It is probable that this report would have evoked immediate action by Congress to some effect had not the Spanish-American War intervened. The close of the war found the United States approaching another presidential election. Congressional leaders then hastily framed a measure known as the gold-standard law of 1900, which became a statute on March 14th of that year. In this gold-standard law provision was made for the segregation of the funds of the Treasury, so that $150,000,000 should always be available behind the greenbacks, and authority was given to the Secretary of the Treasury to sell bonds for the purpose of re-establishing this fund if at any time it should fall below $100,000,000 fixed for it. The Act declared the standard of money in the United States to be the gold dollar, although it was defective in making no provision for the redemption of the silver dollar in gold or for the issue of bonds to maintain parity. Outstanding bonds were to be refunded into 2-per-cent consols, and these 2-per-cent bonds were made available to protect national-bank currency. Prior to 1900, $50,000 had been the minimum capitalization of a national bank, but the new Act reduced this sum to $25,000 in towns of 3,000 inhabitants. This reduction and the issue of the 2-per-cent bonds were expected to enable country communities to organize national banks and take out the currency they needed. The fact that prior to 1900 the outstanding bonds had brought a large premium, while banks could obtain only 90 per cent of the par value of their bonds in currency, had made it unprofitable for the banks to issue. For example, if a bank had to pay for $100,000 of government bonds, say, $112,000, while it could get only $90,000 in currency, there would be a gap of $22,000 between the currency and the amount invested in bonds, on which the bank was likely to suffer loss. Shrinkage in bond premiums and the fact that this amount of money was not definitely employed in any way, except for the interest on the face of the bonds, made the issue unsatisfactory to the banks. Therefore the new law allowed the banks to get in notes 100 per cent of the face of their bonds or market value if below par. The Act of 1900 made, however, no provision whatever for notes based on commerical paper, nor did it render the prompt issue of the notes any easier than before. It was nevertheless successful in stimulating the organization of national banks, and the number in existence rapidly increased, especially in the group with $25,000 capital. The outstanding bonds were rapidly converted into the new 2-per-cent bonds, and these were taken up by the new banks. The small banks, especially, were disposed to take out circulation up to the level allowed by law, and became strong buyers of 2-per-cent bonds.

Under the Act of 1900 the needs of the country for currency were more or less fully met. Business was prosperous and there was a general expansion of operations and of prices. The Act of 1900 had not, however, met any of the real requirements of banking and currency reform. Although the previous prosperity and the apparent remoteness of panic had led to a slackening of interest on the part of many commercial and business interests which had previously urged banking reform, scientific students of the situation did not reduce their efforts, and nearly every year a succession of new bills made their appearance in Congress. The striking feature of this second period of agitation may be said to be the recognition of the fact that a mere reform in note-currency issue methods would not meet the needs of the case. Both the experience of foreign countries and of the United States, as well as closer analysis of the contemporary experience of Canada, showed that such was the fact, and emphasized the necessity for a more thorough and far-reaching type of legislation than had yet been afforded.