f the Government offered at the
Treasury on becoming due in any form. The pressure of rapid
contraction secured a hearing for every extravagant proposition.
Prejudice against speculators in gold, who during the war had grown
rich on the disasters of the Union, was added to the discussion,
especially while the premium was maintained and the National credit
charged with odium on its account.

At the opening of the second session of the Fortieth Congress
(December, 1867) numerous resolutions and bills demanding the stoppage
of contraction were referred to the Committee on Ways and Means.
Five days afterwards Mr. Schenck reported a bill of four lines, by
which the "further reduction of the currency by retiring and cancelling
United-States notes is prohibited." It had the unanimous approval of
the Committee on Ways and Means, and was passed by the House,--_ayes_
127, _noes_ 32. The minority included a goodly number of leading
Republicans. In the Senate Mr. Sherman, in supporting the bill, stated
the amount of contraction since August 1, 1866, at $140,122,168. He
argued from these figures that "contraction should go no farther while
industry is in a measure paralyzed, and that Congress ought to resume
control of the currency, which should not be delegated to any single
officer." He declared that the measure was entirely preliminary to
other legislation, "which must include the banking system, the time
and manner of resuming specie payments, the payment of the debt and
the kind of money in which it may be paid, and the reduction of
expenditures and taxes." Debate was somewhat prolonged, and a
conference committee gave final form to the measure, which failed to
receive the President's signature, but became a law without it. It
is known as the "Act of February 4, 1868, prohibiting any further
reduction of the currency, and authorizing the replacing of mutilated
notes." By this Act the minimum limit of legal-tender notes was
fixed at $356,000,00,--the volume then afloat after Mr. McCulloch's
policy of contraction had done its work.

The actual legislation of the second session of the Fortieth Congress
included also the repeal of the tax on raw cotton, and the further
reduction of internal revenue, by the Acts of March 31 and July 20
(1868). Great relief was given to manufactures by the abolition of
the five per cent tax on a variety of products. The surrender of
revenue was estimated at $23,000,000 on cotton at $45,0