July 1, 1861, and August 31, 1865, when our national debt was greatest,
$1,109,000,000 worth of bonds had been sold to the people and the money
used for war purposes.

%469. United States Notes.%--The United States notes were of two
kinds: those which bore interest, and those which did not. Those bearing
interest passed under various names, and by 1866 amounted to
$577,000,000.

United States notes bearing no interest were the "old demand notes," the
"greenbacks," the "fractional currency," and the "national bank notes."

The greenbacks (a name given them from the green color of their backs)
were authorized early in 1862, were in denominations from $1 up, bore no
interest, were legal tender in payment of all debts, public and private,
except duties on imports and interest on the public debt. In time
$450,000,000 were authorized to be issued, and in 1864, $449,000,000
were in circulation.

%470. Fractional Currency.%--The issue of the demand notes in 1861,
and the fact, apparent to every one, that Congress must keep on issuing
paper money, led the state banks to suspend specie payment in December,
1861. As a consequence, the 3, 5, 10, 25, and 50 cent silver pieces (and
of course all the gold) disappeared from circulation. This left the
people without small change, and for a time they were forced to pay
their car fare and buy their newspapers and make change with postage
stamps and "token" pieces of brass and copper, which passed from hand to
hand as cents. Indeed, one act of Congress, in July, 1862, made it
lawful to receive postage stamps (in sums under $5) in payment of
government dues. But in March, 1863, another step was taken, and an
issue of $50,000,000 in paper fractional currency was authorized.

%471. The National Banking System.%--Yet another financial measure to
aid the government was the creation of national banks. In 1863 Congress
established the office of "Comptroller of the Currency," and authorized
him to permit the establishment of banking associations. Each must
consist of not less than five persons, must have a certain capital, and
must deposit with the Treasury Department at Washington government bonds
equal to at least one third of its capital. The Comptroller was then to
issue to each association bank notes not exceeding in value ninety per
cent of the face value of the bonds. It was supposed that the state
banks, which then issued $150,000,000 in 7000 kinds of bank notes, would
take advantag