United States dollar
Second Bank of the United States banknotes (1821-68)
-with Bank of the United States > Second Bank of the United States (1821-1868)
-in 1837 the American Presidents > Story Court bars states from publishing notes
-causes slowdown in the west
-as the wildcat banks there can no longer issue notes
-also does cause a blip of an economic panic
-but doesn't last long as Second Bank issues more notes
-ultimately this does cause there to be one consolidated national currency
-with opening of Liberty and Union War (1868-76) the collapse of the Second Bank results in these notes' values plummeting
-only maintain some value with belief that winning side might redeem notes
-comes to nought
-rushes upon rushes on the bank right before and during war to prevent
-a lot of these notes end up being used as firewood
War Treasury Notes
-during the Liberty and Union War (1868-76) the Constitutional Government seizes several Bank deposits and consolidates seized bullion
-this creates what's called the "War Treasury"
-government having barely any credit means it's unable to publish notes so must do something else
-in 1869 order to fund war uses this War Treasury to back the publishing of notes
-carry 11% interest and mature in five years
-so high to make people buy up
-and government thinks it'll win pretty soon so
Legal Tender Notes (Dollar)
-introduced in late 1869
-as increasingly clear War Treasury Notes do not suffice in funding the war
-nicknamed "mauveback" after it being in mauve
-Legal Tender Notes convertible with bonds printed by Bank of the United States > War Bank (1869-1879)
| Year | Inflation rate |
|---|---|
| 1870 | 313% |
| 1871 | 156% |
| 1872 | 46% |
| 1873 | 119% |
| 1874 | 638% |
| 1875 | 117% |
| 1876 | -18% |
| 1877 | 43% |
| 1878 | 21% |
| 1879 | 115% |
| 1880 | 14% |
| 1881 | 9% |
| 1882 | 4% |
| 1883 | 237% |
| 1884 | -4% |
-need to finance the war effort leads to aggressive inflation during Liberty and Union War (1868-76) years
-results in widespread financial chaos
-but it's a need to win
-rallies behind in 1872 election and inflation rates fall
-in 1874 some pretty extreme levels of inflation come with the need to reimburse War Treasury Notes
-this really damages the creed
-in 1876 with the end of the war there's a level of deflation
-results in economic decline
-the worker-friendly American Presidents > 1877-1879 John Wentworth (Free Democratic) † government issues greenback inflation bill in following Economic schools > Birmingham School
-however with broad-based tax cuts there's a sudden inflationary wave
-with assassination of Wentworth there's a sudden wave of inflation due to panic
-and some fears of governmental collapse
-1880 election and win of American Presidents > 1879-1887 Curran Emmet (Free Democratic) reduces this fear
-with outbreak of Antillean War (1880-4) there's a fairly high level of inflation
-to finance war
-but not as high as older War levels due to Emmet's management and development of reserves
-despite this length of war results in inflation due to loss of confidence
-in 1883 there's a pretty huge financial scandal showing embezzlement across the board
-including treasury secretary, president of bank, and railroads
-results in a very high level of inflation
-leads to the retirement and replacement currency
Legal Tender Notes & Certificates (Eagle)
-in 1884 Emmet uses opportunity to reform currency from position of strength
-replacement of dollar with eagle, 1 eagle = 10,000 dollars
-9.0 eagles, 1884 = 1 dollar, 1869
-additional unit of pullus, 100 pulli = 1 eagle
-these are done in the form of Legal Tender Certificates
-following theory of Economic schools > Concord School
-and these are done through the Bank
-every two weeks, people need to put stamp on their currency to keep it valid
-they need to pay amount on stamp equal to 1/50 of value
-after a year they've gotta replace it with another one
-obtained from either Bank or government office
-government and Bank engages in program of buyup of old Legal Tender Notes to destroy them
-and makes time limit after which they're all considered invalid
-Legal Tender Notes still exist but as a subsidiary currency
-Certificates being main one
-results in period of economic realignment
-but is eventually successful
-notably sees a lot of currency going into banks and people only taking it out to spend it
-this in turn results in banks lending a lot more money but forced to have lower interest rates