Specie Payment Resumption Act

From Wikipedia, the free encyclopedia

The Specie Payment Resumption Act (January 14, 1875, ch. 15, 18 Stat. 296) provided for the redemption of United States paper currency, known colloquially as greenbacks, in gold beginning in 1879. Drafted by Ohio Senator John Sherman, the Resumption Act was drafted in opposition to the Eastern financial community, who objected to how the act allowed the Treasury Secretary to manipulate the money supply. Indeed, the measure was hardly drafted in response to the demands of powerful economic groups, but to remove a divisive economic issue from the approaching presidential election of 1876. The measure was instrumental in granting the Treasury Secretary discretionary authority to issue loans and manipulate currency markets, authority which was successfully used by Treasury Secretary John Sherman (who had drafted the Resumption Act and forced it through the Senate and House) to resume specie payments in 1879. Although the measure has been seen as a turning point in the financial history of the United States, the Resumption Act actually marks a much more important political transformation in the power of the American state. Specifically, the measure marks the institutionalization of discretionary regulatory authority in an executive bureaucracy, as such, it established perhaps the single most salient charicteristic of modern American government, as a form of state authority originally created by Salmon Chase during the Civil War had been institutionalized by the Resumption Act a decade following the conclusion of the Civil War.