Comment: Article about Jackson, Lincoln, and central banking

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Article about Jackson, Lincoln, and central banking

As soon as Lincoln took office the old Whig coalition finally controlled the entire government. It immediately tripled the average tariff rate, began subsidizing the building of a transcontinental railroad in California even though a desperate war was being waged, and on February 25, 1862, the Legal Tender Act empowered the Secretary of the Treasury to issue paper money ("greenbacks") that were not immediately redeemable in gold or silver. The National Currency Acts of 1863 and 1864 created a system of nationally chartered banks that could issue bank notes supplied to them by the new Comptroller of the Currency, and a 10 percent tax was placed on state bank notes to drive them out of business and establish a federal monetary monopoly. The government’s paper money flooded the banks so that by July 1864 greenback dollars were worth a mere 35 cents in gold.

Ever since the days of Andrew Jackson American presidents had opposed a fiat money system. The Jacksonian opposition to central banking was ended, literally, at gunpoint. Lincoln’s main role was to avoid doing what presidents had done for the previous three decades: veto central banking legislation. There was no chance of that since Lincoln, unlike Jackson and President John Tyler, was a career-long advocate of central banking and fiat money.

http://www.lewrockwell.com/2002/09/thomas-dilorenzo/financin...