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Updated: July 28, 2025
His recommendations included first an increase of the revenue; second the redemption of legal-tender notes in coin, reckoned at a premium of ten per cent in the beginning and gradually diminishing until the date named in the Act for resumption; third an addition to the facilities for coinage, in one or more of the Western cities, so as to save to the miner the cost of transporting bullion to the principal mint at Philadelphia.
The same influence which had resisted the issue of legal-tender notes during the war, when they were deemed vital to the National success, now demanded that they be used to pay the public debt, though depreciated far below the standard of coin. "The same currency for the bond-holder and the plough-holder" was a favorite cry in the mouths of many.
To the last month there had been many doubters, but when the day came it was found that the Treasury was fully prepared and the gold coin which had borne a premium for the seventeen years of specie suspension was not now demanded even by those who had been hoarding legal-tender notes for that express purpose.
The House of Representatives proposed to pass an act authorizing and directing the Secretary of the Treasury to issue legal-tender notes, without interest, not exceeding $100,000,000, in place of the compound-interest bearing notes. To this proposition the Senate would not accede, and passed a substitute which the House would not accept.
Greenman, "if there be anything in the history of the Constitution which can be established with moral certainty, it is that the framers of that instrument intended to prohibit the issue of legal-tender notes both by the general government and by the states, and thus prevent interference with the contracts of private parties."
The Toledo platform, as the resolutions adopted by this conference came to be designated, first denounced "the limiting of the legal-tender quality of greenbacks, the changing of currency-bonds into coin-bonds, the demonetization of the silver dollar, the excepting of bonds from taxation, the contraction of the circulating medium, the proposed forced resumption of specie payments, and the prodigal waste of the public lands."
Upon this imposing and authoritative advice of the financial minister, the legal-tender trait of the paper issues of the Government was adopted by Congress, and without his sanction, presumptively, it would have been denied.
The legal-tender clause to the law authorizing the issue of currency by the National Government should be repealed, to take effect as to all contracts entered into after a day fixed in the repealing act not to apply, however, to payments of salaries by Government, or for other expenditures now provided by law to be paid in currency, in the interval pending between repeal and final resumption.
It pledged the Government to the payment in coin, or its equivalent, of all obligations, notes, and bonds, except those where the law authorizing the issue stipulated that payment might be made in "lawful money," which simply meant legal-tender notes.
By this Act the minimum limit of legal-tender notes was fixed at $356,000,00, the volume then afloat after Mr. McCulloch's policy of contraction had done its work.
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