SUMMARY
Financial History, 1868-1880
1. When the war ended, the national debt consisted of two parts: the bonded, and the unbonded or floating.
2. As public sentiment demanded the reduction of the debt, it was decided to pay the bonds as fast as possible, and contract the currency by canceling the greenbacks.
3. Contraction went on till 1868, when Congress ordered it stopped.
4. The payment of the bonds brought up the question, Shall the 5-20's be paid in coin or greenbacks?
5. The Democrats in 1868 insisted that the bonds should be redeemed in greenbacks; the Republicans that they should be paid in coin,—and when they won, they passed the "Credit Strengthening Act" of 1869, and in 1870 refunded the bonds at lower rates.
6. In the process of refunding, the 5-20's, whose principal was payable in greenbacks, were replaced by others payable "in coin." In 1873, the coinage of the silver dollar was stopped, and the legal-tender quality of silver was taken away. The words "in coin" therefore meant "in gold."
7. In 1875 it was ordered that all greenbacks should be redeemed in specie after January 1, 1879 (resumption of specie payment).
8. In 1878 silver was made legal tender, and given limited coinage.
The South and the Negro
9. In 1869, three states still refused to comply with the Reconstruction Act of 1867 and had no representatives in Congress.
10. Such states as had complied and given the negro the right to vote were under "carpetbag" rule.
11. This rule became so unbearable that the Ku Klux Klan was organized to terrify the negroes and keep them from the polls.
12. Congress in consequence sent out the Fifteenth Amendment to the Constitution, and in 1871 enacted the Force Act.
13. These and other issues, as that of amnesty, split the Republican party and led to the appearance of the Liberal Republicans in 1872.
14. In general, however, party differences turned almost entirely on financial and industrial issues.
[Illustration: INDUSTRIAL AND RAILROAD MAP OF THE UNITED STATES]