An 1875 act
that called for the reduction of paper currency
in circlation and replacing the smaller unit paper money
(they were called "Shinplasters") with silver
coins and allowed for exchanging greenbacks
A lot of statesmen thought that currency that was not redeemable for hard currency like gold or silver was a dangerous trend that would eventually cause out of control inflation if not a collapse of the economic infastructure of the United States.
Eventually the Treasury Department decided to increase the circulation of paper money. When people became aware that greenbacks could be exchanged for gold readily they stopped making the exchanges which lessened the burden on the Treasury to have so much gold on hand.