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 measure. It would have carried the bank note circulation up to $400 millions. Another section in it provided that the limit of the greenbacks should be $400 millions,—that is, it put back into circulation all which McCulloch had retired.

Another bill was immediately introduced, which became a law June 20, 1874. The reserve required in the law for the national banks was restricted to the deposits, and a redemption bureau was provided for the circulation, supplying the want for which the Assorting House had been planned. Each bank was required to deposit in this bureau, in greenbacks, five per cent. of its circulation, which might be counted into its lawful reserve; whenever bank notes were presented to the Treasurer of the United States in multiples of $1,000, they were to be redeemed from this fund and charged to the banks which issued them. When $500 were so withdrawn from the deposit of any bank, it was to be notified to make it good. If this was done, new notes were to be issued. The redemption at the redemption cities was done away with. This device was intended really to keep the national currency clean and in good order. The banks were also allowed by this act to deposit legal tender notes and take up their bonds, thus reducing or entirely withdrawing their circulation. The limit of the greenbacks was set at the point where it then stood, with the $26 millions out,—that is, at $382 millions.

The veto by President Grant of the inflation bill in the spring of 1874 was really the turning point in the struggle between inflation and resumption. At the next session, the resumption act of January 14, 1875, was passed. Fractional silver was re-introduced. The appreciation of the greenback and the depreciation of silver had gone so far that the fractional coins could be maintained in circulation. All charges for converting standard bullion into coin were repealed. All limit on the amount of national bank circulation was removed. This was in concession to a demand for free banking. After this, therefore, it was free to anybody under the conditions of the law to organize national banks, or to dissolve and wind up the same at will; but whenever any new banks were formed, increasing the national currency, the Secretary of the Treasury was required to redeem greenbacks for eighty per cent. of that increase, until the greenbacks should be reduced to $300 millions. This was construed to apply to the increase of national bank notes, without any reference to the reduction of the same, which might be going on at the same time. After January 1, 1879, the Secretary of the Treasury was to redeem, in coin, any legal tender notes presented at the office of the Assistant Treasurer in New York, in sums of not less than $50. In order to do this, he might sell bonds to provide the redemption fund. During the years 1878 and 1879, the gold premium was steadily reduced,—that is, the whole paper currency advanced towards par.

In May, 1884, during a temporary stringency in the money market at New York, it again became necessary to issue clearing house certificates. Between May 15th and October 3d, they were issued to the amount of $24.9 millions.