History
Late in 1861, the United States federal government suspended specie payments, seeking to raise revenue for the American Civil War effort without exhausting its reserves of gold and silver. Early in 1862, the United States issued legal-tender notes, called greenbacks. By war's end, a total of $431 million in greenbacks had been issued, and authorization had been given for another $50 million in small denominations, known as fractional currency or "shin plasters."
During Reconstruction, a new coalition of agrarian and labor interests found common cause in the promotion of inflationary monetary policies. At the end of 1874, a total of $382 million of these notes still circulated. The Resumption Act of January 14, 1875 provided for the replacement of the Civil War fractional currency by silver coins. It also reduced the greenback total to $300 million. The Secretary of the Treasury was directed to "redeem, in coin" legal-tender notes presented for redemption on and after 1 January 1879.
The Resumption Act was hotly debated during the 1880 presidential election, with most western politicians opposed to it. Specie payments resumed during the presidency of Rutherford B. Hayes. Aided by the return of prosperity, Secretary of the Treasury John Sherman accumulated gold to carry out the intent of the Resumption Act. However, when people found greenbacks to be on a par with gold, they lost their desire for redemption.
Read more about this topic: Specie Payment Resumption Act
Famous quotes containing the word history:
“The disadvantage of men not knowing the past is that they do not know the present. History is a hill or high point of vantage, from which alone men see the town in which they live or the age in which they are living.”
—Gilbert Keith Chesterton (1874–1936)
“The history of all Magazines shows plainly that those which have attained celebrity were indebted for it to articles similar in natureto Berenice—although, I grant you, far superior in style and execution. I say similar in nature. You ask me in what does this nature consist? In the ludicrous heightened into the grotesque: the fearful coloured into the horrible: the witty exaggerated into the burlesque: the singular wrought out into the strange and mystical.”
—Edgar Allan Poe (1809–1849)
“The history of the world is none other than the progress of the consciousness of freedom.”
—Georg Wilhelm Friedrich Hegel (1770–1831)