BANKING AFFAIRS

Detailed explanation-1: -A greenback is a colloquial term for U.S. paper dollars. The term originated during the mid-1860s, when these notes were printed in green ink. Congress had limited taxing authority, and used paper currency to help finance the civil war.

Detailed explanation-2: -Greenbacks, such as this $5 bill issued in March 1863, were a form of legal tender paper money created by the Union government to help finance the Civil War.

Detailed explanation-3: -The paper notes, called greenbacks, worked much better than expected. The government was able to pay its bills and, by increasing the money in circulation, the wheels of Northern commerce were greased. The greenbacks were legal tender, which meant that creditors had to accept them at face value.

Detailed explanation-4: -Greenbacks-named for their distinctive color-were the first national currency of the United States. The notes, though not redeemable for gold or silver, were lawful money backed by the credit of the federal government.

Detailed explanation-5: -During the Civil War, the federal government issued “greenback” paper money to keep a sufficient amount of currency in circulation. Because this type of money was not backed by gold or silver, inflation resulted and the greenbacks declined in value.