Harper’s Weekly – December 20, 1873

The Civil War had been financed with $400 million of paper money (called greenbacks because of their green ink) in addition to gold and silver (known as specie). Beginning in 1865, Treasury Secretary Hugh McCulloch redeemed $44 million of greenbacks until Congress stopped him in 1868.

Westerners, in particular, wanted the recalled greenbacks — which were backed by government bonds and not by gold — reissued to help farmers and pay off railroad bonds with cheaper currency. Hard-money opponents, including Eastern bankers, wanted to pay off the national debt, contract the money supply and resume specie payments.

The Panic of 1873 brought the subject to a boil in Congress and the press. Nast took note in December with the first of his 122 cartoons on monetary policy. Since paper money was made from rags, he created the Rag Baby to represent inflation, sometimes referring to it as the Money-Bag in its 32 appearances over the next ten years.