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← Greenbacks Americas First Fiat Currency
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Question
Why did the Union government issue greenbacks rather than continuing to finance the Civil War through bond sales and tax revenues?
1
European creditors refused to purchase US bonds because they were uncertain which side would win the war
2
The Confederacy had flooded Northern markets with counterfeit bonds, destroying confidence in US government debt
3
A banking crisis in December 1861 suspended specie payments, leaving the government unable to meet its obligations in gold
4
Congress constitutionally prohibited new bond issuances without a supermajority, which the wartime legislature could not achieve
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