The Logbook: That one time the U.S. banned gold futures for 2 weeks

In 1861, the first year of the American Civil War, the Union government began borrowing money in an effort to fund the war by issuing Demand Notes that were redeemable on demand for gold or silver coins. By the end of the year, however, economic conditions in Union states deteriorated to a point where the government could no longer afford to redeem Demand Notes.

The following year, facing an escalating war and incurring rising expenses, President Abraham Lincoln had to find a way to continue funding the Union’s war efforts. Lincoln’s treasury secretary Salmon P. Chase proposed issuing treasury notes that weren't redeemable in gold or silver. Following a series of debates, the Union enacted the Legal Tender Act of 1862, authorizing the government to issue, for the first time ever, fiat currency backed solely by the faith of the Union government. Greenbacks, as they are now popularly known, required creditors to accept them at face value and, by law, were tender for payment of all debts public and private.