The question of the National Debt, while not arousing the bitter antagonism that marked the attempt to settle the Reconstruction question, was nevertheless of equal, if not greater importance, because it affected the prosperity and business of the entire country. The total debt of the United States on October 31, 1865, was $2,808,549,437.55, of which debt $454,218,038.00 was in United States notes (legal tenders or greenbacks, as they were called) and fractional currency, in active circulation with the National Bank currency. When the Thirty-ninth Congress convened for the first session it had to consider the disposition of this enormous debt, most of which had been incurred at a high war rate of interest; and to decide what, if anything, should be done with this vast volume of fiat currency, and to consider the matter of reducing the Internal Revenue. The greenbacks were, of course, not on a par with coin, as the action of the Government in declaring these notes legal tender had destroyed our credit abroad and had driven all coin out of circulation, and the value of these notes fluctuated almost daily with the market value of coin. The plan of the Secretary of the Treasury, Mr. McCulloch, was to contract the currency so as to lead to a resumption of specie payment and again establish our credit abroad. The situation was without precedent in financial history and there was some excuse for what has since been deemed a wrong step in the beginning. After considerable debate, in which some opposition was shown to the policy of Contraction--this opposition being led by John Sherman, who was, in fact, almost alone in his contention--a Bill was passed (April 12, 1866) allowing the Secretary of the Treasury to redeem a certain amount of legal tenders with Bonds, a course which naturally increased the bonded interest-bearing indebtedness and reduced the volume of circulating medium. The people of the country speedily complained of the contraction of the currency, and attributed the failure of business enterprises and the lack of money to it. This sentiment resulted later in the formation of a new but ephemeral political party, the Greenback Party, which went so far as to advocate the unlimited issue of legal tenders and the payment of all the indebtedness of the United States in United States notes. The public disapproval of contraction showed itself strongly, and this led to a Bill, passed on February 4, 1868, suspending the authority of the Secretary of the Treasury to reduce the currency. The total amount of greenbacks had by this time been reduced to $356,000,000. This practically settled the question of Currency Contraction, although the Greenback Party, created by this agitation, was in existence until the resumption of specie payments in 1879.