It was plain that public opinion was deeply interested in the question of the currency. The agitation begun in 1868 had not died out. It had been stimulated and intensified by the panic of 1873, which, on the one hand, had convinced a large part of the voters, and especially of the business men, that a return to a currency based on specie was needed, and on the other, had plunged a multitude of people into distress or bankruptcy, from which they sought relief in an inflation of the currency. Following that panic, in the first session of the Fortythird Congress, in which the Republicans still held the House by the heavy majority elected in 1872 and had a plurality of thirty-one in the Senate, there were strenuous efforts to inflate the legal-tender circulation. A bill fixing the maximum of United States notes at $400,000,000 passed both houses, was vetoed by President Grant (April 22, 1874), and failed to pass over the veto. Later what was known as the "compromise-inflation" act the first to which that ill-omened adjective was generally attached passed and became a law. It fixed the maximum of the United States notes at $382,000,000, and was in effect an act to legalize the action of the treasury in using, at the time of the panic, $26,000,000 of the previously retired notes.

When the Forty-third Congress met, in December, 1874, the elections of that year had, as I have noted, wrought havoc with the overwhelming preponderance of the Republican Party. The advocates of the return to specie payments saw the need of prompt and efficient action, and the pledge of 1869 was to be carried out before the control of Congress passed from the hands of the Republicans. A vigorous campaign was begun, and by January 14, 1875, the law for the resumption of specie payments1 was placed upon the statute book.

1 Following is the essential part of this law: "Sect. 3. That section 5177 of the Revised Statutes of the United States, limiting the aggregate amount of the circulating notes of national banking-associations, be and is hereby repealed; and each existing banking-association may increase its circulating notes in accordance with existing law without respect to said aggregate limit; and new bankingassociations may be organized in accordance with existing law without respect to said aggregate limit; and the provisions of law for the withdrawal and redistribution of national-bank currency among the several States and Territories are hereby repealed. And whenever and so often as circulating notes shall be issued to such

The plan of resumption provided in this bill was very clear. It removed the limit on national bank circulation; required the reduction of the volume of United States notes to $300,000,000, contingent on the issue of bank notes to the amount (in round numbers) of $100,000,000 and the redemption of United States notes on and after January 1, 1879, in coin on presentation. The passage of the law marked the extreme point of advance in the reëstablishment and application of the principles to which I have referred the payment of the public debt in the currency of the world and the recognition of the legal-tender notes as debt. During the next three years not only was gold the standard of the currency of the United States, but no other metal possessed the legal-tender quality. Under the provisions of the Resumption Act some $36,000,000 of the United States notes were retired, and their volume was reduced to $346,681,016, at which point it still rests.

No sooner, however, had this advanced position been reached, than the efforts of those whom, for lack of a better general term, I shall call the inflationists, were directed with renewed energy first to checking the advance and then to forcing a retreat. The Resumption Act awakened strong opposition, which was shared by probably the majority of active Democrats and by a considerable minority of Republicans. In the presibanking-association, so increasing its capital or circulating notes, or so newly organized as aforesaid, it shall be the duty of the Secretary of the Treasury to redeem the legal-tender United States notes in excess only of $300,000,000 to the amount of eighty per centum of the sum of national-bank notes so issued to any such banking-association as aforesaid, and to continue such redemption as such circulating notes are issued until there shall be outstanding the sum of $300,000,000 of such legal-tender United States notes and no more. And on and after the first day of January, A.D. 1879, the Secretary of the Treasury shall redeem, in coin, the United States legal-tender notes then outstanding on their presentation for redemption at the office of the Assistant Treasurer of the United States in the city of New York in sums of not less than $50. And to enable the Secretary of the Treasury to prepare and provide for the redemption in this act authorized or required, he is authorized to use any surplus revenues, from time to time, in the treasury not otherwise appropriated, and to issue, sell and dispose of, at not less than par, in coin, either of the descriptions of bonds of the United States described in the act of Congress approved July 14th, 1870, entitled 'An Act to authorize the refunding of the National Debt,' with like qualities, privileges and exemptions to the extent necessary to carry this act into full effect, and to use the proceeds thereof for the purposes aforesaid." 18 Stat. at Large, 296.

dential canvass of 1876, the Democratic convention "denounced" the resumption clause of the act of 1875 as "a hindrance to a speedy return to specie payments," and demanded its repeal. Several attempts to secure a repeal were made in the Forty-fourth Congress, which in great part were defeated by the firmness and parliamentary skill of Mr. Samuel J. Randall, the Democratic speaker of the House. A repealing bill finally passed the House, but failed in the Senate.

The

In the Forty-fifth Congress (March 4, 1877 to March 3, 1879) the Republicans in the House numbered 137, to 156 Democrats, while in the Senate they had 39 members to 36 Democrats, with one Independent. The president was Mr. Hayes, seated after a disputed election, on the decision of the Electoral Commission. It will be seen that parties were very evenly balanced. passions of the war certainly were not stilled, but the hold of the Republicans as the war party was hopelessly broken. Questions immediately connected with the war or reconstruction no longer engaged the exclusive attention of the public or of Congress. The sentiment on which the policy of the Democratic convention of 1868 was based had grown greatly. The leaders in each party either had in a great degree become animated by it or saw their advantage in appealing to it. They no longer confined their efforts to changing the policy of the government as to the legal-tender notes, though these were not neglected, but found a new field in advocating the use in the currency, "as money of final redemption," of silver, which, since 1873, had been slowly but steadily falling in market value.1 Almost immediately on the opening of Congress in 1877 (December 10), Mr. Stanley Matthews, senator from Ohio, a Republican and an intimate political friend of President Hayes, called up a resolution declaring that all the bonds of the United States issued under the Refunding Act of 1870 and the Resumption Act of 1875 should be

payable, principal and interest, at the option of the government of the United States, in silver dollars of the coinage of the United States, containing 4121⁄2 grains each of standard silver; and that to

1 The average price had declined from $1.29 per ounce to $1.15.

restore to its coinage such silver coins as a legal tender in payment of said bonds, principal and interest, is not in violation of the public faith nor in derogation of the rights of the public creditor. This resolution was adopted by a vote of 43 to 22. The Republicans gave 19 for to 15 against it; the Democrats 23 for to 7 against; and Senator David Davis, the Independent, also voted for the resolution. At this time the silver in the dollar described was worth in the market a little less than ninety-one cents.

In the same Congress the House of Representatives, by a very heavy vote (163 to 34), passed the bill introduced by Mr. Bland of Missouri for the free and unlimited coinage of full legal-tender standard silver dollars. This bill was amended in the Senate under the leadership of Mr. Allison, of Iowa, and finally, on the report of a conference committee, was passed by both houses. It was vetoed by President Hayes, Mr. John Sherman being the secretary of the treasury, and on February 28, 1878, was passed over the veto. The vote in the Senate was 47 to 21; in the House, it was 196 to 73. The vote by party was as follows :

The bill was entitled "An act to authorize the coinage of the standard silver dollar and to restore its legal-tender character." It provided that "there shall be coined at the several mints of the United States silver dollars of the weight of 412% grains troy of standard silver," which "shall be a legal tender at their nominal value for all debts and dues, public and private, except where otherwise expressly stipulated in the contract." It directed the purchase "from time to time" of "silver bullion at the market price thereof, not less than $2,000,000 worth per month, nor more than $4,000,000 worth per month," "to be coined monthly as fast as so purchased into such dollars."

provided further that, on the deposit of standard dollars, the treasury should issue certificates, "receivable for customs, taxes and all public dues," which "when so received may be reissued." And finally, it directed the president to invite the governments of the Latin Union and of other European nations to a "conference to adopt a common ratio between gold and silver for the purpose of establishing internationally the use of bimetallic money and securing fixity of relative value between those metals."

Three days later (May 31, 1878), the president signed an act declaring that "it shall not be lawful" for the treasury to cancel or retire any more of the United States legal-tender notes; and when any of said notes may be redeemed or be received into the treasury under any law from any source whatever and shall belong to the United States, they shall not be retired, canceled or destroyed, but they shall be reissued and paid out again and kept in circulation.

With the legislation of 1878 the currency system of the United States assumed the form which it retained for the next twelve years. The legal-tender notes became redeemable in coin on the 1st of January, 1879, and before that date advanced to par. The coinage of standard dollars was resumed, but was kept at the lowest point ($2,000,000 worth of bullion) per month. It is not within the scope of this article to trace the practice and policy of the treasury under this legislation. It is enough to say that each successive secretary sought by every means to prevent the accumulation of silver in the treasury. The fortunes of the two great political parties during this interval continued to fluctuate. The Democrats lost their majority in the House of Representatives in the elections of 1880 by a small margin; regained it, with decided increase, in 1882; elected their president by a close vote in 1884; and in the House retained a majority, which, however, steadily dwindled until it was lost in the elections of 1888. In the Senate the relation of the two parties changed in a curious way, owing to the long term and indirect election of senators. In the Fortyfifth Congress the Republicans had a plurality of three in the Senate; in the Forty-sixth the Democrats had a plurality of nine;