[175] Hayes feared the Act would cause inflation that would be ruinous to business, effectively impairing contracts that were based on the gold dollar, as the silver dollar proposed in the bill would have an intrinsic value of 90 to 92 percent of the existing gold dollar.[176] He also believed that inflating the currency was dishonest, saying, "[e]xpediency and justice both demand an honest currency."[176] He vetoed the bill, but Congress overrode his veto, the only time it did so during his presidency.[175]
The second issue concerned United States Notes (commonly called greenbacks), a form of fiat currency first issued during the Civil War. The government accepted these notes as valid for payment of taxes and tariffs, but unlike ordinary dollars, they were not redeemable in gold.[175] The Specie Payment Resumption Act of 1875 required the treasury to redeem any outstanding greenbacks in gold, thus retiring them from circulation and restoring a single, gold-backed currency.[175] Sherman agreed with Hayes's favorable opinion of the Act, and stockpiled gold in preparation for the exchange of greenbacks for gold.