RESUMPTION ACT OF 1875

in U.S. history, culmination of the struggle between soft money forces, who advocated continued use of Civil War greenbacks, and their hard money opponents, who wished to redeem the paper money and resume a specie currency. By the end of the Civil War, more than $430 million in greenbacks were in circulation, made legal tender by congressional mandate. After the Supreme Court sanctioned the constitutionality of the greenbacks as legal tender, hard money advocates in Congress pushed for early resumption of specie payments and retirement of the paper money. On Jan. 14, 1875, Congress passed the Resumption Act, which called for the secretary of the Treasury to redeem legal-tender notes in specie beginning Jan. 1, 1879. The bill also called for reducing the greenbacks in circulation to $300 million and for replacing the fractional paper currency (shinplasters) with silver coins as rapidly as possible. Members of the new Greenback Party were bitterly opposed to the Resumption Act, and in 1878 they succeeded in raising the amount of paper money allowed in circulation. Specie resumption proceeded on schedule, however, and Treasury Secretary John Sherman accumulated enough gold to meet the expected demand. When the public realized that the paper money was good as gold, there was no rush to redeem, and greenbacks continued as the accepted currency.