Size of the Federal debt mostly accumulated from freeing slaves ...$346,682,016. By act of Congress impossible to reduce or eliminate.

https://history.state.gov/historical...-the-president

In May, 1878, and before the date thus appointed for the redemption and retirement of these notes, another statute was passed forbidding their further cancellation and retirement. Some of them had, however, been previously redeemed and cancelled upon the issue of additional national-bank circulation, as permitted by the law of 1875, so that the amount outstanding at the time of the passage of the act forbidding their further retirement was $346,681,016.

The law of 1878 did not stop at distinct prohibition, but contained, in addition, the following express provision:

“And when any of said notes may be redeemed or be received into the Treasury, under any law, from any source whatever, and [Page XL]shall belong to the United States, they shall not be retired, cancelled, or destroyed, but they shall be reissued and paid out again and kept in circulation.”

This was the condition of affairs on the Ist day of January, 1879, which had been fixed upon four years before as the date for entering upon the redemption and retirement of all these notes, and for which such abundant means had been provided.

The Government was put in the anomalous situation of owing to the holders of its notes, debts payable in gold on demand which could neither be retired by receiving such notes in discharge of obligations due the Government, nor cancelled by actual payment in gold. It was forced to redeem without redemption and to pay without acquittance