Greenback Movement

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GREENBACK MOVEMENT

GREENBACK MOVEMENT. To meet the enormous demands of the Civil War, the federal government in 1863 began issuing large quantities (as much as from $300 to $400 million in circulation between 1862 and 1879) of "greenbacks," notes not redeemable for gold. At the close of the war, fiscal conservatives expected a return to the gold standard and a constriction in the monetary supply. However, the increased cash available was attractive, not as a wartime expediency but as a monetary policy, to a growing group of Greenbackers. Frequently westerners and southerners, they were alienated by the limited supply of specie-backed notes available through the eastern-dominated national banking system, and felt that the conservative policies of the system limited their ability to expand entrepreneurial activity, particularly in the newly settled West. Many Greenbackers sprang from the Jacksonian tradition of agrarian and antimonopolistic politics, and far from being the yokels and bumpkins that their political rivals depicted, they campaigned for an imaginative and dynamic new system of fiscal management in the United States.

As early as 1868, Greenbackers saw a political proposal from Ohio Democrat George Pendleton ("The Pendleton Plan"), which suggested that greenbacks be continued, tied to an incontrovertible bond scheme. The bonds proposed would widen the supply of cash, and because the amount of money could be expanded or contracted by the number of bonds sold, make the country's money supply respond to the demands of the population. Although this plan was not adopted, the bond plan remained a priority for Greenbackers until the return to the gold standard in 1879. Greenbackers were a disparate and organizationally dispersed group, which was both advantageous and a drawback for the Greenback Party, which emerged as a political entity by the early 1870s. Positively, the party could draw on the organizational resources of various groups, such as the Grange, for meeting space and financial support. Negatively, as a third party, it lacked the patronage and machinery required to compete with the Republicans and Democrats, especially as many supporters of greenbacks were often concerned with other issues—like Reconstruction in the southern states, women's rights, and labor problems—and divided by them as well. Some candidates, like Daniel Russell of North Carolina, ran for Congress on both the Greenback and Republican ticket, but others—caught between the two major parties—were successful at only the state level. (The party's candidates were particularly successful in Illinois, where they enjoyed tremendous agrarian support.)

During the 1870s, the debate over greenbacks remained a clash between the conservative "goldbugs," as Greenbackers derisively called their opponents, and the Greenbackers, who defined themselves as antimonopolist, entrepreneurial, democratic, and—with these values—representing the best of America. Their detractors accused them of being the least desirable of citizens: shiftless debtors who saw in easy money a way to quick riches. The debate officially ended when, with Republican organizations in the Midwest winning over voters and Greenbackers unable to push for a national policy, the gold standard was returned in 1879. Many followers of the movement, however, continued their political activities under the banner of the Populist Party.

BIBLIOGRAPHY

Ritter, Gretchen. Goldbugs and Greenbacks: The Antimonopoly Tradition and the Politics of Finance in America. Cambridge, U.K.: Cambridge University Press, 1997.

Unger, Irwin. The Greenback Era: A Social and Political History of American Finance, 1865–1879. Princeton, N.J.: Princeton University Press, 1964.

Margaret D.Sankey

Dictionary of American History