The Greenback Party was founded in 1874 in Indianapolis, Indiana. Following the panic of 1873, an economic downturn hit the nation's agricultural sector: farm prices dropped but growers' costs (including rail freight rates) remained stationary or rose. The amount of money in circulation decreased and interest rates increased. Farm families were caught in the middle— those unable to pay their mortgages faced bank fore-closure. Rural America was in crisis. The greenback forces, mostly western and southern farmers, reasoned that putting more money into circulation would have an inflationary effect: Farm prices would rise thereby putting more cash in farmers' pockets and allowing them to pay off their debts.
Originally called the Independent National Party, the Greenbackers advocated the government issue of more greenbacks (the paper currency printed to fund the American Civil War 1861–65). When the party assembled its first convention in 1876, it nominated American inventor and industrialist Peter Cooper (1791–1883) as its presidential candidate. Receiving only 81,837 votes, Cooper's run for office was a failure. But in the midterm elections of 1878 the party united with workers to form the Greenback-Labor Party. Capturing more than 1 million votes, the independent political party placed 14 members in Congress. For the presidential election of 1880, the party nominated Congressional leader James B. Weaver (1833–1912) in order to broaden their political platform to support women's suffrage, a graduated income tax, and the eight-hour work day (then a popular initiative among the nation's laborers). The Greenbackers received few votes and lost seats in Congress, in part because the economy had rebounded.
The Greenback-Labor Party dissolved following the 1884 election. Some of its members joined the People's (Populist) Party. But the nation's monetary crisis was far from over. The greenback forces, which consisted largely of debtors, were later replaced by the Free Silver supporters who advocated government coinage of silver to expand the nation's money supply and produce inflationary effects. Until the mid-1890s the Free Silverites struggled against gold standard forces, (mostly New England creditors who favored a limited money supply).
See also: Bland-Allison Act, Free Silver, Gold Resumption Act, Gold Standard Act, Greenbacks
green·back / ˈgrēnˌbak/ • n. 1. inf. a dollar bill; a dollar: the pot she purchased with our last greenback. 2. inf. an animal with a green back, esp. a race of the cutthroat trout found only in Colorado.