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Posts Tagged ‘American Civil War’

United States NotesAccording to the December 2012 report by the U.S. Treasury Dept., out of the $450 million Greenbacks issued during the American Civil War, there is an estimated $239 million still outstanding.

In 2013 dollars, this would be at least $10 billion, according to this inflation calculator. While not significant today, it’s significant that such a huge percentage of the Greenbacks are still in circulation, given that they were ordered to be taken out of circulation in 1971, so there have been many that are being privately circulated or collected.

While there were $500 million in interest-bearing bonds that were issued as backing for them, the money supply grew by a total of $950 million, and the interest-free Greenbacks provided significant funding for the Civil War, when the total debt was $2.7 billion by 1865, and no interest was due, nor will ever be due, on the $450 million issued, and nothing is stopping the U.S. government from returning to directly-issued interest-free currency, other than lack of political will.

As for the validity of the American Civil War, I have publicly stated on my radio program and in a recent public presentation that the States had the right to secede from the Union, and that President Lincoln and the Union were in the wrong. The effectiveness of the Greenbacks, and of any interest-free currency, is something that can be independently judged.

For more on United States Notes, see my articles:

1) Gary North gives the false impression that interest-free United States Notes are no longer valid

2) Gary North deliberately omits the fact that United States Notes are interest-free

3) Michael Badnarik on issuing interest-free fiat money like Lincoln did: “That’d be a step in the right direction”

4) Don’t just blame Lincoln for a national legal tender law — Washington signed one, too

5) The Federal Reserve lies about United States Notes (Lincoln Greenbacks)

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Gary North speaking at the Mises Institute aft...Gary North, in attacking Ellen Brown for her support of government-issued credit, has repeatedly referred to her as a “Greenbacker.”

He states, without reference, that she is “a Greenbacker by confession.

It’s ironic that North got on his high horse and claimed to have discredited her book, Web of Debt, by pointing to errors in it, yet failed to do research into his own bogus claim that she is a Greenbacker.

The Greenback movement refers to those who supported the issuance of interest-free paper money at the federal level during the Civil War era and in the subsequent years of the late 19th century.

Had North done even the most basic amount of research — which he claims Brown failed to do regarding some of her claims — he would’ve come across her proposal (on page 455) for:

A bill to update the Constitutional provision that “Congress shall have the power to coin money” so that it reads, “Congress shall have the power to create the national currency in all its forms, including not only coins and paper dollars but the nation’s credit issued as commercial loans.”

Calling for a constitutional amendment to make Greenbacks constitutional means that Ellen Brown is not a Greenbacker, since she is saying that the Greenbacks that were issued at the time were unconstitutional, and would be unconstitutional if issued today, until an amendment is passed.

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Michael Badnarik

Michael Badnarik, 2004 Libertarian presidential candidate and “Stepfather of the Constitution,” was asked the following question by a caller on his October 2, 2008 radio show (at 48:44):

During the Civil War, Abraham Lincoln printed Greenbacks in order to finance the army of the North and to pay his soldiers and buy goods. Couldn’t we do the very same thing? Couldn’t we abolish the Federal Reserve and the fractional reserve banking system and go to constitutional money printed by the Treasury and controlled by Congress, which would, we would not have to pay interest on that debt, and we could pay our debts without the interest applied? Wouldn’t that solve the whole problem?

Badnarik responded:

That’d be a step in the right direction, I think.

Despite being a hard money advocate, notice how he didn’t take exception with United States Notes being unconstitutional as he has with blatantly unconstitutional acts like the USA PATRIOT Act, 2001, and the Military Commissions Act, 2006.

For where some people get the idea that interest-free fiat money is constitutional, see my articles: The “necessary and proper” clause: it’s not meaningless, and The Constitution doesn’t prohibit both the states and federal government from issuing fiat money.

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