1 Dollar – United States

The United States in 1878 stood at a pivotal moment in its monetary history, caught between the competing doctrines of hard money and soft money. The nation had operated without a uniform national paper currency until the Civil War, when the federal government issued "greenbacks" (U.S. Notes) to finance the conflict. These were legal tender but not redeemable in gold or silver, leading to their depreciation. Following the war, a fierce political struggle emerged between creditors and urban industrialists in the Northeast, who favored a strict gold standard ("sound money"), and debtors, farmers, and silver miners in the South and West, who advocated for inflationary policies like the free coinage of silver to ease debt burdens and raise crop prices.

This conflict culminated in two major legislative acts in the pivotal year of 1878. First, the Bland-Allison Act was passed over President Hayes's veto, requiring the U.S. Treasury to purchase between $2 and $4 million worth of silver each month and coin it into silver dollars. This was a major victory for silver interests, though it fell short of free and unlimited coinage. Second, Congress passed the Act of May 31, 1878, which halted the further retirement of greenbacks, permanently fixing their circulation at approximately $347 million. This created a dual system of paper currency: gold-backed National Bank Notes and the unredeemable but legal-tender greenbacks.

Thus, by the end of 1878, the United States was operating on a de facto limping gold standard. Gold remained the official basis for value, and the government resumed specie payments for all other forms of currency in 1879. However, the mandated purchase of silver and the frozen supply of greenbacks created a complex and somewhat contradictory monetary base. This uneasy compromise did not settle the debate but merely established a tense and unstable status quo, setting the stage for the more intense political battles over "Free Silver" that would dominate the 1890s.