1 Congressioual Globe, Jan. 12,1869, p. 303.

This scheme, in 1869, excited only laughter. Two months after it was explained, Congress solemnly pledged the faith of the United States to make provision at the earliest practicable period for the redemption of the legal tender notes in coin. The Pres-idential election of 1872 settled a long controversy about the payment of the bonds in coin, but nothing was really done about the payment of the notes until the explosion of 1873; and the depression which followed recalled the national legislature to its senses. The first impulse of Congress, then, as it had been in 1863, was toward expansion. The $44,000,000 of Unit States notes retired by Secretary McCul-loch had not been destroyed; the law fixing the limit of such notes at $400,000,000 had not been repealed; the $44,000,000 had been regarded in the treasury department as a reserve, and Secretary Richardson, without specific authority, had reissued $26,000,000 of this reserve. It was contended in debate that these notes were improperly issued; but the Senate finally passed a bill authorizing the issue of treasury notes to the amount of $400,000,000, and of national bank-notes to the amount of $410,000,000. The bill passed the Senate in April, 1874, by a vote of 29 to 24, and the House, 140 to 102. There was no discussion in the House; but General Butler found an opportunity to intimate that this addition of $100,000,000 to the paper currency was, in his estimation, only a beginning. "I think," he said, "we had better pawl, as the sailors say in my country- that is, put down the catch and hold what we have got; and then we can spit upon our hands and try another heave." But the catch did not hold. President Grant returned the bill to the Senate unsigned, with a message in which he characterized it as a departure from the true principles of finance, and a violation of national obligations to creditors, of Congressional promises, and of public pledges on the part of both political parties. Upon the question, Shall the bill pass, notwithstanding the objections of the President ? there were 34 yeas and 30 nays, and so the bill, not receiving a two-thirds vote, failed. Later in the session the issue of United States notes was fixed at $382,000,000, the amount then outstanding. Then a new Congress was elected, and at last, in 1875, the resumption act was passed, to take effect on the 1st of January, 1879.

This long delay had given time for the ripening of a plentiful crop of monetary fallacies. There were many men in business, in 1875, who had never known any other than a depreciated and fluctuating currency, and were unable to see why there should be any other. The times were hard, and they were inclined to think that the effort to resume specie payments had something to do with the difficulties under which they were laboring. In some strange way the act of 1875 was conceived to be retroactive, and to have caused the panic of 1873. Gradually their hostility was concentrated upon the banks, which always seemed to have plenty of money, and to be unwilling to part with it except on good security. The banks have money as the ship-chandlers have cordage, because that is a commodity in which they deal; but this did not, at first, appear. When it became plain, the situation was suddenly illuminated. The banks, being dealers in money, had contrived to bring about a resumption of specie payments in order to enhance the value of their goods at the expense of their neighbors. This conclusion flows from a confusion of ideas not altogether unnatural. The "value of money" may mean either its value in relation to gold, or its market value, the rate of interest. The banks have no special concern about the gold value of their currency; but they are directly affected by the rate of interest, and the return to specie payments has depressed the rate of interest. So far as their trade is concerned, therefore, the bankers should have been opposed to a restoration of specie payments; and many of them were.

Not all who shared this feeling against the banks were prepared to adopt the wild vagaries of which General Butler is the chief exponent. The Prohibition party, which nominated Green Clay Smith for President in 1876, adopted this resolution :

The national government only should enjoy the high prerogative of issuing paper-money ; and that should be subject to prompt redemption, on demand, in gold and silver, the only equal standards of value recognized by the civilized world.

The Greenback convention, which nominated Peter Cooper at Indianapolis, issued this declaration:

We believe that a United States note, issued directly by the government and convertible on demand into United states obligations bearing a rate of interest not exceeding one cent a day on each $100, and exchangeable for United States notes at par, will afford the best circulating medium ever devised. Such United States notes should be full legal tenders for all purposes except for the payment of such obligations as are, by existing contracts, especially made payable in coin ; and we hold that it is the duty of the government to provide such circulating medium, and insist, in the language of Thomas Jefferson, that" bank paper must be suppressed, and the circulation restored to the nation, to whom it belongs."

At the Toledo convention of the same party, in 1878, the name "National" was adopted, and the currency theory was set forth in these words:

It is the exclusive function of the general government to coin and create money, and regulate its value. All bank issues designed to circulate as money should be suppressed. The circulating medium, whether of metal or paper, shall be issued by the government, and made a full legal tender for all debts, duties, and taxes in the United States at its stamped value.

These extravagant theories found expression not only in the professions of political parties, but in legislative measures. In the Forty-fifth Congress two bills were offered in the Senate and fourteen in the House to repeal the resumption act, and the House, in November, 1877, passed a fifteenth bill for the same purpose, matured and reported by the committee on banking and currency. The premium on gold had then declined to 3 per cent., and yet the House voted, 133 to 120, to abandon the attempt to return to specie payments. The bill went to the Senate, and was pigeon-holed by the committee on finance.