Gold and the Gold Standard.pdf

GOLD AND GOLD MONEY IN U.S. PRIOR TO 1914
million,l to the amount of SOper cent of the new
issues of national bank notes.!
The Secretary, within the broad limits' of the
Resumption Act, was to work out plans for bringing
about resumption on the scheduled date. '"
Obviously, under the law as passed and the conditions
prevailing, the only form of specie in which
resumption could be made was gold. Silver no
longer enjoyed the free-coinage. privilege and there
was no silver money circulating that was unlimited
legal tender. There was, moreover, comparatively
little gold coin, and most of what was actually
circulating was on the Pacific Coast. To obtain the
gold coin required for resumption, therefore, the
Secretary was forced to sell bonds abroad-a policy
that brought on him much unmerited public criticism.
John Sherman, when he became Secretary of
the Treasury in 1877, under President Hayes,
initiated a vigorous policy of accumulating gold
reserves.
There was much public opposition to the Resumption
Act, largely on the part of people who feared
that it would unduly reduce the country's supply of
1 In January, 1875, there were in circ,ulation $382 million of greenbacks and
$352 million of national bank notes.
2 Inasmuch as the National Bank Law of that time required national banks
in the principal cities to maintain a reserve of 25 per cent of lawful money
against their national bank notes and required the banks in other cities to
maintain a reserve of 15 per cent, ,it was reasoned that the above-mentioned
80 per' cent limit would keep the net circulation of greenbacks and national
bank notes combined about where it was.
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