While the issues of reconstruction and impeachment dominated the second session of the Fortieth Congress, there was also a growing awareness of the importance of dealing with the financial problems facing the country. As Congress met in December, 1867, there was particular urgency in demands for action on economic measures, as the long business decline that had begun at the end of the war reached its nadir in that month. 1 But although many measures were considered on a wide range of subjects related to the economy, only a few were passed. The main result of the session was to indicate the areas of conflict on these issues, leaving their resolution to the future.
The most immediate demand was for the repeal of the contraction policy which many blamed for the downturn. As has been seen, early in 1867, the House had declared itself against that policy in principle, but it had gone no further as the representatives had been unable to agree on a bill. Before a week of the new session went by, however, a measure forbidding further reduction in the currency was passed, 127-32. Republican leadership in the anti-contraction movement was again evident, as they supported the bill 103-17, while the Democrats divided 214-15 in favor of it. The sectional division was now also extremely clear as westerners supported the bill nearly unanimously, the opposition votes coming almost entirely from the Northeast. The Senate, on January 15th, passed a similar measure by the equally one-sided vote of 33-4, all of the opposing votes coming from New England and New York. There was some speculation that Johnson would veto the bill, on the grounds that it was the opening wedge for currency expansion and debt repudiation, but instead the President let it become law without his signature. 2
His decision not to sign it was a reflection of the continued commitment to rapid specie resumption of Secretary of the Treasury