A New Economic View of American History by Jeremy Atack - Article Example

I get to learn the demerit of such a system in a situation whereby the conversion into real currency was tedious and procedural. Also, it encouraged the creation of counterfeits, and the majority of the local banks had issues.From the reading, the article that caught my attention is the one on greenbacks. It is interesting as it answers my question on the solution to the preceded discussion which is the issue of convertibility. It is an issue that led to the failure of the money market thus leading to the rise of questions about the abilities of the union government.

The concerned leaders were running out of options and had to establish a solution soon enough if the situation was to be saved. The proposed solution was the issue of treasury notes that were not profit-bearing. Despite receiving opposition from the banking lobby, Congress went ahead and executed the plan in 1862. It answers a major question about the solution established by the concerned authorities after a realization that methods such as raising tax could not be applied (Atack and Passell 496).

The article's imperativeness is further seen by clearly depicting the aspect of inflation. The pumping of large amounts of greenbacks to the economy caused inflation in the sense that the value of the currency dropped. It is clear that having a lot of money in circulation increases the purchasing power of the consumers which in turn causes an increase in the general price of goods and services.