Resumption Act - Definition and Overview

The Resumption Act of 1875 provided for the redemption of United States paper currency, known colloquially as greenbacks, in gold beginning in 1879. This sound money program reduced amount of paper money and restored confidence in it. The political reason behind it was the strong influence of wealthy loaners on politics, who wanted to use gold-backed currency that would hold a higher value and not inflate, as gold was relatively scarce. It was opposed by the pro-silver faction, who wanted to cause inflation and in doing so lower their debts after the economic panic of 1873. Ultimately, not many people wanted to trade in their greenback money come Resumption day, as it was much more convenient to carry and had been restored to nearly full value (on the gold dolar) with the government's discontinued production and removal from use of nearly one-fourth of all greenbacks that were originally printed during the Civil War.