ates, and received a special increase because of
the development of business. After 1865 business transactions grew in
number and volume more rapidly than the amount of available money, and
this, driven to greater activity in circulation, rose in value from the
increased demand. As the purchasing value of the dollar increased,
prices, measured by the greenbacks, necessarily fell, while the
equivalent of every debt that had to be paid in a specified number of
dollars as steadily rose. Indeed, so great was the increase of
production from the new farms, reached by the new railroads, and
supplying raw materials for the new factory processes, that prices fell,
even when stated in terms of gold. In a period of falling prices and
appreciating currency, the gap between the poor and the rich was
widened. The debtor carried a growing burden while the creditor
harvested an unearned increase. Persons who lived on fixed salary or
income profited by the fluctuations, but commercial transactions were
made more difficult for the debtor.

The organized Greenback movement had figured in politics during the
campaign of 1868, and made a special appeal to the debtor section
during the hard times after 1873. The Republican Congress had, in 1869,
sealed the professions of the party's platform by passing a resolution
"to strengthen the public credit," in which it declared "that the faith
of the United States is solemnly pledged to the payment in coin or its
equivalent," of the greenbacks, and that the United States would not
take advantage of its creditors by paying off its "lawful-money" bonds
in depreciated paper. All debts created before the war or during its
early years had lost through depreciation, just as the later debts had
gained through the reverse.

Despite this pledge, advocates of greenback inflation, with Butler among
their leaders, became more numerous in both parties after the panic, and
an attempt was made to have Congress reverse itself. Grant's Secretary
of the Treasury gave a new construction to the law by reissuing during
the critical days of the panic some $26,000,000 of greenbacks that had
been called in by McCulloch. He raised the total outstanding to
$382,000,000, and Congress in 1874 passed a law increasing the amount to
$400,000,000, in an act named by its opponents the "Inflation Bill." To
the surprise of many, Grant sharply vetoed the act, adhering to his
views of 1869 on the evils of an irredeemable paper currenc