Greenbacks were paper money advocated by President Andrew Jackson in the 1840s and eventually authorized by the Legal Tender Act of 1862. Greenbacks were issued directly by the US Government…subject to limitations established by the US Congress. The total value of Greenbacks in circulation was raised by subsequent currency acts on July 10, 1862 , March 3, 1863, and May 3, 1878.
Greenbacks were not backed by gold, or bank deposits, or government reserves and bore no interest. At the end of the Civil War, the Radical Republicans, led by Abraham Lincoln and his economic advisor Henry Charles Carey sought to make the Greenback System permanent. In March 1865 Carey published a series of letters to the Speaker of the House of Representatives entitled The Way to Outdo England Without Fighting Her in which he called for the two-pronged financial strategy for post-war reconstruction of raising the Bank Adequacy Ratio to 50% and issuing Public Credit in the form of Greenbacks. Lincoln was assassinated the following month and the Lincoln/Carey Plan abandoned. The American economist S.G.Fisher once commented that ‘the Greenbacks were the best currency that ever a Nation had.’