Judicature Act of 1873

Coinage Act of 1873

The Fourth Coinage Act was enacted by the United States Congress in 1873 and embraced the gold standard and de-monetized silver. Western mining interests and others who wanted silver in circulation years later labeled this measure the "Crime of '73". Gold became the only metallic standard in the United States.

Following the lead of Britain, most major nations in the period also demonetized silver and moved to a gold standard, including Germany, France, Russia, Italy and smaller counties. By 1880 the only large countries still on the silver standard were India and China, both very poor at the time.

The act (H. R. 2934) also placed the United States Mint within the United States Department of the Treasury, and specified four United States mints at Philadelphia, San Francisco, Carson City, and Denver, and two assay-offices at New York and Boise City, Idaho.

H. R. 2934 was a very lengthy bill written in 67 sections which filled 35 pages in the House Journal on May 27, 1872. When presented to President Grant, he promptly signed it into law on February 12, 1873.

Political results

As countries leave the silver standard (or bimetallic standard) there becomes an increased supply of silver. Coupled with the fact that more silver is being discovered, this causes the world's silver-to-gold supply-demand ratio to rise (it would reach 40:1 by 1908).

The U.S. Government finally caved to the pressure from the western mining states and agreed to the Bland-Allison Act of 1878 which forced the Treasury to purchase silver at a high price. It was replaced in 1890 by the Sherman Silver Purchase Act of 1890). The Bland-Allison Act (Richard P. Bland (Democrat of Missouri) and William Allison (Republican of Iowa)) required the U.S. Treasury to purchase between $2 and 4 million of silver per month at a 16:1 ratio, or about double the market value. President Grover Cleveland forced the repeal of the silver purchase laws in 1893, which ruined his popularity among many Democrats. After 1893 Western miners and wheat and cotton farmers rallied to the silver cause with the slogan the "Crime of '73". The silverite movement that took control of the Democratic party in 1896 under William Jennings Bryan. The 1896 and 1900 presidential elections focused on silver and gold, with victory going both times to the gold champion, William McKinley.

Further reading

  • Friedman, Milton (1990). "The Crime of 1873". Journal of Political Economy 98 (6): 1159–1194.
  • Nugent, Walter (1968). Money and American Society, 1865-1880. New York: Free Press.

See also


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