June 07, 2019 Friday
Bedtime Story
The Destruction of American South
The farms of the South lay in a state of
decrepitude with 40% of the livestock (horses, mules, cattle) having been
depleted.
The war had lead to serious vandalization
of the transportation infrastructure because two-thirds of the South’s
transportation infrastructure that included rails, bridges and mechanical
repair shops were systematically destroyed by the Union army.
It was like, sorry my bad, not like but
actually a case of a nation intentionally and systematically destroying it’s
one half to bring it to its knees.
The damage to the transportation
infrastructure of the South was naturally accompanied with the devastation of
its economic infrastructure one of the main reason being the hyperinflation of
the Confederacy States dollar that was first issued just before the outbreak of
the American Civil War.
The Confederate dollar was nicknamed the
“Greyback” as opposed to the Greenback paper currency that was being issued by the
United States as the war started.
Before the American Civil War the only
currency in circulation was the gold and silver coins and they were deemed as
legal tender.
They were called by a weird-sounding name
of “specie”.
It does not mean that before the civil war
no paper currency existed.
They did exist in the form of banknotes
issued by banks that were in the hands of private businessmen.
But such banknotes were not legal tender;
meaning it would not be illegal if someone chose not to accept them or refused
to trade through them as a means of exchange.
Moreover these private banks-issued
currency notes were redeemable for specie only at those particular bank
offices.
The value of such paper currencies depended
largely on both the reputation and solvency of those particular banks.
In case the paper currency-issuing private
bank went bankrupt, which was not that uncommon, then the paper currency issued
by that bank would be worthless.
But when Abraham Lincoln assumed office and
he was facing war that was going out of his control he realized the importance
of such paper currency since the physical gold and silver coins would
necessarily come in limited supply.
Like everyone else, the new President
Lincoln and his Secretary of the Treasury Salmon Chase underestimated the
length, the time and the cost the war would entail as it continued to drag on.
The treasury of the United States
approached the private banks for loans to fund the war who demanded exceedingly
high interest (as high as 36%) that was unacceptable to the treasury and the
government.
Now the only way left for the government to
finance the war was to create money out of thin air and this they have been
doing very successfully ever since then.
For the first time ever in the history of
United States the government began to print paper currency.
Stay tuned to the voice of an
average story storytelling chimpanzee or login at http://panarrans.blogspot.com
Good night Mon Ami and my fellow cousin ape.
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Another great educator and a teacher that I am aware of is
Professor Subhashish Chattopadhyay in Bangalore, India.
While I narrate stories, Professor Subhashish an electronic
engineer and a former professor at BARC, does and teaches real mathematics and
physics.
He started the participation of Indian students at the
International Physics Olympiad.
Do visit him here:
All his books can be downloaded for free through this link:
For edutainment and English education of your children, I
recommend this large collection of Halloween Songs for Kids:
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