ct, and a
considerable sentiment arose in favor of redeeming them with currency,
or lawful money, as it was called.

These questions were not party issues at first, and there was no
clear-cut division upon them between the two old parties throughout the
period. The alinement was by class and section rather than by party; and
inflationists and advocates of the redemption of the bonds in currency
were to be found not only among the rank and file but also among the
leaders of both parties. The failure of either the Democrats or the
Republicans to take a decided stand on these questions resulted, as so
often before, in the development of third parties which made them the
main planks in the new platform.

The first attempts at organized political activity in behalf of
greenbackism came not from the farmers of the West but from the laboring
men of the East, whose growing class consciousness resulted in the
organization of the National Labor Union in 1868. Accompanying, if not
resulting from the Government's policy of contraction, came a fall of
prices and widespread unemployment. It is not strange, therefore,
that this body at once declared itself in favor of inflation. The plan
proposed was what was known as the "American System of Finance": money
was to be issued only by the Government and in the form of legal-tender
paper redeemable only with bonds bearing a low rate of interest, these
bonds in turn to be convertible into greenbacks at the option of
the holder. The National Labor Union recommended the nomination of
workingmen's candidates for offices and made arrangements for the
organization of a National Labor party. This convened in Columbus in
February, 1872, adopted a Greenback platform, and nominated David Davis
of Illinois as its candidate for the presidency. After the nomination
of Horace Greeley by the Liberal Republicans, Davis declined this
nomination, and the executive committee of his party then decided that
it was too late to name another candidate.

This early period of inflation propaganda has been described as "the
social reform period, or the wage-earners' period of greenbackism, as
distinguished from the inflationist, or farmers' period that followed."
The primary objects of the labor reformers were, it appears, to
lower the rate of interest on money and to reduce taxation by the
transformation of the war debt into interconvertible bonds. The farmers,
on the other hand, were interested primarily in th