POLITICAL EFFECTS OF LEGAL TENDER. 147 reproduced under utterly different circumstances. Argument and experience have demonstrated the fallacy of this conception, and averted the evils which might have flowed from it. But in the judgment of a large and intelligent majority of those who were contemporary with the war and gave careful study to its progress, the legal-tender bill was a most effective and powerful auxiliary in its successful prosecution.” 1 1 1 Twenty Years of Congress. James G. Blaine. Vol. I., pp. 427– 429. Norwich, Conn.: The Henry Bill Publishing Company. 1884. CHAPTER X. THE SILVER DOLLAR AND THE SILVER CERTIFICATE. THE act of April 2, 1792, for establishing a mint and regulating the coinage of the United States, authorized the free coinage of a silver dollar of 412.5 grains, and this provision remained in force until 1873. The act of June 28, 1834, which reduced the gold standard about six and one-fourth per cent., practically demonetized the silver coinage. Previous to the date of the passage of that act American gold and silver coins of all denominations were equally a legal tender, and the silver coins of less denomination than one dollar were chiefly in use, only $1,369,517 in silver dollars having been issued from the mint at that date. The act of 1834 overvalued the gold coinage, driving from the country the full-weight silver coins previously in circulation; and it may be confidently stated that from 1834 to 1873 no silver dollar-pieces had been presented at any custom-house in payment of duties. The entire customs duties of the country during this period were, with the exception of silver used in change, paid in gold coin, and from this fund the interest paid upon the public debt has been chiefly derived; and it is not probable that during this time any of these silver dollar-pieces were used in this country in the payment of debt, except SILVER COIN THE BASIS UNTIL 1834. 149 in certain cases of special contract, while thousands of millions in gold coin have been used to liquidate debts, both public and private. The average amount in silver dollar-pieces annually coined from 1834 to 1873 was about $160,000. From 1793-the date of the first issue of silver coin by the United States-to 1834 the silver and the gold dollar were alike authorized to be received as legal tender in payment of debt, but silver alone circulated. Subsequently, however, silver was not used, except in fractional payments, or, since 1853, as a subsidiary coin. The silver coin, as a coin of circulation, had become obsolete. The reason why, prior to 1834, payments were made exclusively in silver, and subsequently to that date in gold, is found in the fact that prior to the legislation of 1834 the weight of fine silver in the silver dollar was fixed at fifteen times the weight of fine gold in the gold dollar; but after that date, owing to a reduction in the weight of gold required for the standard gold dollar, the silver dollar was made to contain of fine metal almost precisely sixteen times that of the new gold dollar, the actual market value of gold during the entire period having been greater than fifteen and less than sixteen times the value of silver of equal weight. During the earlier period, therefore, the standard silver coins were relatively the cheaper, and consequently circulated to the exclusion of the gold; while during the later period the standard gold coins were the cheaper, circulating to the exclusion of the silver. The Coinage Act of 1873, by which the coinage of the silver dollar was discontinued, became a law on February 12th of that year. The act of February 28, 1878, which passed Congress by a two-thirds vote over the veto of President Hayes, again provided for the coinage of a silver dollar of 412.5 grains, the silver bullion to be purchased at the market price by the Government, and the amount so purchased and coined not to be less than two millions of dollars per month. During the debate on this bill the charge was repeatedly made, in and out of Congress, that the previous act of 1873, discontinuing the free coinage of the silver dollar, was passed surreptitiously. This statement has no foundation in fact. The report of the writer, who was then Deputy Comptroller of the Currency, transmitted to Congress in 1870 by the Secretary, three times distinctly stated that the bill accompanying it proposed to discontinue the issue of the silver dollar-piece.' Various experts, to whom it had been submitted, approved this feature of the bill, and their opinions were printed by order of Congress. The House was informed by its members of this provision, and the bill was printed thirteen times by order of Congress, and once by the commissioners revising the statutes, and was considered during five successive sessions. If the question of the double standard did not become prominent in the discussion upon the bill, it was for the reason that usage had established the gold dollar as the unit, the silver dollar, on account of its greater relative value, having, with the Mexican dollar and the pistareen, disappeared from the circulation of the country. The Coinage Act of 1873' and the Revised Statutes. of 1874 simply registered in the form of a statute what. 1 Senate, Mis. Doc. No. 132, XLI. Cong., 2d Sess. 2 For the history of the Coinage Act of 1873, see pp. 170-175, Report of the Comptroller of the Currency for 1876. COINAGE ACT OF 1873. 151 had been really the unwritten law of the land for nearly forty years. It is not probable that any act passed by any Congress ever received more care in its preparation, or was ever submitted to the criticism of a greater number of practical and scientific experts' than was this Coinage Act of 1873. The statements in reference to the surreptitious or inadvertent passage of the bill was subsequently repeated in the city of Paris by a member of the Silver Commission. 2 A well-known scientific author and writer on financial subjects, in criticising the report of the Paris Silver Commission, says: "Another act which must have placed our commissioners at a moral disadvantage was their filing the humiliating plea that the act of 1873, demonetizing the silver dollar, was passed through inadvertence. "It is difficult to see what this plea meant, what relation it had to the business of the conference, or what object was to be gained by raising it. If a proposed law can be debated in Congress for five years, be reported several times from committees in various forms, be recommended by the Secretary of the Treasury in at least one annual report, finally pass both Houses of Congress, and be signed by the President, then remain on the statute-books for two or three years without any one knowing it, and all through 'inadvertence,' what shall we say of our political system, or of the attention of 1 H. R., Ex. Doc. No. 307, XLI. Cong., 2d Sess. 2 The Silver Commission and the Silver Question, by Professor Simon Newcomb: International Review, March, 1879. |