During the American Civil War, Abraham Lincoln’s administration understood that the federal government would need millions of dollars to finance the war, and as the war dragged on, the government’s deficit and debt grew. It did not help that the previous administration, led by James Buchanan, left over $20 million budget deficit at the end of Buchanan’s term in 1861 as a result of a recession in 1857 that persisted throughout Buchanan’s term. More gold and silver left the nation to finance the war effort, reducing the nation’s resources in the long run, so Congress had metallic payments suspended in 1861 to stop the outflow. Lincoln and his Secretary of the Treasury, Salmon P. Chase, needed more loans to finance the war, but bankers, as a result of shaken public confidence, charged 24 percent in interests for the loans. As a solution, the government issued “demand notes”, or federal notes requesting for a certain amount of money to be redeemed in gold or silver. In 1862, the government issued “greenbacks”, which were unbacked notes that relied on government credit to retain value by themselves without the backing of metal. By the end of the war, gold was worth 1.5 greenbacks. This, combined with the amount of debt the government already owed, threatened the war-torn economy as it prepared to pay off its war debts.
As a response to the growing concerns regarding the amount of paper money used and growing debt of the United States, Congress passed the Fourth Coinage Act in 1873. This law eliminated silver as the legal tender of the United States by abolishing the rights of the silver holders to have their silver bullions struck into U.S. Dollar coins. Proponents of free silver came to criticize the act as the “Crime of ‘73”, while proponents of gold standard argued that since most world powers of the time, including England (in 1816) and the German Empire (in 1871), used the gold standard, it would facilitate international commerce.
The Panic of 1873 followed shortly after the passage of the act, and another panic followed in 1893, which continued to affect businesses and investors as of the pamphlet's publish date. Banks continued to close as panicked investors and customers made runs on the bank, forcing them to run out of money, while businesses failed as a result of the loss of customers and shortage of money. The bank runs dried up the gold reserves in the federal treasury. As a result, then-president Grover Cleveland "was forced" to borrow $65 million from J.P. Morgan and the Rothschild family. However, there are those of us that believe he was not "forced" to do anything and it was simply a well-orchestrated series of events that forced an opportunity for the O.A.K. to take over the Federal reserve from that point forward.