THE GREENBACKS 

President Lincoln's re-election meant an indefinite prolonga- 
tion of the war, and hence destroyed any chance of a speedy 
redemption of the paper money. 1 On the strength of this 
view there was a fall on the 9th from $40.65 to $38.46. 
However, a reaction quickly followed. 

President Lincoln's assassination occurred after the regu- 
lar gold market had closed on the evening of April 14, 1865. 
Currency had ranged between $67.97 and $68.49. The 
news was received, however, at the "evening exchange." At 
the first shock there was a fall to $60.61. This fall was 
followed by a quick reaction, so that the market closed about 
$63.90. J Next day the gold exchanges remained closed, and 
the following day was Sunday. The intermission gave an 
opportunity for the panic to subside. On Monday the 
opening price was $65.36, but it soon rose to $67.51, and the 
next day the currency nearly regained the level which it had 
held before the assassination. 

Though the country's foreign relations were overshadowed 
during the war by domestic affairs, they exercised some influ- 
ence upon the value of the paper money. There were two 
important matters of diplomatic concern: the chance of for- 
eign intervention between the federal and confederate 
governments and the French occupation of Mexico. Fears on 
the former score were in a measure put to rest on July 30, 
1862, by the arrival of a steamer from England bringing 
reports of a speech of the prime minister, Lord Palmerston, 
which was interpreted to mean that the British govern- 
ment had no intention of interfering in the American 
war. 3 Currency rose from $85.84 the lowest price on the 
29th to $87.43. On the 10th of the following February 
a report that the French emperor was attempting to bring 

1 See editorial article in New York Express, November 9, 1864. 

2 New York Herald, money article dated April 16, 1865. 

3 See the dispatches to the New York papers of July 31, 1862, and editorial com- 
ments. 



SPECIE VALUE or THE PAPEB CURRENCY 207 

about a conference between the North and South caused the 
paper money to appreciate from $63.90 to $65.57.* The 
news of the withdrawal by England of the recognition which 
it had accorded the Confederacy as a belligerent occasioned 
a rise from $68.91 to $71.43 on the 19th of June, 1865. 2 

May 3, 1864, the publication in Le Moniteur of the con- 
vention assuring the stay of French troops in Mexico caused 
the currency to depreciate from $56.50 to $55.63. 3 At the 
close of the war the administration attacked the Mexican 
question with vigor. June 5, 1865, word came that Napoleon 
had been urged to withdraw his troops. This news showed the 
possibility of trouble with France, and caused a slight decline 
from $73.94 to $73.13.* During the summer many con- 
flicting reports were circulated concerning complications on 
the Rio Grande, causing considerable fluctuations in the 
gold market. 5 But the beginning of the end came November 
7, with the report that the cabinet had decided to notify the 
French government that the sending of further troops to 
Mexico would meet with the disapprobation of the United 
States. That little fear of a serious complication was enter- 
tained is shown by the slight extent of the fall caused by 
this news $68.03 on the 6th to $67.91 on the 7th. 6 

Perhaps some explanation should be given why two mat- 
ters of which much was made by contemporary commenta- 
tors on the premium have been passed over so lightly in the 
preceding analysis, viz., the quantity of money in circula- 
tion and speculation. Statistical attempts to demonstrate or 
disprove the validity of the quantity theory of the value of 
money must always be inconclusive so long as there are no 

1 New York Times, money article, February 10, 1863. 

2 New York Herald, money article, June 19, 1865. 

3 New York Times, money article, May 3, 1864. 

* New York Herald, money article, June 5, 1865. 

5 Hunt's Merchants 1 Magazine, Vol. LIII, p. 133. 

6 New York Herald, money article, November 7, 1865. 



208 HISTORY OP THE GREENBACKS 

accurate data regarding the volume of exchanges to be per- 
formed by the use of money and the rapidity of circula- 
tion. 1 Of course, no such data are to be had for the years 
of the Civil War, and besides there is the added embarrass- 
ment that the quantity of money in use is involved in even 
more obscurity than common. 2 A rigorous comparison 
between the quantity and the gold value of the currency 
or between quantity and prices is therefore out of the ques- 
tion. But at least this much may be said with confidence : 
the fluctuations of the gold premium cannot be accounted 
for by actual issues and redemptions of government notes. 
As the above remarks upon the second and third legal-tender 
acts show, additional issues of United States notes affected 
the value of the notes already in circulation as soon as their 
probability was known and long before they were actually 
made or even authorized. Indeed, in the six months follow- 
ing the passage of the third legal-tender act, when notes 
were being issued in accordance with its provisions, the value 
of the currency appreciated in a marked degree. 8 That is, 
the quantity of the greenbacks influenced their specie value 
rather by affecting the credit of the government than by 
altering the volume of the circulating medium. 

Nor is the case of the quantity theorist improved by tak- 
ing account of all forms of money in circulation instead of 
the greenbacks alone. Most discussions of the value of an 
inconvertible paper currency proceed on the assumption 
that its quantity is arbitrarily determined by government, 
and that the business community must adapt itself to the 
situation. But such an assumption is hardly more true of 
the North during the war than of the whole country before 
suspension. In both periods free use was made of bank 

1 1 feel none the less convinced of the soundness of this proposition because I 
once made such an attempt. Journal of Political Economy, Vol. IV, pp. 159-65. 

2 See Part n, chap, ii, sec. vii, above. 3 See pp. 217-20, below. 



. SPECIE VALUE OF THE PAPER CURRENCY 209 

notes and bank deposits as currency, and of course the vol- 
ume of these elements in the circulating medium followed 
the needs of the public. More than this, the amount of gov- 
ernment currency in use as money was in neither case deter- 
mined solely by treasury policy. Before suspension, free 
coinage and free export provided for an automatic regulation 
of the supply of specie ; after suspension a somewhat similar 
element of elasticity was found in the presence of legal- 
tender, interest-bearing treasury notes which could be treated 
as an investment or used as money at the convenience of the 
holder. 1 It would be difficult, indeed, to show that the vol- 
ume of a currency comprising elements so elastic as these 
interest-bearing legal tenders and the notes and deposits of 
banks was the ultimate fact that regulated the value of the 
whole circulating medium. 

As for speculation, there seems to be more danger of 
exaggerating than of minimizing its importance as an inde- 
pendent factor in the gold market. No doubt, as has been 
suggested, the formation of highly organized markets, where 
engagements were entered into to receive or deliver large 
amounts of gold within stipulated times, gave opportunity 
for artificial manipulation. No doubt, also, many of the 
false rumors so industriously circulated were concocted by 
operators with special intent to affect the premium. 2 But it 
must be remembered that there were two parties in the mar- 
ket, and the arts of " bulls " were set off against the arts of 

1 See Part II, chap, ii, sec. vi, above. 

2 The most notable instance of this character was the fraudulent proclamation 
of President Lincoln, taken by unknown persons to the offices of all the New York 
papers except the Tribune about 3 : 30 o'clock on the morning of May 18, 1864. It 
stated that Grant's campaign was virtually at an end ; that the Red River expedition 
was a failure, that 400,000 additional men would be raised by draft if the state quotas 
were not filled by June 15, and that May 26 would be observed as a day of fasting and 
prayer. Though the World and Journal of Commerce alone were duped into pub- 
lishing the document, it caused a rapid rise in the premium before the opening of 
the exchanges. As the World at once denounced the forgery on its bulletin board, 
the fright subsided quickly and the transactions on the stock exchange were at a 
very slight advance over the preceding day. See the newspapers of May 18 and 19. 



210 HISTORY or THE GREENBACKS 

"bears." Which party carried the day depended in the 
long run on matters over which neither had control prima- 
rily the condition of the finances and the war news. Viewed 
in a broad way, it is therefore a serious mistake to look on 
the gold market as a place where a few gamblers were toss- 
ing the premium about to suit their selfish schemes ; a much 
saner view is that it was the place where the community's 
estimate of the government's credit was visibly recorded. 
Here, as in other markets, those operators succeeded who 
forecast the future correctly, and men who tried to advance 
the price of gold when public confidence was increasing, or 
to depress it when confidence was on the wane, learned to 
their cost that they were not masters of the situation. 

III. THE COURSE OP DEPRECIATION, JANUARY, 1862, TO 
DECEMBER, 1865 

In order to facilitate study of the progress of depreciation 
during the war, the highest, average and lowest gold value 
of the currency for each month from 1862 to 1865 is shown 
upon the accompanying chart. From this graphic repre- 
sentation it is readily seen that there were six strongly 
marked periods in the general course of the fluctuations: 
(1) January to April, 1862, the depreciation was slight and 
almost constant. (2) After April there occurred an almost 
unbroken fall until February, 1863, when the average value 
of the currency for the month was but $62.30. (3) This fall 
was succeeded by an appreciation, which culminated in the 
following August, when the average price reached to $79.50. 
(4) A second and more serious decline followed, until, in 
July, 1864, the lowest value of the war was reached $38.70 
for the month. (5) August, 1864, to May, 1865, an upward 
movement, interrupted by a reaction in November, carried 
the currency to $73.70. (6) After May there was a slow 
decline till the end of the year. 



SPECIE VALUE OP THE PAPER CURRENCY 211 



CHART II 



FLUCTUATIONS IN THB GOLD VALUE OF $100 IN AMERICAN PAPEB MONET FROM 
JANUARY, 1862, TO DECEMBER, 1865 




i! 




ft t * I 



212 HISTORY OF THE GREENBACKS 

1. January to April, 1862. From a gold value of 
$99.50 on the 1st of January the currency fell as low as 
$95.24 on the 10th, but from this point there was a rally, 
so that the average value for the month was $97.60. The 
perplexities of the financial situation, particularly the slow- 
ness of Congress in framing tax bills, exercised a depressing 
influence in the first half of February, that was counteracted 
in the latter half by Grant's capture of Fort Donelson and 
the provision made for the treasury by the first legal-tender 
act. Despite this rally, the average for the month was $1 
less than in January. March, however, more than restored 
this loss. Curtis defeated the Confederates decisively at 
Pea Ridge, the "Monitor" proved itself more than a match 
for the "Merrimac," McClellan advanced into Western 
Virginia, and Shields defeated Stonewall Jackson at Win- 
chester on the 23rd. 1 Confidence in the speedy end of the 
war was high, and consequently the value of the currency 
was but 1.8 per cent, below par in gold. 

During April the depreciation was even less. So confi- 
dent was the administration that peace was at hand that 
the adjutant-general issued an order stopping recruiting. 
While Grant suffered a severe check at Pittsburgh Landing 
on the 6th, he more than recovered the lost ground on the 
7th. Island No. 10 surrendered, Halleck telegraphed that 
Pope had captured 6,000 prisoners in Missouri ; on the 15th 
news came to New York that Fort Pulaski, guarding the 
entrance to Savannah, had been taken ; and to crown the 
month, New Orleans fell into Union hands, in its closing 
week. Moreover, the greenbacks, which now, for the first 

1 As most of the events referred to in the following review of the course of depre- 
ciation are very well known, I have not considered it necessary to insert references 
to war histories. The newspapers have been my main reliance, because the premium 
was affected rather by what was reported concerning battles, etc., than by what 
really happened ; but I have also used the diaries in Harper's Monthly Magazine, 
and MOORE'S Record of the Rebellion, besides DRAPER'S Civil War in America, and 
J. F. RHODES'S History of the United States. 



SPECIE VALUE OP THE PAPER CURRENCY 213 

time, began to come into general circulation, were most 
favorably received, for it was considered highly patriotic to 
accept the government's notes as nearly the equivalent of 
gold. Thus, under the stimulus of victories and universal 
confidence, the paper money reached the highest value of 
the war $98.50, a depreciation of but $1.50. 

2. The fall from May, 1862, to February, 1863. In 
May military operations turned against the North. The 
Confederates quietly slipped out of Yorktown after Mc- 
Clellan had made elaborate preparations for a siege, and 
McClellan followed so slowly as to lose his advantage. Far- 
ragut took Natchez on the 13th, but all the successes of the 
month were overshadowed by Jackson's brilliant operations 
iu the Shenandoah valley, where he defeated the Union 
forces at Front Royal, drove Banks across the Potomac, 
eluded the attempts of McDowell and Fremont to cut off 
his retreat, repulsed their attacks at Cross Keys and Port 
Republic, and finally effected a junction with Lee. So 
great was the consternation at Washington that the gover- 
nors were called upon by Stanton to forward all their militia 
and volunteers for the defense of the capital. From $97.92 
on the 1st of the month the currency declined to $96.04 on 
the 27th, when the fright in Washington was at its height 
and the average for the month was $1.70 less than it had 
been in April. 

A further fall of $2.90 came in June. Hanover Court- 
House, Seven Pines, and Fair Oaks caused a slight rise in the 
last days of May and the first days of June ; Fort Pillow was 
taken on the 4th and Memphis two days later. But on the 
12th Chase's request for a second issue of greenbacks was an- 
nounced. Meanwhile McClellan lay inactive while Stuart's 
cavalry rode around his army, capturing prisoners and burn- 
ing supplies. 

July brought yet greater disasters. McClellan's peninsu- 



214 HISTORY OP THE GREENBACKS 

lar campaign, which was to have ended with the capture of 
Richmond, ended instead with the desperate retreat to Harri- 
son's Landing, where he remained quiescent for the rest of the 
month. The dream of a prompt close of hostilities was 
rudely dispelled, and the president issued a call for 800,000 
volunteers. Meanwhile Morgan was raiding in Kentucky, and 
Congress passed the second legal-tender act. Under such 
depressing influences the currency fell rapidly, and the 
average for the month was $7.30 less than in June. 

After the 22d of July there was a rally from the extreme 
depression that lasted during the first part of August. Hal- 
leek's appointment as general-in-chief had a good effect. 
Reports were received of a debate in the House of Commons 
that was interpreted to mean that the English government 
had no intention of intervening in favor of the South. 
Such news more than offset the draft of 300,000 nine- 
months' militia ordered on the 4th. But after the llth of 
August the current set in the opposite direction. Lee forced 
Pope into the defenses before Washington, and opened the 
way into Maryland, while Bragg was executing a similar 
northward movement in Kentucky. About the same time 
the Sioux Indians suddenly commenced their outrages in 
Minnesota. 

During September the depreciation continued. Lee's 
advance caused grave fears for the safety of Baltimore, Har- 
risburg, and Philadelphia. The public archives of Pennsyl- 
vania were sent to New York for safekeeping, and Governor 
Curtin called for 50,000 men to repel the invasion. Similar 
fears were entertained for Louisville and Cincinnati, which 
Bragg and Kirby Smith were threatening. The fall was 
stopped for a week in the middle of the month by the battles 
of South Mountain on the 14th and Antietam on the 17th, 
but the latter was too dearly bought a victory to compensate 
for Jackson's capture of Harper's Ferry with its immense 



SPECIE VALUE OP THE PAPER CURRENCY 215 

stores and garrison of over 11,000 men. When it was found 
that McClellan had failed to follow up his advantage and 
that Lee had recrossed the Potomac in safety, the disap- 
pointment was keen, and despite Rosecrans's victory at luka 
the fall of the currency recommenced, and the lowest price 
was that of the last day of the month. 

In October McClellan remained inactive, despite the urg- 
ing of the president and the impatience of the public. Lee 
had time to recover in a measure from the losses of his sortie 
into the free states, and he caused great exasperation by 
sending Stuart on another raid entirely around McClellan's 
idle army. In the West military operations favored the 
North. The desperate attempt to recapture Corinth was 
foiled by Rosecrans ; and Bragg, after his failure to capture 
Louisville, retreated from Kentucky, suffering rather greater 
loss than he inflicted at the battle of Perryville on the way. 
While these successes tended to offset Stuart's raid and 
McClellan's inactivity, the autumn elections had a very 
depressing influence. Almost everywhere the administration 
lost ground. In Maine and Michigan the Republican majori- 
ties were greatly reduced ; Wisconsin, Illinois, Ohio, Indiana, 
Pennsylvania, and New York went Democratic. A majority 
for the opposition was predicted in the House of Represen- 
tatives. 1 The net effect of these various influences was an 
average price of the currency $6.60 below that of September. 

November was a quieter month, with a much narrower 
range of fluctuations, although the average value of the 
currency was somewhat less. Military events were not of 
great consequence, and the market was dull awaiting the 
convening of Congress in December. The lowest quotation 
of the month occurred on the 10th, when the order relieving 
General McClellan was published. 2 

1 Cf. ELAINE, Twenty Years of Congress, Vol. I, pp. 441-3. 

2 Cf. money article in New York Times, November 10, 1862. 



216 HISTORY OF THE GREENBACKS 

When Congress assembled Chase's report showed that 
unpaid requisitions were accumulating at a rapid rate, and 
that the secretary had no suggestions for increased taxation, 
but laid great stress upon his widely distrusted banking 
scheme. Presently, inquiry in Congress called public atten- 
tion to the fact that the pay of the army was in arrears, and 
a third issue of United States notes was foreshadowed. The 
administration was also sharply attacked for the suspension 
of the writ of habeas corpus and for the monitory proclama- 
tion of emancipation. Meanwhile there was a quarrel in the 
Republican ranks. The caucus of the Senate advised the 
president to reconstruct his cabinet, and in consequence the 
secretaries of state and of the treasury both resigned, but 
were prevailed upon by Mr. Lincoln to remain in office. The 
greatmilitary eventof the month was Burnside's bloody repulse 
at Fredericksburg with a loss of nearly 14,000 men. Under 
this combination of depressing influences the first year of the 
paper standard closed with a depreciation of 25 per cent. 

In January and February the fall of the currency was 
accelerated in the manner shown above by the framing of 
the third legal-tender act. On the Potomac Hooker, who 
succeeded Burnside, was quietly engaged in reorganizing 
the army and preparing for a spring campaign. Meanwhile 
it became known that Grant's first campaign against Vicks- 
burg had been frustrated by the destruction of his depot at 
Holly Springs, and by Sherman's repulse at Chickasaw Bayou 
on the 29th of December. The next day the "Monitor" 
foundered off Cape Hatteras, Forrest's Confederate cavalry 
were beaten at Parker's Cross Roads, and the great battle of 
Murfreesboro began. On the first of the new year Magruder 
recaptured Galveston, but ten days later Sherman, on his 
return from the Yazoo river, captured Arkansas Post with 
5,000 prisoners. Early in February a Federal attack on 
Fort McAllister in Georgia and a Confederate attack on Fort 






SPECIE VALUE OP THE PAPER CURRENCY 217 

Donelson in Tennessee were repulsed. The rest of the 
month was rather quiet and the dominating influence in the 
gold market was the progress of the third legal-tender act. 

This period, May, 1862, to February, 1863, commenced 
with a depreciation of but 2 per cent., and ended with one of 
42 per cent. From May to November the dominating causes 
of the decline were military disasters and the second issue 
of greenbacks. McClellan's peninsular campaign was a mel- 
ancholy failure. Richmond was not taken; instead, Lee 
invaded the North. Though his sortie was checked at 
Antietam, full advantage was not taken of the situation. 
When the offensive was at last resumed with vigor, the defeat 
of Fredericksburg resulted. What slight advantages had 
been gained in the West could not counterbalance such dis- 
asters. To this ill fortune in war was added the political 
defeat of the administration in the autumn elections, the dis- 
sensions among Republican leaders in Congress and the cabi- 
net, and the gloomy financial prospect. In January and 
February the depreciation was accelerated, but now because 
of the legislation pending in Congress rather than because 
of military events. 

3. The rise from March to August, 1863. February 
closed with the currency at about $58. In March a reaction 
began. There were no decisive military operations ; for Grant 
was vainly trying to get at Vicksburg from the North, Far- 
ragut bombarded Port Hudson without result, and in Ten- 
nessee and Virginia the fighting was mainly confined to the 
cavalry. But Congress had passed the supplementary inter- 
nal revenue act, the national banking act, and the $900,- 
000,000 loan act; and the enactment of these laws was fol- 
lowed, as Secretary Chase said, "by an immediate revival of 
public credit." 1 

The same favorable causes continued to operate in April. 

i Report of the Secretary of the Treasury, December 1863, p. 2. 



218 HlSTOBY OP THE GREENBACKS 

Jay Cooke now had his system of agencies for the five- 
twenty loan well organized, and subscriptions began to come 
in. An unsuccessful bombardment of the forts in Charles- 
ton harbor checked the rise for a time ; but Banks was suc- 
cessful in his operations along the Bayou Teche in Louisiana, 
and Grant shifted his forces to the west of the Mississippi, 
marched them south of Vicksburg, ran his gunboats and 
transports past the batteries with slight loss, and prepared 
to cross again and attack the city from the south. Mean- 
while Hooker executed a well-planned movement across the 
Rappahannock and seemed to have Lee at a disadvantage. 
For these reasons the average value of the currency was a 
little higher in April than in March. 

During the first week in May there was a fall caused by 
the disastrous battle of Chancellorsville. But Grant's cav- 
alry reached Baton Rouge after cutting the communications 
of Vicksburg with the East, and his main army effected its 
landing on the eastern bank of the Mississippi and won the 
series of victories that forced Pemberton back into the city 
and completed its investment. A trifle later in the month 
Banks closed in on Port Hudson farther down the river. 
These events with increasing subscriptions to the loan 1 
caused another advance in the value of the currency, so that 
the average for the month was slightly higher than for 
April. 

June presents a striking example of an appreciation of 
the currency small, to be sure despite military reverses. 
After Chancellorsville, the Army of Virginia was reinforced 
by conscriptions and fitted out better than ever before. On 
the 3d of June Lee set forward on a second grand invasion of 
the North. At Winchester he captured nearly 4,000 prisoners, 
with many guns and large supplies, and proceeded through 
the Shenandoah valley to Chambersburg in Pennsylvania. 

Cf. Bankers' Magazine, Vol. XVII, p. 817. 



SPECIE VALUE OP THE PAPEK CURRENCY 219 

On the 15th President Lincoln issued a call for 100,000 
militia from Maryland, Pennsylvania, Ohio, and West Vir- 
ginia, to aid in repelling the invasion. In the West nothing 
decisive was accomplished. Grant was pressing Vicksburg 
closely and Banks Port Hudson, but their attacks upon the 
works were repulsed without substantial gains. Meanwhile 
the political opponents of the administration seized the 
moment to push their agitation against the conduct of the 
war. Mr. C. L. Vallandingham, who had been arrested for 
treasonable utterances, was nominated for governor of Ohio. 
At New York a great "peace meeting" was held. All this 
made the latter half of June a very dark period for the Union 
cause. But the machinery of the national loan was now 
thoroughly organized, and, while Lee was advancing, the 
treasury was receiving $1,500,000 to $2,500,000 daily for 
government bonds. 1 The fact that the government was able 
to borrow on so large a scale, even at this crisis, had a great 
effect in maintaining its credit, and hence the value of its 
notes. So, while Lee's invasion caused a heavy fall in the 
middle of the month, there was a reaction after the first scare 
subsided, and for the month the average value of the cur- 
rency was $2 higher than in May. 

If June had shown the possibility of a rise in the face of 
military reverses, July showed how powerful a stimulant was 
military success. It was a month of victories Gettysburg, 
Vicksburg, and Port Hudson. These great successes, with 
Sherman's expulsion of Johnson from Jackson, the repulse 
of the Confederates at Helena, and the capture of Morgan 
and his raiders in Ohio, completely overshadowed the draft 
riot in New York and a few Union reverses. On the 15th 
President Lincoln appointed a day of thanksgiving, and on 
the 25th President Davis a day of fasting and prayer. The 
advance of the currency over June was $7.40. 

i Bankers' Magazine, Vol. XVIII, p. 607. 



220 HISTORY OP THE GREENBACKS 

August continued the good times. In a military way the 
month lacked dramatic features, for Grant, Meade, and Lee 
were allowing their troops a rest, essential after the furious 
campaigning of July. Rosecrans, however, began his 
advance against Bragg at Chattanooga, and Burnside moved 
on Knoxville. Much encouragement was received from the 
vigorous pushing of the siege of Charleston. 1 The draft in 
New York, which had been interrupted by riots, was resumed 
and completed. Elections in Kentucky, Vermont, and Cali- 
fornia resulted most favorably for the administration candi- 
dates. Under these circumstances the currency reached 
$79.50 a higher level than was again attained during the 
war. 

4. The fall from September, 1863, to July, 1864. Many 
had expected after the great victories of July that the end 
of the rebellion was at hand. But much to the chagrin of 
the president and the public, Lee, instead of being annihi- 
lated was suffered to withdraw unmolested across the Poto- 
mac, and was soon confronting Meade in the old positions 
along the Rappahannock. Early in September news of 
positive disaster was added to this disappointment. At 
Chickamauga Rosecrans lost 16,000 men and narrowly 
escaped the destruction of his whole army. The news 
caused a fall of nearly $3 in a single day. So the currency 
declined from $78.82 on the opening day of September to 
$69.87 on the 29th. 

From the last of September to the close of the year there 
was a slow but tolerably steady depreciation. The lowest 
point of the period was $63.80, October 15, caused by rumors 
of another forward movement by Lee. After Longstreet had 
been sent west to reinforce Bragg, Hooker was also dispatched 
with two corps to help Rosecrans. Lee then threatened to 
turn Meade's flank and compelled him to fall back on Bull 

1 New York Times, money articles, July 15, 17, and August 25, 1863. 



SPECIE VALUE OP THE PAPER CURRENCY 221 

Run. The operations in Virginia, however, were less important 
than those in Tennessee, where Grant relieved Rosecrans, 
who had allowed himself to be cooped up in Chattanooga by 
Bragg. In November the lowest prices, those of the 21st 
and 23d, were due to the investment by Longstreet of Knox- 
ville, where Burnside's forces lay ; the highest, on the 27th, 
to Grant's spectacular victories at Chattanooga. December 
was a very quiet month with a slight range of variation. 
Sherman averted disaster to Burnside by hurrying from 
Chattanooga to Knoxville and forcing Longstreet to raise 
the siege. In the East Meade recrossed the Rapidan and 
went into winter quarters. Congress assembled and received 
a treasury report of rather cheerful tenor, despite the fact 
that Chase found it necessary to ask authority for borrowing 
$900,000,000. 

During the first three months of 1864 the slow decline 
continued. In January the armies lay nearly still both east 
and west. On the 1st of February a draft was ordered for 
half a million men to serve three years or for the war. 
Butler's sally from Fortress Monroe, made in the hope of 
taking Richmond by surprise and freeing the prisoners of 
war, was frustrated by a deserter who alarmed the Confed- 
erates, and Kilpatrick's cavalry on a similar mission suc- 
ceeded in penetrating the first and second line of defenses 
about the city, but were repulsed from the third. Late in 
the month the Florida expedition received a serious check at 
Olustree. In Mississippi Sherman succeeded in destroying 
Meridian and effectually cutting the line of railway that 
supplied Mobile from the North, but the hoped-for destruc- 
tion of Pope's army was not accomplished because the co-op- 
erating cavalry failed to do its expected part in the cam- 
paign. In March the ill-fated Red River expedition set out, 
and the Confederate general Forrest defeated W. S. Smith 
at Okalonaj re-captured Jackson, the capital of Mississippi, 



222 HISTORY OP THE GREENBACKS 

but late in the mouth was repulsed at Paducah with a loss 
of 1,500 men. More important in its effect upon the gold 
market was the slowness of Congress in passing the finance 
bills. Even the New York Tribune became impatient. "A 
Congress fit to exist," it said, " would have matured and per- 
fected some sort of finance system before the close of its 
fourth month." 1 

In April Congress still passed no revenue laws, and the 
war news was unfavorable. The massacre of Fort Pillow, the 
failure of the Red River expedition, Steel's forced evacuation 
of his position in Arkansas, the Confederate capture of Fort 
Williams, and later of Plymouth, in North Carolina, all 
combined to make a gloomy commencement of the spring 
campaign. 2 Slight successes in Texas, Grant's preparations 
for a vigorous advance, and Union gains in the elections in 
Connecticut, Rhode Island, Missouri, and New Jersey could 
not counterbalance these disasters and the inactivity of 
Congress. Consequently the currency fell $3.50 below the 
average of March. 

In the first half of May there was a rise. Sherman set- 
ting out from Chattanooga succeeded by skilful maneuvers 
in forcing Johnson back from Dalton, then from Resaca and 
then from Allatoona Pass. At the same time Grant crossed 
the Rapidan and fought the desperate battles of the Wilder- 
ness and Spottsylvania Court House. Every rumor from the 
field caused a rise or fall of the currency, 3 but despite 
Grant's enormous losses, he was believed to have the advan- 
tage, so that the general trend of the fluctuations was upward 
until near the middle of the month. But on the 10th Ave- 

1 Editorial article, March 29, 1864. 

2 The feeling of depression is shown by the New York Tribune's remark : "With 
perhaps a single exception, the important military events which we have been called 
upon to record since the early opening of the campaign have been disasters to the 
national cause " (April 29, 1864). 

a E. g., see New York Times, money article, May 12, 1864. 



SPECIE VALUE OF THE PAPER CURRENCY 223 

rill's cavalry was defeated by Stuart, on the 15th Siegel 
was routed at Newmarket, and on the 16th Beauregard 
forced Butler back upon Bermuda Hundred and intrenched 
along his front so strongly as to prevent his co-operating 
with Grant. Meantime Lee forestalled Grant in his move- 
ment to the North Anna, and Congress still failed to pass 
the tax bills. Consequently after the 10th currency fell 
again; by the 17th it was back to the opening value of the 
month, and as the depreciation continued the average value 
was $1.20 less than in April. 

During these first five months of 1864 there had been a 
depreciation of less than $2 a month, due to lack of prog- 
ress in subduing the rebellion and the dilatoriness of Con- 
gress in voting taxes. In the next two months this rate of 
depreciation was greatly accelerated, in part at least because 
of the appearance of a new factor in the market the 
"gold bill." This measure, however, was only the last of a 
series of governmental attempts to control the price of gold. 
As was shown in the preceding section, the treasury officials 
believed that the premium was in very large measure due 
to a rise in the value of gold effected by the nefarious 
arts of speculators. Could this speculation be broken up, 
they thought that the premium would fall back to a moderate 
figure and the credit of the government be greatly enhanced. 
Acting on this principle, Congress, on March 3, 1863, laid a 
stamp tax upon time sales of gold, amounting to one-half of 
1 per cent, of the amount plus interest at 6 per cent, per 
annum, and at the same time forbade loans on the pledge of 
coin in excess of its par value. 1 News of the passing of this 
law was followed by an advance of the currency from $58.22 

1 12 Statutes at Large, sees. 4, 5, p. 719. At the same time a bill was pending in the 
New York legislature to prohibit banks from selling specie above par and from loan- 
ing upon specie so long as specie payments were suspended. It had some effect upon 
the market, although it finally failed of becoming law. See money articles of New 
York Tribune, February 6, 7, and March 5, 1863; Times, March 4, and April 17, 1863. 



224 HlSTOBY OP THE GREENBACKS 

on the 3d of March to $66.67 on the 6th ; but the gold market 
quickly rallied, and by the 10th the currency had fallen 
again to $61.35.' 

Though this measure produced but little effect, for other 
reasons, the average gold value of the currency advanced 
slowly from March to June, 1863, and much more rapidly 
in July and August. During this period, therefore, the 
public concerned itself little with the iniquity of gold specu- 
lation. But when the current turned and the premium 
began to advance again, denunciation of the speculators 
recommenced. As a specimen of the way in which they 
and their works were regarded by a large section of the 
most earnest northern people, one of the numerous edi- 
torial articles on the subject may be quoted from the New 
York Tribune: 

For years past, the partisans of the Rebellion quartered in our 
city have systematically and by concert striven and employed their 
means to increase the premium on gold. Their intercepted letters 
prove that they did this in behalf of their master, Jeff. Davis, and 
in the conviction that they were aiding the Rebellion as truly and 
palpably as though they were wielding muskets in the front ranks 
of Lee's army. 2 

When Congress assembled in December the prevalence 
of the feeling that the premium was largely due to specula- 
tion, and speculation to treason, manifested itself in proposals 
to enact restrictive legislation. But it was some time before 
these proposals were given serious attention. In the Senate 
Mr. Lane, of Kansas, introduced a bill December 15, 1863, 
to prohibit speculative transactions in gold, and another 
January 13, prohibiting the sale of gold at a price higher 
than that of 6 per cent, federal bonds. Both these measures 

1 See money articles of this period. 

2 June 15, 1864. More or less similar outbursts can be found in most of the New 
York papers at any time that the premium was advancing rapidly. Cf., e. g., New 
York Times, money article, February 3, 1864. 



SPECIE VALUE OP THE PAPEB CURRENCY 225 

were referred to the Committee on Finance and were no more 
heard of. 1 A third bill of the same character met a similar 
fate, though introduced by so influential a senator as John 
Sherman. 2 In the House Mr. Clay's "bill to regulate con- 
tracts for gold" was killed by the Committee on Judi- 
ciary, to which it had been referred. 3 But while Congress 
was not yet ready to attack the business of dealing in gold 
directly, it assented to a measure of which the object was the 
reduction of the premium. 

Just at this time the government was receiving more gold 
from customs duties than was required for meeting the inter- 
est on the public debt. The excess was accumulating in the 
New York subtreasury. It was thought that, if this large 
supply could be suddenly thrown on the market, it would 
break the "corner" in gold and cause the premium to fall. 
With this intent, the secretary of the treasury was author- 
ized to dispose of any surplus gold not required for interest. 4 
The passage of this measure, like that of the tax provision of 
March, 1863, was followed by a temporary appreciation of 
the currency from $59.61 on the 9th of March, when its 
defeat was expected, to $62.06 on the 17th, when it was 
approved by the president. 5 

Mr. Chase, however, was loath to use the power thus 

1 Congressional Globe, 38th Cong., 1st Sess., pp. 24, 173. When the committee was 
asked what it had done with the bills, Fessenden replied that it still had the 
matter under consideration. Ibid., p. 360. 

2 Ibid., p. 539. 3 ibid., pp. 730, 2773. 

* Joint resolution of March 17, 1864, 13 Statutes at Large, p. 404. For the grounds 
on which the bill was urged see Sherman, Congressional Globe, 38th Cong., 1st Sess., 
p. 1023; Hooper, ibid., p. 731 ; Kasson, pp. 707, 737, 738; Garfield, p. 734. On the other 
side see Pendleton, pp. 731, 732 ; Brooks, p. 733 ; Hendricks, pp. 1045, 1046 ; Reverdy 
Johnson, pp. 1050, 1051. As the bill passed the House, it merely authorized the secre- 
tary to anticipate the payment of interest in gold, but the Senate Committee on 
Finance reported an amendment permitting the secretary to sell any gold in the 
treasury not needed for the payment of interest (p. 1023). This resolution as amended 
was adopted by the Senate after a yea and nay vote of 30 to Son March 11 (p. 1052), 
and after much discussion was accepted by the House March 16, by 84 votes to 57 
(p. 1147). 

5 New York Times, money articles, March 9, 11, 12, 15, 1864. 



226 HISTORY OP THE GREENBACKS 

given him to sell gold, except as a last resort. He had 
another plan. Importers with customs duties to pay had to 
buy the necessary coin in the gold room or on the stock 
exchange. Chase thought the premium might fall if this 
demand were taken out of the market. Consequently he 
announced that importers would be allowed to deposit paper 
currency with the subtreasury, receive in return certificates 
of deposit of gold at a rate a trifle below the current pre- 
mium, and use these certificates in payment of customs. 1 

The announcement of this plan caused a fall of gold from 
169| on the 26th to 165f on the 29th of March. This day 
certificates were sold at 165^, and for the 30th the price was 
set at 164. The market quotation followed, and for the 
next day the price of certificates was 163. But this time 
the market did not yield, and in consequence the rate for 
certificates had to be raised to 165 on April 1, and to 166 on 
the 2d. This advance meant the defeat of the plan. Instead 
of the treasury being able to dictate to the market what the 
price of gold should be each day, it was obliged itself to 
accept the dictation of the market. However, the plan was 
kept in operation two weeks longer. The rate for certifi- 
cates was set permanently at 165 ; but the market quotation 
regardless of this rose to 175 on the 12th. The next day 
Mr. Chase issued an order stopping the sale of certificates 
after the 16th. 2 

Balked in his first scheme, Mr. Chase went to New York 
on the night of April 13 and ordered the surplus gold in the 
subtreasury to be sold. 3 On the 14th the gold quotation 
reached 177J. By selling about $11,000,000 of gold in 
five days Chase forced the premium down to 66 on the 21st. 
In comparison with the effort made, the result was trifling. 

1 See official announcement in the New York papers of March 29, 1864. 

2 Published in New York Tribune, money article, April 16, 1864. These operations 
can all be followed best in the current money articles. 

3SCHUCKEBS, op. dt., p. 358. 



SPECIE VALUE OP THE PAPEB CURRENCY 227 

The policy could not be continued indefinitely, because suf- 
ficient gold had to be kept in the treasury to meet interest. 
When the pressure was removed, the advance recommenced, 
and by the 25th of April the premium was higher than ever. 1 

At the outset of this campaign in the gold market Mr. 
Chase seems to have been influenced by outside pressure 
rather than by any conviction of his own that the expedients 
adopted would produce a permanently beneficial result. 
Many business men as well as many politicians, who had 
become alarmed by the rapid leaps upward of the premium 
in the spring of 1864, were urging him to suppress the gam- 
bling in gold by any means in his power. 2 But even when 
he was beginning the sales of gold Chase wrote to President 
Lincoln: "The sales which have been made yesterday and 
today seem to have reduced the price, but the reduction is 
only temporary, unless most decisive measures for reducing 
the amount of circulation and arresting the rapid increase of 
debt, be adopted." 3 And after the sales were over he wrote 
to Mr. S. D. Bloodgood, of New York: "I see that gold is 
again going up. This is not unexpected. Military success 
is indispensable to its permanent decline, or, in the absence 
of military success, taxation sufficient upon state bank issues 
and state bank credits to secure .... an exclusive national 
currency ; and sufficient, also, to defray so large a proportion 
of current expenditures as to reduce the necessity for bor- 
rowing to the minimum." ' 

But neither this clear insight into the situation, nor his 

1 Though these operations had but a fleeting effect upon the price of gold, they 
produced a severe panic in the stock market. Money became exceedingly "close, 1 ' 
and speculators holding stocks for an advance were obliged to sell at heavy sacri- 
fices. Cf. CORNWALLIS, The Gold Room, p. 8; MEDBEKRY, Men and Mysteries of Wall 
Street, pp. 248, 249. 

2 Cf, SCHUCKEES, op. cit., pp. 357, 358. Schuckers says that the plan of selling 
customs-house certificates was adopted at the recommendation of the New York 
chamber of commerce (p. 361). 

3 Letter of April 15, ibid., pp. 358, 359. 

* Letter of April 26, 1864, WARDEN, Life of Chase, p. 582. 



228 HISTORY OP THE GREENBACKS 

former failures, deterred Chase from trying a third plan 
that of satisfying the export demand for gold by selling 
exchange upon London at a rate below that prevailing in 
the market. 1 This plan had still less effect than its pre- 
decessors. It caused a fall of gold from 181-| on May 19 to 
181 on the 20th. But the next day gold began to rise 
again, and on the 24th the treasury was forced to raise its 
price for exchange, 2 thus acknowledging another defeat. 

Why all the attempts to reduce the premium on gold had 
failed is not difficult to see. They were based on the 
assumption that speculators had increased the value of gold 
while the fact was rather that the government's notes had 
fallen in common esteem. Neither increasing the market 
supply of gold by selling the coin in the treasury, nor dimin- 
ishing the market demand for gold by selling customs-house 
certificates or foreign exchange, could better the govern- 
ment's credit, and therefore such measures could have noth- 
ing more than a temporary effect upon the premium. What 
was needed was, as Mr. Chase himself wrote, victories and 
heavier taxes. 

By this time, however, the secretary's temper had become 
ruffled by defeat, and he was ready to try extreme meas- 
ures. " The price of gold must and shall come down," he 
wrote to Horace Greeley, June 16, "or I'll quit and let 
somebody else try." 3 One resort was left: the government 
had failed to control the gold market; it remained to try 
abolishing the market altogether. 

A bill with this purpose had been sent by Chase to the 
Senate Committee on Finance and reported by Sherman 
April 14.* This measure prohibited under heavy penalties 
all contracts for the sale of gold for future delivery and also 

i New York Times, money article, May 20, 1864. 

2 Ibid., May 24. 3 WABDEN, op. cit., p. 603. 

* Congressional Globe, 38th Cong., 1st Sess., p. 1618. Compare Fessenden's expla- 
nations of the source of the bill, p. 1669. 



forbade the sale of gold by a broker outside his own office. 1 
Of course the bill, if it became law, would make dealing in 
"futures" illegal, break up the gold room, and prevent sales 
at the stock exchange. 

It was with much misgiving that the Committee on 
Finance brought the bill before the Senate and few advo- 
cates were found who would say more than that they hoped 
it might accomplish some good. Fessenden spoke for the 
majority of his colleagues when he said: 

Although we may not believe .... that a bill of this kind 
will necessarily produce the effect .... it is. nevertheless a duty 
in the present condition of things in this country to leave nothing 
untried which offers even a reasonable ground of hope ; and it is 
upon that supposition .... that the committee recommend the 
measure .... a bill of this kind may produce an effect in two 
ways; first by operating upon public opinion, and second by high 
penalties .... it may .... have an effect to check in some, 
perhaps not any inconsiderable, degree, the rampant and heartless 
and wicked spirit which is actuating men with reference to this 
subject. 2 

If those who voted for the bill spoke doubtfully of it, 
those who voted against it were more certain of their 
ground. With one accord they declared that such legisla- 
tion could not accomplish what the secretary expected. Mr. 
Henderson, for example, reminded the Senate that the act 
authorizing sales of gold had been " a total failure " and 
added: "It is utterly futile for us, unless we can keep up 
the character of the currency of the United States, to under- 
take to interfere with the price of gold." ' 

Senator Collamer took similar ground : " Gold does not 
fluctuate in price," he said, " . . . . because they gamble 

i See text, ibid., p. 1640. 

2/6td., p. 1640; compare similar remarks of Chandler, p. 1644; Hale, p. 1671; 
Sherman, pp. 1640, 1646. 

3 Ibid., p. 1670. Cf. remarks of Clark, p. 1643; Powell, p. 1671; Rcverdy Johnson, 
p. 1645. 



230 HISTORY OP THE GREENBACKS 

in it ; but they gamble in it because it fluctuates But 

the fluctuation is not in the gold; the fluctuation is in the 
currency, and it is a fluctuation utterly beyond the control of 
individuals." ' 

The true way to restore national credit, said Cowan, was 
not to pass futile enactments against gold speculation, but to 
prosecute the war vigorously and to raise large sums by 
taxation. "If we do that," he concluded, "if in the first 
place we satisfy the money lender that we are going to put 
down the rebellion, and in the second place that we are 
going to pay the expenses .... then the public credit at 
once will appreciate and public securities will rise, or, if you 
choose the other phrase, gold will apparently go down." 2 

Perhaps the only senator who heartily approved of the 
bill was Lane, of Kansas: "It is my opinion," he said, "and 
the opinion of loyal and sagacious business men of the city of 
New York, that the Confederate government is to day, and 
has been since last December, through its foreign agents, 
engaged in the effort to depreciate our currency by gam- 
bling." His only objection was that Secretary Chase was 
being credited with the authorship of the bill, when he 
himself had introduced a very similar measure several 
months before. 8 

Though the bill was passed by the Senate April 16, 4 its 
consideration in the House was delayed while Mr. Chase 
was trying his other experiments in the gold market. When 
they had all failed he wrote a note to Samuel Hooper urg- 
ing that the bill be acted on. "Its passage," he said, "will 
probably check the advance and give a little time for further 
measures." 5 Accordingly the bill was taken up June 7, but 
so closely was opinion divided that the speaker's casting 

> Ibid., pp. 1666, 1667. 2 Ibid., p. 1641. * Ibid., p. 1669. 

*The final vote was 23 to 17. Ibid., p. 1673. 
5 Letter of Jane 2, WARDEN, op. cit., p. 599. 



SPECIE VALUE OP THE PAPER CURRENCY 231 

vote was required to secure consideration for the subject. 1 
A week later the bill was passed after very little discussion 
in the House by a vote of 76 yeas to 62 nays. 2 It received 
the president's signature June 17. 3 

Gold opened in June at 190 and rose at the prospect that 
the gold bill would be passed. On the 14th, when the 
House agreed to the bill, the price touched 197^. When 
the law was put in operation on the 21st of June, the gold 
room was closed, and at the stock exchange the precious 
metals were dropped from the call list ; for it was now 
unlawful for brokers to buy and sell gold outside of their 
offices. Persons who needed gold to pay customs or to send 
abroad were forced to go from one office to another inquir- 
ing the price. 4 There being no organized market, there was 
no regular quotation, and the prices demanded by different 
brokers varied so widely that June 27 there was a difference 
of 19 points between the lowest and highest selling rates 
reported. Business was so greatly inconvenienced that a 
meeting of bankers and merchants convened on the 22d and 
appointed a committee to recommend necessary alterations 
in the law. 5 Two days later the committee called upon Mr. 
Chase in Washington to urge the repeal of the act. 8 At a loss 
what to do, Chase had already authorized the assistant treas- 
urer at New York and Mr. Jay Cooke to take such measures as 
would arrest the rise of the premium. 7 But they could do 
nothing, and the rise went on. Mr. Chase was very loath to 
recommend the repeal of the bill, and yet he saw no other way 

1 Congressional Globe, 38th Cong., 1st Sess., pp. 2793, 2794. 

2 Forty-three members did not vote. Ibid., p. 2937. The Senate concurred in 
the House amendments, which did not affect the substance of the bill, on the same 
day.-P. 2930. 

3 13 Statutes at Large, p. 132. 

* New York Herald, editorial article, June 24, 1864. 

' See account of the meeting in New York papers of June 23, 1864. 

Extract from Chase's diary, WAEDEN, Life of Chase, p. 607. 

? Letter to J. Cooke, June 21, WARDEN, p. 606. 



232 HlSTOBT OP THE GREENBACKS 

to remedy the situation. 1 Before this dilemma was settled he 
sent his resignation to President Lincoln, June 29, and next 
day it was accepted. The vacant position was offered to 
Governor David Tod of Ohio. When he declined it, Senator 
Fessenden was prevailed upon to assume its duties. 2 

Meanwhile the gold bill had been repealed. Unanimous 
consent to introduce a bill for this purpose was granted to 
Senator Reverdy Johnson on the 22d of June. 8 July 1, 
this bill was called up and passed with no debate except 
Johnson's brief explanation : 

The universal impression, so far as I have been able to collect 
it, in Congress and out of Congress, now is that .... the gold 
bill is doing nothing but mischief ; and I have communications, and 
other Senators have received them, from New York especially, beg- 
ging that that bill shall be repealed. I do not know any member 
of the Senate who formerly was willing to give that bill his sanction 
who is not now just as willing to repeal it. It has had its trial and 
has failed to produce anything but mischief.* 

Later in the same day the bill for repeal was passed by 
the House without any discussion. 6 It was signed by Presi- 
dent Lincoln July 2 ; 8 the 3d was Sunday, and the 4th Inde- 
pendence Day, but on the 5th the gold room was reopened 
and the business of dealing in gold resumed its wonted 
course. 7 

The great fall of the currency, shown by the spectacular 
advance of the premium in June and July, was by no 
means due solely to the gold-bill blunder. Military news 
was unfavorable. After his frightful losses in the Wilder- 

1 See his own account of what he said to Fessenden in regard to the matter, 
WAEDEN, p. 619. 

2 Compare Part I, chap, v, sec. ii, p. 124, above. 

3 Congressional Globe, 38th Cong., 1st Sess., p. 3160. 7Wd., p. 3446. 
s Ibid., p. 3468. The vote was : yeas, 87 ; nays, 29 ; not voting, 66. 

f > 13 Statutes at Large, p. 344. 

i At the stock exchange, however, transactions in gold were never regularly 
resumed after June 20. Cf. Commercial and Financial Chronicle, Vol. I, p. 168. 



SPECIE VALUE OF THE PAPER CURRENCY 233 

ness and at Spottsylvania, Grant had been compelled to 
give up his plan of taking Richmond by assaults on Lee's 
lines. The bloody repulse at Cold Harbor, June 3, was fol- 
lowed by ten days of inaction. When Grant crossed the 
James in the middle of the month, Lee merely fell back on 
Richmond and seemed as safe as before. The attempt to 
secure the Weldon railway south of Petersburg by swinging 
infantry corps to the left was foiled by Ewell's fierce attacks, 
and though Wilson's cavalry succeeded in cutting the rail- 
way, they were afterward defeated and the damage repaired. 
On the last day of June the mine was exploded at Peters- 
burg, but the assault through the breach failed miserably. 
Meantime Hunter, advancing on Lynchburg, was compelled 
to retreat into West Virginia by the sudden appearance of 
Early on his front with a superior force. This move opened 
the way for Early's dash on Washington in the first fort- 
night of July, which was almost successful. Though miss- 
ing this prize, the Confederates operated in the Shenandoah 
for the rest of the month and on the 30th burned Chambers- 
burg in Pennsylvania. Grant in the meanwhile was reduced 
to acting on the defensive ; for he had been compelled to 
send an army corps and two divisions of cavalry to confront 
Early. In the South Sherman seemed to be making slow 
progress against the wary Johnston in his campaign about 
Atlanta, and all attempts to capture Forrest's cavalry in 
Mississippi proved futile. It seemed, indeed, in June and 
July that almost no progress was being made toward sub- 
duing the Confederacy, despite the prodigious expenditure 
of money and blood. 

The financial outlook was no better. In contrast with 
the five-twenty loan which had closed in January, the ten- 
forty loan was a dismal failure. Another loan on seventeen- 
year bonds advertised June 25 met with so unflattering a 
reception that it had to be withdrawn on the 2d of July. 



234 HISTORY OP THE GREENBACKS 

The outstanding certificates of indebtedness had mounted to 
$162,000,000 and there were unpaid requisitions on the 
treasurer of $72,000,000. The expenditures were $2,250,000 
a day, while the income from customs was hardly more than 
sufficient to pay the coin interest on the debt, and even the 
secretary's overestimate made the daily receipts from inter- 
nal taxes but $750,000.' Add to this the fact that there was 
little chance of quick improvement because Congress had 
delayed passing the revenue bills until the last day of June, 
and the unhappy state of the finances becomes apparent. 2 

Under the combination of unfavorable circumstances it is 
not strange that the value of the currency fell rapidly. News 
of Mr. Chase's resignation came to New York July 1, and 
was declared by the World to mean that the treasury was 
practically bankrupt. 3 This seems to have been the construc- 
tion generally put on the resignation at first, and it was not 
until July 7 that the Tribune denied this story and declared 
that Chase withdrew simply because he and the president 
could not agree on a successor to Mr. Cisco. Senator Fes- 
senden's appointment produced a temporary reaction, but 
Early's raid was creating too much consternation to allow of 
much improvement. Sunday, July 10, he was within ten 
miles of Washington, where there was no force that seemed 
capable of withstanding his veterans. Next day the price of 
gold touched 285 the highest value of the war that is, 
the currency fell to a specie value of $35.09.* Though the 
crisis was passed, the market yielded stubbornly. Fessen- 

' Cf. Report of the Secretary of the Treasury, December, 1864, pp. 19, 20, and 
Part I, chap, v, sec. ii, above. 

2 The tariff act, the ways and means act, and the internal revenue act were all 
approved June 30. 13 Statutes at Large, pp. 202, 218, 223. 

3 See the reply of the Tribune, July 7. 

* After the regular market had closed for the day, transactions in gold at a still 
higher price are said to have taken place. MEDBEEEY tells a circumstantial story 
of a frightened Missouri banker who bought $100,000 of gold at 310, in Men and 
Mysteries of Wall Street, p. 250. 



SPECIE VALUE OP THE PAPER CUBBENOY 235 

den's attempt to relieve the treasury by securing a loan 
from the banks failed on account of the limitations imposed 
by the subtreasury law, and the seven-thirty loan which he 
advertised on the 25th of July was not very well received. 1 
Consequently while the currency reached $40.98 on the 15th, 
it fell back again and closed for the month at about $39. 

Contemporary observers were wont to declare that this 
extraordinary rise of the premium after the gold room had 
been reopened was due solely to a well-concerted corner 
which had been arranged while the gold bill was still in 
force. 2 When one examines the military and financial 
situation, however, one finds little ground for surprise that 
the credit of the federal treasury was at a low ebb in the 
first half of July. No doubt the "bulls" in the gold room 
were doing their utmost to raise the price, but their signal 
triumph over the " bears " would have been impossible had 
July, 1864, been like July, 1863, a month of great sub- 
scriptions to national loans and decisive victories in the 
field. 

5. The rise from August, 1864, to May, 1865. In Au- 
gust there was a slow but tolerably steady appreciation in 
the value of the currency, due to the improving military 
prospect. Sheridan took command in the Shenandoah, and 
while he accomplished nothing decisive against Early until 
September, all fear of the capture of Washington was 
removed. Grant was able at last to resume the offensive 
against Lee, and by feinting with his right wing succeeded 
in seizing the Weldon railway with his left and holding it 
against fierce assaults. In the South Sherman continued 
his flanking movements against Atlanta, and Farragut cap- 
tured the Confederate vessels in Mobile bay and reduced 

1 Part I, chap, v, sec. ii, p. 125, above. 

2C<y. MEDBEBBT, op. cit., p. 250; COBNWALLIS, op. cit., p. 10; Chase's letter of 
Jane 21, to Jay Cooke, WARDEN, op. cit., p. 606; editorial articles of New York 
Tribune, July 8 and 15. 



236 HISTORY OP THE GREENBACKS 

the forta The rate of advance, however, was checked by 
the condition of the finances. At one time the unpaid 
requisitions reached $130,000,000,' and the secretary's 
attempts to sell bonds were but moderately successful. 

Early in September news came of the capture of Atlanta, 
and later in the month Sheridan defeated Early at Opequan 
and Fisher's Hill. The meeting of the Democratic conven- 
tion in Chicago at the very end of August had caused a 
reaction, but this was overcome by the good news from the 
front, and the average value of the currency for the month 
was $5.50 above that for the previous month. 

During October the appreciation continued, for though 
Kautz's cavalry was defeated on the 7th and lost its guns, 
Hood in his advance into Tennessee was repulsed at Alla- 
toona Pass and Resaca, Sheridan destroyed Early's army at 
Cedar Creek, Lieutenant Gushing sank the "Albemarle" 
with a torpedo, and the cruiser " Florida " was captured. In 
November there was a curious reaction, due mainly to the 
presidential election. Mr. Lincoln's triumph was taken to 
mean an indefinite continuation of the war, and so depressed 
the value of the government's notes. In a military way the 
most important event was that Sherman cut connections 
with the North and started from Atlanta on his march to 
the sea. Hood meanwhile was still pressing north, while 
the imperturbable Thomas continued quiet preparations for 
his reception at Nashville. Schofield's withdrawal from the 
field after the battle of Franklin was construed as a defeat. 

The interrupted rise recommenced in December when 
word was received from Sherman that he had reached the 
sea in perfect safety and taken Savannah. A little later 
Thomas destroyed Hood's army at the battle of Nashville. 
The favorable effect of these great successes was partially 
neutralized by the disappointment felt over Secretary Fes- 

i Report of the Secretary of the Treasury, December, 1864, p. 21. 



SPECIE VALUE OP THE PAPEB CURRENCY 237 

senden's finance report, by a curious bill introduced into the 
House of Representatives by Thaddeus Stevens imposing 
penalties upon anyone who should pay more than its face 
value for gold coin, or less than its full value for paper 
money, 1 and by Butler's failure to take Fort Fisher. 

In January Terry did what Butler had failed to do by 
capturing Fort Fisher, and Sherman got ready for his march 
north from Savannah. On the 23d an attempt to destroy 
Grant's shipping in the James failed. These events, with the 
prevalence of peace rumors, sufficed to continue the gradual 
advance of the currency. In February Grant's attempt to 
turn the Confederate lines at Hatcher's Run was unsuccess- 
ful, but Charleston and Wilmington fell in consequence of 
Sherman's advance. The failure of the "peace conference" at 
Hampton Roads was depressing. Still, the rise continued 
until the currency regained the level which it had held in 
October before the relapse caused by the election. 

In March the very slow rate of appreciation suddenly 
became very rapid, because of the opening of the spring 
campaign. Word came March 14 from Sherman, who had not 
been heard from since early in February, that his army had 
safely reached Laurel Hill, in North Carolina ; and later 
came reports of his victories at Averysboro and Bentonville. 
Meantime Sheridan joined Grant before Petersburg. Lee's 
position becoming desperate, he made a last assault upon 
the encompassing lines, but was driven back. Then Grant 
began the advance that was to end the war. In Wash- 
ington President Lincoln's second inauguration occurred, 
and Senator Fessenden was replaced by Hugh McCulloch as 
secretary of the treasury. All this was favorable, and the 
average value of currency for the month was $8.80 higher 
than it had been in February. 

1 The full text of this bill may be found in the New York Tribune, December 10, 
1864. For its effect upon the gold market see ibid., money articles, December 6 and 7. 



HISTORY OF THE GREENBACKS 



In the first two weeks of April matters culminated with 
the victory of Five Forks, the capture of Petersburg and 
Richmond, Lee's retreat and surrender. A little later Sher- 
man took Raleigh, and Johnston's army capitulated. Presi- 
dent Lincoln's death was the one untoward event. Not- 
withstanding it, the currency gained $9.80 over March. 

During May there was a further advance of $6.40 above 
the average for April. Armed resistance ceased, President 
Davis was captured, and the war was over. Moreover, Jay 
Cooke was meeting with great success in selling seven-thirty 
notes to obtain funds for paying the army. In these last 
three months of the war there was an appreciation above 
February of $25. 

6. Decline from June to December, 1865. After the 
war was over, the gold market became calm, indeed, com- 
pared with what it had been. Great fluctuations gave place 
to slight variations from day to day. A reaction naturally 
followed on the first joy caused by the cessation of hostili- 
ties. May 11 marked the high-water point $77.82. After 
that there was a slow decline. Although the seven-thirty 
loan was readily subscribed, it led to a great increase of the 
debt. Moreover, there was some danger of war with France 
because of Napoleon's maintenance of Maximilian in Mexico. 
By November the currency had depreciated $5.70 below the 
level for May. 

In December there was a slight reaction, due to McCul- 
loch's finance report recommending a speedy resumption of 
specie payments and the warm indorsement of this policy by 
the House of Representatives. l 

1 See Part I, chap, v, sec. iii, above. 



CHAPTER IV 

PRICES 

I. Falkner's Table of Relative Prices: 

Price Data of the Aldrich Report Criticisms of Falkner's Price 
Table Effect of Using Price Quotations for Different Months. 
II. A New Table of Relative Prices by Quarters : 

Method of Construction Data Employed Range of Fluctua- 
tions Arithmetic Mean of Relative Prices Discrepancy between 
New Figures and Falkner's Grouping of Closely Related Price 
Series Second Series of Arithmetic Means Treatment of South- 
ern Products Third Series of Arithmetic Means Median of 
Related Prices. 

III. Relative Prices Paid by the Federal Government for Supplies: 
Data Employed Results of Computations Comparison with 
Wholesale Prices. 

IV. Relative Prices of Various Necessities at Retail: 

Weeks 's Report on Retail Prices Relative Prices of Twenty-three 
Commodities at Wholesale and at Retail Relative Retail Prices 
of Sixty Commodities Comparison with Wholesale and Govern- 
ment Prices. 

V. General Causes of the Price Fluctuations Other than the Currency : 
Government Purchases Diminished Supply of Southern Staples 
War Taxation Rise of Money Wages Speculation Quantity 
of Money International Trade Relations Decline in Value of 
Gold. 
VI. The Currency as a Cause of the Price Fluctuations: 

Concomitant Variations of Prices and the Premium Conclusion 

i. FALKNER'S TABLE OP RELATIVE PRICES 

FOR the study of prices during the Civil War the most 
copious and trustworthy source of material is the report upon 
Wholesale Prices, Wages, and Transportation made by Mr. 
Aldrich from the Senate Committee on Finance in 1893. 1 
In Part I of this document there is an elaborate table, com- 

1 Senate Report No. 1394, 52d Cong., 2d Sess. (four parts), pp. 658, 1956. For the 
sake of brevity this document is hereafter cited simply, as the Aldrich Report. 

239 



240 HISTORY OP THE GREENBACKS 

piled under the direction of Professor Roland P. Falkner, 
the statistician of the committee, showing the relative prices 
at wholesale of some 230 commodities each year from 1860 
to 1891. As the base from which variations in price are 
measured in this table is 1860, a proper starting-point for 
investigating the effect of the legal-tender acts upon prices, 
it may seem that the present chapter can be confined to an 
analysis of Professor Falkner's carefully elaborated results. 
Slight examination of the table, however, suffices to show 
that it cannot be accepted as a satisfactory index of the 
course of prices during the war. 

In the first place, Falkner's table gives but a single index 
number for each year, and therefore does not enable one to 
investigate in any detail the point of primary interest the 
relation between the fluctuations of prices and the constantly 
changing premium on coin. Second, the prices of the single 
commodities used in computing the average relative price 
for each year do not all refer to the same month. In col- 
lecting material, Professor Falkner explains, an attempt was 
made to get four quotations each year for every article. In 
a few cases, however, this was not possible, and it was neces- 
sary to take instead average prices for the year. Where the 
prices were obtained by quarters the analysis proceeded on 
the basis of the quotations for January. "An exception to 
this rule is made, of course," he continues, "for articles for 
which the January price is not the distinctive price for the 
year, as for fresh vegetables and the like. Thus, in the cost 
of potatoes, October is taken as the typical month, but the 
exceptions to the rule that January is the basis of the com- 
parison are very few. " ' 

It is probable that in years of less violent price fluctua- 
tions this use of some quotations for July, for example, in 
place of quotations for January would make little, if any, 

lAldrich Report, Part I, p. 29. 



PRICES 241 

difference in the general average for all commodities. But 
in the years of the Civil War the case is different. The 
tables of the last chapter show that the specie value of the 
currency in which all prices were reckoned, fell 40 per cent, 
between January and July, 1864, and rose 52 per cent, be- 
tween January and July, 1865. When one is trying to 
ascertain what effect changes in the specie value of the cur- 
rency had upon prices, it is clearly inadmissible to include 
in the index numbers for years marked by such extraordinary 
perturbations relative prices for both January and July. 

Nor is this point one of merely theoretical significance. 
To determine how frequent is the use of quotations for other 
months than January, I have recomputed from the original 
data in Part II of the Aldrich Report all the relative prices 
given in Table I for 1865. The result indicates that the 
cases of divergence from the general rule of using the Janu- 
ary price are much more numerous than Professor Falkner's 
language would lead one to infer. Of the 222 relative prices 
for that year only 99 are based on quotations for January. 
Of the remainder, 74 refer to unstated months or to averages 
for the year, 26 to July, 6 to March, 6 to the average of 
January and July, 4 to February, and 7 to various other 
months. 1 

iAs these statements seem in some measure inconsistent with the impression 
given by the language of the report, I append a list of the relative prices for 1865 
that are not based on January quotations : 

1. Time within year not specified : fish, mackerel, No. 1, No. 2, No. 3; lard, pure 
leaf; meat, bacon clear and ham; salt, coarse solar, and fine boiled; blankets, cot- 
ton warp, all wool filling; broadcloths, first and second quality ; cassimeres, Nos. 1, 
2, and 3; checks; hides; horse blankets; shawls; sole leather; wool, medium and 
fine; anvils; bar-iron; door knobs; iron rails; iron rods; lead, pig, No. 2; locks, 
mortise and rim; meat cutters; nails; pig iron; pocketknives, Nos. 1 to 25; saws, 
Nos. 1 to 4 ; scythes ; carbonate of lead ; maple boards ; oak boards ; shingles, Nos. 
3 and 4; calomel; glycerine; glassware, Nos. 1 to 5. 

2. July: starch, corn, No. 2; calico; print cloths, Nos. 1 and 2; iron wire; brick; 
cement ; chestnut logs ; hemlock logs ; lime ; oxide of zinc ; pine boards, Nos. 1, 3, 5, 
and 6; pine logs; putty; shingles, No. 1; spruce boards; tar; turpentine; window 
glass, Nos. 1 to 4 ; starch, ordinary laundry. 

3. Average of January and July : doors ; hemlock boards ; pine boards, Nos. 2, 4, 
and 7 ; pine shingles, No. 2. 



242 HlSTOBY OP THE GREENBACKS 

Precisely how great an effect these very frequent devia- 
tions from the rule have upon Falkner's index number for 
1865 it is impossible to tell. In eleven of the above cases of 
deviation the price for the other month is identical with that 
for January, but in the majority of instances where a Janu- 
ary quotation is available for comparison the difference is 
considerable. Perhaps the best way to get a quantitative 
expression of this difference is to examine the case of the 
twenty-three commodities for which both January and July 
prices are given in the exhibits, but where the relative prices 
for 1865 are based on the latter quotation. The average 
relative price of these articles for January is 268, for July 
202 a difference of 66 points. 

It is evident that Professor Falkner's average which 
includes relative prices based upon these twenty-three July 
quotations, to say nothing of the much larger number of 
relative prices based upon quotations for other months 
besides January, cannot show the true average relative price 
of the 222 articles for January, or for any single month, or 
for the year as a whole, and therefore cannot with propriety 
be compared with the premium on gold for any single month 
or for the year. 1 Clearly, then, all thought of using the table 
of relative prices in the form in which it is published in the 
report for investigating the relation between the rise of prices 
and the depreciation of the currency in relation to specie 
must be given up. 2 

4. March : plate glass, Nos. 1 to 6. 

5. February : fish, cod ; meat, beef loins, beef ribs, and mutton. 

6. April : carpets, Wilton ; starch, Ontario. 

7. October : coal, anthracite, pea ; potatoes, No. 2. 

8. May: powder, rifle, No. 2. 

9. August : meat, lamb. 

10. November : potatoes, No. 1. 

1 Professor Falkner, overlooking the nature of his average, divides the average 
relative price for each year from 1862 to 1878 by the premium on gold in January, and 
thus obtains a table which he calls " Relative Prices in Gold." Ibid., p. 99. 

2 Other objections might be urged against Falkner's table, such as the inclusion 
of many different series for slightly different forms of the same article, etc. But 
what has been said is sufficient to show the reason for compiling a new table. 



PRICES 243 

Fortunately, while the table of relative prices published 
in Part I of the Aldrich Report is thus unsuitable for the 
present purpose, all of the material from which that table 
was constructed is published at length in the "Exhibits" of 
Part II. As this collection of data was made from authen- 
tic sources with scrupulous care, the student who finds that 
he cannot employ Professor Falkner's averages is able in 
many cases to go back to the original material and compile 
from it new tables specially adapted to his needs. This is 
the task attempted in the next section. 

II. A NEW TABLE OF RELATIVE PRICES BY QUARTERS 

The preceding criticism of Falkner's table of relative 
prices indicates what should be the distinctive features of 
the new table. First, in order that the comparison between 
the fluctuations of prices and of gold may be as full as pos- 
sible, it is desirable that several index numbers should be 
obtained for each year the more the better. The attain- 
ment of this desideratum in partial measure is made possible 
by the fact that for a large number of articles prices are 
given four times a year for January, April, July, and 
October, and in a very few cases for February, May, August, 
and November. Second, in order that the meaning of the 
averages shall be clear when they are obtained, all articles 
that are not quoted in this manner must be excluded. By 
observing these two rules, a table can be made that will show 
the relative prices of a considerable number of commodities 
at four dates in each year for the period of the Civil War. 

Two points remain to be settled What prices shall be 
used as the basis upon which to compute variations, and, 
How shall the average of the price variations of the single 
commodities be struck? On the first point it seems well 
to follow the precedent set by Professor Falkner and take 
the quotations for January, 1860, as the basis, except in 



244 HISTORY OP THE GREENBACKS 

cases where the quotation for some other month or for the 
year as a whole is clearly more representative. 1 As prices 
remained nearly stationary during this whole year and the 
first quarter of 1861, the general results obtained in this 
fashion will not vary appreciably from those that might be 
obtained from the use of the average for the year 1860, or 
for the fifteen months from January, 1860, to April, 1861. 
The advantage of the course chosen is that it facilitates 
comparison with Falkner's table. 

The same reason may be given for taking a simple arith- 
metic mean of the several relative prices each quarter as the 
first average. Afterward other methods of averaging will 
be tried. Weights, however, will not be in place in any of 
the averages that may be employed in this chapter. When 
one is concerned simply with ascertaining what effect mone- 
tary conditions have had upon prices, the importance of a 
commodity for purposes of consumption is a wholly irrelevant 
fact. To take a concrete illustration, the fluctuations in the 
price of cotton, while more significant than the fluctuations 
of, say, wood-screws, when a computation is being made of 
the increase in cost of living, are much less significant when 
the effect of the greenback issues upon prices is the subject 
of investigation. In the following tables, therefore, all com- 
modities will be treated precisely alike, so far as the quanti- 
ties produced or consumed are concerned. 

Examination of Table XI of Part II of the Aldrich 
Report, from which Falkner's table of relative prices was 
made, shows that there are tolerably complete series of 
quarterly quotations for 120 commodities. In Part IV there 
is a supplementary table (XXI) that furnishes two more series. 
Further, as there is no reason for excluding from the inves- 
tigation any class of commodities for which the requisite data 
are obtainable, thirteen more series may be added for the 

i In dealing with agricultural products, for example, it is best to use the average 
of the quarterly quotations for 1860. 



PRICES 



245 



farm products grouped by themselves in Table X of Part II. 
This makes a total of 135 nominally distinct articles a num- 
ber considerably smaller than that included in Falkner's 
table, but larger than the number included in some of the 
currently received foreign tables. The relative prices of these 
commodities have been computed in the usual fashion as per- 
centages of the quotations for 1860. All of the resulting 
series are published at length in the Appendix. 

Anyone who looks over these individual series will find 
that, while there was a very general and violent advance of 
prices from 1860 to 1865, this advance was far from uni- 
form. A few of the most extreme examples of dissimilar 
fluctuations may be presented, side by side to show how 
great the differences were: 

TABLE vm 

EXAMPLES OF DISSIMILAR PRICE FLUCTUATIONS 





Silk: 
Raw 
Italian 


Cotton : 
Upland 
Middling 


Matches 


Mercury 


Wood 
Screws 


Gold 


1860, January 


100 


100 


100 


100 


100 


100 


April 


100 


101 


100 


100 


100 


100 


July 


106 


98 


100 


100 


81 


100 


October 


100 


98 


100 


100 


117 


100 


1861, January 


100 


109 


100 


100 


117 


100 


April 


83 


117 


100 


100 


117 


100 


July... 


78 


134 


100 


100 


117 


100 


October 


72 


196 


100 


82 


117 


100 


1862, January 


72 


327 


100 


82 


117 


103 


April 


72 


250 


100 


82 


117 


102 


July 


83 


336 


100 


82 


117 


116 


October 


81 


509 


100 


109 


117 


129 


1863, January 


75 


614 


100 


127 


135 


145 


April 


72 


664 


100 


127 


158 


152 


July. . . 


67 


627 


100 


127 


158 


131 


October 


67 


768 


100 


142 


119 


148 


1864, January 


69 


736 


100 


151 


158 


156 


April 


75 


691 


100 


200 


158 


173 


July. . . 


89 


1400 


208 


282 


216 


258 


October 


94 


1091 


208 


346 


216 


207 


1865, January 


89 


1091 


208 


251 


216 


216 


April 


100 


318 


396 


182 


216 


149 


July. . . 


111 


455 


396 


96 


216 


142 


October 


100 


400 


396 


96 


216 


146 

















246 HISTORY OP THE GREENBACKS 

A less spectacular, but more comprehensive, view of the 
range of price fluctuations may be had from Table IX, which 
shows the 135 commodities classified each quarter according 
to the degree of their rise or fall in price. 

The chief value of such an exhibit is that it emphasizes a 
fact that one interested in tracing the effect upon prices of 
the monetary changes of the war is prone to slur over 
namely, that, however powerful a factor in determining the 
ratios of exchange between dollars and commodities, the shift 
from a specie to an irredeemable paper standard may have 
been, it was by no means solely responsible for the changes 
that took place. Every article bought and sold continued to 
feel in undiminished force the effect of all changes in the 
conditions affecting its own particular demand and supply, 
as well as of changes in the specie value of the currency. 
But from the present point of view all matters that caused 
price fluctuations, except those connected with the cur- 
rency, are disturbing factors to be eliminated so far as possi- 
ble. To attain this end it is customary to strike an average 
of the relative prices at stated intervals, on the theory that in 
such an average the effect of the conditions peculiar to each 
article that cause some to rise while others fall will neutral- 
ize each other and thus leave evident only those changes 
connected with the currency or some other common cause. 
Accordingly, in Table X are shown the arithmetic means of 
the relative prices of the 135 quarterly series, side by side 
with Falkner's corresponding figures for 230 commodities. 

In examining this table and the material from which it 
is made, one finds two matters that shake confidence in the 
representative character of the results. The more obvious is 
the not inconsiderable discrepancy between the figures of the 
quarterly table and of Falkner's annual table. This discrep- 
ancy, however, is more apparent than real, and need cause little 
uneasiness. From what was said in the preceding section of 



PRICES 



247 



O?OCOn 
(53 (N rH <N 



t- Oi IO IO <* CO ** 



* CD CO IO OS <M T* T* CO D CO rH T* 



CD CO IO 
rH<NCO 



OS CO CO lO CO (M iH <N iH 



: n 

;0 

O 






lin 



to 

: 

CO 



<> CO CO O CO lO -* rH <M tH <N iH iH 



> CO 
CO 



O5 1C 
N CO 



t- CD T-H lO CO * iH rH iH (M 



00 IN * QO lO t- i-H T* (M rH rH C<1 -O 
rH TflCO rH .... 

OCOCOrHlNlN <N -O 

CO O * rH in rH rH -CO rH 

lO * rH rH ' 

ICO'JDCOCOrHrHrH O 

JtJBnuB |t-t-OOt-C<l -i-H -rHrH rH 

jaqcnoo | g-g 05i - Hffq :'- | ::: i - | ::::: rH 
x i n f | co^ 00 : i 1 " 1 ::::::::: i 1 " 1 

II Jd V |t-io *'.'.'.'.'.'.'.'.'.'.'. 

lOCO^OrH O 

*i"f| 1000" :::::::::::: : 

n ad v| S5S W : : : i::::::::: 05 

jtjBnuBf I i ;;!::;;;;;;;;; i : 

*9 


E 

::::::::::::::: :g> 

*- :::::::::':':':':':': : p 

a 

W -4 
5 

ft 

^4 ,-M ::::;:::::: & 

rH rH rH rH C^l CNI Ol C^ CO CO T^ TjH t^* OS J ~*^ 

a 



IMS 



HISTORY OF THE GREENBACKS 



TABLE X 

ARITHMETIC MEAN OF THE RELATIVE PRICES AT WHOLESALE OF 135 COMMODITIES 
H V QUARTERS, 1860-& 1 



Date 


135 
Commodi- 
ties 


Falkner's 
General 
Average 


Date 


135 
Commodi- 
ties 


Falkner's 
General 
Average 


1860, January . . 
April 
July 


101 2 
102 
100 


100 


1863, January.. 
April 
July.. . 


147 
165 
159 


149 


October. . 
1861, January . . 
April 
July 


102 
98 
98 
94 


101 


October. . 
1864, January . . 
April 
July.... 


160 
185 
201 
254 


191 


October. . 
1862, January . . 
April 
July 


101 
111 
111 
115 


118 


October. . 
1865, January. . 
April 
July 


254 
262 
211 
193 


217 


October. . 


130 




October. . 


213 





the elements from which Falkner's average is constructed, it 
follows that the two averages would not agree, even were the 
list of articles included in both identical. The use of so 
many quotations for other months than January necessarily 
makes Falkner's figure higher than that in the other table for 
January in years when prices were rising, and lower in years 
when prices were falling. As the observed discrepancies are 

i A table somewhat like the above was made in 1895 by Miss S. MCLEAN HARDY 
and published in the Journal of Political Economy, Vol. Ill, p. 158. Her table, how- 
ever, covered only the quarters from January, 1861, to January, 1865, inclusive, and 
contained 114 instead of 135 commodities. She omitted the thirteen farm products, 
raw silk, and tin plates from Table XXI of the Aldrich Report, and calico, denims, 
tickings, shovels, castor oil, and jute from Table XI. The omission of the last two 
articles of this list alone is explained, but the reasons given that the price of jute 
is expressed part of the time in gold and that there is a change in the unit of meas- 
ure applied to castor oil do not apply to the period covered by either table. I have 
not been able to use Miss Hardy's figures even for the articles and quarters common 
to both tables, because of the discovery of numerous errors in her computations. 
Most of these, however, are minute, and the only case in which they seem apprecia- 
bly to affect the general result is in October, 1861, when her table, apparently because 
of a mistake in addition, shows a very sudden advance from 95 to 125, followed by a 
fall to 113. In no other quarter is the difference between Miss Hardy's results for 
114 commodities and mine for 135 greater than four points. 

2 The reason why the arithmetic mean in January, 1860, is not 100 is that the 
relative prices of agricultural products is based upon the average prices for four 
quarters, and, of course, the January price is in most cases above this average. 



PRICES 249 

of this character, they are cause for confidence rather than 
for distrust. 

The second reason for doubting the fairness of the quar- 
terly table as an index of price movements, though less 
obtrusive, is more serious. On looking over the 135 series 
that enter into the quarterly table one finds a considerable 
number of cases where two or more series of relative prices 
are given for more or less similar varieties of the same com- 
modities. These cases are as follows: bread Boston crack- 
ers, three series; beeves beef loins, beef ribs, salt mess 
beef; sheep, mutton; hogs and pork pork, salt mess; 
molasses New Orleans and Porto Rico; salt Ashton's, 
Ashton's Liverpool fine, Turk's Island; sugar fair refining, 
Havana brown, refined; vegetables fresh potatoes, two 
series; carpets Brussels, ingrain, Wilton; print cloths 
metacomet, standard; sugar of lead brown, white; furni- 
ture chairs, bedroom, kitchen; pails wooden, two-hoops 
(two series), three-hoops, tubs (four series) ; starch Ontario, 
pearl, pure, refined, silver gloss; coal, anthracite chestnut, 
egg, grate, stove; copper ingot, sheet; lead drop shot, 
pig, pipe; rope Manila, tarred American; pine boards, 
lumber in log; window-glass American firsts and thirds, 
French firsts and thirds. 

Now, according to the logic of the average when used for 
such a purpose as the present, it is not admissible to include 
more than one series of relative prices for any single article. 
For, as has been said, the average is employed here as a device 
for eliminating price changes due to conditions affecting the 
supply and demand of the individual commodities. This 
elimination is believed to take place because, when a large 
number of commodities are selected at random, it is probable 
that the cases where these changes in supply and demand 
are in the direction of higher prices will be about as numer- 
ous as the cases where they are in the direction of lower 



250 HISTORY OP THE GREENBACKS 

prices. But if one commodity is counted two or more times, 
and others but once, the factors affecting that one commodity 
are given undue prominence, and the chance is diminished 
of their being offset by changes of an opposite character in 
the case of other commodities. 1 

The inclusion of several series for different varieties of 
the same article is not quite so objectionable as the counting 
of a single series several times over, because the chances are 
small that these different varieties will all be subject to pre- 
cisely the same changes of supply and demand. To take 
the instance of starch, for which the greatest number of 
series are given in the quarterly table it appears from the 
table on the following page that no two of the five series 
showed the same variations. 

But while the fluctuations in the relative prices of the 
several kinds of any commodity may not be identical 
there is a difference of 56 points between the highest and 
lowest relative prices of starch in January, 1865 they 
usually resemble each other enough to substantiate the 
belief that there are certain broad conditions of supply and 
demand that affect all the varieties in somewhat the same 
fashion. By including series for the different varieties these 
broad conditions are given more prominence than similar 
conditions affecting other commodities. Therefore the chance 
of obtaining an average in which the effect of price changes 
due to fluctuations in the supply and demand for the various 
commodities is substantially eliminated, seems to be 
improved by taking but one series for each distinct commodity. 
But the question what shall be deemed distinct commodities 
is not easy to answer. The general rule must be that com- 

i Of coarse, these remarks have no application to index-numbers when used for 
purposes that make weighted averages desirable. Frequently in such cases the 
weighting can best be performed by using several series for articles of great impor- 
tance and but one for the majority of other articles. But, as has been explained, 
weights are to be avoided when one is investigating the effect of monetary changes 
upon the general trend of prices. 



PBICES 



251 



TABLE XI 

BEltATIVE PBICES OP FIVE VABIETIES OF STARCH 



Date 


Ontario 


Pearl 


Pure 


Refined 


Silv'r Gloss 


Average 


1860, Jan. 




100 


100 


100 


100 


100 


Apr. 


ioo 


100 


100 


100 


100 


100 


July 


100 


100 


100 


100 


100 


100 


Oct. 


100 


100 


100 


100 


100 


100 


1861, Jan. 


100 


100 


100 


100 


100 


100 


Apr. 


100 


100 


100 


100 


100 


100 


July 


100 


100 


100 


100 


100 


100 


Oct. 


100 


92 


92 


93 


94 


94 


1862, Jan. 


100 


92 


92 


93 


94 


94 


Apr. 


100 


92 


92 


93 


94 


94 


July 


100 


92 


92 


93 


94 


94 


Oct. 


110 


100 


100 


100 


100 


102 


1863, Jan. 


130 


117 


115 


114 


113 


118 


Apr. 


140 


125 


123 


121 


119 


126 


July 


130 


117 


115 


114 


113 


118 


Oct. 


130 


117 


115 


114 


113 


118 


1864, Jan. 


160 


142 


139 


136 


132 


142 


Apr. 


180 


158 


154 


150 


145 


158 


July 


200 


175 


169 


164 


158 


173 


Oct. 


244 


192 


185 


179 


171 


194 


1865, Jan. 


240 


208 


200 


193 


184 


205 


Apr. 


240 


208 


200 


193 


184 


205 


July 


200 


175 


169 


164 


158 


173 


Oct. 


200 


175 


169 


164 


158 


173 



modities are distinct for the present purpose when the con- 
ditions affecting their production and consumption, their 
supply and demand, are distinct. This line, however, is diffi- 
cult to draw because of the many degrees of relationship 
between different goods. While everyone may admit that 
the difference between wooden pails with two hoops and 
with three hoops is not sufficient to entitle the articles to be 
treated as distinct commodities, there is room for difference 
of opinion regarding such articles as brown and refined 
sugar, Brussels, ingrain and Wilton carpets, etc. In the 
present case, I have thought it best to err rather on the side 
of drawing the line too strictly than too loosely. With this 
purpose I have taken the average relative prices of all the 



252 



HISTORY OP THE GREENBACKS 



above enumerated groups of related articles, and recom- 
puted the arithmetic mean for each quarter, using these 
averages in place of the original series. This procedure 
reduces the number of series that enter into the average 
from 135 to 97. It will be noticed that the new series of 
averages is somewhat higher than the former one from 
Table X, which is introduced into the new table to facilitate 
comparison. 

TABLE XII 

ARITHMETIC MEAN OF RELATIVE PRICES OF 135 COMMODITIES BEFORE AND AFTEB 
AVERAGING SERIES FOB DIFFERENT VARIETIES OF THE SAME COMMODITY 





Before 


After 




Before 


After 




Averaging 


Averaging 




Averaging 


Averaging 




Series for 


Series for 




Series for 


Series for 




Different 


Different 




Different 


Different 


Date 


Varieties 


Varieties 


Date 


Varieties 


Varieties 




of Same 


of Same 




of Same 


of Same 




Commo- 


Commo- 




Commo- 


Commo- 




dity 


dity 




dity 


dity 


1860, January.. 


101 


102 


1863, January.. 


147 


154 


April 


102 


102 


April 


165 


173 


July 


100 


100 


July 


159 


165 


October . . 


102 


104 


October. . 


160 


166 


1861, January.. 


98 


98 


1864, January.. 


185 


193 


April 


98 


98 


April 


201 


208 


July 


94 


94 


July 


254 


264 


October . . 


101 


101 


October. . 


254 


262 


1862, January.. 


111 


114 


1865, January.. 


262 


272 


April 


111 


113 


April 


211 


216 


July 


115 


117 


July 


193 


197 


October . . 


130 


134 


October.. 


213 


214 



One objection against the average, even after the cor- 
rection has been made for different varieties of the same 
commodities, remains to be dealt with. On looking over the 
amended list of series one finds a number of articles that 
show extraordinary fluctuations which are clearly due to other 
causes than the currency especially the staple southern 
products, cotton, molasses, sugar, turpentine, and finished 
products made of these materials, like cotton fabrics. It may 
seem at first sight that there can be no question about the 



PRICES 253 

propriety of excluding all such articles from the list on the 
ground that their price perturbations are assignable in large 
measure to known causes other than the changes in the 
currency. But, after all, the matter is not so simple. Every 
series in the table has a value not only as an indication of 
the effect of the currency on the price of the specific com- 
modity which it represents, but also as bearing within it a 
corrective for the effect upon the average of changes in 
the supply and demand of other commodities. If, then, 
one commodity is thrown out because the investigator hap- 
pens to know something of the conditions affecting its 
demand and supply, there is danger that the effect of oppo- 
site conditions affecting some other commodity about which 
he happens to know less will not be offset. 

In other words, use of the average to ascertain the effect 
upon prices of any general cause like the issue of an irre- 
deemable paper currency, implies reliance upon the laws of 
chance, and the operation of these laws should not be lightly 
interfered with by limiting the number of cases submitted to 
them. Of course, this reliance upon chance is not and should 
not be blind. The investigator properly uses his discretion in 
determining whether the material which he subjects to the 
process of averaging is of a representative character. Under 
this head comes, for example, his liberty to combine series 
that represent the effects of the same set of particular con- 
ditions. But the mere fact that he happens to know some- 
thing of the reasons why one article advanced or fell in 
price much more than the majority gives him no logical 
right to throw it out. If he were to commence upon 
the process of excluding all articles for the deviation of 
which from the mode he could account, consistency would 
demand that he make a careful study of the conditions 
affecting the supply of and demand for all articles in his list 
and try to distinguish in each and every case between the 



254 HISTORY OP THE GREENBACKS 

effects upon price of the monetary conditions and of other 
factors. But it is precisely because such discrimination of 
the part played by different causes in producing the given 
result is admitted to be impossible that he has recourse to 
the device of the average. When he employs that device 
at all, he should employ it consistently, and not allow his 
accidental knowledge of the market conditions affecting cer- 
tain commodities, and his inevitable ignorance of the market 
conditions affecting other commodities, to interfere with the 
operations of the laws of chance. 

But, while it would be inconsistent to exclude the whole 
list of southern products because the cause of their remark- 
able advance in price is known, there is the same reason for 
cutting down the representation of one group of them as for 
using but a single series for the five different kinds of 
starch. The extreme advance in the price of cotton caused 
by the practical cessation of exports from the South, com- 
municated itself in large measure to all goods made of cot- 
ton print cloths, drillings, shirtings, sheetings, calico, 
denims, and tickings. To include all of these separate series 
would give an undue prominence to the changes in the sup- 
ply of and demand for cotton, precisely like the undue 
prominence given to the corresponding particular conditions 
affecting starch by the use of the five series for it. There- 
fore it seems probable that the representative character of 
the average will be improved by treating cotton and cotton 
fabrics like the other groups of closely related commodities, 
i. e., by substituting for the original eight series their aver- 
age relative price. When this change has been made the 
new average given in the next table side by side with the 
preceding two is obtained. 

The preceding discussion points to the conclusion that 
the third of these columns has a better claim upon accept- 
ance as an index of the general trend of price fluctuations 



PRICES 



255 



TABLE XIII 

ARITHMETIC MEAN OF 135 8EEIE8 OF RELATIVE PRICES ACCORDING TO THREE METH- 
ODS OF GROUPING 





01 tO 


01 O) 


t* a 




co in 








.2.2 


; <D 


a Q 






2 2 


S-S 


Date 


eraging Ser 
rent Variet 
Commodity 


jl-& 

a-gs 


ier Averagi 
ies for Cott 
on Textiles 


Date 


sraging Ser 
rent Variet 
Commodity 


's'g.& 

iff 

111 

eS <u O 


tc m O 




"*si 


ill 


|1 




5^ 2 

3 


t*j o 


"SjgO 




O^M 


s? 


111 




1?" 


j< 


|8-o 




1-2-S 


.2 "8 


CO * 




-2o 


^-o 


^a 


1860, January. 


101 


102 


102 


1863, January. . 


147 


154 


142 


April .... 


102 


102 


102 


April 


165 


173 


162 


July 


100 


100 


100 


July 


159 


165 


156 


October . 


102 


104 


104 


October . . 


160 


166 


154 


1861, January. 


98 


98 


97 


1864, January . . 


185 


193 


176 


April .... 


98 


98 


98 


April 


201 


208 


194 


July 


94 


94 


93 


July 


254 


264 


233 


October . 


101 


101 


100 


October . . 


254 


262 


234 


1862, January . 


111 


114 


111 


1865, January . . 


262 


272 


247 


April 


111 


113 


110 


April 


211 


216 


207 


July 


115 


117 


113 


July 


193 


197 


184 


October . 


130 


134 


124 


October . . 


213 


214 


199 



than either of the others. But, granting that this series 
rests upon the best arrangement of the available data, the 
question may well be asked whether the arithmetic mean is 
the best method of averaging to employ. It has been 
pointed out frequently since the days of Jevons that in an 
arithmetic mean a few cases of extraordinary advance in 
price will offset many cases of decline. As such cases of 
unusual advance are not wanting in the series even as finally 
amended, it seems wise to try some method of striking an 
average not open to this criticism. For this purpose the 
median may be used that is, the point which divides the 
whole number of relative prices each quarter into two equal 
groups, one showing advances in price greater than the 
median, and the other less. In ascertaining the median, the 
final grouping of price series used in making Table XIII has 



HISTORY OP THE GREENBACKS 



been used as the basis, and the results are presented side by 
side with the final set of arithmetic means from the same 
table. 

TABLE xrv 

MEDIAN AND ARITHMETIC MEAN OP THE 135 SERIES OP RELATIVE PRICES AFTER AVER- 
AGING ALL CLOSELY RELATED SERIES 



Date 


Median 


Arithmetic 
Mean 


Date 


Median 


Arithmetic 

Mean 


1860, January.. 
April 


100 
100 


102 
102 


1863, January. 
April. . . . 


130 
142 


142 
162 


July 


100 


100 


July 


139 


156 


October . . 
1861, January . . 
April 


100 
100 
97 


104 
97 
98 


October . 
1864, January . 
April .... 


140 
161 
175 


154 
176 
194 


July 


95 


93 


July .... 


200 


233 


October . . 
1862, January. . 
April 


100 
100 
100 


100 
111 
110 


October . 
1865, January. 
April .... 


208 
228 
184 


234 
247 
207 


July 


103 


113 


July .... 


160 


184 


October . . 


117 


124 


October . 


180 


199 



On the whole, I incline to believe that the column show- 
ing the median is the most trustworthy indication of the 
general character and degree of price fluctuations that can 
be obtained from the data for wholesale prices given in the 
Aldrich Report. It is interesting, however, to see whether 
the results thus obtained agree with corresponding figures 
from other sources. Such material as is available for the 
purpose of comparison is analyzed in the next two sections. 

III. RELATIVE PRICES PAID BY THE FEDERAL GOVERNMENT 
FOR SUPPLIES 

In Part IV of the Aldrich Report there is a series of 
tables showing the prices paid by various bureaus of the 
federal government for a large variety of articles. From 
these tables it is possible to obtain fifty series representing 
the sums paid contractors for various kinds of food, clothing, 
and drugs for the years 1860 to 1865, and twenty-nine addi- 



PRICES 



257 



tional series of similar character for 1861 to 1865. In the 
majority of cases it is stated that the prices are averages for 
the year, or else the prices are given by months so that an 
average can be struck; but in the case of twenty-three of 
the series the time of the year to which they refer is not 
explicitly indicated. For this reason, because there were 
probably changes in the quality of the supplies furnished 
by army contractors from time to time, and because nearly 
half of the series are for a single class of articles drugs 
these data have not so high a character as the data dealt 
with in sec. ii. However, any credible price data deserve 
a brief analysis, if only for the purpose of comparison with 
the preceding tables. With this end in view the arithmetic 
means of the series have been computed, first before, and 
second after, grouping the intimately related articles, and 
then the medians of the series as they stand after grouping 
have been ascertained. These three sets of results are pre- 
sented in the next table side by side with the annual averages 
of the quarterly index-numbers obtained by similar methods 
from the data for wholesale prices: 

TABLE xv 

RELATIVE PRICES PAID BY THE FEDERAL GOVERNMENT FOR SUPPLIES COMPARED WITH 
RELATIVE PRICES IN WHOLESALE MARKETS 



DATE 


ARITHMETIC MEAN OF 
ALL SERIES BEFORE 
GROUPING OF BELAT- 
ED COMMODITIES 


ARITHMETIC MEAN 
AFTER GROUPING OF 
BELATED COMMODI- 
TIES 


MEDIAN AFTER GROUP- 
ING OF BELATED 
COMMODITIES 


Govern- 
ment Sup- 
plies 


Wholesale 
Market 
Prices 


Govern- 
ment Sup- 
plies 


Wholesale 
Market 
Prices 


Govern- 
ment Sup- 
plies 


Wholesale 
Market 
Prices 


I860.. 


100 
101 
110 
126 
179 
206 


101 
98 
117 
158 
224 
220 . 


100 
101 
109 
123 
176 
202 


102 
97 
115 
154 
209 
209 


100 
100 
100 
113 
173 
187 


100 
98 
105 
138 
186 
188 


1861 


1862 


1863 


1864 


1865 





HISTORY OF THE GREENBACKS 



It will be noticed that the grouping of the related series 
reduces the average relative prices of government supplies 
somewhat less than it reduces the average relative wholesale 
prices, and the same is true of the substitution of the median 
for the arithmetic mean as an average. Whatever method 
of grouping and averaging is employed, however, the table 
indicates that the advance in the price of the commodities 
purchased by the government for which data are available 
was less than the advance in the price of a somewhat larger 
list of commodities dealt in upon the wholesale markets. 
Whether this result is due to the imperfections of the 
materials on which the table is based, or whether it is fairly 
representative of the relative advance in the prices paid by 
the government and by private persons, it is difficult to say. 
The common opinion has been that the demand for war sup- 
plies was a very important factor in causing the advance of 
prices and that those articles purchased by the government 
on a large scale advanced much more in price than the 
majority of other things. No doubt this opinion is well 
founded when expressed with reference to the first year of 
the war, when there was a sudden as well as a large increase 
in the quantities of goods ordered by the war and navy 
departments. To fill such large orders at once was difficult, 
and accordingly competing contractors found it possible and 
necessary to advance prices. This condition of affairs is 
reflected by the table, which indicates that, while there was 
a general decline in the prices paid in wholesale markets in 
1861, the prices of government supplies did not fall but 
rose slightly. But one need not be surprised to find that 
after sufficient time had been given to readjust the machinery 
of production to meet the government demand and to organ- 
ize the intricate business of furnishing supplies, the very 
increase in the quantities ordered enabled contractors to 
supply the majority of articles at an advance in price some. 



PRICES 259 

what less than purchasers in the open market were asked 
to pay. While, however, there is no inherent improbability 
in the results of the comparison between the advance in 
prices paid by government and by private persons, the 
statistical material on which that comparison is based is not 
of sufficient scope or of sufficiently uniform character to 
make one comfortably sure of its reliability. 

IV. BELATIVE PBICES OF VARIOUS NECESSITIES AT RETAIL 

Another interesting body of price data is found in the 
twentieth volume of the Tenth Census, which contains a 
" Report on the Average Retail Prices of Necessaries of Life 
in the United States," by Joseph D. Weeks. The material 
for this report was collected by sending a large number of 
schedules to retail merchants in various sections of the 
country, with the request that they report the prices of 
specified staple articles in which they dealt. Some 409 
returns were received giving the retail prices of about sixty 
different commodities for longer or shorter periods of time. 
As Mr. Weeks says,it is not probable that the articles quoted 
by different dealers under the same caption as, e.g., rice, 
cheese, starch, beans, etc. are all of precisely the same 
quality. But this fact did not seriously diminish the value 
of the material for the calculation of relative prices in Mr. 
Weeks's opinion, because he thought it "fair to presume 
that in a given tabulation the price of the same quality or 
grade of each article, as near as is possible, is quoted for the 
different years, as the report is made by the same person 
and of the prices at the same shop." 1 

While the material thus collected was tabulated with care 
and published at length in Mr. Weeks's report, no attempt 
was made to analyze or combine the different series for the 
same or different articles in such a manner as to show the 

i P. 2 of the " Report." 



260 HISTORY OP THE GREENBACKS 

general trend of price movements. Consequently, little, if 
any, use has ever been made of this source by students of 
prices. In the hope of getting some light upon the very 
interesting question of the relation between the fluctuations 
of prices at wholesale and at retail, however, it seems well 
worth while to see what can be made of Weeks's data for the 
years of the Civil War by applying to them the methods used 
in dealing with the material of the Aldrich Report. 

A collation of the list of articles for which this Census 
report gives retail prices with the wholesale price lists of the 
Aldrich Report shows that there are twenty-three commodi- 
ties included in both sources that seem to be identical, or very 
similar. This fact makes possible a comparison between the 
relative prices of these articles at wholesale and at retail. 
There is, however, one obstacle. The census series used 
purport to show average prices for the year, while the 
Aldrich series give returns as a rule for four months only 
in most cases January, April, July, and October. It is 
accordingly necessary to take the average prices of these four 
months as representing the average for the year a pro- 
cedure that seems from comparison of other tables to be 
legitimate. The full detail of the comparison is given in 
the Appendix and a summary of the results is presented in 
Table XVI. 

This table indicates that prices at retail continued to cor- 
respond roughly with the fluctuations in wholesale prices, 
despite the disturbances caused by the paper currency, but 
that their movements were more sluggish. From the figures 
it seems that the fall in wholesale prices in the spring and 
summer of 1861 caused by the cessation of remittances from 
the South that embarrassed so many large jobbing houses 1 
was not reflected in retail prices probably because it was 
followed by the sharp upward turn in the last quarter of the 

1 Compare Part I, chap, i, p. 21, above. 



PRICES 



261 



TABLE XVI 

RELATIVE PEICES OP TWENTY-THREE COMMODI- 
TIES AT WHOLESALE AND AT RETAIL 1 





AVEEAGE 1 

YE 


'RICES PEB 
LB 




Whole- 
sale 


Retail 


I860 


100 


100 


1861 


88 


107 


1862 


105 


129 


1863 


138 


165 


1864 


221 


211 


1865 


222 


214 


1866 


206 


202 









year. 2 On the other hand, the advance of wholesale prices 
from 1863 to 1864 under the stimulus of the paper issues was 
more prompt and more considerable than the advance of 
prices at retail. Finally wholesale prices fell rather more 
rapidly when the war ended and the paper money began to 
appreciate in value. 

The uses of the census data, however, are not exhausted 
by this comparison of the relative prices of the articles which 
appear both in the Weeks and the Aldrich Report. Similar 
materials are given for the retail prices of thirty-seven other 
commodities, and it will be well to employ all the data 
available in the computation of a new set of index-numbers. 
While the whole number of commodities included by Mr. 
Weeks's investigation (sixty) is less than half as great as the 
number in the preceding quarterly tables and is only one- 
quarter as great as that in Falkner's table, it is still con- 
siderable enough to afford a fair average. In transcribing 
the actual prices as given in the census volume, all series 

1 While the number of articles included in this table is not large, the changes in 
the relative retail prices are almost identical with those of the fifty-eight articles 
for which prices are given below from the same source. On the average there are 
more than ten series from different towns for each of the twenty-three articles. 

2 See Table XIV above. 



202 



HISTORY or THE GREENBACKS 



were rejected except those which were explicitly said to give 
average prices for the several years. This course was neces- 
sary to secure uniform material, and while it reduces con- 
siderably the number of series for some articles, 556 are left 
an average of more than nine series for each of the sixty 
articles. In constructing the table all of the series of rela- 
tive prices for each article were averaged to form a single 
series, and then these average series were treated as the 
representatives of the articles to which they referred. The 
whole material may be found in the Appendix and a notion 
of its general character and scope formed from the next 
table : 

TABLE xvn 

RELATIVE RETAIL PRICES OF SIXTY COMMODITIES 



Groups of Articles 


Number of Articles 
in Group 


i 
_ 

JM 

Pn 
en 

*s 

s^ 

ja, 




I860 


1861 


1862 


1863 


1864 


1865 


1866 


Dry goods. . 


9 


108 


100 


1?fi 


199 


?,90 


40?, 


364 


?,96 


Boots 


1 


?,7 


100 


10?, 


119 


138 


196 


165 


154 


Groceries 


11 


84 


100 


104 


1?,8 


16-71 


fl05 


?,1? 


?11 


Flour and meal 


4 


.33 


100 


107 


114 


150 


185 


198 


?0? 


Rice, beans, and potatoes 
Beef 


3 
4 


26 
.35 


100 
100 


107 
108 


137 
11?, 


158 
139 


182 
158 


182 
167 


193 
167 


Veal 


3 


W 


100 


108 


109 


1?fi 


157 


160 


161 


Mutton 


8 


17 


100 


109 


111 


1?,?, 


135 


158 


158 


Pork and hog products. 
Fish, dried or pickled. . . 
Eggs and dairy products 
Fuel 


7 
2 
4 
5 


50 
14 
34 
41 


100 
100 
100 
100 


111 
98 
99 
104 


117 
112 
107 
118 


131 
127 
130 
154 


165 
150 
162 
173 


187 
155 
183 
176 


186 
159 
182 
171 


House rent 


1 


38 


100 


99 


107 


116 


131 


136 


139 


Board 


| 


?9 


100 


109 


119 


136 


154 


160 


156 






















Total 


60 


556 
















Average relative price of 
all articles (except 
board) 






100 


109 


130 


165 


?oa 


?,11 


301 























PRICES 263 

In this table the average relative price is not the aver- 
age of the index numbers of the groups, but the average 
of the relative prices of the fifty-eight commodities. 
Board is excluded from the average because of the proba- 
bility that the character of the food furnished at most 
boarding-houses changed very much as the result of the 
advance in prices. 

As in the case of the wholesale-price tables, a considerable 
variety is to be observed in the price movements of the 
different groups. For example, in 1865 dry goods, which 
here consist entirely of cotton fabrics, show an advance of 
264 per cent, over the prices prevailing before the war, while 
fish show an increase of 55 and house rent of but 36 per 
cent. A study of the 556 series given in the Appendix from 
which the averages for the several groups have been made 
will discover still greater divergencies. Even in the case of 
the same articles the relative change in the retail price in 
different towns is by no means uniform, for the equalizing 
effect of competition is much less felt in the case of prices 
at retail than at wholesale. But the number of quotations 
used is considerable enough to give some ground for accept- 
ing the general average as fairly representative of the fluctu- 
ations in the retail prices of some of the most important 
articles of daily consumption. 

In order to make possible comparisons with what have 
been regarded as the better forms of tl e preceding tables, a 
new series of arithmetic means and one of medians have been 
computed from the above data after grouping the closely 
related commodities. The results of these computations 
with the corresponding figures for wholesale prices and for 
government supplies are shown in Table XVIII. In order 
to make the character of the material more uniform, ordinary 
commodities alone are included that is, the series for board 
and house rent are not used. 



264 



HISTORY OF THE GREENBACKS 



TABLE XVIII 

ARITHMETIC MEAN AND MEDIAN OF RELATIVE RETAIL, WHOLESALE AND GOVERN- 
MENT PRICES, AFTER AVERAGING SERIES FOR RELATED ARTICLES 



DATE 


ARITHMETIC MEAN OF 


MEDIAN OF 


Relative 
Retail 
Prices 


Relative 
Wholesale 
Prices 


Relative 
Prices of 
Governm't 
Supplies 


Relative 
Retail 
Prices 


Relative 
Wholesale 
Prices 


Relative 
Prices of 
Governm't 
Supplies 


I860.. 


100 
106 
121 
150 
184 
191 


102 
97 
115 
154 
209 
209 


100 
101 
109 
123 
176 
202 


100 
103 
115 
144 
172 
181 


100 
98 
105 
138 
186 
188 


100 
100 
100 
113 
173 
187 


1861 


1862 


1863 


1864 


1865.'. 





When the differences between the sources from which 
the data for these three sets of averages are drawn, the 
lists of articles which enter into them, and the character 
of the material, are taken account of, the correspondence 
between them must be regarded as fairly close. Confidence 
in the representative character of each series is materially 
increased by the confirmation borne by the other two. The 
greatest advance is shown by the largest and most fully 
authenticated set of series that for wholesale prices. Re- 
tail prices, on the contrary, show the steadiest movement 
a fact that may be due in part to the less complete organi- 
zation of retail markets and in part perhaps to the fact that 
the series used for each commodity in making up the table 
is itself an average of several series from different towns. 

V. GENERAL CAUSES OF THE PRICE FLUCTUATIONS OTHER 
THAN THE CURRENCY 

The tables in the three preceding sections present the 
facts concerning the price changes of the Civil War as fully 
as they can be ascertained from the available data by the 
common methods of analysis. But, while a price table may 



PRICES 265 

show with approximate fairness the general trend of price 
movements, it does not show to what causes these move- 
ments are due. The only help a table gives in solving 
this problem is by eliminating the effect of fluctuations in 
the particular supply of and demand for single commodi- 
ties or small groups of commodities. But if changes of a 
tolerably uniform character have taken place in the supply 
of and demand for a large number of the commodities in- 
cluded in the table, their effect will not be eliminated by 
the process of averaging. Before concluding that the results 
shown by the price tables were produced by the issue of the 
greenbacks, it is therefore necessary to consider what other 
general causes of price perturbations were active during the 
Civil War. Such a study is the more imperative because 
contemporary observers were in many cases inclined to 
ascribe the price disturbances mainly to other factors than 
the currency. 

Two of these other factors on which much stress has been 
laid have already been noticed briefly government pur- 
chases and the interruption in the supply of southern 
products. On the whole, there seems to be much more 
danger of over- than of underestimating the importance of both 
these causes. The government demand for many articles 
was not at all an increase in the whole amount required by 
the community, but amounted merely to a change in the 
channel through which the commodities reached their con- 
sumers. For example, the War Department purchased each 
year thousands of uniforms and vast quantities of rations ; but 
had the volunteers remained at home, they would doubtless 
have bought nearly as much clothing and eaten an equal 
amount of food. While the demand for certain kinds of food 
and clothing was increased, the demand for other kinds fell 
off in nearly the same degree. Indeed it is not unlikely 
that the increase of price from the former cause was less 



2b'G HISTORY OP THE GREENBACKS 

considerable than the decrease from the latter, because a 
given quantity can be furnished at lower prices when there 
is but little variety in quantity and style, as in the case of 
army uniforms and rations, than when there is a great diver- 
sity in these respects as is the case with food and clothing 
used by the general public. Finally, if the war increased 
the total demand for certain articles, like lead, it indirectly 
decreased the total demand for others, like brick. 1 Such 
opposite changes in the demand for different articles may be 
expected to neutralize each other in the averages of a large 
price table. But speculative analysis is not the only resort 
in dealing with this question. It has already been shown 
that there is available a considerable body of statistical data 
regarding the prices paid by government bureaus for war 
supplies, and that these data indicate an average increase 
rather less than that indicated by other data for ordinary 
wholesale markets. If one accepts the evidence, therefore, 
one must conclude that this factor is responsible in very slight 
degree, if at all, for the great advance in prices shown by the 
tables. 

Much the same must be said of the interruption in the 
supply of the staple products of the Confederate states. The 
diminished supply of cotton, tar, turpentine, etc., caused a 
spectacular advance in their prices ; but it is also true that 
the cessation of southern demand for northern products 
tended to lower the prices of the latter articles. The latter 
effect was much less noticeable than the former, because less 
extreme, but it was probably felt by a larger number of com- 
modities. In the preceding price tables, as they stand after 
the grouping of cotton and cotton fabrics under a single 
series, there seems little reason to fear that the peculiar con- 
ditions affecting the few southern products included in the 
list exercise undue influence upon the general averages 

i Relatively few new buildings seem to have been constructed during the war. 



PRICES 267 

especially when the median is substituted for the arithmetic 
mean. 1 

A third much-emphasized factor in causing the advance 
of prices was the war taxation. In its need of revenue the 
federal government subjected almost all imported articles to 
heavy customs duties, and levied internal taxes upon almost 
all articles produced within the country. These taxes, it 
has been held, were equivalent to a general increase in cost 
of production and as such were added to the selling prices 
of products. 2 

This contention raises a most complex question which it 
is obviously impossible to discuss fully in this place 
namely, the incidence of the war taxes. But a little 
consideration serves to show that the danger again lies 
in unduly exaggerating rather than in unduly minimizing 
the importance of the factor. For, in the first place, not 
all of the internal taxes at least were of a nature to be shifted 
e, g., the tax upon incomes was not. And, second, the 
shifting of the taxes upon manufactures, sales, etc., was 
seriously impeded by the very universality of the levies. 
A tax upon a few competitive products is usually trans- 
ferred to the consumers, because, unless they will submit to 
the addition of the tax to the price, the producers out of 
whose pockets the money is taken in the first instance have 
the alternative of gradually turning their attention at least 
in part to untaxed branches of industry. But when nearly 
all branches of industry are taxed at a tolerably uniform 
rate, as was the case during the Civil War, there is no sucb 
alternative open to the producer. He must pay the tax out 
of his profits and sell at the old rates, or add all or a part 

i For, as stated above, an advance in relative price very much in excess of the 
average, has no more effect upon the median than an advance very little in excess 
of the average. 

2 See, e. g., J. S. GIBBONS, The Public Debt of the United States (New York, 1867), 
pp. 219-32. 



HISTORY OP THE GREENBACKS 



of the tax to his price and submit to a diminished volume 
of sales in consequence. Which policy will be pursued will 
depend upon a number of circumstances, such as the elasticity 
of the demand for the products taxed, the closeness of com- 
petition among producers, etc. If this statement be true, it 
is clearly inadmissible to assume that in the case of all 
articles the full amount of tax was added to the price, 
though some addition must have been made in many cases 
on this account. It is accordingly impossible to determine, 
by reasoning upon the incidence of the internal taxes, how 
much importance should be attached to taxation in ad- 
vancing prices. 

Unfortunately no satisfactory statistical test can be 
applied to supplement this indeterminate analysis. The 
most promising test case turns out on examination to have 
little significance. The 5 per cent, tax on sales, of which 
most has been said as a factor in raising prices, imposed by 
the act of June 30, 1864, and increased to 6 per cent, in 
March, 1865, applied to most domestic products except 
lumber, breadstuffs and a few less important articles. 1 
Accordingly one might hope to gauge the effect of this levy 
roughly by seeing whether by 1865 these excepted articles 
had risen in price less than the average. 2 Examination shows 
that the average relative price of the eight grains and the five 

1 H. R. Executive Document No. 34, p. 13, 39th Cong., 1st Sess. 

2 The average relative prices of the thirteen commodities referred to compare 
as follows with the general index numbers for 1862 and 1865 : 





18 


62 


li 





Month 


Thirteen 
Commodi- 
ties 


All Com- 
modities 


Thirteen 
Commodi- 
ties 


All Com- 
modities 


January 
April . . . 


101 

107 


111 
110 


212 

179 


247 
207 


July 
October 


106 
113 


113 
124 


157 

168 


184 
199 













PRICES 269 

kinds of lumber included in the quarterly table of sec. ii 
was indeed less than the average for all articles in 1865, 
but also that it was less before this tax was thought of. 
Accordingly, quite aside from the objection that might hold 
against this comparison on the score of the scanty number 
of commodities included, it throws no new light on the 
problem. 

There are two facts, however, of some significance, to 
which attention may be called: first, prices had reached 
almost their highest point before the 5 per cent, tax on 
sales was imposed ; second, the repeal of the internal reve- 
nue duties after the war did not cause any considerable 
decline of prices. David A. Wells, special commissioner of 
the revenue, who had maintained in his report of December, 
1866, that "the burden of national taxation" was "perhaps 
the most influential" of the causes to which the "inflation 
of prices may be attributed," admitted in his report of 
January, 1869, that he was "constrained to confess, that 
thus far the abatement of prices consequent upon the large 
annual reduction of taxes has not been what was antici- 
pated." 1 

A somewhat more definite conclusion can be reached 
regarding the effect of duties on imports. Successive tariff 
acts advanced these duties to a much higher point than had 
ever been reached before in the United States, and as the legal 
tender acts forbade the acceptance of greenbacks at the cus- 
toms house, the real increase of taxation was greater than in 
the case of excises which were paid in paper money. 
Importers had consequently to buy goods abroad for specie, 
pay duties upon them in gold, and finally sell them for 
paper money. New duties would therefore increase directly 
the prices charged to American consumers of imported 

i Senate Executive Document No. 2, p. 26, 39th Cong., 2d Sess., and H. R. Execu- 
tive Document No. 16, p. 23, 40th Cong., 3d Sess. 



270 HISTORY OF THE GREENBACKS 

goods without compelling the foreign producer to accept a 
lower price except perhaps indirectly if there were a con- 
siderable falling off in sales which the producer hoped to 
remedy by making concessions. One expects to find, there- 
fore, that imported commodities on the average advanced 
somewhat more rapidly in price than domestic products, 
and an examination of the price series in the Appendix will 
show that this expectation is justified, so far as materials for 
making the comparison exist. It seems altogether probable, 
therefore, that the war tariffs and perhaps the internal taxes 
also are responsible for some portion of the advance in prices 
as shown in the preceding tables. 

Three other matters that have played r6les in the dis- 
cussions of war prices may be dismissed more briefly. 
Withdrawal of men from their ordinary occupations to fill 
the armies, it has been frequently argued, made labor scarce ; 
consequently wages rose, expenses of production increased 
in proportion, and this increase made it necessary to advance 
prices. 1 But, as will be shown in the next chapter, the rise 
of wages was subsequent, not prior, to the rise of prices. 
Wages did not advance first and increase prices by augment- 
ing cost; but quite the contrary, prices rose so sharply as to 
decrease real wages in a marked degree, and this decrease 
led, though not immediately, to an increase in money wages. 
That the rise of money wages when once secured was an 
obstacle in the way of reducing prices is true, but it can 
hardly be that the advance of wages caused the preceding 
rise of prices. In fact, depreciation actually decreased the 
cost of labor to the employer and so worked in the direction 
of a fall, not a rise, of prices. 

Contemporary observers were apt to hold speculation 
responsible for the advance of prices as for the advance of 

IE. g., see C. A. MANN, Paper Money (New York, 1872), p. 239; JOHN EADIE, 
Panics in the Money Market (New York, 1873), p. 24. 



PRICES 271 

the premium on gold. 1 But it would probably be more true 
to say that the marked speculation of the war time was the 
effect than that it was the cause of the price movements 
although neither statement is true without qualification. 
So universal and long-continued a rise of prices cannot have 
been due to artificial cornering of the supply of nearly all 
articles. The really important part, with reference to prices, 
that speculators played then as at other times, was in fore- 
seeing the advances that were coming from the general 
conditions of the market monetary and other and pur- 
chasing commodities at a lower range of prices in the 
hope of selling at a higher. Such operations had the 
effect of accelerating the advance, but also of tempering 
its excesses, for the stocks of speculators, sold after prices 
had risen in order to realize profits, tended to depress the 
market. 

Finally a word may be said about the relation between 
prices and the quantity of money in circulation a subject 
that was much debated by the pamphleteers of the greenback 
agitation. 2 It is altogether impossible to determine whether 
there was a close correspondence between the course of 
prices and the volume of the currency, as was affirmed by 
some writers and denied by others, because, as has been 
shown at length, 3 the quantity of money in use cannot be 
ascertained. And more than this, the circumspect quantity- 
theorist would hardly expect to find a close correspondence 
at a time when "other things" were so far from "being 
equal." To add one important, but unobstrusive, point to 
the list of these inconstant "other things" that readily 
come to mind there was a very decided contraction of 

1 E. g., see Commercial and Financial Chronicle, Vol. II, p. 2. 

2 See, e. g., H. C. CAREY, Contraction or Expansion? (Philadelphia, 1866), Letters 
III and IV; J. S. GIBBONS, Public Debt of the United States (New York, 1867), pp. 
219-32. 

3 Part II, chap, ii, sec. vii. 



272 HISTORY OP THE GREENBACKS 

credit during the war, arising from the unstable volume of 
the paper currency, and consequently, a considerably larger 
proportion of exchanges than usual was performed by the 
use of cash. 1 

While the importance of all the foregoing considerations 
in the study of the war prices has been frequently observed 
and exaggerated, there remains another factor that has 
attracted little, if any, attention. The notion that prices in 
any country which has important commercial relations with 
other nations are necessarily influenced by the course of 
prices elsewhere has long been familiar, but it was probably 
not until the compilation of elaborate tables of relative prices 
for different countries that the degree of correspondence 
between the direction of price movements was duly appre- 
ciated. After examining such tables, a careful student 
would hardly think of discussing the fluctuations in the 
price level of the United States, without taking account of 
the trend of prices in England and Europe. But the aban- 
donment of the specie for the greenback standard in 1862 
seemed to sever the connection between prices in America 
and elsewhere. The fluctuations of prices in the United 
States were so exceedingly violent that they appeared to 
have no relation to the gentle undulations of the foreign 
price level. How great the differences were is best seen 
by comparing Sauerbeck's index-numbers for England and 
Soetbeer's for Germany, as recomputed by Falkner upon the 
basis of prices in 1860, with averages of the quarterly 
arithmetic means for each year from the preceding tables. 

But this emancipation of American prices from the 
influence of the international markets for goods and gold 
was more apparent than real. Even the barriers of a war 
tariff did not greatly diminish the extent of exports and 
imports, and so long as such commercial relations continued, 

1 See Part II, chap, vii, sec iii. 



PRICES 



273 



TABLE XIX 

COMPARISON OF RELATIVE PRICES IN THE UNITED STATES, ENGLAND, AND GERMANY 1 



Date 


United 
States 


England 


Germany 


I860.. 


102 


100 


100 


1861 


97 


99.6 


97.6 


1862 


115 


105 5 


101 4 


1863 


154 


109.3 


103.7 


1864 


209 


112 3 


106 9 


1865 


209 


105 8 


101 4 











the conditions of supply and demand in one market neces- 
sarily exercised a very considerable influence over the cor- 
responding conditions in all related markets. During the 
paper-money period the influence of these commercial rela- 
tions was towards making the advance of prices in the United 
States conform to the decline in the specie value of Ameri- 
can currency, in the same manner that before suspension it 
had been toward making the movements of gold prices in 
the United States correspond in a general way with similar 
movements abroad. For, had the prices of exportable com- 
modities in the United States not risen above their specie 
prices elsewhere in proportion as the price of gold in paper 
money advanced, there would have been a large profit in 
sending gold from London to New York, selling it for 
greenbacks, investing the latter in American products, and 
shipping them abroad to sell again for gold with which to 
repeat the operation. Of course, the influence of such oper- 
ations would be to depress the price of gold and raise the 
prices of commodities until the divergence between their 
relative advances in price had been reduced to compara- 

1 For the English and German prices see Aldrich Report, Part I, pp. 255, 295. 
Sauerbeck's figures for England are distinctly superior to those of the London 
Economist at this period, because the inclusion in the latter of so many articles 
affected by the price of cotton gives altogether too much weight to the diminished 
supply of that article as a price factor. As recomputed on the basis of 1860, the 
Economist figures are, 1861,102; 18(52,109; 1863,135.9; 1864,144.8; 1865, 135.5. Ibid.* 
p. 226. 



274 HISTORY or THE GREENBACKS 

tively narrow limits. On the other hand, had the prices of 
commodities in the United States risen above their prices 
elsewhere much in excess of the advance in the premium on 
gold, a large profit would have been realized by shipping 
European products to the United States, selling them at the 
high currency prices, converting the paper money received 
into specie by buying gold in the gold room, and taking the 
coin back to Europe to invest anew in articles for export. 
Here again the effect would be in the direction of bringing 
the currency price of gold and commodities in the United 
States into tolerable harmony with the trend of the European 
equation between money and wares but this time the 
means would be reduction of prices from the increased sup- 
ply of imported articles, and a rise in the premium from the 
increased demand for gold. 

Such a line of reasoning, however, must not be pushed 
too far. (1) While the purchase of American products for 
shipment abroad in case the premium was much above 
prices would not have been hindered by law, the converse 
operation when prices had outstripped the premium would 
have encountered an obstacle in the high duties upon impor- 
tation of foreign commodities. Of course, the American 
prices for such articles might remain above the European 
level by the amount of the duties and the cost of transporta- 
tion ; but once given this difference in the general level, a 
divergence from it would be checked by the process indi- 
cated. (2) It is also true that such complicated operations 
would have been more than commonly hazardous during the 
war because of the rapid fluctuations both of the premium 
and of prices. A state of affairs that promised a large mar- 
gin of profit one week might so far change before the series 
of transactions could be completed as to substitute loss for 
gain. The existence, then, of brief divergencies between 
the courses of the premium and of prices is quite compati- 
ble with the logic of the argument ; but if the argument 



PBICES 275 

is valid, one would not expect to find a wide divergence 
long-continued. (3) The trend of the commercial forces 
was not in the direction of making the movement of com- 
modity prices and of the gold premium in the United States 
parallel, but in the direction of making the movements 
harmonize with the relative value of commodities and 
gold abroad. At the time of the Civil War the purchasing 
power of gold was everywhere slowly declining in conse- 
quence of the immense production from the Californian and 
Australian mines. Consequently one would expect to find 
in the United States a corresponding advance of relative 
prices of commodities slightly greater than the advance of 
the premium on gold. 

One must not be betrayed, then, by the very great differ- 
ence between the course of specie prices in England and 
Germany and of greenback prices in the United States, into 
treating the latter as entirely independent of the former. 
In fact, barring the influence of increased taxation in this 
country, the connection between the markets of the great 
commercial nations was quite as real during the paper- 
money period as at other times, and the common influences 
upon prices were as truly felt, despite the fact that their 
effect in the United States was effectually concealed from 
superficial observation. Had there been no war and no 
paper standard, doubtless prices would have advanced here 
in somewhat the same degree as they advanced in England 
and Germany, and we seem bound to believe that some 
part though, of course, a small part of the violent rise 
actually experienced was due to the decline in the exchange 
value of gold. 

VI. THE CUBEENCY AS A CAUSE OF THE PBICE FLUCTUATIONS 

The argument has at last reached a stage where the prob- 
lem of chief interest may be attacked : How far were the 
fluctuations of prices due to the disorders of the greenback 



276 HISTORY OP THE GREENBACKS 

currency ? By process of exclusion the conclusion has been 
reached that these fluctuations cannot be accounted for, 
except in small measure, on any other ground than has been 
suggested; but it remains to be seen whether any positive 
evidence can be adduced for the opinion that the monetary 
conditions preponderated over all other factors as a price 
determinant. The most effective method of dealing with 
this problem is to apply the test of concomitant variations 
by comparing the specie value of the currency with its rela- 
tive purchasing power over commodities. To put the data 
in convenient form for making this test, the average monthly 
value of gold in currency, and the average relative prices of 
commodities at wholesale by quarters are platted on the 
accompanying diagram. Most value seems to attach to the 
median of the relative prices, but a line representing the 
arithmetic mean is added for purposes of comparison. 

Examination of this chart shows that there is a general 
correspondence between the relative prices of specie and of 
commodities in greenbacks. Agreement in detail is pre- 
cluded by the nature of the data; for prices are given but 
once a quarter, and the intermediate monthly fluctuations 
answering to those of gold can only be surmised. But in 
general direction and to a less extent in degree of movement 
the gold and commodity lines harmonize well. There are, 
however, two noticeable differences. First, the fluctuations 
of prices are more sluggish than those of gold, partly, no 
doubt, because the lines for commodity prices represent 
averages, and partly because the market for gold was more 
highly organized, and therefore more immediately sensitive 
to all changes in conditions of supply and demand, than even 
wholesale markets for commodities. Second, the advance of 
commodities does not halt at any time until it has consider- 
ably outstripped the advance of gold. In this excess of 
prices above the premium we see the effect of various 



PBICES 



277 



CHART III 

RELATIVE PBICES AT WHOLESALE AND THE VALUE OF GOLD COIN IN CUBBENCY, 

1860-65 




HISTORY OP THE GREENBACKS 



general causes other than the currency particularly war 
taxation and the world-wide decline in the exchange value 
of gold. But to appreciate fully the facts as shown by the 
chart it is necessary to follow the course of prices and of 
gold quarter by quarter. In so doing attention will be 
directed to the median, rather than the arithmetic mean. 

Throughout 1860, then, prices remained practically con- 
stant, but in the summer of 1861 the general business depres- 
sion caused a rather general but moderate decline. In the 
autumn, however, business improved somewhat and immense 
government purchases caused a sharp stiffening in the price 
of supplies. The class of articles affected, however, was not 
large, and consequently the median shows merely a return to 
the price level of 1860. Suspension of specie payments and 
the appearance of a small premium upon gold had no appre- 
ciable effect upon prices for the first six months; but when 
the premium began to rise rapidly after the failure of 
McClellan's campaign against Richmond, prices followed. 
The rise of gold, however, was considerably faster, so that 
by January, 1863, its average value was 145 against a median 
relative price of 130. But after the advance of gold had 
culminated in February and the current turned sharply in 
the other direction, prices still continued to rise for three 
months and then reacted very little, so that by July prices 
were higher than the premium. 

Very similar maneuvers were executed from the middle of 
1863 to the end of 1865. There was a rapid rush upward 
of gold in which prices were left behind; then gold fell, 
while prices continued to climb until they had outstripped 
the premium once more. The chief difference between the 
two periods, aside from the greater scale of the fluctuations, 
is that in the beginning the advance of the premium was not 
so fast, but that prices could keep fairly even pace with it. 
But in June and July of 1864 the premium advanced at a 



PRICES 279 

pace that made the progress of prices seem slow, and it was 
not until October, when the premium had been falling rapidly 
for three months, while prices continued to rise at a scarcely 
diminished rate, that the two were on even terms again. 
Another sudden advance of gold in November gave it a 
momentary advantage, but after its great fall began prices 
passed it once more, and, declining with less precipitance 
after January, remained for the rest of the year considerably 
higher. 

In all these movements from 1862 to 1865 the lines repre- 
senting the premium and the median of relative prices cor- 
respond so well that one cannot resist the conclusion that 
these changes are mainly due to a common cause, which can 
hardly be other than the varying esteem in which the notes 
of the government that constituted the standard money of 
the country were held. If this conclusion be accepted, it 
follows that the suspension of specie payments and the legal- 
tender acts must be held almost entirely responsible for all 
the far-reaching economic disturbances following from the 
price upheaval which it is the task of the following chapters 
to trace in detail. 



CHAPTER V 

WAGES 

I. Falkner's Table of Relative Wages: 

Defects of Falkner's Table A New Table Necessary. 
II. Scope of the Data Concerning Wages in the Aldrich Report: 
Kinds of Work Industries Geographical Range. 

III. New Tables of Relative Wages Based upon the Aldrich Report: 
Method Weighting Range of Fluctuations Actual Wages 
Wages in Nine Industries Constant and Variable Weights 
Various Occupations Men and Women Relative Wages and 
Earnings before Suspension Actual and Relative Wages 
Relative Wages of All Employees New Tables and Falkner's 
Results. 

IV. Relative Wages in Coal, Iron, Glass, and Pottery Industries : 
Weeks's Data Coal Miners Iron-Ore Miners Iron Workers 
Potters Glass Blowers. 

V. Relative Salaries of School Teachers: 

Character of the Data Earnings of Professional Men. 
VI. Relative Wages of Farm Laborers: 

Character of the Data Results of Computations. 
VII. Tables of Relative Money Wages Based on Tenth Census : 

Character and Scope of Data Average Relative Wages Range 
of Fluctuations East and West Relative Wages and Earnings 
before Suspension. 
VIII. Pay of Government Employees: 

Clerical Employees in Washington Private Soldiers. 
IX. Increase of Living Expenses: 

Difficulty of Weighting the Price Tables Wholesale and Retail 
Tables Median and Arithmetic Mean. 
X. Relative Real Wages: 

Character of Series Real Wages of Various Groups East and 
West. 
XI. Conclusion. 

i. PALKNEB'S TABLE OP RELATIVE WAGES 
FOB the study of money wages, as for the study of prices, 
the most important source of material is the Aldrich Report. 
Part I contains a table No. 37 prepared under the direc- 

280 



WAGES 281 

tion of Professor Falkner, showing the relative wages of 
working people in twenty-one industries from 1860 to 1891. 
But this table, like the corresponding table of prices, is 
found on close examination to be constructed in such a man- 
ner as to be unfit for the purposes of the present investiga- 
tion. From the point of view of statistical method, its chief 
defects are as follows: 

1. Only one index-number is given for each year. This 
index-number is usually computed from the wages paid in 
January; but in some cases what cases is not specifically 
stated from the wages paid in July or October. For the 
present purpose more than one index-number per year is 
highly desirable, and the indiscriminate use of returns for 
different months is to be deprecated. An average into 
which enter figures for several different months cannot be 
taken to represent the condition of affairs at any specific 
time, and therefore is of little value for comparisons with 
the data regarding prices. 

2. No attempt is made to distinguish between the wages 
of men and women, or between the wages of groups of 
workers possessing different degrees of skill and receiving 
unlike remuneration. As will be shown later, the paper 
standard did not produce the same effect upon the wages of 
the different sexes or the different groups, and a table must 
be had which will permit an investigation of these diver- 
gences. 

3. The 543 wage series included in this table are classi- 
fied by industries, but not by occupations. It is as impor- 
tant, e. g., to know the variations in the wages of carpenters, 
machinists, etc., wherever employed, as it is to know the 
variations in wages paid in the building and metallic indus- 
tries as a whole. 

4. In computing the average variations of wages in each 
industry Professor Falkner treated all wage series as if they 



282 HISTORY OP THE GREENBACKS 

possessed precisely the same importance, quite irrespective 
of whether they represented the pay of a single man or that 
of several hundreds. But if the table is to be employed as 
an index of the probable average variation in the wages of 
the great mass of workers, a return which shows the pay of 
many men is of much greater importance than one which 
shows the pay of but few. Every series, that is, should be 
given a weight in the computations, proportioned to the num- 
ber of persons whose pay it represents. 

Recognition of these defects has the unhappy conse- 
quence that Professor Falkner's table of relative wages must 
be discarded altogether and a fresh table of relative wages, 
like the fresh table of relative prices, laboriously compiled 
from the data published in the "exhibits" of the Aldrich 
Rep&rt. 1 

i More extended criticisms of the wage-tables of the Aldrich Report may be 
found in several places. In 1894 F. C. WAITE published in Washington a pamphlet 
entitled Prices and Wages: A Dissection of the Senate Finance Committee's Great 
Report. This was a rather acrid criticism of the methods employed by Falkner in 
analyzing the wage-data and of the conclusions drawn from his results. In 1895 an 
article by A. L. BOWLEY appeared in the Economic Journal (Vol. V, pp. 369-83) under 
the title " Comparison of the Rates of Increase of Wages in the United States and in 
Great Britain, 1860-91." Bowley took exception to Falkner's methods. His chief 
objections were (1) that there was no guarantee that the establishments from which 
returns were obtained were typical of the industries to which they belonged; 
(2) that no account was taken of the number of men represented by the different 
series; (3) that the relative importance of the series was unwarrantedly assumed to 
have remained constant throughout the whole period ; and (4) that the tables showed, 
not the change in average wages, but the average change in wages. Bowley, however, 
like Waite, put a high value upon the material published in the "exhibits" of the 
Report. Again, C. B. SI-AUK, in his Essay on the Present Distribution of Wealth in 
the United States (New York, 1896), declared that it is "necessary to throw away 
the work done by the committee's experts." He did not hesitate to charge that the 
Aldrich Report was "prepared by men who wished to show the highest possible 
level of wages," and that the statisticians " employed to summarize the returns were 
to a hurtful extent in sympathy with the political aim of the investigation" (pp. 
103, 106). Finally PROFESSOR C. J. BOLLOCK in his " Contributions to the Study of 
Wage Statistics" (Publications of the American Economic Association, Vol. VI, pp. 
187-218) subjected Falkner's tables once more to a searching criticism, which, how- 
ever, added little to the points developed by his predecessors. It seems to have been 
this systematic critique of Bullock's that led FALKNEB to publish his article upon 
" Wage Statistics, in Theory and Practice " (Publications of the American Statistical 
Association, Vol. VI, pp. 275-89). To the detailed criticisms of the methods which he 
had followed, however, he found no effective answer. 



WAGES 283 

II. SCOPE OF THE DATA CONCERNING WAGES IN TABLE XII 
OF THE ALDBICH BEPOBT 

These data, which are all brought together in Table XII, 
were collected by the Department of Labor from actual pay- 
rolls and show the daily wages paid in January and July or, 
in a few cases, October of each year to the different classes 
of employees in twenty-one industries, together with the num- 
ber and sex of the employees and the length of the working- 
day. Some 1,268 pages are covered by this exhibit. 

Though the material thus supplied is much more compre- 
hensive than that from which most wage tables have been 
constructed, it suffers from serious limitations. 

1. The data are confined almost entirely to manual 
laborers engaged in manufactures or transportation. Pro- 
fessional earnings are represented only by a scant supple- 
mentary report upon the salaries of school-teachers. Clerical 
work is omitted entirely, while three wage series from two 
New Hampshire stores give the only data for the large body 
of sales-people. No account is taken of domestic servants, 
nor of fishermen, while miners again are treated in a supple- 
mentary report for which the data were collected in a differ- 
ent fashion. 1 Last and most important, agricultural laborers 
the most numerous' group of workingmen in the United 
States of the Civil War are entirely unrepresented. 

2. The exhibit is incomplete even for manufactures and 
transportation. Nominally there are returns for eighteen 
manufacturing industries; but of these industries three are 
of slight importance, viz., sidewalks, spice, and white lead. 
On the other hand, certain very important branches are rep- 
resented only in the supplementary reports as is the case 
with the iron, glass, and pottery industries ; or else are not 
represented at all as is the case with the boot and shoe, 
the milling and baking, dressmaking and millinery, tailoring, 

lAldrich Report, Part I, p. 180, and Part IV, Table XIII. 



HISTORY OF THE GREENBACKS 



Bhip-building, tobacco, and brick industries. Furthermore, 
the data for some of the important industries included are 
very meager. This may best be seen from the following 
table, which shows for each of the twenty-one industries the 
number of establishments from which returns were obtained 
covering the war period, the number of wage series, and the 
number of employees whose pay is reported. 



TABLE XX 

CONSPECTUS OF WAGE DATA FOB THE TEARS 1860 TO 
THE ALDBICH BEPOBT 



GIVEN IN TABLE XII OF 



Industries 



Number of 
Establish- 
ments 



Number of 
Wage Series 



Number of 
Employees 
Jan., 1860 



Agricultural implements 1 

Ale, beer, and porter 1 

Books and newspapers 3 

Building trades 21 

Carriages and wagons 1 

City public works 4 

Cotton goods 3 

Dry goods 1 

Ginghams 1 

Groceries 1 

Illuminating gas 4 

Leather 

Lumber 

Metals and metallic goods 19 

Paper 1 

Railways 1 

Sidewalks 1 

Spice 1 

Stone 6 

Whitelead 1 

Woolen goods 3 

Total . . 78 



5 

5 
17 
42 

4 

22 

105 

3 
30 

2 
22 
16 

5 
138 

7 
11 

4 

4 
19 

4 
62 



40 

76 
216 

14 

1,955 
639 

10 

568 

3 

460 

46 

35 
803 

41 
263 

31 

8 

227 

20 
177 



527 



5,641 



If it be thought that returns for 100 employees is as nar- 
row a basis as can well be accepted in computing the probable 
wage fluctuations in any industry, ten of the eighteen 
branches of manufacture would have to be excluded. 

3. Of the seventy-eight establishments included in the 
above table, all but live were situated in the North Atlantic 



WAGES 285 

states, and of these five four were in Maryland and one a 
gas plant was in Ohio. 1 Thus the material shows the 
course of wages in but one section of the country. 

4. While the material of Table XII seems to have been 
collected and published with scrupulous care, it nevertheless 
suffers from a defect characteristic of wage statistics in 
general. It frequently occurs that when several men are 
employed in an establishment to do substantially similar 
work they are paid different rates of wages, which vary as 
their efficiency, the length of time they have been connected 
with the firm, etc. In this case, when the several men are 
not distinguished in the reports, it is necessary to take the 
average wage as the basis of calculation. But at any time 
some of these hands may be discharged. If the ones sent 
away are the recipients of the lower wages, the average pay 
rises; on the other hand, if the better-paid men are dis- 
missed, the average falls. A similar change is effected by 
taking on new men at wages differing from the pay of the 
old employees. Thus the table may show a fluctuation in 
wages, though no change whatever has taken place in the 
pay of the men who have had steady employment. 2 Of 
course, a fall in average wages caused by the employment of 
more men is not an injury to wage-earners, and a rise caused 
by the discharge of the lower-paid portion of a force is a 
purely fictitious gain. But while the effect of such adventi- 
tious changes cannot be wholly eliminated by any manipula- 
tion of the material, it may be expected that in a large 
number of cases the depressing influence of some such 
changes upon the general average will be counterbalanced 
more or less completely by the opposite influence of others. 
It may seem that the imperfections of the material to 

1 The distribution of the establishments by states was as follows : New Hamp- 
shire, 4 ; Massachusetts, 21 ; Rhode Island, 1 ; Connecticut, 9 ; New York, 25 ; New 
Jersey, 2 ; Pennsylvania, 11 ; Maryland, 4 ; Ohio, 1. 

2 For examples see the " Exhibits," pp. 947, 973, 982, 1318, and 1510. 



286 HISTORY OP THE GREENBACKS 

which attention has been called are so serious as to invali- 
date any conclusions regarding the general trend of wages 
that may be based upon it. But, after all has been said, the 
fact remains that Table XII of the Aldrich Report shows the 
actual wages paid to more than 5,000 men and women 
throughout the war period. Of course, the whole number 
of wage-earners, even in the North Atlantic States alone, was 
many times 5,000 ; but if there be any considerable degree 
of truth in the common assumption regarding the effect of 
competition upon the price paid for similar services there 
seems to be sufficient reason for believing that a range of 
observation so considerable as the table affords may be 
accepted as fairly typical. The assumption involved in the 
use of such material as the basis for generalizations is that a 
common cause the rise of prices which is shown to have 
had a certain average effect upon the remuneration of 5,000 
persons had a substantially similar effect upon the remunera- 
tion of the thousands doing similar work whose pay is not 
recorded. 

III. NEW TABLES OF RELATIVE MONEY WAGES BASED UPON 
THE DATA IN TABLE XII OP THE ALDBICH REPORT 

In order to get the material of these elaborate " exhibits " 
into usable shape the series of actual wages were reduced to 
series of relative wages on the " index-number plan." Every 
series in Table XII that gave tolerably complete returns twice 
a year from 1860 to 1866 was transcribed upon a card. The 
industry, number, and location of the establishment, and the 
number and sex of the workers were recorded as well as the 
rates of pay. Then the relative wages in January and July of 
each year were computed as percentages of the wage in Janu- 
ary, 1860. Next, in order to secure to the most important 
occupations a weight proportionate to their numbers, the 
series of relative wages were multiplied by the number of 



WAGES 287 

persons whose pay they represented. Finally, these products 
were added together, and the resulting sums divided by the 
whole number of persons employed. Thus the results show in 
all cases the arithmetical average change in the pay of all the 
persons included in any group. By arranging the cards in 
different ways it was possible to classify the wage-earners by 
industries, occupations, sex, establishments, per diem wages, 
etc., and to compute the average changes in pay for the vary- 
ing groups thus formed. 

In carrying out this general plan the most serious prob- 
lem that presented itself was in what manner the weighting 
of the several series according to number of employees 
should be performed. The choice lay between multiplying 
the relative wage shown by each series for each succes- 
sive January and July by the average number of persons 
employed during the whole period under investigation, and 
multiplying by the number actually employed at different 
dates. In the many cases of series which show no change in 
number of employees the results of the two methods which 
for convenience may be called the methods of " constant " 
and of " variable weights" are identical. But there are 
many and important series that show considerable variations 
in number of employees, and it is accordingly necessary to 
canvass the relative merits of the rival methods. 

The distinctive advantage of the method of variable 
weights is that it shows the average change in the money 
wages of a division of the industrial army as it was actually 
constituted. Changes in number of employees are a con- 
stant and important feature of the industrial situation and 
one of peculiar significance for the wage-earning classes, 
whose interests are at present the subject of investigation. 
To adopt a scheme of weighting which takes no account of 
such changes would be to eliminate this important element 
in the situation. If an increase in the numbers employed in 



288 HISTORY OP THE GREENBACKS 

certain kinds of work as compared with the numbers employed 
in other kinds causes a change in the average relative wage 
for the whole body of working men that change is as real 
in its effect upon the well-being of laborers as if it had been 
due to some other cause. Accordingly, it may be argued, no 
scheme of analysis can be trusted that will exclude the effect 
of changes in number of employees. 

On the other hand, one who examines the wage-series 
and notes how frequent and how considerable are the fluctu- 
ations in numbers employed, is not unlikely to distrust an 
average made up of such shifting elements. The total num- 
ber of employees represented by the series included in the 
following tables as working in January, 1860, is 5,641. In 
July the number rose to 6,444. Then followed a gradual 
decline to 4,009 in January, 1863, and afterward a rise to 
5,576 in July, 1866. If these changes in aggregate num- 
bers were produced by uniform changes of corresponding 
degree in all the series, variable weights would make no 
difference in the results, because, while the number of men 
represented by any series would vary absolutely, it would 
bear a constant proportion to the numbers in all other series. 
But, of course, the variations of numbers in the different 
series are not thus uniform, and the weights therefore fluc- 
tuate relatively as well as absolutely. To take the most 
extreme example common laborers employed by some city 
in the state of New York the number of employees varies 
from 1,500 in July, 1860, to 420 in January, 1866, and the 
proportion of these numbers to the aggregate number of all 
employees varies from 23 per cent, at the first date to 8 per 
cent, at the second. Now, it may be argued, if the object is 
to ascertain the effect of the paper currency upon money 
wages, it would be improper to compute the average of 
changes in a fashion that would expose the results to the 
influence of such fluctuations in the constitution of the 
wage-earning class as those represented by the Aldrich data. 



WAGES 289 

In deciding, on the basis of the preceding arguments, 
what course to pursue in regard to weighting, the question 
seems to turn upon the character of the changes in numbers. 
If these changes are largely due to particular causes such 
for example, as the completion of an elaborate plan for 
paving streets that would reduce the number of men 
employed by a city, or the sale of a factory followed by a 
new policy of rapid expansion that would increase the work- 
ing force they cannot properly be allowed consideration. 
In this -case the method of constant weights is to be pre- 
ferred. But if the changes in numbers are not mainly due 
to causes that may from the present point of view be 
regarded as accidental; if, on the contrary, they should 
prove to be largely an indirect consequence of the monetary 
situation itself, then careful account should be taken of them 
and variable weights used for this purpose. Inasmuch as it 
is difficult, if not impossible, to determine in advance whether 
the changes are of the one kind or the other, the best course 
to pursue is to employ both methods of weighting, see what 
differences exist between the two sets of results, and try to 
form some conclusion regarding the significance of these 
differences. 

All of the series used in the following computations are 
published in the Appendix, where they are arranged accord- 
ing to industries, establishments, sex, and occupation. To 
save space, the initial wage, number of employees, and rela- 
tive wages alone are given, but to show more clearly how the 
computations have been made, a specimen of the card actu- 
ally used in making the tables is placed here. 

It will be noticed that on this specimen card the series is 
extended through 1866. This last year is included in all 
the following wage-tables in order to supply data for deter- 
mining whether or not the withdrawal of wage-earners from 
the labor market into the army was a chief cause of the 



290 



HISTORY OF THE GREENBACKS 



SPECIMEN CARD 



METALS BLACKSMITHS 
ESTABLISHMENT 57 MALES MARYLAND 


Date 


Wages 


Nnm- 
ber 


Relative 
Wages 


Products 


Variable 
Weights 


Constant 
Weights 


1860, January 


$1.565 
1.605 
1.555 
1.50 
1.48 
1.48 
1.705 
1.83 
2.105 
2.655 
2.75 
2.71 
2.875 
2.78 


8 
8 
3 
2 
4 
4 
6 
6 
7 
8 
7 
6 
6 
8 


100 
103 
99 
96 
95 
95 
109 
117 
135 
170 
176 
173 
184 
178 


800 
824 
297 
192 
380 
380 
654 
702 
945 
1,360 
1,232 
1,038 
1,104 
1,424 


590.0 
607.7 
584.1 
566.4 
560.5 
560.5 
643.1 
690.3 
796.5 
1,003.0 
1,038.4 
1,020.7 
1,085.6 
1,050.2 


July 


1861, January 


July 


1862, January 


July 


1863, January 


July 


1864, January 


July 


1865, January 


July 


1866, January 


July 




5.9 



advance in money wages. If it appears that when the 
volunteers were disbanded and returned to their usual occu- 
pations wages did not fall, there will be a strong presumption 
that some other cause than enlistments was a more powerful 
factor in determining wages. 

A study of the individual series of relative wages, as 
given in the Appendix, shows that during the war the range 
of fluctuations was considerably narrower in the price of labor 
than in the price of commodities. For a comparison it is 
best to take the changes between January, 1860, and Jan- 
uary, 1865 the culminating point of prices. The greatest 
relative advance in price shown by the quarterly table 
between these dates was 991 per cent, (cotton), and the 
greatest fall 11 points (raw Italian silk). On the other 
hand, the greatest advance in wages was 220 per cent, (slate 
and metal roofers), and the greatest fall 37 per cent, (steam- 



WAGES 



291 



and gas-fitters' helpers). Thus while the prices of the com- 
modities included in the table covered a range of 1,002 
points, the prices of labor covered but 257. Of the 135 
articles for which relative prices are given in 1865 some 67 
per cent, had doubled or more than doubled in price ; but 
this was true of only 3 per cent, of the wage-series and of an 
even smaller proportion of the wage-earners. 

Within this comparatively restricted range, however, no 
great degree of uniformity is observable in the fluctuations 
of wages. This may best be seen from the subjoined table, 
in which the wage-earners for whom reports are given in 
January, 1865, are classified according to the degree in 
which their wages had changed since 1860 : 

TABLE XXI 

WAGE-EARNERS IN JANUARY, 1865, CLASSIFIED ACCORDING TO RELATIVE CHANGE IN 
WAGES SINCE 1860 



BATIO OF WAGES IN 
JANUARY, 1865, TO 
WAGES IN 1860 


NUMBER OF EMPLOYEES IN 
THE RESPECTIVE GROUPS 


PERCENTAGE OF WHOLE NUM- 
BER OF EMPLOYEES IN THE 
RESPECTIVE GROUPS 


Males 


Females 


Males 


Females 


60- 69*.. 


4 
3 
16 
30 
72 
183 
444 
414 
459 
787 
370 
385 
379 
539 
30 
2 
4 
2 


"6 
12 
52 
144 
54 
206 
130 
10 
1 
2 
5 
5 
1 


0.10* 
0.07 
0.39 
0.73 
1.74 
4.44 
10.77 
10.04 
11.13 
19.09 
8.97 
9.34 
9.19 
13.07 
0.73 
0.05 
0.10 
0.05 


'6! 96* 
1.91 
8.28 
22.94 
8.60 
32.80 
20.70 
1.59 
0.16 
0.32 
0.79 
0.79 
0.16 


70-79 


80-89 


90-99 


100-109 


110-119 


120-129 


130-139 


140-149 


150-159 


160-169 


170-179 


180-189 


190 199 


200-224 


225-249 


250-299 


300 and over 


Totals 


4,123 


628 


100.00* 


100.00* 





292 HISTORY OP THE GREENBACKS 

This table shows that over nine-tenths of the men had 
received an increase of between 20 and 100 per cent., and 
nearly nine-tenths of the women an increase of between 10 
and 50 per cent. But there is no very striking concentra- 
tion on any one point in the scale of increase, except that 
nearly one-third of the women had gained about one-third, 
and nearly one-fifth of the men had gained between 50 and 
59 per cent, in pay. 

The absence of cases of extreme variation in the wage- 
series makes it unnecessary to work out averages in two 
ways, as was done in the chapter on prices. The reason 
given for using the median there was that the few commodi- 
ties which showed an extraordinary advance in price affected 
the arithmetic mean much more powerfully than the few 
commodities which were just as extraordinary in not rising 
at all. Accordingly, the median which is not affected by 
the degree of divergence from the average shown by any 
series gave results considerably lower than the arithmetic 
mean. With the wage data, however, the two methods of 
averaging give almost the same results. In the above table 
the median point is found in the group 50-54 per cent, for 
males and 30-34 per cent, for females. The corresponding 
arithmetic means are 55 and 28 per cent. Such differences 
are hardly sufficient to justify the laborious computation of 
two sets of results. 1 

More concrete ideas regarding the change in wages are 
given by study of the actual amounts of money received per 
day in 1860 and 1865. An average wage computed for such 
diverse kinds of labor as those included in the material 
would mean little, and consequently a " classified " table 
has been arranged for the purpose of the comparison. 

The significant fact brought out by this exhibit is the 

i It may be added that arithmetic means of both wages and prices were com- 
puted before the superiority of the median in averaging the price series was fully 
appreciated. 



WAGES 



293 



TABLE XXII 

EMPLOYEES IN JANUARY OF 1860 AND OF 1865 CLASSIFIED ACCORDING TO AMOUNT 
OF DAILY WAGES 1 



WAGE CLASSES 


MALES 


FEMALES 


Number of 
Employees 


Percentage of 
Whole 
Number 


Number of 
Employees 


Percentage of 
Whole 
Number 


1860 


1865 


1860 


1865 


1860 


1865 


1860 


1865 


$0.25-0.49 


118 
123 
599 
2,186 
542 
609 
184 
628 
66 
23 
1 
28 
1 
3 


51 
86 
57 
276 
567 
381 
897 
614 
332 
319 
181 
259 
31 
54 


2.312 
2.41 

11.72 
42.77 
10.61 
11.92 
3.60 
12.29 
1.29 
.45 
.01 
.55 
.01 
.06 


1.242 
2.09 
1.39 
6.72 
13.81 
9.28 
21.85 
14.96 
80.9 
7.77 
4.41 
6.31 
.76 
1.32 


139 
469 
14 
10 


16 

250 
313 
1 
11 


21.992 
74.21 
2.22 
1.58 


2.712 
42.30 
52.96 
.17 
1.86 


0.50 0.74 


0.75-0.99 


1.00-1.24 


1.25 1.49 


1.50 1.74.... .... 


1 75 1 99 










2.00-2.24 










2.25-2.49 










2.50-2 74 










2.75-2 99 










3.00-3.24 










3.25-3.49 










3.50+ 






















5,111 


4,105 


100.002 


100.002 


632 


591 


100.002 


100.002 



decrease in the number of persons of both sexes in the 
lower wage classes and the increase in the higher. Among 
males the largest group of wage earners in 1860 was the 
$1-$1.24 class, and in 1865 the $1.75-$1.99 class ; among 
females, the $0.50-$0.74 class in 1860, and the $0.75-$0.99 
class in 1865. The median wage for males was $1.05^ in 
1860 and $1.90 in 1865. For females it was $0.56 in 1860 
and $0.80 in 1865. 

Greater significance attaches to the results obtained 
when the numerous wage-series are classified according to 

' The totals of Tables XXI and XXII do not agree, because in a few cases the 
Aldrich Report gives piece-rate wages instead of time wages, and in a few other 
cases gives wages with board furnished. As these series show changes in relative 
pay, they are included in Table XXI, but as they do not show net earnings, they are 
excluded from Table XXII and all subsequent computations in which actual, instead 
of relative, wages is regarded. 



294 HISTORY or THE GREENBACKS 

the various economic groups to which the wage-earners 
belonged. One such classification that according to 
industries is made in the next table. No industry is 
included in which returns are not given for an average of at 
least 200 employees. The results are presented according 
to both the systems of weighting described above. 

Comparison of these industries shows that the slightest 
advance of relative wages occurred in the textile trades 
which employ numerous women and children. At the 
other extreme, with the greatest advance are city public 
works and the manufacture of gas in which the employees 
represented by the data are all men and mostly men who 
rank as unskilled laborers. 

It will be noticed that the two systems of weighting pro- 
duce results that vary but little. What difference exists, 
however, is, on the whole, on the side of higher figures for 
the constant weights. If one compares the two sets of 
index-numbers for each of the nine industries from January, 
1864, when the full effects of the paper currency began to 
be felt, to July, 1866, one finds that in ten cases the con- 
stant weights give the same figure as the variable weights, 
in twelve cases a lower figure, and in thirty-two cases a 
higher figure. Observation of these differences raises again 
the problem that was mentioned in discussing the two sys- 
tems of weighting: What is the cause of the differences 
are they accidental results due to the imperfections of the 
data, or are they indicative of some general feature of the 
wage situation which has so far been overlooked ? 

In answer to these questions a hypothetical explanation 
may be suggested. In organizing the labor force of a fac- 
tory, a railway, or a commercial house, it is often possible to 
secure substantially similar results at about the same cost 
from several different combinations of laborers belonging to 
different trades or possessing different degrees of skill. For 






WAGES 



295 



H 




296 HISTORY OF THE GREENBACKS 

example, in different factories producing the same products 
one is likely to find more foremen employed by one manager, 
more skilled mechanics by another, more unskilled laborers 
by a third. Now, any change in the relative rates of pay 
given to these various classes of workingmen may make it 
profitable to alter the constitution of a given force by hiring 
relatively fewer of those persons whose wages have risen most 
and more of those whose wages have risen least. Of coarse, 
the use of constant weights conceals any effect that such sub- 
stitutions of one kind of labor for other kinds may have upon 
the results, for in multiplying the relative wages of each 
series always by the same number one introduces the arbi- 
trary assumption that no changes take place in the propor- 
tional numbers of workingmen of different sorts employed. 
The variable weights, on the contrary, representing the 
actual number of men of various trades employed at each 
successive period, allow any changes of the sort described to 
have their due influence upon the averages. 

To test whether the observed differences may be explained 
in the manner indicated, it is necessary to make a new classi- 
fication of the wage-series according to ratio of increase in 
relative wages, and then to ascertain whether there was in 
fact a change in the constitution of the labor force in 
the direction of relatively larger employment of men whose 
wages had increased little, and relatively smaller employ- 
ment of men whose wages had increased much. With this 
object in view, the wage-series belonging to each of the 
nine industries included in the last table were divided into 
two equal groups, one containing all series that show an 
increase in relative wages between January, 1860, and Janu- 
ary, 1865, less than the median increase, and the other all 
series that show an increase greater than the median. Then 
the proportionate number of the total employees belonging 
to these two groups at the two dates was computed for each 



WAGES 



297 



of the industries, generally with the result of finding that 
the group of series showing an increase less than the median 
had a larger percentage of the whole number of employees 
in 1865 than in 1860. The figures for the several industries 
are as follows: 

TABLE XXIV 

PROPORTION OF TOTAL NUMBER OF EMPLOYEES IN NINE INDUSTRIES IN JANUARY OF 
1860 AND 1865, BELONGING TO WAGE-SERIES SHOWING AN INCREASE IN RELA- 
TIVE WAGES 



Industry 


Less than the 
Median for All Series 
in the Industry 


Greater than the 
Median for All Series 
in the Industry 


1860 


1865 


1860 


1865 


City public works 


1% 
9 
8 
41 
48 
43 
39 
16 
39 


22# 
8 
11 
52 
46 
42 
47 
18 
39 


93 
91 
92 
59 
52 
57 
61 
84 
61 


78* 
92 
89 
48 
54 
58 
53 
82 
61 


Illuminating gas 


Stone 


Building trades 


Metals and metallic goods 


Railways 


Cotton textiles 


Ginghams 


Woolen textiles 





Of course, it cannot be assumed that desire to substitute 
men whose wages had risen less for men whose wages had 
risen more for the performance of the same work, wherever 
feasible, was the sole cause of changes in the constitution of 
working forces. Numerous other causes in individual in- 
stances no doubt led to similar changes. In the case of 
city public works, for example, the change shown by the 
above figures is probably due in large part to some altera- 
tion in the kind of tasks that were being performed a 
change that happened to create a much greater proportion- 
ate demand for men belonging to those groups whose 
pay had increased less. 1 But such changes as are due to 

1 As an industry city public works is rather unsatisfactory because of the inter- 
mittent character of the work and the change in its nature from time to time. Dur- 
ing the war there seems to have been a decrease in the attention devoted to civic 
undertakings at least the figures from the Aldrich Report show a marked falling 



298 



HlSTOBY OP THE GREENBACKS 



accidental causes may be expected to counterbalance each 
other over a field of observation so wide as the present ; and 
as the cases of increased relative employment of men whose 
pay had increased less than the median for all kinds prepon- 
derate decidedly over the cases of an opposite character, one 
is forced to the conclusion that the figures reflect the results 
of the obvious economic motive to reconstitute forces of 
workingmen in such a fashion as to secure given results 
most cheaply. And, to return to the starting-point, it is 
clear that such substitutions of men whose labor had become 
relatively cheaper for others must produce differences of the 
kind observed between the averages of Table XXIII ob- 
tained by the use of constant and of variable weights. 

A similar conspectus of changes in relative wages, but 
one based on a classification of wage-earners according to 
occupations instead of industries, is presented in the next 
table. 

This table, though including a much larger number of 
groups, shows but a slightly greater range of fluctuations 
than Table XXIII. The maximum and minimum relative 
wages in January, 1865, of the twenty-seven occupations 
included are 173 (laborers) and 122 (machinists' helpers), as 
compared with 17G (illuminating gas) and 131 (ginghams) 

off in the number of employees. As this falling off is particularly great in the 
case of the largest series " Laborers, Establishment 35" one which shows an 
uncommonly rapid increase in pay, the difference in the constitution of the working 
force in 1860 and 1865 shown by the above table may be thought to be exaggerated 
unduly. But if this series be omitted, the proportionate change is found to be even 
greater, as the following figures show : 

EMPLOYEES REPRESENTED BY SERIES SHOWING AN INCREASE IN RELATIVE WAGES 





Less than the 
Median 


Greater than the 
Median 


1860 


1865 


1860 


1865 


City public works after exclusion of 
"Laborers, Establishment No. 35". . 


18% 


58% 


82% 


42% 



WAGES 



299 



g 

II 



seopnajcWy 



o- 



SCO ^ t? CO ^ ^ 
O O O ^H iH *1 



pas uainajoj; 



838 



8q> ^ -^j ^t O 
O O ^H ^ ^H 



g? ^5 co os CO ci ~ 
O O O ^-l -^ i-l tH 



s J a n n i 



CO o O 00 

* o o 






32 88 88 88 83 S 



ss 



U.HU,U: .[ 



2 8 S 



as 



sjaaniSng 2SS 88 88 88 88 88 



< " 8 8 38 88 S3 85 



ISS 



5 S 



S 88 83 



as 



saadjajj 






S-* ^ iH O 00 
Oi O i-t TH iH i I 



N C<1 <= 

IH to -; 



St ^ 
o M 



to to to to 



t-t9 QO oot- coo -HO -HO* 
i^tO-- OO .- *- OO i t C"J CO-** 



sjadjajj 
t sjap|Q yt 



88 88 8S S 



38 88 22 



saa 
3IB ji nja^^B j 



3 88 82 



SS 88 83 88 32 S 



oo o* ** Sc? 22 52 SSS 2? ^ ^1 3* *5 t* O 

i-tOi-i O O O O O O O-t ^H^l "VCD i.'DC 



SUOSBJI 



as 9 S si ft 33 s! 

CV c-4 O O O O Cv 



8 SB SS2B SJ 2Jt- SB'S <Soo t-to 
o OO Oi-< oicq co>?5 >o>?S tot- 



38 88 23 



1 u. mi .< J J 1:11?) 



i-H-1 QO OIH OQ Pjeo opt- 03-* to 
Oo r. _ ~. OI-H ^co toio t- 



e* in ~! <3 it ejo S?^i t-io t-o> --( eo>* 
i-Hci-; oo cso oo O-H i-ifi oj^I ** 



2 c-5 2 88 S $ 



88 25S 



S 88 



83 



35 



No. of wage-series 
Av. No. employees 

Av. wages per day In 186 

Relative wages 
1860, January.. 
July 



fc : 



OJ? az? 54? aS 

p fl ~ _: c0^3 - r 
'a'-s "^^ "^^ >-s>-j 



g OS 

3 a 

a> o 

<D M 

55 

9 I 



po 



1 

il 

2^ 

s-g 

S <s 

?! 



300 HISTORY OP THE GREENBACKS 

among the nine industries. Since these groups are much 
more homogeneous than those of Table XXIII, which are 
composed of persons belonging to dissimilar trades but 
employed in the same industry, the question of the relative 
weights attached to different series is of less consequence, 
and I have not thought it necessary to work out new aver- 
ages by the use of constant weights. The only occupation 
in which inspection of the data makes it certain that differ- 
ent results would be obtained is the first laborers. Here 
a somewhat greater advance would be shown by the applica- 
tion of constant weights. 

Because of the large number of occupations represented 
in Table XXV the detail is rather confusing. A simpler 
and clearer result may be obtained from the same data by 
grouping the occupations according to the degree of skill 
and responsibility which they require. For this purpose 
four groups may be constituted: (1) superintendents, (2) 
skilled handicraftsmen, (3) assistants of artisans, (4) un- 
skilled laborers. The results of this grouping are presented 
in Table XXVI. 

This table shows clearly that men in the lower ranks of 
the industrial army received a relatively greater increase in 
pay during the war than men in the higher ranks. 1 

The two series in Table XXV representing wages of 
women are not included in the groups of Table XXVI. A 
glance at them shows that they indicate a relatively smaller 
increase in wages than was received by men in the majority 
of the occupations for which figures are given. The com- 
putation of median wages based on Table XXI, and also the 
relatively small advance found from Table XXIII to charac- 
terize the textile industries, point to a similar conclusion 
that women on the whole succeeded less well than men in 

i The reason for this difference, and the question whether the greater relative 
increase in wages meant also a greater absolute addition to the pay received, will 
be discussed presently. 



WAGES 



301 



TABLE XXVI 

RELATIVE WAGES OF FOUR GRADES OF WAGE-EAENEES, 1860-66 1 





Unskilled 
Laborers 


Assistants 
of Handi- 
craftsmen 


Skilled 
Handi- 
craftsmen 


Superin- 
tendents 


Number of series 


60 


51 


142 


69 


Average number of employees . . 
Average wages per day in 1860 . 

1860, January 


1,701 
$1.00 

100 


535 
$1.10 

100 


1,404 
$1.66 

100 


140 
$1.95 

100 


July. . . 


100 


102 


100 


102 


1861, January 


103 


101 


101 


099 


July 


093 


103 


101 


101 


1862, January 


100 


103 


104 


099 


July 


099 


108 


106 


099 


1863, January 


121 


116 


112 


107 


July 


121 


127 


116 


111 


1864, January 


143 


137 


125 


119 


July 


157 


144 


139 


131 


1865, January 


169 


151 


151 


137 


July 


167 


155 


153 


140 


1866, January 


176 


161 


156 


144 


July . . 


169 


163 


162 


152 













the struggle to readjust money wages to the increased cost 
of living. But all these indications are less accurate than a 
comparison that can readily be made by computing the rela- 
tive wages of men and women in all industries in which the 
material shows the employment of persons of both sexes. 
Figures for this purpose are given in Table XXVII. To 
save space only one set of results is given under each 
industry that obtained by the application of variable 
weights but the totals for all the industries are presented 
in both forms. It will be noticed that the differences 
between the results produced by the two systems of weight- 
ing are slight. 

' The occupations included in the several groups are as follows : (1) unskilled 
laborers laborers, watchmen, teamsters, quarrymen; (2) assistants of handicrafts- 
men helpers of machinists, boilermakers, molders, masons, and blacksmiths, fire- 
men, and apprentices ; (3) skilled handicraftsmen stonecutters, masons, painters, 
carpenters, machinists, engineers, blacksmiths, patternmakers, printers, weavers 
(males), molders, and boilermakers; (4) superintendents foremen and overseers 
and second-hands. 



302 



HISTORY OP THE GREENBACKS 



TABLE XXVII 

RELATIVE WAGES OF MALE AND FEMALE EMPLOYEES IN INDUSTRIES IN WHICH BOTH 
MAl.s WERE EMPLOYED, 1860-66 ' 





COTTON 


GING- 
HAMS 


WOOL- 
ENS 


PAPER 


BOOKS, 
NEWS- 
PAPERS 


SPICE 


DRY 
GOODS 


ALL INDUSTRIES 
































Var. 


Con. 
































Wts. 


Wts. 




M.2 


F. 


M. 


F. 


M. 


F. 


M. 


F. 


M. 


F. 


M. 


F. 


M. 


F. 




































M. 


F. 


M. 


F. 


No. of 






































series. 


83 


23 


21 


9 


51 


11 


5 


2 


14 


3 


3 


1 


2 


1 


179 


50 


179 


50 


Av.No. 






































of em- 






































ploy's. 


354 


201 


182 


323 


171 


48 


21 


16 


58 


27 


8 


9 


5 


5 


799 


628 


799 


628 


'60,Jan. 


100 


100 


100 


100 


100 


100 


100 


100 


100 


100 


100 


100 


100 


100 


100 


100 


100 


100 


July 


100 


101 


100 


101 


103 


103 


100 


100 


96 


101 


100 


100 






100 


101 


100 


101 


'61,Jan. 


96 


98 


100 


104 


106 


108 


100 


100 


96 


93 


101 


100 






99 


102 


99 


101 


July 


97 


98 


102 


113 


107 


106 


100 


100 


92 


96 


102 


100 


100 


100 


100 


106 


101 


106 


'62,Jan. 


98 


97 


99 


109 


107 


112 


86 


80 


99 


97 


101 


100 


100 


100 


100 


104 


100 


105 


July 


99 


96 


101 


116 


110 


115 


88 


80 


97 


103 


104 


100 


100 


100 


102 


107 


101 


109 


'63,Jan. 


107 


106 


101 


113 


121 


117 


105 


100 


100 


106 


109 


100 


150 


100 


110 


109 


108 


110 


July 


109 


108 


101 


110 


113 


116 


105 


100 


100 


[152) 


111 


100 


150 


100 


109 


109 


109 


110 


64,Jan. 


127 


115 


104 


109 


122 


120 


106 


100 


114 


[152] 


113 


100 


150 


100 


120 


112 


121 


112 


July 


136 


121 


117 


118 


128 


127 


137 


117 


135 


127 


144 


100 


150 


100 


130 


120 


130 


121 


65,Jan. 


;// 


125 


126 


133 


146 


130 


152 


117 


146 


118 


//.-. 


100 


167 


104 


142 


12S 


142 


ISO 


July 


148 


130 


143 


151 


144 


136 


163 


122 


147 


128 


154 


100 


167 


104 


146 


142 


147 


142 


tW.Jan. 


159 


159 


158 


161 


152 


143 


156 


120 


145 


132 


150 


100 


167 


104 


156 


156 


196 


159 


July 


162 


163 


167 


171 


155 


148 


157 


134 


145 


145 


150 


100 


167 


104 


161 


163 


159 


167 



From this table it appears that in all the industries except 
the manufacture of ginghams the wages of women advanced 
less rapidly than the wages of men, while prices continued 
to rise, but that after prices had begun to recede the relative 
wages of women caught up and at the end of the period 
covered by the figures were on the whole slightly in the 
lead. It is also noticeable that in these industries in which 
many of the male employees were exposed to the competition 
of women their wages increased rather less rapidly than in 

1 The sudden rise from 106 in January, 1863, to 152 in July, followed by a drop to 
127 in the relative wages of females employed in the manufacture of books and news- 
papers, is an aggravated instance of a defect of wage statistics mentioned in sec. ii, 
above. It is due to the fact that of the twenty-one employees at work in January, 
1863, twenty were discharged before July, while forty new women had been taken on 
again by July, 1864. The one woman who remained at work steadily received wages 
considerably greater than most of her companions. 

2M.= Male; F.= Female. 



WAGES 303 

other industries. It is true, however, that the number of 
returns for spice and dry goods are too slender to possess 
much significance, and the same remark applies in a less 
degree to paper and to books. Of the series in the table, 
those for the three textile industries alone are based upon 
fairly comprehensive material. 

Table XXV, in which wage-earners are classified accord- 
ing to occupations, and still more clearly Table XXVI, in 
which these occupations are grouped according to degree of 
skill and responsibility, suggest that there may have been 
some connection between actual earnings before prices rose 
and the degree of advance in relative wages during the war. 
If the increased cost of living was the primary factor in pro- 
ducing the rise of money wages, the existence of some such 
relation between actual income and degree of increase seems 
not improbable. For increased cost of living would neces- 
sarily press more severely upon families barely able to make 
both ends meet before the war than upon families which had 
a comfortable margin above subsistence, and would there- 
fore force the breadwinners of families in the first class to 
be particularly strenuous in demanding higher pay. To 
discover whether such a connection actually existed, all of 
the wage-series have been reclassified according to the per 
diem wage received in 1860, and the relative increase of pay 
has been computed for the groups thus formed. The results 
obtained by the use of variable weights are presented in 
Table XXVIII A. 

These figures indicate that there was an important nexus 
between the advance of wages and earnings before the sus- 
pension of specie payments. In the case both of men and 
of women the higher grades of employees received a rela- 
tively less increase in pay than the lower grades. It will be 
observed, however, that among males the group that fared 
relatively best was not the lowest paid, but the fourth in 



304 



HISTORY OP THE GREENBACKS 



TABLE XXVin A 

RKLATIVE WAGES OF EMPLOYEES CLASSIFIED ACCORDING TO DAILY WAGES 
RECEIVED IN 1860. (25-CENT GROUPS) 





|. 


jj 


ia 


(0 


m 


51 


181 


12 


1* 


'.3 


181 


54 


181 


55 


18( 


56 


Per diem 




- '~ 5 






























-.i v.'iT in 1860 


e| 


zi 

* c 


a 




a 


"3 


a 


"3 





"3 


d 


j* 

"3 


d 

a 


>> 


a 

as 


> 
"a 




55 


-* C 

< w 






























Males : 


































($0.25-0.49. 


13 


103 


100 


105 


101 


105 


106 


113 


123 


127 


135 


138 


152 


156 


171 


180 


4 0.50-0.74. 


23 


98 


100 


101 


99 


101 


103 


106 


115 


118 


124 


122 


143 


145 


155 


156 


( 0.75-0.99. 


58 


414 


100 


101 


100 


102 


101 


104 


112 


116 


126 


141 


148 


150 


161 


166 


1.00- .24. 


108 


1,979 


100 


100 


103 


94 


101 


101 


121 


122 


144 


155 


165 


165 


173 


169 


1.25- .49. 


69 


551 


100 


100 


100 


100 


102 


101 


113 


119 


125 


137 


149 


153 


153 


159 


1.50- .74. 


80 


661 


100 


101 


103 


103 


107 


109 


118 


121 


127 


140 


152 


155 


160 


164 


1.75- .99. 


41 


212 


100 


99 


101 


100 


100 


105 


107 


115 


123 


132 


142 


144 


147 


154 


2.00- .24. 


43 


319 


100 


100 


100 


97 


98 


99 


103 


108 


120 


140 


146 


154 


155 


162 


2.25-2.49. 


9 


58 


100 


100 


100 


101 


100 


100 


105 


105 


106 


113 


128 


131 


132 


138 


2.50-2.99. 


13 


27 


100 


100 


101 


103 


101 


97 


95 


101 


108 


115 


122 


123 


127 


132 


i 3.00-3.49. 


13 


27 


100 


100 


97 


97 


97 


97 


101 


101 


104 


108 


121 


121 


124 


124 


( 3.50+ 


3 


3 


100 


100 


100 


100 


117 


117 


125 


125 


138 


134 


159 


128 


138 


137 


Females : 


































$0.25-0.49. 


16 


144 


100 


101 


100 


100 


105 


105 


106 


113 


123 


130 


126 


134 


163 


170 


0.50-0.74. 


26 


426 


100 


101 


102 


108 


104 


109 


111 


109 


109 


117 


132 


148 


159 


167 


0.75-0.99. 


3 


14 


100 


110 


118 


114 


115 


114 


120 


108 


118 


117 


131 


122 


126 


147 


1.00-1.24. 


2 


8 


100 


105 


106 


1"-, 


74 


76 


67 


67 


105 


105 


93 


99 


116 


134 



rank persons receiving from $1 to $1.24 per day. And it 
will also be noticed that the decline in relative increase does 
not hold perfectly of each successive group. For instance, 
in January, 1865, the group $1.50 $1.74 shows a slightly 
greater gain than the group $1.25 $1.49, and the very small 
highest group, that includes but three one-man series, shows 
among its irregularities some very considerable increases. 
To facilitate the study of the connection in a broader way by 
reducing the detail, and to get series that are more signifi- 
cant and regular because larger, it is convenient to regroup 
the male employees in the manner suggested by the braces 
on the margin. The results of such a regrouping are pre- 
sented in Table XXVIII B. 

This summary exhibits a higher degree of regularity 
than Table XXVIII A. It shows that from the time when 
the increased cost of living began to be an important factor 

i July, I860, to July, 1866, inclusive. 



WAGES 



305 



TABLE XXVIII B 

RELATIVE WAGES OF MALE EMPLOYEES CLASSIFIED ACCORDING TO PER DIEM WAGES 
RECEIVED IN 1860. (50-CENT GROUPS) 



Per diem 


<D 


S 


<3 "to 
Ll 


18 


60 


18 


61 


18 


62 


18 


63 


18 


64 


18 


35 


18 


66 


ceived in 1860 


q'jj 

Ot/3 
X 


55 3, 

> 

-tl W 



t-s 


>t 

p 

1-3 


S3 
CD 

1-5 


>> 

>-5 


a 

C8 
1-3 


"0 
<- 


9 

1-5 


>t 

3 

1-5 


a 

a 

1-9 


j*> 

"3 

-5 


a 



1-5 


>> 

3 

>-5 


a 
- 

*-5 


>s 

"3 

-9 


$0.25-0.992 
1.00-1.49. . 
1.50-1.99. . 
2.00-2.49. . 
2.50+ . . 


94 
177 
121 

52 
29 


615 
2,530 
873 
377 
57 


100 
100 
100 
100 
100 


102 
100 
100 
100 
100 


100 
102 
102 
100 
99 


102 
95 
102 
98 
100 


102 
101 
105 
99 
100 


106 
101 
108 
100 
98 


115 
119 
116 
103 

98 


118 
121 
119 
108 
101 


127 
140 
127 
117 
106 


137 
151 
138 
136 
113 


148 
161 
150 
142 
123 


150 
162 
152 
149 
122 


162 
168 
157 
150 
126 


166 
166 
160 
158 
128 




473 


4,451 































about the close of 1862 to the end of the period cov- 
ered by the figures, the increase in relative wages varied in 
a rough way inversely as per diem wages in 1860, with the 
important exception that men earning less than $1 per day 
received a less proportional increase in pay than men in the 
second class. It also shows that when the rapid fall of 
prices began early in 1865 these differences between the 
relative rates of increase in money wages became less. If 
we take men paid less than $2.50 per day in 1860 over 98 
per cent, of the whole number we find that the difference 
between the increase in the relative wages of the various 
groups declined from 23 points in January, 1864, to 19 
points in January, 1865, and to 8 points in July, 1866. 

As already suggested, the general fact of a connection 
between the relative increase of wages and the amount 

1 July, 1860, to July, 1866, inclusive. 

2 Were female employees included with male, the first two series in the above 
table would be as follows : 





M 
































8 % 


18 


60 


18 


SI 


18 


62 


18 


63 


181 


U 


1R 


R5 


1^ 


fifi 


Per diem Wages 


B.,6 






























in 1860 


5 e> 3 

25 ft 

> & 

<! W 


a 

a) 


3 


a* 

C9 


3 


a 

a 


3 


a 


3 


a 

1 


3 


d 
a 


3 


a 

CS 


3 

i-s 


$0.25-0.99 


1,199 


100 


101 


101 


104 


103 


107 


in 


in 


19ft 


T>8 


ns 


11fi 


160 


167 


1.00-1.49 


2,538 


100 


100 


102 


96 


101 


101 


119 


121 


139 


150 


161 


161 


167 


166 



306 HISTORY OF THE GREENBACKS 

earned before the sudden advance in cost of living is readily 
explainable on the hypothesis that the rise of prices rather 
than the withdrawal of men into the army or any other 
cause was the chief reason for the higher pay. Though it 
may not seem so clear at first, both the exception to this 
general rule in the case of men earning less than $1 per day 
before the war, and the decreasing divergence between the 
series after prices had begun to fall, can be accounted for on 
similar grounds. It is probable that most of the men repre- 
sented in the table who received less than $1 a day before 
the war were unmarried, or at least that a considerably larger 
proportion of them than of men earning from $1 to $1.49 
were without family responsibilities. On the average, a 
single man is better off, from the material point of view, on 
a wage of, say, 75 cents a day than a man with a family on 
a wage of, say, $1.25 a day. If this be so, there is the same 
reason why men in the first of our groups should receive a 
less average increase in money wages because of the increased 
cost of living that there is why men in the third group 
should receive a less average advance than men in the 
second, men in the fourth less than men in the third, and 
men in the fifth group less than men in the fourth. 

As for the decreasing divergencies between the series of 
relative wages, a study of the table shows its cause to be 
that after prices began to fall in January, 1865, the rate of 
increase in wages became distinctly smaller in the case of 
the group that had been most affected by the increased cost 
of living, but not in the case of the other groups. As the 
changes in the pay of men earning from $!-$!. 49 per day 
conformed more closely to the changes in cost of living 
when the cost was advancing than did the changes in the 
pay of other men earning either more or less, so also, when 
the cost of living declined, this group was the first to show 
the effect of the change. 



WAGES 



307 



Similar considerations explain why on the whole the wages 
of women increased less than the wages of men. One of the 
reasons commonly given for the fact that female employees 
are paid less than men for similar work is that they have 
smaller family responsibilities. * If such is the case, an 
increase in the cost of living would press on the average less 
severely upon working women than upon working men, just 
as it would press less severely on men receiving high, than 
upon men receiving low, wages. 

It would be an error, however, not to note that this 
connection between earnings and change in relative wages 
holds true only in a broad and general way. The contrast 
between the first and second forms of Table XXVIII shows 
that the rule does not hold uniformly in the smaller wage- 
groups. Similarly, reference to Table XXV will show that, 
while the better-paid occupations on the whole exhibit a 
less considerable increase in relative wages than the poorer- 
paid occupations, this is not true in every individual case. 
For example, the average increase in the pay of 440 machin- 
ists who received an average wage of $1.62 per day in 1860 
was 52 per cent, by January, 1865, as compared with 22 per 
cent, in the case of 69 of their helpers, who got but $1.16 
a day in 1860. This qualification means nothing more, 
however, than that the general law of statistics applies to 
these figures uniformities are discovered only when large 
groups are taken. 

Another misapprehension may be guarded against by call- 

1 A rough illustration of this fact is furnished by the following classification of 
male and female breadwinners in the United States in 1890 according to conjugal 
condition computed from Eleventh Census, " Population," Part II, p. cxxvi. 





Total 


Single 


Married 


Widowed 


Divorced 


Males 


100 


39. 2 


57. 1# 


3.4$ 


3 


Females 


100 


69.8$ 


13. 2# 


16. 1 


9# 















308 



HISTORY OP THE GREENBACKS 



ing attention to the fact that the above discussion refers 
only to the relative not to the absolute increase in money 
wages. The fact that men earning from $1 to $1.49 per day 
in 1860 received a relatively greater advance in pay than any 
other class does not mean that the extra sums given them 
were as large as the sums added to the pay of employees of 
higher grade. As a matter of fact, the actual increase was 
greater in the pay of men receiving higher wages at the 
outset. To bring out this fact, Table XXIX has been pre- 
pared by computing the average actual increase of pay 
represented by the average relative increase for each of the 
groups of Table XXVIII B.- A wage midway between the 
greatest and the least included in each group has been taken 
as the basis for the computations. 

TABLE XXIX 

AVERAGE ACTUAL INCBEASE IN DAILY WAGES OF HALE EMPLOYEES, COMPUTED 
FROM TABLE XXVIII II 



3 


1860 


1861 


1862 


1863 


1864 


1865 


1866 


si 


& 




& 




& 




E? 









E 




& 




& 







1 













eg 




1 




1 




/ o 





^ 










^ 




^ 


3 


^ 







s 


^ 


fe<i 


a 

1 


~3 


a 
a 


"3 


a 
1 


"3 





'a 


a 

1 


3 


a 

cd 




a 
3 


g 




1-9 








* 




1-9 


* 


11 


^ 


1^ 


^ 


-3 


-9 


$0.62 


$.00 


$.01 


$.00 


$.01 


$.01 


$.04 


$.09 


$.11 


$.17 


$.23 


$.30 


$.31 


$.38 


$.41 


1.25 


.00 


.00 


.03 


.06 


.01 


.01 


.24 


.26 


.50 


.64 


.76 


.78 


.85 


.83 


1.75 


.00 


.00 


.04 


.04 


.09 


.14 


.28 


.33 


.47 


.61 


.88 


.91 


1.00 


1.05 


2.25 


.00 


.00 


.00 


.05 


.02 


.00 


.07 


.18 


.m 


.81 


, 


1.10 


1.13 


1.31 


3.00 


.00 


.00 


.03 


.00 


.00 


.06 


.06 


.03 


.18 


.39 


.69 


.66 


.78 


.84 



According to this table the most considerable average 
increase in actual wages was that of men earning from $2 to 
$2.49 per day in 1860; but the relative increase was greater 
in the case of men earning less, because the smaller actual 
additions bore a higher proportion to. the lower initial wages. 
Of the two forms of presentation relative and actual 
increase the former seems to possess more significance 
when one is concerned with the economic well being of 



WAGES 309 

wage-earners, for the reason that the importance of a given 
sum added to an income depends upon the amount of that 
income before the addition is made. An increase of 75 
cents to the daily wage of an unskilled laborer who formerly 
received $1.25 means more to him than an increase of $1 
to the daily wage of a carpenter who had been paid $2.25. 
Consequently a better idea of the alteration in the circum- 
stances of the two men is afforded by saying that the day- 
laborer's pay had been increased 60 per cent, and the car- 
penter's 44 per cent., than by saying that the former's pay 
had been increased 75 cents and the latter' s $1. 

As has been said, an average wage computed from the 
returns of employees of such diverse character as the persons 
for whom the Aldrich Report gives returns means compara- 
tively little ; but there is no valid objection to a computation 
of the average variation in the pay of men in unlike occupa- 
tions. While a series of such averages does not present the 
facts concerning the changes in the wages of any specific 
individuals or groups, it is nevertheless the only means by 
which a general notion regarding the circumstances of the 
whole class of workingmen can be arrived at. Consequently 
it seems worth while to present a summary of the average 
relative wages of all employees for whom we have data and 
to compare it with the results obtained by Professor Falkner 
from practically the same material. This is the purpose of 
Table XXX. 

Between the two forms of the semiannual table it is found 
again that the differences are slight, but that the constant 
weights give slightly higher figures. In order to test once 
again the explanation given above for this difference, all of 
the wage-series have been divided into two nearly equal 
groups, one containing the 255 series that show an advance by 
January, 1865, of 42 per cent, or less, and the other the 257 
series that show an advance of 43 per cent, or more. The 



310 HISTORY OP THE GREENBACKS 



TABLE xxx 

AVERAGE RELATIVE WAGES OF ALL EMPLOYEES FOR WHOM DATA ARE GIVEN IN TABLE 
\ 1 1 OF THE ALDRICH REPORT 

Semiannual Table Falkner's Table > 



Variable Constant Simple Weighted 

Weights Weights Average Average 

1860, January 100 100 I mo 
July - 100 99 ) 

1861, January 102 102 ) m8 
July - 99 99 ) 

1862, January 102 102 ) 1ft9Q 1fta - 
July 104 103 \ 

1863, January 116 114 ) 1105 nfifi 
July - 119 119 

1864, January - 131 132 
July - - 142 144 

1865, January - 152 156 / usl 148fi 
July - - 155 159 i 

1866, January 161 165 f j 
July - 164 166 I 

former group includes 27 per cent, of the whole number of 
employees in 1860 and 38 per cent, in 1865 ; conversely, the 
latter group includes 73 per cent, of the whole number in 
1860 and 62 per cent, in 1865. Lest it be thought that this 
difference is due to the prominence of the one very large 
series laborers employed by establishment 35 the figures 
have been recomputed after excluding it. Then the result is 
that the group of series showing an increase less than the 
median include 35 per cent, of the employees in 1860 and 42 
per cent, of the employees in 1865, while the corresponding 
figures for the other group are 65 and 58 per cent. The 
data thus show unmistakably the tendency to substitute 
employees whose pay had increased relatively less for 
employees whose pay had increased relatively more, wher- 
ever such a change was feasible. 

i Aldrich Report, Part I, pp. 174, 176. 



WAGES 311 

The discrepancies between both the columns of the semi- 
annual table and the two sets of results obtained by Falkner 
are much greater than the differences produced by variable 
and constant weights. These discrepancies deserve care- 
ful attention, because they show clearly the effects produced 
by dissimilar methods of analyzing substantially the same 
data. 

The first of the Falkner summaries was obtained by 
striking a simple arithmetic average of the 500 or more 
wage-series, all of which were treated as having precisely 
the same importance. In the semiannual table, on the con- 
trary, each series was weighted by the number of persons 
whose pay it represented. That this difference in the method 
of striking the averages must produce somewhat divergent 
results may be seen from Table XXVIII A or B. Not only 
are the wage-groups in this table that show the greatest 
increase in pay represented by a larger number of series 
than the groups that show a smaller increase, but, more than 
this, their series include on the average a larger number of 
employees. Falkner's method of preparing a general aver- 
age of variations would allow to each of these groups an 
influence upon the result in proportion to the number of 
series included in it ; but the method adopted in construct- 
ing the semiannual table would give each group an impor- 
tance in proportion to the number of employees. For 
example, in computing the index number for January, 1865, 
the group $1-$1.49, which shows the greatest advance in 
money wages, would have a weight of 35 per cent., accord- 
ing to Professor Falkner's method, because 179 of the 505 
series fall within it, and a weight of 50 per cent, according 
to the second method, because 2,325 of the 4,696 employees 
fall within it. It is further true that the average index num- 
ber for this group is higher when calculated according to the 
second method, because the large series as a rule show a 



312 HISTORY OF THE GREENBACKS 

somewhat greater increase than the small series. This last 
fact may perhaps mean that establishments requiring the 
services of many hands found it necessary in order to secure 
full quotas to offer wages rather higher than a small employer 
was compelled to pay to secure two or three men. 

The second of the Falkner series in Table XXX, like the 
semiannual series, is a " weighted " average. But the meth- 
ods of weighting adopted in the two cases are very different. 
Instead of multiplying each relative wage by the number of 
employees whose pay it represented, Professor Falkner 
struck a simple average of the relative wages in each indus- 
try and then multiplied the series for each industry by 
the number of persons engaged in it according to the fed- 
eral census reports. As several of his critics have pointed 
out, there are grave objections to this procedure. First, the 
census does not purport to show the number of persons 
engaged in industries like the manufacture of agricultural 
implements, for example ; but the number of persons 
engaged in various occupations like painting, bricklaying, 
tailoring, carpentering, and the like. Nor is it possible to 
ascertain from these returns for occupations the numbers 
employed in industries. To take one example, the first of 
Falkner' s industries " Agricultural Implements " is 
weighted for the years 1880-91 by the number of persons 
reported in the occupation tables of the Tenth Census under 
the caption "Agricultural Implement Makers " viz., 4,891.' 
But that this number does not include by any means all the 
persons engaged in this industry is indicated by the follow- 
ing footnote appended to the caption in the census table: 
"Generally reported as 'iron founders,' 'carpenters,' 'machin- 
ists,' 'painters and varnishers,' etc." 

Second, if the weights used are erratic, some of the series 
for the industries to which they are applied are not less so. 

J Tenth, Census, Vol. I, "Population," p. 746; cf. Aldrich Eeport, Part I, p. 175. 



WAGES 313 

It has been pointed out above that the number of wage- 
series in several of the " industries" of the Aldrich Report 
is altogether insufficient to give a reliable indication of the 
general trend of wages. 1 To take the most extreme cases, 
there are but two series for "Groceries" and three for 
"Dry Goods." 2 Of course this is an altogether inadequate 
basis for conclusions about the wages of salesmen, yet " Dry 
Goods " receives, in Professor Falkner's table, a weight sec- 
ond only to that of " Building Trades." 

In considering which of the four series of relative wages 
in Table XXX has the best claim to acceptance, therefore, 
Falkner's weighted series must be discarded. Curiously 
enough it approaches the results of the semiannual tables 
more closely than its companion series of simple averages. 
But in view of the faulty method by which the weights 
were obtained and the recklessness with which they were 
applied, this closer approach must be regarded as an acci- 
dental virtue. 

Of the three remaining series, Professor Falkner's simple 
average will be preferred only by those, if any such there 
be, who believe that in computing average variations in 
wages no attention should be paid to the number of persons 
employed at different rates of pay. On the other hand, 
the semiannual table will be preferred by those in whose 
eyes the numbers are important. Perhaps the difference 
between the two tables can best be expressed by saying that 
Falkner's simple average shows the average change in the 
price paid for various kinds of work, allowing to each kind 
an importance in proportion to the number of reporting 
establishments in which it is performed, while the semi- 
annual table shows the average change in the pay of all the 
wage-earners for whom returns are given. 

1 See sec. ii, above. 

2 See Table XX, above. 



314 



HISTORY OF THE GREENBACKS 



IV. RELATIVE MONEY WAGES IN THE COAL, IRON, GLASS, AND 
POTTERY INDUSTRIES 

The preceding discussion has been confined to the 
material afforded by Table XII of the Aldrich Report. 
Before combining the figures for money wages with the 
tables of prices it is in order to seek what additional wage- 
data may be found in other sources. 

The task of collecting material for the Aldrich committee 
regarding wages in the coal, iron, glass, and pottery 
industries was intrusted to Mr. Joseph D. Weeks. His 
report presented the data in such a different form that they 
cannot readily be compared with the uniform returns for 
other industries secured by the Department of Labor. Not 
only do Mr. Weeks 1 s tables fail to report number and sex 
of the workers, but they also do not give wages for the same 

TABLE XXXI 

RELATIVE WAGES OF COAL MINERS 1 



ANTHRACITE COAJ- 


BITUMINOUS 
COAL 


ANTHRACITE COAL 


BITUMINOUS 
COAL 


Date 


Relative 
Wages 


Relative 
Wages 


Date 


Date 


Relative 
Wages 


Relative 
Wages 


Date 


1859, Nov. . . 
1860, March 
Dec. . 
1861, May. . 
Aug. . 
1862, May. . 
July. 
Nov.. 
1863, July. 
Sep.. . 
1864, May. . 
July. 


93 

107 
93 
107 
93 
100 
107 
123 
154 
185 
208 
239 


100 
100 

'56 
75 

88 
88 
100 
150 
200 
250 


1859 
1860 

isei 

1861 
1861 
1862 
1862 
1863 
1863 
1864 


1865, May.. 


208 
162 
185 
208 
169 
181 
166 
185 
208 
166 


250 
200 


1865 
1866 


July.. 


Sep .. 


Oct 


1866, Jan 


Feb 
April 
June 
Aug . . 


Dec 





i In computing the relative wages in the first of these series the average of the 
wage paid in November, 1859 ($6 per week), and March, 1860 ($6.96), was taken as 
the basis. In the case of the second series the months of the year in which the 
specified wages were paid are not stated. 



WAGES 



315 



months in the year. As a glance at any of the previous 
tables will show, this second lack of uniformity is particu- 
larly serious when one is studying the effects of the green- 
back issues, because wages changed so rapidly during the 
war. It is, therefore, necessary to take up Mr. Weeks's 
reports for the several industries, separately. 

For the coal industry he gives two series, one presenting 
the weekly wages of a miner of anthracite coal doing 
" company work " in Luzerne county, Pa., and the other 
showing the price paid per bushel for mining bituminous 
coal near Pittsburg. These series are shown in the preced- 
ing table. 

Both these series show a somewhat greater relative 



TABLE XXXII 

RELATIVE WAGES OF IRON-ORE MINERS 









1? 











NEW JERSEY 


OXFORD , N. J. 


CORNWALL, PA. 


life 


Blasters 
and Drillers 


Miners 




Un- 
skilled 
Laborers 


Skilled 
Laborers 


Miners 


Per diem 
wage, 1860 


$1.00 


Per diem 
wage, 1860 


$1.00 


Per diem 
wage, 1860 


$0.75 


$0.95 


$1.25 


1860. . . . 


100 


1860 


100 


1860 


100 


100 


100 


Oct 


113 














1861.... 


100 


1861, Oct. 


90 


1861.. 


107 


105 


100 


1862.... 


100 


1862,July 


100 


1862 


120 


116 


108 


1863. . . . 


144 


1863,July 


125 


1863 


133 


126 


112 


1864, Jan. 


144 














Feb. 


163 














Apr. 


200 






1864 


207 


179 


200 


July 


250 


1864,July 


175 










1865, Jan. 


250 














Apr. 


200 






1865 


187 


179 


120 


July 


150 


1865,July 


188 










1866, Jan. 


165 


1866,Jan. 


138 


1866 


193 


184 


132 






1866,July 


150 











316 



HISTORY OF THE GREENBACKS 



increase of pay than any of the occupations included in 
Table XXV, but not greater than some of the individual 
series, as may be seen by referring to Table XXI. The 
anthracite miners belong in the $1.00-$1.24 wage group, 
for their pay per day before the war averaged $1.08. In 
which group the bituminous miners belong it is difficult to 
say. During the nine years, 1852 to 1860, they had been 
paid two cents a bushel, and according to Mr. Weeks men 
in good mines working full time could mine about 100 
bushels a day. What average earnings per day had been, 
however, we do not know. 

Among men engaged in mining iron ore Mr. Weeks's 
figures also show not only a large increase in money wages, 
but also violent fluctuations from time to time. An attempt 
to compare the five series relating to this industry is made 
in Table XXXII. 

Men employed in making pig iron, on the contrary, 
received an advance in pay below the average, if the two 
series given by Mr. Weeks and represented in Table XXXIII 
give a correct impression. 

TABLE XXXIII 

RELATIVE WAGES IN THE PIG IRON INDUSTRY 



CATASAUQUA, PA. 



Year 


Fillers at 
Blast 
Furnace 


Keepers at 
Blast 
Furnace 


Per diem wage, 1860. 
I860 


$1.37 
100 


$1.85 
100 


1861 


105 


103 


1862 


91 


91 


1863 


101 


103 


1864 


153 


146 


1865 


141 


135 


1866 


142 


130 









WAGES 



317 



TABLE XXXIV 

RELATIVE EARNINGS IN THE BAR IRON INDUSTRY 



PUDDLING IRON 
ETNA, PA. 


PUDDLING IRON 
DUNCANNON, PA. 


ROLLING IRON 
DUNCANNON, 
PA. 


Date 


Tonnage 
Rates 


Puddlers 


Puddlers' 
Helpers 


Tonnage 
Rates 


Puddlers 


Puddlers' 
Helpers 


Tonnage 
Rates 


2 

h D 
3 



M 


Per diem wage,'60 
I860 




$2.67 
100 


$1.33 
100 




$2.01 
100 


$1.01 
100 




$3.20 

ioo 

100 
113 


100 


100 


100 
100 
113 


September 8 
1861 


100 


100 


100 


100 


100 


100 


1862,April 12 


July 12 








114 
129 


114 
129 


114 
129 


August 23. . . 








September 1 
September22 
October 
October 18. . 


113 


112 


113 








125 


125 


125 


125 


126 








136 
143 


136 
143 


136 
143 




... 


November 35 
1863,April 


138 


isi 


iss 


April 25 


157 


158 


156 


138 


iss 


May 2 








June 


150 


150 


150 








July 




189 


188 






December . . 
1864, January 30. . 


163 


162 


163 




171 

186 


206 
223 


205 
222 


150 


150 


April 9 








May 


175 


175 


175 


May 17 








163 


163 


June 


188 


187 


188 








June 4 


214 


257 


256 




... 


July 


200 


200 


201 


August 27 . . 








175 


175 


October 1 ... 








229 


275 


273 


December . . 
1865,February 4.. 
March .... 


225 

200 
150 


225 

200 
150 


226 

2oi 

150 


200 


240 


240 


165 


165 


April 












May 13. 


171 


206 


205 


150 


150 


July 


144 

200 


143 

200 


iii 

201 


September. . 
September 9 
September23 
October 21.. 
1866 












157 
171 
200 
200 


189 
205 
240 
240 


188 
205 
240 
240 


138 
150 
165 

158 
165 


138 
150 
165 

iss 

165 


January 6. . . 








January 27. . 














March 31. .. 
December 22 


200 
22T> 


201 
226 


202 
227 



















318 



HISTORY OF THE GREENBACKS 



For the bar iron industry Mr. Weeks's reports are not 
quite so restricted. They indicate a large increase in the 
pay of puddlers and their helpers, checked by a brief reac- 
tion in 1865, and for the better paid bar-rollers an increase 
not greatly in advance of that of pig-iron workers. 

The two series given by Mr. Weeks as representative of 
the pottery industry are both for men making very high 
wages. The net earnings of the hollow-ware pressers from 
1859 to 1863 are reported as $10 a day, and of the handlers 
as $9. The dollar a day added to their earnings in 1864 
accordingly represented a relatively slight increase. 



TABLE XXXV 

RELATIVE EARNINGS OF POTTERS 



Year 


Hollow-Ware 
Pressers 


Handlers 


Average net earnings 
in 1860 


$10.00 


$9.00 


I860 


100 


100 


1861 


100 


100 


1862 


100 


100 


1863 


100 


100 


1864 


110 


111 


1865 


110 


111 


1866 


110 


111 









Finally, Mr. Weeks gives six series representing the aver- 
age daily earnings of glass-blowers engaged in making win- 
dow glass and green-glass bottles of various sizes. These 
figures are for years beginning in September and ending 
in May or June, for glass-blowing is generally suspended 
during the summer months. Table XXXVI shows that until 
May, 1866, the average earnings of blowers had increased 
slightly less than wages in, the industries represented in 
Table XXX. 



WAGES 



319 



TABLE XXXVI 

KKI.ATI VK EARNINGS OF GLASS BLOWERS 



YEAR 


Blowers 
of 
Window- 
Glass 


BLOWERS OF GREEN GLASS BOTTLES 


2 oz. 


4 oz. 


8 oz. 


Pint 


Quart 


Av. earnings a day in 
1859-60 


$3.32 

100 
100 
100 
100 
100 
136 
151 
213 


$2.25 

100 
93 
100 
100 
100 
149 
149 
233 


$2.25 

100 
98 
107 
107 
107 
156 
156 
231 


$2.40 

100 
96 
110 
110 
110 
156 
156 
225 


$2.97 

100 
91 
121 
121 
121 
148 
148 
167 


$3.08 

100 
94 
125 
125 
125 
155 
155 
159 


1859-60 


1860-61 


1861-62 


1862-63 


1863-64 


1864-65 


1865-66 


1866-67 





V. RELATIVE SALARIES OF SCHOOL TEACHERS 

The Aldrich committee found it impractical to collect 
data regarding the earnings of professional men, such as 
lawyers, physicians, or even clergymen ; but as in a measure 
representative of this whole class their statistician used a few 
carefully selected returns of the salaries of teachers in the 
public schools of four cities Boston, Baltimore, Cincinnati, 
and St. Louis and of two rural counties in Massachusetts 
Franklin and Barnstable. These returns are presented in 
Table XXXVII. 

On the whole, these results accord well with those of the 
preceding sections. The average increase in the salaries of 
male teachers is less than that shown by any of the twenty- 
seven occupations represented in Table XXV with two excep- 
tions. The discussion based on Table XXVIII suggests 
that the reason for this slight increase is found in the high 
initial earnings. On the other hand, a seeming contradiction 
of the rule is found in the fact that the advance in the sal- 
aries of women teachers is greater than in the case of men. 
But this exception is one in seeming only. In gathering 



320 



HISTORY OP THE GREENBACKS 



TABLE XXXVII 

RELATIVE SALARIES OF SCHOOL TEACHERS, 1860-66 





BOSTON 


BALTIMORE 


CINCIN'ATI 


ST. Louis 


COUNTRY 
SCHOOLS 
IN MASS. 


AVERAGE OF 
ALL SERIES 




M. 


Fern. 


M. 


Fern. 


M. 


Fern. 


M. 


Fern. 


M. 


Fern. 


M. 


Fern 


Both 


No. of 




























series 


3 


2 


3 


6 


3 


3 


2 


2 


2 


2 


13 


15 


28 


AvVge 


$2,267 


$400 


$1,167 


$292 


$1,423 


$390 


$1,225 


$400 


$34.09 


$17.52 








sal'ries 


pr yr. 


pryr. 


pryr. 


pryr. 


pryr. 


pryr. 


pryr. 


pryr. 


prmo 


prmo 








Year. 




























1860. . 


100 


100 


100 


100 


100 


100 


100 


100 


100 


100 


100 


100 


100 


1861. . 


100 


100 


100 


100 


87 


91 


66 


78 


102 


95 


92 


95 


93 


1862. . 


100 


100 


100 


100 


87 


91 


82 


91 


100 


99 


94 


97 


96 


1863. . 


100 


100 


100 


100 


100 


100 






101 


97 


NX) 


100 


100 


1864. . 


109 


127 


130 


178 


120 


100 


123 


isi 


106 


101 


118 


139 


129 


1865. .. 


125 


a.; 


130 


178 


120 


100 


123 


131 


128 


//.'. 


126 


//.' 


135 


1866. .. 


125 


145 


159 


249 


138 


117 


139 


143 


137 


126 


140 


183 


164 



their data the agents of the Aldrich committee found it pos- 
sible to include only the highest and the lowest grades of 
teachers ; because the intermediate grades are so many and 
show such variations in pay that no satisfactory data could 
be obtained regarding them. 1 Since the highest grades of 
teachers in American schools are men and the lowest women, 
the figures of the report for women relate to teachers with 
very low salaries and the figures for men to well-paid teach- 
ers. The salaries of the women range from $100 to $500 a 
year and those of the men from $900 to $2,800. Now, while 
it has been shown that in most industries in which both 
sexes participate the average increase in the pay of men was 
greater, it does not follow that the increase in the wages of 
the best-paid men was greater than that in the wages of the 
worst-paid women. Indeed, a comparison of the two parts 
of Table XXVIII A will show that the men belonging in the 
wage-groups $2.25-$2.49 and above received on the whole a 
smaller average advance than the 628 females for whom we 
have returns. Of course, in Table XXXVII we are com- 

Aldrich Report, Part I, p. 184. 



WAGES 321 

paring with women men receiving on the average con- 
siderably more than $2.25 a day. 

A less definite, but nevertheless an important contribu- 
tion to knowledge of the economic situation of professional 
men during the war, is supplied by an inquiry made in 1869 
by David A. Wells, then special commissioner of the revenue. 
"The answers," he says in his fourth report, "to a large 
number of circulars sent out by the commissioner during the 
past year to clergymen, teachers and other professional men, 
lead to the conclusion that, while their salaries or incomes 
have, as a general rule, been advanced since 1861, the 
advance has not been equal, by any means, in extent, to the 
advance in the price of commodities." 1 

Since prices fell after January, 1865, while money earn- 
ings of such persons apparently continued to increase, it 
follows that the case of these correspondents was probably 
worse during the war than when their troubles were laid 
before Mr. Wells in 1869. 

VI. BELATIVE WAGES OP FARM LABORERS 

It is especially regretable that wages of farm laborers 
are not included in the exhibits of the Aldrich Report, 
because they formed in the United States of the Civil War 
the largest single class of wage-earners. 2 Nor can this gap 
be satisfactorily closed with material drawn from other 
sources. The Department of Agriculture has made several 
investigations into the wages of farm laborers, but the earliest 
of these was not undertaken until 1866, and no systematic 

iT. R. Executive Document No. 27, p. xlii, 41st Cong., 2d Sess. 

2 la the occupations table of the Census of 1860 the number of " farm laborers " in 
the nine states represented in the material of the Aldrich Report (see sec. 2) is 
reported as 335,246, while the number of " laborers " given is 512,481. But the pre- 
ponderance of the latter class is probably due to the fact that in rural districts a 
farm hand is often reported simply as a " laborer " on the schedules filled in by the 
enumerator and tabulated as such in the Census Office, when he should have been 
reported as an " agricultural laborer." 



HISTORY OF THE GREENBACKS 



attempt was made then to ascertain what wages had been 
paid in former years. Mr. Dodge, the statistician of the 
department, however, gave it as his opinion that there had 
been an increase of about 50 per cent, between 1861 and 
1866. 1 But when the ninth of these investigations was 
made, in 1892, the department requested its correspondents 
to send it copies of any accessible wage-records relating to 
years before 1866. A considerable number of replies was 
received from different sections of the country and published 
by Mr. Dodge in his report. 2 Fragmentary as is this mate- 
rial, one can glean from it a few series that may give some 
notion of the changes in the pay of farm hands during the 
war. The results of such an attempt are presented in Table 
XXXVIII. 

TABLE XXXVIII 



BELATIVE WAGES OF FARM LABORERS 



Terms 


1860 


1861 


1862 


1863 


1864 


1865 


MALES 
Per month, without board, Mass 


100 


92 


120 




133 


147 


Per month, with board, Mass., Southampton.... 
Per month, with board, Mass 


100 
100 


89 
99 


84 
127 


126 
129 


137 
135 


132 

154 


Per month, with board, Mass., Groton 
Per month, with board, N.J., for summer only . . 
Per month, with board, N.J., for whole year 
Per month, with board, Pa 


100 
100 
100 
100 


90 
108 
109 
108 


137 
108 
109 
108 


167 
138 
136 
117 


167 
154 
145 
133 


173 
154 
145 
167 


Per month, with board [11, _Ohio, Butler Co 
Per month, with board, Ohio, Lake Co 


100 
100 


100 
100 


89 
100 


104 
138 


125 

1~>4 


154 


Per month, with board, 111., Champaign Co 
Per day, with board, common labor, N.J 


100 
100 


88 
100 


106 
117 


118 
133 


129 
167 


147 

167 




100 


104 


104 


125 


167 


167 


Per day, with board, harvest. Pa 


100 


100 


100 


120 


160 


160 


Per day, with board [?J. Ohio, Butler Co 


100 


100 


100 


117 


150 


183 


Per day, without bd. [?J, harvest, O., Butler Co, 
FEMALES 
Per week, with board [7] Ohio, Butler Co . . . 


100 
100 


100 
100 


100 
100 


93 
136 


133 
136 


167 
155 
















Average relative wages of the sixteen series 


100 


99 


107 


126 


145 


158 



Scanty as is this material, it seems to be the most 
authentic upon the subject, and some interest attaches, 

1 Annual Report, Department of Agriculture, 1866, p. 81. 

2 Wages of Farm Labor in the United States (Department of Agriculture, Divi- 
sion of Statistics, Misc. Series, Report No. 4, 1892), pp. 54-69. 



WAGES 



323 



therefore, to a comparison with the fuller returns for other 
occupations. To facilitate such comparison the series for 
" farm laborers," " all employees," " laborers," and " unskilled 
laborers" are placed side by side in Table XXXIX. 

TABLE XXXIX 

COMPARISON OF RELATIVE WAGES OF FARM LABORERS AND OTHER WAGE-EARNERS 



Date 


Farm 
Laborers 
Tab. XXXVIII 


All Employees 
Table XXX 


Laborers 
Table XXV 


Unskilled 
Laborers 
Table XXVI 


1860, January 
July 


166 


100 
100 


100 
100 


100 
100 


1861, January 
July 


99 


102 
99 


100 
93 


103 
93 


1862, January 
July 


ioi 


102 
104 


100 
101 


100 
99 


1863, January 
July 


126 


116 
119 


123 
125 


121 
121 


1864, January 
July 


iis 


131 

142 


143 
167 


143 
157 


1865, January 
July.. 


i58 


152 
155 


173 
176 


169 

167 













From this comparison it appears that farm laborers 
received an advance in money wages slightly greater than 
the average for the 5,000 employees for whom the Aldrich 
Report gives returns, but considerably less than the 
advance in the pay of the groups with which they have 
most in common. This result is what the previous analysis 
would lead one to anticipate. As the rise of wages seems to 
have been due primarily to an increase in living expenses, 
one would expect to find that when part of this increased 
expense was assumed by the employer in furnishing board, 
the advance in money wages would be less than when the 
person had to find himself. Table XXXVIII shows that in 
the case of but one of the sixteen series is it positively stated 
that the pay was "without board." Second, there seems 
reason to believe that, as a rule, farm hands have smaller 
family responsibilities than unskilled laborers in towns. 



324 HISTORY OF THE GREENBACKS 

The occupation returns of the census of 1860 are not classi- 
fied by conjugal condition, but it is improbable that there 
was a change in this respect in the next generation sufficient 
to invalidate the application of the ratios shown by the 
census of 1890. According to the latter census, in the nine 
states covered by the Aldrich returns, slightly more than 
one-half of the "unspecified laborers" were married as com- 
pared with but three-tenths of the " agricultural laborers." 
As many who belong in the latter class are probably classi- 
fied erroneously in the former, the real difference would 
appear greater, could it be ascertained accurately. 1 As has 
been suggested, a single man is less affected by a sudden 
increase in the cost of living than one with a family, and the 
previous discussions seem to show that wage-earners received 
an increase in money wages roughly proportioned to the dis- 
tress caused them by the rise of prices. 

VII. TABLES OF RELATIVE MONEY WAGES BASED UPON THE 
MATERIAL IN VOL. XX OF THE TENTH CENSUS 

The second of the great collections of data regarding 
wages in the United States covering the period of the Civil 
War is found in Vol. XX of the Tenth Census (1880). 
Beginning in 1820, the Census Office had made attempts to 
ascertain the rates of wages paid in the census year ; but in 
1880 this investigation was extended to cover a long series 
of years. Blank schedules were sent to the proprietors of a 
large number of carefully selected manufacturing establish- 
ments representing over fifty measurably distinct industries 
and located in different sections of the country, with the 

i The figures compiled from Table CXVI of the second volume on Population are 

as follows : 

Agricultural Laborers Laborers, Unspecified 

Whole number 470,105 782,844 

Single, number .... 312,603 353,124 

Single, per cent. - 67 45 

Married, number .... 141,341 398,359 

Married, per cent. .... 30 51 



WAGES 325 

request that they report the wages paid to certain important 
classes of their employees for as many years as their records 
allowed. When these schedules were received by the Census 
Office they were examined, and when necessary sent back to 
the manufacturers for correction, completion, or explanation. 
"Not infrequently," it is stated in the report, "schedules 
were passed backward and forward several times before a 
final adjustment was reached." 1 

Owing to the care exercised in their compilation, the 
figures as finally published have borne a good reputation ; 2 
but very little use has been made of them because of the 
inconvenient form of publication. Mr. Joseph D. Weeks, 
the special agent in charge of the investigation, made no 
attempt to analyze or combine the data obtained, or to 
discuss their significance. He confined his efforts to 
collecting and verifying materials from many sources, and 
published the reports made to him by some 600 factories 
substantially as received. Consequently anyone who 
desired to make use of the material was under the hard 
necessity of working it into intelligible form for himself. 

An examination of the figures as published, however, 
shows sufficient promise in them to warrant an attempt to 
discover how far they bear out the inferences drawn from 
the materials already dealt with. In particular, the Census 
figures have the great merit of being more comprehensive 
than the data of the Aldrich Report. Nearly three times 
as many wage-series available for the present investigation 
can be collected from the former source as from the latter, 
and these series represent a larger number of branches of 
manufacture and a larger geographical area. A conspectus 

1 Tenth Census, Vol. XX, p. xv. 

2 See, for example, the opinion expressed by C. J. BULLOCK in his paper upon 
"Wage Statistics and the Federal Census," in The Federal Census ("Publications 
American Economic Association," New Series, No. 2), pp. 351, 352, and the prefatory 
note by General F. A. WALKEE in the report itself, p. x. 



326 



HISTORY OP THE GREENBACKS 



of the material derived from the census is afforded by 
Table XL. 

In this exhibit twelve industries are marked by a star 
(*) to indicate that they are not represented in the wage- 

TABLE XL. 

CLASSIFICATION OF WAQE-SEBIE8 FBOM THE TENTH CENSUS 



i. ACCORDING TO INDUSTRIES 


ii. ACCORDING TO LOCATION 




Number of Estab- 
lishments 


Number of Wage- 
Series 




Number of Estab- 
lishments 


Number of Wage- 
Series 


Agricultural implements 
Boots and shoes* 


1 
3 
1 
3 
9 
1 
3 
14 
4 
5 
13 
2 
7 
1 
8 
2 
11 
2 
7 
3 
1 
4 
1 
7 
2 
4 
8 
1 
4 
10 

142 


5 
17 
4 
32 
73 
18 
17 
258 
62 
28 
117 
4 
47 
9 
76 
3 
98 
11 
103 
26 
3 
38 
6 
61 
8 
46 
63 
7 
16 
173 

1429 


East: 
Maine 


3 

8 
16 
8 
26 
7 
12 
2 
2 

1 
1 

86 

13 
13 
7 
6 
3 
6 
2 
6 

56 
142 


51 
114 
208 
116 
265 
52 
134 
4 
13 

1 
11 

969 

128 
100 
63 
51 
23 
45 
9 
41 

460 
1429 


Breweries 


New Hampshire. 
Massachusetts . . 
Connecticut 
New York 


Brick* 


Carriages . 


Carpets* 


Clothing* 


New Jersey . . . 


Cotton 


Pennsylvania . . . 
Delaware 


Flint glass"!" 


Flour mills* 


Maryland 


Furniture* 


District of Col- 
umbia 


Gas and coke 


Hardware 


West Virginia. . 

West: 
Ohio 


Ice* 


Iron blast f urnacesf 
Iron mining")" 


Machinery 


Marble 


Paper 


Indiana 


Pianos* 


Illinois 


Pins* 


Kentucky 


Potteryt 


Michigan 


Rolling mills'!" 


Wisconsin 


Saw mills. 


Iowa 


Ship carpentry* 


Missouri 


Stove foundries'!" 


Total East and 
West 


Tanneries 


Tin* 


Tobacco* 


Woolen 


Total 







WAGES 327 

tables of the Aldrich Report, and six more by a dagger (f) 
to indicate that they are included only in the supple- 
mentary returns discussed in sec. iv above. 1 Quite as 
important as the larger number of industries is the greater 
geographical range of the material. As was pointed out in 
sec. ii, all the establishments for which returns are inserted 
in the main wage-table of the Aldrich Report were situated 
in states east of Ohio, with the exception of a single gas plant. 
But of the series obtained from the Tenth Census nearly 
one-third are from the middle West. This makes it pos- 
sible to compare the fluctuations of money wages in different 
sections of the country. 

On the other hand, the character of the Census series is in 
several respects distinctly inferior to that of the Aldrich series. 
(1) But one wage is reported for the different kinds of labor 
in each year, and it is not stated whether this quotation rep- 
resents the average wages for the whole year, or the wages 
paid in some one month. This must be regarded as a decided 
blemish, particularly unfortunate for the study of money 
wages during the war; for the preceding summaries show 
distinctly that from 1863 to 1865 wages were fluctuating so 
violently that there was on the average a considerable 
difference between the rates paid at the beginning, middle, 
and end of the year, and that the average for twelve months 
might differ from the wage at any specified date within the 
year. (2) The sex of the employees is not uniformly 
reported, so that it is impossible to separate the female from 
the male series. (3) The number of persons whose pay is 
represented by the series is not stated. Thus it becomes 
necessary in making up summaries from these series to treat 
them in the way that Professor Falkner treated the Aldrich 
material that is, to disregard the number of wage-earners 

1 This division cannot be made with entire confidence in every case, because no 
precise statement is made of the nature of the establishments included in the 
twenty-one " industries " of the Aldrich Report. 



328 



HISTORY OP THE GREENBACKS 



belonging to the different groups altogether. (4) The 
material is even more strictly confined to manufacturing 
industries than that of the Aldrich Report. 

Because of these limitations of the Census wage material 
particularly the absence of information regarding the 
numbers employed at different wages it seems advisable 
to confine the comparison between it and the series from the 
Aldrich Report to a few of the most general forms of 
presentation. We may begin by comparing the average 
variation in relative wages as computed from all the series 
derived from both sources. 

TABLE XLI 

COMPARISON OF RELATIVE WAGES COMPUTED FROM THE TENTH CENSUS AND THE 

ALDRICH REPORT 





CENSUS OF 1880 


Falkner's 
Table 


Semi- 
annual 
Table 


Total 


East 


West 


Number of series 
I860 


1,429 
100 
102 
106 
117 
133 
145 
152 


969 
100 
101 
104 
112 
127 
141 
150 


460 
100 
103 
112 
127 
144 
153 
155 


543 
100 
101 
103 
111 
126 
143 
152 


520 

100 
102 
99 
102 
104 
116 
119 
131 
142 
152 
155 
161 
164 


1861 


1862 


1863 


1864 


1865 


1866 





It will be observed that there is a remarkably close 
correspondence between the average variation in wages 
computed from the Census material for the eastern states 
and Professor Falkner's average for all industries. This 
correspondence enhances confidence in the approximate 



WAGES 



329 



accuracy of both sets of data. These are the two columns 
that ought logically to agree, because they refer to prac- 
tically the same district and the averages are obtained in the 
same way. On the other hand, the lack of correspondence 
between the results of the Census series and the semiannual 
table does not disturb faith in the latter, because of the 
unavoidable difference in the methods employed. As has 
just been explained, in the latter case each relative wage was 
weighted by the number of persons whose pay it repre- 
sented, while in the case of the Census series this could not 
be done for lack of data. Substantial agreement is here 
shown by differences nearly identical with those between 
the two series obtained from the Aldrich material by the 
two methods of computation. 

But while the general average variation in wages appears 
practically the same in the Census and the Falkner tables, 
the fluctuations of the individual series from the two sources 
are somewhat different. This is best shown by Table XLII: 

TABLE XLII 

WAGE-SERIES FROM THE TENTH CENSUS AND THE ALDRICH REPORT CLASSIFIED 
ACCORDING TO RELATIVE CHANGE IN WAGES BETWEEN 1860 AND 1865 



RATIO OF WAGES IN 
1865 TO WAGES 
IN 1860 


No. OF : SERIES IN EACH GROUP 


PERCENTAGE OF SERIES IN 
EACH GROUP 


Census of 1880 


Aldr'ch 
Report 

Series 


Census of 1880 


Aldr'ch 
Report 
Series 


Total 


East 


West 


Total 


East 


West 


60-99* 


21 
182 
164 
349 
268 
208 
75 
112 
41 
7 
2 


19 
111 
128 
273 
185 
144 
35 
50 
19 
5 


2 
71 

36 
76 
83 
64 
40 
62 
22 
2 
2 


19 
13 
71 
132 
148 
80 
33 
10 
3 
1 
1 


1.5* 

12.7 
11.5 
24.4 
18.8 
14. b 
5.2 
7.8 
2.9 
0.5 
0.1 


1.9* 
11.5 
13.2 
28.2 
19.1 
14.9 
3.6 
5.2 
1.9 
0.5 

- 


0.4* 
15.4 
7.8 
16.6 
18.1 
13.9 
8.7 
13.5 
4.8 
0.4 
0.4 


3.7* 

2.5 
13.9 
25.8 
29.0 
15.7 
6.5 
1.9 
0.6 
0.2 
0.2 


No change 


101-119* 


120-139 


140-159 


160-179 


180-199 


200-219 


220-259 


260-299 


300 and over 


1429 


969 


460 


511 


100.0 


100.0 


100.0 


100.0 



330 HISTORY OP THE GREENBACKS 

As shown here, the grouping of the series from the Cen- 
sus is somewhat less symmetrical. A relatively larger num- 
ber show no variation or a very considerable increase. Of 
the series used in the semiannual table 71 per cent, show an 
increase of from 20 to 79 per cent, in wages, as compared 
with 62 per cent, of the eastern and 49 per cent, of the 
western Census series. 

A second fact brought out by Table XLI is that the in- 
crease in relative wages seems to have been greater in the 
Mississippi valley than on the Atlantic slope. This differ- 
ence is due, in part at least, to the fact that the textile indus- 
tries that furnish over 30 per cent, of the Census series 
(Table XL) had their chief seats in the East, and in them 
the relative increase of wages has been shown to have been 
least among the industries represented in Table XII of the 
Aldrich Report. 1 But this fact cannot account for the whole 
difference, because among persons belonging to the same 
economic groups the average increase in pay was generally 
greater in the West. The following table has been arranged 
to bring out this relation. It shows the relative wages paid 
in the eastern and western states to men following the eight 
trades most fully represented in the Tenth Census returns. 

It will be noticed that in six of these eight cases western 
workingmen received a larger average increase in pay than 
their fellows in the East. Why this should have been so is 
a question that can best be discussed after the course of 
prices in the two sections of the country has been investi- 
gated. 2 

There is one feature of this table that seems to contra- 
dict certain of the conclusions drawn from the Aldrich 
Report data. In Table XXV it appears that the poorest- 
paid occupations as a rule show the greatest relative gain in 
wages, but the same is not true of Table XLIII. This 

> See Table XXIII, above. See pp. 346, 347, below. 



WAGES 



331 





a 
I 


I 


* 






i 


cd 
H 


in O OOOrHlM^-* 
IO i rH rH rH rH rH rH rH 









01 

o 


Q 1C CO IO CO rH Q 
OS O OOrHCOlOCOCO 






g 
fi 


1 


gj " SSSSrH??^ 






H 




st 




. 


X 

M 
H 


1 


fe OC<>-*COCOt-rH 
CO . OOrH5<lTj<Tj<lO 
,_, rH i 1 i 1 rH rH rH rH 




X 


PM 


i 


O S 8 OS OS O (M S "H 




1 


i 

H 


a 

i 


f Q O * rH <N rH CO 

CO . O rH (M CO CO CO CC 




M 

M 

a H 

M OS 


E 

H 

3 


1 


!2 QCOQt-CDrH<M 
CO OOSOOrH-^lO 
75 ^ rH rH rH rH rH rH 




H * 

H O 


SMITHS' 

PEBS 


CO 


- 1 133133 




e3 i 


Hi 


0} 


,0 g 8S8SgcS 









w 


8 




s 




SMITHS 


-s 




rf O^(NrHlCO'* 

\O . OOrHCOlOt t- 

8 




! 


9 




a) 


fS O rH CO rH rH CO IQ 
T(i u - OOOC^^^iO 






M 


N 


8 




< 


M 


0) 

c 


S2 QCOlOrHCOt-lO 
t- *. O O rH CO 1C CO t- 
^ rH rH rH rH rH rH rH 






O 

S 


i 


S QriS2 WOOCDi: S 
53 *J ooorH<N-*in 

CO ,_, rH rH i 1 rH rH i 1 rH 








B 


a 


^ sSSa 






H 
O 

A 


1 

H 


K g 










*; g ::::::: 










"S S ^p ::::::: 










^||.Eiiiiii 





332 



HlSTOBY OP THE GfiEENBACKS 



observation suggests that the connection between ratio of 
increase and earnings per day, of which so much has been 
made, may not be shown by the Census material. When, 
however, these series are all classified according to daily 
wages received in 1860 and the average rates of increase 
computed for the several groups, this inference is found to 
be mistaken. The figures for the comparison are given in 
Table XLIV, A and B, which corresponds to Table XXVIII, 
A and B. 

TABLE XLIV 

WAGE-SERIES FROM THE TENTH CENSUS CLASSIFIED ACCORDING TO DAILY WAGES 
BECEIYED IN 1860 



Per Diem, Wages 
Received in 1860 


No. of 

Series 


I860 


1861 


1862 


1863 


1864 


1865 


1866 


$0.15-0.49.. 


63 


100 


101 


103 


116 


126 


146 


162 


0.50-0.74 


126 


100 


103 


108 


114 


128 


144 


158 


0.75-0.99 


169 


100 


101 


107 


119 


140 


158 


167 


1 00-1.24 


262 


100 


101 


106 


118 


138 


149 


156 


1.25-1.49 


191 


100 


103 


109 


123 


138 


149 


156 


1.50-1 74 


254 


100 


101 


106 


116 


134 


143 


149 


1.75-1.99 


108 


100 


102 


107 


118 


132 


143 


145 


2 00-2 24 


120 


100 


101 


106 


114 


126 


136 


140 


2.25-2.49 


28 


100 


99 


101 


105 


117 


120 


124 


2.50-3.99 


89 


100 


101 


106 


113 


120 


127 


131 


4.00-6.99 


19 


100 


102 


102 


105 


112 


126 


127 





















Per Diem Wages 
Received in 1860 


No. of 

Series 


I860 


1861 


1862 


1863 


1864 


1865 


1866 


Under $1.00.. 
$1.00-1.49 


358 
453 


100 
100 


102 
102 


107 
107 


117 
120 


133 
138 


151 
149 


163 
156 


1 50-1.99 


362 


100 


101 


106 


117 


133 


143 


148 


2.00-2.49 


148 


100 


101 


105 


112 


124 


133 


137 


2.50+ .. 


108 


100 


101 


106 


112 


119 


126 


131 





















While the general rule that there is a regular connection 
between the advance in pay under the stimulus of the price 
disturbances and the amount of wages earned before the war 



WAGES 333 

is fully confirmed by this exhibit, it is noticeable that the 
most considerable gain is found, not among persons earning 
$1-$1.24 a day, but in the next lower group. When, how- 
ever, the fifty-cent groups are taken instead of the twenty- 
five, the second group $1-$1.24 shows the greatest gain 
in both tables in the years 1863 and 1864, while by the end 
of the period the first group takes the lead. It is also true 
of both sets of data that, while employees in the lower 
groups received a greater relative increase in pay, the actual 
sums added to their wages were less than in the higher 
groups. The application of the method of Table XXIX to 
the figures for 1865 in Table XLIV B shows the average 
actual increase in the daily wages of the five groups to be 
32, 61, 75, 74, and 78 cents, respectively. 



VIII. PAY OF GOVERNMENT EMPLOYEES 

An interesting side light is thrown upon the advance of 
wages during the war by the position of government 
employees as represented in the reports of officials. Of 
course, the war caused a vast increase in the amount of busi- 
ness to be transacted by most of the departments, and the 
clerical force employed in Washington was increased accord- 
ingly. The salaries paid for clerks were generally regarded 
as fairly liberal before the war, but as the cost of living rose 
after the issue of the greenbacks many employees, especially 
men with families, began to find themselves pinched for 
funds. Congressional action was required to increase the 
rates of pay allowed, and in the face of the enormous 
expenditures for the military and naval service Congress 
was unwilling to pass any general act that would involve an 
increased outlay for clerks. Consequently many men resigned 
their positions in Washington to accept places with private 
employers. So general did this movement become that the 
heads of several bureaus found themselves seriously embar- 



334 HISTORY OF THE GREENBACKS 

passed by the difficulty of securing and retaining sufficient 
skilled assistants. The reports of 1864 and 1865 are full of 
such complaints. General F. E. Spinner, for example, the 
treasurer of the United States, declared in his report for 
1864 that " But for the employment of females, whose com- 
pensation is low, and in most cases too low, it would have 
been impossible to have carried on the business of the office 
with the compensation allowed. During the year many 
clerks who were employed in this office have been obliged, 
in justice to themselves, to resign their positions, in order to 
enter into business for themselves, or to take places with 
moneyed and other corporations, or in business houses, 
where their talents and services were better appreciated and 
rewarded." 1 Similar remarks can readily be found in the 
reports of General Spinner's colleagues. 2 

The rank and file of the army fared somewhat better 
than the clerks in Washington. At the outbreak of the 
war the pay of privates was $11 per month. 8 One of the 
first of the war measures passed in August, 1861, increased 
this pay to $13. * As the rise of prices proceeded, much was 
heard in Congress of the distress caused to the soldiers by 
the decline in the purchasing power of their pay. True, 
the soldier himself was supplied with food and clothing, so 
that his position was less serious than that of a clerk who 
had to pay board and tailor bills; but the soldier's family, if 
dependent on his earnings, was no better off than the clerk's. 
At last in June, 1864, when the specie value of $13 in 
greenbacks had fallen to $6.18, Congress undertook to 

1 Finance Report, 1864, p. 76. 

2 For examples see reports of the secretary of the navy, 1864, p. ilii, and 1866, p. 37 ; 
secretary of the treasury, 1865, p. 42 ; comptroller of the currency, 1864, p. 55 of Finance 
Report; treasurer, ibid., 1865, p. 98; second auditor of the treasury, iliid., 1864, p. 99, 
and 1865, p. 127; fourth auditor, ibid., 1864, p. 110; commissioner of internal revenue, 
ibid., 1865, p. 92. 

3 Act of August 4, 1854, 10 Statutes at Large, p. 575. 
* Act of August 6, 1861, 12 Statutes at Large, p. 326. 



WAGES 335 

relieve the army. Rejecting a proposition to pay the $13 
a month in gold, or an amount of paper equivalent at the 
market rate to $13 in gold, 1 Congress added $3 to the 
monthly pay. 2 This act raised the stipend to $16 per month, 
at which figure it remained for the rest of the war. The 
advance was but 23 per cent, on the old rate an increase 
in relative wages less, according to all our tables, than that 
received by the majority of workingmen. It must be 
remembered, however, that both the local and federal gov- 
ernments were paying lavish bounties for volunteers. Of 
course these extra sums mitigated somewhat the hardships 
suffered by soldiers' families. 

IX. INCREASE IN LIVING EXPENSES 

Statistics of relative money wages, no matter how elabo- 
rate, throw no light upon the relative well-being of the 
working classes until they have been compared with figures 
that show the changes in cost of living. In the present 
case satisfactory figures of the latter sort are extremely 
difficult to obtain. Of course, the tables of relative prices 
in the preceding chapter may be made to serve as a general 
guide of increased expenditure, but it will be remembered 
that in making up these tables, all commodities were treated 
as having the same importance. From the point of view of 
statistical theory this procedure was correct in the last chap- 
ter, for there the object was simply to ascertain how far the 
changes in the specie value of the paper currency were 
reflected in the prices of commodities. But here, when an 
index of variation in the living expenses of workingmen's 
families is the desideratum, another form of computation 
would be preferable. Theoretically, each commodity should 

1 This proposition was made by Senator Powell, of Kentucky. Congressional 
Globe, 38th Cong., 1st Sess., p. 2306. 

2 Act approved June 20, 1864 (13 Statutes at Large, p. 144). This act took effect 
from May 1, 1864. Privates in the cavalry, artillery and infantry were all included. 



336 HlSTOBY OP THE GREENBACKS 

now be weighted according to its importance as an item of 
expenditure to wage earners. Professor Falkner has per- 
formed this process upon his table of wholesale prices by 
using weights for groups of expenditure obtained from an 
elaborate collection of American workingmen's budgets. 
The results of the weighting are lower index numbers for 
all the years of the war except 1865. l Reasons have been 
given in the preceding chapter, however, for distrusting 
Falkner's table of prices, and it therefore seems unwise to 
accept the weighted series, which is but a modification of 
the unweighted, and open to all criticisms urged against the 
latter. 

If Falkner's figures are not to be used, the question 
becomes serious whether it is not possible to weight the 
tables that have been preferred to his in such fashion as to 
take account of the relative importance of various items of 
expenditure. The obstacle in the way is that the tables do 
not contain price series for many of the commodities that 
figure most prominently in family outlay. In the quarterly 
table of wholesale prices, there are no series for men's cloth- 
ing, tea, or house rent, and in many other cases it would be 
necessary to infer changes in the price of consumption goods 
from changes in the price of materials e. g., shoes from 
harness leather. The same obstacle is even more serious in 
the case of the table of retail prices, for it contains even 
fewer series than the quarterly table. Of course, an elabo- 
rate scheme of weights is of no advantage unless one has 
corresponding price series to which to apply the weights. 
Without such data the attempt at improving the character of 
the table by weighting is futile. 

The fact that a satisfactory plan of allowing for the 
importance of the various price series is not attainable with 
the budgetary and price data at our disposal ought not, how- 

Aldrich Report, Part I, pp. 93, 94. 



WAGES 337 

ever, to prejudice us in advance against the results that can 
be obtained from our unweighted tables. Statistical experi- 
ence has shown abundantly that where there is no biased 
error in the figures, the application of weights to a large 
number of series makes little change in the final averages. 
Even in a time of such remarkable fluctuations as that of 
the Civil War, Falkner's simple and weighted series are very 
similar, and there is no reason for assuming that an applica- 
tion of weights to the tables of the last chapter, were such 
an application possible, would seriously modify the character 
of the results. 1 As has been said frequently before, the 
margin of error in all such computations as the present is 
wide, and the differences introduced by weighting would not 
be great in comparison with differences that might be made 
by the possession of a wider range of data for prices or 
money wages. 

If we are to content ourselves with the tables of the last 
chapter from a conviction that with the data at hand we 
cannot weight them satisfactorily, it remains only to decide 
what series shall be used as the index of increase in living 
expenses. Both the wholesale and retail series have char- 
acteristic advantages. The former contains a larger number 
of articles and, moreover, gives index numbers for January 
and July that can readily be applied to the figures for rela- 
tive wages obtained from the Aldrich Report. On the 
other hand, the latter table is better because based on retail- 
price returns. But a glance back at Table XVIII, where 
the two series are presented side by side, shows that it does 

1 It may be pointed out that the problem of weighting as affecting the wage 
tables is quite different from the problem as affecting the price tables. The reason 
for this difference is that there is a biased error in the wage statistics that is, the 
wage-series representing the lower and most numerous grades of laborers show 
rather uniformly a more considerable advance in pay than the series representing 
the higher and less numerous grades. Therefore, weighting the series according to 
number of employees represented gives higher figures. But there is no reason for 
assuming that the articles of much importance as items of expenditure would show 
a uniformly higher or lower range of prices than the articles of slight importance. 



338 HlSTOBY OP THE GREENBACKS 

not matter greatly which series is used. The chief differ- 
ence is that prices at retail show a somewhat more slug- 
gish movement than prices at wholesale not exhibiting a 
fall in 1861, rising less rapidly from 1862 to 1864, and fall- 
ing less promptly in 1865. Consequently it seems fair to 
use in any case the series that applies most conveniently to 
the wage statistics in hand, but with the constant remem- 
brance that the wholesale figures probably show somewhat 
too large a purchasing power of wages in 1861 and again in 
1865, and too small a purchasing power in the earlier years 
of the war. 

One other question remains: Shall the arithmetic mean 
or the median of the price tables be employed ? In the last 
chapter it was argued that the latter is a more significant 
form of average for the years of the war, but in the present 
chapter the arithmetic mean alone has been used in making 
the wage tables. The median was not used in the latter case, 
however, simply because the absence from among the wage- 
series in Tables XXI and XLII of such cases of extreme 
advance as are found among the price-series, shows that 
the fluctuations of relative wages were much more uniform 
than the fluctuations of relative prices as exhibited in Table 
IX. Therefore, there can be no such divergence between 
the two forms of average for relative wages as for relative 
prices. A trial of the semiannual wage-table for the single 
date, January, 1865, has shown that the median is a trifle 
lower than the arithmetic mean for males and a trifle higher 
for females. 1 Since the results of the two methods of averag- 
ing are so nearly identical, there is no valid objection against 
using the arithmetic mean of relative wages in the same way 
that the median would be used had two sets of averages been 
computed. In the tables of the following section, therefore, 
the median of the price-series will be employed, for the rea- 

i Sec. iii, p. 292, above. 



WAGES 339 

son that it was preferred in chap. iv. Computations based 
on the arithmetic mean would show a lower range of real 
wages. 

X. RELATIVE BEAL WAGES 

It is now possible to combine the results of the investi- 
gations into money wages and into prices with the pur- 
pose of obtaining an idea of the manner in which the 
issue of greenbacks affected the material well-being of 
families dependent on wages. Despite all that has been 
said, it may not be superfluous to enter once again a 
caution that the results obtained can be nothing more 
than rough approximations. The limitations of the wage 
data have been dwelt upon at length, and the tables have 
shown that the money incomes of some workingmen's 
families increased much more than those of others. No 
columns of "average variations" can give an adequate 
notion of these differences. If one set of figures shows 
fairly the changes in the pay of any one man or class of 
men, it must from that very fact be inaccurate as applied to 
others. Limitations not less serious exist in the price- 
series that are to be used as indicative of changes in the 
cost of living. Families living side by side in the same 
town have different scales of expenditure, and therefore will 
be affected in different degrees by price fluctuations. And 
an examination of the retail-price series, as given in the 
Appendix, will show that the living expenses of men receiv- 
ing similar incomes did not vary in the same degree in dif- 
ferent towns. To bring this fact out more clearly a table 
has been compiled showing the average variations in the 
retail prices of thirty-six articles in the four towns for which 
the fullest reports are found in the Census volume. 

If it is well to enter this caution, it is equally well to 
guard against an undervaluation of the results. Though 
the data both of wages and of prices leave much to be 



340 



HISTORY OP THE GREENBACKS 



TABLE XLV 

RELATIVE RETAIL PRICES OF THIRTY-SIX COMMODITIES IN FOUR TOWNS (AVERAGE 
PRICES FOR EACH YEAR) 



Year 


New Cumber- 
land, W. Va. 


Canton, O. 


Zanesville, O. 


Lawrence- 
burg, Ind. 


1860 


100 


100 


100 


100 


1861 


155 


93 


115 


99 


1862 


203 


141 


135 


128 


1863 


236 


210 


176 


165 


1864 


264 


283 


248 


218 


1865 


265 


246 


221 


183 


1866 


222 


207 


209 


170 



desired in fulness, they have been carefully collected from 
reliable sources and show the actual wages paid to thou- 
sands of employees for work of a diverse character per- 
formed in many different places, and the actual prices paid 
at wholesale and at retail for many articles of great impor- 
tance. So far as the material extends, there is little reason 
to doubt its substantial accuracy. Confidence in its repre- 
sentative character is strongly supported by the uniformity 
in the results obtained regarding both wages and prices 
from the figures drawn from different sources. Finally, 
though there are many deviations from the general averages, 
the trend of fluctuations is the same in almost all cases. It 
seems, then, that we may proceed to combine the two sets of 
tables with a considerable degree of confidence in the sig- 
nificance of their results. 

This combination may begin with Tables XXI and XIV. 
In Table XXI the wage-earners included in the series 
drawn from the main exhibits of the Aldrich Report are 
classified according to the relative change in wages between 
1860 and January, 1865. The more conservative price- 
series of Table XIV indicates that prices had more than 
doubled within this period. But of the 4,751 employees 
accounted for in Table XXI the pay of but thirty-nine 



WAGES 341 

had increased as much as 100 per cent. less than one 
in a hundred. The remaining ninety-nine wage-earners 
in every hundred must have suffered in no inconsider- 
able degree from the paper standard of value, because 
their money incomes had risen less rapidly than the 
cost of commodities. Of the men, half had received an 
increase of less than 54 per cent, in pay, and of the women 
half less than 34 per cent. If money income increases but 
one-half, while living expenses double, real income is 
reduced a quarter; this, or worse than this, appears to have 
been the case with half the men and much more than half 
the women. It seems clear, then, that practically all wage- 
earners found themselves in more straightened circumstances 
in 1865 than in 1860, and that in the majority of cases the 
inconvenience suffered was not slight. 

This combination refers to a single year. Some notion 
of the rapidity of the changes that took place in the circum- 
stances of working-people may be gained by turning to the 
tables that represent the fluctuations of money wages year 
by year. Table XXX gives the average relative wages of 
over 5,000 persons from 1860 to 1866. A series showing 
average changes in real wages to July, 1865, may be readily 
computed from these figures and the price index numbers of 
Table XIV. In making the computation both columns for 
relative wages and the lower column for relative prices 
the median have been employed. 

According to these figures, the average relative purchas- 
ing power of money wages over the commodities included in 
our largest price table was at its lowest ebb from the middle 
of 1864 to the beginning of 1865 although money wages 
at this time were nearly half again as great as they had 
been before the war. From this low point there was an 
extraordinary recovery owing to the very rapid fall of prices 
between January and July, 1865. It must not be forgotten, 



342 



HISTORY OF THE GREENBACKS 



TABLE XLVI 

AVERAGE CHANGE IN REAL WAGES OF OVER 5,000 WAGE-EARNERS, COMPUTED 
FROM TABLES XIV AND XXX 



Date 


Variable 
Weights 


Constant 
Weights 


Date 


Variable 
Weights 


Constant 
Weights 


1860, January.. 
July 


100 
100 


100 
99 


1863, January.. 
July 


89 
86 


88 
86 


1861, January.. 
July 


102 
104 


102 
104 


1864, January. . 
July 


81 
71 


82 
72 


1862, January . . 
July 


102 
101 


102 
100 


1865, January . . 
July. . 


67 
97 


68 
99 















however, that this fall was much more sudden in wholesale 
than in retail markets, and therefore the figures give an 
altogether too favorable picture of the situation of the 
workingman's family in the middle of 1865. Even accord- 
ing to the wholesale price table there was a sharp reaction 
of prices in the latter part of the year that would make the 
real wage-index number for October considerably less than 
that for July, had we data for computing it. 

It would be interesting to apply the retail-price table to 
these same figures for relative wages and see how different 
the results would be. But such an application is scarcely 
legitimate, because the retail prices are averages for the 
year and the wages are the rates prevailing in but two 
months. On the whole, therefore, it seems best to rest con- 
tent with the rather vague modification of the preceding 
series suggested by the relation between wholesale and 
retail prices brought out in the last chapter. 

With these results may be compared similar figures 
computed from the tables of the Aldrich Report. The 
re- working of the price data in the last chapter and of the 
wage data in the present chapter has led to the conclusion 
that Falkner's methods of analysis show too slight an 
advance in both cases. The question remains whether the 
failure to gauge the full extent of the rise in prices is offset 



WAGES 343 

by the failure to gauge the full extent of the rise of money 
wages. To answer this question two series of relative real 
wages have been computed from Falkner's tables by using 
his weighted and his simple averages for both wages and 
prices. 

TABLE XL VII 

COMPARISON OP BELATTVE SEAL WAGES AS SHOWN IN TABLE XLVI, WITH BELATIVE 
EE.YL WAGES COMPUTED FEOM FALKNEIl'S TABLES 

Falkner's Tables 

Table XLVI Simple Weighted 

Averages Averages 

1860, January - 100 ) inft inft 
July 100 \ 

1861, January - 102 ) inn lrV7 
July 104 \ 

1862, January - 102 ) 87 1QO 
July - 101 f 

1863, January 89 f 74 90 
July - 86 I 

1864, January - 81 ) 66 78 
July 71 \ 

1865, January 67 ) RR KA 
July - 97 \ 

On the whole, there is less difference between these results 
for real wages than between the results of the tables of 
prices or of money wages. The extreme depression of real 
wages in all three series is about the same, and except in 
1865 the impression left by Falkner's weighted average 
agrees very closely with that left by the series from Table 
XLVI. The chief difference is that the semiannual figures 
show the recovery of real wages in the middle of the last 
year a recovery that certainly took place, although its 
completeness is exaggerated by the enforced reliance upon 
wholesale instead of retail price data. 

This examination of the decline in the real wages of all 
employees represented in Table XII of the Aldrich Report 
might be elaborated by making similar computations of real 



344 



HISTORY OP THE GREENBACKS 



wages in the several industries, occupations, and wage-groups 
of the preceding tables. The reader who will compare the 
figures for money wages in these tables with the figures for 
prices will find that in no case did the wage-earners escape 
a considerable loss in real income. By way of illustration, 
three tables based upon the most significant groupings of 
the wage-series are presented below. In examining them, 
one must remember that, like the preceding tables, they 
overstate real wages in July, 1865. 

TABLE XLVHI 

AVRRAOE CHANGE IN SEAL WAGES IN XI NK INDUSTRIES, COMPUTED FROM TABLES 

XIV AND X X 1 1 1 1 



Date 


City 
Public 
Works 


Illumi- 
nating 
Gas 


Stone 


Build- 

ill!,' 

Trades 


Metals 
ami Me- 
tallic 
Goods 


Rail- 
ways 


Cotton 
Goods 


Ging- 
hams 


Wo'len 
Goods 


1860, Jan.. 


100 


100 


100 


100 


100 


100 


100 


100 


100 


July. 


100 


99 


100 


102 


101 


103 


101 


100 


103 


1861, Jan.. 


100 


100 


128 


101 


102 


105 


97 


103 


106 


July. 


96 


104 


96 


107 


108 


111 


102 


115 


113 


1862, Jan.. 


99 


100 


96 


103 


105 


105 


98 


105 


108 


July. 


96 


100 


87 


104 


105 


100 


95 


107 


108 


1863, Jan.. 


94 


96 


77 


91 


88 


82 


82 


84 


92 


July. 


88 


102 


81 


85 


86 


78 


78 


77 


82 


1864, Jan.. 


89 


98 


89 


80 


78 


71 


76 


66 


76 


July. 


85 


81 


68 


72 


70 


56 


65 


59 


64 


1865, Jan.. 


77 


77 


68 


64 


65 


63 


61 


57 


62 


July. 


111 


109 


94 


99 


94 


91 


88 


93 


89 



Extended comment upon these tables is superfluous. 
While the fluctuations of real wages are seen to have been 
by no means uniform in all cases, there is no industry or 
occupation in which the advance in money wages kept pace 
with the advance in prices. The differences represent 
merely greater or less degrees of inconvenience, not to say 
suffering. Perhaps the most interesting of the tables is the 
third, for it brings out once more the rule that the incomes 
of those families nearest the minimum of subsistence before 

' The variable-weight wage-series are used here. 



WAGES 



345 



TABLE XLIX 

AVEEAOE CHANGE IN SEAL WAGES, IN NINE OCCUPATIONS, COMPUTED FROM TABLES 

XIV AND XXV 



Date 


Labor- 
ers 


Quar- 
rymen 


Masons 


Stone- 
cutters 


Car- 
penters 


Hold- 
ers 


Machi- 
nists 


Fire- 
men 


Weav- 
ers, 
Female 


1860, Jan.. 


100 


100 


100 


100 


100 


100 


100 


100 


100 


July. 


100 


100 


99 


101 


100 


102 


100 


102 


99 


1861, Jan.. 


100 


114 


101 


100 


99 


104 


103 


103 


103 


July. 


98 


96 


100 


108 


106 


108 


109 


107 


115 


1862, Jan.. 


100 


100 


99 


91 


103 


105 


107 


102 


104 


July. 


98 


87 


100 


92 


100 


103 


107 


106 


109 


1863, Jan.. 


95 


78 


85 


79 


80 


85 


92 


92 


85 


July. 


90 


81 


80 


80 


79 


83 


89 


101 


79 


1864, Jan.. 


89 


92 


76 


75 


78 


76 


80 


101 


68 


July. 


84 


69 


66 


73 


70 


68 


71 


79 


58 


1865, Jan.. 


76 


71 


63 


68 


67 


65 


67 


75 


59 


July. 


110 


96 


92 


99 


98 


94 


95 


106 


92 



the war were reduced relatively less than the incomes of 
families in easier circumstances. 

It does not seem worth while to multiply examples of 
decline in the purchasing power of the money incomes of 
wage-earners by computations based on the wage-series 

TABLE L 

AVERAGE CHANGE IN BEAL WAGES IN FIVE WAGE-GBOUPS COMPUTED FBOM TABLES 

XIV A1ID XXVIII B 



Males Earnings in 1860, Daily Wages of 





$0.25 $0.99 


$1.00 $1.49 


$1. 50-$1.99 


$2.00 $2.49 


$2.50+ 


1860, January 


100 
102 
100 
107 
102 
103 
88 
85 
79 
69 
65 
94 


100 
100 
102 
100 
101 
98 
92 
87 
87 
76 
71 
101 


100 

100 
102 
107 
105 
105 
89 
86 
79 
69 
66 
95 


100 
100 

100 
103 
99 
97 
79 
78 
73 
68 
62 
93 


100 
100 
99 
105 
100 
95 
75 
73 
66 
57 
54 
76 


July... 


1861, January 


July 


1862, January 


July 


1863, January 


July 


1864, January 


July 


1865, January 


July 





346 



HISTORY OP THE GREENBACKS 



drawn from the Tenth Census. Were this done, a some- 
what harsher state of affairs would be shown, for the 
absence of data regarding numbers employed produces a 
general average advance in wages less than that computed 
from the completer data of the Aldrich Report. 1 But there 
is one point brought out by Table XLI that deserves 
further notice viz., the difference between the rise of 
wages in the East and West. It was found that even if the 
comparison be confined to members of the same trade, the 
average increase in wages seems to have been somewhat 
greater in the north central than in the north Atlantic states. 
It is interesting to see whether this difference can be 
accounted for on our general hypothesis, that the rise of 
wages was due chiefly to the increased cost of living. If 
so, prices must have advanced more rapidly in the West 
than in the East. The Census statistics of retail prices 
mak it possible to discover whether or not this was the 
case, for there are 239 series from the East and 287 from 
the West. An exhibit of the relative prices of the fifty- 

TABLE LI 

RELATIVE RETAIL PRICES OF FIFTY-EIGHT ARTICLES IN THE EAST AND WEST 

BY GROUPS 





Dry 
Goods 


Men's 
Heavy 
Boots 


Gro- 
ceries 


Flour 
and 
Meal 


Rice, 
Beans, 
Potat's 


Meat 
and 
Fish 


Eggs, 
Dairy 
Prdcts. 


Fuel 


House 
Rent 




E 


W 


E 


W 


E 


W 


E 


W 


E 


W 


E 


W 


E 


W 


E 


W 


E 


W 


No. of 


9 


9 


1 


1 


11 


11 


4 


4 


3 


3 


19 


19 


4 


4 


5 


5 


2 


2 


Articles 






































No. of 


42 


66 


8 


19 


33 


51 


17 


16 


12 


14 


79 


57 


14 


20 


73. 


18 


12 


7 


Pr. Ser. 






































1860. 


100 


100 


100 


100 


100 


100 


100 


100 


100 


100 


100 


100 


100 


100 


100 


100 


100 


100 


1861. 


132 


122 


105 


101 


116 


98 


103 


111 


111 


103 113 


103 


112 


92 


118 


105 


100 


99 


1862. 


219 


186 


116 


121 


143 


119 


111 


117 


145 


130 117 


110 


116 


109 


128 


126 


106 


1(X 


1863. 


299 


285 


129 


142 


166 


159 


124 


179 


156 


160 125 


1K> 


128 


131 


1(52 


161 


105 


120 


1864. 


386 


414 


151 


216 


207 


201 


160 


212 


178 


1*5 145 


168 


149 


174 


185 


168 


123 


136 


1865. 


365 


865 


157 


168 


209 


211 


166 


235 


183 


183 164 


175 


172 


196 


188 


164 


132 


139 


1866. 


287 


301 


156 


153 


205 


215 


167 


243 


184 


203 


172 


174 


168 


195 


183 


162 


138 


141 



i See sec. vii, p. 32S, above. 



WAGES 



347 



eight articles arranged in nine groups is presented in 
Table LI. 

This table indicates that boots, flour and meal, meat and 
fish, and eggs and dairy products increased more in price in 
the West, while the opposite is true of fuel, and the remain- 
ing groups dry goods, groceries, rice, beans, and potatoes, 
and house rent varied in about the same degree in both 
sections. If the arithmetic mean be struck of the relative 
prices of all the fifty-eight articles in the Census list, the 
advance is found to be greater in the West, as the next table 
shows : 

TABLE LII 

AVEBAGE RELATIVE PRICES AT RETAIL. OF FIFTY-EIGHT COMMODITIES IN THE 
EAST AND WEST 



Date 


East 


West 


I860.. 
1861 


100 
116 


100 

105 


1862 


139 


126 


1863 


164 


169 


1864 


200 


216 


1865 


206 


215 


1866 


196 


207 









These figures lend strong support to the view that the 
difference between the advance of relative wages in the two 
sections of the North was in large measure due to the unlike 
changes in relative cost of living. 

XI. CONCLUSION 

All of the statistical evidence that has been presented in 
the preceding pages supports unequivocally the common 
theory that persons whose incomes are derived from wages 
suffer seriously from a depreciation of the currency. The 
confirmation seems particularly striking when the conditions 
other than monetary affecting the labor market are taken 
into consideration. American workingmen are intelligent 



348 HISTORY OP THE GREENBACKS 

and keenly alive to their interests. There are probably few 
districts where custom plays a smaller and competition a 
larger rOle in determining wages than in the northern states. 
While labor organizations had not yet attained their present 
power, manual laborers did not fail to avail themselves of 
the help of concerted action in the attempt to secure more 
pay. Strikes were frequent. 1 All these facts favored a 
speedy readjustment of money wages to correspond with 
changed prices. But more than all else, a very considerable 
part of the labor supply was withdrawn from the market into 
the army and navy. In 1864 and 1865 about one million of 
men seem to have been enrolled. 2 What proportion this 
number forms of the wage-earners can be very roughly esti- 
mated from the Census statistics of occupations. Accord- 
ing to the Eighth Census, there were 6,791,844 persons 
engaged in gainful occupations in the loyal states in I860. 3 
If we assume that as large a proportion of wage-earners 
went to the war as of those who were working on their own 
account, it follows that about one-seventh of the labor supply 
withdrew from the market. But despite all these favoring 
circumstances, the men who stayed at home did not succeed 
in obtaining an advance in pay at all commensurate with the 
increase in living expenses. 

It is sometimes argued that the withdrawal of laborers 

1 The Springfield Republican of March 26, 1863, said : " . . . . the workmen of 
almost every branch of trade have had their strike within the last few months. No 
less than six strikes are reported by the New York papers this week, of laborers on 
the Erie, Hudson River, and Camden and Amboy railroads, the journeymen tailors 
of the city, and the employees of two large manufacturing companies .... in almost 
every instance .... the demands of the employed have been acceded to. These 
strikes, which have all been conducted very quietly, .... have led to the formation 
of numerous trade leagues or unions." 

2 The Report of the Secretary of War for 1865 states the number of men enrolled 
as 970,710, May 1, 1864 ; 965,591, March 1, 1865; and 1,000,516, May 1, 1865. Pp. 1, 5, and 13. 
The Report of the Secretary of the Navy for the same year states that the number of 
men in service in the navy increased from 7,600 at the commencement of the war to 
51,500 at its close. The number of men employed in the navy yards increased in the 
same period from 3,844 to 16,880. P. xiii. 

3 Compiled from the table on p. 630 of the volume on Population. 



I WAGES 349 

from industrial life was the chief cause of the price dis- 
turbances of the war period. This withdrawal, it is said, 
caused the advance of wages, and greater cost of labor led to 
the rise of prices. The baselessness of this view is shown 
by two facts, established by the preceding tables first, that 
the advance of. wages was later than the advance of prices, 
and second, that wages continued to rise in 1866 after the 
volunteer armies had been disbanded and the men gone 
back to work. 

Though the figures developed in the foregoing analysis 
show a slightly smaller decline in real wages than those 
heretofore accepted on the authority of the Aldrich Report, 
it is probable that even the new figures overstate rather 
than understate the actual injury suffered by wage-earners. 
The tables used as an index of the change in cost of living 
really show what would have been the relative cost of the 
articles included in the price lists had people continued to 
purchase them in the same proportions as before the war. 
But, of course, the character of the consumption of most 
families did not remain unchanged. In many cases it was 
possible to substitute some other article for one which had 
risen more than common in price. Thus woolen, linen, and 
other fabrics were largely made to take the place of cotton 
goods, and cheaper beverages took the place of tea and 
eoffee. In so far as the substitutes were less agreeable as 
articles of consumption, the change represents a loss of eco- 
nomic satisfaction. But the degree of this loss of satisfac- 
tion is exaggerated somewhat by a table that shows the 
increase in cost of the less-used article ; for the motive for 
buying other things is found precisely in the possibility of 
thus avoiding a portion of the inconvenience caused by the 
high prices. 

As the price tables probably exaggerate the increase in 
relative living expenses, so the wage tables probably under- 



350 HISTORY OP THE GREENBACKS 

estimate the increase in the income of working-people. The 
reason for thinking thus is that wage-earners seem to have 
been more fully employed during the war than in common 
times of prosperity. Of course, the enlistment of so many 
thousands of the most efficient workers made places for 
many who might otherwise have found it difficult to secure 
work. Moreover, the paper currency itself tended to obtain 
full employment for the laborer, for the very reason that 
it diminished his real income. In the distribution of what 
Marshall has termed the "national dividend" a diminu- 
tion of the proportion received by the laborer must have 
been accompanied by an increase in the share of someone 
else. Nor is it difficult to determine who this person was. 
The beneficiary was the active employer, who found that the 
money wages, interest, and rent he had to pay increased less 
rapidly than the money prices of his products. The differ- 
ence between the increase of receipts and the increase of 
expenses swelled his profits. Of course, the possibility of 
making high profits provided an incentive for employing as 
many hands as possible. But here we are trenching upon 
the subject of a later chapter. 

The importance of these factors the changes in the 
character of consumption and the fuller employment as 
affecting the material well-being of wage-earners is inca- 
pable of statistical measurement with the materials at hand. 
But while they must be recognized as modifying in consider- 
able measure the inferences to be drawn from the series of 
"changes in real wages" given above, it can hardly be that 
they sufficed to compensate many families for the increased 
money cost of living. Most families were doubtless forced 
to practice economies of a very uncomfortable character to 
make both ends meet. 

After such an examination of the change in the condition of 
the great mass of wage-earners, it may seem surprising that 






WAGES 351 

few complaints were heard from them of unusual privations. 1 
This silence may be due in part to the fact that a conJder- 
able increase of money income produces in the minds of many 
a fatuous feeling of prosperity, even though it be more than 
offset by an increase of prices. But doubtless the chief 
reason is to be found in the absorption of public interest in 
the events of the war. The people both of the South and 
North were so vitally concerned with the struggle that they 
bore without murmuring the hardships it entailed of what- 
ever kind. Government taxation that under other circum- 
stances might have been felt to be intolerable was submitted 
to with cheerfulness. The paper currency imposed upon 
wage-earners a heavier tax amounting to confiscation of 
perhaps a fifth or a sixth of real incomes. But the working- 
men of the North were receiving considerably more than a 
bare subsistence minimum before the war, and reduction of 
consumption was possible without producing serious want. 
Accordingly the currency tax, like the tariff and the internal 
revenue duties, was accepted as a necessary sacrifice to the 
common cause and paid without protest by severe retrench- 
ment. 

1 Compare D. A. WELLS, Recent Financial, Industrial, and Commercial Experi- 
ences of the United States (New York, 1872), p. 22. 



CHAPTER VI 

RENT 

I. Urban Rents: 

Use of Term "Rent" Long and Short Leases Wells's Investiga- 
tions into House Rents Statistical Data from the Tenth Census 
Rents in Eastern and Western States In Cities and Towns Nar- 
row Range of the Data. 
II. Farm Rents: 

Farms Let for Money Rents Farms Let "on Shares." 

I. URBAN RENTS 

IN studying the influence of depreciation upon rent, it is 
necessary to use that term in its popular rather than in its 
scientific sense. The distinction, so dear to the economist, 
between payment for situation and return on capital invested 
in improvements, cannot be maintained in a discussion based 
on figures which show simply the sums paid for the use of 
real property. This fact is less to be lamented, because the- 
theorist himself admits that the distinction becomes sadly 
blurred when he attempts to deal with short intervals of 
time. Capital once invested in improvements can seldom be 
withdrawn rapidly. In "the short run," therefore, it is 
practically a part of the land, and the return to it follows 
the analogy of rent rather than of interest. 1 

Like the lending capitalist, the renting landlord found 
that the degree in which he was affected by the fluctuations 
in the value of the paper money depended largely upon the 
terms of the contract into which he had entered. It is clear 
from the preceding chapters that the landlord who before 
suspension had leased his property for a considerable period 
without opportunity for revaluation must have suffered 

1 Compare MARSHALL, Principles of Economics, Book V, chaps, viii, ix. 

352 



RENT 353 

severely if paid in greenbacks. The number of "dollars" 
received as rental might be the same in 1865 as in 1860, 
but their purchasing power was less than one-half as great. 

Somewhat less hard was the situation of the landlord 
who had let his property for but one or two years. At the 
expiration of the leases he had opportunities to make new 
contracts with the tenants. To ascertain accurately how far 
he succeeded in recouping himself for the rise of prices by 
increasing rentals, elaborate statistics of the sums paid for 
the use of different classes of real estate would be necessary. 
Unfortunately, such figures are scanty, and such as are avail- 
able refer entirely to urban property. 

In his capacity as special commissioner of the revenue, 
Mr. David A. Wells devoted some attention to the rise of 
rent. His report for December, 1866, says: 

The average advance in the rents of houses occupied by mechan- 
ics and laborers in the great manufacturing centers of the country 
is estimated to have been about 90 per cent.; in some sections, 
however, a much greater advance has been experienced, as, for 
example, at Pittsburg, where 200 per cent, and upward is reported. 
In many of the rural districts, on the other hand, the advance has 
been much less. 1 

In his third annual report, dated January, 1869, Mr. 
Wells modified this estimate somewhat. Edward Young 
had prepared for him " tables showing the comparative cost 
of provisions, groceries, domestic dry goods, house rent, etc., 
in the manufacturing towns of the United States in the 
respective years 1860-61 and 1867-68." These tables made 
out an average increase of about 65 per cent, in rents. Mr. 
Wells remarked, however, that 

this .... average is .... largely affected by the circumstance 
that in New England, where manufacturing companies .... very 
generally own the tenements occupied by the operatives, rents have 

i Senate Executive Document No. 2, 39th Cong., 2d Sess., p. 14. 



354 



HISTORY OP THE GREENBACKS 



not been advanced to any considerable extent. Excluding New 
England from the calculation, the average advance in rents for 
1867, as compared with 1860-61, must be estimated at a much 
higher figure. Thus in the smaller manufacturing towns of Penn- 
sylvania the average increase in the rents of houses occupied by 
operatives is believed to have been about 81 per cent., and in New 
Jersey 111 per cent. In the cities of New York, Philadelphia, 
Newark, and Pittsburg the increase has been from 90 to 100 per 
cent. 1 

Young's figures, on which these conclusions were based, 
are as follows: 

TABLE Lin 

HOUSE RENT IN MANUFACTURING TOWNS 1860-61 AND 1867-68* 



STATE 


FOUK-ROOM TENEMENTS 


SIX-ROOM TENEMENTS 


1860-61 


1867-68 


Per 

cent, of 
In- 
crease 


1860-61 


1867-68 


Per 
cent, of 
In- 
crease 


Maine 


$3.25 
2.42 

5.86 
5.93 
4.04 
4.20 
5.60 
4.67 
4.00 


$5.67 
3.68 
10.28 
9.63 
5.77 
6.85 
9.60 
10.00 
5.00 


74 
52 
75 
62 
43 
51 
71 
114 
25 


$4.67 
3.17 
6.54 
9.11 
4.56 
5.78 
8.00 
7.17 
5.17 


$8.17 
5.75 
10.14 
11.69 
6.81 
9.37 
15.20 
15.00 
6.33 


75 
81 
55 

28 
49 
62 
90 
109 
22 


N. Hamp., Vermont 
Massachusetts 
Rhode Island 
Connecticut 


New York 


Pennsylvania 
New Jersey 


Delaware 




General average . . 


$4.44 


$7.39 


66 


$6.02 


$9.83 


63 



These figures become more significant for the present 
purpose when interpreted in the light of the similar data 
already presented in part in the chapter on prices. 3 The 
latter figures are taken from Mr. Weeks's report in the Tenth 
Census and show the relative rents paid for four- and six- 

1 H. R. Executive Document No. 16, 40th Cong., 3d Sess., p. 14. 

2 Ibid., Appendix D, pp. 118-21. 

3 See Part II, chap, iv, sec. iv, Table XVII. 



RENT 



355 



or seven-room houses in twenty towns scattered over eleven 
states from Massachusetts to Missouri. Comparison with 
Young's figures, however, should be confined to eastern 
towns, and of these returns are given but for five. 1 In these 
five towns the average increase in rents between 1860 and 
1868 was somewhat less than Young makes out for four- 
room tenements viz., 56 instead of 66 per cent. and 
slightly greater in the case of six-room tenements viz., 
68 as compared with 63 per cent. 

But though it be inferred, as both these sets of data indi- 
cate, that rents of workingmen's houses in eastern towns 
were on the average some 60 or 65 per cent, higher in 1868 
than they had been before the war, it does not at all follow 
that rents had advanced so much as this in 1864 and 1865. 
In fact, the Census figures that cover the intervening years 
indicate that in most towns rents rose during the war more 
slowly than prices, but that, like wages, they continued to 
rise for some time after prices had fallen. Table LIV com- 

TABLE LIV 

RKL ATI VK BENTS IN FIVE EA8TEEN TOWNS AND RELATIVE PRICES * 

(Arithmetic means) 



YEAE 




PRI 


CES 






Retail 


Wholesale 


I860.. 


100 


100 


100 


1861 


100 


116 


101 


1862 


101 


139 


118 


1863 


101 


164 


149 


1864 


120 


200 


191 


1865 


132 


206 


217 


1866 


138 


196 


191 


1867 


141 




172 


1868 


163 




161 











'Boston; Jewett City, Conn. ; Camden, N. J. ; Philadelphia and Hokendauqua, 
Pa. New Cumberland, W. Va., which is included in the East in the table of the pre- 
ceding chapter, is excluded here because Young gives no figures for West Virginia. 

2The figures for rent are simple averages of the ten series for the five towns ; 
the retail prices are from Table LII of chap, v, and the wholesale prices are from the 
Aldrich Report, Part I, p. 91. 



356 HISTORY OP THE GREENBACKS 

pares the fluctuations of rent in the five eastern towns with 
the index numbers for retail prices in the East, as far as 
they extend, and with Falkner's unweighted average of the 
relative prices of all articles. 

According to this table, though owners of small houses in 
these towns may have found themselves approximately as well 
off in 1868 as before the war, they had not escaped severe 
injury from the depreciation of the currency during the 
interim. Elsewhere landlords seem to have been in a rather 
worse plight. In the fifteen western towns for which the 
Tenth Census gave returns the increase in rents of similar 
property seems to have been somewhat less, as Table LV 
shows: 

TABLE LV 

HELATIVB EENT8 IN FIFTEEN WESTERN TOWNS ' 

1860 - - 100 1865 - - 138 

1861 99 1866 139 

1862 108 1867 137 

1863 121 1868 - 135 

1864 - 135 

This contrast between rents in the East and West is vitiated 
to a certain extent by the fact that a much larger propor- 
tion of the western towns were small places. More signifi- 
cant is the comparison between rents in the five cities for 
which figures are given Boston, Philadelphia, Cincinnati, 
Louisville, and St. Louis and the fifteen lesser towns. 2 
Table LVI presents the data in succinct form. 

The conclusion, supported by these figures, that the ad- 
vance in rents was greater in cities than in minor towns, is 
not difficult to accept. In two of the cities Cincinnati 
and Louisville owners of workingmen's tenements appear 

1 The figures are simple arithmetic means of the twenty-eight series. New Cum- 
berland, W. Va., is included. 

2 Louisville, with 68,033 inhabitants in 1860, is the smallest of the cities, and 
Indianapolis, with 18,611 inhabitants, the largest of the towns. 



RENT 



357 



TABLE LVI 

RELATIVE RENTS IN CITIES AND TOWNS 



Year 


Boston 


Phila- 
del- 
phia 


Cincin- 
nati 


Louis- 
ville 


St. 
Louis 


Average for 
Preceding 
Cities 


Average for 
Fifteen 
Lesser 
Towns 


I860 


100 


100 


100 


100 


100 


100 


100 


1861 


100 


100 


84 


129 


90 


101 


99 


1862 


100 


100 


84 


129 


90 


101 


110 


1863 


100 


100 


117 


167 


131 


123 


115 


1864 


138 


133 


207 


221 


131 


166 


120 


1865 


138 


167 


207 


221 


131 


173 


124 


1866 


138 


200 


207 


221 


157 


185 


122 


1867 


138 


200 


167 


167 


157 


166 


128 


1868 


196 


200 


167 


167 


157 


177 


128 



















to have been able to increase their money incomes rather 
more rapidly than prices advanced, but in Boston, Phila- 
delphia, St. Louis, and in all the smaller towns on the list, 
with the possible exception of Terre Haute, their money 
incomes appear to have increased more slowly than living 
expenses. 1 

It must be remembered that these conclusions rest on a 
narrow statistical basis. No figures for house rent can be 
altogether satisfactory because of the change in the charac- 
ter of accommodation from time to time. What figures are 
available refer to one class of property alone such tene- 
ments as are occupied by working people in manufacturing 
towns. For houses of other classes and for business prop- 
erty of all kinds no reliable data are known to me. And 
even for the workingmen's tenements the Tenth Census gives 
but two or three series for each town. But though all this 
be true, the fact remains that the figures seem to be worthy 
of credence for one class of urban property at least, and, in 
the absence of evidence to the contrary, establish a pre- 
sumption that relatively few owners of urban real estate of 
other descriptions escaped injury from the greenback issues. 

1 The figures for all the towns are given in detail in the Appendix, 



358 HISTORY OP THE GREENBACKS 

Even in those cases where rents advanced more rapidly 
than commodity prices it is probable that the greenbacks 
deprived the landlords of a portion of the gains that they 
would otherwise have made. 

II. FARM RENTS 

All the foregoing refers to the rent of urban property. 
For agricultural rents Wells and Weeks give no data. Inas- 
much, however, as custom seems to play a larger r6le in deter- 
mining the price paid per acre for farms than the price paid 
per month for city houses, it is probable that much the same 
difference existed between the advance of rents in the coun- 
try and in the small towns that Table LVI indicates as 
having existed between the advance in towns and in cities. 
If this conjecture be just, it follows that the rural landowner 
suffered serious injury from the paper currency when he let 
his land for a money rent. 

But renting farms for a fixed sum of money has always 
been less common in the United States than renting for a 
definite share of the products. Prior to 1880 the Census 
Office made no attempt to ascertain the tenure on which farms 
were held. In that year, however, 30 per cent, of the farms 
not occupied by their owners are reported as " rented for a 
fixed money value" in the northern and western states, and 
70 per cent, as " rented for a share of the products." Since 
the enumeration of 1890 showed that the practice of accept- 
ing money rent was increasing, so that the above percentages 
had become 35 and 65 respectively, 1 it is probable that at 
the time of the Civil War more than three-quarters of the 
rented farms were let "on shares." Inasmuch as no money 
payments entered into such arrangements, the pecuniary 
relations of landlord and tenant were not directly affected 

i Percentages computed from Table 3 of the Report on the Statistic! of Agricul- 
ture at the Eleventh Census, pp. 116, 117. 



RENT 



359 



by the change in the monetary standard. Farm owners who 
had let their places on these conditions escaped the direct 
losses that weighed so heavily on the recipients of money 
rents. But even they did not avoid all loss. For, as will be 
shown at length in chap, viii, the price of agricultural prod- 
ucts for the greater part of the war period lagged consid- 
erably behind the price of other goods. This difference, of 
course, meant loss to men whose incomes were paid in bush- 
els of grain. 



CHAPTER VII 
INTEREST AND LOAN CAPITAL 

I. The Problem of Lenders and Borrowers of Capital: 

Two Elements in the Problem : Rate of Interest and Purchasing 
Power of Principal Differences in Relative Importance of These 
Elements to Different Lenders and Borrowers. 

II. Purchasing Power of the Principal of Loans: 

Table Illustrating Variations in Purchasing Power of Loans and 
Consequent Loss or Gain of Lenders. 

III. The Rate of Interest: 

Interest on Long-Term Loans On Short-Term Loans Defective 
Character of Statistics Regarding Interest Slight Increase in Rates 
on Short Loans Failure of Lenders and Borrowers to Foresee the 
Future Course of Prices Inability of Lenders to Recoup Them- 
selves for Losses Due to Such Failures Effect of Government 
Loans and Profitableness of Business on the Rate of Interest 
Contraction of Credit Operations During the War Gains of Lend- 
ers after January, 1865 Position of Capitalists Who Invested in 
Federal Bonds. 

I. THE PROBLEM OP LENDERS AND BORROWERS OF CAPITAL 

THE task of ascertaining the effect of the greenback 
issues upon the situation of lenders and borrowers of capital 
is in one respect more simple and in another respect more 
complex than the task of dealing with wage-earners. It is 
simpler in that there are not different grades of capital to 
be considered like the different grades of labor. But it is 
more complex in that the capitalist must be considered not 
only as the recipient of a money income, as is the laborer, 
but also as the possessor of certain property that may be 
affected by changes in the standard money. 

The problem is further complicated by the fact that the 
relative importance of these two items rate of interest and 

360 



INTEREST AND LOAN CAPITAL 361 



value of principal is not the same in all cases. Whether 
a lender is affected more by the one item or the other 
depends upon what he intends to do with his property at the 
expiration of existing contracts. A widow left in 1860 with 
an estate of say $10,000, who expected to keep this sum 
constantly at interest and to find new borrowers as soon as 
the old loans were paid, could neglect everything but the 
net rate of interest received. On the other hand, if this 
estate had been left to a youth of twenty who intended to 
invest his property in some business after a few years, the 
rate of interest would be of relatively less importance to him 
than the purchasing power of the principal when the time 
came to set up for himself. 

Of course, the same difference exists, mutatis mutandis, 
in the case of different borrowers. Those borrowers who 
expected to renew old loans on maturity would have to con- 
sider little beyond the interest demanded by lenders, while 
borrowers who expected to pay off the loans out of the pro- 
ceeds of their ventures would be interested primarily in the 
amount of goods that would sell for sufficient money to make 
up the principal. 

Although these two classes of cases are by no means 
independent of each other, the following discussion will be 
rendered clearer by observing the broad difference between 
them. Accordingly, attention will first be directed to the 
effect of the price fluctuations upon the purchasing power of 
the principal of loans, and afterward to changes in the rate 
of interest. 

II. PURCHASING POWER OF THE PRINCIPAL OF LOANS 

It follows directly from the chapter upon prices that 
most persons who made loans in the earlier part of the Civil 
War and were repaid in greenbacks must have suffered 
heavy losses from the smaller purchasing power of the 



362 HISTORY OP THE GREENBACKS 

principal when it was returned to them. But while this 
general fact is clear, it is difficult to make a quantitative 
statement of the degree of the loss that will be even tolerably 
satisfactory. Indeed, no single series of percentages can 
represent the loss of all lenders, any more than any single 
series can represent the decline in the real wages of all 
laborers, for the reason that the loss depends both upon 
the time of lending and repayment, and upon the particular 
commodities which the capitalist wishes to purchase. Prob- 
ably the best course to pursue is to take the median of 
relative prices at wholesale as the most reliable index of 
general price movements, and work out a table based upon 
it which shall show the relative rise or fall in the purchasing 
power of money from quarter to quarter. Such a table is 
given on the next page. 

The first line of figures across the top of this table, 
showing the relative purchasing power of money, is 
obtained by computing the reciprocals of the corresponding 
index numbers for prices as given in Table XIV. To see 
how the variations shown by this series of figures affected 
the interests of lenders, a number of loans is supposed 
to be made each quarter, one of which matures and is repaid 
each subsequent quarter. The second to the twenty-fourth 
lines of figures across the table show what was the percent- 
age of loss or gain in the purchasing power of the prin- 
cipal in the months of repayment as compared with the 
months when the loans were made. To obtain these series, 
the figure representing the relative purchasing power 
of money each quarter is taken as the starting-point, and 
the corresponding figures for each subsequent quarter are 
treated as percentages of the first. For example, the loss 
on a loan made in January, 1863, and repaid in January, 
1865, is stated as 43 per cent., because 44, which represents 
the relative power of money at the later date, is only 57 



INTEREST AND LOAN CAPITAL 



363 



TABLE LVII 

PBBCENTAGB OF LOSS (-) OE GAIN (-)-) TO CEEDITOE IN PDBCHASING POWEE OF 
PBINCIPAL OF LOANS MADE AND BEPAID AT DATES INDICATED 1 


i 


1 


g 


3 


3 


i 


S 


7 


s 

4 


M 

7 


3 

i 


3 
i 


3 
T 


1 


"i 


'l 


8o4i-ioc4eir~r~^**l 
S'--<N ^1 
1 ) 1 1 1 + + + +![ 


$ 


s 


I 


5 


S 

i 


to 
1 


'> 


r 




7 


B 


B 
i 


B 
i 




T 


R 


l 


777+?? + + ?! 


1 


s 


S 
1 


i 


3 
i 


7 


s 
i 


T 


7 


i 


7 


i 


S 


S 
i 


! 


1 1 7 7 1 + + + S * 


4 


3 


8 
i 


g 
i 


S 
i 


1 


i 


i 


T 


T 


g 
i 


S 
1 


S 


3 

T 


i 


S S S 8 S3 2 " 
i. i i i i i i 2 i 


^ 


3 


5 


i 


i 


1 


1 


9 

i 


i 


i 


10 

1 


? 


? 


o 


3 
1 


i 


S " g 13 2 '* S d 

T i i i 7 i M m . 


= 


g 


S 

l 


g 
i 


I 

I 


g 


3 
i 


i 


" 


8 
i 


g 

i 


g 

1 


7 


-* 
1 


i 


S 3. S 2 S | 5 
i i i i i S 


1 


E 


i 


T 


I" 


7 


5 
i 


5 


i 


7 


T 


1 


i 


i 



i 


7 ? i i 2 





8 


8 
i 


R 
T 


i 


i 


S 
i 


3 
i 


i 


7 


R 
i 


T 


R 

i 


B 


7 


77711 


1 


3 


B 


i 


S 
l 


S 
1 


R 
i 


"i 


1 


7 


s 

i 


s 
t 


s 

i 


B 
i 


S 


i 


" 7 i 4 


>* 
a 


r- 


i 


"i 


"l 


S 
1 


i 


a 
1 


i 


"i 


i 


?: 


B 

i 


i 


i 


: l ' 


i 


g 


8 

1 


g 
i 


s 


R 
i 


7 


1 





1 

i 


I 


i 





7 


i 


t 

8 
1 

i 

i 

f 
I 

j 

1 


,* 


P 


a 


R 


B 


13 
i 


R 


I 


"i 


B 


R 


R 
i 


i 





4 


i 


| 


s 


i 


17 


I 


,- 


I 


i- 





,7 


.7 


I 





OoW 1862 


1 


1 


i 


i 


i 


i 


1 


1 




j 


I 


s 


i 


1 


7 


i 


T 


t 


i 


l" 


1 


i 


1 


I 





1 





a 






1 


i 






April, 1862 


4 


I 








o 





* 


1 


i 


O 


I 
4 


I 


3 


8 














o 


T 


i 


'Oct.. 1801 


g 


8 


- 


9 




- 


5 


7 


1 


i 


S 








_ 


I 





1 


1 












4 


8 


o 











4 


i 


J 


S 













% 


8 


o 





< 


1 


8 





1 

! 


-s 


1 


i 






Average relative purchasing 
power of money over com- 
moditiea at wholesale. 



364 HISTORY OF THE GREENBACKS 

per cent, of 77, which represents its purchasing power at 
the earlier date. 1 

The conclusion to be drawn from the table is so clear as 
hardly to require formal statement. In the case of almost 
all loans made before the middle of 1864 and repaid at any 
subsequent time embraced by the table, the creditor found 
that the sum returned to him had a purchasing power much 
less than the purchasing power that had been transferred to 
the borrower when the loan was made. According to the 
figures, this decline varied from 1 to more than 50 per 
cent. On loans made in the middle of 1864 or later, on the 
contrary, the creditor gained as a rule. In the case of 
loans made in January, 1865, and repaid six months later, 
the increase in purchasing power was over 40 per cent. It 
may not be unwise, however, to enter once again a caution 
against taking such figures too literally. 2 

III. THE BATE OP INTEREST 

In turning to study the fortunes of men who have no 
thought of employing their capital for themselves, but 
expect 'to seek new borrowers as rapidly as old loans are 
repaid, one finds it necessary to distinguish between 

1 A more strictly accurate method of estimating the relative loss or gain would 
be to compute the average relative prices of all the series anew on the basis of the 
actual prices at each successive period. But this would be a heavy task, and it is 
thought that the inaccuracy of the simple method employed is not greater than the 
inaccuracy of the material upon which the whole computation rests. To pretend to 
great refinement in the method of analysis for the purposes of so rough a statement 
as the present would be pedantic. 

2 Loans made before the passage of the first legal-tender act, February 25, 1862, 
are treated in the table as if they were all repaid in greenbacks. Some debtors, how- 
ever, are said to have repaid such obligations in gold. (See letter of Judge Hoar 
to E. J. James in Publications of the American Economic Association, Vol. Ill, p. 51.) 
But so nice a sense of business honor was not universal, and the courts were called 
upon to adjudicate the question involved. In Hepburn vs. Qiiswold (8 Wallace, p. 
603; 1869) the federal Supreme Court held that United States notes were not a 
legal tender for debts contracted before February 25, 1862; but within a year the 
court reversed this decision (" The Legal Tender Cases," 12 Wallace, p. 457). But 
the table indicates that losses on loans made in April, 1862, were not less heavy 
than on loans made in 1860. 



INTEREST AND LOAN CAPITAL 



365 



cases where loans have been made for short and for 
long terms ; between the cases, that is, where there is and 
where there is not an opportunity to make a new contract 
regarding the rate of interest. The latter cases may be 
dismissed with a word. The capitalist who lent $10,000 for 
five years in April, 1862, at 6 per cent, interest would be in 
relatively the same position as the workingman who received 
no advance in money wages; while his money income 
remained the same, the rise of prices would decrease his 
real income in 1864 and 1865 by about one-half. Of 
course, this loss to the creditor is a gain to the debtor; for 
to the business man using borrowed capital the advance of 
prices means that he can raise his interest money by selling 
a smaller proportion of his output. 

More interesting is the case of loans maturing and made 
afresh during the period under examination. The impor- 
tant question is : How far did the lender secure compensa- 
tion for the diminished purchasing power of the money in 
which he was paid by contracting for a higher rate of 
interest? To answer this question adequately abundant 
statistics of the rate of interest received on loans of differ- 
ent kinds during the war are necessary. Unfortunately, 
however, it is extremely difficult to find such figures. To 
my knowledge there are no systematic records of rates of 
interest on long-time business loans, and the data for 
short-time loans are unusually meager and doubtful. In 
1860 Hunt's Merchants' Magazine and the Bankers' Maga- 
zine the most prominent business periodicals of the day 
were publishing each month tables showing the rates of 
interest paid in New York for loans of several different 
kinds. But during the war they ceased these systematic 
reports and one can glean from them but occasional scatter- 
ing statements. Professor Irving Fisher, however, in his 
Appreciation and Interest gives a table which purports to 



360 HISTORY OP THE GREENBACKS 

show the rate on "call" loans, "60 day" loans and "prime, 
two name, 60 day" loans for a period of years including 
1860 to 1865. The third of these series was obtained, he 
states, from a diagram prepared by one of his students 
showing "the highest and lowest monthly rates"- though 
from what source the data were taken he does not say. 
The other two series were obtained from a table compiled 
by Mr. E. B. Elliott. Elliott made this table for a paper 
upon "The Periodicity of Rates of Interest," read 
before the American Association for the Advancement of 
Science in 1874. The paper was not published in the pro- 
ceedings of the association, and the only record which I 
have been able to find of it is a brief abstract published 
in the Bankers' Magazine. 1 It is here said regarding the 
source of information upon which Elliott' drew: "Being 
asked whence the data were obtained, Professor Elliott 
replied that they were collated from The Bankers' Maga- 
zine, The Financial Chronicle and Hunt's Merchants 1 
Magazine." I have no doubt that this statement is correct 
for most of the years included in the table (1849 to 1874), 
but since the Commercial and Financial Chronicle was not 
established until July, 1865, and the other journals men- 
tioned did not maintain these tables of interest regularly, it 
follows that Mr. Elliott must have had irregular data for the 
years of the war, or else that he went to some unknown 
source for his figures. 

Under these circumstances it seems justifiable to attempt 
constructing a new table from the reports of the daily news- 
papers. On examination, however, one finds that this course 
also is open to objection. In the first place, regular state- 
ments can be found only for one kind of transactions 
loans on call. In the second place, whenever the rates for 
call loans rise above 7 per cent, the reporter is apt to say 

i Vol. XXIX, p. 220. 



INTEREST AND LOAN CAPITAL 



367 



merely that the ruling rate is "the legal maximum plus a 
small commission." In the third place, one is justified in 
feeling some suspicions of the accuracy of newspaper reports. 
However, I have compiled a table from the financial columns 
of the newspapers of the rate for call loans every Saturday 
from 1862 to 1865. In doing so I have been compelled to 
supplement one paper by another, for no one gives the 
reports with perfect regularity for the whole period. 1 

Since none of these series have an unquestioned title to 
acceptance, they are all presented in the next table. The 

TABLE LVIII 

INTEREST BATES IN THE NEW YORK MONEY MARKET 1860 TO 1865 
I. AVERAGE RATES PER YEAR 



YEAR 


CALL 


SIXTY DAYS 


PRIME TWO 
NAME 60 DAYS 


Elliott 


Newspapers 


Elliott 


Fisher 


I860.. 


6.1# 
5.4 
5.6 
5.0 
7.2 
6.1 


5.2% 
6.2 
6.6 
6.2 


8.4# 
9.0 
6.8 
6.7 
9.3 
10.2 


1.1% 
6.6 
5.4 
5.8 
8.0 
8.2 


1861 


1862 


1863 


1864 


1865 





II. AVERAGE RATES PER MONTH FOR CALL LOANS 





1862 


1863 


18S4 


1865 


January 


6.5 


6.1# 


7.0# 


7.0 


February 


6.0 


6.3 


6.1 


6.1 


March. 


5.5 


6.1 


5.9 


7.0 


April 


5.5 


5 2 


6.8 


5.6 


May 


4.6 


5.3 


5.6 


5.4 


June 


4.1 


6.1 


6.7 


4.9 


July. . 


5.4 


6.1 


6.8 


5.5 


August 


4.0 


6.0 


6.9 


5.9 


September 


4.3 


6.6 


7.0 


6.0 


October 


4 6 


6.5 


6.8 


7.0 


November 


6.3 


7.0 


6.9 


6.8 


December 


6.0 


7.0 


6.6 


6.8 













1 The Herald, Tribune, Evening Express, and World have all been drawn upon. 



868 



HISTORY OF THE GREENBACKS 



exhibit of average annual rates is followed by a statement of 
the average rate each month based upon the newspaper 
reports. 

While the different series showing annual average rates 
of interest do not agree with each other perfectly, they all 
indicate that the advance in the rate of interest was com- 
paratively small much too small to compensate persons 
whose income was derived from such sources for the increased 
cost of living. To bring this fact out clearly the next table 
shows the relative increase in the rates of interest side by 
side with the relative increase in prices and in money wages: 

TABLE LIX 

RELATIVE INCREASE IN INTEEEST, PRICES, AND WAGES 



YEAR 


RATES OF INTEREST 


PRICES 


WAGES 


CALL 


60 DATS 


PRIME 

TWO 

NAME 
60 DAYS 


Wholesale 


1 


Variable Weights 


Constant Weights 


Elliott 


News- 
papers 


Elliott 


Fisher 


I860.. 


100 
89 
92 
82 
118 
100 


ioo 

119 
127 
100 


100 
107 
81 
80 
111 
121 


100 
86 
70 
75 
104 
106 


100 
98 
105 
138 
186 
188 


100 
103 
115 
144 
172 
181 


100 
101 
103 
118 
137 
154 


100 
101 
103 
117 
138 
158 


1861 


1862 


1863 


1864 


1865 





The conclusion from these figures is not only that per- 
sons who derived their income from capital lent at interest 
for short terms were injured by the issues of the greenbacks, 
but also that their injuries were more serious than those 
suffered by wage-earners. 

To explain this state of affairs is not easy. The first 
reason that suggests itself to the mind considering the 
problem is that both lenders and borrowers failed to foresee 



INTEREST AND LOAN CAPITAL 



369 



the changes that would take place in the purchasing power 
of money between the dates when loans were made and 
repaid. No doubt there is much force in this explanation. 
If, for instance, men arranging for loans in April, 1862, to 
be repaid a year later, had known that in the meantime the 
purchasing power of money would decline 30 per cent., they 
would have agreed upon a very high rate of interest. On 
the assumption that, monetary conditions aside, the rate 
would have been 6 per cent., the lender gifted with second 
sight would have demanded 50.52 per cent. ; i. e., 6 per 
cent, plus 42 per cent, of both capital and interest to offset 
the decline of 30 per cent, in the purchasing power of the 
dollars received in repayment as compared with that of the 
dollars lent. According to the table of relative prices, any 
interest rate less than this would have deprived capitalists 
of a portion of their ordinary returns; and, on the other 
hand, since the prices of products increased on the average 
42 per cent, between April, 1862, and April, 1863, borrowers 
could afford to pay on the average 50.52 per cent, for loans 
quite as well as they could afford to pay 6 per cent, in years 
of stable prices. Men able to discern the future course of 
prices would not have lent money at the ordinary rates, and 
if, as the table indicates, the rates prevailing in the New 
York market throughout all 1862 and 1863 were less than 
7 per cent., it must have been because the extraordinary 
rise of prices was not foreseen by borrowers and lenders. 

Nor, if the* arguments of the preceding chapters are valid, 
is it surprising that business men failed to see what was 
coming; for the course of prices depended chiefly upon the 
valuation set upon the greenbacks, and this valuation in turn 
depended chiefly upon the state of the finances and the 
fortunes of war matters that no one could foresee with cer- 
tainty. Indeed, there was much of the time a very general 
disposition to take an unwarrantedly optimistic view of the 



370 HISTORY OF THE GREENBACKS 

military situation and the chances of an early peace. Many 
members of the business community seem to have felt that 
the premium on gold was artificial and must soon drop, that 
prices were inflated and must collapse. To the extent that 
such views prevailed borrowers would be cautious about 
making engagements to repay money in a future that might 
well present a lower range of prices, and lenders would 
expect a gain instead of a loss from the changes in the pur- 
chasing power of money. 

But the full explanation of the slight advance in interest 
cannot be found in this inability to foresee the future at 
least not without further analysis of what consequences such 
inability entailed. Workingmen are commonly credited 
with less foresight than capitalists, and nevertheless they 
seem, according to the figures, to have succeeded better in 
making bargains with employers of labor than did lenders 
with employers of capital. The explanation of this less 
success seems to be found in the difference between the way 
in which depreciation affected what the capitalist and the 
laborer had to offer in return for interest and wages. There 
is no reason for assuming that an artisan who changed 
employers during the war would render Jess efficient service 
in his new than in his old position, or that a landlord who 
changed tenants had less advantages to put at the disposal 
of the incoming lessee. In both these cases the good offered 
to the active business man remained substantially the same, 
and it may safely be assumed that, other things being equal, 
this business man could afford to give quite as much for the 
labor and the land after as before suspension. From the 
business man's point of view, therefore, there seems to have 
been room for a doubling of money wages and rent when the 
purchasing power of money had fallen one-half. But in the 
case of the borrower of capital the like was not true. The 
thousand dollars which Mr. A. offered him in 1865 was not, 






INTEREST AND LOAN CAPITAL 371 

like the labor of John Smith or the farm of Mr. B., as effi- 
cient for his purposes as it would have been five years before. 
For, with the thousand dollars he could not purchase anything 
like the same amount of machinery, material, or labor. And 
since the same nominal amount of capital was of less efficiency 
in the hands of the borrower, he could not without loss to him- 
self increase the interest which he paid for new loans in pro- 
portion to the decline in the purchasing power of money, as 
he could increase the wages of laborers or the rent for land. 
From the point of view of the lender this remark means 
simply that the expiration of old contracts and the making 
of fresh ones gave him no opportunity to remedy the mis- 
takes of judgment once committed. If a farm hand in April, 
1862, contracting to work a year, failed to foresee the advance 
of prices that would occur, and agreed to accept his usual 
wage of $15 a month and board, he would suffer during the 
year from having to pay more for clothing, etc. ; but when 
he came to renew his bargain in April, 1863, he would be in 
a strong position to demand an increase of wages sufficient 
to offset the depreciation in the purchasing power of money. 
But if a capitalist with no more power of divination than the 
farm hand lent $1,000 in April, 1862, for a year at 6 per 
cent, interest, he would not only suffer during this time from 
the rise of prices, but he would also have no ground for ask- 
ing from a new borrower compensation, in the form of higher 
interest, for the advance that had already taken place in 
prices. If both lender and borrower in April, 1863, antici- 
pated that the rise of prices would continue during the 
next year, they might attempt to adjust the rate of interest 
so as to counterbalance the expected changes, but the bor- 
rower could give no compensation for the changes that had 
already taken place, inasmuch as these changes diminished 
the efficiency of the thousand dollars which the lender trans- 
ferred to his control. 



372 HISTORY OP THE GREENBACKS 

Thus ground once lost by a lender through monetary 
depreciation could not be recovered so long as prices con- 
tinued to advance ; the utmost that the lender could hope to 
accomplish was to keep from falling farther behind by obtain- 
ing a rate of interest sufficiently high to offset the further 
advances of the future. As has been shown, the capitalist 
who lent $1,000 in April, 1862, for a year should have 
charged 50.52 per cent, for interest. After deducting his 
income of 6 per cent, plus 42 per cent, of itself, he would 
have had left at the end of the year a nominal principal of 
$1,420, which in April, 1863, had the same purchasing 
power as $1,000 in April, 1862. With this number of paper 
dollars to put at the disposal of borrowers, the capitalist 
could prevent a decline in his real income if he were able to 
foresee that the purchasing power of money would depreciate 
19 per cent, more during the next year and to persuade bor- 
rowers of the same fact. The rate charged should be 30.9 
per cent. i. e., 6 per cent, plus 23.4 per cent, of capital and 
interest to offset the diminution of 19 per cent, in purchasing 
power. This rate would give the usual real income to the 
capitalist and leave him in April, 1864, a nominal capital of 
$1,752, or the equivalent in purchasing power of $1,000 in 
April, 1862. For the next year the rate should be 11.61 
per cent., which on $1,750 would give the usual real income and 
a principal of $1,841 in April, 1865, which again is equal to 
$1,000 in April, 1862. Failure to obtain these exceedingly 
high rates of interest in making the loan for any year would 
subject the lender to a heavy loss of real income not only for 
that year, but also for the years to come, beause it would not 
provide for an increase in the nominal amount of the prin- 
cipal sufficient to sustain its purchasing power undiminished. 
The failure of the rate of interest to attain anything like 
the extraordinary rates which alone could have saved lenders 
from loss seems at first sight more remarkable when the 



INTEREST AND LOAN CAPITAL 



373 



government demand for loans and the high profits made by 
business men are taken into account. But neither of these 
factors had quite so much influence as one at first imagines. 
Just as the government's demand for food and clothing 
was not a new demand superadded to that formerly exist- 
ing, but rather a part of the old demand making itself felt 
through a new channel, so in a measure the government 
demand for capital was a substitute for private demands 
rather than an increase in the whole sum required by the 
community. The government had become the employer of 
a considerable fraction of the working population, and it 
needed large sums of money to provide for these employees, 
in the same way that a corporation that increased the number 
of its hands would need a larger working capital to pay 
wages and purchase supplies. But after all there is a 
radical difference between the effect of war loans and 
industrial loans upon the rate of interest. The corporation 
would hope to direct the labor in such fashion that it 
would more than replace the capital consumed in providing 
for it; while the majority of the men employed by the 
federal government during the Civil War were not engaged 
in productive operations. Since the soldiers enlisted in 1862 
did not produce an equivalent in commodities for the food 
they ate and the clothes they wore, the government had 
to borrow new sums of capital to maintain them in 1863, 
and new sums again in 1864 and 1865. Through the 
war loans the community was voluntarily devoting a not 
inconsiderable proportion of its labor and capital each year 
to employments that from the strictly economic point of 
view must be called unproductive, and so far as this was 
the case the process of accumulation was retarded. It 
seems therefore safe to say that though the government 
demand for loans was in considerable degree a substitute 
for private demands, the difference in the use made of the 



374 HISTORY OP THE GREENBACKS 

borrowed funds tended to raise the rate of interest for future 
years. 

The modification required by the proposition that the 
high profits of trade were a factor of great importance 
in the loan market is more serious. That profits were 
uncommonly large during the war is not doubted; indeed, 
the next chapter will be devoted primarily to showing that 
such was the fact. Nor is it doubted that under ordinary 
circumstances high profits will tend powerfully to produce 
high rates of interest ; both by making business men anxious 
to borrow capital with which to extend the scope of their 
existing operations or to undertake new ventures, and by 
making capitalists who have the choice between employing 
their means themselves and lending them to others prefer 
the former course. But during the Civil War this usual 
consequence of high profits conflicted with another conse- 
quence of the monetary situation namely, the uncertainty 
about the future course of prices. Men were at any given 
time " making money," but they recognized that their unu- 
sual profits were in a large measure the product of monetary 
depreciation. If the premium on gold should drop suddenly, 
as it might at almost any time in consequence of a favorable 
change in the military situation, prices would probably fol- 
low, and the trend of affairs might set as strongly against 
the realization of high profits as it had set formerly in its 
favor. Under such circumstances prudence forbade men to 
enter into contracts that would call for the repayment of 
large sums of money in a future that might bring a low 
level of prices and make it necessary for the debtor to sell 
an unexpectedly large part of his product to obtain sufficient 
money to meet his obligations. A man would be in a safer 
position if he kept free of debt and confined his operations 
as closely as possible to business that he could manage with 
his own capital. In other words, men realized their inability 



INTEREST AND LOAN CAPITAL 375 

to foresee the future and, knowing that it might bring great 
price fluctuations in either direction, sought protection 
against these changes by limiting their future pecuniary 
obligations as narrowly as possible. 

That considerations of this character were carefully 
weighed by business men is clearly shown by the remarkable 
contraction of credit operations that took place during the 
war. When no one could foresee with confidence what would 
be the relative purchasing power of a dollar three months in 
advance, it was obviously risky for a merchant to accept a 
note due in ninety days for goods sold, or to give such a note 
for goods bought. Consequently, cash business increased in 
importance and credit operations diminished a condition 
of affairs that was remarked in mercantile circles as early as 
August, 1862. 1 In proportion as the fluctuations of prices 
became more marked, credits were more strictly curtailed. 
" Even the West," said the New York Times of November 
28, 1863, " which has long been wont to strain credit to its 
utmost, is now buying and selling for cash to an unprece- 
dented degree." The circular published in 1864 by Dun's 
Mercantile Agency ascribed the small number of bankrupt- 
cies in large part " to that rigid caution which has obtained 
in our business community in dispensing credits." 2 Mr. 
McCulloch in his report as secretary of the treasury, Decem- 
ber, 1865, said that " it is undoubtedly true that trade is 
carried on much more largely for cash than was ever the 
case previous to 1861." 3 In the autumn of the same year 
the Commercial and Financial Chronicle made a careful 
inquiry into the credits being granted to the South and 
West, and reached the following conclusions : ' ' The great 
bulk of jobbing sales now being made are on short time, say 
from sixty days to four months Half of the buyers 

1 Compare Hunt's Merchants' Magazine?] o\. XLVII, p. 333, and the " Commercial 
Chronicle and Review " of later issues. 

2 Ibid., Vol. LII, p. 146. 3 P. 11. 



376 HISTORY OP THE GREENBACKS 

pay in cash, and a large portion of the remainder average 
less than three months in their credits, while but a very few 
obtain six or eight months." ' 

Of course, the increase in cash business meant that the 
demand for commercial loans was less, and this diminution 
in the quantity of commercial paper on the market may not 
improbably have offset the great increase in public securities 
offered to investors. It must be noticed, however, that in 
explaining the cause of the contraction of credit one finds 
himself brought back again to men's conscious inability to 
foresee the future course of prices as the controlling factor 
in the loan market. Ordinarily men treat the value of 
money as a constant and arrange their transactions with 
little conscious reference to its fluctuations. A paper stand- 
ard, however, the value of which depends upon the varying 
credit of a government passing through a serious crisis, 
forces upon everyone a realization of the fact that the pur- 
chasing power of money is subject to great variations. But 
the realization of this fact is of little practical use in arran- 
ging business affairs unless men can foresee the character of 
the impending changes. During the Civil War the uncer- 
tainty was so great that such foresight was hardly possible. 
As a consequence it seems probable from what information 
is available that men made their bargains for borrowing and 
lending money upon terms not very unlike the terms pre- 
vailing in less unquiet times. The chief difference appears 
to have been that, so far as possible, everyone refrained from 
assuming obligations to receive or to pay money at future 
dates, because everyone realized that the sum which he would 
be called upon to give or take might well possess much less 
purchasing power than the sum which he had received or 
given particularly when the time that would elapse between 
the making and repayment of the loan would be considerable. 

l. I, p. 325. 



INTEREST AND LOAN CAPITAL 377 

Lest too strong an impression be given of the losses of 
creditors during the war, it is well to call attention to the 
fact that against the losses during the period of rising prices, 
extending broadly from 1862 to January, 1865, were set 
similar gains during the period of falling prices, extending 
broadly from January, 1865, to the resumption of specie 
payments in 1879. If Falkner's index number of 100 
for the latter year can be accepted, it follows that a man 
who had kept a sum of money at interest for the whole 
period from suspension to resumption would find its pur- 
chasing power at the end of the paper-money regime 
substantially the same as it had been at the beginning. In 
the meantime, however, he would have suffered a heavy loss 
of real income from 1862 to 1865, and on the other hand 
would have enjoyed an increase of real income from the 
latter date to 1879. 

It should also be pointed out that on one important class 
of loans capitalists suffered comparatively little even during 
the war. Interest on many forms of government bonds was 
paid in gold. Capitalists who invested their means in these 
securities consequently received an income of unvarying 
specie value. But even these investors did not escape all the 
evil consequences of the paper-money system ; because, as has 
been shown, prices rose in the end to a greater height than 
the premium upon gold. To illustrate the situation of such 
investors, suppose the case of a man who in 1860 had 
$10,000 of the fifteen-year 5 per cent, federal bonds of the 
loan of 1858. The following table shows what would be his 
income in gold and paper money, and how its purchasing 
power would fluctuate in consequence of the advance in 
prices. 

While persons who had purchased bonds as an investment 
before the war suffered no great loss of income, persons who 
had sufficient faith in the stability of the federal government 



378 



HlSTOBY OF THE GREENBACKS 



TABLE LX 

MONET AND REAL INCOME YIELDED BY $10,000 OF BONDS OF LOAN OF 1858 



Year 


Income in 
Gold Coin 


Average 
Value of 
$100 of 
Gold Coin 
in 
Currency 


Equiva- 
lent of 
Gold In- 
come in 
Currency 


Relative 
Prices at 
Retail 


Purchas- 
ing Power 
or Money 
Income 


Relative 
Real 
Incomer 


I860 


$500 


$100.0 


$500.0 


100 


500 


100 


1861 


500 


100.0 


500.0 


103 


485 


97 


1862 


500 


113.3 


566.5 


115 


493 


99 


1863 


500 


145.2 


726.0 


144 


504 


101 


1864 


500 


203.3 


1,016.5 


172 


591 


118 


1865 


500 


157.3 


786.5 


181 


435 


87 

















to purchase its securities at the low prices that prevailed 
during the war realized a very high rate of interest. By 
way of rough illustration, consider the case of a foreigner 
who sent $1,000 in gold to New York every January and 
directed his broker to purchase 6 per cent, twenty-year 
bonds of the loan of 1861. The following table shows the 
amount of bonds which this sum would buy and the interest 
which the investment would yield: 

TABLE LXI 

INTEREST YIELDED BY AN INVESTMENT OF $1,000 IN GOLD IN UNITED STATES SIXES 
OF 1881, MADE IN JANUARY OF EACH YEAR FROM 1862 TO 1865 



Date 


Average 
Value in 
Currency 
of $1,000 in 
' Gold 


' Average 
Price of 
U. S. 6's of 
1881 


Amount of 
Bonds 
Which 
$1,000 in 
Gold 
Would Buy 


Gold 

Interest at 
6 per cent, 
on Bonds 
Bought 


Rate of 
Interest 
Realized 


1862, January 


$1,025 


89.6 


$1.143 


$68.58 


6.9* 


1863, January 


1,451 


95.4 


1,521 


91.26 


9.1 


1864, January 


1,555 


105.5 


1,474 


88.44 


8.8 


1865, January 


2,162 


110.9 


1,950 


117.00 


11.7 















If the person who made these investments were an 
American, he would be able to sell his gold-interest money 
at a high premium, but he would also have to pay corre- 



INTEREST AND LOAN CAPITAL 379 

spondingly high prices for commodities, so that upon the 
whole his position would not be greatly different from that 
of the foreign investor. That such opportunities for invest- 
ment as these securities offered should exist when men were 
most of the time loaning money for short terms at 7 per 
cent, or less, is perhaps the most emphatic proof that could 
be offered of the inability of the public to foresee what the 
future had in store. Had men been able to make clearer 
forecasts, the rate of interest would have risen much more 
than it did, and had they not feared for the solvency of the 
federal government, its bonds would not have fallen so low. 
But, for that matter, this same distrust of the government's 
solvency, arising from the darkness of the future, may be 
said to have been fundamentally responsible for all the 
economic disturbances of the war times, because to it was 
due the varying depreciation of the greenbacks. 



CHAPTER VIII 
PROFITS 

I. Profits as a Share in the Distribution of the Product: 

Use of the Terms "Profits" and "Residual Claimants " Gains of 
Residual Claimants at the Expense of Laborers, Landlords, and 
Lending Capitalists Other Things being equal, Profits Varied 
Inversely as Average Wages Paid to Employees and Directly as the 
Complexity of Business Organization. 
II. Profits in Different Industries: 

Dependence of Profits on Relative Advance in Prices of Different 
Products Profits of Farmers as an Illustration. 
III. Statistical Evidence Regarding Profits: 

Meagerness of the Evidence Statistics of Failures. 

I. PROFITS AS A SHABE IN THE DISTRIBUTION OF THE PBODDCT 

IN the three preceding chapters an attempt has been 
made to show in what manner the depreciation of the paper 
standard affected the real incomes of laborers, landlords, 
and lending capitalists. These classes are all alike in that 
the amount of the remuneration received by them for the 
aid which they render to production is commonly fixed in 
advance by agreement, and is not immediately affected by 
the profitableness or unprofitableness of the undertaking. 
It remains to examine the economic fortunes of those men 
whose money incomes are made up by the sums left over 
in any business after all the stipulated expenses have been 
met. 

For the purposes of the discussion it is convenient to 
call these men "residual claimants," and to use the term 
"profits" to denote the sums which they receive. It will be 
observed that neither of these terms is used in the sense 
frequently assigned it in economic treatises. When one is 

380 



PROFITS 381 

investigating the consequences of monetary depreciation or 
appreciation, particularly within a limited period of time, 
one finds that the economic functions that men perform in 
the process of production are facts of less significance than 
the legal positions in which they stand with reference to the 
payment of their incomes. The residual claimant of the 
present chapter is likely to be that man in any business 
organization whom Marshall would call the undertaker; but 
the factor of importance in determining whether the rise of 
prices injures or benefits him is not the work that he per- 
forms in initiating and superintending operations, but the 
fact that, instead of having entered into a contract to accept 
a certain sum for his services, he has as his share whatever 
funds are left after paying all fixed charges and operating 
expenses. The residual claimant in this sense may be either 
manager, capitalist, landlord, or laborer, or any two or three, 
or all of these persons in one. Which man in any establish- 
ment of those who contribute services or property to aid the 
process of production is in the legal position of residual 
claimant depends upon the organization of the business. 
Many cases can be differentiated, varying in complexity 
from that of the farmer who works his own land without 
assistance of hired labor or borrowed capital, to that of the 
great corporation which leases its land, borrows most of its 
capital, hires its laborers, and pays fixed salaries to its 
officials. In the last case the residual claimants are the 
shareholders among whom the profits are divided in the 
form of dividends, and these shareholders may include 
among their number persons who are officials, or laborers, 
or bondholders, or landlords of the corporation, or who have 
no other connection with it than that of owning stock. 
But widely different as these residual claimants may be 
from other points of view, they are all alike in that the 
amount of their incomes depends upon the difference between 



382 HISTORY OP THE GREENBACKS 

the total receipts of the business and the sums paid to all 
the other co-operators in production who have commuted 
their claims to share in the product for a stipulated pay- 
ment. The problem of the present chapter is: How did 
the depreciation of the greenbacks affect these differences 
between total receipts and the total of payments to other 
co-operators ? 

When the problem of profits is conceived of in this 
fashion, it becomes clear that a very important part of the 
solution has already been contributed by the preceding 
studies of wages, rent, and interest. The evidence has been 
found to support the conclusion that in almost all cases the 
sums of money wages, rent, and interest received by labor- 
ers, landlords and capitalists increased much less rapidly 
than did the general price level. If the wording of this 
conclusion be reversed the prices of products rose more 
rapidly than wages, rent, or interest we come at once to 
the proposition that as a rule profits must have increased 
more rapidly than prices. For, if the sums paid to all the 
other co-operating parties were increased in just the same 
ratio as the prices of the articles sold, it would follow that 
other things remaining the same, money profits also would 
increase in the same ratio. But if, while prices doubled, the 
payments to laborers, landlords, and capitalists increased in 
any ratio less than 100 per cent., the sums of money left for 
the residual claimants must have more than doubled. In other 
words, the effect of the depreciation of the paper currency 
upon the distribution of wealth may be summed up in the 
proposition: The shares of wage-earners, landowners, and 
lenders in the national dividend were diminished and the 
share of residual claimants was increased. 

Real profits were unusually large during the Civil War, 
therefore, but large because real wages, rent, and interest 
were low. It must not be assumed, however, that the residual 



PROFITS 383 

claimant necessarily gained as much as the other parties in 
distribution lost. In the chapter upon wages, for example, 
it was suggested that the efficiency of labor probably 
decreased somewhat during the Civil War, because a large 
number of the most efficient laborers had enlisted in the 
armies and their places had to be filled with less skilful 
hands. So far as this was the case, the volume of output 
must have diminished, and, of course, such diminution would 
decrease the difference between total income and total outgo 
that figures with us as profits. But if this was an important 
consideration, it was one due, not to the paper standard, 
but to the fact that the country was involved in a great war. 
With regard to the relations between residual claimant 
and lending capitalist it must be said that the capital bor- 
rowed during the war decreased very much more in efficiency 
than the labor hired. When prices had doubled, $1,000 of 
capital was the equivalent of only $500 on the old level of 
prices, and if the borrower had to pay 8 instead of 6 per 
cent, interest, he seems to have been worse instead of better 
off in consequence of the depreciation of money. And, of 
course, the residual claimant is, in fact, worse off because of 
even a slight increase in the rate of interest which he has to 
pay unless further depreciation takes place between the 
time that he invests the funds lent him and repays them to 
the lender. But if such depreciation does take place, he is 
likely to make a larger gain at the expense of the lender 
than he makes at the expense of the laborer, because the 
contract which he makes with the former is likely to run for 
a longer time than the contract with the latter, and conse- 
quently the person who finds himself injured by the course 
of events cannot seek relief so promptly by insisting upon 
making new terms. Moreover, the borrower gains not only 
by continuing to pay the same money income to the lender 
for a considerable period, as he may perhaps do with the 



384 HISTORY OP THE GREENBACKS 

laborer, but also by returning the principal sum lent in dol- 
lars of much less purchasing power than the dollars received. 
On the other hand, the borrower of capital feels the effect of 
a downward turn of prices much more quickly than the 
employer of labor. The wage-tables indicate that, though 
money wages continued to rise for some time after prices had 
begun to fall, they had nevertheless not caught up with 
prices by the end of the war. Therefore, while employers 
were making less extra gain at the expense of their hands 
at the close of 1865 than they had been making in 1863 and 
1864, they were nevertheless receiving an extra profit as 
compared with the situation before the suspension of specie 
payments. The extra gain of the borrower, however, was 
turned into a positive loss as soon as the purchasing power 
of the dollars in which his obligations were repaid became 
greater than the purchasing power of dollars which had been 
lent to him. 

As for the relations between the tenant and landlord, they 
were like those between employer and employee in that 
the efficiency of the good transferred was not affected by 
monetary conditions, and like those between borrower and 
lender in that the contract was likely to run for a con- 
siderable term. From the tables of chap, vi which indicate 
that money rents increased less rapidly than money wages, 
it follows that the gain of the residual claimant at the expense 
of his landlord was probably greater in degree than the gain 
at the expense of laborers. 

Two other general propositions respecting profits are sug- 
gested by the results of preceding investigations. First, 
other things being equal, profits varied inversely as the 
average wage per day paid to employees. This conclusion 
follows directly from the demonstration in chap, v that the 
money wages of men earning $!-$!. 49 per day before the 
perturbation of prices increased in higher ratio than those 






PBOFITS 385 

of men earning $1.50-$1.99; that the wages of the latter 

CJ O 

class increased more than the wages of men in the next 
higher wage class, etc. Second, other things being equal, 
profits varied directly as the complexity of the business 
organization. By this proposition is meant, for example, 
that a farmer who paid money rent, used borrowed capital, 
and employed hired laborers, made a higher percentage of 
profits than a farmer of whom any one of these suppositions 
did not hold true. If, as has been argued, the increase of 
profits was made at the expense of laborers, landlords, and 
capitalists, it follows that that residual claimant fared best 
whose contracts enabled him to exploit the largest number 
of these other persons. 

II. PROFITS IN DIFFERENT INDUSTRIES 

The effect of monetary depreciation upon profits resulting 
from the increase in the share of the residual claimant in the 
product at the expense of the shares of laborers, landlords, 
and capitalists, was felt more or less alike in all industries. 
Of course, the average advance of money wages was not uni- 
form in all branches of production: there were probably 
similar differences in the increase of the sums paid as rent 
for locations of various sorts, and there may have been dif- 
ferences in the fluctuation of rates of interest charged to 
borrowers in dissimilar lines of business. But, despite 
these differences in degree of diminution in the shares of 
these three classes of participants in distribution, as compared 
with the share of residual claimants, the general character of 
this effect of depreciation was substantially the same in all 
industries. 

There was another and hardly less important effect of 
depreciation upon profits, however, that was by no means 
uniform. In chap, iv emphasis was put upon the dissimi- 
larity in the price fluctuations of different commodities. 



HISTORY OP THE GREENBACKS 



These dissimilarities produced corresponding variations in 
the profits realized by producers. The residual claimant 
whose profits came from the production of commodities that 
advanced in price more rapidly than the majority of other 
commodities derived a second gain in addition to the gain 
made at the expense of his laborers, landlord, and creditors. 
Not only did such a residual claimant have a relatively larger 
share in the product, but the money value of that product 
was relatively larger as compared with the money value of 
other things that he might wish to buy. When the advance 
of the product in price was nearly the same as the advance 
of the articles which the residual claimant purchased, he 
enjoyed no such second gain the only way in which he 
was benefited by the depreciation was through his ability 
to satisfy contracts with the proceeds of a smaller portion of 
the output. Finally, in the case of products that advanced 
in value less than the average the residual claimant not only 
made no second gain, but he even suffered a loss through 
the diminshed relative purchasing power of his product a 
loss that might or might not be offset by the gains made at 
the expense of the other participants in distribution. 

The statistical material is not complete enough to make 
possible an elaborate investigation of these differences in 
the profitableness of industries due to the dissimilar price 
fluctuations. But there is one case that merits attention, not 
only because of the relative fulness of the statistical record, 
but also because of the great importance of the industry. It 
will be remembered that thirteen agricultural products are in- 
cluded in the tables of relative prices at wholesale. Since 
this list comprises all the most important farm products of 
the northern states, it affords a fair basis for estimating how 
the farmer's money income was affected by price changes in 
comparison with that of other producers. Table LXII pre- 
sents the data regarding the prices of farm products in two 



PBOFITS 



387 



TABLE LXII 

RELATIVE WHOLESALE PRICES OP FARM PRODUCTS AND OF OTHER COMMODITIES 





ARITHMETIC MEAN 


MEDIAN 




Thirteen 


Seven 


All 


Thirteen 


Seven 


All 


DATE 


Farm 


Farm 


Articles 


Farm 


Farm 


Articles 




Products 


Products 


Included 


Products 


Products 


Included 




Simple 


Weighted 


in 


Simple 


Weighted 


in 




Average 


Average 


Table XIV 


Average 


Average 


Table XIV 


1860, Jan ... 


103 


108 


102 


101 


102 


100 


April . . 


105 


103 


102 


105 


105 


100 


July . . 


98 


94 


100 


96 


92 


100 


Oct . . . 


95 


95 


104 


94 


97 


100 


1861, Jan ... 


92 


91 


97 


94 


90 


100 


April . . 


94 


87 


98 


90 


92 


97 


July . . 


74 


66 


93 


66 


66 


95 


Oct ... 


76 


71 


100 


71 


72 


100 


1862, Jan ... 


83 


78 


111 


84 


79 


100 


April. . 


92 


81 


110 


87 


85 


100 


July . . 


87 


77 


113 


86 


74 


103 


Oct ... 


97 


85 


124 


96 


82 


117 


1863, Jan . . . 


119 


100 


142 


100 


94 


130 


April. . 


144 


129 


162 


130 


120 


142 


July . . 


129 


110 


156 


115 


103 


139 


Oct ... 


133 


125 


154 


127 


122 


140 


1864, Jan . . . 


159 


157 


176 


152 


153 


161 


April . . 


171 


171 


194 


161 


160 


175 


July . . 


189 


192 


233 


185 


206 


200 


Oct . . . 


194 


194 


234 


194 


174 


208 


1865, Jan . . . 


223 


216 


247 


224 


212 


228 


April . . 


186 


177 


207 


179 


169 


184 


July . . 


143 


129 


184 


139 


117 


160 


Oct ... 


166 


154 


199 


149 


149 


180 



ways. The first column gives the simple arithmetic means 
of the relative prices of the thirteen agricultural products 
included in the general price tables ; the second column gives 
a similar average of the relative prices of barley, corn, meats, 
oats, rye, tobacco, and wheat weighted according to the esti- 
mated money value of these products in the northern and 
western states in I860; 1 the third column gives the arith- 

1 These weights are as follows in percentages : Corn, 39.4 ; meats, 32.2 ; wheat, 17.4 ; 
oats, 6.9 ; rye, 1.7 ; barley, 1.6 ; tobacco, 0.8. They are derived from the table of quan- 
tities and values prepared by the statistician of the Department of Agriculture for 
Senator A Id rich V committee and published in its report, Part I, p. 108. In order to 
exclude the south Atlantic and south central states, recourse was had to the census 
reports of farm yields in 1860, as given in the Eleventh Census, " Report upon Agri- 
culture," Table 2. 



388 HISTORY OP THE GREENBACKS 

metic mean of the relative prices of all articles included in 
the wholesale price-tables of chap. iv. A second set of aver- 
ages is added in which the median is substituted for the 
arithmetic mean. 

It seems safe to conclude from these figures that the 
farmers of the loyal states were among the unfortunate pro- 
ducers whose products rose in price less than the majority of 
other articles, and that from this standpoint they were losers 
rather than gainers by the paper currency. Of course, it is 
possible that the farmer's loss from this inequality of price 
fluctuations might be more than offset by his gains at the 
expense of laborers, landlord, and lending capitalist. But 
there is good reason for believing that the increase of the 
residual claimant's profits in the latter fashion was less in 
farming than in any other important industry. This conclu- 
sion seems to follow from the proposition that, other things 
being equal, profits varied directly as the complexity of 
business organization. The American farmers of the Civil 
War were in a large proportion of cases their own landlords, 
capitalists, and laborers. So far as this was true, they had 
few important pecuniary contracts with other persons of 
which they could take advantage by paying in depreciated 
dollars. Of those farmers who hired labor very many paid 
wages partly in board and lodging an arrangement which 
threw a considerable part of the increased cost of living 
npon them instead of upon their employees. Finally, the 
renting farmer probably gained less on the average from 
the contract with his landlord than tenants of any other 
class, because in a majority of cases the rent was not a sum 
of money, but a share of the produce. While, then, the 
general effect of the paper standard was in the direction of 
increasing profits, it seems very doubtful whether farmers as 
a whole did not lose more than they gained because of the 
price disturbances. 



PROFITS 



389 



III. STATISTICAL EVIDENCE REGARDING PROFITS 

So far the conclusion that profits were on the whole much 
increased during the Civil War has been based mainly on the 
results of preceding chapters. It would be highly desirable 
to test these conclusions by means of direct information 
regarding profits made in various branches of trade, but the 
data available for such a purpose are more meager even than 
the data concerning rent or interest. What scraps of informa- 
tion are available, however, support the view that profits 
were uncommonly large. Mr. David A. Wells, for example, 
in his reports as special commissioner of the revenue, has 
stories of "most anomalous and extraordinary" profits that 
were realized in the paper, woolen, pig-iron, and salt indus- 
tries. 1 A more general indication of the profitableness of 
business is afforded by the remark in the annual circular of 
Dun's Mercantile Agency for 1864, that "it is generally 
conceded that the average profits on trade range from 12 
to 15 per cent." 2 

But the most important piece of evidence is found in the 
statistics of failures compiled by the same agency. The fol- 
lowing table shows Dun's report of the number of bank- 
ruptcies and the amount of liabilities in the loyal states from 
the panic year 1857 to the end of the war: 

TABLE LXIII 

STATISTICS OF FAILURES IN THE LOYAL STATES FROM 1857 TO 1865 ACCORDING TO 
DUN'S MERCANTILE AGENCY* 



Year 


Number 


Liabilities 


Year 


Number 


Liabilities 


1857.. 
1858 
1859 
1860 


4,257 
3,113 
2,959 
2,733 


$265,500,000 
73,600,000 
51,300,000 
61,700,000 


1861.. 
1862.. . 
1863.. . 
1864.. . 
1865.. . 


5,935 
1,652 
495 
510 
500 


$178,600,000 
23,000,000 
7,900,000 
8,600,000 
17,600,000 



^Executive Document No. 27, 41st Cong., 2d Sess., pp. Ixxxi, xciii, cvi; Executive 
Document No. 16, 40th Cong., 3d Sess., pp. 42, 46; House of Representatives Report No. 
72, 41st Cong., 2d Sess., pp. 73, 74. Cf. also Commercial and Financial Chronicle, Vol. 
II, p. 227; C. B. CONANT in Hunt's Merchants' Magazine, Vol. LII, p. 359. 

2 Hunt's Merchants' Magazine, Vol. LII, p. 146. 

3 Commercial and Financial Chronicle, Vol. II, p. 34. 



3 ( .>0 HISTORY OP THE GREENBACKS 

The very great decrease both in the number and the liabili- 
ties of firms that failed is the best proof that almost all 
business enterprises were "making money." 

From one point of view the small number of failures is 
surprising. An unstable currency is generally held to make 
business unsafe, and seldom has the standard money of a 
mercantile community proven so unstable, undergone such 
violent fluctuations in so short a time, as in the United States 
of the Civil War. Yet, instead of being extremely hazard- 
ous, business seems from the statistics of failures to have 
been more than usually safe. 

The explanation of the anomaly seems to be that the very 
extremity of the danger proved a safeguard. Business men 
realized that the inflation of prices was due to the deprecia- 
tion of the currency, and that when the war was over gold 
would fall and prices follow. They realized very clearly the 
necessity of taking precautions against being caught in a 
position where a sudden decline of prices would ruin them. 
How they did this by curtailing credits has been shown in 
the preceding chapter. So long as prices continued to rise 
such precautions were really not needed by the man in active 
business except, in so far as he was a creditor of other men ; 
but when prices commenced to fall prudence had its reward. 
Such a sudden and violent drop of prices as occurred between 
January and July, 1865, would have brought a financial 
revulsion of a most serious character upon a business com- 
munity under ordinary circumstances. But so well had the 
change been prepared for, that the number of failures was 
actually less than it had been in the preceding year of rap- 
idly rising prices. 

The whole situation can hardly be explained better than 
it was by a New York business man writing in Harper's 
Monthly Magazine: "When the war ended," he said, " we 
all knew we should have a panic. Some of us, like Mr. Hoar, 



PROFITS 



391 



expected that greenbacks and volunteers would be disbanded 
together. Others expected gold to fall to 101 or 102 in a 
few days. Others saw a collapse of manufacturing industry, 
owing to the cessation of government purchases. But we all 
knew a 'crisis' was coming, and having set our houses in 
order accordingly, the 'crisis' of course never came." 1 

1 Vol. XL, p. 747. 



CHAPTER IX 

THE PRODUCTION AND CONSUMPTION OF WEALTH 

I. Production: 

Attempt of Publicists to Demonstrate Prosperity of the North 
During the War Contemporary Criticisms Effect of the Paper 
Currency on Production Influence of High Profits on Industrial 
Enterprises Counterbalanced by Uncertainty of the Future And 
by Attractiveness of Speculative Lines of Trade. 
II. Consumption: 

Contemporary Complaints of Extravagance Increased Consump- 
tion of Articles of Luxury Decreased Consumption of Necessities 
and Comforts. 

I. PRODUCTION 

DURING the Civil War the question whether or not the 
loyal states were really "prosperous" was debated with much 
zeal. Supporters of the Greenback policy, like Spaulding 
and Hooper, were in the habit of claiming that the paper 
currency " operated very beneficially upon the business of 
the country " and promoted the general well-being of the 
people. 1 "It is an indisputable fact," said Hooper in Jan- 
uary, 1863, "that the material interests of the North were 
never more prosperous than at present." 2 

From Congress such assertions passed on to newspapers 
and pamphleteers. Publicists of the prominence of Dr. Wil- 
liam Elder, D. A. Wells, and Lorin Blodget employed their 
pens in drawing most cheerful pictures of the condition and 
prospects of the country. A brief citation from the first 
writer will suffice to indicate the general character of the 
conclusions at which these optimistic patriots arrived: "The 
knowledge of an immensely enhanced activity in all branches 

1 Spaulding, Congressional Globe, 37th Cong., 3d Sess., p. 288. 
Ibid., p. 386. 

392 



PRODUCTION AND CONSUMPTION OF WEALTH 393 

of industry," said Dr. Elder, "is brought home to everybody 
in the free states by the almost perfect distribution of its 
benefits. One class, and one class only, of the people, and 
that a class which the general prosperity always injures, 
suffers something the class of annuitants, salaried officers, 
and people living upon accumulated capital." 1 

The general tone of all these pamphlets suggests that 
the primary object of the writers who prepared them was to 
encourage the public to accept heavy taxation without 
grumbling, and to invest their savings in government bonds 
without hesitation. Laudable as such a design may have 
been, it was not conducive to impartial selection of data or to 
successful analysis, and sober-minded critics had no diffi- 
culty in showing to such as would listen that the boasted 
prosperity was not so real as it seemed. The little pamphlet, 
"Are We Prosperous?" by "A Boston Merchant" is a good 
example of the protests against accepting the specious 
appearances of activity in business as sufficient evidence of 
actual increase in well-being. The booklet begins by admit- 
ting that "labor is fully employed, .... trade is active, 
. . . . money plenty," and that everywhere "are heard 
rejoicings over our prosperity." But, runs the argument, 
if true prosperity consists "in the productive employment of 
labor," there is no great ground for congratulation. For 
nearly a million of men are engaged in the service of the 
government and nearly a million more are making materials 
of war. So far as the work of supplying the wants of the 
community is concerned, all these persons are "not only 
non-producers, but are destroyers and consumers of the cap- 
ital of the country." The "enhanced activity" of trade and 

1 Debt and Resources of the United States (Philadelphia, June, 1863), pp. 21, 23, 24; 
cf. WELLS, Our Burden and Our Strength, Troy, N. Y., 1864; BLODGET, The Commer- 
cial and Financial Strength of the United States, Philadelphia, 1864. Also see the 
series of letters published in London by ROBERT J. WALKEB, under the title Ameri- 
can Finances and Resources, 1863 and 1864. 



394 HISTORY OF THE GREENBACKS 

the full employment of labor mean only that the people 
left at home are working more than usually hard in the 
effort to supply these non-producers as well as themselves 
with the requisites of life. The producers who sell to the 
government are receiving in exchange not products that are 
wealth, but evidences of debt. This unproductive employ- 
ment of labor, consumption of capital without replacement, 
and rapid accumulation of debt, may quicken the pace of 
business, but it does not make true prosperity. 1 

From the present point of view it would be improper to 
enter at length upon the question in what degree the pro- 
duction and accumulation of wealth were retarded in the 
years from 1861 to 1865. Such a discussion would involve 
an attempt to gauge the relative importance of several inde- 
terminate elements, such as the degree in which the labor 
force of the North was weakened by enlistments, how far 
the withdrawal of laborers into the army was compensated 
by the increased exertions of those who stayed at home, how 
far the introduction of labor-saving machinery in agriculture 
and other industries was promoted by the lack of hands, 
whether industry suffered from lack of capital because of 
the huge sums lent the government, etc. All these problems 
lie beyond the scope of the present inquiry. But it is 
pertinent to ask here: what influence did the greenback 
currency have as one of the many factors that affected the 
production of wealth? On this problem the preceding 
investigations throw some light. 

In the first place, the paper standard was responsible in 
large measure for the feeling of "prosperity" that seems 
from all the evidence to have characterized the public's frame 
of mind. Almost every owner of property found that the 
price of his possessions had increased, and almost every 

i Is Our Prosperity a Delusion? Our National Debt and Currency, by a Boston 
Merchant (A. W. STETSON ?), Boston, 1864. The title on the cover is The Age of Green- 
backs. 



PRODUCTION AND CONSUMPTION OF WEALTH 395 

wage-earner found that his pay was advanced. Strive as 
people may to emancipate themselves from the feeling that 
a dollar represents a fixed quantity of desirable things, it is 
very difficult for them to resist a pleasurable sensation when 
the money value of their property rises or their incomes 
increase. They are almost certain to feel cheerful over the 
larger sums that they can spend, even though the amount of 
commodities the larger sums will buy is decreased. Habit 
is too strong for arithmetic. 

But, more than this, "business" in the common meaning 
of the word was unusually profitable during the war. The 
"residual claimant" of the last chapter is in most enterprises 
the active business man, and, as has been shown, his money 
income did as a rule rise more rapidly than the cost of living. 
Only in those cases where the advance of the product with 
which the given individual was concerned lagged so far 
behind the advance of those things that he wished to buy as 
to neutralize the gain which he made at the expense of his 
employees and creditors, was the business man actually 
worse off. In other words, "business" was, in reality as well 
as in appearance, rendered more profitable by the greenbacks. 
There is therefore no error in saying that the business of the 
country enjoyed unwonted prosperity during the war. And 
it may be added that the active business man is probably a 
more potent factor in determining the community's feeling 
about "good times" and "bad times" than is the working- 
man, the landlord, or the lending capitalist. 

The effect of high profits, however, is not limited to pro- 
ducing a cheerful frame of mind among business men. 
Under ordinary circumstances one would say that when the 
great majority of men already in business are "making 
money" with more than usual rapidity they will be inclined 
to enlarge their operations, that others will be inclined to 
enter the field, and that thus the production of wealth will 



396 HISTORY OP THE GREENBACKS 

be stimulated. But the circumstances of the war period 
were not ordinary and this conclusion cannot be accepted 
without serious modifications. 

1. It has been shown that business men realized the pre- 
cariousness of all operations that depended for their success 
upon the future course of prices and nearly all operations 
that involved any considerable time for their consummation 
were thus dependent. So far did this disposition prevail 
that it produced a marked curtailment in the use of credit. 
The prudent man might be willing to push his business as 
far as possible with the means at his own disposal, but he 
showed a disinclination to borrow for the purpose. Thus 
the uncertainty which all men felt about the future in a 
large measure counteracted the influence of high profits in 
increasing production. 

2. The foregoing consideration of course weighed most 
heavily in the minds of cautious men. But not all business 
men are cautious. Among many the chance of winning 
large profits in case of success is sufficient to induce them 
to undertake heavy risks of loss. On the whole, Americans 
seem to display a decided propensity toward speculative 
ventures and are not easily deterred by having to take 
chances. To men of this type it seems that the business 
opportunities offered by the fluctuating currency would make 
a strong appeal. But, while the force of this observation 
may be admitted, it does not necessitate a reconsideration of 
the conclusion that the instability of prices tended to 
diminish the production of wealth. For in a time of great 
price fluctuations the possibilities of making fortunes rapidly 
are much greater in trade than in agriculture, mining, or 
manufactures. Every rise and fall in quotations holds out an 
alluring promise of quick gain to the man who believes in 
his shrewdness and good fortune, and who does not hesitate 
to take chances. The probable profits of productive industry 



PKODUCTION AND CONSUMPTION OP WEALTH 397 

in the narrower sense might be larger than common, but 
this would not attract investors in large numbers if the 
probable profits of trading were larger yet; and such seems 
clearly to have been the case during the war when the paper 
currency offered such brilliant possibilities to fortunate 
speculators in gold, in stocks, or in commodities. Instead, 
then, of the greenbacks being credited with stimulating the 
production of wealth, they must be charged with offering 
inducements to abandon agriculture and manufactures for 
the more speculative forms of trade. 

This tendency of the times did not escape observation. 
On the contrary, it was often remarked and lamented in 
terms that seem exaggerated. Hugh McCulloch, for instance, 
in his report as secretary of the treasury for 1865, said: 

There are no indications of real and permanent prosperity .... 
in the splendid fortunes reported to be made by skilful manipu- 
lations at the gold room or the stock board; no evidences of increas- 
ing wealth in the facts that railroads and steamboats are crowded 
with passengers, and hotels with guests; that cities are full to 
overflowing, and rents and the necessities of life, as well as luxuries, 
are daily advancing. All these things prove rather .... that the 
number of non-producers is increasing, and that productive indus- 
try is being diminished. There is no fact more manifest than that 
the plethora of paper money is not only undermining the morals 
of the people by encouraging waste and extravagance, but is strik- 
ing at the root of our material prosperity by diminishing labor. 1 

More explicit was Mr. Wells's statement of the movement 
away from industry and toward speculative trading. In one 
of his reports as special commissioner of the revenue he said : 

During the last few years large numbers of our population, 
under the influence and example of high profits realized in trading 
during the period of monetary expansion, have abandoned employ- 
ments directly productive of national wealth, and sought employ- 
ments connected with commerce, trading, or speculation. As a 

IP. 9. 



398 HISTORY OP THE GREENBACKS 

consequence we everywhere find large additions to the population 
of our commercial cities, an increase in the number and cost of the 
buildings devoted to banking, brokerage, insurance, commission 
business, and agencies of all kinds, the spirit of trading and specu- 
lating pervading the whole community, as distinguished from the 
spirit of production. 1 

Within the period under review, then, it seems very 
doubtful whether the high profits had their usual effect of 
leading to a larger production of raw materials or to an 
increase in manufactures. The prudent man hesitated to 
expand his undertakings because of the instability of the 
inflated level of prices ; the man with a turn for speculative 
ventures found more alluring opportunities in trade. 

II. CONSUMPTION 

No one can read contemporary comments on American 
social life of the later years of the war without being 
impressed by the charges of extravagance made against the 
people of the North. Newspapers and pulpits were at one 
in denouncing the sinful waste that, they declared, was 
increasing at a most alarming rate. The "shoddy aris- 
tocracy" with its ostentatious display of wealth became a 
stock subject for cartoonists at home, and earned a well- 
merited reputation for vulgarity abroad. So common are 
the comments on this subject that no specific references 
need be given; one has only to examine the files of news- 
papers and magazines, or to read published sermons or let- 
ters, to find how universally observers were impressed by 
the prevalence of extravagant expenditure. 

i Executive Document No. 27, 41st Cong., 2d Sess., p. xxxi. Cf. CHABLES A. MANN, 
Paper Money, pp. 187-94. The opponents of the greenback party were fond of point- 
ing to the less rapid increase of national wealth between 1860 and 1870 than between 
1350 and 1860, shown by the figures of the federal census, as an indication of the influ- 
ence of the paper currency in discouraging production. Cf. AMASA WALKER, The 
National Currency (New York, 1876), p. 44; The Nation (New York), Vol. XII, p. 286; 
WELLS'S fourth report, cited at the beginning of this note, p. xxxi. The imperfec- 
tions of the Census of 1870, however, to say nothing of the unreliability of statistics 
of national wealth in all American censuses, make these data of slight value. 



PRODUCTION AND CONSUMPTION OF WEALTH 399 

In trying to account for this unpleasant phase of social 
development, men usually laid the blame upon the paper 
standard. High prices were said to make everyone feel 
suddenly richer and so to tempt everyone to adopt a more 
lavish style of living than his former wont. Thus the view 
gained general credence that the greenbacks were ultimately 
responsible for a great increase in the consumption of wealth. 

If the conclusions reached in the preceding chapters 
regarding the changes in the distribution of wealth caused 
by the paper money are sound, however, such a view regarding 
the consumption of wealth can be but partially true. The 
enormous profits of "residual claimants" made possible the 
rapid accumulation of an unusual number of fortunes, and 
the families thus lifted into sudden affluence enjoyed spend- 
ing their money in the ostentatious fashion characteristic of 
the newly rich. It is therefore true that the monetary situ- 
ation was largely responsible for the appearance of a con- 
siderable class of persons of whom the fortunate speculator 
and the army contractor are typical who plunged into the 
recklessly extravagant habits that called down upon their 
heads the condemnation of the popular moralist. 

But if the greenbacks were in the last resort a chief 
cause of the increased consumption of articles of luxury by 
families whom they had aided in enriching, they were not 
less truly a cause of restricted consumption by a much larger 
class of humbler folk. The laboring man whose money 
wages increased but one-half, while the cost of living 
doubled, could not continue to provide for his family's wants 
so fully as before. He was forced to practice economies 
to wear his old clothing longer, to use less coffee and less 
sugar, to substitute cheaper for better qualities in every line 
of expenditure where possible. Similar retrenchment of liv- 
ing expenses must have been practiced by the families of 
many owners of land and lenders of capital. In other words, 



400 HISTORY OP THE GREENBACKS 

the war-time fortunes resulted in a very large measure from 
the mere transfer of wealth from a wide circle of persons to 
the relatively small number of residual claimants to the 
proceeds of business enterprises. The enlarged consumption 
of wealth which the paper currency made possible for the 
fortunate few was therefore contrasted with a diminished 
consumption on the part of the unfortunate many on whose 
slender means the greenbacks levied contributions for the 
benefit of their employers. 

That the diminished consumption of wealth by large num- 
bers of poor people escaped general notice, while the extrava- 
gance of the newly rich attracted so much attention, need not 
shake one's confidence in the validity of these conclusions. 
The purchase of a fast trotting-horse by a government con- 
tractor, and the elaborateness of his wife's gowns and jewelry, 
are much more conspicuous facts than the petty economies 
practiced by his employees. The same trait that leads for- 
tunate people to flaunt their material prosperity in the eyes 
of the world leads the unfortunate to conceal their small 
privations. Even an attentive observer may fail to notice 
that the wives of workingmen are still wearing their last 
year's dresses and that the children are running barefoot 
longer than usual. 

But though the newspapers were not full of comments on 
the enforced economies of the mass of the population, whole- 
sale dealers in staple articles of food and clothing noticed a 
decrease in sales. In reviewing the trade situation in Sep- 
tember, 1864, when real wages were near their lowest ebb, 
Hunfs Merchants' Magazine remarked that "the rise in the 
prices of commodities has .... outrun the power of con- 
sumption and the fall trade has been almost at a stand. 
Those articles such as coffee, sugar, low grade goods, which 
[form] the staple products of the great mass of the people in 
moderate circumstances, has [sic] reached such high rates 



PRODUCTION AND CONSUMPTION or WEALTH 401 

that the decline in consumption is very marked, amounting 
almost to a stagnation of the fall trade." ' 

It would be of exceeding interest to trace the temporary 
change in the character of the consumption of the people 
that resulted from the artificial alteration of the distribution 
of wealth by the greenback currency to see, for example, 
how the consumption of tobacco and liquors was affected as 
compared with the consumption of sugar, coffee, flour, and 
woolen fabrics. But unfortunately there are no reliable 
data to serve as the basis of such an investigation. The 
Revenue Commission of 1865-66 made an attempt to esti- 
mate the decline in the consumption of cotton, tea, coffee, 
sugar, and molasses, but its figures are too largely the 
results of guesswork to possess much significance. 2 All that 
can be said with assurance is that the consumption of many 
articles of luxury increased very greatly, while the con- 
sumption of many staple articles declined. It is probable 
that in the first year or two of the war a spirit of economy 
pervaded nearly all classes of the people. 3 As the charac- 
teristic effects of the greenback standard began to make 
themselves felt, still more careful supervision of expendi- 
tures was forced upon wage-earners and small owners of 
land and lenders of capital, while residual claimants began 
to find their profits uncommonly great. The great fall of 
prices in the first half of 1865, combined with the continued 
advance of money wages, alleviated the situation of the first 
class of persons, though it did not quite restore them to the 
situation that existed before the war. To residual claimants 
it brought a reduction in profits that was in part merely 
nominal the expression of their fortunes in fewer figures, 

J Vol. LI, p. 243; c/. also pp. 370, 447. 

2ff. R. Executive Document No. 34, 39th Cong., 1st Sess., Special Reports Nos.1-4. 

8 <y., e. g., remarks of T. M. Parker, Congressional Olobe, 37th Cong., 2d Sess., 
p. 885; "Report of the Bank Commissioners of the State of Maine," December, 
1862, in Executive Document No. 20, 38th Cong., 1st Sess., p. 3. 



402 



HISTORY OP THE GREENBACKS 



but with a denominator of enhanced value and in part real 
the relative increase in the shares of the product that 
went to other co-operators in production and the increased 
value of the dollars in which whatever pecuniary obligations 
they had contracted must be paid. But, on the other hand, 
the fact that they had survived the sharp fall of prices that 
they had foreseen would come with the end of the war 
relieved their minds of a great source of anxiety, and put 
them in a position to enjoy the gains that they had saved. 
Consequently in 1865, consumption of goods of all kinds prob- 
ably increased over that of 1864 ; of staple articles, because 
money wages had risen, while prices had fallen ; of luxuries, 
because, though profits were less enormous, fortunes were 
felt to be less precarious. 



CHAPTER X 
THE GREENBACKS AND THE COST OF THE CIVIL WAR 

I. The Problem and the Method of Solution: 

Financial vs. Economic Consequences of the Legal-Tender Acts 
Various Estimates of Increase in Debt Caused by Greenbacks 
Method by which Estimate Should Proceed. 
II. The Greenbacks and Expenditures: 

Difference Between Increase of Expenditures for Commodities and 
for Services Difficulty of Distinguishing Between the two Classes 
in Government Accounts Estimate of Increase in Ordinary 
Expenditures. 

III. The Greenbacks and Receipts: 

Effect of Depreciation on Various Items of Revenue Indirect 
Financial Consequences of the Legal-tender Acts. 

IV. The Greenbacks and the Public Debt: 

Danger of Double Computation of Loss by Greenbacks Terms 
on Which Bonds were Sold Saving and Loss of Interest. 
V. Conclusion : 

Net Effect of Greenbacks on Amount of Debt Incurred During 
War Financial Consequences after Return of Peace. 

I. THE PROBLEM AND THE METHOD OP SOLUTION 

DISCUSSION of the consequences of the legal-tender acts 
has so far been confined to the economic relations between 
individuals. There is, however, another phase of the sub- 
ject to be considered. The reader who turns back to the 
account of the debates upon the legal-tender bills will find 
that most of the unfortunate consequences that followed 
their enactment were foretold in Congress the decline of 
real wages, the injury done creditors, the uncertainty of 
prices that hampered legitimate business and fostered specu- 
lation. But a majority of this Congress were ready to sub- 
ject the community to such ills because they believed that 

403 



404 HlSTOBY OP THE GREENBACKS 

the relief of the treasury from its embarrassments was of 
more importance than the maintenance of a relatively stable 
monetary standard. There was little of that confusion 
between economic and fiscal considerations that has fre- 
quently been held responsible for the attempts of govern- 
ment to use its power over the currency as a financial 
resource. Rather, there was a conscious subordination of 
the interest of the community in a stable monetary standard 
to the interest of the government in obtaining funds to 
carry on the war. It is therefore incumbent upon one who 
would judge the policy from the standpoint of its sponsors 
to inquire into the financial effects which to them seemed 
most important as well as into the effects on the distribu- 
tion of wealth. 

This topic has two aspects one of which has already 
been discussed. Power to issue greenbacks formed a 
quickly available financial resource from which the treasury 
was able to meet large amounts of indebtedness already 
accumulated when the legal-tender acts were passed. But 
while such issues relieved immediate needs, their ultimate 
effect was to increase the future demands on the treasury. 
The first of these consequences has been dealt with in the 
historical chapters of Part I, where an attempt was made to 
show how much immediate help the greenbacks afforded Mr. 
Chase. It remains for the present chapter to treat the 
larger question: What effect had the greenbacks upon the 
amount of expenditures incurred? 

Few questions raised by the legal-tender acts have 
attracted more attention than this last. Even while the 
first legal-tender bill was being considered its critics 
declared that if made a law it would increase the cost of 
waging the war by causing an advance in the prices of 
articles that the government had to buy. 1 As the war went 

i See Part I, chap, ii, p. 57. 






GREENBACKS AND COST OF THE CIVIL WAR 405 

on the soundness of this view became apparent. Simon 
Newcomb, writing early in 1865, estimated that by the end of 
1864 the greenbacks had increased the amount of indebted- 
ness incurred by the federal government $180,000,000 
beyond the amount that would have been incurred had the 
specie standard been maintained. Even if the war should 
end in 1865, he prophesied, $300,000,000 more would be 
added to this needless augmentation of the debt. 1 

When the war was over and the divers reasons that had 
deterred many men from criticising the financial policy of 
the government were removed, competent writers began to 
express similar views with freedom. For example, Mr. H. 
R. Hulburd, comptroller of the currency, said in his report 
for 1867: "Probably not less than 33 per cent, of the 
present indebtedness of the United States is owing to the 
high prices paid by the government while its disbursements 
were heaviest." 2 Mr. C. P. Williams put the increase of 
debt at one-third to two-fifths ; C. A. Mann, at one-fourth ; 
S. T. Spear, at a billion dollars ; L. H. Courtney, an English 
critic, at nearly $900,000,000." Of later discussions that of 
Professor H. C. Adams has attracted the most attention. 
He estimated that of the gross receipts from debts created 
between January 1, 1862, and September 30, 1865, amount- 
ing to $2,565,000,000 the gold value was but $1,695,000,- 
000 a difference of $870,000,000 between value received 
and obligations incurred.* 

All of these estimates seem to rest either upon guesses or 
upon reduction of sums borrowed in currency to specie value. 
The former method of arriving at the result inspires little 

1 Critical Examination of our Financial Policy (New York, 1865), pp. 171, 172. 

2 Finance Report, 1867, p. 15. 

3 See A Review of the Financial Situation of Our Country (Albany, 1868), p. 7; 
Paper Money (New York, 1873), p. 184; The Legal-Tender Acts (New York, 1875), p. 78; 
Journal of the Royal Statistical Society, Vol. XXXI, p. 204. 

* Public Debts, p. 131. 



406 HISTORY OP THE GREENBACKS 

confidence even when the guesses are made by men inti- 
mately familiar with the federal finances, and the latter 
method assumes that all government expenditures rose in 
proportion to the decline in the specie value of the green- 
back dollar, and that all revenues remained what they would 
have been on a special basis assumptions subject to impor- 
tant exceptions. 1 The problem of ascertaining the financial 
consequences of the greenback issues is much too complex 
to be solved by methods so crude. Some branches of ex- 
penditure were much affected by the depreciation of the 
currency, other branches but little. The effect of the paper 
currency on the receipts of the government is quite as 
important a part of the problem as the effect on expendi- 
tures, and examination shows that here as there different 
items were affected in very different degrees. Finally, the 
greenbacks were themselves a "loan without interest" 
though, on the other hand, they increased the volume of the 
interest-bearing debt by augmenting expenditures. These 
three topics, then the influence of the paper-money standard 
on ordinary expenditures and receipts, and on interest 
must all be examined by anyone who hopes to frame an 
adequate estimate of the net effect of the greenbacks on the 
cost of the war. As will appear, however, examination of 
these topics is beset by serious difficulties. 

II. GREENBACKS AND EXPENDITURES 

It is a familiar remark of writers on public finance that 
all things required by government fall into one of two 
categories commodities and services. If the conclusions 
of the preceding chapters on prices and wages are well 
founded, it follows that this elementary distinction regard- 

1 Professor Adams is free from this reproach, for he is careful not to say that 
his figures represent the difference made by the greenback policy in the cost of the 
war. This latter interpretation, however, has been commonly put upon the 
passage. E. g., see H. WHITE, Money and Banking, 1st ed., p. 162. 



GREENBACKS AND COST OP THE CIVIL WAR 407 

ing the objects of government expenditure is of very great 
importance for the present problem. For, since prices 
advanced in much greater ratio than wages, it is clear that 
the greenback issues must have increased the sums paid for 
commodities more than the sums paid for labor. Indeed, 
this difference between increase in cost of commodities and of 
labor seems to have been much wider in the case of the govern- 
ment than in the case of private persons; for, as was shown 
in sec. viii of chap, v, the wages of federal employees were 
advanced on the average considerably less than the wages 
of other persons. Clearly, then, the first step in any 
estimate of the effect of the legal-tender act upon the 
expenditures incurred by government during the war should 
be a careful separation of expenditures for commodities from 
expenditures for services. 

Accordingly, it is a very serious obstacle that one 
encounters in finding that such a separation cannot readily 
be made. A statement of the expenditures of the preceding 
fiscal year is published in each annual report of the sec- 
retary of the treasury. But in these statements the items 
are arranged rather according to the department of govern- 
ment through or for which the specified sums were spent, 
than according to the object of expenditure. For example, 
the first general division of expenditures is placed under 
the caption " Civil," and under this caption the first three items 
are "For Congress, including books," "For executive," "For 
judiciary." It is obvious that each of these items must 
include payments for both commodities and services; but 
there is no way of separating the two classes of payments. 

A more detailed statement is given in the annual Account 
of the Receipts and Expenditures of the United States 
rendered by the register of the treasury. But even these 
bulky documents do not make possible such a division of 
expenditures as is desired. A careful examination of the 



HISTORY OP THE GREENBACKS 



register's accounts for the fiscal years 1863-65 shows that 
about one-third of the total expenditures each year con- 
sists of items which appear to include payments for both 
labor and commodities in unknown proportions. Such, for 
example, are expenditures upon fortifications, armories, and 
hospitals, repairs of ships, construction of buildings, inci- 
dental expenses of various bureaus, and the like. The best 
that can be done with these accounts is to divide the items 
into three classes: (1) expenditures for salaries and the like, 
most of which appear to have been little affected by the 
paper currency; (2) expenditures for commodities; (3) ex- 
penditures that include payments for both commodities and 
labor. Even with such a scheme of classification it is some- 
times difficult to decide where certain items should be 
placed. 

If this division of expenditures be accepted, the next 
step is to determine in what ratio the expenditures falling 
within each of the three classes shall be assumed to have 
been increased. In the first class the largest items are the 
pay of the regular and volunteer armies. As was shown in 
sec. viii of chap, v the wages of private soldiers was 
increased from $13 to $16 per month after May 1, 1864. 
Since this increase was made with the avowed object of 
compensating soldiers in some measure for the decline in 
the purchasing power of the paper money, one must con- 
sider three-sixteenths of the pay of the army after that time 
as an addition to the money cost of the war. It is not im- 
probable also that, had the specie standard been maintained, 
it would have been unnecessary to grant such lavish bounties 
to stimulate enlistments. If so, a part at least of the large 
sums reported as paid in bounties should be added to the 
increase in the cost of the war. To be on the safe side, 
however, this item will be neglected. As for other employees 
of the government besides the soldiers, it appears that in 



GREENBACKS AND COST OP THE CIVIL WAE 409 

few cases were the money salaries increased beyond the 
scale prevailing before suspension. No doubt it was largely 
from motives of patriotism that so many men in humble as 
well as in conspicuous positions remained in the service of 
the government at wages they would have accepted from no 
private employer. Their self-sacrifice lessened the effect of 
the greenbacks upon the cost of the war in dollars and cents. 
But from any other than the narrowest fiscal point of view 
it was one of the most unfortunate consequences of the 
paper- money regime that the men who were serving the 
country faithfully were compelled to submit to a great 
decrease in their real incomes. 

With respect to the second of the above described classes 
of expenditures, the question of interest is whether the 
depreciation of the currency affected the prices paid by the 
government for commodities as much as it did prices paid by 
private purchasers at wholesale. Reference to the tables in 
sec. iii of chap, iv will show that the statistical material 
gleaned from the Aldrich Report indicates that public con- 
tractors did not advance their prices quite as rapidly as other 
dealers. But it must be remembered that the two series there 
brought into comparison are not constructed in the same 
fashion one series gives the averages of four relative prices 
each year; the other gives the relative average prices of 
twelve months in some cases and of prices for unstated dates 
in others. Moreover, many of the government series are based 
on prices for 1861 instead of for 1860, and in the former 
year the government seems to have been paying rather higher 
prices than in the latter. Still further the whole number of 
articles included in the government list is not great, and 
about half belong to a single and financially unimportant 
group drugs and chemicals. Finally, it is not improbable 
that there were changes in the qualities of some articles 
accepted from contractors that account for a relatively slight 



410 HISTORY OP THE GREENBACKS 

increase in price. For these various reasons the divergence 
between the two series possesses little significance. 

Much greater weight should be attached to the general 
conclusion drawn in chap, iv that the dominant factor in 
determining prices during the war was the fluctuating valua- 
tion of the currency. There is no reason why knowledge 
that he would be paid in greenbacks should affect in differ- 
ent degrees the prices that a dealer would ask from the gov- 
ernment and from private men. Since, then, the fairly 
satisfactory wholesale-price data show a rather close paral- 
lelism between prices of commodities and of gold, it seems 
fair to infer that the sums asked of the government for 
identical goods also rose and fell in rough agreement with 
the premium. True, prices seem not to have advanced so 
quickly as did the gold quotation, but neither did they fall 
so quickly. Everything considered, then, the most trust- 
worthy index of the increase in the sums expended by the 
government upon commodities is probably found in the aver- 
age premium upon gold in the several fiscal years. 

An even larger element of conjecture enters into the esti- 
mate of the increase in the expenditures of the third class, 
which includes payments for both commodities and labor. 
So far as commodities are concerned it is as fair here as in 
Class II to apply the average premium upon gold as an 
index of the increase. But with reference to labor a new 
problem arises. The salaries of most persons in the regular 
service of the government, aside from soldiers, were not in- 
creased at all. But the titles of the items grouped in Class 
III as they appear in the register's accounts seem to indicate 
that the great mass of the labor was not that of officials, but 
that of workmen employed on a strictly commercial basis. 
In constructing fortifications, erecting and repairing public 
buildings, etc., it is probable that the government or its 
contractors paid as much for the labor hired as a private 



-GREENBACKS AND COST OP THE ClVIL WAR 411 

employer would have done. If so, it follows that the best 
index of the increased expenditure on the labor included in 
this class is found in the tables of chap, v, particularly Table 
XXX, which shows the averave relative wages for all em- 



TABLE LXTV 

ESTIMATED INCKBASE IN THE OEDINAEY EXPENDITURES OF THE FEDERAL GOVERN- 
MENT CAUSED BY THE GREENBACKS 

(In millions of dollars) 



FISCAL YEARS 



% 


1802 
Six 
Months 


1863 


1864 


1865 


1866 
Two 
Mouths 


Expenditures: 1 
Class I, salaries, etc 


92 


242 


259 


408 


45 


Class II, commodities 


82 


214 


258 


402 


43 


Class III, both labor and 
commodities 


89 


238 


294 


405 


44 


Assumed ratio of increase: 
Class II 2 


3 


37# 


56 


102 


43# 


Class III 8 


3# 


27# 


44# 


11% 


49$ 


Estimated actual increase: 
Class I, increase in pay of 
soldiers 4 






6 


62 


20 


Class II 


2 


58 


93 


203 


13 


Class III 


3 


51 


90 


176 


14 


Total estimated increase each 
year . 


5 


109 


189 


441 


47 















1 The figures for the fiscal years 1863-65 are obtained from the annual reports on 
"Receipts and Expenditures." For the second half of the fiscal year 1862 the ordinary 
expenditures were estimated on the basis of the " Treasurer's Accounts" (H. B. Ex. 
Doc. No. 4, 38th Cong., 1st Sess. ), and these expenditures were divided among the three 
classes according to the proportions given by the computations for 1863. Similarly, 
the expenditures for the months July and August, 1865, are assumed to be two-thirds 
of the total for the quarter July to September and are divided among the three 
classes in the same ratio as the expenditures for the fiscal year 1865. 

2 Average premium upon gold as given in Appendix A below. 

3 Average of premium on gold and increase in money wages according to system 
of variable weights, as shown by Table XXX above. For wages in each fiscal year I 
have taken the index number for January of the corresponding calendar year. 

* Three-sixteenths of pay of army (except bounties) after May 1, 1864, as the pay 
is reported in "Receipts and Expenditures." For the months July and August, 1885, 
the increase is computed on one-half the sum stated by the paymaster-general as 
paid to the army between June 30 and October 31. (Ex. Doc. No. 1, Part II, p. 898, 
39th Cong., 1st Sess.) 



412 HISTORY OP THE GREENBACKS 

ployees for whom data are given in Table XII of the Aldrich 
Report. Assuming so much, we have two ratios of increase 
in expenditure for this class one applicable to the prices of 
commodities, the other to the wages of labor. Since there 
is no way of distinguishing between expenditure for goods 
and labor it is necessary to make some purely arbitrary 
assumption regarding their relative amounts. The simplest 
assumption is that the increase in the total expenditures of 
Class III was midway between the average premium upon 
gold and the average increase in money wages. Perhaps 
this assumption may be accepted as well as any other, for, 
if no definite reason can be assigned for ft, neither can any 
reason be assigned in favor of any rival assumption. 

In accordance with the preceding plan, Table LXIV has 
been constructed to show the probable increase in the ex- 
penditure of the government caused by the issues of paper 
money between the date of suspension and August 31, 1865, 
when the public debt reached its maximum amount. 1 The 
total increase for the whole period is $791,000,000. After 
all that has been said of the elements that enter into the 
problem it is hardly necessary to insist strenuously that this 
total is but a very rough estimate. 

III. THE GREENBACKS AND RECEIPTS 

Almost all the writers who have discussed the financial 
consequences of the legal -tender acts have confined their 
attention to the increase of expenditures. This procedure 
is perhaps natural for ardent critics of the paper-money 
policy, but a little consideration shows that it is unfair. The 
reports of the secretary of the treasury give the govern- 
ment revenue under five heads customs, sales of public 
lands, direct tax, miscellaneous sources, and internal revenue. 
Of these receipts some were and some were not affected by 

^Report of the Secretary of the Treasury, 1866, p. 6. 



GREENBACKS AND COST OF THE CIVIL WAR 413 

the greenback issues. In accordance with the provisions of 
the first legal-tender act customs duties were paid in gold, 
and the ad valorem duties were assessed on the foreign 
specie valuation of goods. The receipts from this source 
therefore remained on substantially the same footing as if 
specie payments had been maintained. During the war 
receipts from the sales of public lands were an item of 
little importance less than $1,000,000 per year despite 
the decline in the value of the currency that might be paid 
by the purchaser of lands. The receipts from direct taxes 
were all collected under one law passed six months before 
suspension. This law fixed the total amount of the tax at 
$20,000,000 and determined the precise amount to be raised 
by each state. 1 Accordingly the legal-tender acts had no 
effect upon this item except that the states were enabled 
to pay their quotas in greenbacks instead of in gold. The 
revenue derived from miscellaneous sources includes a con- 
siderable number of small items. Of these, some were doubt- 
less increased by depreciation, e. g., proceeds of sales 
of captured and abandoned property. Other items were 
unaffected, e. g. , receipts of fees by American consuls abroad. 
Premiums on sales of gold coin among these miscellaneous 
receipts may be set down from the present point of view as 
clear gain. 

The last of the enumerated government receipts remains, 
the internal-revenue duties. This system of taxation was 
inaugurated by an elaborate law passed July 1, 1862, which 
imposed certain duties, partly ad valorem, partly specific, 
upon a great variety of manufactured articles ; imposed a tax 
upon the gross receipts of canals, railroads, theaters, etc.; 
taxed auction and brokers' sales; required licenses for prac- 
ticing professions; levied an income and a legacy tax, and 
placed certain taxes upon articles of luxury, such as carriages, 

1 Act of August 6, 1861 ; 12 Statutes at Large, p. 294. 



414 HISTORY OF THE GREENBACKS 

pianos and plate. 1 This law was superseded two years later 
by another internal-revenue act which raised the rates of 
taxation, and increased the number of articles made to pay 
dnties. 2 

At the time the first law was passed the depreciation of 
the currency was not great, and probably the rates of taxa- 
tion imposed do not differ much from what they would have 
been upon a specie basis. But without any modification 
of the terms of the law, the progressive rise of prices must 
have caused an increase of the revenue from ad valorem 
duties, and from taxes on gross receipts and upon incomes. 
Receipts from specific duties, licenses, etc., however, prob- 
ably did not increase except as changes were made in the 
law or in its administration. While, then, the yield of this 
most important of the sources of federal revenue was materi- 
ally affected by the legal-tender acts, it would be too much 
to argue, as was done with reference to expenditures for 
commodities, that it was increased in the ratio indicated by 
the premium on gold. Some arbitrary assumption, however, 
must be made regarding the ratio of increase if any estimate 
is to be had. Again, it is perhaps best to adopt the simplest 
expedient, and count the increase of receipts from internal 
taxes at the full amount indicated by the premium, but, on 
the other hand, take no account of the increase of receipts 
from miscellaneous sources. Since the latter sums are 
relatively small, it is probable that an estimate thus made 
will err rather on the side of over, than of understating the 
increase of revenue. 

The total increase of receipts shown by this method as 
applied in Table LXV is $174,000,000. Again the caution 

1 12 Statutes at Large, pp. 432-89. The amendments to this act were not such as to 
increase the total revenue derived from it. See acts of July 17, 1862 (12 Statutes, p. 
627) ; March 3, 1863 (ibid., pp. 713-31), and March 7, 1864 (13 Statutes, p. 14). 

2 Act of June 30, 1864, 13 Statutes at Large, pp. 223-306; amended by act of March 
3,1865, (ibid., pp. 469-87). 



GREENBACKS AND COST OF THE CIVIL WAR 415 



TABLE LXV 

ESTIMATED INCREASE IN THE ORDINARY RECEIPTS OF THE FEDERAL GOVERNMENT 
CAUSED BY THE GREENBACKS 

(In millions of dollars) 





Fiscal 
Year 
1862 (Six 
Months) 


Fiscal 

Year 
1863 


Fiscal 
Year 

1864 


Fiscal 
Year 

1865 


Fiscal 
Year 
1866 (Two 
Months) 


Current receipts: 1 












From customs 


33.5 


69.1 


102.3 


84.9 


31.3 


From sales of public lands. 


.1 


.2 


.6 


1.0 


.1 


From direct tax 


1.8 


1.5 


.5 


1.2 


.0 


From miscellaneous sources 


.5 


3.0 


47.5 


33.0 


12.3 


From internal revenue .... 




37.6 


109.7 


209.5 


64.4 
















35.9 


111.4 


260.6 


329.6 


108.1 


Assumed ratio of increase . . . 


3 


37 


56# 


102# 


43# 


Estimated actual increase . . . 





10 


39 


106 


19 



is hardly necessary that the result is to be accepted subject 
to a wide margin of error. 

So far the discussion of the increase both of expenditures 
and of revenues has proceeded as if the paper currency had 
exerted none but simple and direct effects. There were other 
financial consequences of the shift from the specie to the 
paper standard, however, that were not unimportant, though 
they were indirect and difficult to gauge. Three of the most 
prominent must be indicated. 

1. It is probable that not a little of the lavishness with 
which public funds were appropriated by Congress during 
the war can be traced to the paper-money policy. At least 
such was the opinion of a man so well placed to observe the 
operations of the treasury as Hugh McCulloch. In his report 
of 1867 he said: "As long as notes could be issued and 
bonds could be sold at a premium or at par, for what the 

1 As given by the annual statements of the register of the treasury (see Finance 
Reports, 1862, p. 37 ; 1863, pp. 34, 35 ; 1864, p. 33 ; 1865, pp. 44, 45, 48) . For 1862 the receipts 
of the last two quarters of the year are given ; for 1866 two-thirds of the receipts for 
the first quarter. 



416 HISTORY OP THE GREENBACKS 

statute made money, there was a constant temptation to 
liberal, if not unnecessary, expenditures. Had the specie 
standard been maintained and bonds been sold at a discount 
for real money, there would have been an economy in all 
branches of the public service which unfortunately was not 
witnessed." ' 

2. If the paper currency tempted the government to reck- 
less expenditures, it also predisposed the people to submit 
more willingly to heavy taxation. It has been remarked 
several times that the advance of money wages and of money 
prices made most people feel wealthier, and, feeling wealthier, 
they were less inclined to grumble over the taxes. 

3. But while the feeling of prosperity may have been 
instrumental in procuring a cheerful acceptance of war taxes, 
it is very doubtful whether the net effect of the paper-money 
system was favorable to revenue. It was pointed out in the 
last chapter that the lagging of money wages behind money 
prices necessarily diminished the consumption of wealth 
among wage-earners. In so far as this diminution affected 
the consumption of articles that paid either an import or an 
excise duty and there were but few articles exempt from 
taxation by one of these methods the fall of real wages 
must have lessened the tax receipts. Much the same must 
have been true, although in less degree, of the indirect taxes 
collected from the consumption, of the great agricultural 
class, if the conclusion of chap, viii is true, that farmers were 
injured rather than benefited by the price fluctuations. On 
the other hand, the extravagance of the fortunate families 
enriched by the receipt of high profits tended to increase 
the revenue for the time being ; but it is improbable that the 
increase of receipts from the enlarged consumption of this 
limited class offset the decrease of receipts from the enforced 
economies of wage-earners and farmers. 

i Report of the Secretary of the Treasury, November 30, 1867, p. xi. 



GREENBACKS AND COST OF THE CIVIL WAR 417 

While, then, these indirect effects of the paper currency 
on expenditures and receipts could not by any system of 
bookkeeping be brought to definite quantitative statement, 
it is probable that their net result was unfavorable to the 
treasury. 

IV. THE GREENBACKS AND THE PUBLIC DEBT 

It may seem that in a discussion of the financial conse- 
quences of the legal-tender acts account should be taken of 
the effect of the desertion of the specie standard upon the 
terms on which the government could borrow. The resort 
to a legal-tender paper currency, one may argue, is a con- 
fession of acute financial distress and as such must depress 
the market for bonds. Therefore, to the financial loss caused 
by the increase of expenditures should be added a second 
loss from the unfavorable terms to which the government 
had to submit in selling its securities. 

Of course, it is true that the secretaries of the treasury in 
their efforts to borrow morfey were obliged to agree to some 
very hard bargains. There was little ground for exultation 
over the sale at par of bonds bearing interest at 5 or 6 per 
cent, in gold when the currency received from purchasers 
was worth in specie but 50 per cent, of its face value. But 
this loss arising from the difference in value between the 
paper dollars received by the treasury for bonds and the 
specie dollars which the treasury contracted to pay bond- 
holders after a term of years is not a further loss in addition 
to the losses discussed in the preceding sections, but rather 
these same losses looked at from another point of view. For, 
the estimate of the increase of expenditures above receipts, 
and therefore of debt contracted, rests precisely upon the 
decline in the value of the paper dollar from the specie 
standard. One may arrive at an estimate of the loss either 
by computing the increase in the number of dollars that had 



418 HISTORY OP THE GREENBACKS 

to be borrowed in paper money to be repaid in gold, or by 
estimating the decline in the specie value of the paper money 
raised by the sale of bonds; but to make estimates by both 
of these methods would be to include two guesses at the 
same item. 

It is, of course, true that, had gold bonds been sold largely 
at less than par for paper money, a second loss would have 
been incurred from the discount in addition to the loss from 
the smaller purchasing power of the currency received. But, 
as a matter of fact, the deviations from par in the subscrip- 
tion prices for bonds were not of great importance. The 
prices of government securities did not fluctuate very widely 
during the war, for the very good reason that these prices 
showed merely the value of one set of government promises 
to pay, viz., bonds in terms of another set viz., green- 
backs. Most factors that affected the credit of the govern- 
ment would affect the specie value of all its promises in much 
the same manner, and therefore would not alter materially 
the ratio of one to another. 

It remains only to say a word about the effect of the 
legal-tender acts upon the interest charge borne by the gov- 
ernment. The great financial argument in favor of the 
greenbacks has always been that they constitute a "loan 
without interest." However many millions the depreciation 
of this currency added to the principal of the public debt, 
the greenbacks should be credited with whatever sum was 
really saved in this fashion. But against the saving of 
interest effected by issuing greenbacks instead of selling 
bonds should be put down the loss of interest on the 
increase of debt arising from the augmentation of expendi- 
tures. If the rate of interest be taken at 6 per cent., a 
simple calculation shows that the interest saved by the 
greenbacks up to August 31, 1865, was but $28,000,000 
greater than the interest lost through the excess of increase 



GREENBACKS AND COST OF THE CIVIL WAR 419 

of expenditures over the increase of receipts as shown by 
Tables LXIV and LXV. By the end of this period the 
augmentation of debt caused by the greenbacks had appar- 
ently become greater than the volume of greenbacks in cir- 
culation, so that from this time forward the annual loss of 
interest probably exceeded the gain. 

V. CONCLUSION 

The public debt reached its maximum amount August 31, 
1865, when it stood at $2,846,000,000. ' Of this immense 
debt the preceding estimates indicate that some $589,000,000, 
or rather more than a fifth of the whole amount, was due to 
the substitution of United States notes for metallic money. 
Little as these estimates can pretend to accuracy, it seems 
safe at least to accept the conclusion that the greenbacks 
increased the debt incurred during the war by a sum run- 
ning into the hundreds of millions. If so, it follows that, 
even from the narrowly financial point of view of their spon- 
sors, the legal-tender acts had singularly unfortunate con- 
sequences. 

The present chapter, to agree with its predecessors, must 
end with the Civil War. But it may be pointed out that 
the financial effects of the legal-tender acts, like the eco- 
nomic effects, did not cease with the return of peace. No 
additional discussion is required to show that the varying 
depreciation of the currency continued to affect the volume 
of both receipts and expenditures until resumption of specie 
payments in January, 1879, restored the greenbacks to 
equality with gold. It is equally clear that the United 
States notes continued to be a " loan without interest," and 
that, on the other hand, the government continued to pay 
interest on the unnecessary debt created during the war. 
But there is another phase of the subject that deserves spe- 

1 Report of the Secretary of the Treasury, 1866, p. 6. 



420 HISTORY OP THE GREENBACKS 

cial remark, because it is frequently overlooked. A consid- 
erable portion of the immense public debt in existence 
August 31, 1865, consisted of obligations expressly payable 
in " lawful money. " In so far as the government was able 
to pay these debts out of revenue before the greenbacks had 
appreciated to par, it effected a saving. 1 But all such top- 
ics the continued effect of depreciation on government 
expenditures and revenue, the annual loss or gain of inter- 
est, the cost at which the " lawful money " debt was paid, 
the expense at which specie payments were resumed, and 
the difficulties encountered in maintaining the convertibility 
of the paper money into specie belong to a later period in 
the history of the greenbacks. It is probable, however, that 
were a careful study made of these topics the indictment 
brought against the greenbacks on financial grounds would 
be rendered yet more serious. 

lOf course, when the lawful money debt was paid by refunding operations 
that is, out of the proceeds of new loans themselves payable in gold no such savings 
resulted, unless the new bonds were sold at a premium. An estimate of the saving 
actually effected may be found in the Journal of Political Economy, Vol. V, pp. 146-9. 
The total arrived at is $72,000,000. If this sum be deducted from the above estimate 
of the increase in debt, the net loss to the government caused by the greenbacks 
during the war will still appear to have been over half a billion in gold. 



STATISTICAL APPENDICES 



APPENDIX A 

GOLD VALUE OF THE PAPER CURRENCY, 1862-65 

EXPLANATORY NOTE. There are two well-authenticated tables that show the 
average monthly and yearly value of currency in gold during the Civil War: (1) a 
table published by the American Almanac (see, e.g., issue of 1889, p. 341) ; (2) a table 
prepared by the Bureau of Statistics (Finance, Commerce and Immigration of the 
United States, Series of 1895-%, No. 4, p. 518). For the years 1862-65 these tables are 
identical ; the figures given below are taken from the second. This table was pre- 
pared by Mr. E. B. Elliott, actuary of the treasury, in the following manner : four 
daily quotations of the rates of gold at New York, viz., the opening, highest, lowest, 
and closing prices, were recorded ; from them a daily average was made, and from 
these average daily prices was prepared the average rate for each month. 

The table of daily highest and lowest prices is based, for the reasons assigned 
in the text (Part II, chap, iii, sec. i), upon the table given in the Report of the Cham- 
ber of Commerce of the State of New York for 1865-66, Part II, pp. 130-33. The figures 
for the first eleven days of January, 1862, however, are supplied from the daily 
reports of the premium on gold in the New York Commercial Advertiser. 



TABLE 1 

MONTHLY HIGHEST, AVERAGE, AND LOWEST GOLD PRICE OF $100 OF PAPER MONEY 
IN THE NEW YORK MARKET 



1862 



Month 


Date of Highest Price 


Highest ' 


Average 


Lowest i 


Date of 
Lowest Pr. 


January 
February . . . 
March 


1 

27,28 
25 


$99.50 
97.92 
98.77 


$97.60 
96.60 
98.20 


$95.24 
95.47 
97.56 


10 
15 
1 




8,18,19,24,25,26 


98.52 


98.50 


97.68 


2 




1 


97.92 


96.80 


96.04 


27 


T J 

June 


11 


96.74 


93.90 


91.32 


27 


July 


1 


91.95 


86.60 


83.25 


22 


August 
September . . 
October 
November. . . 
December. . . 


9,11 
1, 2, 16, 17, 18 
1 
29 
1 


88.89 
85.84 
81.97 
77.52 
77.82 


87.30 
84.40 
77.80 
76.30 
75.60 


86.02 
80.65 
74.91 
75.05 
74.63 


29 
30 
22 
10 
4 



1 The highest and lowest prices are taken from the following tables of daily 
prices. 

423 



424 



HISTORY OF THE GREENBACKS 



TABLE 1- Continued 

MONTHLY HIGHEST, AVERAGE, AND LOWEST GOLD PRICE OP $100 OF PAPER MONET 
IN THE NEW YORK MARKET 

1863 



Month 


Date of Highest Price 


Highest i 


Average 


Lowest ' 


Date of 
Lowest Pr. 


January 
February . . . 
March 


2 
10,11 
26 


$74.84 
65.57 
71.94 


$68.90 
62.30 
64.70 


$62.21 
57.97 
58.22 


31 
26,28 
1, 2 


April 


8 


68.73 


66.00 


63.34 


1 


May 


26,28 


69.69 


67.20 


64.62 


7 


June 


10 


71.17 


69.20 


67.40 


16 


July . . 


20 


81.14 


76.60 


68 97 


1 


August 


25 


81.88 


79.50 


77 07 


1 


September. . 
October 


1 
1 


78.82 
71.24 


74.50 
67.70 


69.87 
63 80 


29 
15 


November. . . 
December.. . 


27 

1 


69. as 

67.51 


67.60 
66.20 


64.94 
65.47 


21,23 
4,29 



1864 



January 
February . . . 
March 


6 
27 
1 


$66.01 
63.64 
62.89 


$64.30 
63.10 
61.40 


$62.75 
62.11 
58.91 


19 
16 
26 


April 


4 


60.15 


57.90 


54 13 


26 


May 


10 


59.52 


56.70 


52.63 


31 


June 


2 


53.05 


47.50 


40.00 


29,30 


July 


1 


45.05 


38.70 


35.09 


11 


August 
September . . 
October 
November. . . 
December. . . 


30 
30 
3 
18 
19 


43.20 
52.36 
52.91 
47.62 
47.00 


39.40 
44.90 
48.30 
42.80 
44.00 


38.20 
39.29 
43.91 
38.46 
41.15 


6 
2 
31 
9 

7 



1865 



January 
February . . . 
March 


21 
21 
24 


$50.70 
50.92 
67.51 


$46.30 
48.70 
57.50 


$42.67 
46.14 
49.75 


4 

7 
1 


April 


10 


69.69 


67.30 


64.73 


5 


May 


11 


77.82 


73.70 


68.91 


1 


June 


5 


73.94 


71.40 


67.74 


15 


July 


3 


72.14 


70.40 


68.43 


28 


August 
September . . 
October 
November . . 
December . . 


11,15 
15 
2,3 
1 

9 


71.30 
70.11 
69.38 
68.73 
69.20 


69.70 
69.50 
68.70 
68.00 
68.40 


68.73 
68.97 
67.11 
67.23 
67.34 


2 
1 
6 
29 
1.4,5 



i The highest and lowest prices are taken from the following tables of daily 
prices. 




APPENDIX A 



425 



TABLE 2 

DAILY HIGHEST AND LOWEST VALUE IN GOLD OF $100 IN CURRENCY 

1862 





January 


February 


March 


April 


May 


June 


1 


$99.50-98.52 


$96.62-96.62 


$97.68-97.56 


$98.16-98.04 


$97.92-97.80 


S. 


2 


99.01-98.77 


S. 


S. 


98.04-97.68 


97.80-97.56 


$96.62-96.50 


3 


99.01-98.77 


96.74-98.62 


98.04-97.68 


98.28-98.16 


97.56-97.32 


96.62-96.62 


4 


98.28-98.04 


96.62-96.50 


98.16-98.04 


98.28-98.16 


S. 


96.62-96.50 


5 


S. 


96.74-96.62 


98.04-98.04 


98.16-98.04 


96.97-96.39 


96.50-96.15 


6 


97.80-97.56 


96.74-96.62 


98.04-97.92 


S. 


97.44-96.73 


96.15-95.92 


7 


97.32-97.09 


96.74-96.50 


98.04-97.92 


97.92-97.80 


97.68-97.32 


96.15-95.04 


8 


96.62 


96.62-96.50 


98.28-98.16 


98.52-97.92 


97.32-97.09 


S. 


9 


95.92 


S. 


S. 


98.28-98.16 


96.97-96.85 


95.92-95.81 


10 


95.69-95.24 


96.50-96.27 


98.04-98.04 


98.28-98.16 


96.85-96.74 


95.92-95.81 


11 


96.62-96.15 


96.27-96.15 


98.40-98.28 


98.16-98.04 


S. 


96.74-95.69 


12 


S. 


96. 15-%. 04 


98.40-98.40 


98.28-98.04 


96.74-96.50 


95.47-95.01 


13 


97.09-97.09 


95.92-95.81 


98.52-98.52 


S. 


96.85-96.74 


95.01-94.90 


14 


97.32-96.85 


95.81-95.58 


98.52-98.40 


98.28-98.16 


96.85-96.85 


94.67-94.56 


15 


97.56-97.33 


95.58-95.47 


98.52-98.52 


98.28-98.16 


96.85-96.50 


S. 


16 


97.80-97.56 


S. 


S. 


98.40-98.40 


97.09-96.62 


93.90-93.68 


17 


98.16-98.04 


96.39-96.27 


98.52-98.40 


98.52-98.40 


97.09-96.97 


94.34-93.90 


18 


98.28-98.04 


96.74-96.39 


98.64-98.52 


98.52-98.52 


S. 


94.90-94.45 


19 


S. 


97.09-96.85 


98.52-98.40 


98.52-98.40 


96.85-96.85 


94.34-93.79 


20 


97.80-97.56 


96.85-96.74 


98.77-98.64 


S. 


96.85-96.74 


94.01-93.79 


21 


97.80-97.56 


96.97-96.97 


98.77-98.52 


98.40-98.40 


96.85-96.62 


94.01-93.90 


22 


97.44-97.21 


97.09-97.09 


98.77-98.64 


98.40-98.40 


96.62-96.50 


S. 


23 


96.74-96.39 


8. 


S. 


98.40-98.28 


96.74-96.62 


93.68-92.59 


24 


96.74-96.62 


97.09-96.85 


98.77-98.64 


98.52-98.40 


96.74-96.50 


92.38-91.95 


25 


97.09-96.85 


97.09-96.97 


98.89-98.77 


98.52-98.52 


S. 


92.38-91.95 


26 


S. 


97.21-96.97 


98.77-98.64 


98.52-98.40 


96.15-96.15 


91.85-91.53 


27 


97.09-96.85 


97.92-97.80 


98.77-98.28 


S. 


96.15-96.04 


91.43-91.32 


28 


96.74-96.74 


97.92-97.80 


98.77-98.64 


98.40-98.28 


96. 27-96. 15 


91.74-91.64 


29 


96.85-96.74 




98.52-98.52 


98.28-98.28 


96.39-96.27 


S. 


30 


96 85-96 62 




S. 


98.04-98.04 


96 50-96 50 


91.85-91.53 


31 


96.62-96.50 




98.64-98.28 




96.62-96.50 






July 


August 


September 


October 


November 


December 


1 


$91.95-91.53 


$86.86-86.39 


$85.84-85.47 


$81.97-80.81 


$77.15-76.19 


$77.82-76.05 


2 


91.85-91.43 


86.96-86.77 


85.84-85.65 


81.47-81.30 


S. 


76.34-76.05 


3 


91.32-91.32 


S. 


84.93-84.75 


81.72-81.55 


76.63-76.05 


-76.34-75.76 


4 


Holiday 


87.24-86.96 


84.93-84.84 


81.63-81.30 


77.22-76.63 


75.19-74.63 


5 


91.32-91.01 


87.34-87.15 


84.57-83.95 


S. 


76.05-75.61 


76.05-75.47 


6 


S. 


87.24-87.15 


84.21-83.88 


81.38-80.56 


76.a5-75.76 


76.63-75.76 


7 


90.91-90.70 


87. 72-87. 05 


S. 


81.30-80.72 


76.05-75.76 


S. 


8 


89.89-89.69 


88.79-87.72 


84.21-83.68 


80.48-80.08 


75.76-75.47 


76.12-67.05 


9 


88.11-85.84 


88.89-88.59 


84.30-84.12 


79.84-79.05 


S. 


75.40-75.19 


10 


86.49-85.11 


S. 


84.30-84.21 


78.59-77.52 


75 61-75.05 


75.69-75.47 


11 


87.15-86.21 


88.89-88.20 


84.21-84.12 


78.12-77.97 


76.34-75.33 


75.69-75.61 


12 


87.82-87.34 


88.11-87.53 


84.39-84.21 


S. 


76.05-75.76 


76.05-75.90 


13 


8. 


87.43-87.34 


84.75-84.57 


77.52-77.37 


76.05-75.76 


76.26-75.76 


14 


86.58-85.93 


86.77-86.30 


S. 


76.34-75.19 


76.34-75.76 


S. 


15 


85.65-85.47 


87.15-86.58 


85.11-84.93 


75.76-75.33 


75.90-75.76 


75.83-75.61 


16 


85.r>5-75.29 


87.34-87.24 


85.84-84.93 


75.76-75.47 


S. 


75.76-75.26 


17 


84.93-84.12 


S. 


85.84-85.11 


75 76-75.47 


75.76-75.61 


75.61-75.19 


18 


84.03-83.88 


86.86-86.77 


85. 84-85. 56 


76.92-76.78 


76.12-75.76 


75.69-75.33 


19 


84.57-84.39 


87.15-86.86 


85.56-85.47 


S. 


76 92-76.34 


75.61-75.33 


20 


S. 


86.96-86.77 


85.65-85.38 


77.75-77.22 


76 78-76.63 


75.76-75.26 


21 


83.51-83.33 


86.77-86.30 


S. 


77.97-77.07 


76.78-76.56 


S. 


22 


&3. 59-83. 25 


86.58-86.02 


85.38-85.11 


75.19-74.91 


76.63-76.48 


75.61-75.40 


23 


84.03-83.88 


86.86-86.30 


84.93-84.21 


75.47-75.19 


S. 


75.69-75.61 


24 


85.47-84.39 


S. 


84.30-84.03 


76.34-75.76 


76.85-76.48 


75.76-75.69 


25 


87.53-85.84 


86.77-86.39 


83.33-82.81 


76.92-76.19 


77 00-76.92 


Xmas Day 


26 


85.47-85.11 


86.77-86.67 


83.16-82.99 


S. 


77.37-77.22 


75.83-75.76 


27 


8. 


86.77-86.58 


82.39-82.39 


76.92-76.19 


Thanks. Day 


75.83-75.40 


28 


85.74-85.02 


86.58-86.49 


S. 


75.97-75.61 


77.37-77.22 


S. 


29 


86.39-85.84 


86.21-86.02 


82.14-80.97 


76.19-75.90 


77.52-77.37 


75 83-75.33 


30 


87.43-86.67 


86.49-86.39 


82. 30-80. 65 


76.78-76.48 


S. 


75.40-75.19 


31 


87.34-86.67 


S. 




77.22-76.92 




75.05-74.84 



426 



HISTORY OF THE GREENBACKS 



TABLE 2 Continued 

DAILY HIGHEST AND LOWEST VALUE IN GOLD OF $100 IN CURRENCY 

ma 





January 


February 


March 


April 


May 


June 


1 


N. Year's Day 


S. 


S. 


$64.10-63.34 


$66.34-66.01 


$68.49-67.80 


2 


$74.84-74.70 


$63.80-62.89 


$58.31-58.22 


66.25-63.69 


66.72-66.45 


68.14-67.91 


S 


74.77-74.35 


64.73-64.46 


58.48-58.22 


65.36-65.15 


8. 


68.14-68.08 


4 


S. 


63.69-63.09 


60.61-59.52 


64.62-64.41 


67.45-66.67 


68.49-68.26 


5 


74.28-73.94 


63.85-63.29 


63.69-63.29 


8. 


67.34-66.01 


68.49-68.38 


6 


74.63-74.28 


63.59-63.09 


66.67-64.94 


66.23-65.41 


65.68-64.94 


68.91-68.79 


7 


74.63-74.07 


tw.sr.-Ki.;i 


64.62-64.31 


66.67-65.41 


64.83-64.62 


8. 


8 


73.60-72.99 


S. 


S. 


68.73-68.03 


64.83-64.73 


69.93-69.93 


9 


72.46-72.20 


64 73-63.90 


64.21-63.59 


68.38-67.57 


67.11-66.56 


70.36-70.24 


10 


73.06-72.07 


65.57-64.99 


62.50-61.35 


68.26-67 11 


S. 


71.17-70.98 


11 


S. 


65.57-65.04 


63.34-63.09 


66.45-65.57 


67.34-67.11 


70.54-70.42 


12 


71.11-70.30 


64.88-64.73 


63.09-62.45 


S. 


67.34-67.00 


70.80-70.73 


13 


70.42-69.44 


64.46-64.10 


62.89-62.02 


63.69-63.49 


66.78-66.72 


70.30-70.18 


14 


68.14-67.57 


64.41-64.10 


63.39-62.99 


64.52-64.26 


66.78-66.67 


S. 


15 


67.51-67.23 


S. 


S. 


65.79-64.94 


66.78-66.67 


69.20-68.49 


16 


68.73-68.61 


64.15-63.49 


64.73-64.31 


65.79-65.04 


66.78-66.56 


67.68-67.40 


17 


68.08-67.74 


63.19-62.79 


64.67-64.41 


65.25-64.21 


S. 


68.73-68.61 


18 


8. 


62.31-61.73 


65.20-64.52 


66.12-65.52 


66.78-66.67 


69.87-69.14 


19 


67.68-37.23 


61.92-60.98 


64.57-64.15 


8. 


67.51-67.06 


69.93-69.57 


20 


67.68-67.23 


61.54-61.07 


64.73-64.52 


67.23-66.34 


67.28-67.11 


69.69-69.69 


21 


67.68-67.34 


61.73-61.16 


64.99-64.57 


68.49-68.03 


67.23-66.67 


8. 


22 


67.91-67.34 


8. 


S. 


68.61-68.03 


67.34-66.78 


69.75-69.50 


23 


68.03-67.57 


61.16-60.65 


66.23-65.15 


67.40-66.67 


67.34-6ti.89 


69.75-69.69 


24 


67.40-66.67 


59.61-58.31 


68.73-62.89 


66.01-65.79 


S. 


69.87-69.44 


25 


S. 


58.31-58.01 


71.68-70.55 


65.79-64.94 


68.61-68.26 


69.08-68.61 


26 


67.17-65.90 


59.00-57.97 


71.94-71.30 


S. 


69.69-68.97 


69.08-68.97 


27 


65.25-64.62 


58.87-58.48 


71.43-70.98 


66.67-64.99 


69.63-69.08 


68.97-68.85 


28 


65.57-64.94 


58.31-57.97 


70.30-69.87 


66.83-66.39 


69.69-69.50 


8. 


29 


65 36-64 41 




S. 


66.67-66.39 


69.20-68.91 


68.26-67 97 


30 


65.36-63.19 




69.32-67.91 


National Fait 


69.03-68.85 


68.43-68.14 


31 


62.89-62.21 




67.34-66.67 




S. 






July 


August 


September 


October 


November 


December 


1 


$69.08-68.97 


$77.29-77.07 


$78.82-78.51 


$71.24-71.24 


S. 


$67.51-67.40 


2 


69.50-69.32 


S. 


78.43-78.12 


70.18-69.81 


$68.55-68.26 


67.34-67.28 


3 


69.44-69.32 


78.43-78.28 


77.37-74.49 


70.11-69.87 


68.43-68.38 


66.01-65.57 


4 


Holiday 


77.97-77.67 


74. 91-74. 35 


S. 


68.49-68.43 


65.57-65.47 


5 


S. 


78.28-78.20 


76.05-75.90 


69.44-69.08 


68.38-67.91 


65.90-65.79 


6 


72.46-71.81 


Nat'l Thanks. 


S. 


68.49-67.91 


67.57-67.23 


S. 


7 


75.47-72.20 


78.74-78.28 


75.19-75.05 


68.38-68.26 


68.38-67.85 


66.23-65.74 


8 


76.12-75.90 


79.21-79.13 


75.76-75.69 


68.55-68.49 


S. 


67.23-66.89 


9 


76.19-76.05 


S. 


75.54-75.40 


68. 14-68. 03 


68.38-68.20 


67.34-67.28 


10 


75.61-75.47 


79.29-78.90 


76.26-76.12 


67.40-67.34 


68.97-68.73 


67.23-66.83 


11 


75.69-75.47 


79.21-79.05 


77.29-77.07 


8. 


68.79-68.61 


66.23-66.01 


12 


S. 


79.29-79.13 


77.59-77.52 


66.89-66.56 


68.20-68.03 


66.56-66.50 


13 


76.19-75.97 


78.97-78.74 


S. 


65.04-64.52 


68.0:1-67.85 


S. 


14 


76.19-76 05 


79.84-79.05 


76.41-75.97 


65.57-65.04 


68.20-68.03 


66.78-66.50 


15 


77.59-77.37 


79 76-79.68 


76.34-75.69 


64.10-63.80 


S. 


66.34-66.34 


16 


79 37-79.29 


S. 


76.12-75.61 


64.88-64.83 


68.03-67.97 


67.00-66.78 


17 


79.52-79.37 


79.60-79.52 


75.61-75.47 


67.00-66.67 


67.62-67.34 


66.56-66.45 


18 


79.84-79 84 


79.60-79 60 


75.19-75.05 


S. 


66.89-66.67 


65.95-65.74 


19 


S. 


80.32-79.92 


74.77-74.63 


66.28-64.31 


66.23-65.47 


66.01-65.79 


20 


81.14-79.76 


80.08-80.08 


S. 


66.83-66.78 


65.57-65.25 


S. 


21 


79.37-78.51 


79.84-79.76 


71.94-71.81 


69.57-68.49 


65.15-64.94 


65.74-65.57 


22 


80.32-79.52 


80.16-80.08 


72.86-72.20 


70.05-69.32 


S. 


65.74-65.68 


23 


79.52-79.29 


S. 


72.73-72.33 


68.61-68.26 


65.36-64-94 


65.79-65.57 


24 


79.29-79.21 


80.65-80.65 


73.13-72.99 


68.14-68.03 


66.45-65.79 


65.95-65.90 


25 


79.52-79.44 


81.88-80.97 


72.46-72.40 


S. 


67.23-67.11 


Xmas D'y 


26 


S. 


81.63-81.14 


71.94-71.81 


66.89-66.78 


Thanks. Day 


66.01-66.01 


27 


78.43-78.12 


80 32-80.08 


S. 


68.49-67.91 


69.93-68.73 


S. 


28 


78.43-78.28 


80.65-80.40 


71.81-71.75 


68.61-68.26 


69.20-69.14 


65.90-65.52 


29 


78.43-78.28 


80.16-80.08 


70.18-69.87 


68.03-67.57 


S. 


65.52-65.47 


30 


78.35-78.28 


S. 


70.80-70.42 


68.49-68.32 


67.57-67.23 


65.90-65.57 


31 


78.05-77.52 


78.74-77.97 




68.79-68.73 




65.84-65.84 



APPENDIX A 



427 



TABLE 2 Continued 

DAILY HIGHEST AND LOWEST VALUE IN GOLD OF $100 IN CUEEENCY 
1864 





January 


February 


March 


April 


May 


June 


1 


N. Year's Day 


$63.49-63.39 


$62.89-62.50 


$60.06-59.44 


S. 


$52.63-52.63 


2 


$65.95-65.79 


63.59-63.54 


62.65-62.65 


60.06-59.97 


$56.82-56.38 


53.05-52.63 


3 


S. 


63.39-63.29 


62.31-62.11 


S. 


56.50-55.63 


52.67-52.32 


4 




63.29-63.29 


62.45-61.92 


60.1560.02 


55.71-55 71 


52 56-52.19 


5 


65.95-65.95 


63.39-63.19 


61.87-61.78 


59.66-59.61 


56.42-56.30 


S. 


6 


66.01-66.01 


63.39-63.19 


S. 


59.26-58.61 


57.47-56.58 


51.55-51.55 


7 


65.84-65.68 


S. 


61.82-61.82 


58.61-58.48 


57.89-57.85 


51. 81-51., 35 


8 


65.90-65.68 


62.99-62.79 


61.49-61.26 


59.00-59.00 


S. 


51.81-51.75 


g 




62.65-62.60 


59.88-59 61 


59 00-59 00 


58.91-58.48 




10 


S. 


62.79-62.79 


60.70-60.70 


S. 


59.52-59.35 


50.38-50.81 


11 


65.63-65.57 


62.75-62.70 


60.74-60.70 


59.00-59.00 


57.39-56.74 


50.44-50.38 


12 


65.04-64.83 


62.89-62.79 


62.31-61.73 


57.55-57.14 


57.80-57.39 


S. 


13 


65.04-64.99 


62.70-62.65 


S. 


56.94-56.90 


58.82-57.51 


51.09-51.09 


14 


64.73-64.57 


S. 


62.31-62.21 


56.82-56.42 


58.14-58.06 


51.15-50.63 


15 


64.41-64.31 


62.55-62.35 


61.63-61.44 


57.64-57.55 


S. 


50.57-50.57 


16 


64.21-63.90 


62.40-62.11 


61.87-61.73 


58.48-58.39 


57.64-57.55 


50.70-50.70 


17 


S. 


62.55-62.50 


62.06-61.92 


S. 


56.50-56.18 


50.86-50.79 


18 


62.79-62.79 


62.55-62.55 


61.35-61.3S 


58.65-58.65 


55.25-55.17 


51.22 51.15 


19 


62.79-62.75 


63.29-63.04 


61.73-61.73 


59.88-59.52 


55.10-55.06 


S. 


20 


63.19-62.94 


62.84-62.79 


S. 


59.88-59.70 


55.25-55.25 


50.51-50.44 


21 


64.00-63.69 


S. 


61.73-61.73 


59.93-59.70 


55.10-55.10 


50.25-48.08 


22 


63.80-63.44 


62.89-62.89 




57.64-57.22 


S. 


47.62-43.48 


23 


64.10-63.85 


63.59-63.39 


60.88-60.42 


57.43-56.34 


54.91-54.91 


48.78-44.84 


24 


S. 


63.59-63.49 


60.06-60.06 


S. 


54.83-54.83 


46.95-46.08 


25 


63.44-63.34 


63.19-63.14 


Good Friday 


55.87-54.79 


54.13-54.09 


46.73-45.45 


26 


63.29-63.24 


63.49-63 14 


59.00-58.91 


55.17-54.13 


54.64-54.50 


S. 


27 


63.69-63.69 


63.64-63.49 


S. 


55.25-55.17 


53.76-53.69 


45.25-41.67 


28 


63 64-63.59 


S. 




56.22-55.48 


53.76-53.76 


42.73-41.67 


29 


63.80-63.44 


62.89-62.79 


60.33-60.29 


56.30-55.48 


S. 


42.55-40.00 


30 


63.80-63.64 




61.12-60.88 


55.71-55.56 


53.76-53.76 


40.82-40.00 


31 


S. 




60.88-60.88 




52.63-52.63 






July 


August 


September 


October 


November 


December 


1 


$45.05-40.00 


$39.84-38.61 


$41.15-40.24 


$52.63-51.61 


$43.48-41.41 


$44.10-43.67 


2 


43.48-40.00 


39.06-38.68 


40.24-39.29 


S. 


43.57^40.65 


43.43-42.78 


3 


S. 


39.06-38.68 


42.37-41.07 


52.91-52.15 


44.00-42.24 


43.81-43.29 


4 


Holiday 




S. 


52.63-52.02 


43.17-41.91 


S. 


5 


42.55-40.16 


38.83-38.28 


42.55-41.07 


52.84-52.29 


42.46-40.86 


44.05-43.53 


6 


40.32-38.24 


38.57-38.20 


41.58-41.32 


52.02-50.76 


S. 


43.48-42.60 


7 


38.17-36.63 


S. 


41.52-41.19 


50.51-49.02 


41.93-40.67 


41.93-41.15 


8 


37.49-36.17 


38.95-38.54 


42.42-41.49 


50.83-49.20 


40.73-40.08 


41.84-41.19 


9 


38.46-36.36 


39.60-39.14 


42.71-42.37 


S. 


40.65-38.46 


41.75-41.26 


10 


J. 


39.29-39.14 


45.87-43.76 


51.02-50.25 


41.15-39.53 


42.64-41.80 


11 


36.23-35.09 


39.39-38.95 


S. 


50.41-49.17 


42.22-40 90 


S. 


12 


36.90-35.46 


39.20-38.83 


46.84-44.44 


49.94-48.84 


41.24-40.82 


43.01-42.11 


13 


37.21-36.63 


39.35-39.02 


45.98-43.86 


49.05-47.68 


S. 


42.87-42.46 


14 


38.76-37.31 


S. 


44.74-43.86 


48.08-46.03 


41.15-40.55 


42.85-42.46 


15 


40.98-39.06 


39.10-38.93 


43.81-43.57 


46.89-45.45 


41.91-40.98 


42.64-42.06 


16 


40.24-38.28 


39.12-38.95 


44.62-43.86 


S. 


43.76-41.67 


42.78-42.60 


17 


S. 


39.10-38.91 


45.27-44.72 


45.82-44.94 


45.82-44.10 


44.42-4322 


18 


39.33-38.24 


38.91-38.76 


S. 


48.48-46.51 


47.62-45.66 


S. 


19 


38.6H-37.2l 


38.91-38.78 


44.67-44.10 


48.19-47.28 


46.30-44.35 


47.00-46.03 


20 


38.31-37.91 


38.99-38.89 


44.84-44.10 


48.48-47.34 


S. 


45.35-44.05 


21 


38.99-38.46 


S. 


45.45-45.05 


48.22-47.85 


45.98-45.15 


44.99-44 25 


2 


39.92-38.80 


38.93-38.87 


46.30-45.20 


47.73-46.84 


44.64-43.67 


45.25-44.54 


23 


39.41-39.06 


38.89-38.72 


47.39-46.08 


S. 


45.35-44.74 


45.35-44.89 


24 


S 


39.35-38.91 


50.00-47.17 


47.11-46.11 


Thanks. D'y 


45.38-45.05 


25 


39.16-38.65 


39.29-39.10 


S. 


46.57-45.71 


46.14-45.20 


S. 


26 


38.80-38.54 


39.47-39.06 


51.27-50.47 


47.09-46.08 


45.56-44.51 


Holiday 


27 


39.37-38.87 


40.82-39.53 


52.02-51.27 


46.54-46.16 


S. 


46.30-45.87 


28 


40.98-39.68 


S. 


51.28-48.78 


46.48-45.92 


44.20-42.78 


46.24-44.64 


29 


40.00-39.45 


42.53-40.82 


51.48-49.50 


45.92-45.20 


43.10-42.35 


45.05-44.42 


30 


39.53-38.76 


43.20-42.37 


52.36-51.51 


S. 


44.00-42.92 


44.25-43.57 


31 


S. 


42.73-41.15 




45.15-43.91 




44.59-43.88 



HISTORY OF THE GREENBACKS 



TABLE 2 -Continued 

DAILY HIGHEST AND LOWEST VALUE IN OOLD OF $100 IN CURRENCY 
1865 





January 


February 


March 


April 


May 


June 


1 


8. 


$19.38-48.63 


$50.12-49.75 


$66.23-65.79 


$70.11-68.91 


Fast day 


2 


Holiday 


49.08-48.54 


50.99-50.51 


8. 


71.O>-70.18 


$72.73-72.27 


3 


$14.25-43.57 


48.72-47.68 


50.47-50.25 


68.73-67.57 


70.86-70.48 


73.26-72.99 


4 


43.29-42.67 


47.93-46.62 


50.25-50.00 


68.32-67.23 


70.42-69.75 


8. 


5 


44. 17-13.57 


8. 


S. 


67.57-64.73 


70.18-69.50 


73.94-73.13 


6 


44.05-43.81 


47.17-46.62 


50.51-50.22 


66.56-65.57 


70.05-69.63 


73.39-72.93 


7 


44.17-43.96 


47.06-46.14 


50.73-50.25 


67.91-66.45 


8. 


72.99-72.66 


8 


8. 


47.51-46.92 


51.05-50.57 


67.34-66.34 


72.33-69.93 


72.60-72.46 


9 


44.22-44.05 


47.34-46.73 


51.71-50.92 


8. 


73.66-72.86 


72.93-72.46 


10 


44.94-43.69 


47.51-47.20 


53.58-52.32 


69.69-68.67 


76.26-73.66 


72.93-72.60 


11 


45.45-44.69 


48.87-47.85 


53.12-52.22 


68.49-68.03 


77.82-75.90 


8. 


12 


46.19-45.51 


S. 


S. 


68.91-68.49 


76.56-75.05 


72.33-70.92 


13 


45.77-45.05 


48.75-48.31 


53.98-52.22 


68.49-67 97 


77.37-76.78 


71.11-69.93 


14 


45.92-45.25 


48.28-47.90 


56. 26-54. 05 


Prei. MSB. 


S. 


70.61-69.93 


15 


S. 


48.84-48.43 


57.39-55.90 


Excb. cloud 


77.07-76.63 


69.69-67.74 


16 


45.85-45.22 


49.26-48.78 


58.74-56.54 


S. 


76.70-76.48 


69.69-68.85 


17 


46.62-46.08 


49.14-48.87 


62.50-59.17 


67.51-65.36 


77.15-75.97 


69.57-68.91 


18 


46.51-40.08 


49.02-48.66 


61.26-60.15 


68.38-67.68 


77.15-76.34 


S. 


19 


48.08-46.54 


S. 


S. 


Holiday 


76.56-76.05 


71.43-69.75 


20 


49.57-48.13 


50. 44-49. 94 


62.40-59.57 


Holiday 


76.78-76.34 


72.60-71.62 


21 


50.70-48.54 


50.92-50.06 


64.73-62.79 


67.91-66.83 


S. 


71.68-70.48 


22 


8. 


Holiday 


64.10-62.89 


67.06-66.45 


76.56-76.19 


71.17-70.55 


23 


50.54-49.32 


50.28-49.94 


66.34-63.69 


S. 


76.26-75.54 


70.61-70.30 


24 


50.54-49.08 


50.28-49.94 


67.51-65.57 


Holiday 


74.07-73.80 


70.61-70.18 


25 


48.96-48.19 


50.51-50.03 


65.15-63.49 


Holiday 


73.53-72.14 


S. 


26 


49.50-48.31 


S. 


S. 


66.39-65.79 


73.66-72.46 


71.43-70.61 


27 


47.90-46.51 


50.12-49.57 


65.36-64.31 


67.80-67.00 


73.60-73.06 


70.80-70.42 


28 


46.95-15.45 


49.81-49.14 


65.04-64.67 


68.14-67.57 


S. 


71.81-70.80 


29 


8. 




66.23-65 63 


68.49-68.26 


73 53-72 99 


72 40-71 81 


30 


47.39-46.57 




66.83-65.84 


8. 


72.86-72.07 


71.94-70.80 


31 


49.50-47.39 




66.12-65.84 




73.26-72.73 






July 


August 


September 


October 


November 


December 


1 


$71.75-70.92 


$69.50-68.91 


$69.26-68.97 


S. 


$68.73-68.55 


$67.57-67.34 


2 


8. 


69.03-68.73 


69.32-69.14 


$69.38-69.32 


68.49-68.20 


67.80-67.45 


3 


72.14-71.17 


69.38-69.14 


S. 


69.38-69.08 


68.20-68.03 


S. 


4 


Holiday 


69.75-69.32 


69.50-69.26 


69.08-68.14 


68.14-67.97 


67.62-67.34 


5 


71.68-71.24 


69.87-69.57 


69.38-69.14 


68.26-67.91 


S. 


67.51-67.34 


6 


71.94-71.49 


S. 


69.20-68.97 


68.43-67.11 


68.03-67.85 


68.14-67.57 


7 


71.68-71.56 


69.69-69.44 


69.14-69.03 


68.49-68.08 


68.08-67.91 


Thanks. Day 


8 


71.56-71.36 


69.32-69.08 


69.20-69.08 


S. 


68.26-67.74 


68.61-68.26 


9 


8. 


69.57-69.20 


69.14-69.08 


68.61-68.14 


68.43-68.14 


69.20-68.91 


10 


71.88-71.30 


70.30-69.63 


S. 


69.03-68.79 


68.26-68.20 


S. 


11 


71.75-71.43 


71.30-70.48 


69.20-69.14 


69.08-68.91 


68-26-68.08 


69.08-68.85 


12 


71.05-70.42 


70.98-70.42 


69.57-69.20 


68.97-68.79 


S. 


69.14-68.91 


13 


70.48-70.42 


S. 


69.81-69.57 


69.14-69.03 


68.14-67.97 


68.97-68.73 


14 


70.18-S9.63 


70.30-69.99 


69.87-69.57 


69.14-69.03 


68.03-67.91 


68.85-68.43 


15 


70.42-70.18 


71.30-70.73 


70.11-69.81 


S. 


67.91-67.85 


68.38-68.14 


16 


S. 


70.86-70.39 


70.05-69.81 


69.97-68.73 


67.97-67.91 


68.49-68.26 


17 


70.42-69.93 


70.55-70.11 


S. 


69.67-68.32 


68.14-68.03 


S. 


18 


69.93-69.75 


70.18-69.57 


69.75-69.57 


68.49-68.38 


68.08-68.03 


68.43-68.20 


19 


70.30-69.57 


69.63-69.32 


69.63-69.44 


68.26-68.03 


S. 


68.26-68.20 


20 


70.24-70.05 


S. 


69.6:1-69.44 


68.49-68.38 


68.20-68.03 


68.49-68.14 


21 


70.36-70.05 


69.38-69.08 


69.50-69.32 


68.61-68.32 


68.20-68.08 


68.55-68.38 


22 


70 18-70.05 


69 81-69.44 


69.81-69.50 


S. 


68.08-68.03 


68.55-68.43 


23 


S. 


69 69-69.50 


69.81-69.57 


68.49-68.32 


68.08-68.03 


68.79-68.61 


24 


70.11-69.81 


69 63-69.50 


S. 


68.49-68.38 


68.14-68.08 


S. 


25 


69.93-69 69 


69.69-69.44 


69.93-69.50 


68.73-68.38 


68.08-67.97 


Xmas D'y 


26 


69.99-69.69 


69.44-69.26 


69.57-69.50 


69.03-68.67 


S. 


68. 85-68. 7U 


27 


69.81-68.85 


8 


69.50-69.32 


68.73-68.55 


67.97-67.74 


68.85-68.79 


28 


69.14-68.43 


69.50-69.38 


69.50-69.38 


68.85-68.67 


67.85-67.40 


68.79-68.67 


29 


70 05-68.73 


69.38-69.26 


69.50-69.38 


S. 


67.57-67 23 


68.91-68.67 


30 
31 


S. 

69.87-69 38 


69. 44-69. 03 
69.20-68.97 


69.44-69.32 


68.67-68.62 
68.55-68 38 


67 91-67.40 


69.03-68.97 
S. 



APPENDIX B 



RELATIVE PRICES OF COMMODITIES 
TABLE i 

RELATIVE PRICES OF FARM PRODUCTS 

A. INDIVIDUAL, SERIES 



DATE 


BARLEY 


CLOVER SEED 


CORN 


New 
York 


Chi- 
cago 


Cin- 
cinnati 


New 
York 


Chi- 
cago 


New 
York 


Cin- 
cinnati 


1860, January 


103 
100 


101 
117 

93 
89 
64 
71 
34 
59 
59 
80 
101 
131 
161 
186 
195 
181 
205 
233 
233 
248 
220 
165 
101 
129 
110 
89 
76 
140 


84 
109 
98 

109 
92 
78 
57 
52 
57 
80 
80 
115 
155 
184 

i72 
190 
155 

224 
184 
149 
86 

iei 

132 
172 
184 


103 

94 

io3 

103 
91 
91 

'84 
98 
89 
89 
126 
117 

149 
161 
183 

25i 
326 
294 
343 
274 
160 
123 

i83 


99 
88 
99 
114 
102 
89 
89 
92 
85 
105 
83 
102 
124 
107 
120 
120 
143 
139 
161 
193 
309 
298 
161 
163 
158 
114 
137 
137 


122 
97 
87 
94 
97 
88 
65 
75 
89 
79 
75 
82 
109 
126 
103 
119 
178 
178 
217 
217 
257 
196 
102 
125 
127 
106 
120 
130 


107 
95 

97 
101 
71 
67 
57 
57 
57 
69 
73 
81 
91 
133 
115 
182 
208 
212 
218 
242 
212 
141 
131 
127 
107 
97 
125 
166 


April 


July 


October 


96 
90 
88 
94 
81 
94 
113 


1861, January 


April 


July.. 


October 


1862, January 


April 


July 


October 


75 
166 
191 


1863, January 


April 


July 


October 


i63 
178 
165 


1864, January 


April 


July 


October 


232 
257 
202 
163 
160 
135 
153 
135 
175 


1865, January 


April 


July 


October 


1866, January 


April 


July 


October 





429 



430 



HISTORY OF THE GREENBACKS 



TABLE 1 Continued 

RELATIVE PRICES OF FARM PRODUCTS 



DATE 


FLAX SEED 


HIDES 


MEAT: BEEVES 


New 
York 


Cin- 
cinnati 


Cin- 
cinnati 


Chi- 
cago 


New 
York 


Cin- 
cinnati 


New 
York 


Chi- 
cago 


1860, January ... 
April 


98 
102 
101 
99 
101 
91 


100 
100 
100 
100 
100 
100 
91 
91 
114 
136 

iii 

182 
295 

i82 
227 
236 
255 
255 
259 
182 
136 
245 
227 
205 
264 
255 


100 
107 
107 
85 
93 
93 
63 
85 
78 
100 
100 
100 
126 
130 
137 
137 
148 
141 
174 
159 
156 
156 
96 
119 
133 
141 
133 
133 


91 
100 
106 
103 
69 
82 
58 
69 
72 
86 
79 
103 
106 
120 
113 
141 
132 
156 
161 
120 
139 
100 
91 
122 
93 
76 
93 
120 


100 
103 
103 
94 
68 
75 
61 
86 
83 
75 
83 
94 
99 
94 
94 
103 
125 
139 
161 

ia3 

153 
104 
83 
128 
139 
133 
125 
139 


103 
117 
90 
90 
97 
110 
76 
90 
83 
90 
97 
76 
90 
131 
124 
97 
131 
179 
166 
193 
221 
262 
193 
166 
172 
193 
207 
193 


103 
108 
92 
97 
103 
90 
90 
90 
103 
97 
87 
87 
97 
118 
110 
103 
118 
144 
162 
178 
164 
215 
159 
190 
174 
159 
172 
169 


97 
113 
105 
85 
105 
105 
110 
77 
73 
97 
90 
85 
92 
145 
110 
101 
105 
141 
177 
153 
169 
242 
145 
222 
179 
155 
210 
185 


July 


October 
1861, January . . . 
April 


July 


October .... 
1862, January . . 
April 


98 
116 
140 
129 
125 
193 
182 
165 
165 
207 
223 
231 
200 
233 
176 
142 
190 
187 
160 
203 
209 


July 


October 
1863, January . . . 
April 


July 


October 
1864, January . . . 
April 


July 


October 
1865, January . . . 
April 


July 


October 
1866, January . . . 
April 


July 


October 





MEAT: SHEEP 


MEAT: PORK 


OATS 


RYE 


DATE 


New 


Cin- 


Chi- 


Cin- 


New 


New 


Cin- 


Cin- 


New 




York 


cinnati 


cago 


cinnati 


York 


York 


cinnati 


cinnati 


York 


1860, Jan. . 


101 


110 


91 


121 


90 


111 


119 


113 


107 


Apr. . 


110 


138 


100 


101 


97 


103 


106 


119 


100 


July. 


92 


83 


101 


62 


107 


95 


101 


87 


99 


Oct. . 


97 


69 


108 


116 


106 


92 


74 


81 


94 


1861, Jan. . 


101 


138 


87 


115 


86 


90 


64 


70 




Apr. . 


99 


124 


87 


98 


82 


80 


64 


63 


77 


July. 


78 


55 


53 


63 


68 


72 


57 


52 


. . 


Oct. . 


87 


55 


51 


61 


63 


83 


59 


41 


82 



APPENDIX B 



431 



TABLE I Continued 

RELATIVE PRICES OF FARM PRODUCTS 



DATE 


MEAT: SHEEP 


MEAT: PORK 


OATS 


RYE 


New 
York 


Cincin- 
nati 


Chi- 
cago 


Cincin- 
nati 


New 
York 


New 
York 


Cincin- 
nati 


Cincin- 
nati 


New 
York 


1862, Jan.. 


106 


90 


48 


65 


60 


99 


69 


49 


101 


April 


110 


110 


52 


65 


74 


93 


72 


63 


94 


July. 


97 


72 


45 


47 


57 


103 


84 


56 


87 


Oct.. 


101 


103 


57 


63 


67 


138 


99 


66 


75 


1863, Jan.. 


110 


83 


69 


94 


75 


166 


128 


69 


107 


April 


138 


179 


84 


76 


88 


200 


173 


113 


126 


July. 


87 


114 


76 


74 


88 


178 


156 


85 


121 


Oct.. 


97 


121 


79 


57 


79 


168 


173 


113 


130 


1864, Jan.. 


136 


145 


92 


141 


113 


224 


205 


153 


152 


April 


179 


200 


144 


151 


139 


214 


195 


149 


151 


July. 


117 


110 


184 


151 


176 


238 


200 


175 


236 


Oct.. 


147 


166 


142 


237 


179 


208 


185 


158 


173 


1865, Jan.. 


175 


207 


227 


314 


219 


261 


212 


164 


203 


April 


211 


276 


197 


227 


191 


212 


148 


113 


145 


July. 


101 


117 


147 


174 


169 


177 


153 


70 


101 


Oct.. 


124 


152 


235 


257 


229 


144 


111 


88 


119 


1866, Jan.. 


161 


166 


176 


244 


165 


122 


96 


85 


121 


April 


140 


179 


175 


189 


171 


115 


101 


73 


101 


July. 


113 


138 


176 


188 


165 


147 


111 


107 


143 


Oct.. 


108 


131 


183 


196 


173 


137 


111 


127 


149 



DATE 


TIMOTHY SEED 


TOBACCO 


Leaf 
Aver'ge 


Leaf 
Fine 


Wrap's 
Ohio 


Wrap's 
Penn. 


Wrap's 
Conn. 


Leaf 
Ky. 


Cincin- 
nati 


Chi- 
cago 


New 
York 


Cincin- 
nati 


Cincin- 
nati 


New 
York 


New 
York 


New 
York 


New 
York 


I860, Jan.. 
April 
July. 
Oct.. 
1861, Jan. . 


87 
121 

'92 


83 
113 
116 
87 
89 
85 

'57 
64 
65 

'60 


94 
110 

'96 

98 
120 
101 

72 
77 
82 
67 
74 


100 
100 

'84 
145 
116 
148 

222 


100 
100 

iis 

123 
105 
127 

182 


100 
100 
100 
100 
100 
100 
88 
88 
88 
104 
104 
131 


100 
100 
100 
100 
100 
100 
88 
88 
88 
104 
104 
131 


126 
91 
91 
91 
91 
91 
74 
74 
74 
94 
94 
118 


112 
98 
89 
101 
104 
98 
110 
125 
146 
152 
153 
223 


April 
July. 
Oct.. 
1862, Jan.. 
April 
July. 
Oct. 


107 

'58 
58 
66 

'64 



432 



HISTORY OF THE GREENBACKS 



TABLE 1-Continued 

RELATIVE PRICES OF FARM PRODUCTS 







TOBACCO 


DATE 


TIMOTHY SEED 


Leaf 

Aver'ge 


Leaf 

Finn 


Wrap's 
Ohio 


Wrap's 
Penn. 


Wrap's 
Conn. 


Leaf 
Ky. 




Cincin- 


Chi- 


New 


Cincin- 


Cincin- 


New 


New 


New 


New 




nati 


cago 


York 


nati 


nati 


York 


York 


York 


York 


1863, Jan.. 


68 


72 


110 


241 


218 


131 


131 


118 


259 


April. 


78 


59 


82 


284 


236 


173 


173 


191 


312 


July. 







94 


284 


236 


173 


173 


191 


238 


Oct.. 


99 


'9! 


94 


220 


205 


173 


173 


191 


213 


1864, Jan.. 


120 


110 


104 


255 


218 


173 


173 


191 


262 


April. 


110 


101 


106 


253 


218 


231 


231 


235 


262 


July . 






120 


220 


218 


269 


269 


265 


253 


Oct.. 


229 


i62 


192 


216 


205 


269 


269 


265 


318 


1865, Jan.. 


227 


218 


226 


261 


295 


269 


269 


265 


333 


April. 


174 


152 


211 


247 


318 


135 


135 


176 


387 


July. 




181 


134 


273 


341 


96 


96 


135 


226 


Oct.. 


i55 


144 


182 


240 


341 


115 


115 


162 


297 


1866, Jan.. 


140 


129 


163 


237 


250 


115 


115 


169 


297 


April. 


136 


147 


163 


216 


205 


115 


115 


169 


297 


July. 


178 




259 


216 


205 


115 


115 


169 


297 


Oct.. 


128 


iii 


127 


212 


205 


115 


115 


169 


232 









WHEAT 






DATE 


Winter 


Spring 


Prime 


No. 2 
Winter 


No. 2 
Spring 




New 
York 


New 
York 


Cincin- 
nati 


Chi- 
cago 


Chi- 
cago 


1860, January 


102 


105 


103 


99 


99 


April - 


105 


98 


110 


105 


105 


Julv 


102 


103 


93 


105 


108 


October 


91 


94 


95 


91 


88 


1861, January. . 


98 


97 


84 




82 


April 


99 


102 


83 


96 


81 


July.. 


78 


65 


63 




57 


October 


95 


94 


66 


76 


74 


1862, January 


103 


103 


72 


71 


70 


April. 


97 


102 


78 


73 


74 


July 


86 


85 


69 


76 


75 


October 


93 


92 


72 


85 


83 


1863, January. . 


107 


103 


as 


93 


86 


April. ... 


125 


99 


108 


112 


110 


July . . 


108 


102 


89 


100 


97 


October . . 


98 


103 


93 


95 


104 















APPENDIX B 



433 



TABLE 1 Continued 

RELATIVE PEICES OF FARM PRODUCTS 



DAT* 


Winter 


Spring 


Prime 


No. 2 
Winter 


No. 2 
Spring 




New 
York 


New 
York 


Cincin- 
nati 


Chi- 
cago 


Chi- 
cago 


1864 January 


116 


118 


110 


108 


115 


April 


126 


131 


110 


123 


114 


July 


190 


193 


169 


176 


199 


October 


143 


149 


143 


129 


149 


1865, January 


185 


184 


173 


144 


160 


A pril 


134 


137 


127 




101 


July 


107 


103 


105 


111 


92 


October 


166 


141 


181 


132 


126 


1866, January 


148 


139 


165 




98 


April 


141 


112 


198 




93 


July 


177 


155 


228 




119 


October 


199 


177 


236 


191 


195 















WHEAT 



B. AVERAGES FOR THE SEVERAL PRODUCTS 



Date 


Barley 


Clover 
Seed 


Corn 


Flax 
Seed 


Hides 


Meat: 
Beeves 


1860, January 


96 


101 


115 


99 


97 


101 


April 


109 


91 


96 


101 


103 


113 


July 


96 


99 


92 


101 


105 


96 


October 


98 


109 


98 


100 


94 


91 


1861, January 


82 


103 


84 


101 


77 


102 


April 


79 


90 


78 


96 


83 


102 


July. . . 


62 


90 


61 


91 


61 


92 


October 


64 


92 


66 


95 


80 


86 


1862, January 


70 


85 


73 


115 


78 


86 


April 


91 


102 


74 


138 


87 


95 


July .. 


91 


86 


74 


129 


87 


91 


October 


107 


96 


82 


120 


99 


83 


1863, January 


161 


125 


100 


188 


110 


93 


April 


187 


112 


130 


239 


115 


131 


July. . . 


195 


120 


109 


165 


115 


115 


October 


172 


135 


151 


174 


127 


100 


1864, January 


191 


152 


193 


217 


135 


118 


April 


184 


161 


195 


230 


145 


155 


July . . 


233 


161 


218 


243 


165 


168 


October 


235 


222 


230 


228 


137 


175 

















434 



HISTORY OF THE GREENBACKS 



TABLE 1 Continued 

RELATIVE PRICES OF FARM PRODUCTS 



Date 


Barley 


Clover 
Seed 


Corn 


Flax 
Seed 


Hides 


Meat: 
Beeves 


1865, January 


220 


318 


235 


246 


149 


185 


April 


172 


296 


169 


179 


120 


240 


July .. 


117 


252 


117 


139 


90 


166 


October 


145 


219 


126 


218 


123 


193 


1866, January 


135 


159 


117 


207 


122 


175 


April 


125 


119 


102 


183 


117 


169 


July 


128 


137 


123 


234 


117 


196 


October 


166 


160 


148 


232 


121 


182 

















Date 


Meat: 
Sheep 


Meat: 
Pork 


Oats 


Rye 


Tim. 
Seed 


Tobac- 
co 


Wheat 


1860, January 


106 


101 


115 


110 


88 


106 


102 


April 


124 


99 


105 


110 


115 


98 


105 


July . . 


88 


90 


98 


93 


116 


95 


102 


October 


S3 


113 


83 


88 


92 


98 


92 


1861, January 


120 


96 


77 


70 


94 


99 


90 


April 


112 


89 


72 


70 


156 


97 


92 


July 


67 


61 


65 


52 


101 


90 


66 


October 


71 


58 


71 


62 


62 


96 


81 


1862, January 


98 


58 


84 


75 


66 


111 


84 


April 


110 


64 


83 


79 


71 


113 


85 


July.. 


85 


50 


94 


72 


67 


122 


78 


October 


102 


62 


119 


71 


66 


168 


85 


1863, January 


97 


76 


147 


88 


83 


183 


94 


April 


159 


83 


187 


120 


73 


228 


111 


July 


101 


79 


167 


103 


94 


216 


99 


October 


109 


72 


171 


122 


95 


196 


99 


1864, January 


141 


115 


215 


153 


111 


212 


113 


April 


190 


145 


205 


150 


106 


238 


121 


July 


114 


170 


219 


206 


120 


249 


185 


October 


157 


186 


197 


166 


194 


257 


143 


1865, January 


191 


253 


237 


184 


224 


282 


169 


April 


194 


205 


180 


129 


179 


233 


125 


July 


109 


163 


165 


86 


158 


195 


104 


October 


138 


240 


128 


104 


160 


212 


149 


1866, January 


164 


195 


109 


103 


144 


197 


138 


April 


160 


178 


108 


87 


149 


186 


136 


July . . 


126 


176 


129 


125 


146 


186 


170 


October 


120 


184 


124 


138 


123 


175 


200 



















APPENDIX B 



435 



TABLE 2 

RELATIVE PRICES OP VARIOUS COMMODITIES AT WHOLESALE 







BREAD 






DATE 


BEANS 


Boston 


Boston 


Boston 


BUTTER 


CHEESE 






Crackers: 


Crackers : 


Crackers : 










1 


2 


Ex. Grade 






1860, Jan.... 


100.0 


100.0 


100.0 


100.0 


100.0 


100.0 


April . . 


93.3 


100.0 


100.0 


100.0 


81.0 


110.0 


July . . 


93.3 


100.0 


100.0 


100.0 


81.0 


75.0 


Oct . . . 


120.0 


100.0 


100.0 


100.0 


95.2 


100.0 


1861, Jan.... 


100.0 


107.1 


117.6 


116.7 


81.0 


100.0 


April. . 


103.2 


107 1 


123.5 


116.7 


85.7 


90.0 


July . . 


120.0 


100.0 


129.4 


116.7 


61.9 


60.0 


Oct ... 


120.0 


100 


129.5 


116.7 


64.3 


60.0 


1862, Jan.... 


136.5 


107.1 


135.3 


116.7 


90.5 


70.0 


April . . 


116.6 


107.1 


141.2 


120.8 


97.6 


75.0 


July . . 


173.3 


100.0 


147.1 


120.8 


73.8 


65.0 


Oct ... 


153.3 


100.0 


147.1 


120.8 


90.5 


80.0 


1863, Jan . . . 


145.9 


107.1 


164.7 


141.7 


116.7 


110.0 


April . . 


153.3 


107.1 


152.9 


133.3 


119.1 


145.0 


July . . 


180.0 


107.1 


147.1 


133.3 


92.9 


105.0 


Oct.. . 


129.9 


107.1 


147.1 


129.2 


114.3 


120.0 


1864, Jan ... 


160.5 


185.7 


152.9 


133.3 


145.2 


140.0 


April. . 


146.7 


185.7 


158.8 


137.5 


230.9 


170.0 


July . . 


146.7 


185.7 


158.8 


137.5 


157.1 


150.0 


Oct ... 


146.7 


185.7 


158.8 


137.5 


202.4 


205.0 


1865, Jan . . . 


173.3 


185.7 


117.6 


116.1 


250.0 


225.0 


April . . 


142.7 


185.7 


129.4 


116.7 


150.0 


210.0 


July . . 


106.7 


157.1 


129.4 


116.7 


142.9 


125.0 


Oct ... 


120.0 


157.1 


117.6 


116.7 


204.8 


150.0 











FRUIT 






COFFEE : 




FLOUR ' 




FISH: 


DATE 


Rio, Fair 


EGGS 


Rye 


Apples : 


Currants: 


Cod 










Dried 


Zante 




1860, Jan . . . 


100.0 


149.1 


100.0 


100.0 


100.0 


Feb. 100.0 


April . . 


115.2 


88.9 


100.0 


90.3 


104.2 


May 100.0 


July . . 


117.4 


78.8 


95.0 


87.1 


91.7 


Aug. 112. 5 


Oct.... 


121.7 


83.2 


100.0 


77.4 


79.2 


Nov. 125.0 


1861, Jan . . . 


100.0 


103.2 


92.5 


77.4 


75.0 


Feb. 125.0 


April . . 


104.3 


88.9 


95.0 


51.6 


75.0 


May 125.0 


July . . 


104.3 


64.5 


75.0 


103.2 


66.7 


Aug. 125.0 


Oct.... 


134.8 


74.5 


87.5 


77.4 


158.3 


Nov. 125.0 


1862, Jan . . . 


156.5 


134.8 


100.0 


96.8 


150.0 


Feb. 125.0 


April . . 


178.2 


74.5 


100.0 


90.3 


158.3 


May 125.0 


July . . 


182.6 


68.8 


87.5 


71.0 


166.7 


Au-. 300.0 


Oct.... 


195.7 


83.2 


106.3 


71.0 


179.2 


Nov. 125.0 



436 



HISTORY OF THE GREENBACKS 



TABLE 2 Continued 

RELATIVE PRICES OF VARIOUS COMMODITIES AT WHOLESALE 





COFFEE: 




FLODR: 


FR 


DIT 


FISH* 


DATE 


Rio, Fair 


Eaos 


Rye 


Apples: 
Dried 


Currants: 
Zante 


Cod 


1863, Jan ... 
April . . 
July . . 
Oct.... 
1864, Jan... 
April . . 
July . . 
Oct 


243.5 

269.6 
252.2 
265.2 
293.5 
339.1 
373.9 
317 4 


114.7 
134.8 
111.8 
114.7 
166.3 
120.9 
146.2 
166.3 


118.8 
112.5 
106.3 
125.0 
137.5 
137.5 
181.3 
187 5 


83.9 
87.1 
90.3 
83.9 
122.6 
125.8 
148.4 
167 7 


175.0 
233.3 
250.0 
241.7 
239.6 
275.0 
308.3 
283 3 


Feb. 150.0 
May 125.0 
Aug. 150.0 
Nov. 150.0 
Feb. 200.0 
May 175.0 
Aug. 200.0 
Nov. 


1865, Jan . . . 
April . . 
July . . 
Oct ... 


378.3 
279.6 
243.7 
243.1 


252.3 
106.1 
152.0 
163.4 


212.5 
143.8 
127.5 
168.8 


200.0 
177.4 
132.3 
167.7 


341.7 
216.7 
208.3 
233.3 


Feb. 387. 5 
May 225.0 
Aug. 450.0 
Nov. 200.0 



DATE 


FRUIT: 
Raisins 


LARD 


MEAL: 
Corn, 
Yellow, 
Kiln-Dried 


MEAT 


Beef: 
Salt Mess 


Beef: 
Loins 


Beef: 
Uibs 


1860, Jan ... 


100.0 


100.0 


100.0 


100.0 


Feb. 100.0 


100.0 


April. . 


103.3 


97.6 


96.4 


91.3 


May 100.0 


93.3 


July . . 


106.5 


114.3 


89.2 


87.0 


Aug. 100.0 


93.3 


Oct ... 


123.9 


116.7 


92.8 


82.6 


Nov. 94.4 


93.3 


1861, Jan... 


89.1 


95.2 


84.3 


91.3 


Feb. 88.9 


93.3 


April . . 


68.5 


85.7 


90.4 


91.3 


May 88.9 


100.0 


July . . 


50.0 


76.2 


72.5 


82.6 


Aug. 83.3 


93.3 


Oct.... 


102.2 


76.2 


73.5 


95.7 


Nov. 83.3 


86.7 


1862, Jan ... 


139.1 


76.2 


78.3 


104.3 


Feb. 83.3 


86.7 


April . . 


139.1 


73.8 


75.9 


100.0 


May 83.3 


86.7 


July . . 


135.9 


73.8 


71.1 


104.3 


Aug. 83.3 


86.7 


Oct ... 


154.3 


73.8 


94.0 


113.0 


Nov. 83.3 


86.7 


1863, Jan... 


152.2 


88.1 


108.4 


108.7 


Feb. 94.4 


93.3 


April . . 


173.9 


100.0 


112.0 


113.0 


May 100.0 


100.0 


July . . 


184.8 


89.3 


106.0 


100.0 


Aug. 100.0 


100.0 


Oct.... 


180.4 


102.4 


115.7 


104.3 


NOT. 100.0 


100.0 


1864, Jan . . . 


173.9 


114.3 


144.6 


106.5 


Feb. 105. 6 


106.7 


April . . 


178.3 


126.2 


148.2 


95.7 


May 138. 9 


146.7 


July . . 


184.8 


157.1 


192.8 


217.4 


Aug. 155. 6 


153.3 


Oct ... 


173.9 


185.7 


189.2 


130.4 


NOT. 150.0 


146.7 


1865, Jan . . . 


254.3 


195.2 


212.0 


165.2 


Feb. 194. 4 


186.7 


April. . 


215.2 


147.6 


156.6 


191.3 


May 194. 4 


213.3 


July . . 


250.0 


152.4 


124.1 


113.0 


Aug. 177. 8 


186.7 


Oct ... 


204.3 


233.3 


122.9 


139.1 


NOT. 166. 7 


166.7 



APPENDIX B 



437 



TABLE 2 Continued 

RELATIVE PRICES OF VARIOUS COMMODITIES AT WHOLESALE 



DATE 


MOLASSES 


SALT 


MEAT 


P'rto Rico : 
Best 


N.Orleans: 
Prime 


Ashton's 


Ashton's 
Liv., fine 


Pork: 
Salt Mess 


Mutton 


1860, Jan . . . 


100.0 


100.0 


100.0 


100.0 


100.0 


Feb. 100.0 


April . . 


107.9 


90.6 


76.9 


77.9 


109.1 


Mayl'20.0 


July . . 


100.0 


90.6 


89.7 


90.9 


109.8 


Aug. 100.0 


Oct ... 


105.3 


94.3 


82.1 


83.1 


116.7 


Nov. 100.0 


1861, Jan ... 


92.1 


69.8 


82.1 


83.1 


101.5 


Feb. 110.0 


April . . 


86.8 


70.8 


82.1 


83.1 


109.1 


May HO.O 


July . . 


71.2 


67.9 


82.1 


83.1 


97.0 


Aug. 100.0 


Oct .. 


118.4 


103.8 


84.6 


85.7 


90.9 


Nov. 90.0 


1862, Jan ... 


105.3 


103.8 


87.2 


88.3 


75.0 


Feb. 100.0 


April . . 


100.0 


84.9 


92.3 


93.5 


76.5 


May 100.0 


July . . 


97.4 




92.3 


93.5 


65.2 


Aug. 90.0 


Oct ... 


131.6 


90.6 


105.1 


106.5 


71.2 


Nov. 100.0 


1863, Jan . . . 


126.3 


105.7 


110.3 


111.7 


86.4 


Feb. 100.0 


April . . 


118.4 


105.7 


143.6 


145.5 


98.5 


May 125.0 


July . . 


139.5 


94.3 


138.5 


140.2 


84.8 


Aug. 120.0 


Oct ... 


164.5 


113.2 


130.8 


132.5 


86.4 


Nov. 125.0 


1864, Jan . . . 


171.1 


132.1 


143.6 


145.5 


118.2 


Feb. 120.0 


April . . 


223.7 


160.4 


174.0 


176.6 


145.5 


May 140.0 


July . . 


289.5 


217.0 


230.8 


233.8 


275.8 


Aug. 160.0 


Oct ... 


223.7 


311.3 


256.4 


259.7 


254.5 


Nov. 150.0 


1865, Jan . . . 


289.5 


283.0 


243.6 


246.8 


212.1 


Feb. 190.0 


April . . 


184.2 


207.5 


161.5 


163.6 


162.1 


May 190.0 


July . . 


184.2 


217.0 


166.7 


168.8 


163.6 


Aug. 170.0 


Oct ... 


250.0 




212.8 


223.1 


213.6 


Nov. 170.0 









SPICES 






DATE 


SALT: 
Turk's 
Island 


SHIP 
BISCUIT 




STARCH: 
Corn 


SUGAR ; 
Fair, 
Refining 


Nutmegs 


Pepper: 
Whole, 










Sumatra 






1860, Jan... 


100.0 


100.0 


100.0 


100.0 


100.0 


100.0 


April . . 


90.0 


100.0 


102.4 


98.5 


100.0 


93.1 


July . . 


97.5 


100.0 


101.2 


98.5 


100.0 


91.4 


Oct ... 


100.0 


100.0 


100.0 


101.5 


100.0 


86.2 


1861, Jan . . . 


85.0 


112.5 


90.5 


95.5 


100.0 


74.1 


April . . 


95.0 


112.5 


95.2 


101.5 


100.0 


65.5 


July . . 


100.0 


100.0 


97.6 


98.5 


100.0 


as. 8 


Oct ... 


120.0 


100.0 


113.1 


134.3 


94.1 


106.9 


1862, Jan... 


100.0 


100.0 


142.9 


185.1 


94.1 


106.9 


April . . 


120.0 


100.0 


160.7 


191.0 


94.1 


101.7 


July . . 


150.0 


100.0 


154.8 


209.0 


94.1 


101.7 


Oct . . . 


155.0 


100.0 


161.7 


238.8 


100.0 


120.7 



4HS 



HISTORY OF THE GREENBACKS 



TABLE 2- Continued 

i; I 1. \ I I \ I PRICES OF VARIOUS COMMODITIES AT WHOLESALE 









SPICES 






DATE 


SALT: 
Turk's 
Island 


SHIP 
BISCUIT 




STARCH : 
Corn 


SUGAR: 
Fair, 
Refining 


Nutmegs 


Pepper : 
Whole, 










Sumatra 






1863, Jan ... 


150.0 


125.0 


190.5 


274.6 


111.8 


131.0 


April . . 


185.0 


125.0 


208.3 


322.4 


117.6 


134.5 


July .. 


210.0 


125.0 


190.5 


316.4 


111.8 


141.4 


Oct ... 


220.0 


125.0 


184.5 


304.5 


111.8 


158.6 


1864, Jan... 


240.0 


193.8 


214.3 


346.3 


129.4 


165.5 


April . . 


250.0 


193.8 


327.4 


489.6 


141.2 


206.9 


July . . 


300.0 


193.8 


428.6 


549.3 


152.9 


269.0 


Oct... 


500.0 


193.8 


381.0 


417.9 


164.7 


220.7 


1865, Jan... 


330.0 


187.5 


428.6 


537.3 


176.5 


244.8 


April . . 


250.0 


187.5 


297.6 


358.2 


176.5 


141.4 


July . . 


255.0 


137.5 


273.8 


346.3 


152.9 


158.6 


Oct ... 


275.0 


137.5 


342.7 


395.2 


152.9 


189.6 



DATE 


SUGAR 


TALLOW : 
Prime,City 

in hln Is. 


VEGETABLES 


CALICO 


Havana : 
Brown 


Refined, 
Crushed, 
and 
Qranulat'd 


Fresh 
Potatoes : 
White (1) 


Fresh 
Potatoes : 
White (2) 


1860, Jan ... 


100.0 


100.0 


100.0 


Feb. 100.0 


Jan. 143.8 


100.0 


April . . 


96.9 


97.5 


102.4 


May 100.0 


April 137. 5 


105.3 


July . . 


93.0 


100.0 


97.6 


Aug. 128. 6 


July 112.5 


100.0 


Oct ... 


91.4 


93.8 


97.6 


Nov. 100.0 


Oct. 100.0 


100.0 


1861, Jan... 


72.7 


83.8 


82.9 


Feb. 100.0 


Jan. 112.5 


100.0 


April. . 


67.2 


80.0 


95.1 


May 128. 6 


April 118. 8 


94.7 


July . . 


64.1 


77.5 


78.0 


Aug. H4. 3 


July 143.8 


94.7 


Oct ... 


100.0 


108.8 


82.9 


Nov. H4. 3 


Oct. 106.3 


105.3 


1862, Jan ... 


97.7 


110.0 


92.7 


Feb. 128. 6 


Jan. 112.5 


131.6 


April. . 


96.9 


102.5 


87.8 


May 128. 6 


April 125.0 


126.3 


July . . 


96.9 


105.0 


92.7 


Aug. 100.0 


July 106.3 


131.6 


Oct ... 


118.8 


128.8 


109.8 


Nov. 128. 6 


Oct. 106.3 


179.0 


1863, Jan... 


121.1 


132.5 


101.2 


Feb. 121. 4 


Jan. 112.5 


210.5 


April. . 


126.6 


145.0 


112.2 


May 107.1 


April 131. 3 




July . . 


134.4 


147.5 


109.8 


Aug. 128. 6 


July 131.3 





Oct ... 


145.3 


146.3 


109.8 


Nov. 142. 9 


Oct. 125.0 




1864, Jan . . . 


160.9 


168.8 


125.6 


Feb. 128. 6 


Jan. 156.3 


252 '.6 


April . . 


195.3 


178.8 


124.4 


May 214. 3 


April 231. 3 


263.2 


July . . 


271.9 


300.0 


165.8 


Aug. 342. 8 


July 287.5 


421.1 


Oct . . 


231.3 


255.0 


143.2 


Nov. 171. 4 


Oct. 200.0 


357.9 


1865, Jan ... 


239.1 


285.0 


175.6 


Feb. 242. 8 


Jan. 237.5 


389.5 


April . . 


150.0 


180.0 


107.3 


May 142. 9 


April 212. 5 


210.5 


July . . 


154.7 


195.0 


102.4 


Aug. 142. 9 


July 112.5 


289.5 


Oct... 


176.6 


202.5 


141.4 


Nov. 157.1 


Oct. 193.8 


315.8 



APPENDIX B 



439 



TABLE 2 Continued 

EELATTVE PRICES OF VARIOUS COMMODITIES AT WHOLESALE 







CARPETS 




COTTON : 




DEIL- 
LINQS : 


DATE 


Brussels 


Ingrain 


Wilton 


Upland 
Middling 


DENIMS 


30-inch 
Pepperell 


1860, Jan . . . 


100.0 


100.0 




100.0 


100.0 


100.0 


April . . 


96.2 


100.3 


100.0 


101.1 


103.5 


97.2 


July . . 


92.3 


99.3 


97.3 


97.7 


103.5 


100.0 


Oct . . . 


92.3 


98.0 


97.3 


97.7 


103.5 


100.0 


1861, Jan ... 


92.3 


101.4 


97.3 


109.1 


103.5 


97.2 


April . 


96.2 


95.0 


100.0 


117.0 


103.5 


97.2 


July . . 


96.2 


95.1 


100.0 


134.1 


103.5 


97.2 


Oct ... 


96.2 


92.6 


100.0 


195.5 


105.2 


116.8 


1862, Jan ... 


100.0 


106.6 


105.4 


327.3 


124.1 


146 


April. . 


100.0 


109.1 


105.4 


250.0 


136.2 


146.0 


July .. 


107.7 


119.3 


108.1 


336.4 


137.9 


157.2 


Oct . . . 


115.4 


123.4 


116.2 


509.1 


210.3 


292.0 


1863, Jan . . . 


134.6 


149.5 


132.4 


613.6 


258.6 


308.8 


April . . 


165.4 


174.5 


151.4 


663.6 




393.0 


July . . 


153.8 


166.0 


151 4 


627 3 




308.8 


Oct ... 


146.2 


154.9 


143.2 


768.2 


. 


404.3 


1864, Jan . . . 


165.4 


179.4 


162.2 


736.4 


379'.3 


449.2 


April . . 


173.1 


196.7 


173.0 


690.9 


396.6 


449.2 


July . . 


269.2 


299.3 


270.3 


1400.0 


425.8 


701.8 


Oct ... 


269.2 


250.9 


270.3 


1090.9 


606.9 


729.9 


1865, Jan . . . 


269.2 


260.6 


270.3 


1090.9 


463.8 


673.8 


April. . 


192.3 


208.2 


202.7 


318.2 


412.1 


336.9 


July . . 


192.3 


219.9 


202.7 


454.6 


424.1 


a36.9 


Oct ... 


211.5 


241.2 


216.2 


400.0 


455.2 


404.3 







PRINT CLOTHS 


SHEET- 


SHIRT- 






LEATHER: 




INGS: 


INGS: 


SILK : 






DATE 


Harness 


28-inch, 
7 yds. to Ib. 
Standard 


28-inch, 
64X64. 
Metacomet 


Brown, 
4-4 t 
Atlantic A 


Bleached, 
4-4, 
N.Y. Mills 


Raw 

Italian 


1860, Jan . . . 


100.0 


100.0 


100.0 


100.0 


100.0 


100.0 


April. . 


100.0 


97.8 


100.0 


102.9 


100.0 


100.0 


July . . 


102.9 


100.0 


100.0 


102.9 


100.0 


105.6 


Oct . . . 


100.0 


97.8 


100.0 


102.9 


100.0 


100.0 


1861, Jan . . . 


94.3 


84.4 


86.0 


102.9 


96.8 


100.0 


April . . 


88.6 


77.8 


79.1 


102.9 


96.8 


&3.3 


July . . 


85.7 


80.0 


76.7 


105.8 


96.8 


77.8 


Oct . . . 


100.0 


106.7 


104.7 


135.1 


103.2 


72.2 


1862, Jan . . . 


94.3 


160.0 


107.0 


164.5 


109.7 


72.2 


April . . 


94.3 


128.9 


125.6 


164.5 


116.1 


72.2 


July . . 


91.4 


153.3 


155.8 


188.0 


129.0 


83.3 


Oct ... 


102.9 


220.0 


251.1 


296.9 


167.5 


80.6 



440 



HISTORY OF THE GREENBACKS 



TABLE 2 Continued 

RELATIVE PEICE8 OP VARIOUS COMMODITIES AT WHOLESALE 







PRINT CLOTHS 


SHEET- 


SHIRT- 






LEATHER : 




INGS: 


INGS: 


SILK: 






DATE 


Harness 


28 inch. 7 
yds. to Hi.. 
Standard. 


28 inch, 
64X64, 
Meta comet 


Brown, 
4-4, 
Atlantic A 


Bleached, 
4-4, 
N. Y. Mills 


Raw 
Italian 


1863, Jan. . . 


108.6 


253.3 


279.1 


356.3 


209.7 


75.0 


April. . 


128.6 


257.8 


297.7 


445.4 


209.7 


72.2 


July . . 


128.6 


257.8 


260.2 


415.6 


232.3 


66.7 


Oct... 


131.4 


280.0 


295.3 


445.4 


237.1 


66.7 


1864, Jan... 


142.9 


302.2 


316.3 


504.6 


266.6 


69.4 


April. . 


154 3 


288.9 


300.0 


475.0 


283.8 


75.0 


July . . 


165.7 


524.4 


593.0 


831.3 


467.7 


88.9 


Oct... 


171.4 


568.9 


480.0 


682.8 


307.3 


94.4 


1865, Jan... 


171.4 


480.0 


537.2 


712.5 


411.3 


88.9 


April.. 


165.7 


177.8 


188.4 


463.1 


270.9 


10U.O 


July . . 


137.1 


337.8 


360.5 


386.0 


290.3 


111.1 


Oct. . . 


151.4 


484.4 


453.5 


397.8 


354.8 


100.0 



Date 


Tickings 


Alcohol 


Alum 


Hichrom. 
of Potash 


Blue 
Vitriol 


Brimstone 


1860, Jan . . 


100.0 


100.0 


100.0 


100.0 


100.0 


100.0 


April . 


100.0 


85.2 


105.6 


95.2 


97.4 


100.0 


July.. 


100.0 


81.5 


100.0 


100.0 


97.4 


122.2 


Oct. . . 


100.0 


85.2 


100.0 


100.0 


94.7 


128.9 


1861, Jan. . . 


95.6 


74.1 


94.4 


100.0 


94.7 


133.3 


April . 


95.6 


66.7 


94.4 


100.0 


86.8 


95.6 


July.. 


98.5 


63.0 


94.4 


100.0 


89.5 


88.9 


Oct. . . 


101.5 


74.1 


94.4 


95.2 


94.7 


88.9 


1862, Jan. . . 


122.1 


74.1 


94.4 


100.0 


94.7 


133.3 


April . 


150.0 


88.9 


100.0 


95.2 


94.7 


95.6 


July.. 


136.8 


107.4 


100.0 


97.6 


94.7 


97.8 


Oct. . . 


211.8 


122.2 


133.3 


95.2 


100.0 


106.7 


1863, Jan... 


266.2 


142.6 


155.6 


104.8 


121.1 


111.1 


April . 




174.1 


166.7 


114.3 


157.9 


122.2 


July 




181.1 


166.7 


114.3 


134.2 


111.1 


Oct 




192.6 


133.3 


107.1 


142.1 


116.7 


1864, Jan... 


416.2 


342.6 


161.1 


114.3 


142.1 


127.8 


April . 




379.6 


161.1 


119.0 


168.4 


131.1 


July.. 


4i3'.2 


657.4 


200.0 


133.3 


189.5 


188.9 


Oct. . . 


617.6 


638.9 


266.7 


133.3 


221.1 


166.7 


1865, Jan. .. 


451.5 


814.8 


255.6 


142.9 


192.1 


222.2 


April . 


411.8 


796.3 


222.2 


133.3 


178.9 


200.0 


July.. 


469.2 


759.3 


188.9 


104.8 


147.4 


138.9 


Oct... 


472.1 


833.3 


183.3 


104.8 


142.1 


133.3 




APPENDIX B 



441 



TABLE 2 Continued 

RELATIVE PRICES OF VARIOUS COMMODITIES AT WHOLESALE 



Date 


Castor Oil 


Copperas 


Flax Seed 


Linseed 
Oil 


Mercury 


Muriatic 
Acid 


1860, Jan... 


100.0 


100.0 


100.0 


100.0 


100.0 


100.0 


April.. 


104.8 


125.0 


98.2 


105.3 


100.0 


100.0 


July.. 


100.0 


125.0 


103.1 


103.5 


100.0 


100.0 


Oct . . . 


104.8 


125.0 


101.2 


101.8 


100.0 


100.0 


1861, Jan... 


95.2 


125.0 


89.0 


187.7 


100.0 


100.0 


April. . 


85.7 


125.0 


85.8 


105.3 


100.0 


100.0 


July . . 


85.7 


125.0 


92.0 


94.7 


100.0 


100.0 


Oct ... 


102.9 


112.5 


92.0 


103.5 


81.8 


100.0 


1862, Jan... 


119.1 


150.0 


110.4 


149.1 


81.8 


116.7 


April. . 


152.4 


125.0 


135.0 


149.1 


81.8 


116.7 


July . . 


150.5 


125.0 


107.4 


150.9 


81.8 


116.7 


Oct ... 


145.7 


150.0 


116.6 


150.9 


109.1 


116.7 


1863, Jan... 


190.5 


200.0 


171.8 


219.3 


127.3 


100.0 


April. . 


214.3 


200.0 


245.4 


298.2 


127.3 


100.0 


July . . 


190.5 


175.0 


147.3 


210.5 


127.3 


100.0 


Oct... 


176.2 


150.0 


147.3 


236.8 


141.8 


100.0 


1864, Jan... 


190.5 


175.0 


184.0 


250.9 


150.9 


1,33.3 


April. . 


195.2 


175.0 


214.7 


280.7 


200.0 


133.3 


July . . 


261.9 


187.5 


220.9 


298.2 


281.8 


133.3 


Oct... 


333.3 


250.0 


199.4 


245.6 


345.5 


133.3 


1865, Jan... 


319.1 


237.5 


230.1 


271.9 


250.9 


150.0 


April. . 


342.9 


200.0 


168.7 


245.6 


181.8 


150.0 


July . . 


323.8 


150.0 


116.6 


207.0 


96.4 


150.0 


Oct... 


314.3 


250.0 


177.9 


271.9 


96.4 


150.0 



Date 


Opium 


Oxide of 
Zinc 


Quicksilv'r 


Quinine 


Soda Ash 


Sugar of 
Lead: 
Brown 


1860, Jan... 


100.0 


111.1 


100.0 


100.0 


100.0 


100.0 


April. . 


121.7 


111.1 


112.3 


122.7 


100.0 


93.3 


July . . 


95.7 


100.0 


113.3 


136.4 


94.7 


93.3 


Oct ... 


104.3 


100.0 


113.8 


159.1 


89.5 


100.0 


1861, Jan . . . 


82.6 


100.0 


113.3 


154.5 


89.5 


100.0 


April. . 


91.3 


100.0 


108.7 


172.7 


89.5 


93.3 


July . . 


95.7 


100.0 


98.5 




78.9 


93.3 


Oct . . . 


100.0 


100.0 


96.4 


i90'.9 


105.5 


93.3 


1862, Jan... 


87.0 


100.0 


96.4 


227.3 


121.1 


126.7 


April.. 


87.0 


100.0 


88.2 


204.5 


111.1 


113.3 


July . . 


108.7 


100.0 


114.8 


236.4 


105.5 


113.3 


Oct . . . 


125.2 


100.0 


129.2 


259.1 


115.8 


126.7 



442 



HISTORY OP THE GREENBACKS 



TABLE 2 Continued 

RELATIVE PRICES OF VARIOUS COMMODITIES AT WHOLESALE 



Date 


Opium 


Oxide of 

Ziuc 


Quicksilv'r 


Quinine 


Soda Ash 


Sugar of 
Li-ad: 
Brown 


1863, Jan... 


146.1 


100.0 


139.5 


254.5 


126.3 


166.7 


April. . 


173.9 


144.4 


164.1 


286.4 


142.1 


200.0 


July . . 


147.8 


144.4 


164.1 


263.6 


142.1 


200.0 


Oct . . . 


169.6 


138.9 


160.0 


227.3 


142.1 


120.0 


1864, Jan... 


169.6 


144.4 


184.6 


231.8 


152.6 


186.7 


April.. 


204.3 


155.6 


256.4 


272.7 


168.4 


213.3 


July . . 


243.5 


188.9 


389.7 


295.5 


221.1 


213.3 


Oct ... 


300.0 


200.0 


307.7 


304.6 


205.2 


640.0 


1865, Jan... 


121.7 


200.0 


256.4 


295.5 


273.7 


533.3 


April.. 


116.5 


200 


194.9 


231.8 


110.5 


533.3 


July . . 


102.6 


177.8 


153.8 


200.0 


89.5 


493.3 


Oct . . . 


126.1 


200.0 


174.4 


268.2 


136.8 



















Date 


SUGAR OF 
LEAD; 

WHITE 


SOL- 

TMUR1C 

ACID 


CANDLES 


COAL 


Anthracite 
Chestnut 


Anthracite 
Egg 


Anthracite 
Grate 


1860, Jan... 


100.0 


100.0 


100.0 


100.0 


100.0 


100.0 


April. . 


95.7 


100.0 


100.0 





100.0 


100.0 


July . . 


95.7 


100.0 


96.3 


92.1 


97.4 


97.3 


Oct... 


95.7 


100.0 


96.3 


107.9 


111.8 


112.2 


1861, Jan... 


100.0 


109.1 


96.3 


98.4 


105.3 


116.2 


April. . 


100.0 


109.1 


96.3 


103.2 


93.4 


110.8 


July . . 


100.0 


109.1 


96.3 


95.2 


97.4 


97.3 


Oct . . . 


100.0 


109.1 


96.3 


107.9 


97.4 


102.7 


1862, Jan... 


104.3 


127.3 


92.6 


95.2 


97-4 


108.1 


April.. 


100.0 


127.3 


88.9 


85.7 


92.1 


91.9 


July . . 


104.3 


127.3 


88.9 


82.5 


93.4 


90.5 


Oct... 


139.1 


127.3 


88.9 


85.7 


94.7 


86.5 


1863, Jan... 


156.5 


109.1 


96.3 


92.1 


98.7 


102.7 


April.. 


226.1 


109.1 


100.0 


187.3 


155.3 


159.5 


July . . 


173.9 


109.1 


100.0 


190.5 


168.4 


16M.9 


Oct ... 


139.0 


109.1 


100.0 


190.5 


203.9 


196.0 


1864, Jan... 


191.3 


109.1 


100.0 


198.4 


230.3 


216.2 


April. . 


208.7 


109.1 


100.0 








July . . 


287.0 


145.5 


103.7 


293.7 


263.1 


263.5 


Oct ... 


478.3 


172.7 


148.1 


230.2 


223.7 


229.7 


1865, Jan... 


413.0 


172.7 


148.1 


269.8 


250.0 


243.2 


April.. 


391.3 


181.8 


148 1 








July... 


347.8 


181.8 


111.1 


198.4 


184.2 


186.5 


Oct . . . 


434.8 


181.8 


111.1 


309.5 


276.3 


283.8 



APPENDIX B 



443 



TABLE 2 Continued 

KKLA'l I VK PKICE8 OF VAEIOUS COMMODITIES AT WHOLESALE 



DATE 


COAL 


MATCHES 


BBICK 


CEMENT : 
Rosendale 


CHESTNUT 
Lumber, 
in the Log 


Anthracite 
Stove 


Bitumi- 
nous 


1860, Jan... 


100.0 


100.0 


100.0 


114.3 


80.0 


100.0 


April. . 




105.0 


100.0 


97.1 


100.0 


100.0 


July . . 


98.7 


102.0 


100.0 


100.0 


100.0 


100.0 


Oct... 


102.6 


105.0 


100.0 


102.8 


100.0 


104.2 


1861, Jan... 


116.7 


108.0 


100.0 


102.8 


100.0 


104.2 


April. . 


94.9 


96.0 


100.0 


91.4 


90.0 


108.3 


July . . 


98.7 


92.0 


100.0 


80.0 


90 


108.3 


Oct. . . 


97.4 


97.0 


100.0 


85.7 


90.0 


108.3 


1862, Jan... 


98.7 


97.0 


100.0 


85.7 


90.0 


116.7 


April . . 


92.3 


135.0 


100.0 


91.4 


90.0 


125.0 


July.. 


93.6 


122.0 


100.0 


91.4 


90.0 


133.3 


Oct.... 


94.9 


180.0 


100.0 


94.3 


90.0 


133.3 


1863, Jan... 


100.0 


160.0 


100.0 


137.1 


90.0 


133.3 


April. . 


151.3 


150.0 


100.0 


140.0 


120.0 


133.3 


July . . 


166.7 


150.0 


100.0 


137.1 


120.0 


ias.3 


Oct.... 


201.3 


160.0 


100.0 


148.6 


120.0 


ias.3 


1864, Jan... 


243.6 


173.0 


100.0 


205.7 


120.0 


133.3 


April . . 




180.0 


100.0 


171.4 


140.0 


133.3 


July . . 


262'.8 


199.3 


208.3 


160.0 


150.0 


1,33.3 


Oct... 


224.4 


233.2 


208.3 


217.1 


160.0 


133.3 


1865, Jan... 


243.6 


256.2 


208.3 


211.4 


160.0 


133.3 


April. . 




250.0 


395.8 


217.1 


160.0 


133.3 


July . . 


l79'. 5 


165.0 


395.8 


171.4 


150.0 


133.3 


Oct . . . 


275.6 


200.0 


395.8 


262.9 


175.0 


133.3 



Date 


Hemlock : 
Lumber, 
in the Log 


Lime: 
Rockland 


Pine: 
Dumber, 
in the Log 


Pine 
Boards : 
B'rds,lin. 


Putty 


Rubber : 
Para 


1860, Jan... 


100.0 


133.3 


100.0 


106.4 


100.0 


100.0 


April. . 


100.0 


141.7 


100.0 


106.4 


100.0 


109.1 


July . . 


100.0 


100.0 


100.0 


100.0 


100.0 


122.7 


Oct ... 


133.3 


125.0 


125.0 


106.4 


100.0 


118.2 


1861, Jan... 


ia3.3 


133.3 


125.0 


106.4 


116.7 


100.0 


April.. 


133.3 


133.3 


125.0 


106.4 


116.7 


68.2 


July.. 


133.3 


133.3 


125.0 


106.4 


116.7 


81.8 


Oct . . . 


ia3.3 


133.3 


125.0 


106.4 


116.7 


77.3 


1862, Jan... 


166.7 




187.5 


106.4 


133.3 


87.3 


April. . 


166.7 


137.5 


187.5 


109.6 


133.3 


90.9 


July . . 


183.3 


91.7 


187.5 


106.4 


133.3 


104.5 


Oct. . . 


191.7 


116.7 


193.8 


109.6 


133.3 


121.8 



H.I 



HISTORY OP THE GREENBACKS 



TABLE 2 -Continued 

RELATIVE PRICES OF VARIOUS COMMODITIES AT WHOLESALE 



Date 


Hemlock : 
Lumber, 
in the Log 


Lime: 
Rockland 


Pine: 
Lumber, 
in the Log 


Pine 
Boards : 
B'rds, 1 in. 


Putty 


Rubber: 
Para 


1863, Jan... 


200.0 


141.7 


200.0 


109.6 


150.0 


159.1 


April . . 


200.0 


141.7 


200.0 


132.0 


150.0 


154.5 


July . . 


200.0 


166.7 


200.0 


132.0 


150.0 


131.8 


Oct... 


200.0 


191.7 


200.0 


148.0 


150.0 


136.4 


1864, Jan... 


200.0 


175.0 


200.0 


148.0 


166.7 


145.5 


April.. 


'200.0 


225.0 


200.0 


164.0 


166.7 


150.9 


July.. 


200.0 


166.7 


200.0 


196.0 


166.7 


172.7 


Oct... 


200.0 


208.3 


200.0 


196.0 


166.7 


218.2 


1865, Jan... 


200.0 


250.0 


200.0 


196.0 


183.3 


218.2 


April. . 


200.0 


' 266.7 


200.0 


196.0 


183.3 


154.5 


July . 


200.0 


200.0 


200.0 


196.0 


183.3 


127.3 


Oct... 


200.0 


300.0 


200.0 


228.0 


183.3 


136.4 



DATE 


SPRUCE : 
Boards 


TURPEN- 
TINE 


WINDOW GLASS 


American, 
10X14, 
firsts 


American, 
10 X 14, 
thirds 


French, 
10X14 
firsts 


French, 
10X14, 
thirds 


1860. Jan... 


91.7 


110.0 


91.7 


105.8 


85.1 


106.3 


April. . 


91.7 


115.0 


91.7 


100.0 


100.0 


106.3 


July.. 


100.0 


100.0 


100.0 


100.0 


100.0 


100.0 


Oct... 


100.0 


105.0 


100.0 


100.0 


100.0 


100.0 


1861, Jan... 


100.0 


87.5 


100.0 


94.0 


93.8 


100.0 


April. . 


100.0 


90.0 


100.0 


95.6 


108.9 


97.7 


July . . 


87.5 


205.0 


100.0 


103.4 


96.1 


97.7 


Oct... 


83.3 


362.5 


100.0 


111.2 


96.1 


109.1 


1862, Jan... 


83.3 


350.0 


100.0 


118.5 


96.1 


118.9 


April. . 


83.3 


245.0 


100.0 


159.3 


96.1 


140.7 


July.. 


79.2 


325.0 


100.0 


159.3 


96.1 


156.3 


Oct... 


97.9 


562.5 


100.0 


159.3 


96.1 


146.6 


1863. Jan... 


97.9 


625.0 


133.3 


159.3 


115.3 


140.7 


April. . 


97.9 


675.0 


133.3 


171.5 


140.6 


156.3 


July.. 


131.3 


895.0 


153.1 


159.3 


132.8 


156.3 


Oct. . . 


127.1 


687.5 


131.3 


159.3 


117.2 


156.3 


1864, Jan... 


127.1 


750.0 


131.3 


220.5 


125.0 


185.3 


April. . 


177.1 


800.0 


256.9 


205.8 


146.4 


185 3 


July.. 


202.1 


900.0 


208.3 


245.0 


223.4 


224.7 


Oct... 


191.7 


607.5 


250.0 


254.8 


205.9 


254 


1865, Jan... 


191.7 


512.5 


242.2 


274.4 


232.0 


259.9 


April. . 


168.8 


500.0 


209.9 


240.1 


193.4 


218.9 


July . . 


168.8 


337.5 


177.6 


161.7 


154.7 


150.5 


Oct... 


168.8 


262.5 


226.0 


212.3 


180.5 


177.8 



APPENDIX B 



445 



TABLE 2 Continued 

RELATIVE PEICES OF VARIOUS COMMODITIES AT WHOLESALE 



DATE 


BUTTS : 
Loose- 
joint, 
cast3X3in. 


COPPER : 


IRON: 
Wire 


LEAD: 


Ingot 


Sheet 


Drop-shot 


Pig 


1860, Jan . . . 


100.0 


100.0 


100.0 




100.0 


100.0 


April. . 


100.0 


97.9 


100.0 




119.1 


101.7 


July . . 


93.0 


89.4 


100.0 


100.0 


114.9 


98.0 


Oct... 


89.5 


90.4 


100.0 


100.0 


110.6 


97.8 


1861, Jan... 


89.5 


80.9 


100.0 


100.0 


110.6 


95.2 


April.. 


89.5 


80.9 


93.2 


100.0 


110.6 


95.2 


July.. 


89.5 


76.6 


93.2 


100.0 


110.6 


84.8 


Oct. . . 


89.5 


87.2 


93.2 


100.0 


119.1 


100.4 


1862, Jan... 


89.5 


112.8 


93.2 


100.0 


144.7 


121.2 


April. . 


89.5 


93.6 


103.4 


100.0 


144.7 


116.9 


July . . 


112.3 


97.9 


103.4 


100.0 


144.7 


116.9 


Oct... 


133.3 


119.1 


103.4 


100.0 


148.9 


123.4 


1863, Jan... 


133.3 


131.9 


128.8 


105.8 


170.2 


138.5 


April.. 


133.3 


129.8 


144.1 


232.7 


204.3 


155.8 


July.. 


140.4 


129.8 


135.6 


169.2 


204.3 


145.0 


Oct... 


140.4 


138.3 


128.8 


137.5 


187.2 


147.2 


1864, Jan... 


178.9 


160.6 


162.7 


211.5 


229.8 


186.1 


April.. 


207.0 


172.3 


178.0 


211.5 


263.8 


201.2 


July . . 


266.7 


197.9 


194.9 


211.5 


357.6 


251.1 


Oct... 


308.8 


200.0 


237.3 


285.6 


340.4 


251.1 


1865, Jan... 


308.8 


208.5 


220.3 


264.4 


340.4 


259.7 


April.. 


308.8 


144.7 


169.5 


211.5 


272.4 




July . . 


277.2 


121.3 


152.5 


148.1 


238.3 


iis.i 


Oct... 


277.2 


138.3 


169.5 


169.2 


255.4 





Date 


Lead: 
Pipe 


Shovels 


Spelter : 
Imported 


Tin Plates : 
I. C. Coke 


Wood Screws: 
1-inch, No. 
10, Flat Head, 
Iron 


Zinc: 
Imported 
Sheet 


I860, Jan... 


100.0 


100.0 


100.0 


100.0 


100.0 


100.0 


April. . 


116.7 


100.0 


100.0 


101.7 


100.0 


100.0 


July . . 


112.5 


100.0 


99.0 


101.7 


80.5 


101.8 


Oct... 


104.2 


100.0 


95.2 


96.5 


116.7 


96.4 


1861, Jan... 


104.2 


100.0 


90.5 


94.7 


116.7 


92.9 


April. . 


108.3 


100.0 


90.5 


98.2 


116.7 


100.0 


July . . 


108.3 


100.0 


81.0 


98.2 


116.7 


100.0 


Oct... 


116.7 


100.0 


85.7 


89.5 


116.7 


103.6 


1862, Jan... 


141.7 


94.7 


109.5 


108.9 


116.7 


103.6 


April. . 


141.7 


94.7 


95.2 


105.3 


116.7 


103.6 


July . . 


141.7 


98.7 


114.3 


105.3 


116.7 


103.6 


Oct... 


145.8 


98.7 


83.3 


122.8 


116.7 


128.6 



446 



HISTORY OP THE GREENBACKS 



TABLE 2 Continued 

RELATIVE PRICES OF VABIODS COMMODITIES AT WHOLESALE 



Date 


Lead: 
Pipe 


Shovels 


Spelter: 
Imported 


Tin Plates : 
I. C. Coke 


Wood Screws: 
1-Inch. No. 
10, Flat Hed. 
Iron 


Zinc: 
Imported, 
Sheet 


1863, Jan... 
April.. 


166.7 
166.7 


102.6 


142.9 
161.9 


129.8 
154.4 


135.0 
158.3 


146.4 
178.6 


July.. 


200.0 




147.6 


136.8 


158.3 


164.3 


Oct. . . 
1864, Jan... 
April. . 
July.. 
Oct... 
1865, Jan... 
April. . 
July.. 
Oct... 


183.3 
225.0 
258.3 
350.0 
333.3 
333.3 
266.7 
233.3 
216.7 


122.8 
135.9 
161.0 
200.4 
200.4 
184.2 
184.2 
134.2 
134.2 


161.9 
176.2 
238.1 
333.3 
257.1 
285.7 
171.4 
171.4 
202.4 


136.8 
154.4 
196.5 
308.8 
210.5 
238.6 
147.4 
143.8 
154.4 


118.8 
158.3 
158.3 
215.7 
215.7 
215.7 
215.7 
215.7 
215.7 


157.1 
171.4 
214.3 
357 1 
257.1 
285.7 
185.7 
171.4 
207.1 



DATE 


FCENITCEE 


PAILS: WOODEN 


Chairs, 
Bed-Room 


Chairs, 
Kitchen 


Tables, 
Kitchen 


2 Hoops 
(1) 


2 Hoops 
(2) 


3 Hoops 


I860, Jan... 


100.0 


100.0 


100.0 


100.0 


100.0 


100.0 


April. . 


100.0 


100.0 


100.0 


100.0 


100.0 


100.0 


July. . 


100 X) 


100.0 


100.0 


100.0 


100.0 


100.0 


Oct... 


80.0 


100.0 


100.0 


100.0 


100.0 


100.0 


1861, Jan... 


80.0 


100.0 


100.0 


98.2 


100.0 


100.0 


April. . 


80.0 


100.0 


100.0 


98.2 


100.0 


100.0 


July.. 


80.0 


100.0 


100.0 


98.2 


100.0 


100.0 


Oct... 


80.0 


100.0 


100.0 


98.2 


98.1 


96.9 


1862, Jan... 


80.0 


100.0 


100.0 


92 9 


92.6 


93.8 


April. . 


80.0 


100.0 


100.0 


92.9 


92.6 


93.8 


July. . 


80.0 


100.0 


100.0 


107.1 


107.4 


106.3 


Oct... 


80.0 


100.0 


100.0 


121.4 


119.3 


118.8 


1863, Jan... 


85.0 


100.0 


100.0 


121.4 


122.2 


125.0 


April. . 


106.0 


100.0 


112.5 


150.0 


151.9 


146.9 


July. . 


105.0 


100.0 


112.5 


139.3 


138.5 


137.5 


Oct... 


110.0 


111.1 


112.5 


139.3 


138.5 


140.6 


1864, Jan... 


125.0 


122.2 


112.5 


160.7 


163.0 


156.3 


April. . 


125.0 


122.2 


125.0 


178.6 


183.0 


176.3 


July.. 


145.0 


133.3 


137.5 


178.6 


181.5 


176.9 


Oct... 


180.0 


166.7 


162.5 


178.6 


183.0 


178.1 


1865, Jan... 


180.0 


166.7 


162.5 


178.6 


183.0 


178.1 


April. . 


150.0 


155.6 


150.0 


178.6 


181.5 


178.1 


July.. 


145.0 


144.4 


150.0 


142.9 


146.7 


140.6 


Oct... 


145.0 


144.4 


150.0 


214.3 


218.5 


203.1 



APPENDIX B 



447 



TABLE 2 Continued 

RELATIVE PRICES OF VAEIOD8 COMMODITIES AT WHOLESALE 



DATE 


TUBS: WOODEN 


JUTE 


POWDER : 
Rifle 


(1) 


(2) 


(3) 


(4) 


1860, Jan... 


100.0 


100.0 


100.0 


100.0 


100.0 


100.0 


April. . 


100.0 


100.0 


100.0 


97.8 


108.6 


100.0 


July.. 


100.0 


100.0 


96.6 


93.3 


105.7 


100.0 


Oct... 


100.0 


100.0 


89.7 


88.9 


100.0 


100.0 


1861, Jan... 


90.0 


93.8 


89.7 


88.9 


114.3 


100.0 


April. . 


90.0 


93.8 


89.7 


88.9 


91.4 


100.0 


July.. 


90.0 


93.8 


89.7 


88.9 


91.4 


120.0 


Oct... 


90.0 


93.8 


86.2 


86.7 


102.9 


120.0 


1862, Jan... 


90.0 


83.8 


81.4 


80.0 


146.3 


140.0 


April. . 


100.0 


100.0 


89.7 


98.7 


125.7 


120.0 


July.. 


110.0 


100.0 


96.6 


95.6 


108.6 


130.0 


Oct... 


120.0 


112.5 


105.2 


104.4 


148.0 


130.0 


1863, Jan... 


140.0 


137.5 


124.1 


124.4 


205.7 


130.0 


April. . 


148.0 


142.5 


127.7 


126.7 


257.1 


135.0 


July.. 


148.0 


142.5 


131.0 


128.9 


194.3 


135.0 


Oct... 


152.0 


150.0 


131.0 


128.9 


182.8 


147.0 


1864, Jan... 


170.0 


162.5 


148.3 


144.4 


251.4 


145.0 


April. . 


189 6 


168.5 


165.5 


151.1 


320.0 


152.0 


July.. 


200.0 


175.0 


175.9 


157.8 


354.3 


174.0 


Oct... 


170.0 


168.8 


148.3 


148.9 


314.3 


172.0 


1865, Jan... 


180.0 


150.0 


170.3 


154.2 


320.0 


180.0 


April. . 


140.0 


193.8 


124.1 


126.7 


302.8 


175.0 


July.. 


160.0 


156.3 


144.8 


140.0 


200.0 


170.0 


Oct... 


170.0 


162.5 


148.3 


144.4 


171.4 


170.0 





ROPE 




STARCH 






SOAP: 




DATE 






Castile 










Manilla 


Tarred, 
American 




Ontario 


Pearl 


Pure 


1860, Jan... 


100.0 


100.0 


100.0 




100.0 


100.0 


April. . 


100.0 


100.0 


114.7 


ioo!6 


100.0 


100.0 


July.. 


97.0 


100.0 


117.6 


100.0 


100.0 


100.0 


Oct... 


97.0 


100.0 


108.8 


100.0 


100.0 


100.0 


1861. Jan... 


97.0 




114.7 


100.0 


100.0 


100.0 


April.. 


106.1 


ios!i 


111.8 


100.0 


100.0 


100.0 


July.. 


93.9 


105.1 


117.6 


100.0 


100.0 


100.0 


Oct... 


90.9 




141.2 


100.0 


91.7 


92.3 


1862, Jan... 


121.2 


iis'.g 


152.9 


100.0 


91.7 


92.3 


April. . 


130.3 


118.9 


158.8 


100.0 


91.7 


92.3 


July.. 


124.2 


113.5 


155.9 


100.0 


91.7 


92.3 


Oct... 


145.4 


129.7 


164.7 


110.0 


100.0 


100.0 



448 



HISTORY OP THE GREENBACKS 



TABLE 2 Continued 

I 

RELATIVE PRICES OF VARIOUS COMMODITIES AT WHOLESALE 



DATE 



1863, Jan.. 
April. 
July. 
Oct.. 

1864, Jan ... 
April. 
July. 
Oct.. 

1865, Jan.. 
April. , 
July. 
Oct.. 



ROPE 




STARCH 




SOAP: 




Manilla 


Tarred, 
American 


Castile 


Ontario 


Pearl 


Pure 


151.5 


143.2 


170.6 


130.0 


116.7 


115.4 


218.2 


164.9 


202.9 


140.0 


125.0 


123.1 


172.7 


162.2 


200.0 


130.0 


116.7 


115.4 


184.8 


154.1 


194.0 


130.0 


116.7 


115.4 


197.0 


164.9 


217.6 


160.0 


141.7 


138.5 


230 3 


164.9 


205.9 


180.0 


158.3 


153.8 


254.5 


167.6 


282.4 


'200.0 


175.0 


169.2 


303.0 


205.4 


247.1 


244.2 


191.7 


184.6 


284.8 


200.0 


294.1 


240.0 


208.3 


200.0 


242.4 


194.6 


247.1 


240.0 


208.3 


200.0 


242.4 


194.6 


194.0 


200.0 


175.0 


169.2 


272.7 


194.6 


252.9 


200.0 


175.0 


169.2 





STA 


BCH 




STA 


RCH 


DATE 


Refined 


Silver 
Gloss 


DATE 


Refined 


Silver 
Gloss 


1860, January.. 
April 
July 
October . . 
1861, January.. 
April 
July 


100.0 
100.0 
100.0 
100.0 
100.0 
100.0 
100.0 


100.0 
100.0 
100.0 
100.0 
100.0 
100.0 
100.0 


1863, January . . 
April 
July 
October . . 
1864, January. . 
April 
July 


114.3 
121.4 
114.3 
114.3 
135.7 
150.0 
164.3 


112.9 
119.4 
112.9 
112.9 
132.3 
145.2 
158.1 


October . . 
1862, January. . 
April 
July 


92.9 
92.9 
92.9 
92.9 


93.5 
93.5 
93.5 
93.5 


October . . 
1865, January. . 
April 
July 


178.6 
192.9 
192.9 
164.3 


171.0 
1&3.9 
183.9 
158.1 


October . . 


100.0 


100.0 


October . . 


164.3 


158.1 



APPENDIX B 



449 



TABLE 3 

RELATIVE PRICES PAID BY FEDERAL. GOVERNMENT FOR SUPPLIES, 1860-651 

1. Relative Prices Paid by the Quartermaster General (War Department). Pp. 1596, 
1597. Date within Year Not Specified 





I860 


1861 


1862 


1863 


1864 


1865 


Caps, forage , 


100 


111 


98 


102 


114 


175 


Hats, uniform 


100 


66 


69 


70 


77 


96 


Great coats 


100 


113 


148 


117 


133 


188 


Coats, blue flannel, sack 


100 


102 


114 


112 


126 


191 


Coats, blue flannel, sack, lined. 
Trousers .... 


100 
100 


103 
107 


123 
126 


122 

89 


127 
110 


188 
168 


Shirts, flannel 


100 


98 


162 


170 


174 


258 


Stockings 


100 


108 


133 


133 


146 


200 

















2. Relative Prices Paid by the Office of the Commissary General of Subsistence 
(War Department). Pp. 1806-9. Average Prices for Year 



Pork 




100 


89 


110 


217 


238 


Bacon 




100 


100 


100 


229 


300 


Ham 




100 


90 


130 


190 


250 


Beef cattle 




100 


100 


124 


200 


232 


Fresh beef 




100 


100 


100 


167 


183 


Salt beef 




100 


96 


94 


147 


144 


Flour 




100 


111 


130 


175 


170 


Soft bread 




100 


100 


100 


133 


133. 


Hard bread 




100 


100 


100 


150 


175 


Corn meal 




100 


200 


300 


300 


400 


Beans 




100 


133 


167 


167 


133 


Peas .... 




100 


100 


150 


150 


300 


Rice 




100 


86 


114 


157 


143 


Hominy 




100 


100 


150 


200 


200 


Desiccated potatoes 




100 


110 


100 


110 


140 


Mixed vegetables 




100 


109 


87 


78 


109 


Green coffee 




100 


153 


213 


293 


247 


R. and R. and G. coffee 




100 


145 


190 


250 


160 


Tea 




100 


129 


167 


239 


280 


Brown sugar 




100 


111 


133 


211 


167 


White sugar 




100 


120 


160 


250 


260 


Vinegar 




100 


91 


146 


264 


318 


Candles 




100 


106 


122 


172 


167 


Soap . . 




100 


120 


140 


220 


220 


Salt 




100 


117 


119 


119 


119 

















' The data from which the following series of relative prices have been com- 
puted are found in the "exhibits" of the Aldrich Report on the pages indicated 
under the several divisions of the table. 



450 



HISTORY OF THE GREENBACKS 



TABLE 3 Continued 

RELATIVE PRICES PAID in FEDERAL GOVERNMENT FOR SUPPLIES, 1860-65 

3. Relative Prices Paid by Bnreau of Provisions and Clothing (Navy Department). 
Pp. 1586-93. Date within Year Not Specified 





1860 


1861 


1862 


1863 


1864 


1865 


Beans . . 


100 


86 


100 


150 


215 


215 


Beef fresh 


100 


101 


91 


86 


125 


153 


Susrar 


100 


94 


74 


100 


281 


275 


Vegetables 


100 


92 


123 


84 


77 


163 


Blankets 




100 


99 


132 


232 


329 


Flannel 




100 


92 


124 


232 


276 


Overshlrts, flannel 


100 


96 


92 


103 


201 


267 


Satinet 




100 


94 


99 


180 


238 


Trousers, canvas duck 


100 


98 


97 


105 


194 


350 


Trousers, cloth 


100 


71 


68 


75 


132 


207 


Shoes, calf skin 


100 


86 


74 


83 


124- 


149 


Socks, woolen 


100 


109 


102 


113 


208 


234 


Mattresses 


100 


97 


94 


97 


244 


265 


Linseed oil, boiled 




1(X) 


64 


123 


190 


227 


Turpentine 


100 


117 


319 


576 


488 


836 

















4. Relative Prices for Drags and Chemicals Paid by Surgeon General (War Depart- 
ment). Pp. 1620-24. Average Prices for Year 



Aconite 


100 


107 


107 


107 


200 


200 


Aloes 


100 


129 


167 


147 


160 


160 


Alum 


100 


87 


91 


66 


103 


103 


Ammonia 


100 


100 


100 


100 


160 


160 


Arnica 


100 


115 


133 


133 


167 


167 


Calomel . 


100 


100 


92 


112 


223 


214 


Camphor 


100 


119 


222 


237 


423 


420 


Castor oil 


100 


88 


90 


123 


133 


105 


Chalk 


100 


100 


100 


100 


120 


120 


Chloroform 


100 


99 


100 


100 


128 


164 


Cod liver oil 


100 


71 


71 


71 


77 


77 


Ether 


100 


150 


54 


60 


126 


131 


Extract of ginger 


100 


113 


114 


114 


120 


120 


Extract of wild cherry bark. . . 
Gum Arabic 


100 
100 


100 
131 


128 
134 


112 
134 


200 
213 


263 
213 


Ipecac 


100 


104 


116 


117 


223 


265 


Laudanum 


100 


100 


100 


100 


300 


300 


Magnesia 


100 


89 


83 


93 


208 


283 


Nitric acid 


100 


93 


75 


60 


68 


95 


Olive oil ... 


100 


100 


100 


100 


147 


147 


Opium 


100 


101 


102 


115 


185 


185 


Pills, cathartic 


100 


75 


75 


75 


100 


100 

















APPENDIX B 



451 



TABLE 3 Continued 

RELATIVE PRICES PAID BY FEDERAL GOVERNMENT FOR SUPPLIES, 1860-65 





I860 


1861 


1862 


1863 


1864 


1865 


Potassium, chlorate 


100 


104 


104 


104 


200 


200 


Potassium iodide 


100 


100 


100 


100 


126 


126 


Quinine 


100 


123 


149 


187 


196 


130 


Squills, syrup of 


100 


100 


100 


100 


118 


118 


Sulphur 


100 


111 


131 


100 


100 


100 


Sulphuric acid 


100 


81 


67 


78 


111 


111 


Tartar emetic 


100 


90 


83 


120 


120 


120 


Turpentine 


100 


124 


163 


283 


200 


211 


Zinc, sulphate of 


100 


100 


100 


100 


267 


300 

















TABLE 4 

RELATIVE PRICES OF VARIOUS COMMODITIES AT RETAILl 

RELATIVE PRICES OF DRY GOODS AT RETAIL COTTON FLANNEL, MEDIUM 
QUALITY 



State 


Town 


Initial 
Price 

per Yd. 


I860 


1861 


1862 


1863 


1864 


1865 


1866 


Mass. . . . 


Woburn 


0.13 


100 


131 


9,31 


9,69 


385 


385 


346 


Conn. . . . 
Pa 


Jewett City 
New Castle 


.15 
.125 


100 
100 


100 

190 


113 

900 


250 
360 


333 

440 


387 
400 


320 
940 


W. Va. . . 
W. Va. . . 


New Cumberland 
Wheeling 


.14 
.125 


100 
100 


179 
120 


286 
200 


357 
300 


429 
600 


429 
480 


357 

400 


Ohio 


Canton 


.125 


100 


96 


300 


400 


600 


520 


400 


Ohio . . . 


Cincinnati 


.125 


100 


100 


100 


120 


200 


300 


900 


Ohio 


Zanesville 


.10 


100 


150 


?00 


?,?0 


350 


370 


?,80 


Ind 


Jeffersonville .... 


.08V 


100 


300 


300 


300 


300 


300 


300 


Ind 


Lawrenceburg . . . 


.125 


100 


100 


?00 


360 


7?0 


600 


6(10 


Ind 
Ill 


New Albany 
Bloomington 


.10 
.125 


100 
100 


125 
190 


250 
?00 


400 
39(1 


500 
5*>0 


400 
720 


300 
590 























' The source of the following series of relative prices at retail is the report pre- 
pared by Mr. J. D. Weeks in 1880-83 and published as Vol. XX of the Tenth Census. 
Not all of the material supplied by Mr. Weeks, however, has been used, for he gives 
some series of prices at unspecified times of the year and others "on or about 
June 1." Those series " showing average for the year " alone were used as the basis 
for the computations in the text, and they alone are given here. The general divi- 
sions of the series dry goods, groceries, provisions, etc. are the same as in the 
Census report ; but under these heads a classification according to articles was found 
more convenient than the one according to towns which Mr. Weeks adopted. How- 
ever, as the state and town from which every series comes are carefully stated, there 
need be no difficulty in tracing any series to its source. In the case of rent figures 
are given for 1867 and 1868 for the purposes of Part II, chap. vi. 



452 



HISTORY OP THE GREENBACKS 



TABLE 4 Continued 

RELATIVE PRICES OP DRY GOODS AT RETAIL MOC88ELINE8 DE LAINE 



State 


Town 


Initial 
Price 
per Yd. 


I860 


1861 


1862 


1803 


1864 


1865 


1866 


Mass .... 


Woburn 


0.33 


100 


100 


91 


91 


100 


115 


106 


Conn .... 
Pa 


Jewett City 
New Castle 


.25 
.25 


100 
100 


88 
100 


100 
120 


150 
140 


250 

180 


268 
160 


268 
140 


W. Va... 
W. Va.. 


New Cumberland 
Wheeling 


.15 
.25 


100 
100 


200 
194 


267 
150 


400 
160 


467 
940 


467 
200 


267 
150 


Ohio 


Canton 


.25 


100 


100 


120 


160 


200 


150 


190 


Ohio 


Cincinnati 


.25 


100 


100 


100 


150 


160 


160 


160 


Ohio 


Zanesville 


.15 


100 


?,.33 


967 


300 


467 


9,67 


9.33 


Ind 


Evansville 


.20 


100 


19,5 


175 


?50 


9,50 


9,50 




Ind 


Jeffersonville .... 


.20 


100 


175 


175 


175 


175 


175 


175 


Ind 


Lawrenceburg. . . 


.25 


100 


100 


140 


160 


260 


180 


160 


Ind 


New Albany 


.18 


100 


111 


167 


194 


999 


167 


139 


Ill 


Bloomington 


.25 


100 


100 


100 


140 


140 


160 


T>0 























PRINTS, MEEEIMACK 



Mass .... 


Woburn 


0.13 


100 


115 


154 


154 


154 


946 


199 


Conn .... 


Jewett City 


.125 


100 


100 


11'?, 


176 


940 


300 


9,64 


Pa 


New Castle 


.125 


100 


100 


144 


900 


300 


980 


900 


W.Va... 
W.Va... 


New Cumberland 
Wheeling 


.09 
.125 


100 
100 


222 
190 


278 
900 


444 
940 


556 
400 


556 
390 


ass 

940 


Ohio . . . 


Canton 


.125 


100 


80 


144 


940 


400 


390 


940 


Ohio . 


Cincinnati 


125 


100 


80 


100 


190 


240 


300 


360 


Ohio 


Zanesville 


.125 


100 


96 


190 


176 


390 


940 


900 


Ind 
Ind 
Ind 
Ind 
Ill 


Evansville 
Jeffersonville 
Lawrenceburg . . . 
New Albany 
Bloomington .... 


.10 
.125 
.125 
.10 
.125 


100 
100 
100 
100 
100 


100 
100 
100 
105 
100 


150 

100 
160 
200 
900 


250 
100 
240 
300 
940 


500 
100 
480 
400 
360 


450 
120 
280 
250 
440 


300 
200 
200 
200 
390 























SATINETS, MEDIUM QUALITY 



Conn. . . 

Pa 

W.Va.. 

W.Va.. 

Ohio 

Ohio 

Ohio 

Ind 

Ind 

Ind .... 
Ill .. 



Jewett City 0.75 

Newcastle 1.00 

New CumberlandO.il 

Wheeling 75 

Canton 75 

Cincinnati 75 

Zanesville 40 

Jeffersonville 75 

Lawrenceburg... .70 

New Albany 625 

Bloomington 75 



100 
100 
100 
100 
100 
100 
100 
100 
100 
100 
100 



100 
100 
227 
133 
100 
100 
100 
133 
107 
100 
87 



133 
125 
364 
167 
1.33 
107 
150 
133 
179 
120 
100 



166 
138 
455 
167 
167 
113 
250 
133 
179 
172 



177 
150 
545 
200 
200 
120 
213 
133 
214 
172 
1.33 



177 
140 
545 
200 
167 
133 
163 

ia3 

143 
144 

167 



173 
150 
273 
167 
133 
133 
150 
133 
143 
144 



APPENDIX B 



453 



TABLE 4 Continued 

RELATIVE PRICES OF DRY GOODS AT RETAIL SHEETINGS : BLEACHED, 9X8, 
STANDARD QUALITY 



State 


Town 


Initial 
Price 
per Yd. 


I860 


1861 


1862 


1863 


1864 


1865 


1866 


Mass .... 


Woburn 


0.14 


100 


114 


331 


357 


''50 


386 


371 


Pa 


New Castle 


.17 


100 


118 


165 


394 


353 


.353 


334 


W. Va... 
W.Va . 


New Cumberland 
Wheeling 


.10 
.15 


100 
100 


200 
107 


350 
233 


450 
333 


500 
533 


600 
400 


500 
300 


Ohio 


Canton 


.15 


100 


100 


350 


367 


533 


467 


367 


Ohio 


Cincinnati 


.25 


100 


110 


130 


150 


160 


170 


160 


Ohio 


Zanesville 


.13 


100 


138 


169 


331 


577 


346 


369 


Ind 


Lawrenceburg. . . 


.30 


100 


107 


217 


317 


333 


383 


300 


Ind 


New Albany 


.095 


100 


111 


343 


400 


579 


474 


431 


Ill 


Bloomington 


J5 


100 


133 


300 


300 


400 


433 


300 























SHEETINGS: BROWN, 9X8, STANDARD QUALITY 



Mass .... 


Woburn 


0.13 


100 


115 


308 


346 


308 


346 


308 


Pa 


New Castle 


.125 


100 


130 


300 


360 


440 


400 


340 


W.Va... 
W.Va... 


New Cumberland 
Wheeling 


.08 
.125 


100 
100 


225 
130 


375 
340 


500 
360 


625 
600 


625 
400 


500 
330 


Ohio 


Canton 


.125 


100 


96 


380 


400 


600 


530 


400 


Ohio 


Cincinnati 


.20 


100 


135 


150 


175 


190 


300 


190 


Ohio 


Zanesville 


.13 


100 


138 


169 


3,31 


563 


308 


3,69 


Ind 
Ind 
Ind 
Ill 


Jefferson ville 
Lawrenceburg. . . 
New Albany 
Bloomington 


.15 
.28 
.0775 
.15 


100 
100 
100 
100 


167 
107 
135 
1,33 


167 
214 
232 
333 


167 
321 
684 
333 


167 
357 
877 
433 


167 
304 
684 
500 


167 
321 
555 
.333 























SHIRTINGS : BLEACHED, 4X4, STANDARD QUALITY 



Mass .... 


Woburn 


0.125 


100 


104 


330 


360 


380 


340 


340 


Conn .... 


Jewett City 


.16 


100 


81 


100 


3.34 


375 


419 


344 


Pa 


New Castle 


.15 


100 


130 


167 


300 


373 


367 


333 


W.Va. . 
W.Va.. 


New Cumberland 
Wheeling 


.08 
.10 


100 
100 


225 
150 


375 

300 


500 
400 


625 

800 


625 
500 


500 
400 


Ohio 


Canton 


.125 


100 


130 


340 


400 


600 


480 


360 


Ohio 


Cincinnati 


.15 


100 


R3 


90 


1.33 


367 


367 


300 


Ohio 


Zanesville 


.10 


100 


150 


200 


300 


650 


.350 


300 


Ind 


Evansville 


.10 


100 


100 


125 


.350 


600 


650 


400 


Ind 
Ind 
Ind 
Ill 


Jeffersonville 
Lawrenceburg . . . 
New Albany 
Bloomington .... 


.125 
.125 
.085 
.125 


100 
100 
100 
100 


120 
120 
112 
130 


160 
176 
235 
300 


280 
360 
412 
330 


440 
600 
588 
440 


600 
360 
471 

480 


528 
320 
412 
330 























454 



HISTORY OF THE GREENBACKS 



TABLE 4 Continued 

LATTVE PRICES OF DRY GOODS AT RETAIL BHIETINO8 : BROWN, 4X4, STANDARD 

DUALITY 



State 


Town 


Initial 
Price 
per Yd. 


I860 


1861 


1862 


1863 


1864 


1865 


1866 


Mass .... 


Woburn 


0.11 


100 


100 


318 


409 


?97 


997 


997 


Conn .... 


Jewett City 


.125 


100 


88 


119 


280 


400 


440 


360 


Pa 


New Castle 


.10 


100 


1?0 


'^0 


400 


500 


450 


950 


W.Va... 
W.Va... 


New Cumberland 
Wheeling 


.06 
.10 


100 
100 


250 
19,5 


417 
950 


500 
400 


667 
750 


667 
500 


500 
400 


Ohio 


Canton 


.09 


110 


111 


999, 


556 


833 


556 


444 


Ohio 


Cincinnati 


.10 


100 


150 


500 


600 


750 


750 


650 


Ohio 


Zanesville 


.10 


100 


150 


900 


350 


700 


350 


300 


Ind 


Evansville 


.085 


100 


100 


118 


588 


882 


824 


588 


Ind 


Jeffersonville. . . . 


.10 


100 


150 


900 


300 


500 


750 


600 


Ind 


Lawrenceburg. . 


08 


100 


113 


225 


563 


813 


500 


500 


Ind 


New Albany 


.0675 


100 


111 


9,99, 


741 


963 


741 


593 


Ill 


Bloomington . . . 


.125 


100 


120 


240 


360 


480 


560 


360 























TICKINGS: GOOD QUALITY 



Mass .... 


Woburn 


0.17 


100 


118 


9,59 


9,59 


959 


965 


935 


Conn 
Pa 


Jewett City 
New Castle 


.22 
.25 


100 
100 


100 
190 


114 
180 


150 
990 


250 
300 


305 

272 


273 
960 


W.Va... 
W.Va... 


New Cumberland 
Wheeling 


.28 
.25 


100 
100 


143 

100 


179 
160 


250 
200 


250 
400 


268 
300 


143 

940 


Ohio . 


Canton 


.25 


100 


100 


900 


400 


500 


400 


300 


Ohio 


Cincinnati 


.225 


100 


156 


167 


178 


222 


333 


333 


Ohio 


Zanesville 


.25 


100 


160 


900 


990 


340 


990 


148 


Ind 
Ind 
Ind 
Ill 


Jeffersonville 
Lawrenceburg. . . 
New Albany 
Bloomington .... 


.25 
.25 
.17 
.18 


100 
100 
100 
100 


200 
100 
118 
139 


200 
160 
206 

999 


200 
200 
294 

978 


200 
360 
441 
500 


200 
300 
382 
639 


200 
320 
294 
500 























RELATIVE PR-ICES OF GROCERIES AT RETAIL COFFEE: RIO, GREEN 



Mass 


Boston 


per Ib. 
0.13 


100 


108 


179 


197 


319 


954 


905 


Pa 


Philadelphia 


.11 




100 


118 


155 


*>91 


318 


309 


Md 


Baltimore 


.16 


100 


100 


150 


219 


950 


9,19 


188 


W.Va.. 
Ohio 


New Cumberland 
Canton 


.12 
.16 


100 
100 


125 
94 


150 
19,5 


167 
9,50 


208 
313 


208 
950 


167 
950 


Ohio . . . 


Springfield 


.15 


100 


80 


100 


100 


167 


?,67 


333 


Ohio . . 


Zanesville 


.15 


100 


100 


100 


133 


167 


167 


900 


Ind 
Iowa 


Lawrenceburg . . 
Cedar Rapids 


.25 
.08 


100 


100 
100 


140 
125 


140 
313 


160 
438 


140 
438 


160 
375 



APPENDIX B 



455 



TABLE 4 Continued 

RELATIVE PRICES OF GROCERIES AT RETAIL MOLASSES: NEW ORLEANS 



State 


Town 


initial 
Price 
per gal. 


I860 


1861 


1862 


1863 


1864 


1865 


1866 


Pa 


Philadelphia 


0.40 




100 


135 


150 


175 


WO 


9175 


W. Va. . . 
Ohio 


New Cumberland 
Canton 


.40 
.40 


100 
100 


125 
100 


188 
350 


225 
875 


250 
375 


225 
313 


225 
350 


Ohio 


Zanesville 


.50 


100 


100 


100 


150 


300 


WO 


350 


Ind 
Iowa 


Lawrenceburg. . . 
Cedar Rapids . . . 


.60 
.50 


100 


100 
100 


100 
100 


133 
120 


267 
160 


250 
220 


167 
240 



MOLASSES : PORTO RICO 



Mass .... 


Boston 


0.26 




100 


133 


180 


998 


345 


333 


Pa 




.40 




100 


100 


135 


163 


300 


300 


Md 


Baltimore 


.40 


100 


88 


100 


125 


250 


200 


WO 


W. Va. . . 
Ohio .... 


New Cumberland 
Canton 


.25 
.35 


100 


200 
100 


240 
171 


320 
.357 


360 
357 


320 

386 


360 
343 


Ohio 


Springfield 


.50 




100 


130 


150 


150 


150 


160 


Ohio .... 


Zanesville 


.55 


100 


109 


109 


154 


318 


337 


337 


Ind 
Iowa .... 


Lawrenceburg . . . 
Cedar Rapids 


.40 
.30 


100 


125 
100 


125 
100 


188 
133 


250 
133 


250 
167 


200 
167 



Pa 


Philadelphia .... 


0.50 




100 


110 


110 


1W 


160 


180 


Md 


Baltimore 


.60 


100 


100 


100 


117 


333 


333 


167 


W.Va... 

Ohio 


New Cumberland 
Springfield 


.40 
.60 


100 
100 


125 
135 


188 
133 


250 
167 


313 

308 


250 
350 


250 
350 


Ohio .... 
Ind 
la 


Zanesville 
Lawrenceburg. . . 
Cedar Rapids. . . . 


.75 
.80 
.50 


100 
100 


80 
94 
100 


80 
100 
130 


120 
125 
1W 


167 
125 
140 


167 
125 
140 


200 
150 

300 























CODFISH : DRY 



Conn. . . 


Jewett City 


per Ib. 

0.05 


100 


80 


100 


130 


160 


160 


160 


Pa 


Philadelphia 


.04 




100 


100 


135 


150 


175 


3'>5 


W.Va... 
Ohio . . . 


New Cumberland 
Canton 


.06 
.10 


100 
100 


133 
100 


167 
100 


167 
100 


167 
100 


167 
100 


167 
100 


Ohio 


Zanesville 


.05 


100 


100 


100 


140 


160 


200 


WO 


Ind 
Iowa 


Lawrenceburg. . . 
Cedar Rapids .... 


.10 
.06 


100 


100 
100 


100 
117 


100 
133 


120 
175 


120 
208 


100 
208 



HISTORY OP THE GREENBACKS 



TABLE 4 Continued 

RELATIVE PRICES OP GROCERIES AT RETAIL SUGAR : YELLOW 



State 


Town 


Initial 
Price 
per Ib. 


I860 


1861 


1862 


1863 


1864 


1865 


1866 


Pa .. 


Philadelphia 


0.07 




100 


114 


143 


171 


9,14 


?9fl 


W.Va.... 
Ohio . . 


New Cumberland 
Canton 


.07 
.10 


100 
100 


171 
80 


200 
19,5 


200 
150 


200 
9,50 


200 
900 


171 
160 


Ohio 


Springfield 


.10 


100 


100 


100 


150 


150 


900 


9,50 


Ohio 


Zanesville 


.10 


100 


100 


150 


900 


VOO 


9,50 


900 


Ind 


Lawrenceburg. . . 


.12 


100 


100 


100 


100 


117 


117 


117 


Iowa 


Cedar Rapids 


.07 




100 


129 


129 


157 


157 


200 



SDGAE: YELLOW B 



Pa... 


Philadelphia . . . 


0.08 




100 


113 


138 


163 


?00 


9m 


W.Va... 
Ohio 


New Cumberland 
Canton 


.06 
.11 


100 
100 


167 
73 


200 
114 


200 
145 


200 
997 


200 
182 


200 
136 


Ohio . . 


Zanesville 


.11 


100 


109 


164 


900 


200 


227 


227 


Ind 
Iowa 


Lawrenceburg. . . 
Cedar Rapids .... 


.11 

.08 


100 


100 
100 


100 
125 


100 
125 


109 
150 


109 
150 


109 
156 



Mass .... 


'Boston 


per qt. 

0.06 


100 


100 


150 


167 


179 


149, 


175 


Conn ... . 
Pa 


Jewett City 
Philadelphia .... 


.06 
.06 


100 


117 
100 


133 
133 


167 
167 


167 
150 


150 

?,00 


133 
933 


W. Va. . . 
Ohio .... 
Ohio 


New Cumberland 
Canton 
Springfield 


.07 
.05 
.05 


100 
100 
100 


143 

80 
100 


171 
100 
100 


171 

160 
100 


171 
200 
160 


171 
200 
160 


171 
160 
160 


Ohio 


Zanesville 


.06^ 


100 


96 


11?, 


19,8 


160 


160 


160 


Ind 


Lawrenceburg. . . 


.10 


100 


100 


100 


100 


100 


100 


190 


Iowa 


Cedar Rapids 


.10 




100 


100 


120 


120 


125 


125 



SOAP : COMMON 



Pa.. 


Philadelphia 


0.06 




100 


117 


1.33 


150 


167 


167 


W.Va... 
Ohio 


New Cumberland 
Canton 


.06 
.08 


100 
100 


117 
75 


133 
75 


133 
195 


133 
150 


117 
19,5 


117 
113 


Ohio 


Springfield 


.05 


100 


190 


160 


160 


160 


160 


160 


Ohio 


Zanesville 


.05 


100 


100 


190 


900 


900 


900 


900 


Ind 
Iowa 


Lawrenceburg. . . 
Cedar Rapids.. . . 


.12 
.04. 


100 


67 
100 


83 
100 


125 
100 


125 
150 


125 
250 


125 
375 



APPENDIX B 



457 



TABLE 4 Continued 

RELATIVE PRICES OF GROCERIES AT RETAIL SUGAR : GOOD BROWN 



State 


Town 


Initial 
Price 
per Ib. 


I860 


1861 


1862 


1863 


1864 


1865 


1866 


Mass .... 


Boston 


06}J 


100 


99 


133 


175 


266 


2 '5 


183 


N. J 


Jersey City 


08 


100 


100 


113 


175 


250 


263 


300 


Pa 


Norristown 


.07 


100 


100 


114 


157 


314 


186 


186 


Pa 


Philadelphia .... 


06 




100 


117 


150 


183 


233 


350 


Md 


Baltimore 


08 


100 


88 


125 


156 


250 


188 


175 


W. Va. . . 
Ohio 


New Cumberland 
Canton 


.06 
.08 


100 
100 


167 
75 


200 
100 


200 
150 


200 
350 


200 
350 


200 
335 


Ohio 


Springfield 


.09 


100 


89 


89 


111 


122 


167 


300 


Ohio 


Zanesville 


.08 


100 


100 


125 


150 


225 


225 


335 


Ind 


Lawrenceburg . . . 


.10 


100 


100 


100 


100 


V>0 


110 


110 


Iowa .... 


Cedar Rapids 


.06 




100 


133 


133 


167 


167 


278 



COFFEE: RIO, ROASTED 



Pa .. 


Philadelphia .... 


0.16 




100 


113 


138 


338 


381 


381 


Md 


Baltimore 


.20 


100 


100 


150 


210 


350 


310 


180 


W. Va... 
Ohio 


New Cumberland 
Springfield 


.14 

.18 


100 
100 


143 

100 


179 

100 


179 
100 


214 
167 


214 
950 


179 
a33 


Ohio 


Zanesville 


.16 


100 


94 


94 


113 


125 


135 


156 


Ind 


Lawrenceburg. . . 


.30 


100 


100 


133 


133 


150 


133 


150 


Iowa 


Cedar Rapids .... 


.10 




100 


120 


200 


450 


450 


350 



TEA: OOLONG, OR OTHER GOOD BLACK 



Pa .. 


Philadelphia .... 


0.50 




100 


100 


110 


130 


350 


350 


Md 


Baltimore 


.60 


100 


135 


167 


167 


300 


350 


308 


W. Va... 
Ohio 


New Cumberland 
Canton 


.50 
1.00 


100 
100 


120 
100 


160 
135 


160 
150 


160 
300 


180 
300 


160 
180 


Ohio 


Springfield 


0.60 




100 


100 


135 


350 


,333 


393 


Ohio .... 


Zanesville ...... 


.925 


100 


97 


97 


133 


135 


149 


176 


Ind 


Lawrenceburg. . . 


1.00 


100 


90 


100 


13.5 


160 


160 


13-5 


Iowa 


Cedar Rapids 


0.30 




100 


233 


467 


533 


667 


667 



Pa 


Philadelphia 


0.07 




100 


114 


143 


171 


300 


300 


W. Va... 
Ohio 


New Cumberland 
Canton 


.07 
.10 


100 
100 


114 

100 


143 
135 


143 
150 


143 
150 


114 
135 


114 

100 


Ohio 


Springfield 


.05 


100 


100 


100 


160 


300 


300 


300 


Ohio 


Zanesville 


.08 


100 


135 


135 


135 


188 


188 


188 


Ind 


Lawrenceburg. . . 


.10 


100 


80 


100 


130 


100 


100 


100 


Iowa 


Cedar Rapids 


.05 




100 


100 


140 


200 


360 


360 



458 



HISTORY OP THE GREENBACKS 



TABLE 4 Continued 

RELATIVE PRICES OF PROVISIONS AT RETAIL BEEP : CORNED 



State 


Town 


Initial 
Price 
per 
Pound 


I860 


1861 


1862 


1863 


1864 


1865 


1866 


Mass. . . . 


Boston 


0.0775 


100 


97 


97 


133 


164 


200 


194 


Conn. . . . 


Jewett City 


.08 


100 


100 


88 


88 


156 


150 


188 


Conn. . . . 
N. J 


New London 
Camden 


.10 
.08 


100 
100 


110 
100 


110 
100 


140 
125 


140 
175 


140 
225 


140 
225 


Pa 


Philadelphia .... 


.09 




100 


100 


111 


133 


156 


167 


W. Va. . . 
Ohio .... 


New Cumberland 
Canton 


.08 
.06 


100 


125 
100 


125 
133 


125 
167 


125 

208 


125 

200 


125 
167 


Ohio 


Springfield 


.065 


100 


92 


92 


92 


123 


123 


123 


Ohio 


Zanesville 


.08 


100 


100 


100 


125 


1'25 


125 


125 


Ind 


Evansville 


.10 




100 


100 


100 


1?,5 


125 


1?f> 























BEEF : FRESH, ROASTING PIECES 



Mass. . . . 


Boston 


0.115 


100 


100 


100 


130 


166 


?07 


?11 


Conn. . . . 
N. J. 


New London 
Camden 


.13 
.14 


100 
100 


123 

100 


123 
100 


138 
114 


154 
179 


169 
250 


169 
?**) 


Pa. . 
W. Va. . . 
Ohio 


Philadelphia 
New Cumberland 
Canton 


.10 
.08 
.08 


166 


100 
150 
100 


100 
150 
125 


120 
150 
156 


140 
150 

188 


180 
150 
156 


180 
150 
156 


Ohio 


Springfield 


.085 


100 


94 


94 


94 


147 


147 


147 


Ohio 


Zanesville 


.09 


100 


89 


100 


111 


111 


111 


111 


Ind 


Evansville 


.075 




100 


100 


167 


flOO 


200 


?() 























Mass. . . . 


Boston 


0.23t 


100 


86 


90 


106 


159 


183 


199 


Conn. . . . 
Pa 
W. Va. . . 
Ohio 


Jewett City 
Philadelphia 
New Cumberland 
Canton 


.23 
.20 
.16 
.12 


100 

ioo 

100 


96 
100 
125 
67 


91 
110 
125 

83 


109 
120 
125 
150 


122 
125 
125 

333 


143 
150 
125 
292 


196 
140 
125 
W? 


Ohio 


Springfield 


.10 


100 


80 


80 


100 


150 


250 


300 


Ohio 


Zanesville 


.13 


100 


96 


115 


115 


231 


254 


<>f>4 


Ind 
la 


Lawrenceburg. . . 
Cedar Rapids .... 


.30 
.06 


100 


S3 
100 


100 
200 


as 

250 


117 
333 


150 
417 


100 
333 
























APPENDIX B 



459 



TABLE 4 Continued 

RELATIVE PRICES OF PROVISIONS AT RETAIL, BEEF : FEESH, RUMP STEAKS 







Initial 
















State 


Town 


Price 


I860 


1861 


1862 


1863 


1864 


1865 


1866 






per Ib. 
















Conn. . . . 


New London 


0.11 


100 


109 


109 


127 


145 


164 


164 


N. J. 


Camden 


.12 


100 


io-> 


104 


ias 


308 


350 


350 


Pa 


Philadelphia . . . 


.14 




100 


107 


114 


143 


179 


179 


W. Va. . . 


New Cumberland 


.10 


100 


140 


140 


140 


140 


140 


140 


Ohio 


Canton 


.10 


im 


110 


135 


150 


180 


150 


150 


Ohio 


Springfield 


.10 


100 


100 


100 


100 


150 


150 


150 


Ohio . . . 


Zanesville 


.11 


100 


91 


91 


109 


109 


109 


109 


Ind 


Evansville 


.075 




100 


100 


167 


300 


300 


300 























BEEF : FEESH, SOUP-PIECES 



Conn. . . . 
N. J. 


New London 
Camden 


0.055 
.08 


100 
100 


127 
100 


127 

100 


164 
100 


164 

175 


164 

200 


164 

900 


Pa 


Philadelphia .... 


.07 




100 


100 


114 


139 


171 


171 


W. Va. . . 
Ohio. 


New Cumberland 
Canton 


.03 
.04 


100 
100 


233 

100 


233 
125 


233 
150 


233 

200 


233 
150 


233 
150 


Ohio 


Springfield 


.07 


100 


86 


86 


86 


143 


143 


143 


Ohio 


Zanesville 


.06 


100 


100 


100 


100 


117 


117 


117 


Ind 


Evansville 


.06 




100 






167 


167 


167 























FLOUR: RYE 



Mass. . . . 


Boston 


perbbl. 
A OQOF; 


100 


93 


101 


115 


172 


179 


171 


Conn. . . . 
Pa 
Md 


Jewett City 
Philadelphia 
Baltimore 


3.92 
5.00 

K or 


100 
100 


100 
100 
95 


75 
120 
100 


75 
160 
119 


150 
200 
200 


150 
2'JO 
162 


150 
220 
129 


W. Va. . . 
Ohio 


New Cumberland 
Springfield 


3.75 
3pu"k 


100 
100 


107 
139 


ias 

114 


147 
114 


147 

200 


147 

257 


127 
286 


Ohio 


Zanesville 


4 OPl 


100 


94 


94 


141 


165 


176 


188 


la 


Cedar Rapids . . . 


2 no 




100 


125 


350 


350 


375 


375 























FLOUR : WHEAT, EXTRA FAMILY 



Conn. . . . 
Pa 
Md 


Jewett City 
Philadelphia 
Baltimore 


perbbl. 

8.50 
8.00 

89^ 


100 

im 


91 
100 
103 


94 
113 
115 


100 
150 
121 


124 

188 
161 


135 

5JOO 
167 


176 
200 
206 


W. Va. . . 
Ohio 


New Cumberland 
Canton 


6.00 
6fift 


100 
100 


125 
100 


133 
108 


142 
117 


142 
167 


147 
167 


142 
133 


Ohio 


Springfield 


4CA 


100 


122 


111 


111 


189 


244 


289 


Ohio 


Zanesville 


47C 


100 


105 


105 


179 


190 


200 


211 


la 


Cedar Rapids 


2CTJ 




100 


120 


300 


300 


330 


330 























460 



HISTORY OP THE GREENBACKS 



TABLE 4 Continued 

UELATI VE PRICES OF PROVISIONS AT RETAIL CORN MEAL 



State 


Town 


Initial 
Price 
per bbl 


I860 


1861 


1862 


1863 


1864 


1865 


1866 


Mass. . . . 
Conn. . . . 
Pa 


Boston 


4.87 
3.92 
3.00 
1.50 
3.00 
2.25 
2.25 
.70 
1.50 


100 
100 

ioo 

100 
100 
100 
100 


62 
100 
100 
133 
100 
156 
133 
114 
100 


70 
75 
100 
150 
117 
156 
133 
129 
133 


97 
75 
108 
167 
160 
156 
178 
143 
200 


146 
150 
133 
167 
200 
222 
200 
150 
200 


132 
150 
200 
167 
200 
267 
200 
157 
233 


101 

150 
200 
150 
117 
356 
200 
143 
233 


Jewett City 


Philadelphia 
New Cumberland 
Canton 


W. Va. . 
Ohio .... 
Ohio .... 
Ohio .... 
Ind 


Springfield 


Zanesville 


Lawrenceburg. . . 
Cedar Rapids . . . 


la 





Mass. . . . 


Boston 


perlb. 

0-11% 


100 


87 


80 


117 


149 


168 


160 


Conn. . . . 
Pa 
W. Va. . . 
Ohio 


Jewett City 
Philadelphia 
New Cumberland 
Canton 


.13 
.12 
.11 
.10 


100 

ioo 

100 


77 
100 
136 
60 


69 
125 
136 

80 


92 
150 
136 
100 


123 

167 
136 
350 


154 
208 
136 
350 


177 
208 
145 
300 


Ohio 


Springfield 


.08 


100 


100 


100 


100 


135 


150 


163 


Ohio 


Zanesville 


.125 


100 


80 


80 


130 


168 


160 


300 


Ind 
la 


Lawrenceburg. . . 
Cedar Rapids . . . 


.18 
.10 


100 


67 
100 


83 
190 


83 
130 


111 
150 


150 
300 


83 
380 























Mass. . . . 


Boston 


per doz 

0.195 


100 


87 


93 


110 


144 


185 


169 


Conn. . . . 
Pa 
W. Va. . . 
Ohio 


Jewett City 
Philadelphia 
New Cumberland 
Canton 


.17 
.18 
.10 
.10 


100 

ioo 

100 


82 
100 
120 
60 


88 
100 
140 
100 


100 
111 
140 
130 


135 

117 
140 
100 


176 
139 
140 
100 


159 
144 
120 

100 


Ohio 


Springfield 


.07 


100 


143 


143 


171 


186 


214 


229 


Ohio 


Zanesville 


.15 


100 


40 


67 


67 


100 


100 


100 


Ind 
la 


Lawrenceburg. . . 
Cedar Rapids . . . 


.20 
.05 


100 


100 
TOO 


100 
100 


75 

300 


75 

300 


150 
300 


150 
300 























APPENDIX B 



461 



TABLE 4 Continued 

RELATIVE PRICES OP PROVISIONS AT RETAIL LARD 



State 


Town 


Initial 
Price 
per Ib. 


I860 


1861 


1862 


1863 


1864 


1865 


1866 


Mass .... 


Boston 


0.12| 


100 


85 


77 


88 


119 


199 


169 


Conn .... 


Jewett City 


.14 


100 


93 


89 


89 


157 


200 


179 


Conn .... 


New London 


.12 


100 


117 


117 


117 


117 


117 


133 


Pa 


Philadelphia 


.10 




100 


105 


105 


140 


180 


190 


W. Va. . . 
Ohio 


New Cumberland 
Canton 


.10 
.09 


100 
100 


120 
67 


140 
89 


140 
133 


140 
200 


140 
222 


150 

222 


Ohio 


Spri-ngfield 


.07 


100 


114 


114 


114 


143 


143 


143 


Ohio 


Zanesville 


.10 


100 


100 


120 


180 


200 


220 


220 


Ind 


Lawrenceburg . . 


.15 


100 


100 


100 


100 


100 


100 


100 























MUTTON CHOPS 


Conn 
Pa 


New London .... 
Philadelphia 
Camden 


pier Ib. 
0.16 
.10 

.12 

.08 
.10 


100 

ioo 

100 
100 


100 
100 
117 
150 
70 


100 
110 
117 
150 
70 


100 
120 
125 
150 
80 


100 
140 
150 
150 
80 


113 

180 
208 
150 
90 


113 

180 
208 
150 
100 


N.J 
W. Va... 
Ohio .... 


New Cumberland 
Zanesville 




FLOUR: WHEAT, SUPERFINE 


Conn 
Pa 


Jewett City 
Philadelphia 
Baltimore 


per hbl. 

7.50 
6.50 
6.00 
4.50 
5.75 
4.00 
5.25 
3.00 


100 

166 

100 
100 
100 
100 


93 
100 
104 
133 
96 
125 
114 
100 


97 
115 
129 
156 
104 
113 
114 
108 


107 
138 
125 
167 
113 
113 
181 
267 


127 
185 
175 
167 
157 
200 
190 
267 


137 
192 
167 
167 
148 
250 
200 
300 


173 
192 

188 
156 
122 
300 
229 
300 


Md 


W. Va... 
Ohio 
Ohio .... 
Ohio .... 
la 


New Cumberland 
Canton 


Springfield 


Zanesville 


Cedar Rapids 





Pa.. 


Philadelphia 


per qt. 

0.06 




100 


100 


117 


117 


167 


167 


W.Va... 
Ohio . . . 


New Cumberland 
Canton 


.04 
.03 


100 
100 


200 
1.33 


200 
167 


200 
900 


250 
267 


250 
200 


200 
^00 


Ohio 


Springfield 


.05 


100 


130 


1?rft 


160 


160 


160 


160 


Ohio 


Zanesville 


.06 


100 


100 


100 


1,33 


1.33 


133 


167 


Ind 
la 


Lawrenceburg. . . 
Cedar Rapids.. . . 


.07 
.04 


100 


100 
100 


114 

1'tf> 


143 
195 


143 

150 


143 

150 


143 
150 























462 



HISTORY OF THE GREENBACKS 



TABLE 4 Continued 

RELATIVE PRICES OF PROVISIONS AT RETAIL MACKEREL : PICKLED 



State 


Town 


Initial 
Price 
per Ib. 


I860 


1861 


1862 


1863 


1864 


1865 


1866 


Conn 


Jewett City 


09 


100 


78 


89 


89 


199 


111 


111 


Pa 


Philadelphia 


.08 




100 


113 


1?fi 


175 


300 


fl?,5 


W. Va. . . 
Ohio 


New Cumberland 
Canton 


.04 
.08 


100 
100 


150 
75 


200 
100 


200 
1W> 


200 
1?5 


200 
1?,5 


200 
1'f> 


Ohio 


Zanesville 


.10 


100 


50 


60 


70 


80 


100 


100 


Ind 


Lawrenceburg. . . 


.08 


100 


100 


100 


ITfi 


188 


1V.5 


1ft5 


la 


Cedar Rapids .... 


.07 




100 


114 


143 


179 


179 


179 























MUTTON : FOREQUARTER8 



Mass . . 


Boston 


IHT U). 

0.10 a 7 x 


100 


95 


61 


88 


117 


124 


11? 


Conn 


New London 


io 2 * 


100 


130 


130 


130 


130 


140 


140 


N. J 


Camden 


.07 


100 


114 


114 


143 


157 


171 


171 


Pa 


Philadelphia 


.05 




100 


1910 


IflO 


160 


?40 


940 


W. Va... 
Ohio 


New Cumberland 
Zanesville 


.05 
.05 


100 
100 


140 
100 


140 
100 


140 
120 


140 
120 


140 
140 


140 
140 


Ind 


Evans ville 


.075 




100 


100 


167 


flOO 


200 


wo 























PORK: BACON 



Conn 
Pa 


New London 
Philadelphia 


per Ib. 

6712 
.09 


100 


117 

100 


117 

100 


117 
111 


117 
133 


117 

flOO 


133 
?IOO 


W. Va... 
Ohio 


New Cumberland 
Canton 


.08 
.06 


100 


125 
100 


150 
133 


150 
?,50 


175 
333 


175 
250 


150 


Ohio 


Springfield 


.055 


100 


109 


109 


109 


?,18 


218 


218 


Ohio . . . 


Zanesville 


.10 


100 


100 


1?0 


140 


180 


200 


200 


Ind 


Lawrenceburg. . . 


.18 


100 


78 


83 


94 


97 


83 


67 



PORK ' CORNED OR SALTED 



Mass .... 


Boston 


per Ib. 


100 


95 


89 


93 


139 


212 


183 


Conn 
Conn 
Pa 


Jewett City 
New London 
Philadelphia 


.125 
.11 
.09 


100 
100 


100 
109 
100 


80 
109 
100 


96 
109 
111 


176 
109 
133 


200 
109 
200 


192 
127 
VOO 


W. Va. . . 
Ohio 


New Cumberland 
Zanesville 


.06 
.055 


100 
100 


117 

164 


133 

182 


133 

218 


133 
291 


150 
327 


150 
3->7 























APPENDIX B 



463 



TABLE 4 Continued 

RELATIVE PRICES OF PROVISIONS AT RETAIL MUTTON : LEG 



State 


Town 


Initial 
Price 
per Ib. 


I860 


1861 


1862 


1863 


1864 


1865 


1866 


Conn .... 


New London 


0.16 


100 


100 


100 


100 


100 


113 


113 


N.J 


Camden 


.09 


100 


111 


133 


1.33 


178 


244 


^44 


Pa 


Philadelphia 


.10 




100 


110 


190 


140 


180 


180 


W.Va... 
Ohio 


New Cumberland 
Zanesville 


.06 
.07 


100 
100 


150 
86 


150 
86 


150 
100 


150 
100 


150 
114 


150 
199 























PORK: FRESH 



Mass 


Boston 


per lb. 

0.0975 


100 


87 


85 


92 


128 


185 


TV> 


Conn 


New London. 


.11 


100 


109 


109 


109 


109 


109 


197 


Pa 


Philadelphia 


.10 




100 


100 


190 


140 


9,00 


990 


W.Va... 
Ohio 


New Cumberland 
Canton 


.04 
.045 


100 
100 


125 
133 


150 
133 


150 

178 


150 

278 


200 

278 


200 
333 


Ohio 


Zanesville 


.06 


100 


150 


150 


167 


300 


300 


300 























PORK: HAMS, SMOKED 



Mass. . . 


Boston 


per lb. 
11J8 


100 


93 


84 


97 


154 


197 


18<> 


Conn. 


Jewett City. . 


13* 8 


100 


96 


77 


96 


150 


192 


199 


Conn 
Pa 


New London 

Philadelphia 


.14 
.10 


100 


100 
100 


100 
100 


100 
190 


100 
150 


100 
940 


114 
950 


W.Va... 
Ohio 


New Cumberland 
Canton 


.12 
.09 


100 
100 


117 
139 


133 

139 


1,33 
167 


133 

?,99 


150 

378 


150 
944 


Ohio 


Springfield 


.075 


100 


107 


107 


107 


900 


900 


900 


Ohio . 


Zanesville 


.11 


100 


109 


136 


164 


18?, 


397 


997 


Ind 


Lawrenceburg. . . 


.20 


100 


75 


85 


90 


95 


80 


75 



PORK: SAUSAGES 



Mass 


Boston 


per lb. 
0.1125 


100 


97 


100 


93 


113 


192 


176 


Conn .... 
Pa 


New London 
Philadelphia 


.12 
.10 


100 


117 

100 


117 
100 


117 
190 


117 
150 


117 

900 


133 
9,90 


W.Va... 
Ohio . . . 


New Cumberland 
Springfield 


.10 
.07 


100 
100 


120 
100 


140 
100 


140 
100 


140 
114 


150 
114 


150 
114 


Ohio . . . 


Zanesville 


.085 


100 


118 


141 


176 


919 


935 


935 























464 



HISTORY OP THE GREENBACKS 



TABLE 4-Con*inud 

RELATIVE PRICES OF PROVISIONS AT RETAIL PORK: SHOULDERS 







Initial 
















State 


Town 


Price 


I860 


1861 


1862 


1863 


1864 


1865 


18m 






per Ib. 
















Conn 


New London .... 


0.08 


100 


150 


150 


150 


150 


150 


175 


Pa 


Philadelphia .... 


.07 




100 


100 


114 


143 


214 


999 


W. Va. . . 


New Cumberland 


.07 


100 


143 


171 


171 


171 


200 


200 


Ohio 


Canton 


.06 


100 


1,33 


133 


167 


250 


250 


90S 


Ohio 


Springfield 


.05 


100 


100 


100 


100 


160 


160 


160 


Ohio 


Zanesville 


.06 


100 


167 


200 


250 


300 


333 


333 


Ind 


Lawrenceburg . . . 


.13 


100 


100 


115 


115 


19.3 


19.3 


99 























VEAL: CUTLETS 



Conn. . . . 


New London 


0.16 


100 


113 


113 


113 


113 


195 


195 


N. J 


Camden 


.14 


100 


100 


100 


100 


179 


179 


179 


Pa 


Philadelphia .... 


.15 




100 


100 


107 


190 


167 


160 


W.Va.... 
Ohio 


New Cumberland 
Zanesville 


.10 
.10 


100 
100 


120 

80 


120 

80 


120 
90 


120 
100 


120 
100 


120 

190 


Ind 


Evansville 


.20 




100 


100 


100 


125 


125 


195 























VEAL: FORE QUARTERS 



Mass 


Boston 


0.09 A 


100 


98 


63 


77 


196 


153 


151 


Conn 
Pa 


New London 
Philadelphia 


:3r 

.06 


100 


130 
100 


130 
100 


140 
117 


140 
150 


150 

900 


150 

900 


W.Va.... 
Ohio 


New Cumberland 
Canton 


.04 
.03 


100 
100 


150 
100 


150 
1.33 


150 

900 


150 
333 


150 

967 


150 

9fi7 


Ohio 


Zanesville 


.05 


100 


100 


100 


190 


140 


140 


140 


Ind 


Evansville 


.075 




100 


100 


167 


900 


900 


900 























VEAL: HIND QUARTERS 



Conn 
N. J 


New London 
Camden 


0.14 
.10 


100 
100 


107 

100 


107 
100 


114 
100 


114 
140 


129 
140 


129 
140 


Pa 


Philadelphia .... 


.10 




100 


100 


100 


190 


150 


150 


W.Va . . . 
Ohio 


New Cumberland 
Canton 


.05 
.04 


100 
100 


160 
100 


160 
195 


160 
900 


160 
313 


160 
950 


160 
950 


Ohio 


Zanesville 


.06 


100 


100 


100 


117 


1.33 


1.33 


1.33 


Ind 


Evansville 


.08 


100 


100 


100 


156 


188 


188 


188 























APPENDIX B 



465 



TABLE I Continued 

RELATIVE PRICES OF PROVISIONS AT BETATL BICE 



State 


Town 


Initial 
Price 
per Ib. 


I860 


1861 


1862 


1863 


1864 


1865 


1866 


Conn. . . . 


Jewett City 


0.06 


100 


117 


150 


167 


167 


9,50 


9,50 


Pa 


Philadelphia .... 


.08 




100 


113 


195 


163 


175 


175 


Md 


Baltimore 


.06 


100 


100 


150 


167 


9,50 


9,50 


933 


W.Va... 
Ohio .... 


New Cumberland 
Canton 


.07 
.06 


100 
100 


143 
100 


214 

ias 


214 

908 


214 
333 


214 
250 


214 

908 


Ohio 


Springfield 


.08 


100 


100 


125 


125 


125 


195 


195 


Ohio 


Zanesville 


.0625 


100 


160 


192 


240 


288 


320 


390 


Ind 


Lawrenceburg .. . 


.10 


100 


100 


150 


200 


200 


120 


190 


la 


Cedar Rapids .... 


.05 




100 


900 


340 


940 


950 


950 























Mass. 


Boston 


per bu. 
1.02% 


100 


81 


94 


93 


153 


117 


117 


Conn. . . . 
Pa 


Jewett City 
Philadelphia 


0.50 
.60 


100 


90 
100 


110 
100 


100 
195 


180 
1.33 


160 
150 


120 
167 


W.Va... 
Ohio 


New Cumberland 
Springfield 


.35 
.30 


100 
100 


143 
1,33 


214 
1,33 


214 
167 


214 
9,50 


214 

983 


214 
333 


Ohio 


Zanesville 


.60 


100 


83 


83 


100 


1,33 


167 


167 


Ind 


Lawrenceburg . . . 


.80 


100 


94 


19,5 


150 


94 


94 


188 


la 


Cedar Rapids 


.20 




100 


175 


200 


200 


200 


.350 























EELATIVE PRICES OF FUEL AT RETAIL OIL 



State 


Town 


Initial 
Price 
per Gal 


I860 


1861 


1862 


1863 


1864 


1865 


1866 


Conn 
Conn 
N. Y 
Pa 


Jewett City 
New Haven 
Watertown 
Norristown 


1.00 
1.00 
1.12 
0.70 


100 
100 

ioo 


75 
75 

100 
100 


75 
75 
45 
100 


75 
85 
54 
100 


92 
75 
73 
171 


100 
120 
107 
171 


90 
90 
67 
143 


Pa 


Philadelphia 


.25 




100 


100 


400 


400 


400 


390 


W.Va... 
Ohio 


New Cumberland 
Canton 


.30 
.50 


100 
100 


100 
80 


133 

80 


133 
100 


167 

190 


167 

100 


133 

80 


Ohio . . 


Zanesville 


.60 


100 


100 


100 


100 


100 


100 


117 


Ill 


Rock Island 


.35 




100 


171 


286 


286 


?,29 


171 























HISTORY OP THE GREENBACKS 



TABLE 4 Continued. 

RELATIVE PRICES OP I I !:i. AT RETAIL COAL: ANTHRACITE 



State 


Town 


Initial 
Price 
per Ton 


I860 


1861 


1862 


1863 


1864 


1865 


1866 


Mass .... 


Boston (1) 


6 00 


100 


98 


117 


175 


m 


fl17 


?w 


Mass 
Pa .. 


Boston (2) 
Philadelphia (1) . 


5.75 
5 00 


100 


121 

100 


117 
100 


173 
120 


220 
130 


229 
140 


192 
160 


Pa .. 


Philadelphia (2) . 


3 41 




100 


m 


186 


277 


281 


218 


Pa 


Reading 


2 50 




100 


100 


180 


220 


260 


260 


Ohio 


Zanesville 


3.00 


100 


100 


133 


167 


167 


167 


167 























COAL: BITUMINOUS 



W.Va... 
Ohio 


New Cumberland 
Canton 


1.40 
2.00 


100 
100 


171 

88 


179 

100 


214 
175 


214 
175 


196 
150 


196 
150 


Ohio .... 
Ohio 


Springfield 
Zanesville 


3.50 
1.50 


ioo 


100 
100 


100 
100 


100 
WO 


100 

WO 


100 

WO 


100 
WO 


Indiana . 
Illinois. . 


Lawrenceburg. . . 
Belleville 


3.50 
1.82 


100 
100 


93 


114 


114 


129 
171 


114 
171 


107 
171 


Illinois . . 


Rock Island 


3.12 


100 


80 


96 


104 


104 


104 


104 



WOOD : HARD 



Mass . 


Boston (1) 


PerC'd 
6.50 


100 




150 


169 


200 


200 


231 


Mass . 


Boston (2) 


6 50 


100 


T>3 


183 


164 


192 


195 


228 


Conn . . 
Conn . . . 
Pa 


Danielsonville . . . 
Je \vett City 
Reading 


4.00 
3.50 
4.00 


100 
100 


100 
100 
100 


100 
100 
100 


100 
114 
125 


119 
114 
125 


138 
157 
150 


125 
143 
150 


W. Va. . . 
Ohio 


New Cumberland 
Canton 


1.75 
2 50 


100 
100 


100 

80 


114 
100 


143 
1"0 


143 
120 


143 

180 


143 

180 


Ohio 


Springfield 


3.00 


100 


9? 


9? 


100 


133 


167 


167 


Ohio 


Zanesville 


1.50 


100 


133 


133 


150 


183 


?00 


WO 


Indiana . 
Illinois.. . 
Iowa 
Missouri. 


Lawrenceburg. . . 
Rock Island 
Cedar Rapids 
Pilot Knob . . 


4.00 
4.50 
2.50 
2.50 


100 
100 

ioo 


100 
89 
100 
120 


138 
133 
100 
120 


150 
144 
120 
160 


150 
144 

120 
160 


138 
133 

200 
160 


125 
133 
200 
160 



WOOD: PINE 



Mass . 


Boston (1) 


4.50 


100 




153 


178 


?33 


?11 


?67 


Mass. . . . 


Boston (2) 


4.50 


100 


133 


154 


185 


?,30 


?07 


9,67 


Conn . . . 
W. Va. . . 
Ohio 


Danielsonville . . . 
New Cumberland 
Zanesville 


3.50 
1.50 
1.00 


100 
100 
100 


100 
117 
175 


100 

ias 

175 


100 
150 

WO 


121 
150 
Vfl5 


143 
150 

?,50 


129 
150 
?75 


Illinois . . 


Rock Island 


1.00 




100 


150 


200 


200 


150 


150 



APPENDIX B 



467 



TABLE 4 Continued 

RELATIVE PRICES OF MEN'S HEAVY BOOTS, AT RETAIL 



State 


Town 


Initial 
Price 

Pair 


1860 


1861 


1862 


1863 


1864 


1865 


1866 


Conn 


Ansonia 


2.50 




100 


120 


140 


150 


160 


180 




Jewett City 


3.00 


100 


96 


92 


100 


117 


133 


142 


Conn ..... 


Waterbury 


3.25 




100 


108 


108 


123 


123 


123 


N Y 




3 50 




100 


100 


114 


143 


171 


157 


N. J 
Pa.. . 


Camden 
Sharon 


2.50 
3.50 


100 
100 


100 
100 


115 

100 


135 
129 


150 
200 


160 
171 


155 
143 


W. Va 
W. Va . 


New Cumberland 
Wheeling 


3.50 
4 00 


100 
100 


129 
113 


171 
125 


171 
138 


171 

150 


186 
150 


200 
150 


Ohio 
Ohio 


Canton 
Cincinnati 


3.00 
6 00 


100 
100 


100 
67 


133 
83 


200 
100 


267 
100 


200 
117 


167 
117 


Ohio 
Ohio 


Ravenna 
Zanesville 


3.00 
3 50 


100 
100 


108 
100 


142 
114 


158 
114 


183 
143 


183 
143 


183 
171 


Ind 




ft 00 


100 


100 


100 


100 


120 


120 


100 


Ind .. 


Evansville 


3.00 




100 


100 


117 


150 


150 


133 


Ind 


Fort Wayne 


3 50 




100 


114 


129 


157 


157 


157 


Ind .. 


LaFayette 


4.00 




100 


100 




125 


150 


150 


Ind . 


New Albany (1) 


3.00 


100 


100 


117 


133 


167 


167 


133 


Ind .. 


New Albany (2) 


3 125 


100 


100 


124 


144 


160 


160 


160 


Ind . 


Terre Haute 


4 00 


100 


150 


150 


169 


181 


181 


181 


Ind 
Ill 
Ill 


Vincennes 
Belleville (1) 
Belleville (2) 


3.00 
4.50 
3.50 


ioo 

100 


100 
100 
71 


150 
100 


200 
111 


267 
111 


233 
111 
171 


217 
111 
157 


111 
Ill 
Iowa 
Mo .. 


Bloomington 
Springfield 
Cedar Rapids 
Pilot Knob 


2.50 
2.00 
3.50 
4 00 


100 
100 

ioo 


110 
88 
100 
100 


120 
113 
157 
113 


140 
150 
157 
125 


ieo 

175 
143 
125 


160 
200 
143 
125 


160 
225 
143 

100 


Mo 


St. Louis 


2.50 


100 


120 


140 


160 


160 


160 


140 



RELATIVE RENT OF HOUSES PER MONTH FOUR ROOMS 







Initial 




















S^ate 


Town 


Rent 
per 


1860 


1861 


1862 


1863 


1864 


1865 


1866 


1867 


1868 






Month 




















Mass 


Boston 


5.00 


100 


100 


100 


100 


140 


140 


140 


140 


200 


Conn 


Jewett City 


2.00 


100 


100 


100 


100 


100 


100 


100 


100 


100 


N. J... 


Camden 


6.50 


100 


im 


inn 


W, 


I? 


115 


11 r i 


11 r 


VI 


Pa . 


Philadelphia 


6.00 




inn 


ion 


100 


131 


167 


?00 


WO 


200 


W. Va 


New Cumberland 


4.00 


100 


inn 


i?r> 


1?5 


138 


138 


11X 


V>*\ 


100 


Ohio 


Canton 


6.25 


100 


64 


xo 


96 


96 


96 


96 


96 


96 


Ohio 


Cincinnati 


6.00 


100 


fi7 


67 


83 


100 


100 


100 


81 


81 


Ohio 




5 00 


100 


100 


100 


ino 


100 


100 


100 


120 


120 


Ohio . . . 


Zanesville 


7.00 


100 


inn 


114 


114 


114 


1?9 


1'X 


11S 


111 


Ky 


Louisville 


12.00 


100 


125 


125 


167 


208 


208 


aox 


167 


167 


Ind ... 


Indianapolis 


7.00 




inn 


1W 


19q 


1* 


1 9 


11? 


it:; 


141 


Ind 




6.00 


inn 


inn 


100 


inn 


100 


108 


117 


133 


142 


Ind 


Lawrenceburg 


7.00 


100 


114 


143 


1-n 


in 


141 


141 


iii 


V*} 


Ind 




'8 00 




inn 


1 9f > 


163 


ITi 


175 


175 


175 


175 


m... 


Bloomington 


8.00 




inn 


100 


111 


V>*> 


V>*t 


T"i 


118 


138 


Ill 


Rock Island 


4.00 




100 


100 


100 


100 


125 


125 


125 


1?"> 


Iowa 


Cedar Rapids 


5.00 




100 


100 


ino 


1?0 


IM 


1?0 


130 


130 


Mo 


Pilot Knob 


5.00 


100 


100 


1W 


1?0 


1?0 


V'O 


80 


KO 


80 


Mo 


St. Louis 


10.00 


100 


100 


100 


150 


150 


150 


180 


180 


180 



4tis 



\ 
HISTORY OF THE GREENBACKS 



TABLE 4 Continued 

RELATIVE BENT OF HOUSES PEB MONTH SIX OB SEVEN ROOMS 



State 


Town 


Num- 
ber 
of 
Rooms 


Initial 
Rent 
per 
Month 


1860 


1861 


1862 


1863 


1864 


1865 


1866 


1867 


1868 






6 
7 
6 
6 
6 
6 
6 
6,1st 
6, 2d 
6 
6 
6 
6 
6 
6 
6 
6 
6 
6 


$9.00 
10.00 
8.00 
8.00 
8.42 
9.00 
6.00 
7.00 
7.00 
8.00 
9 00 
15.00 
8.00 
(8.00 
10.00 
10.00 
6.00 

re.oo 

15.00 


100 
1(10 
100 
100 
100 

ioo 
ioo 

100 
100 
100 

ioo 

100 

ioo 


100 

KX) 
100 
100 
100 
100 
100 
100 
71 
100 
100 
133 
100 
100 
110 
100 
100 
100 
80 


100 
100 
100 
100 
111 
100 
133 
114 
86 
100 
100 
133 
125 
100 
125 
100 
100 
100 
80 


100 

100 

iuo 

100 
117 
100 
133 
129 
100 
150 
111 
167 
125 
100 
125 
120 
100 
100 
111 


133 
140 
100 
100 
129 
133 
133 
143 
114 
313 
111 
233 
138 
100 
125 
120 
100 
117 
111 


133 
140 
100 
125 
129 
167 
133 
143 
114 
313 
111 
233 
i:is 
113 
125 
120 
117 
117 
111 


133 

140 
100 
125 
129 
200 
1X1 
143 
114 
313 
111 

233 
138 
125 
125 
120 
117 
117 
1.33 


133 
140 
100 
150 
12< 
200 
133 
143 
114 
250 
122 
167 
150 
13S 
125 
130 
117 
125 
133 


189 
200 
100 
188 
129 
200 
117 
143 
114 
250 
122 
167 
150 
144 
125 
130 
117 
125 
133 


Mass 
Goon 


Boston . 
Jewett City 


N. J 


Camden 


Pa... 


1 1 1 iU i i H 1 :u K n i :i . . . 

Philadelphia 
New Cumberland 


Pa 
W. Va 
Ohio 


Ohio 
Ohio 




Cincinnati 


Ohio 


Zanesville 


Ky 




Ind.... 
Ind 


Indianapolis 


Ind... 


Lawrenceburg . . . 
Bloomington 
Rock Island 


111.... 


111.. 


la 


Cedar Rapids 
St. Louis 


Mo 



RELATIVE PRICE OF BOARD PEB WEEK FOR MEN 







Initial 
















State 


Town 


Price 


1860 


1861 


1862 


1883 


1864 


1865 


1866 






Week 
















Conn 


Jewett City 


$2.00 


100 


100 


100 


100 


150 


150 


175 


Pa... 


Philadelphia 


3.00 




100 


117 


117 


1 3 


167 


167 


Pa . 


Sharon 


2.50 


100 


100 


100 


160 


200 


200 


200 


W. Va 


New Cumberland 


1.50 


100 


133 


167 


167 


167 


167 


167 


Ohio 


Canton 


2.50 


100 


120 


180 


180 


180 


180 


160 


Ohio 


Cincinnati 


1.75 


100 


114 


114 


171 


229 


229 


229 


Ohio 


Springfield 


2.50 


100 


120 


120 


160 


200 


200 


180 


Ohio. 




2.75 


100 


109 


109 


127 


127 


145 


145 


Ky . 


Louisville 


4.00 


100 


100 


100 


125 


175 


175 


175 


Ind... 


Fort Wayne 


2.00 




100 


100 


150 


150 


150 


150 


Ind . 


Indianapolis 


3.50 




100 


114 


128 


143 


143 


143 


Ind 


Lawrenceburg 


3.50 


100 


100 


114 


128 


143 


143 


128 


Ill 


Belleville 


5.00 




100 


100 


100 


100 


100 


100 


111... 


Rock Island 


2.50 




100 


100 


100 


100 


120 


120 


la . 


Cedar Rapids 


2.50 




100 


100 


IOO 


120 


120 


120 


Mo... 


Pilot Knob... 


3.UO 


100 


117 


133 


150 


150 


150 


117 



FOR WOMEN 



Conn.. 


Jewett City 


$1.50 


100 


100 


100 


100 


133 


133 


167 


Pa... 


Philadelphia 


1.75 




100 


114 


129 


143 


171 


171 


W. Va 
Ohio 
Ohio 


New Cumberland 
Canton 
Cincinnati 


1 25 
2.50 
1.50 


100 
100 
100 


140 
120 

100 


160 
180 
100 


160 
180 
167 


160 
180 
233 


160 
180 
233 


160 
160 
233 


Ohio 
Ohio 
Ky 
Ind 
111... 


Springfield 
Zanesville 
Louisville 
Indianapolis 
Belleville 


2.50 
2.00 
3.00 
3.00 
4.00 


100 
100 
100 


120 
138 
100 
100 
100 


120 
138 
100 
133 
100 


160 
150 
133 
133 
100 


200 
150 
167 
133 
100 


200 
175 
167 
133 
100 


180 
175 
167 
133 
100 


Ill . 


Rock Island. 


2 00 




100 


100 


100 


100 


125 


125 


la... 


Cedar Rapids 


2.00 




100 


100 


100 


150 


150 


150 


Mo 


Pilot Knob 


3 00 


100 


117 


133 


150 


150 


150 


117 























APPENDIX B 469 


TABLE 5 

COMPARISON OF THE RELATIVE PRICES OP TWENTY-THREE COMMODITIES 
AT WHOLESALE AND AT RETAIL 






Number of 
Price Series 


I860 

100 
100 
100 
100 
100 
100 
100 
100 
100 
100 
100 
100 
100 
100 
100 
100 
100 
100 
100 
100 
100 
100 
100 
100 
100 
100 
100 
100 
100 
100 
100 
100 
100 
100 
100 
100 
100 
100 
100 
100 
100 
100 
100 
100 
100 
100 
100 
100 


1861 


1862 


1863 


1864 


1865 


1866 


Sheetings: brown, 4-4, Atlantic A... . 
Sheetings : brown, 4-4, Atlantic A 
Shirtings: bleached, 4-4, N. Y. Mills- 
Shirtings: bleached, 4-4, N. Y. Mills- 
Tickings : Amoskeag, A.C.A 


Wholesale 
Retail .... 
Wholesale 
Retail.... 
Wholesale 
Retail .... 
Wholesale 
Retail.... 
Wholesale 
Retail .... 
Wholesale 
Retail 


1 
11 
1 

13 
1 
12 
1 
8 
1 
9 
1 
9 
1 
9 
1 
11 
1 
6 
1 
9 
1 
7 
1 
9 
1 
9 
1 
9 
1 
7 
3 
35 
1 
17 
1 
9 
1 
7 
1 
6 
2 
9 
1 
6 
1 
7 


109 
135 
98 
123 
98 
130 
70 
102 
66 
111 
109 
104 
114 
113 
80 
102 
83 
104 
89 
114 
92 
103 
82 
93 
81 
90 
83 
92 
53 
93 
95 
108 
98 
109 
80 
104 
64 
104 
92 
114 
81 
100 
101 
103 
95 
105 
88 
107 


199 
233 
131 
207 
151 
187 
100 
108 
84 
118 
143 
122 
163 
159 
108 
123 
99 
144 
105 
132 
92 
115 
99 
110 
75 
97 
90 
103 
52 
111 
98 
112 
93 
111 
107 
107 
56 
/16 
66 
176 
69 
106 
94 
175 
130 
115 
105 
129 


407 
352 
222 
335 

237 
117 
153 
91 
143 
150 
142 


610 

469 
331 
511 
482 
?35 
163 
198 
178 
174 
148 
156 


480 
405 
332 
447 
451 
)24 
165 
208 
163 
190 
133 
756 
244 
217 
189 
201 
251 
235 
220 
227 
169 
184 
209 
218 
184 
175 
168 
167 
138 
149 
184 
167 
171 
158 
288 
185 
170 
178 
173 
197 
179 
169 
232 
216 
211 
148 
222 
214 


299 
328 
302 
366 
396 
271 
142 
205 
122 
183 
151 
160 
273 
211 
153 
212 
236 
235 
185 
220 
154 
180 
237 
215 
190 
180 
163 
163 
142 
152 
191 
767 
160 
758 
298 
182 
185 
138 
172 
197 
172 
767 
246 
200 
178 
747 
2<X5 
202 


Tickings : Amoskeag, A.C.A 




Flour 'Rye. 










Rice : Carolina prime 


Wholesale 
Retail .... 
Wholesale 
Retail.... 
Wholesale 
Retail .... 
Wholesale 
Retail .... 
Wholesale 
Retail.... 
Wholesale 
Retail.. - 
Wholesale 
Retail.... 
Wholesale 
Retail.... 
Wholesale 
Retail.... 
Wholesale 
Retail 
Wholesale 
Retail.... 
Wholesale 
Retail.... 
Wholesale 
Retail.... 
Wholesale 
Retail.... 
Wholesale 
Retail.... 
Wholesale 
Retail .... 
Wholesale 
Retail.... 
Wholesale 
Retail.... 




187 
138 
151 
112 
192 
133 
192 
115 
140 
124 
129 
125 
173 
119 
122 
88 
125 
107 
129 
112 
122 
195 
119 
60 
139 
82 
127 
89 
118 
154 
167 
150 
151 
138 
165 


220 
225 
213 
219 
238 
220 
242 
169 
165 
206 
188 
173 
153 
150 
133 
188 
153 
146 
158 
136 
135 
257 
154 
119 
179 
182 
164 
131 
146 
242 
205 
191 
156 
221 
211 








Molasses: N. O. prime 


Molasses : Porto Rico, best 


Molasses : Porto Rico, best 


Starch : ordinary laundry 


Starch: ordinary laundry 


Butter 


Butter 














Beef 


Beef 


Mutton 


Mutton 


Pork : hams, sugar-cured 


Pork : hams, smoked 




Pork : bacon, clear 




Pork : corned or salted 






Coal : anthracite, stove 


Coal anthracite, stove 








Average of relative prices 





APPENDIX C 

RELATIVE WAGES 

TABLE 1 

WAQB-8EBIE8 KKOM TABLE XII OF THE ALDRICH BEPOBT'- 
AGBICULTDEAL IMPLEMENTS 

1. Massachusetts 





FOBEMEN 

WOODWOBK'S 


LABOBEBS 


MACHINISTS 


PAINTEBS 


WOODWOBK'S 


Sex 


M. 


M. 


M. 


M. 


M. 














Initial wage 
per day 


$1.64 


81.00 


$1.665 


$1.25 


$1.333 




No. 


Rel. 

Wages 


No. 


Rel. 

Wages 


No. 


Rel. 

Wages 


No. 


Rel. 

Wages 


No. 


ReL 

Wages 


1860, Jan.. 


1 


100 


2 


100 


2 


100 


1 


100 


3 


100 


July . . 


1 


100 


2 


100 


2 


100 


1 


100 


2 


103 


1861, Jan... 


1 


100 


2 


100 


2 


108 


1 


100 


2 


103 


July.. 


1 


99 


2 


100 


1 


108 


1 


100 


1 


94 


1862, Jan... 


1 


99 


2 


88 


2 


100 


1 


100 


1 


113 


July . . 


1 


98 


1 


100 


1 


84 




. 


1 


113 


1863, Jan... 


1 


108 


3 


90 


1 


113 






2 


113 


July . . 


1 


112 


5 


112 


2 


101 






2 


119 


1864, Jan... 


1 


122 


2 


117 


2 


108 


3 


89 


4 


124 


July.. 


1 


152 


3 


142 


3 


123 


2 


106 


3 


161 


1865, Jan... 


1 


152 


3 


150 


3 


125 


2 


113 


4 


169 


July.. 


1 


175 


7 


161 


3 


138 


2 


127 


4 


189 


1866, Jan... 


1 


175 


6 


163 


6 


131 


3 


124 


5 


191 


July.. 


1 


183 


5 


169 


5 


134 


1 


120 


5 


179 



i In the following tables the series of relative wages from the "exhibits" of the 
Aldrich Report, used in chap, v of Part II, are reproduced in full. As in the exhibits, 
the series are classified by establishments, and the establishments by industries. To 
facilitate references, the same order of arrangement is followed and the number 
assigned to each establishment in the exhibits and the state in which it is located are 
given. A change has been made, however, in the arrangement of the series by group- 
ing the foremen, overseers, etc., in any establishment at the beginning and the 
females at the end. The initial wage from which variations are computed and the 
number of employees are given because they were made use of in preparing certain 
of the tables in the text. 



470 



APPENDIX C 



471 



TABLE 1 Continued 

WAGE-SEKIES FROM TABLE XII OF THE ALDEICH BEPOET ALE, BEER, AND PORTER 

2 New York 





F 
L, 


OREMEN 
LBOBERS 


Bi 


SEWERS 


C 


OOPEES 


L; 


LBORERS 


TE 


\MSTI:I;S 


Sex 




M. 




M. 




M. 




M. 




M. 
























Initial wage 
per day 


. 


51.34 


i 


56.39 


1 


1.505 




50.85 


1 


&1.44 




No. 


Rel. 
Wages 


No. 


Rel. 
Wages 


No. 


Rel. 
Wages 


No. 


Rel. 
Wages 


No. 


Rel. 
Wages 


1860, Jan . . . 


1 


100 


1 


100 


8 


100 


26 


100 


4 


100 


July.. 


1 


100 


1 


100 


8 


101 


28 


99 


3 


107 


1861, Jan... 


1 


120 


1 


100 


8 


101 


32 


99 


3 


107 


July . . 


1 


120 


1 


100 


10 


100 


30 


100 


3 


107 


1862, Jan... 


1 


120 


1 


150 


7 


101 


26 


99 


3 


107 


July . . 


1 


120 


1 


150 


6 


101 


33 


101 


3 


107 


1863, Jan... 


1 


120 


1 


150 


7 


101 


26 


102 


2 


107 


July . . 


2 


115 


1 


150 


8 


103 


27 


114 


2 


107 


1864, Jan... 


3 


124 


1 


150 


6 


125 


29 


134 


2 


107 


July . . 


3 


129 


2 


150 


7 


131 


28 


147 


2 


107 


1865, Jan... 


3 


136 


1 


150 


5 


127 


23 


151 


2 


107 


July . . 


4 


130 


1 


150 


4 


148 


18 


149 


2 


107 


1866, Jan... 


4 


132 


1 


250 


5 


146 


30 


154 


2 


107 


July . . 


4 


132 


1 


250 


5 


143 


21 


152 


2 


107 



4Md. 



BOOKS AND NEWSPAPERS 

5 N. Y. 5 N. Y. 5 N. Y. 



5N. Y. 



5N. Y. 





PRINTERS : 
Bk. and Job 


FOREMEN 
COMPS. 


FOREMEN 
PRESSMEN 


CARPENT'S 


COMPOSI- 
TORS 


COMPS. 
LEARNERS 


Sex 


M. 


M. 


M. 


M. 


M. 


M. 
















Init. wage 
per day .. 


$1.665 


$2.00 


$2.00 


$1.315 


$1.665 


$0.695 




No. 


Rel. 
Wages 


No. 


Rel. 
Wages 


No. 


Rel. 
Wages 


No. 


Rel. 
Wages 


No. 


Rel. 
Wages 


No. 


Rel. 
Wages 


1860, Jan. 






2 


100 


1 


100 


2 


100 


17 


100 


10 


100 


July 






2 


100 


1 


100 


2 


100 


11 


100 


7 


81 


1861, Jan. 


8 


166 


2 


100 


1 


100 


1 


95 


20 


99 


8 


76 


July 


8 


100 


2 


100 


1 


100 






17 


99 


6 


72 


1862, Jan. 


6 


100 


2 


100 


1 


100 


2 


95 


16 


99 


5 


81 


July 


6 


100 


2 


100 


1 


100 


2 


95 


18 


99 


7 


88 


1863, Jan. 


6 


100 


2 


100 


1 


100 


1 


102 


21 


99 


5 


94 


July 


8 


100 




. . . 






1 


102 










1864, Jan. 


6 


120 










1 


102 










July 


9 


150 


2 


iss 


i 


1.33 


1 


127 


23 


iso 


4 


99 


1865, Jan. 


12 


180 


2 


150 


i 


133 


1 


127 


27 


150 


4 


108 


July 


12 


180 


2 


150 


i 


142 


1 


127 


25 


150 


4 


105 


1866, Jan. 


12 


180 


2 


150 


i 


150 


1 


140 


23 


150 


5 


120 


July 


12 


180 


2 


150 


i 


150 






'26 


150 


3 


132 



472 



HISTORY OP THE GREENBACKS 



TABLE I Continued 

WAGE-SERIES FBOM TABLE XII Of THE ALDRICH BEPOBT BOOKS AND NEWSPAPEB8 

5 New York 





MACHIN'TB 


PRESSMEN 


PRESSROOM 
HANDS 


PORTERS 


FOLDERS 


PREBSROOK 
HANDS 


Sex 


M. 


M. 


M. 


M. 


F. 


F. 




Init. wage 
per day . . 


$1.705 


$1.665 


$0.612 


$0.915 


$0.47 


$0.465 




No. 


Rel. 
Wages 


No. 


Rel. 
Wages 


No. 


Rel. 
Wages 


No. 


Rel. 

Wages 


No. 


Rel. 
Wages 


No. 


Rel. 
Wages 


1860, Jan. 
July 
1861, Jan. 
July 
1862, Jan. 
July 
1863, Jan. 
July 
1864, Jan. 


2 
3 
3 
4 
3 
1 
2 


100 
95 
95 
95 
94 
88 
92 


1 

'2 
2 
2 
2 
2 


100 

166 

100 
100 
100 
100 


3 
1 
3 
4 
5 
3 
2 


100 
41 
105 
104 
113 
95 
126 


2 
3 
3 
3 
3 
3 
3 


100 
109 
115 
103 
103 
109 
119 


16 
7 
16 
15 
11 
12 
11 


100 
99 
91 
94 
100 
105 
104 


6 
5 
8 
10 
7 
9 
9 


100 
104 
97 
98 
84 
95 
103 


























July 
1865, Jan. 
July 
1866, Jan. 
July 


3 
2 
3 
2 


137 
161 
156 
153 


2 
1 
3 
3 
3 


150 
150 
133 
130 
130 


4 
5 
4 
5 
5 


119 
139 
133 
134 
115 


5 
5 
4 
5 
3 


138 
144 
146 
144 
140 


26 
41 
30 
30 
22 


119 
110 
117 
119 
134 


14 
14 
13 
12 
13 


137 
133 
140 
140 
145 



6 New York 





FOREMEN 
COMPOSITORS 


COMPOSITORS 


COMPOSITORS 
APPRENTICES 


PRESSMEN 


PRESS- 
FEEDERS 


Sex 


M. 


M. 


H. 


M. 


F. 














Initial wage 
per day 


$2.50 


$1.835 


$0.755 


$2.335 


$0.33 




No. 


Rel. 
Wages 


No. 


Rel. 

Wages 


No. 


Rel. 

Wages 


No. 


Rel. 

Wages 


No. 


Rel. 
Wages 


1860, Jan.. 


2 


100 


2 


100 


9 


100 


1 


100 






July . . 


2 


100 


2 


104 


9 


101 


1 


93 




. 


1861, Jan. .. 


2 


100 


3 


108 


8 


88 


1 


93 




, . 


July . . 


2 


100 


4 


104 


7 


83 


1 


93 


i 


100 


1862, Jan... 


2 


100 


6 


106 


7 


93 


1 


93 


i 


152 


July . . 


2 


100 


6 


104 


8 


91 


1 


93 


i 


152 


1863, Jan... 


2 


100 


6 


107 


6 


89 


1 


93 


i 


152 


July . . 


2 


100 


6 


111 


6 


89 


1 


93 


i 


152 


1864, Jan... 


2 


110 


9 


114 


I 


121 


1 


93 


2 


152 


July . . 


2 


117 


8 


117 


3 


99 


1 


93 


2 


164 


1865, Jan... 


3 


129 


11 


138 


4 


98 






2 


174 


July . . 


3 


129 


8 


136 


3 


121 






3 


189 


1866, Jan... 


3 


129 


10 


134 


4 


97 




... 


4 


202 


July . . 


3 


129 


10 


134 


3 


103 




... 


4 


202 



APPENDIX C 



473 



TABLE 1 Continued 

WAGE-SERIES FROM TABLE XII OP THE ALDRICH REPORT BUILDING TRADES 

7 Conn. 8 Conn. 8 Conn. 9 Conn. 9 Conn. 10 Md. 





CARPENT'S 


CARPENT'S 


CARPENT'S 
HELPERS 


HOD 
CARRIERS 


MASONS 


PAINTERS 


Sex 


M. 


M. 


M. 


M. 


M. 


M. 
















Init. wage 
per day .. 


$1.50 


$1.715 


$1.00 


$0.80 


$1.765 


$1.75 




No. 


Rel. 
Wages 


No. 


Rel. 
Wages 


No. 


Eel. 

Wages 


No. 


Rel. 
Wages 


No. 


Rel. 
Wages 


No. 


Rel. 
Wages 


1860, Jan. 


4 


100 


9 


100 


1 


100 


8 


100 


6 


100 


2 


100 


July 


6 


117 


10 


99 






17 


137 


11 


116 


4 


100 


1861, Jan. 


3 


89 


9 


91 


i 


138 


12 


125 


12 


105 


2 


86 


July 


4 


100 


6 


87 


2 


132 


40 


125 


1 


113 


1 


86 


1862, Jan. 


3 


89 


1 


87 






15 


125 


9 


113 


1 


86 


July 


3 


100 


7 


89 


i 


isi 


9 


125 


9 


113 


6 


86 


1863, Jan. 


2 


100 










10 


188 


7 


158 


1 


86 


July 


3 


117 


20 


ii2 


2 


i25 


7 


202 


4 


131 


8 


100 


1864, Jan. 


3 


117 


19 


111 


6 


125 










2 


114 


July 






23 


131 


9 


157 


ii 


i99 


2! 


iio 


9 


143 


1865, Jan. 


3 


iso 


10 


127 


6 


146 










5 


143 


July 


4 


183 










5 


208 


7 


ieo 


9 


143 


1866 Jan 


4 


171 


















5 


143 


July 


4 


188 










13 


208 


10 


170 


11 


143 



12 Massachusetts 





FOREMEN 
BRICKL'RS 


FOREMEN 
MASONS 


BRICKL'RS 


BRICKL'RS 
HELPERS 


MASONS 


MASONS' 
HELPERS 


Sex 


M. 


M. 


M. 


M. 


M. 


M. 
















Init. wage 
per day .. 


$2.50 


$2.50 


$1.765 


$1.12 


$1.875 


$1.055 




No. 


Rel. 
Wages 


No. 


Rel. 
Wages 


No. 


Rel. 
Wages 


No. 


Rel. 
Wages 


No. 


Rel. 
Wages 


No. 


Rel. 
Wages 


1860, Jan. 


1 


100 


1 


100 


9 


100 


5 


100 


5 


100 


9 


100 


July 


1 


100 


1 


100 


12 


86 


6 


91 


11 


85 


15 


100 


1861, Jan. 


1 


100 


1 


100 


12 


107 


12 


100 


11 


101 


9 


85 


July 


1 


100 


1 


120 


28 


101 


35 


100 


13 


96 


15 


92 


1862, Jan. 


1 


100 


1 


100 


10 


106 


13 


101 


10 


84 


20 


97 


July 


1 


100 


1 


100 


11 


105 


14 


110 


13 


105 


17 


110 


1863, Jan. 


1 


100 


1 


100 


4 


110 


9 


109 


4 


93 


6 


118 


July 


2 


110 


1 


100 


17 


105 


14 


108 


9 


102 


16 


114 


1864, Jan. 


1 


120 


1 


100 


15 


120 


11 


122 


7 


114 


11 


130 


July 






2 


120 


19 


131 


13 


134 


19 


102 


8 


142 


1865, Jan. 






1 


120 


9 


139 


9 


134 


7 


116 


9 


142 


July 






1 


160 


20 


146 


18 


134 


8 


137 


8 


142 


1866, Jan. 


i 


160 


1 


160 


15 


147 


11 


156 


13 


143 


13 


160 


July 


i 


160 


1 


160 


13 


167 


11 


.156 


15 


167 


21 


166 






474 



HISTORY OP THE GREENBACKS 



TABLE 1 Continued 

WAGE-SERIES FROM TABLE XII OF THE ALDRICH REPORT BUILDING TRADES 

13 Mass. 13 Mass. 13 Mass. 13 Mass. 13 Mass. 14 Mass. 





FOREMEN 
CARPENT'B' 


FOREMEN 
PAINTERS 


CARPENT'S 


CABPENT'S' 
HELPERS 


PAINTERS 


SIM. * GAS 
FITTERS 


Sex 


M. 


M. 


M. 


M. 


M, 


M 
















In it . wage 
per day.. 


$1.67 


$1.50 


$1.425 


$0.83 


81.165 


$1.875 




No. 


Rel. 

Wages 


No. 


Rel. 

Wages 


No. 


ReL 

Wages 


No. 


Rel. 

Wages 


No. 


Rel. 
Wages 


No. 


Rel. 

Wages 


1860, Jan. 


1 


100 


1 


100 


7 


100 


1 


100 


6 


100 


4 


100 


July 


1 


100 


1 


100 


17 


93 


4 


100 


6 


102 


5 


90 


1861, Jan. 


1 


100 


1 


100 


14 


93 


3 


100 


6 


101 


4 


105 


July 


1 


100 


1 


100 


21 


83 


3 


100 


4 


99 






1862, Jan. 


1 


120 


1 


100 


18 


90 






4 


107 


4 


93 


July 


1 


105 




. . . 


18 


95 


3 


90 


4 


103 






1863, Jan. 


1 


120 






20 


99 


3 


120 


6 


119 


3 


111 


July 


1 


120 


i 


iii 


23 


106 


5 


120 


6 


107 


2 


110 


1864, Jan. 


1 


135 


1 


in 


15 


110 


4 


120 


7 


110 


3 


115 


July 


1 


135 


1 


117 


20 


119 


6 


120 


20 


130 


6 


106 


1865, Jan. 


1 


135 


1 


133 


17 


126 


3 


151 


3 


150 


4 


123 


July 


1 


150 


1 


150 


19 


147 


3 


151 


5 


172 


4 


120 


1866, Jan. 


1 


165 


1 


167 


30 


152 


5 


181 


15 


152 


6 


113 


July 


1 


195 


1 


183 


24 


167 


6 


211 


4 


182 


5 


120 



H Mass. 



15 Mass. 



16 N. J. 



16 N. J. 



16 N. J. 



17 N. Y. 





ST'M & GAS 














FITTERS' 
HELPERS 


PAINTERS 
HOUSE 


PLUMBERS 


LABORERS 


TINSMITHS 


CARPENT'S 


Sex 


M. 


M. 


M. 


M. 


M. 


M. 
















Init. wage 
per day. . 


$1.195 


$1.10 


$2.00 


$1.18 


1.52 


$1.185 




No. 


Rel. 

Wages 


No. 


Rel. 
Wages 


No. 


Rel. 
Wages 


No. 


Rel. 

Wages 


No. 


Rel. 
Wages 


No. 


Rel. 

Wa K es 


1859, July 


?, 


100 






















1860, Jan. 






5 


100 


1 


100 


3 


100 


8 


100 


2 


100 


July 






10 


101 


1 


100 


3 


100 


8 


104 


5 


110 


1861, Jan. 


1 


84 


5 


103 


1 


100 


2 


85 


6 


108 


5 


112 


July 






17 


101 


1 


100 


2 


85 


5 


110 


5 


122 


1862, Jan. 


2 


iio 


3 


114 


2 


81 


3 


92 


3 


113 


3 


127 


July 






6 


102 


2 


84 


2 


85 


3 


113 


6 


127 


1863, Jan. 


i 


ids 


5 


116 


2 


94 


2 


95 


3 


115 


5 


133 


July 


i 


42 


1 


102 


2 


100 


2 


97 


2 


107 


10 


152 


1864, Jan. 


i 


112 


2 


136 


2 


113 


3 


97 


4 


132 


9 


152 


July 


3 


77 


7 


175 


2 


125 


3 


117 


4 


122 


14 


169 


1865, Jan. 


3 


63 


5 1 


164 


2 


125 


4 


123 


3 


128 


12 


183 


July 


4 


79 


9 


195 


3 


150 


3 


153 


8 


148 


12 


174 


1866, Jan. 


2 


84 


4 


227 


a 


150 


5 


151 


5 


148 


10 


186 


July 


3 


73 


10 


198 


4 


139 


2 


155 


5 


155 


10 


196 






i Hours reduced January, 1865, from 13 to 10. 




APPENDIX C 



475 



TABLE I Continued 

WAGE-SERIES FROM TABLE XII OF THE ALDBICH BEPOBT BUILDING TRADES 

17 N. Y. 17 N. Y. 17 N. Y. 17 N. Y. 18 N. Y. 19 N. Y. 





CABPENT'S 
APPEEN. 


CABPENT'S' 
HELPEES 


LABORERS 


TEAMSTEES 


PAINTEES 


CABPENT'S 


Sex 


M. 


M. 


M. 


M. 


M. 


M. 
















Init . wage 
per day.. 


$.375 


$1.00 


$0.88 


$0.75 


$2.00 


$2.00 




No. 


Eel. 
Wages 


No. 


Rel. 
Wages 


No. 


Rel. 
Wages 


No. 


Rel. 
Wages 


No. 


Rel. 
Wages 


No. 


Rel. 
Wages 


1859, Jan. 














1 


100 










1860, Jan. 


4 


100 


1 


100 


1 


100 






15 


100 


30 


100 


July 


5 


123 


3 


79 


1 


100 






60 


100 


65 


100 


1861, Jan. 


4 


147 


3 


79 


3 


99 






8 


100 


30 


100 


July 


1 


88 


4 


92 


3 


109 


i 


ioo 


40 


100 


70 


100 


1862, Jan. 


1 


112 


5 


100 


1 


142 


1 


100 


8 


100 


15 


100 


July 


1 


100 


8 


111 


2 


142 


1 


100 


45 


100 


40 


100 


1863, Jan. 


3 


96 


5 


113 




. . . 


1 


133 


10 


100 


12 


100 


July 


4 


133 


2 


125 


2 


114 


1 


167 


40 


113 


60 


100 


1864, Jan. 


4 


139 


2 


125 


1 


114 


1 


167 


7 


113 


20 


113 


July 


2 


183 








... 


1 


233 


45 


150 


65 


150 


1865, Jan. 




... 


i 


ISO 






1 


233 


12 


150 


25 


150 


July 






1 


150 






1 


233 


45 


175 


50 


163 


1866, Jan. 


1 


267 






i 


i42 


1 


233 


10 


175 


40 


175 


July 






i 


i50 


2 


156 


1 


233 


45 


175 


80 


175 



20 N. Y. 



21 N. Y. 



22 N. Y. 



22 N. Y. 



22 N. Y. 23 N. Y. 





PLUMBEBS 


ROOFEBS 

SL. & M'T'L 


BBICKL'ES 


BBICKL'BS' 
HELPERS 


PLAST'B'S 


PAINTEES 


Sex 


M. 


M. 


M. 


M. 


M. 


M. 
















Init. wage 
per day.. 


$1.875 


$1.25 


$2.00 


$1.25 


$2.00 


$1.915 




No. 


Rel. 
Wages 


No. 


Rel. 

Wages 


No. 


Rel. 

Wages 


No. 


Rel. 

Wages 


No. 


Rel. 

Wages 


No. 


Rel. 

Wages 


1860, Jan. 


4 


100 


2 


100 


8 


100 


12 


100 


8 


100 






July 


4 


100 


6 


125 


8 


100 


10 


100 


8 


100 


3 


ioo 


1861, Jan. 


4 


100 


3 


120 


7 


100 


10 


100 


7 


100 







July 


4 


100 


4 


120 


7 


100 


10 


100 


7 


100 


5 


93 


1862, Jan. 


5 


101 


2 


160 


5 


113 


8 


100 


5 


100 






July 


5 


107 


3 


160 


5 


113 


8 


100 


5 


113 


2 


91 


1863, Jan. 


10 


107 


3 


240 


4 


125 


6 


130 


4 


125 






July 


12 


133 


6 


240 


5 


125 


6 


130 


5 


125 


3 


113 


1864, Jan. 


4 


160 


5 


280 


9 


125 


10 


180 


9 


125 






July 


4 


187 


8 


280 


9 


150 


10 


180 


9 


150 


4 


150 


1865, Jan. 


4 


187 


2 


320 


5 


150 


3 


180 


5 


150 







July 


4 


187 


5 


320 


5 


150 


4 


180 


5 


150 


2 


185 


1866, Jan. 


6 


195 


2 


280 


5 


175 


10 


180 


5 


175 




* 


July 


6 


195 


6 


280 


5 


200 


10 


200 


5 


200 


4 


183 



476 



HISTORY OP THE GREENBACKS 



TABLE I Continued 

WAGE-SERIES FEOM TABLE XII OF THE ALDRICH REPORT BUILDING TRADES 

24 N. Y. 26 Pa. 26 Pa. 27 Pa. 28 Pa. 29 Pa. 





ROOFERS 


BRICKLAY'S 


BRICKLAY'S 
HELPERS 


CARPENT'S 


CARPENT'S 


PLAST'B'S 


Sex 


M. 


M. 


M. 


M. 


M. 


M. 
















Init. wage 
per day.. 


$1.835 


$2.00 


$1.12 


$1.75 


$1.75 


$1.665 




No. 


Rel. 

Wages 


No. 


Rel. 

Wages 


No. 


Rel. 

Wages 


No. 


Rel. 

Wages 


No. 


Rel. 
Wages 


No. 


Rel. 

Wages 


1860, Jan. 


2 


100 


6 


100 


3 


100 


3 


100 


6 


100 


9 


100 


July 


I 


91 


20 


100 


10 


100 


8 


100 


10 


100 


13 


102 


1861, Jan. 


3 


82 










4 


100 


5 


100 


9 


98 


July 


2 


82 


20 


ioo 


io 


ii2 


10 


100 


12 


114 


16 


99 


1862, Jan. 


4 


78 


6 


113 


3 


112 


4 


114 


7 


114 


10 


99 


July 


4 


82 


20 


113 


10 


112 


10 


114 


16 


143 


12 


100 


1863, Jan. 


5 


84 










4 


114 


5 


143 


8 


116 


July 


4 


105 








... 


10 


114 


10 


171 


12 


115 


1864, Jan. 


4 


113 


io 


i25 


io 


134 


10 


1'29 


6 


171 


10 


114 


July 


5 


131 


35 


125 


18 


134 


14 


129 


8 


171 


14 


116 


1865, Jan. 


4 


150 


10 


150 


5 


179 


20 


136 


7 


171 


10 


114 


July 


4 


150 


30 


150 


15 


179 


21 


133 


12 


143 


14 


137 


1866, Jan. 


4 


163 


12 


150 


12 


179 


15 


151 


8 


143 


8 


139 


July 


4 


163 


40 


150 


20 


179 


19 


151 


20 


143 


10 


156 



CARRIAGES AND WAGONS 

33 New York 





BLACKSMIT'S 


BLACKSMIT'S' 
HELPERS 


PAINTERS 


WHEELWRI'S 


Sex 


M. 


M. 


M. 


M. 




Initial wage per day 


$1.50 


$0.835 


$1.25 


$1.25 






No. 


Rel. 
Wages 


No. 


Rel. 

Wages 


No. 


Rel. 
Wages 


No. 


Rel. 

Wages 


1860, January 


3 
3 
3 
3 
3 
3 
3 
3 
3 
3 
3 
3 
5 
5 


100 
100 
100 
100 
200 
200 
200 
200 
200 
200 
200 
200 
200 
200 


3 
3 
3 
3 
3 
3 
3 
3 
3 
3 
3 
3 
5 
5 


100 
100 
100 
100 
180 
180 
180 
180 
180 
180 
180 
180 
180 
180 


2 
2 
2 
2 
2 
2 
3 
3 
3 
2 
2 
2 
4 
4 


100 

100 
100 
100 
140 
140 
140 
140 
]40 
140 
140 
140 
140 
140 


6 
6 
6 
6 
6 
6 
6 
6 
6 
6 
6 
6 
6 
6 


100 
100 
100 
100 
160 

: 160 

160 
160 
160 
160 
160 
160 
160 
160 


July 


1861, January 


July 


1862, January 


July 


1863, January 


July 


1864, January 


July . 


1865, January 


July 


1866, January 


July . . 





APPENDIX C 



477 



TABLE 1 Continued 

WAGE-SERIES FROM TABLE XII OF THE ALDRICH BEPOET CITY PUBLIC WORKS 

34 Mass. 34 Mass. 35 N. Y. 35 N. Y 35 N. Y. 35 N. Y. 





FOREMEN 
LABORERS 


LABORERS 


FOREMEN 
LABORERS 


BLACKSM'S 


BLACKSM'S' 
HELPERS 


BLASTERS 


Sex 


M. 


M. 


M. 


M. 


M. 


M. 
















Init. wage 
per day.. 


$1.25 


$1.02 


$2.00 


$1.82 


$1.25 


$1.25 




No. 


Rel. 
Wages 


No. 


Rel. 
Wages 


No. 


Rel. 
Wages 


No. 


Rel. 
Wages 


No. 


Rel. 
Wages 


No. 


Rel. 
Wages 


1860, Jan. 


1 


100 


7 


100 


42 


100 


16 


100 


15 


100 


6 


100 


July 


2 


140 


24 


99 


30 


100 


23 


99 


12 


100 


10 


100 


1861, Jan. 


1 


140 


18 


99 


25 


100 


17 


99 


19 


92 


15 


100 


July 


2 


170 


16 


99 


28 


100 


25 


96 


8 


84 




. . . 


1862, Jan. 


2 


100 


21 


99 


20 


100 


9 


97 


4 


92 






July 


2 


160 


27 


100 


22 


100 


7 


99 


5 


91 






1863, Jan. 


2 


160 


7 


107 


19 


100 


4 


106 


4 


100 


2 


128 


July 


2 


170 


12 


146 


20 


110 


7 


110 


5 


108 






1864, Jan. 


3 


147 


29 


119 


17 


125 


8 


137 


5 


128 






July 


4 


220 


14 


131 


16 


150 


7 


151 


7 


152 


1 


152 


1865, Jan. 


6 


193 


75 


120 


12 


150 


7 


176 


5 


160 


1 


160 


July 


3 


167 


19 


153 


11 


150 


5 


179 


5 


160 


1 


160 


1866, Jan. 


5 


180 


12 


147 


12 


150 


2 


179 


1 


160 


1 


160 


July 


4 


180 


32 


157 


8 


150 


2 


192 


1 


160 




... 



35 New York 





BRICKLAY'S 


CARPENT'S 


GARDEN 'RS 


LABORERS 


MASONS 


STONECUT'S 


Sex 


M. 


M. 


M. 


M. 


M. 


M. 




Init. wage 
per day.. 


$2.00 


$1.72 


$1.40 


$1.00 


$2.00 


$2.00 




No. 


Rel. 
Wages 


No. 


Rel. 
Wages 


No. 


Rel. 
Wages 


No. 


Rel. 
Wages 


No. 


Rel. 

Wages 


No. 


Rel. 
Wages 


1860, Jan. 
July 
1861, Jan. 
July 
1862, Jan. 
July 
1863, Jan. 
July 
1864, Jan. 
July 
1865, Jan. 
July 
1866, Jan. 
July 


25 
45 
25 
35 
7 
8 
7 
12 
5 
8 
5 
3 
2 
1 


100 
100 
100 
90 
88 
88 
100 
110 
125 
150 
160 
150 
175 
175 


36 
18 
28 
38 
14 
13 
19 
8 
8 
10 
9 
10 
8 
11 


100 
100 
101 
97 
100 
99 
114 
116 
145 
158 
174 
187 
189 
203 


20 
40 
14 
30 
10 
15 
15 
16 
16 
30 
20 
22 
12 
12 


100 
93 
93 
82 
79 
79 
93 
100 
114 
136 
143 
143 
143 
143 


1225 
1500 
1200 
1100 
800 
900 
800 
800 
700 
650 
500 
450 
420 
500 


100 
100 
100 
90 
100 
100 
125 
125 
150 
180 
190 
190 
190 
190 


150 
165 
58 
55 
8 
8 
7 
12 
6 
8 
5 
3 
3 
2 


100 
100 
100 
90 
88 
88 
100 
110 
125 
150 
160 
150 
175 
175 


240 
185 
290 
20 


100 
100 
100 
113 


16 
15 
5 
5 
20 
10 
1 
11 
2 


88 
100 
113 
125 
150 
160 
150 
175 
175 



478 



HISTORY OP THE GREENBACKS 



TABLE 1 Continued 

WAGE-SERIES FROM TABLE XXI OF THE ALDRICH REPORT CITY PUBLIC WORKS 

35 N. Y. 38 Pa. 86 Pa. 36 Pa. 38 Pa 36 Pa. 





QUARRYM'N 


CARPENT'S 


ENGINEERS 


ENGINEER 
ASSISTANT 


FIREMEN 


LABORERS 


Sex 


M. 


M. 


M. 


M. 


M. 


M. 




Init. wage 
per day.. 


$1.10 


$2.00 


$2.125 


81.2T) 


$1.25 


KL886 




No. 


Rel. 
Wages 


No. 


Rel. 

Wages 


No. 


Rel. 
Wages 


No. 


Rel. 
Wages 


No. 


Rel. 
Wages 


No. 


Rel. 
Wages 


1860, Jan. 
July 
1861, Jan. 
July 
1862, Jan. 


110 
340 
280 


100 
100 
100 


'i 
i 

2 
2 
2 


166 
100 
100 
100 
100 


4 
4 
6 
6 
6 
6 
6 
6 
6 
6 
4 
4 
4 
4 


100 
100 
99 
99 
99 
99 
94 
94 
96 
96 
119 
119 
119 
119 


1 
1 
1 
1 
1 
1 
5 
5 
5 
5 
5 
6 
7 
6 


100 
100 
88 
88 
88 
88 
92 
92 
92 
92 
132 
132 
132 
132 


3 
3 
6 

7 
7 
7 
6 
5 
10 
10 
8 
8 
8 
8 


100 
100 
100 
103 
103 
103 
102 
99 
99 
99 
132 
132 
132 
132 


23 
30 
30 
34 
34 
34 
8 
8 
36 
36 
21 
26 
15 
13 


100 
97 
97 
96 
96 
96 
96 
96 
112 
112 
131 
131 
131 
131 






July 
1863, Jan. 










July 
1864, Jan. 
July 
1865, Jan. 
July 
1866, Jan. 
July 










70 
45 
70 
50 
30 


145 
173 
182 

182 
182 


'2 
o 

1 


138 
138 
138 



36 Pa. 



36 Pa. 



36 Pa. 



37 Pa. 





MACHINISTS 


PATTERN 
MAKERS 


WATCHMEN 


LABORERS 


Sex 


M. 


M. 


M. 


M. 




Initial wage per day 


$1.50 


$1.50 


$1.50 


$1.25 






No. 


Rel. 

Wages 


No. 


Rel. 
Wages 


No. 


Rel. 

Wages 


No. 


Rel. 
Wages 


1860, January 


1 
1 
4 
4 
4 
4 
1 
1 
4 
1 
6 
8 
12 
12 


100 
100 
121 
121 
121 
121 
100 
100 
146 
133 
175 
183 
183 
178 


'i 
i 
i 
i 

'i 
i 
i 
i 


166 

100 
100 
100 

iso 

150 
150 
150 


2 
2 
4 
4 
4 
3 
2 
2 
2 
2 
2 
2 
2 
2 


100 
100 
89 
89 
89 
94 
73 
73 
73 
73 
100 
100 
100 
100 


28 
30 
33 
37 
16 
29 
20 
34 
19 
38 
24 
37 
15 
23 


100 
100 
100 
100 
100 
100 
120 
120 
140 
140 
140 
140 
140 
140 


July 


1861, January 


July 


1862, January 


July 


1863, January 


July 


1864, January 


July 


1865, January 


July 


1866, January 


July.. 



APPENDIX C 



479 



TABLE 1 Continued 

WAGE-SERIES FROM TABLE XII OF THE ALDSICH EEPOET COTTON GOODS 

38 Massachusetts 







OVERSEERS 


OVERSEERS 


OVERSEERS 


OVERSEERS 


OVERSEERS 




M'ST'R MA- 


CARDING 


CLOTH 


DRESSING 


SPINNING 


WEAVING 




CHINISTS 


DEP'T 


ROOM 


DEP'T 


DEP'T 


DEP'T 


Sex 


M. 


M. 


M. 


M. 


M. 


M. 


Init. wage 
per day.. 


$3.33 


$3.00 


52.00 


$3.00 


$3.00 


$2.065 




No. 


Rel. 
Wages 


No. 


Rel. 

Wages 


No. 


Rel. 

Wages 


No. 


Rel. 
Wages 


No. 


Rel. 

Wages 


No. 


Rel. 

Wages 


1860, Jan. 


1 


100 


1 


100 


1 


100 


1 


100 


2 


100 


4 


100 


July 


1 


100 


1 


100 


1 


100 


1 


100 


2 


100 


4 


100 


1861, Jan. 


1 


100 


1 


&3 


1 


84 


1 


83 


2 


83 


4 


85 


July 


1 


100 


1 


83 


1 


84 


1 


83 


2 


83 


4 


85 


1862, Jan. 


1 


100 


1 


83 


1 


84 


1 


83 


2 


83 


4 


85 


July 


1 


100 


1 


83 


1 


84 


1 


83 


2 


83 


4 


85 


1863, Jan. 


1 


106 


1 


100 


1 


100 


1 


100 


2 


100 


4 


103 


July 


1 


106 


1 


100 


1 


100 


1 


100 


2 


100 


4 


103 


1864, Jan. 


1 


120 


1 


117 


1 


125 


1 


117 


2 


113 


3 


129 


July 


1 


120 


1 


117 


1 


125 


1 


117 


2 


113 


3 


129 


1865, Jan. 


1 


120 


1 


117 


1 


113 


1 


117 


2 


117 


4 


121 


July 


1 


120 


1 


117 


1 


113 


1 


117 


2 


117 


4 


121 


1866, Jan. 


1 


150 


1 


133 


1 


138 


1 


133 


2 


133 


4 


157 


July 


1 


150 


1 


133 


1 


138 


1 


133 


2 


133 


4 


157 





SECOND 
HANDS 


THIRD 
HANDS 


BACKBOYS 


BALERS 


BEAM- 
CARRIERS 


BELTMEN 


Sex 


M. 


M. 


M. 


M. 


M. 


M. 
















Init. wage 
per day.. 


$1.365 


$0.97 


$0.265 


$1.00 


$0.835 


$1.50 




No. 


Rel. 
Wages 


No. 


Rel. 
Wages 


No. 


Rel. 
Wages 


No. 


Rel. 
Wages 


No. 


Rel. 
Wages 


No. 


Rel. 
Wages 


1860, Jan. 


13 


100 


17 


100 


13 


100 


1 


100 


2 


100 


1 


100 


July 


13 


100 


17 


100 


13 


100 


1 


100 


2 


100 


1 


100 


1861, Jan. 


13 


77 


18 


71 


12 


87 


1 


83 


2 


83 


1 


100 


July 


13 


77 


18 


71 


12 


87 


1 


83 


2 


83 


1 


100 


1862, Jan. 


13 


78 


12 


80 


13 


74 


1 


83 


2 


83 


1 


111 


July 


13 


78 


12 


80 


13 


106 


1 


83 


2 


83 


1 


111 


1863, Jan. 


10 


101 


9 


103 


14 


136 


1 


108 


1 


129 


1 


111 


July 


10 


101 


9 


103 


14 


158 


1 


108 


1 


129 


1 


111 


1864, Jan. 


12 


113 


4 


155 


14 


177 


1 


133 


1 


150 


1 


117 


July 


12 


113 


4 


155 


14 


177 


1 


133 


1 


150 


1 


117 


1865, Jan. 


11 


139 


6 


159 


13 


172 


1 


133 


2 


159 


1 


122 


July 


11 


139 


6 


159 


13 


172 


1 


133 


2 


162 


1 


122 


1866, Jan. 


12 


157 


13 


175 


13 


187 


1 


167 


2 


175 


1 


150 


July 


12 


157 


13 


175 


13 


187 


1 


167 


2 


175 


1 


150 



480 



HISTORY OP THE GREENBACKS 



TABLE 1 Continued 

WAGE-SERIES FBOM TABLE XII OF THE ALDBICH BEPOBT COTTON GOODS 

38 Massachusetts 





BLACK- 
SMITHS 


BOBBIN 

MKN 


BOILERMEN 


B'L'BM'N'S' 
HELPERS 


CABPENT'B 


CARD 
GRINDERS 


Sex 


M. 


M. 


M. 


M. 


M. 


M 
















luit. wage 
per day . . 


$1.79 


11.415 


$1.75 


$1.08 


$1.52 


$1.025 




No. 


Rel. 
Wages 


No. 


Rel. 
Wages 


No. 


Rel. 
Wages 


No. 


Rel. 

Wages 


No. 


Rel. 
Wages 


No. 


Rel. 
Wages 


1860, Jan. 


4 


100 






1 


100 


2 


100 


5 


100 


7 


100 


July! 4 


100 






1 


100 


2 


100 


5 


100 


7 


100 


1861, Jan. 


4 


97 


2 


100 


1 


86 


2 


100 


6 


102 


7 


90 


July 


4 


97 


2 


100 


1 


86 


2 


100 


6 


102 


7 


90 


1862, Jan. 


3 


106 


2 


106 


1 


95 


2 


100 


7 


113 


3 


111 


July 


3 


106 


2 


106 


1 


95 


2 


100 


7 


113 


3 


111 


1863, Jan. 


3 


106 


1 


124 


2 


100 


1 


116 


6 


113 


3 


111 


July 


3 


106 


1 


124 


2 


100 


1 


116 


6 


113 


3 


111 


1864, Jan. 


3 


116 


1 


159 


2 


98 


1 


116 


6 


132 


3 


120 


July 


3 


116 


1 


159 


2 


98 


1 


116 


6 


132 


3 


120 


1865, Jan. 


3 


151 


1 


153 


2 


107 


2 


130 


6 


168 


3 


140 


July 


3 


151 


1 


153 


2 


107 


2 


130 


6 


168 


3 


140 


1866, Jan. 


3 


158 


4 


144 


1 


114 


1 


139 


6 


164 


3 


141 


July 


3 


158 


4 


144 


1 


114 


1 


139 


6 


164 


3 


141 





DOFFERS 


DOUBLE 
TENDERS 


ENTRYMEN 


FILLING 
CARRIERS 


LAP 

CARRIERS 


M'CHINISTS 


Sex 


M. 


M. 


M. 


M. 


M. 


M. 
















Init. wage 
per day.. 


$0.315 


$0.64 


$0.92 


$0.83 


$0.71 


$1.565 




No. 


Rel. 
Wages 


No. 


Rel. 
Wages 


No. 


Rel. 
Wages 


No. 


Rel. 

Wages 


No. 


Rel. 
Wages 


No. 


Rel. 
Wages 


1860, Jan. 


33 


100 


6 


100 


1 


100 


5 


100 


2 


100 


7 


100 


July 


33 


100 


6 


100 


1 


100 


5 


100 


2 


100 


7 


100 


1861, Jan. 


33 


92 


4 


88 


1 


82 


4 


81 


2 


92 


7 


97 


July 


33 


92 


4 


88 


1 


82 


4 


81 


2 


92 


7 


97 


1862, Jan. 


33 


97 


4 


110 


1 


82 


4 


81 


2 


126 


7 


105 


July 


33 


97 


4 


110 


1 


82 


4 


81 


2 


126 


7 


105 


1863, Jan. 


27 


124 


4 


117 


1 


109 


4 


111 


2 


118 


7 


109 


July 


27 


124 


4 


117 


1 


109 


4 


111 


2 


118 


7 


109 


1864, Jan. 


26 


139 


3 


113 


1 


136 


4 


141 


2 


146 


8 


128 


July 


26 


139 


3 


113 


1 


136 


4 


141 


2 


146 


8 


128 


1865, Jan. 


26 


186 


3 


198 


1 


136 


4 


155 


3 


144 


9 


144 


July 


26 


186 


3 


198 


1 


136 


4 


155 


3 


144 


9 


144 


1866, Jan. 


27 


183 


3 


198 


1 


163 


4 


155 


3 


192 


8 


166 


July 


25 


187 


3 


198 


1 


163 


4 


155 


3 


192 


8 


166 



APPENDIX C 



481 



TABLE I Continued 

WAGE-SEBIES FROM TABLE XII OF THE ALDRICH BEPOBT COTTON GOODS 

38 Massachusetts 





MASONS 


OILERS 


PAINTERS 


PICKERS 


ROLLER 
COVERERS 


WASTE 
HANDS 


Sex 


M. 


M. 


M. 


M. 


M. 


M. 


Init. wage 
per day . . 














$1.48 


$0.42 


$1.36 


$0.71 


$1.50 


$1.10 




No. 


Rel. 
Wages 


No. 


Rel. 
Wages 


No. 


Rel. 
Wages 


No. 


Rel. 
Wages 


No. 


Rel. 

Wages 


No. 


Rel. 
Wages 


1860, Jan. 


5 


100 


2 


100 


3 


100 


12 


100 


2 


100 


3 


100 


July 


5 


100 


2 


100 


3 


100 


12 


100 


2 


100 


3 


100 


1861, Jan. 


6 


99 


2 


107 


2 


104 


9 


111 


2 


100 


3 


91 


July 


6 


99 


2 


107 


2 


104 


9 


111 


2 


100 


3 


91 


1862, Jan. 


7 


98 


2 


107 


2 


107 


9 


109 


1 


111 


3 


86 


July 


7 


98 


2 


107 


2 


107 


9 


109 


1 


111 


3 


86 


1863, Jan. 


5 


115 


2 


107 


2 


107 


9 


146 


1 


111 


2 


121 


July 


5 


115 


2 


107 


2 


107 


9 


146 


1 


111 


2 


121 


1864, Jan. 


5 


151 


2 


112 


2 


113 


7 


181 


1 


122 


1 


136 


July 


5 


151 


2 


112 


2 


113 


7 


181 


1 


122 


1 


136 


1865, Jan. 


3 


192 


2 


131 


2 


135 


9 


193 


2 


142 


2 


132 


July 


3 


192 


2 


131 


2 


135 


9 


193 


2 


142 


2 


132 


1866, Jan. 


3 


225 


4 


242 


2 


156 


9 


200 


2 


151 


2 


114 


July 


3 


225 


4 


242 


2 


156 


9 


200 


2 


151 


2 


114 





WATCHMEN 


WHEELPIT 

MEN 


YARD 
HANDS 


YARN 
CARRIERS 


CARD 
STRIPPERS 


SCRUBBERS 


Sex 


M. 


M. 


M. 


M. 


F. 


F. 
















Init. wage 
per day . . 


$1.33 


$2.00 


$1.10 


$0.68 


$0.71 


$0.45 




No. 


Rel. 
Wages 


No. 


Rel. 

Wages 


No. 


Rel. 

\V;ws 


No. 


Rel. 
Wages 


No. 


Rel. 
Wages 


No. 


Rel. 
Wages 


1860, Jan. 


4 


100 


1 


100 


5 


100 


3 


100 


6 


100 


4 


100 


July 


4 


100 


1 


100 


5 


100 


3 


100 


6 


100 


4 


100 


1861, Jan. 


4 


81 


1 


113 


4 


91 


3 


74 


6 


96 


4 


83 


July 


4 


81 


1 


113 


4 


91 


3 


74 


6 


96 


4 


83 


1862, Jan. 


4 


81 


1 


113 


3 


82 


2 


74 


6 


113 


4 


83 


July 


4 


81 


1 


113 


3 


82 


2 


74 


6 


113 


4 


83 


1863, Jan. 


4 


107 


1 


113 


3 


110 


3 


74 


6 


141 


4 


111 


July 


4 


107 


1 


113 


3 


110 


3 


74 


6 


141 


4 


111 


1864, Jan. 


4 


113 


1 


125 


3 


127 


4 


92 


5 


162 


4 


129 


July 


4 


113 


1 


125 


3 


127 


4 


92 


5 


162 


4 


129 


1865, Jan. 


4 


132 


2 


133 


3 


114 


1 


178 


5 


190 


4 


149 


July 


4 


132 


2 


133 


3 


114 


1 


178 


5 


190 


4 


149 


1866, Jan. 


2 


150 


1 


150 


3 


127 


4 


145 


5 


ISO 


7 


164 


July 


2 


150 


1 


150 


3 


127 


4 


145 


5 


190 


7 


164 



4S2 



HISTORY OF THE GREENBACKS 



TABLE I Continued 

WAGE-SERIES FROM TABLE III OF THE ALDRK II REPORT COTTON GOODS 

38 Mass. 38 Mass. 39 Mass. 39 Mass. 39 Mass. 39 Mass. 





SPOOLERS 


SwKEPERS 


FOREMEN 
CARPENT'S 


FOREMEN 
MACHIN'TS 


FOREMEN 
YARD 


OVERSKKRS 
CARD. DEP. 


Sex 


F. 


p. 


M. 


M. 


M. 


M. 














82.00 


I n it . wage 
per day... 


$0.50 


$0.71 


$1.75 


$1.75 


$2.00 




No. 


Rel. 
Wages 


No. 


Rel. 

Wages 


No. 


Rel. 

Wages 


No. 


Rel. 
Wages 


No. 


Rel. 
Wages 


No. 


Rel. 
Wages 


1860, Jan. 


47 


100 


2 


100 


1 


KM) 


1 


100 


1 


100 


1 


100 


July 


47 


100 


2 


100 


1 


107 


1 


100 


1 


100 


1 


100 


1861, Jan. 


45 


84 


1 


70 


1 


107 


1 


100 


1 


100 


1 


100 


July 


45 


84 


1 


70 


1 


107 


1 


100 


1 


100 


1 


100 


1862, Jan. 


45 


80 


1 


85 


1 


107 


1 


94 


1 


100 


1 


100 


July 


45 


80 


1 


85 


1 


114 


1 


94 


1 


100 


1 


75 


1863, Jan. 


45 


105 


3 


97 


1 


114 


1 


114 


1 


100 


1 


100 


July 


45 


105 


3 


97 


1 


114 


1 


114 


1 


100 


1 


100 


1864, Jan. 


44 


95 


3 


102 


1 


114 


1 


119 


1 


100 


1 


100 


July 


44 


95 


3 


102 


1 


129 


3 


129 


1 


100 


1 


113 


1865, Jan. 




. . . 


3 


102 


1 


143 


1 


143 


1 


100 


1 


113 


July 






3 


102 


1 


143 


3 


143 


1 


113 


1 


113 


1866, Jan. 


37 


200 


14 


104 


1 


171 


1 


171 


1 


125 


1 


125 


July 


37 


200 


14 


104 


1 


171 


1 


186 


1 


125 


1 


125 



M Massachusetts 





OVERSEERS 


OVERSEERS 


OVERSEERS 


OVERSEERS 


SECOND 






CLOTH R'M 


DRESS. DEP. 


SPIN. DEP. 


WEAV. DEP. 


HANDS 




Sex 


M. 


M. 


M. 


M. 


M. 


M. 
















Init. wage 
per day... 


$2.25 


$1.75 


$2.00 


$2.00 


$1.175 


81.42 




No. 


ReL 
Wages 


No. 


ReL 
Wages 


No. 


Rel. 
Wages 


No. 


Rel. 
Wages 


No. 


Rel. 
Wages 


No. 


Rel. 

WJIKOS 


1860, Jan. 


1 


100 


1 


100 


1 


100 


1 


100 


6 


100 


11 


100 


July 


1 


100 


1 


100 


1 


100 


1 


100 


7 


103 


11 


96 


1861, Jan. 


1 


100 


1 


100 


1 


100 


1 


100 


6 


103 


9 


98 


July 


1 


100 


1 


100 


1 


100 


1 


100 


2 


103 


11 


99 


1862, Jan. 


1 


100 


1 


100 


1 


100 


1 


100 


3 


101 


10 


98 


July 


1 


78 


1 


86 


1 


75 


1 


75 


4 


89 


12 


95 


1863, Jan. 


1 


78 


1 


114 


1 


100 


1 


100 


1 


99 


24 


90 


July 


1 


78 


1 


114 


1 


100 


1 


100 


1 


99 


26 


92 


1864, Jan. 


1 


78 


1 


114 


1 


100 


1 


100 


2 


128 


14 


106 


July 


1 


92 


1 


114 


1 


88 


1 


113 


2 


106 


8 


128 


1865, Jan. 


1 


100 


1 


129 


1 


88 


1 


113 


2 


106 


8 


143 


July 


1 


100 


1 


129 


2 


113 


1 


113 


5 


136 


14 


148 


1866, Jan. 


1 


111 


1 


143 


1 


125 


1 


138 


5 


149 


12 


147 


July 


1 


111 


1 


143 


1 


129 


1 


138 


4 


154 


12 


150 



APPENDIX C 



483 



TABLE 1 Continued 

WAGE-SEEIES FROM TABLE XII OF THE ALDEICH BEPOBT COTTON GOODS 

39 Massachusetts 





CAED 
GRINDERS 


CAED 
STBIPPEBS 


MACHIN'TS 


PAINTEE8 


PlCKEES 


SECTION 
HANDS 


Sex 


M. 


M. 


M. 


M. 


M. 


M. 
















Init. wage 
per day... 


$0.83 


S0.625 


$1.38 


$1.14 


$0.735 


$0.76 




No. 


Rel. 
Wages 


No. 


Rel. 
Wages 


No. 


Rel. 

Wages 


No. 


Rel. 
Wages 


No. 


Rel. 

Wages 


No. 


Rel. 
Wages 


1860, Jan. 


2 


100 


6 


100 


24 


100 


7 


100 


2 


100 


5 


100 


July 


2 


110 


6 


103 


24 


101 


7 


104 


2 


102 


6 


110 


1861, Jan. 


2 


110 


3 


111 


14 


104 


7 


111 


2 


102 


6 


106 


July 


2 


110 


4 


112 


13 


106 


5 


111 


2 


102 


6 


107 


1862, Jan. 


3 


114 


4 


112 


14 


97 


4 


111 


2 


102 


6 


109 


July 


3 


104 


2 


104 


17 


99 


6 


100 


1 


102 


4 


103 


1863, Jan. 


2 


110 


1 


96 


7 


109 


4 


95 


1 


113 


3 


113 


July 


2 


110 


1 


96 


10 


102 


6 


97 


1 


113 


3 


113 


1864, Jan. 


2 


151 


5 


120 


11 


112 


8 


97 


1 


136 


2 


109 


July 


1 


160 


2 


179 


10 


126 


6 


119 


1 


170 


3 


123 


1865, Jan. 


1 


160 


2 


179 


10 


145 


6 


130 


1 


204 


2 


109 


July 


2 


201 


4 


179 


12 


136 


6 


133 


2 


181 


5 


147 


1866, Jan. 


2 


202 


4 


179 


16 


146 


6 


132 


2 


171 


7 


185 


July 


2 


192 


4 


179 


15 


149 


5 


136 


3 


165 


7 


185 





SLASHES 
TENDEES 


WATCHMEN 


YAED 
HANDS 


DBAWEBS- 

IN 


DEAWTNG 
HANDS 


SPEEDEES 


Sex 


M. 


M. 


M. 


F. 


F. 


F. 
















Init. wage 
per day... 


$1.08 


$0.86 


$0.855 


$0.475 


$0.42 


$0.52 




No. 


Rel. 
Wages 


No. 


Rel. 
Wages 


No. 


Rel. 

Wagns 


No. 


Rel. 
Wages 


No. 


Rel. 
Wages 


No. 


Rel. 
Wages 


1860, Jan. 


3 


100 


14 


100 


17 


100 


5 


100 


4 


100 


4 


100 


July 


4 


92 


14 


100 


12 


101 


3 


112 


3 


119 


4 


106 


1861, Jan. 


2 


83 


14 


100 


12 


101 


4 


84 


3 


119 


4 


104 


July 


2 


83 


14 


100 


14 


102 


5 


113 


3 


119 


4 


101 


1862, Jan. 


1 


84 


14 


100 


10 


92 


4 


114 


3 


119 


4 


104 


July 






13 


100 


18 


101 


3 


117 


2 


95 


2 


96 


1863, Jan. 


2 


97 


13 


100 


14 


104 


2 


114 


2 


95 


1 


92 


July 


2 


97 


13 


100 


13 


105 


2 


114 


2 


95 


1 


92 


1864, Jan. 


5 


111 


15 


116 


8 


119 


5 


123 


3 


119 


2 


106 


July 


3 


131 


14 


145 


9 


150 


2 


143 


2 


119 


3 


110 


1865, Jan. 


2 


127 


15 


145 


5 


148 


2 


141 


2 


119 


2 


110 


July 


2 


139 


14 


145 


10 


152 


7 


133 


4 


129 


5 


121 


1866, Jan. 


6 


148 


16 


174 


14 


154 


6 


189 


4 


160 


4 


161 


July 


4 


155 


15 


174 


13 


168 


5 


171 


5 


160 


5 


161 



HISTORY OP THE GREENBACKS 



TABLE 1 Continued 

WAGE-SERIES FROM TABLE XII OF THE ALDEICH REPORT COTTON GOODS 

39 Mass. 39 Mass. 39 Mass. 40 Mass. 40 Mass. 40 Mass. 





SPINNERS 
FBAMB 


WABPERS 


WEAVEBS 


MASTER 
MACHIN'TS 


FOREMEN 
YARD 


OVERSEERS 
CARD. DEP. 


Sex 


F. 


F. 


F. 


M. 


M. 


M. 
















In it. wage 
per day... 


$0.475 


$0.595 


10.44 


$2.00 


81.50 


$2.50 




No. 


Rel. 
Wages 


No. 


Rel. 
Wages 


No. 


Rel. 
Wages 


No. 


Rel. 
Wages 


No. 


Rel. 
Wages 


No. 


Rel. 
Wages 


1860, Jan. 


28 


UK) 


6 


100 


19 


100 


1 


100 


1 


100 


1 


100 


July 


21 


92 


6 


115 


15 


103 


1 


100 


1 


100 


1 


100 


1861, Jan. 


26 


97 


7 


108 


25 


110 


1 


113 


1 


117 


1 


100 


July 


29 


95 


6 


105 


16 


102 


1 


113 


1 


117 


1 


100 


1862, Jan. 


30 


102 


7 


79 


18 


112 


1 


113 


1 


117 


1 


100 


July 


25 


102 


5 


84 


19 


102 


1 


113 


1 


117 


1 


100 


1863, Jan. 


23 


97 


1 


67 


21 


117 


1 


113 


1 


117 


1 


100 


July 


25 


99 


1 


67 


23 


118 


1 


125 


1 


117 


1 


100 


1864, Jan. 


24 


114 


2 


94 


20 


128 


1 


150 


1 


150 


1 


110 


July 


25 


121 


1 


109 


22 


149 


1 


150 


1 


167 


1 


110 


1865, Jan. 


28 


118 


1 


97 


24 


140 


1 


150 


1 


167 


1 


110 


July 


34 


131 


2 


141 


25 


132 


1 


150 


1 


167 


1 


120 


1866, Jan. 


34 


191 


4 


132 


24 


186 


1 


163 


1 


157 


1 


120 


July 


31 


189 


1 


161 


22 


198 


1 


163 


1 


167 


1 


120 



40 Massachusetts 





OVERSEERS 


OVERSEERS 


OVERSEERS 


OVERSEERS 


SECOND 


THIRD 




CLOTH R'M 


DRESS.DEP. 


SPIN. DEP. 


WEAV.DEP. 


HANDS 


HANDS 


Sex 


M. 


M 


M. 


M 


M 


M 
















Init. wage 
per day... 


$1.42 


$1.83 


$2.50 


$2.25 


$1.485 


$1.265 




No. 


Rel. 

Wages 


No. 


Rel. 
Wages 


No. 


Rel. 
Wages 


No. 


Rel. 
Wages 


No. 


Rel. 

Wages 


No. 


Rel. 
Wages 


1860, Jan. 


1 


100 


1 


100 


1 


100 


2 


100 


6 


100 


5 


100 


July 


1 


100 


1 


100 


1 


100 


2 


100 


6 


100 


5 


100 


1861, Jan. 


1 


106 


1 


100 


1 


100 


2 


111 


7 


97 


5 


100 


July 


1 


106 


1 


100 


1 


100 


2 


111 


7 


97 


5 


100 


1862, Jan. 


1 


106 


1 


137 


1 


100 


2 


111 


6 


97 


4 


100 


July 


1 


106 


1 


137 


1 


100 


2 


111 


5 


97 


2 


96 


1863, Jan. 


1 


106 


1 


137 


1 


100 


1 


111 


6 


97 


2 


82 


July 


1 


106 


1 


137 






1 


111 


3 


96 


2 


82 


1864, Jan. 


1 


106 


1 


150 


i 


i20 


2 


98 


13 


109 


2 


112 


July 


1 


123 


1 


150 


1 


120 


2 


102 


13 


112 


1 


132 


1865, Jan. 


1 


123 


1 


164 


1 


110 


2 


102 


14 


114 


2 


122 


July 


1 


123 


1 


164 


1 


110 


o 


111 


14 


118 


2 


125 


1866, Jan. 


1 


123 


1 


164 


1 


120 


f> 


111 


15 


119 


5 


132 


July 


1 


123 


1 


164 


1 


120 


2 


111 


11 


121 


2 


128 



APPENDIX C 



485 



TABLE 1 Continued 

WAGE-SERIES FROM TABLE XII OF THE ALDRICH REPORT COTTON GOODS 

40 Massachusetts 





BAND 
BOYS 


CAEPENT'S 


CARD 
GRINDERS 


CARD 
STRIPPERS 


CLOTH-R'M 
HANDS 


DRAWING 
HANDS 


Sex 


M. 


M. 


M. 


M. 


M. 


M. 
















Init.wage 
per day.. 


$0.79 


$1.49 


$0.83 


$0.755 


$0.50 


$0.662 




No. 


Rel. 
Wages 


No. 


Rel. 
Wages 


No. 


Rel. 

Wages 


No. 


Rel. 
Wages 


No. 


Rel. 

Wages 


No. 


Rel. 
Wages 


1860, Jan. 


2 


100 


8 


100 


11 


100 


11 


100 


2 


100 


5 


100 


July 


4 


89 


8 


100 


11 


100 


11 


100 


2 


100 


4 


100 


1861, Jan. 


4 


93 


7 


104 


8 


105 


11 


99 


2 


108 


5 


95 


July 


1 


105 


7 


104 


8 


105 


11 


99 


2 


108 


5 


95 


1862, Jan. 


1 


127 


7 


105 


8 


105 


14 


99 


1 


116 


4 


79 


July 


1 


127 


9 


106 


2 


96 


4 


99 


1 


116 


2 


94 


1863, Jan. 




... 


9 


103 


1 


106 


3 


100 


1 


116 


. 9 


. . . 


July 






9 


107 










1 


116 






1864, Jan. 




... 


13 


128 


6 


isi 


9 


i<56 






2 


ioe 


July 






9 


139 


7 


178 


12 


175 




... 


3 


113 


1865, Jan. 


i 


63 


11 


128 


5 


179 


10 


180 




... 


3 


121 


July 


4 


111 


11 


140 


6 


189 


9 


17