interchangeable currency based upon coin, every dollar of which has been
maintained and redeemed according to the original pledge.
The same party is to-day, as ever, in favor of the same sound money,
and will continue to maintain, by prudent legislation, the same wide use of
gold, silver, and paper with profit and security to all the people.
OUR METALLIC MONEY.
Under the Confederation of 1778, Congress was given the exclusive right
and power to regulate the alloy and value of the coin struck by their own
authority, or by that of the respective States; but, having no power to enforce
its laws in the States and no revenues with which to carry out its own right
of coinage, nothing was done.
Under the Constitution, Congress was given the exclusive power to coin
money, to regulate the value thereof and of foreign coins. It was expressly
provided that no State shall coin money, and Congress exercised this power
by the passage of the act of April 2, 1792, establishing a mint and regulating
the coins of the United States,
In this act the "dollar" of gold or silver was adopted as the unit money of
account, with the dollar coin of 371.25 grains of pure silver as the base.
FROM SILVER TO GOLD BASIS.
Between 1792 and 1834 we were under a bimetallic system, with the silver
dollar as the actual unit on a basis of 15 to 1. Spanish dollars until 1816,
and other foreign coins of both metals until a later date, were also a legal
6
tender, but, as our lighter-weight silver dollars were exported to the West
Indies, where they passed at par, we were without a sufficient national cur-
rency of either or both metals.
Legislation was therefore necessary, and by the laws of 1834 and 1837
the weight and fineness of the gold coin and by the latter act the weight
and fineness of both coins were changed so as to make the ratio 16 (15.98)
to 1, and to establish the double unit, viz.: the eagle of gold and the dollar
of silver.
COINAGE AND EXPORT OF SILVER TO 1853.
This change undervalued silver, as the act of 1792 had undervalued gold,
and as a result silver went out of the United States to countries where it
was worth more than with us.
In 1847 our coinage of gold was $20,202,325, which fell to $3,775,513 in
1848; while silver in 1847 was $2,374,450, and $2,040,050 in 1848.
The effects of the California gold output were felt in 1850 and its coinage
increased, while that of silver decreased.
In 1850 the gold coinage was $31,981..739; in 1851, $62,614,493; in 1852,
$56,846,188; while silver in 1850 was $1,866,100; in 1851, $774,397, and in
1852, $999,410.
CONDITIONS IN 1853.
By 1853 (in spite of an annual coinage of over a million dollars in halves,
quarters, etc.) there was not enough subsidiary silver for small change, and
we were practically on a gold basis. By the act of this year the values of
the minor silver coins were reduced so as to stop their exportation, and, what
was a still more important act, these were made a limited legal tender for air
amounts not exceeding $5. This was the first step in the impairment of the
double standard, established by the gold act of 1834.
CAUSES.
There were good reasons for this action. Silver was scarce, gold was
plentiful, and it had been found necessary to coin silver in small denomina-
tions and with smaller proportionate values than the standard dollars to
keep them at home for domestic use.
INCREASED GOLD OUTPUT.
The world's supply of gold had suddenly increased because of the Cali-
fornia and Australian output. From an annual product of about $13,482,000
in the period from 1831 to 1840 it reached $132,500,000 after 1850. The natural
result was to raise the value of silver and to lower that of gold.
NO SILVER IN CIRCULATION.
Then, too, we had no silver dollars in the country, or at least not in
sufficient quantities to figure largely as a circulating medium. We had
coined none from 1806 to 1836. In 1806 President Jefferson, the demigod
of the silver Democracy of the present day, stopped the coinage of the
silver dollar at the mints of the United States, and from 1836 to 1853 wa
had only coined of dollars 1,067,373, all the other silver coinage in this
period being of minor money.
GOLD THE ACTUAL STANDARD.
While, therefore, after 1853, except for the minor coins, the double stand-
ard was the law, yet the actual condition was that of a single gold standard.
RESUME.
Let us briefly review.
The act of 1792 made the silver dollar the unit, at 15 to 1; those of 1834
and 1837 changed the ratio to 16 to 1; that of 1853 reduced the values of the
minor silver coins and limited their legal tender to $5.
While the acts of 1834 and 1837 made the eagle of gold a co-unit with
silver, they did not repeal the act of 1792, which based the unit of a bi-
metallic money on the silver dollar.
But from the causes already named 1853 found us practically with a
single gold standard, with gold as the cheaper and more plentiful metal.
While silver dollars were a full legal tender, they were not greatly used,
because they were usually worth more abroad than at home, and were ex-
ported. Gold was the chief and sole base for coin currency.
SILVER DOLLARS COINED UP TO 1853.
We could not, indeed, have had many silver dollars then, because the
total coinage of these up to 1853 had been only $2,506,890. This condition
obtained until the exigencies of the civil war drove all coin money out and
gave place to bonds, greenbacks, and national bank notes.
GOLD STANDARD INTENDED.
There is no doubt as to the intention of the lawmakers at that time on
this point. They were legislating for a single gold standard, although they
left the silver dollar as a co-unit. That this was the end sought is shown
by the remarks made by the chairman of the Committee on Ways and
Means:
"We mean to make gold the standard coin, and make these new coins"
(the subsidiary silver of proportionately less value) "applicable and con-
venient, not for large but for small transactions."
Another member of the same committee said:
"We have had but a, single standard for the last three or four years; that
has been and now is gold. We propose to let it remain so, to adapt silver to
it, to regulate it by it."
In 1861 came the civil war, the tremendous expense account of the Gov-
ernmer.t, the exhaustion of our current money, and later the issues of paper
money in Treasury notes and bonds and national bank notes.
HISTORY OF THE ACT OF 1873.
This act, concerning which so much has been said, was introduced in the
Senate April 25, 1870; was considered through five sessions of Congress, and
became a law February 12, 1873.
IT HAS BEEN CHARGED THAT THIS BILL DEMONETIZED SILVER,
NOT OPENLY, BUT BY MEANS OF AN AMENDMENT NOT FULLY
KNOWN OR UNDERSTOOD EXCEPT BY A FEW- tet us follow the course
of this bill,
THE ORIGINAL BILL.
As originally presented, April 25, 1870, section 14 made the gold dollar of
25.8 grains the standard of value, the unit of computation.
Section 15 provided that the weight of the silver coin should be for the
half dollar 192 grains (the dollar was not mentioned), with proportionate
values for the quarter, 25-cent piece, and dime; and that these should be legal
tender for f 1.
Section 18 enacted that no coins other than those mentioned (that is, gold
and minor silver) should be thereafter coined.
SILVER DOLLAR PIECE DISCONTINUED.
On page 11 of the report which accompanied this original bill are the
following words:
"The coinage of the silver dollar piece is discontinued."
The discontinuance of the silver dollar piece is pointed out by the com-
mittee three times in other places in this report. In all the discussions and
in every form of the bill these two features, making the gold dollar the stand-
ard unit of value and the omission of the silver dollar (of 412 1 /k grains), re-
main unchanged. Indeed, sections 14 and 18 (afterwards section 17) were
never changed, but passed absolutely as first presented in the original bill.
SILVER SECTION.
Section 15 passed through enough changes to warrant the idea that its
every provision was understood by all fully. In the Senate it first went,
through unmodified 36 to 14 (January 10, 1871), Senator Sherman voting
against and. Senator Stewart, of Nevada, voting for it.
LEGAL TENDER $5.
In the House committee this section was amended to make the legal
tender $5; but owing to lack of time, the bill went over.
On March 9, 1871, Mr. Kelley, in the House, reported the same bill as
amended by the previous House committee; that is, with the legal tender
raised to $5; and, except for the 5-cent piece, it was an exact reproduction
of the law of 1853. No silver dollars were to be coined, and this minor
ccirajje was to be a legal tender for $5 only.
A 384-GRAIN DOLLAR.
In the discussion it was shown that some desired to have a silver dollar
included, although all agreed that its legal tender should be limited, and
that its contents should be not 412% grains, but twice that of the proposed
half dollar, or 384 grains.
On February 13, 1872, Mr. Hooper reported it back as H. R. 1427, with
these provisions:
"Sec. 16. That the silver coins of the United States shall be a dollar, a half
dollar, a quarter dollar, and a 10-cent piece, and that the weight of the do'.lnr
shall be 384 grains, the half and other coins in proportion, and that those
shall be legal tender for $5."
9
This passed the House May 27, 1872. It will be noted that this is not the
old standard dollar of 412% grains, but a subsidiary coin for change and of
limited legal tender.
TRADE DOLLAR.
There were some who desired to attempt a competition in the East Indies
with the Mexican dollar, and through these the bill was still further modified.
As it was finally passed, in the Senate January 17, 1873, and House February
7, 1873, the silver clauses were as follows:
A trade dollar of 420 grains for this export trade, although it was made
a legal tender and so remained until July 22, 1876, for $5 at home; a half dol-
lar of 12% grams (on the basis of a silver dollar of 396 grains), and minor
coins of proportionate value.
All these were made legal tender for $5 only. A 5-cent piece was in-
cluded in the copper and nickel coins.
412%-GRAIN DOLLAR NEVER IN THE BILL.
FROM THE FOREGOING IT IS PLAIN THAT THE SILVER DOLLAR
OF 412% GRAINS, " THE DOLLAR OF THE FATHERS," WAS NOT
DROPPED OUT SURREPTITOUSLY, BECAUSE IT WAS NEVER IN THE
BILL TO BE DROPPED OUT. No one wanted it there. First they had a
half dollar (no dollar), then a dollar of 384 grains, then a trade dollar for
the Pacific coast trade to the East Indies, and a half dollar of 12% grams,
or 192.9 grains (at the rate of 386 grains for a dollar), and all this silver was,
from first to last, a limited legal tender for from one to five dollars.
WHY WAS SILVER DROPPED OUT ?
The law of 1853 had abolished the coinage of our minor silver coins for
private account, but by a ruling of Mr. Guthrie, Secretary of the Treasury
under President Pierce, the Mint was ordered to receive silver from private
individuals and coin it.
This ruling furnished the opportunity for an immense profit to the coin
and bullion broker, and he did not fail to take advantage of it. Our silver
dollars, having a nominal value of 100 cents, were collected by him, taken to
the mints, and coined into minor coin; every two dollars yielded four half
dollars, a dime, and almost a half dime. Here was a profit of 7 per cent.
Silver bullion coined into our minor coin yielded a profit of 4 per cent.
From a quarter to a half million dollars were made in this way yearly, with
a prospect of many millions profit when we should resume specie paymei ts.
INTEREST OF THE COIN BROKERS.
Following the explanation of the various sections of the bill by Mr.
Hooper came a, general discussion of the bill, in. which was shown a deter-
mined effort to secure its defeat. This effort was especially manifest on the
part of some of the members from New York.
Mr. Brooks went so far as to move to strike out se'ction 1, for the .pur-
pose, as he frankly avowed, of putting an end to the bill. Both Mr. Potter
and Mr. Brooks objected to provision after provision of the bill, usually
without specific reason, simply declaring that for the present the existing
laws were sufficient.
10
MB. KELLEY'S EXPLANATION".
Goaded to desperation by the persistent attempts to defeat the measure,
?Jr. Kelley, of Pennsylvania, took the floor and very pointedly called the at-
tention of the House to the fact that any legislation, however general in
character, which assails existing abuses and would abolish opportunities
for illegitimate profits to speculators, is met with zealous and organized
opposition.
"Let me, Mr. Speaker, hastily point out some of the interests that are
on this floor seeking to protect themselves by preventing the passage of this
bill. One silver bullion dealer in New York during the last Congress ad-
mitted to Mr. Hooper that under one defect in existing laws he was making
at the cost of the Government from $75,000 to $100.000 a year. His profits
and he is but one of those who are growing fat and greedy upon the defects
in our mint lav/s arise in this way: Our country, like every other civilized
government, should procure its own metal out of which to make subsidiary
coinage. Now, sir, every coin of ours that is not gold is subsidiary. Our
silver dollar, half dollar, and every other coin that is not gold is subsidiary.
All other governments pay the expense of minting by the difference between
the intrinsic value of subsidiary coins and the value at which they circulate.
And such was the law of this country until by a ruling of Mr. Guthrie the
mint was ordered to receive silver from private individuals and coin it.
Now, it so happens that a constituent of the gentleman from New York has
been taking advantage of that ruling and deposited silver to be made into half
dollars and other silver coins. He has, as he stated to my colleague (Mr.
Hooper, of Massachusetts), and myself, been doing a business of from $1,800-
000 to $2,000,000 per annum, giving him as profit an annual income equal to
the salary of the President for the Presidential term."
In his speech (House, April 9, 1872, Congressional Globe, pages 2306-2308,
vol. 102, one of ten columns, by the way), Mr. Hooper, for the committee,
said:
SILVER DOLLARS NOT A CIRCULATING COIN.
"Section 16 re-enacts the provisions o the existing laws defining the silver
coins and their weights, respectively, except tn relation to the silver dollar,
which is reduced in weight from 412% to 384 grains, thus making it a sub-
sidiary coin in harmony with the silver coins of less denomination to secure
its concurrent circulation with them. The silver dollar of 412% grains, by
reason of its bullion or intrinsic value being greater than its nominal value,
long since ceased to be a coin of circulation, and is melted by manufacturers
of silverware."
MR. STOUGHTON SAYS SILVER DOLLAR IS TOO VALUABLE.
On the same day, Mr. Stoughton. of Michigan, made a speech of seven
columns, in which he said (same volume, page 2308) :
"The silver dollar as now issued is worth for bullion S 1 ^ cents more than
the gold dollar, and 7*4 cents more than two half dollars. Having a greater
intrinsic and nominal value, it is certain to be withdrawn from circulation
whenever we return to specie payment, and to be used only for manufacture
and exportation as bullion."
11
MR. POTTER DECLARES LEGAL TENDER SHOULD BE GOLD.
Mr. Potter, in discussing this part of the bill, said:
"This bill provides for the making of changes in the legal-tender coin
of the country and for substituting as legal-tender, coin of only one metal,
instead, as heretofore, of two. I think myself this would be a wise provision,
and that legal-tender coins, except subsidiary coin, should be of gold alone."
(Page 2310, volume 102.)
MR. KELLEY FAVORS GOLD AS STANDARD AND SILVER AS
SUBSIDIARY MONEY.
And Mr. Kelley, who is reported as having said afterwards that he "did
not know that the bill omitted the standard silver dollar," said on this same
day (Globe, volume 102, page 2316) :
"The values of gold and silver continually fluctuate. You cannot deter-
mine this year what will be the relative values of gold and silver next year.
They were 15 to 1 a short time ago; they are 16 to 1 now.
"Hence all experience has shown that you must have one standard coin
which shall be a legal tender for all others, and then you may promote your
domestic convenience by having a subsidiary coinage of silver, which shall
circulate in all parts of your country as legal tender for a limited amount
and be redeemable at its face value by your Government. But, sir, I again
call the attention of the House to the fact that the gentlemen who oppose
this bill insist upon maintaining a silver dollar worth 3% cents more than
the gold dollar and worth 7 cents more than two half dollars, and that so
long as those provisions remain you cannot keep silver coin in the country."
SENATOR STEWART DECLARES EOR GOLD.
Speaking on another subject a few months afterwards, Mr. Stewart, then,
as now, a Senator from Nevada, said (page 1392, volume 2, part 2, Con-
gressional Record) :
" I want the standard gold, and no paper money not redeemable in
gold."
About two weeks later, on February 20, 1874, Senator Stewart said (same
volume, page 1677):
"By this process we shall come to a specie basis; and when the labor-
ing man receives a dollar, it will have the purchasing power of a dollar,
and he will not be called upon to do what is impossible for him or the
producing classes to do, figure upon the exchanges, figure upon the fluc-
tuations, figure upon the gambling in New York; but he will know what
his money is worth. Gold is the universal standard of the world. Every-
body knows what a dollar in gold is worth."
These are the words of Senator Stewart before he became simply the
representative of a special interest.
12
SENATOR JONES EXTOLS GOLD.
Senator Jones, of Nevada, took the same position. In the Senate April
1, 1S74, he said:
" Does this Congress mean now to leave entirely out of view and to
discard forever a standard of value? Did any country ever accumulate
wealth, achieve greatness, or attain a high civilization without such
standard? And what but Gold can be that standard? What other thing
on earth possesses these requisite qualities?"
PUBLIC DISCUSSION OF ACT OF 1873.
It has been charged that very little was said in the public press about
this legislation. To this the answer is that in 1873 neither metal was in
circulation; and it was also simply a reiteration of what had been a com-
mercial condition for more than twenty years. The bill itself had been
before Congress three years. From the date of its introduction in the
Senate it was printed, by order of Congress, with amendments, thirteen times,
and was considered during five different sessions by the Senate and House.
The debates on the bill in the Senate covered 66 pages and in the House
78 pages of the Congressional Globe. It was finally passed with only the
addition of the trade dollar, and there was not much worthy of extended
comment.
THE PRODUCTION OF GOLD AND SILVER,
The legislation of 1853 and 1873 was based on commercial conditions,
which in turn were largely caused by the variation in the output of the
two metals both in the United States and in the world. Let us briefly study
these and see why from 1853 to 1873, and even for a few years afterwards,
gold was the more plentiful and cheaper; why later the price of silver fell so
that the two were on a parity: why it kept on falling to far below this limit;
and finally why in recent years the change in the ratio of production has
tended and still tends strongly to induce the belief that a few years mo're
will see them near the former parity.
GOLD IN THE UNITED STATES.
Up to the year 1848 our annual output of gold had never exceeded a
million, except a trifle in two years. In that year it suddenly rose' to ten
milions (an amount equal to the total annual world product up to 1840);
in 1849, to forty millions; in 1850, to fifty millions, and ranged from that
figure to sixty-five millions up to 1860. Then for five years it ranged from
forty to forty-six, and from 1865 to 1870 averaged over fifty millions. For
the next five years it averaged under forty, to go to fifty-one millions in
1878, and ranged from thirty millions in 1883 to $39,500,000 in 1894. It did
not touch the forty-million mark after 1871, except $51,200,000 in 1878.
The recent increase dates from 1892, when it was at the low-water mark
of $33,000,000. In 1893 it went to $35,900,000; in 1894 it reached $39,500,000;
in 1895 it went to $46,610,000, and in 1896 to $53,088,000. The Director of the
Mint estimates that but for the great strikes at Leadville, Cour d'Alene, and
Cripple Creek the output for 1897 would have been greatly in excess of what
the figures for that year are likely to show.
GOLD IN THE WORLD.
The gold product of the world had averaged for many years before 1840
a little over ten millions per year. In the ten years from 1841 to 1850 this
suddenly rose to the then unprecedented figure of $36,393,000. Despite this
enormous gain, the next five years, 1851 to 1855, showed a product of more
than three and a half times as great, $132,513,000, or the immense sum of
$662,566,000 for the five years.
From 1856 to 1860 it averaged $134,083,000; fell off eleven millions in the
next five years; rose to $129,614,000, 1866 to 1870; fell to $115,577,000, 1871 to
1875; to $114,585,000, 1876 to 1880, and to $99,116,000, 1881 to 1885.
This was the gold low-water mark for the world for the past forty years.
Since that time it has steadily increased, until for the year 1892 it reached
a sum higher than ever before known the enormous total of $146,815,100.
For 1893 there was a further increase of nearly eleven millions, to $157,287,-
600, while the amount for 1894 was twenty-three millions more to the vast
quantity of $180,626,100. The product for 1895 was $200,406,000; that of 189S,
as computed by Rothwell, $220,600,000; while conservative estimates put the
world's gold product within five years at $300,000,000 per annum.
COUNTRIES OF INCREASE.
It may be well to see whence this great increase has come. It will also
enable us to estimate as to the future. The principal gold-producing coun-
tries for the years 1894, 1895, and 1836 were, in order and' amounts, as
follows:
COUNTRY
1894
1895
1896
United States
$39 500 000
$46 610 000
$53,088,000
Australasia
41 760,800
44,798,300
45,182,000
Africa
40 271 000
44,554 900
44,000,000
Russia
24 1 33 400
28 8M 400
*31, 000,000
Mexico
4 500 000
6 000 000
6,513,090
China
8 556 800
3 521 000
*5,000.000
Total from 6 countries
$158,722,000
$174,378000
$184,783,000
The figures marked with an (*) are those of Mr. Rothwell, of Mineral
Industry, who estimates the gold product of the world for 1896 to have been
$220,600,000.
Of the above, China shows a small increase; it of all other nations re-
mains about the same year by year. The recent and future increases are to
be found and expected in Africa, Australasia, United States, Russia, and
Mexico. These increases have been as follows:
COUNTRY
1893 OVER 1892
1 894 OVER 1893
1895 OVER 1894
United States
$2 900 000
$3 545 000
$7 110000
Australasia
1 529 600
6 072 200
3 037 500
Africa
4711 500
1 1 328 500
4283900
Mexico
176 101)
3 1 ( )4700
1 500 000
Russia
4,761,000
Increase
$9 317 200
$24 140 400
$20 692 400
14
The Director of the Mint and leading European authorities agree in as-
cribing the comparatively small increase in Africa to the political disturb-
ances in the Transvaal, which were brewing some time prior to their actual
eruption in an attempt at revolution.
SILVER IN THE UNITED STATES.
From 1792 to 1834 the product of silver was insignificant; from 1834 to
1844 it is estimated at a total of $250,000; from 1845 to 1857 both inclusive,
it is given at $50,000 per year. In 1858 it went to $500,000; in 1859, fell t6
$100,000; 1860, $150,000; in 1861 it rose suddenly to $2,000,000; went to $4,500,-
000 for 3862; $8,500,000 in 1863, and ranged from eleven millions to sixteen
millions up to 1871. In that year it reached twenty-three, and varied from
twenty-eight to forty-eight millions up to 1885.
Demonetization, so called, took place in 1873; resumption and the use of