An Act went into effect on February 12, 1873, the provisions of which, it was afterwards argued, caused the "demonetization" of silver. This demonetization had already occurred in 1853, when nothing was said in the Act of that year as to the silver dollar piece which had for some years entirely disappeared from circulation. The Act of 1873 simply recognized a condition which had been present for more than twenty years when it provided for the coinage of ten, twenty-five and fifty-cent silver pieces and omitted the dollar. The Act of 1873 was passed because all coin had been driven out of circulation by the United States notes and fractional currency issued during the War, and the Treasury Department, deeming the time appropriate for the issuance of subsidiary silver coins and revision of the coinage laws, suggested, after consultation with experts, the Act of 1873. The Act was, in fact, an important step toward specie resumption. This law also provided for a trade dollar for use in trade with China and Japan. This dollar was to weigh 420 grains, so as to give it the advantage over the Mexican dollar of 416 grains. It was made legal tender for a limited amount only, and several years afterwards was withdrawn from circulation. President Grant was reinaugurated on March 4, 1873, and the Republican Party seemingly had a prospect of a long lease of power, for the strength of all opposition seemed to have been dissipated by the campaign of 1872; but before the year of the reinauguration had passed, circumstances occurred absolutely beyond the control of the party, the result of which caused a complete change of the political aspect of the country. In September, 1873, while business affairs were in a good condition and labor well employed, a sudden financial panic engulfed the country and brought demoralization to almost all industries. The direct cause of this panic was the abuse of credit in the enormous building of railroads which had been going on for several years prior to 1873. The market had been flooded with railroad bonds, and as the old portions of the Western railroads did not earn enough to pay for new construction, the railroads gradually began to default in the payment of interest on their bonds, and the New York bankers became overburdened with them; the natural result was that they were compelled to call in their loans, money became tight, and the storm broke in September, 1873, when the great financial house of Jay Cooke & Co. closed its doors. By the end of October the panic was over, but the effects were felt long afterwards in thousands of ruined enterprises. It gave new arguments to the champions of fiat currency, and the whole situation told against the success of the Republican Party. When the first session of the Forty-third Congress opened on December 1, 1873 (James G. Blaine elected Speaker), arguments for currency inflation were advanced on all sides, and resulted in the