The first "legal-tender" Act was approved February 25, 1862. Mr. Blaine
says of this Act that it was "the most momentous financial step ever
taken by Congress," and it was a step concerning which there has ever
since been the most pronounced difference of opinion. The Act provided
for the issue of $150,000,000 non-interest-bearing notes, payable
to bearer, in denominations of not less than $5, and legal tender in
payment of all debts, public and private, except duties on imports and
interest on the public debt. These notes were made exchangeable for 6
per cent. bonds and receivable for loans that might thereafter be made
by the Government. Supplementary acts of July 11, 1862, and January
17, 1863, authorized additional issues of $150,000,000 each, in
denominations of not less than one dollar, and the time in which to
exchange the notes for bonds was limited to July 1, 1863. It was under
these Acts that the legal-tender notes known as "greenbacks," now
outstanding, were issued.

The retirement of the greenbacks was begun soon after the war. On April
12, 1866, an Act authorized the Secretary of the Treasury to retire and
cancel not more than $10,000,000 of these notes within six months of the
passage of the Act, and $4,000,000 per month thereafter. This policy of
contraction was carried out by Secretary McCulloch, who urged still more
rapid contraction; but the policy was resisted by a large influence in
the country, and on February 4, 1868, an Act of Congress suspending the
authority of the Secretary of the Treasury to retire and cancel United
States notes, became a law without the signature of the President.

On March 18, 1869, an "Act to strengthen the public credit" was passed,
which declared that the "greenbacks" were redeemable in coin. This Act
concluded as follows: "And the United States also solemnly pledges