Greenbacks

Greenbacks is the common name for United States paper currency issued by the federal government during the Civil War and the early Reconstruction era. The name originates from the green ink used on the back of the notes and their distinctive appearance. The notes were created after the Legal Tender Act of 1862, which authorized the Treasury to issue currency to fund the war. They were fiat money, not backed by gold or silver, and were made legal tender for most debts, a departure from the prior gold or silver standard.

The early issues included demand notes and later United States Notes, commonly known as greenbacks, issued in several denominations. They circulated alongside coins and were intended to finance the government’s war effort. Because they were not fully redeemable in specie, their value fluctuated relative to gold and other currencies, fueling debates about inflation and fiscal policy.

Beginning in the late 1870s, the government moved to restore gold convertibility under the Resumption Act, with specie payments resumed in 1879. Even as gold payments were restored, greenbacks continued to circulate and were gradually supplanted by other forms of currency, such as National Bank notes and, later, Federal Reserve notes, which became the standard in the 20th century.

Today, the term "greenbacks" is primarily used in historical contexts to refer to Civil War–era U.S. paper money and, more broadly, to early fiat currency in American monetary history. It reflects a turning point in how money is issued and controlled by the government.