Himself in public affairs, although no longer an active participant, and in all financial questions, especially in regard to the bank charter, the resumption of specie payments, and the panic of 1837, he exerted a powerful influence.
Only a few provisions were made, and those ineffectual, for the protection of the public: later in the same year the legislature passed an act for the suspension of specie payments until the 6th of May 1838, and the consequence was that the state was flooded with irredeemable paper currency.
The Resumption Act of 1875, which provided for the return of specie payments four years later, was largely his work both in inception and in formulation, and his appointment to the head of the Treasury Department by President Hayes in 1877 enabled him to carry the policy embodied in the law to successful execution.
When after the end of the war the question of financial readjustment came up, he vigorously opposed Secretary Hugh McCulloch's policy of retiring the legal tenders, and urged a different plan for effecting the resumption of specie payments.
The first step was to decree the penalty of six years' imprisonment against any person who should sell specie for a more considerable quantity of assignats, or who should stipulate a different price for commodities according as the payment was to be made in specie or in assignats.
But it was found that there were no funds in the treasury to satisfy their inordinate demands, and they were obliged to be contented with one-half the stipulated sums, which, after many difficulties, were paid in specie and in jewels, with the exception of 584,905 rupees.
P. Jones of Nevada advocating a speedy return to specie payments.
Matsukata showed the government the danger of the situation, and urged that the issue of further paper currency should be stopped at once, the expenses of administration curtailed, and the resulting surplus of revenue used in the redemption of the paper currency and in the creation of a specie reserve.
The purpose of this condition was in order to improve the value of the paper milreis in order to increase the specie value of the revenues.
Secundo, Appendix de alid, edque praestantiore Logarithmorum specie construenda.