Abstract: The Business of Making Money: Technology, Competition, and the Transformation of the Civil War Currency System

Franklin Noll

Abstract

In 1863, an act was passed establishing a national currency called the National Bank Note that was to be circulated via a new National Banking System.  A new Office of the Comptroller of the Currency would oversee this new currency backed by Government bonds, administered by a Government agency, issued by banks chartered by the Government, and declared a legal tender by the Government.  The goal was to create a truly national as well as a nationalized currency that would help finance the war effort and replace the Greenback after the end of the war, securing Government control of the currency system.

 

However, these goals were threatened by the realities of currency production.  Making money involved technological hurdles.  It was also an industry wherein the Government would have to compete with private businesses.  As it turned out, the strength of established private currency producers and Government production problems slowed the funding of the Union’s war effort and scuttled US Treasury plans to produce National Bank Notes.  With production privatized, a nationalized currency proved unachievable for decades after the Civil War.