25,270
edits
Abraham Lincoln: Difference between revisions
m
no edit summary
PeterDuffy (talk | contribs) No edit summary |
PeterDuffy (talk | contribs) mNo edit summary |
||
| Line 11: | Line 11: | ||
Lincoln opposed the financial powers in other ways as well. At the beginning of the war, Lincoln tried to borrow money from national and international bankers to finance the Union Army. According to one source, they wanted to charge him 24 to 36 percent interest.<ref>''Appleton Cyclopedia'', 1861, p. 296.</ref> Rather than accept the bankers’ terms, he decided to print paper money—greenbacks—which became legal tender. Had Lincoln borrowed money at those usurious rates, the bankers would have essentially owned the United States government at the close of the war. | Lincoln opposed the financial powers in other ways as well. At the beginning of the war, Lincoln tried to borrow money from national and international bankers to finance the Union Army. According to one source, they wanted to charge him 24 to 36 percent interest.<ref>''Appleton Cyclopedia'', 1861, p. 296.</ref> Rather than accept the bankers’ terms, he decided to print paper money—greenbacks—which became legal tender. Had Lincoln borrowed money at those usurious rates, the bankers would have essentially owned the United States government at the close of the war. | ||
Next, the bankers proposed a national banking system which would allow them to issue bank notes backed by U.S. government bonds. These notes would be just short of legal tender since the law said that they could be used in payment for all debts except duties on imports. The National Bank Act which incorporated their plan would allow expansion of the money supply through a fractional reserve system: banks could lend out more money than they had on deposit.<ref> | Next, the bankers proposed a national banking system which would allow them to issue bank notes backed by U.S. government bonds. These notes would be just short of legal tender since the law said that they could be used in payment for all debts except duties on imports. The National Bank Act which incorporated their plan would allow expansion of the money supply through a fractional reserve system: banks could lend out more money than they had on deposit.<ref>Herman E. Krooss, ed., ''Documentary History of Banking and Currency in the United States'' (Edgemont, Pa.: Chelsea House Publishers, 1969), 2:1392–93.</ref> | ||
After heavy lobbying by bankers led by Jay and Henry Cooke, the act was passed in 1863 and it resulted in a surge of [[inflation]]. Furthermore, as economist Murray Rothbard writes, it also “paved the way for the Federal Reserve System by instituting a quasi-central banking type of monetary system.”<ref>Murray N. Rothbard, ''The Mystery of Banking'' (n.p.: Richardson & Snyder, 1983), p. 224.</ref> | After heavy lobbying by bankers led by Jay and Henry Cooke, the act was passed in 1863 and it resulted in a surge of [[inflation]]. Furthermore, as economist Murray Rothbard writes, it also “paved the way for the Federal Reserve System by instituting a quasi-central banking type of monetary system.”<ref>Murray N. Rothbard, ''The Mystery of Banking'' (n.p.: Richardson & Snyder, 1983), p. 224.</ref> | ||