3,500,000

The History of United States Notes.--United States notes, or
"greenbacks," as they are commonly called, originated during the Civil
War. When the government was without specie (i.e., gold and silver
money) with which to purchase supplies for the army and pay other
expenses, it issued these notes. Each note says on its face, "The United
States will pay to bearer $----." Since no time was set for the
fulfillment of this promise, and since there was neither gold nor silver
in the Treasury with which to redeem the notes, people would naturally
hesitate to accept them in payment for goods or salaries. Consequently,
Congress made the notes "legal tender";[28] that is, the law compelled
creditors to receive this kind of money in payment for debts. The notes
passed into circulation, therefore, because people were forced to take
them; but their value depreciated greatly during the war. In 1879 the
government began the redemption of the notes in specie, and since that
time they have been worth their face value.

[Footnote 28: Our full legal-tender coins at present are the gold coins,
silver dollars, United States notes, and Treasury notes of 1890.
Subsidiary silver coins are legal tender in amounts not greater than
$10.00, and the minor coins are legal tender to the amount of
twenty-five cents.]

Gold and Silver Certificates.--It is much more convenient to handle
paper money than coins. When a person deposits gold or silver coin in
the Treasury, he may receive these certificates in exchange.
Consequently, the value of these certificates in circulation represents
an equal amount of gold coin and silver dollars stored in the United
States Treasury and ready for exchange for the certificates at any time.

National Bank Notes.--The fourth kind of paper money is issued by
National banks. These are organized under United States law and subject
to control by an officer of the Treasury Department. Like banks that are
organized under State law, National banks conduct the ordinary banking
operations. That is, they receive deposits, loan money, and buy and sell
drafts in the ordinary course of business. In addition, these banks are
given the right "to issue notes." In doing this, the bank first buys on
the market a certain amount of United States bonds; these it sends to
the Treasury at Washington and leaves there on deposit. The bank will
then receive from the Treasury "National bank notes" equal in