1978: NOAA announces gender-neutral hurricane naming system
Federal News Network presents a daily update of important moments in the history of the U.S. government.
On Feb. 25, 1862, Congress passed the Legal Tender Act, authorizing the use of paper notes to pay the government’s bills. This ended the long-standing policy of using only gold or silver in transactions, and it allowed the government to finance the enormously costly Civil War long after its gold and silver reserves were depleted. Soon after the war began, several proposals involving the use of bonds were suggested. Finally, Congress began printing money, which the Confederacy had been doing since the beginning of the war. The Legal Tender Act allowed the government to print $150 million in paper money, called “greenbacks,” which were not backed by a similar amount of gold and silver. Many bankers, financial experts and legislators worried about the nation’s financial infrastructure, but the scheme worked better than expected — allowing the government to pay its bills and boost the Northern economy. In 1862, Congress also passed an income tax and steep excise taxes, both of which cooled the inflationary pressures created by the greenbacks.
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