retaining distinctly the feeling that the issue of paper was but a temporary measure, forbade any further issues. Secretary McCulloch, immediately on the close of the war, began to contract, and, by a resolution of the lower branch in Congress (December 18, 1865), a cordial concurrence in the measures for contraction was manifested. Of course, the return from the path of inflated credit and high prices was painful, and Congress began to feel the pressure of its constituents. Had they not yielded, much of the severity of the crisis of 1873 might have been avoided; but (April 12, 1866) they forbade any greater contraction than $4,000,000 a month. Here was a lack of courage not foreseen by Secretary Chase. This was again shown (February 4, 1868) by a law which absolutely forbade the Secretary to further reduce the currency, which now stood [pg 360] at $356,000,000. This marks an important change in the attitude of the Government, as compared with 1862. After the panic of 1873, the paper evil produced its usual effect in the cry for more money, and, as in the Province of Massachusetts in 1712, parties divided on the question of inflation or contraction. A bill to expand the Government issues to $400,000,000 (and the national-bank notes also to $400,000,000) actually passed both Houses of Congress, and we were fortunately saved from it only by the veto of President Grant (April 22, 1874). This was another landmark in the history of our paper money. Secretary Richardson, however, had already, without authority, reissued $26,000,000 of the $44,000,000 withdrawn by Secretary McCulloch, and the amount outstanding was thus $382,000,000. A compromise measure was passed (June 20, 1874), which retained this amount in the circulation.
When the resumption act was passed (January 14, 1875), the provision that, for every $100 of new national-bank notes issued, $80 of United States notes should be retired, resulted in a contraction of the latter from $382,000,000 to $346,000,000. The reason of this was, that there was no