Ulysses S. Grant Establishes The Value Of The Greenback Currency
The Panic of 1873 hit the country hard during his presidency, and he never attempted decisive action to alleviate distress.
The first law that he signed, in March 1869, established the value of the greenback currency issued during the Civil War, pledging to redeem the bills in gold. In 1874, he vetoed a bill to increase the amount of a legal tender currency, which defused the currency crisis on Wall Street but did little to help the economy as a whole. The depression led to Democratic victories in the 1874 off-year elections, as that party took control of the House for the first time since 1856.
A United States Note, also known as a Legal Tender Note, is a type of United States paper money that was issued from 1862 to 1971. Having been current for over 100 years, they were issued for longer than any other form of United States paper money. They were known popularly as "greenbacks" in their day, a name inherited from the Demand Notes that they replaced in 1862. They were called United States Notes by the First Legal Tender Act, which authorized them as a form of fiat currency, but because their value derives from their legally mandated status as legal tender they bear the inscription "This Note is a Legal Tender" and are usually called Legal Tender Notes. They were originally issued directly into circulation by the Treasury to pay expenses incurred by the Union during the American Civil War. Over the next century, the legislation governing these notes was modified many times and numerous emissions were undertaken by the Treasury.
The Panic of 1873 was the start of the Long Depression, a severe nationwide economic depression in the United States that lasted until 1879. It was precipitated by the bankruptcy of the Philadelphia banking firm Jay Cooke & Company on September 18, 1873. It was one of a series of economic crises in the 19th and early 20th centuries.