What was the state of the economy during Grant's second term, and why was this
significant?
The economy experienced a mild panic, but Grant quickly set it back on track, which helped his
standing within the Republican party, guaranteed him the nomination in the upcoming election, and
made Reconstruction appear more likely to succeed.
A severe depression resulted from Grant's efforts to withdraw greenbacks, or paper money, from
circulation after the war, which intensified the debate over soft-money versus hard-money currency
and helped enable Democrats to overtake the Republicans in the congressional elections.
The northern and southern economies became exceedingly integrated as industrialization spread
throughout the South, and as a result, southern farmers began to take steps to bring about deflation
as a means of returning to their old way of life.
The economy flourished under Grant because he had the foresight to introduce greenbacks into
circulation for the first time, and as a result, politicians were more willing to consider and implement
his policies regarding protections for African Americans.
The economy stayed relatively similar to that of the Civil War because Grant refused to eliminate
war bonds out of fear that it would have detrimental effects on an already-fragile southern
infrastructure, and as a result, many southern politicians began to support him.
