1879 – DATE TO REDEEM GREENBACKS FOR GOLD
Forces in opposition to public money passed the Resumption Act in 1875.
It established January 1, 1879 as the date anyone could redeem federal
Greenbacks for gold. Greenbacks were debt free money created by the
Lincoln administration in his effort to avoid borrowing money from banks
and having to pay interest. Why not simply create the money as
stipulated in the Constitution (Art 1, Sec 8 giving the government the
authority to coin money)? Bankers hoped most Greenbacks would be turned
in – so that they could once more exclusively control the issuance and
circulation of paper money – at enormous profit. Doomsayers predicted as
Greenbacks were redeemed for gold, the nation would go bankrupt.
Neither occurred. Only $135,000 in Greenbacks were exchanged for gold –
nationwide. Meanwhile, $400,000 gold was exchanged for Greenbacks! The
New York Daily Tribune called the day, “the grandest page in the history
of the United States.” (Jason Goodwin, Greenbacks)