Question

To help finance the Union war effort, the United States issued millions of dollars in __________ which could not be exchanged for __________ coins.

a) Bonds, foreign
b) Treasury notes, gold
c) Greenbacks, Confederate
d) Stamps, silver

Answer 1

The United States financed the Union war effort by issuing treasury notes known as greenbacks, which could not be exchanged for gold coins.

Step-by-step explanation:

To help finance the Union war effort during the Civil War, the United States issued millions of dollars in treasury notes, often referred to as greenbacks, which could not be exchanged for gold coins. This measure was a part of wartime financial policy that aimed to support the war costs without further draining the limited gold reserves. The Legal Tender Act, signed into law on February 25, 1862, permitted the government and the public to accept paper currency for almost all business transactions with the exception of interest on government bonds and customs duties. Subsequently, inflation was a significant concern as the war effort led to the printing of more money to sustain the economy during this period of conflict.