ces--that is, the cost of living--began to go down, creditors
therefore generally regarded the change with satisfaction as a return to
normal conditions.

=The Cause of Falling Prices.=--The fall in prices was due, no doubt, to
many factors. Among them must be reckoned the discontinuance of
government buying for war purposes, labor-saving farm machinery,
immigration, and the opening of new wheat-growing regions. The currency,
too, was an element in the situation. Whatever the cause, the
discontented farmers believed that the way to raise prices was to issue
more money. They viewed it as a case of supply and demand. If there was
a small volume of currency in circulation, prices would be low; if there
was a large volume, prices would be high. Hence they looked with favor
upon all plans to increase the amount of money in circulation. First
they advocated more paper notes--greenbacks--and then they turned to
silver as the remedy. The creditors, on the other hand, naturally
approved the reduction of the volume of currency. They wished to see the
greenbacks withdrawn from circulation and gold--a metal more limited in
volume than silver--made the sole basis of the national monetary system.

=The Battle over the Greenbacks.=--The contest between these factions
began as early as 1866. In that year, Congress enacted a law authorizing
the Treasury to withdraw the greenbacks from circulation. The paper
money party set up a shrill cry of protest, and kept up the fight until,
in 1878, it forced Congress to provide for the continuous re-issue of
the legal tender notes as they came into the Treasury in payment of
taxes and other dues. Then could the friends of easy money rejoice:

"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," wrot