Money Printing on Trial in 1865 ‘Greenback’ Cartoon

Reading Time: 2 minutes
  • Money printing cartoon emerges from 1865 that shows greenbacks being created out of thin air
  • The new currency was made to fund the civil war and forced on citizens through the Legal Tender Act
  • Striking parallels with the fiat printing during the coronavirus situation

Money printing has become a central theme of the post-coronavirus economy, and the cryptocurrency crowd has certainly not missed out on lampooning the practice, as evidenced by the many and varied incarnations of the ‘money printer go brrrrr’ meme. It seems however that the money printing meme is not quite as original as we thought – an example from 1865 shows the same principle was worrying people 155 years ago, and it seems nothing much has changed.

Money Printing, Civil War Style

Twitter user Brad Mills posted a great example of the money printer go brrrrr meme from May 5, 1865, which depicts the printing of ‘greenbacks’, the unbacked fiat currency created in order to fund the civil war:

Greenbacks were the first notes not to be backed by gold or silver, being instead backed by the credibility of a United States that was only 88 years old at the time. The sales pitch to then president Abraham Lincoln was that, “If you make them full legal tender… they will have the full sanction of the government and be just as good as any money.”

Lincoln was not a fan of the idea but buckled to the pressure to print the notes, with the then Secretary of the Treasury Salmon P. Chase coordinating the efforts – hence why the machine in the cartoon is named after him.

“Greediest Fellows I Ever Saw”

It’s not just the nature of the cartoon that is prescient, but also some of the comments. The man operating the machine calls the cabal “the greediest fellows I ever saw” and complains that they are never satisfied with the amount of money coming out of the machine, while other individuals, Chase and one other, are demanding the printer keeps churning out money.

The greenback, printed by the hundreds of millions and whose acceptance was brought into law by the Legal Tender Act, declined more in value against gold with every new batch that was printed, with their inflation hitting 158% in July 1864. Its implementation was resisted by two states, who ruled the forcing of unsubstantiated money equivalents on citizens was unconstitutional.

The Treasury has clearly not learned its money printing lesson, with some $10 trillion expected to be created out of thin air to cope with the coronavirus downturn, much to the amusement of Bitcoin fans: