What is the state of this debate today? "Greenbackers," who advocate new issues of true United States notes, are few and belittled. But, since the economic collapse of 2008, they have steadily grown in numbers and can no longer be discounted as crackpots and communists. Ignited by brutal bank-fraud-induced foreclosures, unemployment and government austerities, the public's monetary reeducation makes headway, despite pervasive big bank propaganda in a brave new post-Citizens United world.
This article is just another drop in that progressive enlightenment bucket. It provocatively prompts you to ask yourself (1) whether you accept the logic of Lincoln's veto message; (2) whether, and with what force, like logic applies today; and, in any case, (3) why this is the first time you have heard of " Lincoln's Message to Congress in favor of a National Currency, but vetoing irredeemable bank notes."
For deeper guidance, see Lincoln's Populist Sovereignty: Public Finance Of, By, and For the People , 12 Chap. L. Rev. 561 2008-2009, by Professor Timothy Canova.
Federal Reserve notes have not been redeemable to individuals since the 1930s and have not been redeemable to other nations since 1971.
By "fractional banking," the Federal Reserve System, on average, obtains from the public much more than the face value of the money that the Treasury prints for it to issue.
Forgetting this, the mistaken consensus of today's monetary mentors is that Lincoln was driven to reluctantly and momentarily issue fiat greenbacks. For example, Larry Schweikart, on BookTV , recently stated that "Lincoln doesn't have a lot to do with greenbacks [because] his Secretary of the Treasury from Ohio, Samuel Chase, is the one who comes up with idea," and because Lincoln supported a 1863 national banking act, which did authorize national bank notes. In fact, Congress authorized fiat greenbacks as a national currency only because of Lincoln's personal veto; and Chase initially resisted the idea, which appears to have been first proposed by Col. Edmund Taylor . Moreover, the 1863 banking act did not prefer fiat bank notes. It required that the new national bank notes be redeemable in gold, by the issuing bank.