Passage of the public credit act of 1869 which

passage of the Public Credit Act of 1869, which promised to pay the war debt in "coin."
Holders of war bonds expected no less; in fact, they expected payment in coin, although
many had bought their bonds with greenbacks!
With investors reassured by the Public Credit Act, Sherman guided legislation through
Congress that swapped the old short-term bonds for new ones payable over the next
generation. In 1872 another bill in effect defined "coin" as "gold coin" by dropping the
traditional silver dollar from the official coinage. Through a feat of ingenious compromise,
which placated investors and debtors, Sherman preserved the public credit, the currency,
and Republican unity. In 1875 he engineered the Specie Resumption Act, which promised
to put the nation effectively on the gold standard in 1879, while tossing a few more
immediate but less important bones to Republican voters who wanted "easy money."
Grant, no financial theorist, signed this act.
The Republican leadership acted not a moment too soon, because when the Democrats
gained control of the House in 1875, with the depression in full force, a verbal storm broke
out. Many Democrats and some Republicans passionately demanded that the silver dollar

be restored in order to expand the currency and relieve the depression. These "free-silver"
advocates secured passage of the Bland-Allison Act of 1878, which partially restored silver
coinage. The law required the treasury to buy $2 million to $4 million worth of silver each
month and turn it into coin but did not revive the silver standard. In 1876 other
expansionists formed the Greenback party, which adopted the debtors' cause and fought to
keep greenbacks in circulation. But despite the election of fourteen Greenback
congressmen, they did not get even as far as the free-silver people had. As the nation
emerged from depression in 1879, the clamor for "easy money" subsided, only to resurge in
the 1890s. The controversial "money question" of the 1870s, never permanently solved,
gave politicians and voters another reason to focus on new northern issues and forget about
the South.
The Supreme Court of the 1870s also played a role in weakening northern support for
Reconstruction. In the wartime crisis, few cases of note had come before the Court. After
the war, however, constitutional questions surged into prominence.
First, would the Court support congressional laws to protect freedmen's rights? The
decision in Ex parte Milligan (1866) suggested not. In this case, the Court declared that a
military commission established by the president or Congress could not try civilians in
areas remote from war where the civil courts were functioning. Thus special military
courts to enforce the Supplementary Freedmen's Bureau Act were doomed. Second, would
the Court sabotage the congressional Reconstruction plan, as Republicans feared? Their
qualms were valid, for if the Union was indissoluble, as the North had claimed during the
war, then the concept of restoring states to the Union would be meaningless. In Texas v.