page_title: Coinage Act of 1873
section_title: Later reaction
hierarchical_section_title: Coinage Act of 1873 / Aftermath / Later reaction
caption_attribution_description: Cover image of Puck Magazine, v. 47, no. 1201 (1900 March 14). Illustration showing two gladiators, one labeled "Gold Standard" and the other labeled "Silver Standard", in a colosseum. The "Gold Standard" gladiator, with a sword labeled "SOUND MONEY LAW OF 1900", stands victorious over the "Silver Standard" gladiator whose sword, labeled "16 to 1", lies broken at his side.
context_page_description: The Coinage Act of 1873 or Mint Act of 1873, 17 Stat. 424, was a general revision of the laws relating to the Mint of the United States. In abolishing the right of holders of silver bullion to have their metal struck into fully legal tender dollar coins, it ended bimetallism in the United States, placing the nation firmly on the gold standard. Because of this, the act became contentious in later years, and was denounced by some as the "Crime of '73".
  By 1869, the Mint Act of 1837 was deemed outdated, and Treasury Secretary George Boutwell had Deputy Comptroller of the Currency John Jay Knox undertake a draft of a revised law, which was introduced into Congress by Ohio Senator John Sherman. Due to the high price of silver, little of that metal was presented at the Mint, but Knox and others foresaw that development of the Comstock Lode and other rich silver-mining areas would lower the price, causing large quantities of silver dollars to be struck and the gold standard to be endangered. During the almost three years the bill was pending before Congress, it was rarely mentioned that it would end bimetallism, though this was not concealed. Congressmen instead debated other provisions.
context_section_description: The abolition of the half dime, still circulating in the Far West, led to shortages of small change there. Congress tried to address this with the unpopular twenty-cent piece, which was struck for circulation only in 1875 and 1876 and was rejected by the public for its similarity to the quarter dollar. The Western United States was not fully supplied with small change until the Mint began striking cents there in 1908 and five-cent nickels in 1912. The Trade dollar, struck principally to compete with Mexican dollars in the Far East trade, failed to gain full acceptance in the Orient. Many were returned to (or never left) the United States. As they could be purchased at a discount, they were popular among employers, who placed them in workers' pay packets. In 1876, Congress revoked even the limited legal tender status they enjoyed; in 1878, the Mint stopped striking them except for collectors, and even that limited issue ceased after 1885. In 1887, Congress allowed a six-month window during which they could be redeemed for other currency, provided they had not been chopmarked by Asian merchants.
  As Friedman noted, if the price of silver had remained high, the exclusion of the silver dollar from the 1873 act would have been irrelevant. By 1874, the effect of the new mines in the Far West, and the sale of silver in Germany following its demonetization there, combined to force the price of silver down. Silver producers had not been aware of the statutory change, and only learned of it when they sought to present silver at the mints for coining. According to numismatic historian Don Taxay, "an agitation followed, during which several pious Congressmen feigned ignorance of the repeal, maintaining it had been worked into the Mint bill surreptitiously." One Delaware manufacturer wrote to his senator, Thomas F. Bayard, in 1878, "at the beginning ... I was totally ignorant of all that related to the silver question—so much in fact that (I find now like almost everyone else not excluding Congressmen!) I did not know Silver had been demonetized."
  A severe depression, the Panic of 1873, began in the same year as passage of the act, and persisted for much of the decade. Many in the United States came to believe the gold standard too rigid to deal with economic hard times like those, and sought to restore bimetallism. The inflation caused by such a policy would enable debtors to repay what they owed more easily. The price of silver continued to fall—the silver in a dollar in the new metric-weight subsidiary silver coins was worth only $.75 by mid-1876, though the price recovered some after that.
  In early 1875, Congress passed a bill for the resumption of specie payments (that is, in gold and silver coin)—effective in 1879. Friedman stated that had it not been for the 1873 act, resumption would have been on the effective basis of a silver standard, which he viewed as a good thing, allowing for more economic stability and "almost surely would have avoided" the downturn of the early 1890s known as the Panic of 1893.
  Support for bimetallism grew in the 1870s, and resulted in the passage of the Bland–Allison Act of February 28, 1878, over the veto of President Rutherford B. Hayes. This legislation required the Treasury to purchase millions of dollars' worth of silver bullion each month, and coin it into silver dollars—the denomination was restored as a legal tender, except when gold was specified by law or private contract. Renewed support for silver led to the passage of the Sherman Silver Purchase Act of 1890, greatly increasing the silver purchases, and requiring the Treasury to pay for them in banknotes that could be redeemed for gold. Over the next three years, $132,000,000 in gold was withdrawn from the Treasury, and amid another depression President Grover Cleveland secured the repeal of the silver purchase act.
  The free silver movement reached its height with the 1896 campaign of former Nebraska representative William Jennings Bryan, who won the Democratic nomination for president after his Cross of Gold speech, which decried the gol
caption: The gold standard triumphant: a caricature from Puck magazine, 1900.
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