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Greenbacks (United States notes) issued March 10, 1862

Greenbacks—named for their distinctive color—were the first national currency of the United States. The notes, though not redeemable for gold or silver, were lawful money backed by the credit of the federal government. The front of the five-dollar note depicted the Capitol’s Statue of Freedom and Alexander Hamilton, first Secretary of the Treasury.

Smithsonian Institution, National Museum of American History, Behring Center

Greenbacks (United States notes) issued March 10, 1862 Greenbacks (United States notes) issued March 10, 1862

From Gold to Greenbacks

The 37th Congress (1861–1863) faced a financial crisis in 1862, as spiraling costs of war rapidly depleted the Union’s reserves of gold and silver coin, the only legal tender of the United States. After intense debate, Congress authorized the issuance of paper U.S. Notes (popularly called “greenbacks”), declaring them lawful money for all payments except interest on public debt and import duties. The Legal Tender Act, intended as an emergency measure, dramatically extended federal power and changed the nation’s monetary standard.