It was a perfect trap. At the time, gold and silver coins (also known as specie), whose values derived from the value of their metallic contents rather than markings of denomination, were money. As lightweight substitutes, and for convenience of circulation, local banks issued paper notes which were redeemable at the bank in gold or silver coins. On December 28, 1861, despite the emergency caused by the Confederate rebellion, the Associated Banks of New York cut off specie transfers to the United States Government. President Lincoln would not be allowed to secure the resources necessary to build economic and military forces powerful enough to preserve the Union.
It was just another example of the usual Imperial game in action: governments are supposed to be subservient to the Imperial banking/monetary system. Even back then, the British Empire (including its Wall Street arm) was primarily a financial racket. President Lincoln and the American republic needed to learn their subservient place in the global British Imperial order.
But President Lincoln did not submit. Lincoln’s dream of a better United States would not permit submission. So, with access to money cut off, Lincoln and his team at the Treasury and in the Congress bypassed the Empire’s banks, and created a national paper currency, the “Greenbacks,” via the Legal Tender Act. Thereby, Lincoln broke the Imperial stranglehold over scarce specie, not only to finance building the winning Union military and its revolutionary new equipment, but simultaneously to invest in the future productive power of the nation. So, despite the losses of lives and property during the most destructive war in our history, Lincoln and his nationalist Congress created the National Banking system, set protective tariffs, began the transcontinental railroad, created the Department of Agriculture to spread scientific advances to farmers, and created the Land Grant college system, among other advances.
Over the following decades, Lincoln’s American model became the center of the international fight between those who would seek to uplift their people and develop strong national economies, against the British Empire’s desire to wipe out all memory of such methods and maintain a “steady-state” world based upon enforced backwardness. Even today, if you name any relatively developed nation, you can be sure that at some time in its history, its leadership applied measures which reflected in some way the ideas of Henry Carey and the Lincoln administration, in order to achieve some level of development—China, Russia, France, Germany and Japan are just the most outstanding examples.
Wasn’t Kennedy assasiniated over that?
That’s one theory, yes.