rdship upon all who received
them as dollars, since their purchasing value was below the standard of
one hundred cents in gold. When the Government, desperate in war time,
forced its creditors to accept them at par, it did an injustice which
it regarded as real, though necessary. The speedy restoration of the
greenbacks to par received the immediate attention of the Treasury upon
the return of peace.

Hugh McCulloch, of Indiana, who became Secretary of the Treasury in
1865, was a banker of long experience and success. He proposed, if
allowed, to reduce the whole war debt, including the greenbacks, to
long-term bonds bearing a low rate of interest, and to create a sinking
fund which should redeem them as they fell due. This involved the
withdrawal from circulation of the greenbacks, and the destruction of
that amount of the money used in business. Congress authorized it,
however, and McCulloch canceled greenbacks from month to month until he
had reduced the total to $356,000,000 in February, 1868.

The withdrawal of the legal tenders had not been long under way before
protests began to come in upon the Treasury and Congress from the West.
Bad as the depreciated currency was, it was the only currency available
for the active business of the country. If the greenbacks should go
there would be nothing to take their place until coin should finally
emerge from hiding. The reduction of the volume of money in a time of
increasing business would enforce upon each dollar an enlarged activity
and a greater market value. The price of money rising, the price of all
commodities measured in money would necessarily fall, and in a period of
falling prices the West thought it saw financial catastrophe. There was
enough real truth in the contention that resumption meant a fall in
prices for the Treasury to be compelled to make the difficult choice
between this evil and the other evil of a depreciated currency forced
upon the people.

The creditor East regarded the possible increase in the purchasing value
of the dollar with entire complacency. Its selfish interests harmonized
with sound theories of finance. But in the debtor West the process had
so different an aspect that the financial obligations of the United
States were obscured by the local interest.

The great "boom" of the West began after the depreciation had commenced.
Most of the Western debts, whether on the farm of the settler, the stock
of the merchant, or the bonds of th