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Quote of the Day
“The privilege of creating and issuing money is not only the supreme prerogative of Government, but it is the Government’s greatest creative opportunity.”
-President Abraham Lincoln
February 25th – This Day in Stock Market History
February 25th, 1862 – Pres. Abraham Lincoln signs the Legal Tender Act, allowing the U.S. government to print paper money. (Previously, money had been printed only by local banks.)
The paper money would be known as the greenback, and would be used to finance the civil war.
Excess printing to fund the war would raise inflation to 25% in 1863 and 1864.
And although during the depths of the civil war the greenback’s value would fall 50%+, as victory for the union became more certain in later 1864, the greenback’s value would sharply rise.
By 1865, its value would rise back to be on par with gold backed currency notes.
February 25th, 1913 – The 16th amendment to the constitution is ratified, allowing for an income tax in the United States. The Revenue act of 1913, the bill that actually established the income tax, would be enacted shortly thereafter.
The amendment reads:
“The Congress shall have power to lay and collect taxes on incomes, from whatever source derived, without apportionment among the several States, and without regard to any census or enumeration.”
Best February 25th in Dow Jones Industrial Average History
1970 – Up 1.84%, 13.86 points.
Worst February 25th in Dow Jones Industrial Average History
1933 – Down 5.40%, 2.91 points.
Read of the Day
Greenbacks – Museum of American History
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