Following a Democratic congressional victory in the elections of 1874, a lame-duck Republican congress passed The Resumption Act of January 14, 1875. It required the Secretary of the Treasury to redeem greenbacks in specie on demand on or after 1 January 1879. The Act, however, did not provide for a specific mechanism for redemption. The Act, though, did allow the Secretary of Treasury to acquire gold reserves either via any federal surpluses or the issuance of government bonds. An established gold reserve allowed for daily variations in specie flows and facilitated resumption. The act abolished the seigniorage fee on coining gold and substituted silver for any still existing fractional currency. The Resumption Act set no limit on the quantity of national bank notes that could be issued; this idea became known as "free banking." This provision led many conservatives to believe that the Act was inflationary in nature. However, the Resumption Act also required that greenbacks be retired in a proportion of 80% of new national bank note issue, which in theory aimed to contract the money supply and hence encourage dollar appreciation such that gold and currency might equate. However, in practice the effect was mild: the total quantity of greenbacks in circulation fell from $382 million at the end of 1874 to $300 million following the passage of the Resumption Act.