Inflation bill. The name given to a bill passed by Congress in 1874 which provided for an
increase of $44,000,000 in the issue of legal tender notes (United States notes, commonly called
greenbacks). The bill also provided for the redemption of legal tender notes in gold coin or in
government 5 per cent bonds and further provided that the notes when so redeemed might be
reissued. Objection was raised that the constant reissue of legal tender notes and their
conversion into bonds would increase the funded debt (bond issue) without retiring the notes.
President Grant vetoed the bill.