At the same time as he sought to reform the coinage, Sherman worked for "resumption"—the policy of resuming specie payment on all bank notes, including the greenbacks.
The idea of withdrawing the greenbacks from circulation altogether had been tried and quickly rejected in 1866; the notes were, as Sherman said, "a great favorite of the people".
The economic turmoil of the Panic of 1873 made it even more clear that shrinking the money supply would be harmful to the average American.
Still, Sherman (and others) desired an eventual return to a single circulating medium: gold.
As he said in an 1874 speech, "a specie standard is the best and the only true standard of all values, recognized as such by all civilized nations of our generation".
If greenbacks were not to be withdrawn from circulation, therefore, they must be made equal to the gold dollar.

While Sherman stood against printing additional greenbacks, as late as 1872 he remained a proponent of keeping existing greenbacks backed by bonds in circulation.
Over the next two years, Sherman worked to develop what became the Specie Payment Resumption Act.
The Act was a compromise.
It required gradual reduction of the maximum value of greenbacks allowed to circulate to $300 million and, while earlier drafts had allowed the Treasury the choice between paying in bonds or coin, the final version of the Act required payment in specie, starting in 1879.
The bill passed on a party-line vote in the lame duck session of the 43rd Congress, and President Grant signed it into law on January 14, 1875.
At the same time as he sought to reform the coinage, Sherman worked for "resumption"—the policy of resuming specie payment on all bank notes, including the greenbacks. The idea of withdrawing the greenbacks from circulation altogether had been tried and quickly rejected in 1866; the notes were, as Sherman said, "a great favorite of the people". The economic turmoil of the Panic of 1873 made it even more clear that shrinking the money supply would be harmful to the average American. Still, Sherman (and others) desired an eventual return to a single circulating medium: gold. As he said in an 1874 speech, "a specie standard is the best and the only true standard of all values, recognized as such by all civilized nations of our generation". If greenbacks were not to be withdrawn from circulation, therefore, they must be made equal to the gold dollar.
While Sherman stood against printing additional greenbacks, as late as 1872 he remained a proponent of keeping existing greenbacks backed by bonds in circulation. Over the next two years, Sherman worked to develop what became the Specie Payment Resumption Act. The Act was a compromise. It required gradual reduction of the maximum value of greenbacks allowed to circulate to $300 million and, while earlier drafts had allowed the Treasury the choice between paying in bonds or coin, the final version of the Act required payment in specie, starting in 1879. The bill passed on a party-line vote in the lame duck session of the 43rd Congress, and President Grant signed it into law on January 14, 1875.
John Sherman