“Thou, Greenback, ’tis of thee
     Fair money of the free,
      Of thee we sing.”

=Resumption of Specie Payment.=—­There was, however, another side to this victory.  The opponents of the greenbacks, unable to stop the circulation of paper, induced Congress to pass a law in 1875 providing that on and after January 1, 1879, “the Secretary of the Treasury shall redeem in coin the United States legal tender notes then outstanding on their presentation at the office of the Assistant Treasurer of the United States in the City of New York in sums of not less than fifty dollars.”  “The way to resume,” John Sherman had said, “is to resume.”  When the hour for redemption arrived, the Treasury was prepared with a large hoard of gold.  “On the appointed day,” wrote the assistant secretary, “anxiety reigned in the office of the Treasury.  Hour after hour passed; no news from New York.  Inquiry by wire showed that all was quiet.  At the close of the day this message came:  ’$135,000 of notes presented for coin—­$400,000 of gold for notes.’  That was all.  Resumption was accomplished with no disturbance.  By five o’clock the news was all over the land, and the New York bankers were sipping their tea in absolute safety.”

=The Specie Problem—­the Parity of Gold and Silver.=—­Defeated in their efforts to stop “the present suicidal and destructive policy of contraction,” the advocates of an abundant currency demanded an increase in the volume of silver in circulation.  This precipitated one of the sharpest political battles in American history.  The issue turned on legal as well as economic points.  The Constitution gave Congress the power to coin money and it forbade the states to make anything but gold and silver legal tender in the payment of debts.  It evidently contemplated the use of both metals in the currency system.  Such, at least, was the view of many eminent statesmen, including no less a personage than James G. Blaine.  The difficulty, however, lay in maintaining gold and silver coins on a level which would permit them to circulate with equal facility.  Obviously, if the gold in a gold dollar exceeds the value of the silver in a silver dollar on the open market, men will hoard gold money and leave silver money in circulation.  When, for example, Congress in 1792 fixed the ratio of the two metals at one to fifteen—­one ounce of gold declared worth fifteen of silver—­it was soon found that gold had been undervalued.  When again in 1834 the ratio was put at one to sixteen, it was found that silver was undervalued.  Consequently the latter metal was not brought in for coinage and silver almost dropped out of circulation.  Many a silver dollar was melted down by silverware factories.