Greenbackers advocated what policy position?
a. the exchange of hard money for paper currency.
b. the creation of the Federal Reserve system.
c. the free coinage of silver. d. the redemption of federal war bonds with paper currency not tied to gold reserves.
e. a switch to the use of green currency as opposed to the beige currency then in use.
The correct answer and explanation is:
The correct answer is d. the redemption of federal war bonds with paper currency not tied to gold reserves.
The Greenbackers were a political movement in the United States during and after the Civil War. Their central economic position was the promotion of the use of paper money, known as “greenbacks,” that was not backed by gold or silver. This stance emerged as a response to the economic conditions of the time, particularly the need for more money to fund the war effort.
During the Civil War, the U.S. government issued greenbacks, which were paper currency, to help finance the war without depleting the nation’s gold and silver reserves. The Greenbackers supported the continued issuance of this paper currency after the war. They wanted to keep it in circulation, advocating for the redemption of federal war bonds using greenbacks. This was controversial because it was not tied to any physical commodity, unlike gold or silver, which had traditionally been used as the basis for money.
At the heart of the Greenbackers’ policy was their belief in inflationary policies. They argued that more paper money would help ease the burdens of debt and stimulate economic activity. Greenbackers opposed the deflationary policies that sought to return to the gold standard and reduce the money supply. They feared that this would exacerbate the financial struggles of farmers and working-class citizens who were in debt.
The movement gained political traction during the 1870s, particularly among farmers and debtors who were struggling with the economic downturn following the war. Despite their efforts, the Greenback movement was eventually sidelined, and the U.S. returned to a gold-backed currency with the Resumption Act of 1875, which provided for the redemption of greenbacks in gold.
The Greenbackers’ advocacy for paper currency that was not tied to gold reserves had a significant influence on the economic debates of the time, laying the groundwork for future discussions about the role of money in the economy.