Under terms of the Resumption Act, Jan. 1, 1879, was to be an
historic day. For the first time since the beginning of the
Civil War, Americans were told that gold and silver coins were
trading at parity with paper money and the U.S. Treasury would
issue the full value of the note in gold or silver coins. All
you had to do was present your paper money and ask for coins.
How unlike the dark days of 1863 just before the Battle of
Gettysburg when it took $250 in federal paper money to buy $100
in gold coins. As in other cases when people are told they can
have all they want of a previously difficult to obtain
commodity, the public decided they did not like bulky coins all
that much and since the paper was at long last equal in value to
gold and silver coins, they would opt to hold and use federal
paper money. Large quantities of coins were returned to the
banking system as a result and mintages of many coin
denominations plummeted for roughly a decade. The irony, of
course, is that after the inflationary binge th