Bankers' concept of a sound money policy favored a hard money policy, which included currency backed by gold and silver specie. They believed this would prevent economic instability associated with paper currency and maintain a stable monetary system as seen in actions like the Coinage Act of 1835.
Bankers' concept of a sound money policy favored a policy similar to what is often called a hard money policy, which implies a preference for currency backed by and exchangeable for gold and silver (specie) rather than paper currency not backed by such tangible assets. This preference stems from a fear of inflation and economic instability associated with paper money, which was often issued in excess of available specie, thus creating a discrepancy between the value of paper currency and the scarce precious metals that backed them. During times like the aftermath of the War of 1812 and the Jacksonian era, there were shifts in policy towards favoring hard money over paper currency to maintain economic stability and avoid the boom and bust cycles caused by speculation and inflation. The Coinage Act of 1835 reflected such a policy shift by substituting gold coins for paper currency in commercial transactions.