In the Senate Mr.Sherman, in supporting the bill, stated the amount of contraction since August 1, 1866, at $140,122,168.

He argued from these figures that "contraction should go no farther while industry is in a measure paralyzed, and that Congress ought to resume control of the currency, which should not be delegated to any single officer." He declared that the measure was entirely preliminary to other legislation, "which must include the banking system, the time and manner of resuming specie payments, the payment of the debt and the kind of money in which it may be paid, and the reduction of expenditures and taxes." Debate was somewhat prolonged, and a conference committee gave final form to the measure, which failed to receive the President's signature, but became a law without it.

It is known as the "Act of February 4, 1868, prohibiting any further reduction of the currency, and authorizing the replacing of mutilated notes." By this Act the minimum limit of legal-tender notes was fixed at $356,000,00,--the volume then afloat after Mr.McCulloch's policy of contraction had done its work.
The actual legislation of the second session of the Fortieth Congress included also the repeal of the tax on raw cotton, and the further reduction of internal revenue, by the Acts of March 31 and July 20 (1868).

Great relief was given to manufactures by the abolition of the five per cent tax on a variety of products.

The surrender of revenue was estimated at $23,000,000 on cotton at $45,000,000 on manufactures.