Note greenbacks were first authorized by the Legal Tender Act of 1862 to pay for the American Civil War. They were issued directly by the U.S.
"In 1861 our first Greenbacks were printed by the New York bank note companies, and the Treasurer and Register signed them with their own proper hands. But the infant army, that financial Oliver Twist, was always clamoring for 'More.
Instead, legal tender notes ("Greenbacks") were issued. Although the government thus contrived to pay its gold obligations in paper, gold dollars continued to circulate at a premium in the private economy.
It was replaced by greenbacks or
paper currency. Even the beloved Morgan Dollar was forced on the American
public as a means to subsidize the Silver Mining moguls of the early to
mid-1870s.
They were colloquially called "Greenbacks" due to their mono-green coloring on the note backs and "Demand Notes" since the first issue notes were redeemable for specie (gold and silver coins) on demand.
These bills were known as greenbacks for their color and started a tradition of the United States printing the back of its money in green.
1862 US Legal Tender Act and the issue of Greenbacks
The United States Treasury starts issuing notes that are not convertible into silver or gold but are legal tender for all purposes except payment of customs duties and interest on government ...
This currency was not convertible into gold coins; however, greenbacks could be used in financial markets to purchase gold coins at a price that fluctuated in response to the Union's successes (or lack of them) in the war.
greenbacks. And the supposedly pure silver in the coin - the same miraculously recovered silver - was hair-thin and worth about 1.4 cents. State Attorney General Eliot Spitzer's office sued, and a judge fined the company $370,000.
When specie payments resumed in 1878, the half eagles were a convenient coin to redeem the large number of greenbacks still in circulation. By 1880 huge quantities were being made.
Greenbacks, any amount in any denomination of Federal Reserve Note (from the green ink used on the back)
Dead presidents, any amount in any denomination of Federal Reserve Note (from the portrait of a U.S. president on most denominations) ...
Soon the gold eagle was worth 20 percent or more over face value in Federal "greenbacks." As the war progressed-with casualty rates of more than 80 percent and the decimation of entire regiments-the nation as a whole experienced a spiritual revival.
People tended to hoard their coins and to spend their depreciated "Greenbacks," as the U.S. paper money issued to pay for the war were called because of their difficult to counterfeit green reverses.
Because of its convenient size and denomination, the $10 Liberty was instantly popular and became one of the most circulated coins in U.S. history. They were hoarded during the Civil War, when it took $25 in paper "greenbacks" to buy just one $10 ...
In part, the low output resulted from the fact that while specie payments remained suspended, little bullion reached the Mint, as silver was still more valuable than the questionable "greenbacks" the North issued to finance the war.
By 1863 hard money was a real rarity. In addition to greenbacks, private script and notes of dubious origin circulated. These were derisively called "shinplaster" - better to line your boots with them then to take them as currency! ...
 See also: Gold, Silver, Coin, Mint, Coinage
  
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