The Currency Act of 1870 (41st Congress, Sess. 2, ch. 252, , enacted July 12, 1870) maintained greenbacks issued during the

American Civil War The American Civil War (April 12, 1861 – May 26, 1865; also known by other names) was a civil war in the United States. It was fought between the Union ("the North") and the Confederacy ("the South"), the latter formed by states th ...

at their existing level, about $356 million, neither contracting them nor issuing more. It replaced $45 million in "temporary loan certificates,"

paper Paper is a thin sheet material produced by mechanically or chemically processing cellulose fibres derived from wood, rags, grasses or other vegetable sources in water, draining the water through fine mesh leaving the fibre evenly distributed ...

bearing 3% interest but which circulated as currency, with the same amount of national bank notes issued by newly chartered banks. While achieving currency stabilization, the act answered midwestern pressure for more currency, and midwestern dissatisfaction with the concentration of national bank charters in the Northeast. The limit of the new bank note issue was small enough for northeastern Republicans to accept. Greenback Republicans could console themselves that the bill did not contemplate replacing greenbacks with national bank notes.

Legislative history

The bill was sponsored by Senator

John Sherman John Sherman (May 10, 1823October 22, 1900) was an American politician from Ohio throughout the Civil War and into the late nineteenth century. A member of the Republican Party, he served in both houses of the U.S. Congress. He also served as ...

Ohio Ohio () is a state in the Midwestern region of the United States. Of the fifty U.S. states, it is the 34th-largest by area, and with a population of nearly 11.8 million, is the seventh-most populous and tenth-most densely populated. The sta ...

. The act maintained greenbacks issued during the

Civil War A civil war or intrastate war is a war between organized groups within the same state (or country). The aim of one side may be to take control of the country or a region, to achieve independence for a region, or to change government policies ...

at their existing level, about $356 million, neither contracting them nor issuing more. It replaced $45 million in "temporary loan certificates," paper bearing 3% interest but which circulated as currency, with the same amount of national bank notes issued by newly chartered banks. While achieving currency stabilization, the act answered midwestern pressure for more currency, and midwestern disatisfaction with the concentration of national bank charters in the Northeast. The limit of the new bank note issue was small enough for northeastern Republicans to accept. Greenback Republicans could console themselves that the bill did not contemplate replacing greenbacks with national bank notes. {{Money and central banking within the contemporary United States (pre–1913) 1870 in law United States federal currency legislation