What do you do if you’re the U.S. government and you’re short on (don’t have enough) money? You just print it, of course.
During the U.S. Civil War (1861 to 1865), the federal (national) government was nearly broke (without any money). Before 1861, the U.S. did not have paper money as we know it today. Instead, people used government coins (metal money) or banknotes, which were pieces of paper issued by (produced by) banks as a promise to pay the person holding the banknote in “real” money – metal coins.
Historically, in most places government-issued paper money had always been backed by, or represented the value of, some amount of precious (valuable) metal, such as silver or gold. But since the government needed money to pay for things to fight the war, President Abraham Lincoln decided simply to print paper money even though the government did not have metal money to back it up. The paper money was instead backed by the trust one had in the U.S. government.
Not surprisingly, the value of this new paper money depended on just how much people trusted the U.S. government. When the war was going badly (not well) for Lincoln and the North, the value of the money declined (went down). When the North was winning, people trusted the government more and the value of these paper bills (pieces of paper money) increased.
The mastermind (person with the smart or clever plan) behind the printing of paper currency (money of a country) was Salmon P. Chase, then Secretary of the Treasury, the part of the federal government responsible for the country’s money. Chase was also a very ambitious (wanting very much to succeed) politician. To give himself more attention, Chase put his own portrait (image of a person’s face and shoulders) on the United States’ first dollar bill (see photo), called “greenbacks.”
Chase’s greenbacks helped the government avoid financial ruin (complete destruction), but they had a major problem. Because they were produced quickly and weren’t well thought out (planned), it was easy to counterfeit (copy; produce fake versions). By the end of the Civil War in 1865, one in every three bills was fake (not real). At some points during the war, a dollar bill was only worth 34 cents due in part to counterfeiting (100 cents = 1 dollar), although the lack of a gold or silver standard (backing) contributed to this as well.
President Lincoln understood this problem. On April 14, 1865, he created the Secret Service to purge (eliminate completely; get rid of totally) the country of counterfeit bills. Ironically, it was later that same day that Lincoln was shot. The two events were not connected, however.
Today, the Secret Service is mainly known for protecting the president of the United States. But at the time President Lincoln created the Secret Service, it was all about money. It was only 36 years later that the Secret Service was assigned (given the job) to protect the president. By then, there had been two more presidential assassinations: President James Garfield in 1881 and President William McKinley in 1901.
Back to counterfeit money: The Secret Service knew it had an important job to do. If they didn’t stop counterfeiters, the country was in danger of hyper-inflation, which is when prices go up very quickly and people can buy less and less with the same amount of money. The Secret Service used a staff (group of workers) of 10 people, some of whom were reformed (no longer a criminal) counterfeiters themselves, to clean up (to remove the bad or fake) the United States’ currency. By 1869, the Secret Service had arrested over 200 counterfeiters and opened 11 offices across the country.
How much of the United States’ currency today is counterfeit? Only one bill in 10,000 – or at least, that’s what the U.S. government says, if you trust them.
~ Jeff
Dear Jeff, three? sure? I think it has been four.
What about John F Kennedy?
It was assassinated or not, may be I had a dream as Kennedy said?
Dear Jeff, sorry by telling you about so big mistake but it is clear, I was in the bus here in Madrid first
time I listened Kennedy has been assassinated and no one could belived it.
It was like a shock here in Spain too.
*******
Interesting subject what you tell us about paper money so much interesting, I was working in a bank
on my first life, that I have been reading the wikipedia and it said that John Law (economist) was
the man who invented it, the paper money, on the year 1716 more or less in France, with the king Luis XV, despite
this John Law was Scotish.
By the way Spain was one of the first countries with more gold reserves to give value to its paper money, but in the Civil
War a great amount of Gold was sent to Mocow by the Republican Govement, in order to not be taken by Fanco, these gold never has been given back to Spain.
Just a Pity.
Sorry Jeff, by being so incisive. emiliano
I read the blog always but I don’t like writing. Thank to you jeff and lucie. Even I don’t write, I like it. Please keep going.
Printing my monwy? Never, no way! I wouldn’t like to spend time in jail. My freedom is valuable to me.
From Brazil
Me
Emiliano–I think there is some confusion here. Jeff wrote: “By then, there had been two more presidential assassinations: President James Garfield in 1881 and President William McKinley in 1901.” The “by then” is the key here. He meant that between the time that the Secret Service was created in 1865 and 36 years later when the Secret Service was assigned to protect the President of the United States, two presidents had been assassinated. In other words, Jeff was only talk about the period between 1865 and 1901. You’re right, of course, that President John F. Kennedy was assassinated in 1963 and a total of four presidents have been shot while “in office” (in the job as President). As always, thanks for your comments and I hope that helps to clear it up.–Lucy
Hi,
Thank you dear Lucy for clarifying this confusion. This is one of the reasons for that I continue to follow your podcast
as I learn, find out a lot of new things to me.
Best wishes,
Tania
Hi,
I like the Portrait of Gertrude Stein by Picasso, English Cafe 567.
In her book on Picasso, she wrote: “I was and I still am satisfied with my portrait , for me, it is I, and it is the only reproduction of me which is always I, for me.”
I like her firm conclusion, “which is always I, for me.”
I don’t care about what the others think about it. It is just my portrait , for me.
Hi,
Interesting and her ” symbolistic” style of writing poems.
I’d like to share with you one of her poem. It is complete new to me, a novelty. May I?
If I Told Him
A Completed Portrait of Picasso (Stein’s Picasso Poem)
If I told him would
he like it. Would
he like it if I told him.
………………………..
Now
Not now.
And now.
Now.
……………………………
Exactly as they do.
First exactly.
Exactly as they do too.
First exactly.
And first exactly.
Exactly as they do.
And first exactly and exactly.
And do they do.
At first exactly and first exactly and do they do.
The first exactly.
At first exactly
First as exactly
At first as exactly.
………………………
He he he he and he
and he and and he
and he and he
and and as and
as he and as he and
he………………….. ”
Now and now I can understand the remark of our national poet: It is easy to write lyrics when you have nothing to say.
Thank you, dear Jeff.
All the best for you,
Tania
Hi,
I have found the Stein quotes mentioned by you.
“Rose is a rose is a rose is a rose.”
“There is no there , there.”
But I have found and other as interesting as yours.
“What is the answer?
In that case , what is the question?”
“We are always the same age inside.” Maybe we have always a child soul inside without to know. We have to discover it.
“It is awufully important to know what is and what is not your business.” I like it very much.
“Let me listen to me and not to them.” A strong woman that can take her own decisions .
Hi,
It is autumn in my country. A rainy night…
Good night.
Hey Jeff
How is it going ?
I must say
I don’t like the ratio one in 10000
Thanks for the history lesson
One question though
Back then how they carry say 100k worth of coin
Man
Must have been too much work
🙂
Pete
A ESL pod premium member
Thank you so much cy, I am really a donkey not understanding first time I read the Jeff´s post what is clear today and even more clear with you good explanation.
In Spanish it could be translated as “por entonces” o “hasta ese momento” what evidently it is too clear reading again “and with good attention not so fast as I use to do” what my dear Jeff, the one, had written.
Sorry Jeff, your friend is a donkey and readd too fast.
Thank you Lucy, it has been a pleasure to me your direct note to this shamed pupil, his first time correcting and doing it
badly.
Ja,ja, incredible I am looking a place to hide me.
After saying all this I do think it is some how difficult (for us) the use of “by them” at the beginning of a sentence followed by a comma, reading the sentence slowly it is clear of course but being Jeff an incredible cultured person and a perfect English teacher he has exhibited how well he writes.
Excellent lesson Jeff and Lucy, you caught me and it is not easy after reading so much English.
sorry, sorry, sorry, my mind is empty.
Thanks again Lucy, emilianoLu
Well, read too fast and writes too fast as you may see reading my note.
This little story reminds me that “Never is enough” it is always necessary to learn
about everything as much as possible meanwhile there is life.
Proud emiliano thoughts he has read a lot of English books and notes, not my
friend be more humble it is not enough, you need more.
an ashamed one.
this is my first to read the blog and write something,i am a chinese who want to improve my english and know more about the world. this massage is interesting,pleaes continue to write more .
Hi All,
“A bit of fragrance clings to the handthat gives you flowers”, Chinese proverb.
Saw this proverb in Toronto Airport’s Relay Travel Bookshop which sells a lot of sweets and chocolates.
Sorry have to switch off phone soon, will write again when I have arrived back to UK.
Please take care everyone!
lili:)
wen and lili you are welcome home.
It´s true wen this could be home if you want to learn a good
English, in fact the best site by all means.
lili knows it very well but she use to be very busy so it´s
now and then when we have the honor of having her among
us.