Gold and silver had disappeared. Specie payments had ceased. The Government was about “broke.”
The daily expense account was approaching the two million dollar mark.
Spaulding, Salmon P. Chase, Thaddeus Stevens and others realized that unless the Government could float a paper currency the jig was up.
It was just about then that Lincoln expressed the opinion that some of the Wall Street bankers ought to be shot. They were manifesting every disposition to take advantage of the distress of the Government. They were showing that they meant to get rich off the war. And they accomplished their purpose.
They failed to obstruct the plan to issue paper money, but they succeeded in having Congress virtually say that while the Greenback was good enough for the soldier who was shedding his blood for his country, it was not good enough for the Bondholder who was sitting at ease in the financial Zion of Wall Street.
(5) My understanding is that the first paper money issued by the Confederate Government circulated at par when first issued.
The legal tender currency of any Government must depend, in any case, upon the strength, resources and credit of the Government.
Even the coin-currency sinks to the mere commodity-value of the coin, when the Government sinks.
Even now there is an artificial value in gold coin, put there by law.
No pile of a million dollars in gold coin would sell for a million dollars as metal.