“My dear Colonel Dick. I have long determined to make public the origin of the greenback, and tell the world it is Dick Taylor’s creation. You have always been friendly to me, and when troublous times fell upon us, and on my shoulders, though broad and willing, were weak, and myself surrounded by such circumstances and with such people, that I knew not whom to trust. I then said to my extremity, “I will send for Colonel Taylor, for he will know what to do.”
You came, and I said to you, “What can we do?”
Said you: “Why issue treasury notes bearing no interest, printed on the best banking paper. Issue enough to pay off the army expenses and declare it legal tender.” – Abraham Lincoln.
Thus was born, the “Rag Baby,” a commonly used name for the greenback dollar, with which the North’s side of the War Between the States was fought. The rag content of the paper on which they were printed, was so high, that the term “Rag Baby” was coined. This paper dollar’s paper was made from rags, not wood chips or sawdust. A series of Frank Bellew cartoons in northern newspapers, showed the treasury giving birth to the rag baby, with a money doctor giving breath and life to it, and saying, ”Bless its dear little heart, it’s as good as gold.” Other cartoons, began to say that it was growing so fast, that it was un-controllable, and another, showing that the money doctor was being strangled to death by a rag baby. As months passed, another cartoon showed a wheelbarrow full of rag babies trying to buy three cents worth of paregoric.
The South and North, both printed their way through that war, just as America did in WW I, WW II, Korea, Vietnam, Iraq, and currently as needs arise, which is all the time, because politicians can find no other method of buying their public offices, which they so dearly love. The order is then given to the un-constitutional Federal Reserve, which orders them to be printed and inculcated into the money supply. Obviously, the prices of everything, went up, and still go up, although in both the North and South, it happened pretty quickly. In the South, the Confederate dollar went from zero in 1861, to over four billion in 1865, making it worthless. The North’s rag babies went the same way.
Lincoln’s Secretary of the Treasury, was Salmon Portland Chase, who disliked paper money, but decided to allow it anyway, since “There was a severe shortage of coin.” Chase founded the Chase National Bank, over which Nelson Rockefeller presided over for a number of years. A ‘shortage of coin,’ meant that there was shortage of gold and silver, from which coins were made, and which then backed the dollar. It worked for a while, but as Chase wrote to Lincoln, “The sales which have been made yesterday and today seem to have reduced the price (value of rag babies), but it is only temporary unless most decisive measures for reducing the amount in circulation, and arresting the rapid increase debt be reduced.” It never happened on either side.
Of course, gold and silver have always been real money throughout history, and when un-backed paper money proliferates, as it always has in all governments in history, and always will, all prices go up, and this includes the prices of gold and silver. 48 years ago, when I began dealing in gold and silver, I was selling one ounce gold coins for $250, and was buying gas for fifty-nine cents a gallon.
‘Those who will not learn from history, are doomed to repeat it.’ Maybe this repetition explains why maybe 10% or so of Americans still save in paper dollars or items denominated in them. We’re trying to make that 15%. Not by advertising, but by our Better Business Bureau A+ rating we have had for over 40 years, plus our incredible ‘word of mouth,’ which seems to be awfully good. Thanks!
-Don Stott- don@coloradogold.com 970-249-4646