Creating The Greenback

President Abraham Lincoln signed the “First Legal Tender Act” February 25^th 1862, authorizing the issue of United States Notes for Legal Tender.

A private meeting, held between President Abraham Lincoln and Colonel Edmund Dick Taylor on January 16^th 1862 led to the issuance of “greenbacks”.  Buffalo banker and Congressman Elbridge G Spaulding prepared a bill to speed its issue he introduced it to Congress in early February to permit the Unites States Treasury to issue $150 million in legal tender notes.  There was controversy in Congress over the bill being un-Constitutional, but Spaulding argued that the notes were 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.”  President Lincoln signed the First Legal Tender Act into law February 25^th 1862 authorizing the issue of paper currency.