Specie Payment Resumption Act
Encyclopedia
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.
American Civil War
The American Civil War was a civil war fought in the United States of America. In response to the election of Abraham Lincoln as President of the United States, 11 southern slave states declared their secession from the United States and formed the Confederate States of America ; the other 25...
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
Rutherford B. Hayes
Rutherford Birchard Hayes was the 19th President of the United States . As president, he oversaw the end of Reconstruction and the United States' entry into the Second Industrial Revolution...
. Aided by the return of prosperity, Secretary of the Treasury John Sherman
John Sherman (politician)
John Sherman, nicknamed "The Ohio Icicle" , was a U.S. Representative and U.S. Senator from Ohio during the Civil War and into the late nineteenth century. He served as both Secretary of the Treasury and Secretary of State and was the principal author of the Sherman Antitrust Act...
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.