Pike County press. (Milford, Pa.) 1895-1925, 1896-10-16
A HISTORY OF THE SILVER DOLLAR.
A Plain and Concise Statement Of IA
Written by Careful studcpt.

/ w Nvuhu Whi1o tht hinbofg OF Ine silver
dollar from two stand points, either dis
cribing the various processes through
which 1t goes from the mine until 1t passe,
into circulation or as in the present paper
we can conflne ourselves to the chronolo
gical point of view giving an account o.
its origin and the legislation affecting it
| Money is Il medium of exchange ant
anything which serves as medium of ex
change is money Thus in the colonia
days we read Of wampum being used a.
money and in Virginia ministers were paid
in tobacco. Later through the trade will
the West Indias, Spanish coins came into
circula ton and a few years prior to, and
during the revolution they constituted
about the only circulating medium but al
that time money of account was still kept
in pounds, shillings and pence of England
and the different colonial legislatures each
enacted that the Spanish dollar contained
so many grains of pure silver and was
worth so much in English money; The
cnactments were made without any re
gard to facts and differed widely in the
several colonies, thus we had an uncertain
medium of exchange and inter-colonial
trade was impaired
In the year 1852 plan for the establish
lnent of mint which had been submitted
by Robert Morris was approved by Con-
gress and he was directed to report a plan
for conducting it, Coins had been struck
prior to this date in Massachusetts,, but
this was the first attempt at a uniform
system of coinage in America.
The next attempt was in 1855 when Con
gress adopted the Spanish MilIed dollar
and declared that it contained 1854 grs.
of pure silver, gold eagles were also author
lied containing 346.26S grs. of pure gold.
The ratio between the two metals was thus
fixed at 1 to 1888 while the market ratio
was at that time to 14.s9 the reason for
thus undertaking silver is not clear. No
gold or silver were coined under these acts
nor intact under the confederation and
when the bank of North America was or
ganized, its notes were redeemable in
Spanish dollars, but these acts show the
origin Of our dollar and may be regarded
as the basis of American coinage legisla-
tion.
Hamilton decided that the unit of coin
age in the United States should correspond
to 24.75 grs. pure gold and 81 .25 grs. pure
silver each answering to the dollar in the
money of account and Congress passed an
act approved April 2, 1893, authorizing the
erection of mint and the coinage Of gold
and silver on the above basis and in 1894
the first silver coins were struck weighing
416 grs. and containing 371.25 grs. pure sill
yer and the amount of pure silver has
never been changed. The next year the
Eagle or ten dollar gold piece, and two
varieties of the half eagle were coined. The
Eagle weighed 27O grs and was 11-12 fine.
The gold dollar which however was not
coined until 1S49 but existed only as money
Of account and on the statute books, there
fore contained 24.75 grs. pure gold It will
thus be seen that the ratio was fixed at /
to 10 while the market ratio at that time
was about to 1926.
Whenever says Mr.. Sumner in his
History of American Currency 1.-TWO
metals are legal tender and there is a gold
and silver dollar the question of relative
value is involved"
1t is on this matter of relative value that
bimetalism and free silver depends.
Under the ratio fixed by the law of 1872
gold was under valued or silver was over
valued (Which amounts to the same thing)
as a consequence holders of gold coin could
gain by melting it into bullion and using
it for other purposes or when melted ex-
change it for silver at the market ratio and
have this silver coined as under this law
free and gratuitous coinage was allowed
for example. A has ounces of gold bull
ion with which he buys in the open mar
ket at the ratio of to 1926, 64 ounces of
silver which he takes to our mint and has
coined at the ratio of 1 to 15. He now
takes it to the bank and exchanges it at
the same legal ratio for gold and receives
4 4-15 ounces gaining 4-15 of an ounce or
about S5.12 by the transaction as result
of this state of things gold disappeared from
circulation. If the difference between the
coinage ratio and the market ratio of II of
an ounce would cause gold to disappear in
1874 when the country was in its infancy
and was in need Of money, what would be
the effect now Of free bimetalic system
with a ratio of to 10 and market ratio
of about to 28.
The first important change in the coin
age laws was made in 1884 when the eagle
was reduced in weight to 1858 grs. and the
dollar was reduced in the money of ac-
count to 23.20 grs. pure gold the fneness re-
naming the same. The effect of this was
to change the ratio to to 10 approximate
ly. The act Of "a, as it is called was passed
largely through the influence of the well
known Senator Benton who hoped to Sc
cure more uniform coinage in which
believe he was sincere but how he expected
this act to accomplish that end it is hard
TO understand. He certainly showed an
Ignorance Of the truth of Gresham's law
namely that bad money will drive out
good money but good money will not drive
out bad money" from which there follows
the corollary that when coinage value of
a metal is less than the market value. that
metal will only be used In conducting for
eign exchanges or Will disappear altogeth-
er. When metal is over valued in the
coinage 1t will constitute the circulating
medium Of that country or in other words
a token coin win not circulate inter-na-
tionally unless by special agreement as in
the case Of the Latin Union, This state
ment is self evident and is substantiated
by the law in question.
Under the law Of 90 the gold dollar be-
came worth about s1.O3s, the true market
ratio being about to 1876 under this law
the gold dollar was worth at the same IA
ito only $40. Thus silver being under
valued in the coinage became profitable
for foreign exchanges, while gold being