Fourth Coinage Act
Encyclopedia
The Fourth Coinage Act was enacted by the United States Congress
in 1873 and embraced the gold standard
and demonetized silver
. Western
mining
interests and others who wanted silver in circulation years later labeled this measure the "Crime of '73"http://hoohila.stanford.edu/workingpapers/getWorkingPaper.php?filename=E-89-12.pdf. Gold became the only metallic standard in the United States, hence putting the United States de facto
on the gold standard
.
The U.S. did not actually adopt the gold standard de jure
until 1900, following a lengthy period of debate that was made famous by William Jennings Bryan
's cross of gold speech
at the 1896 Democratic convention. By this time, most major nations had moved to a gold standard
. The only major nation that continued on the silver standard
into the twentieth century was China
. China
and Hong Kong
abandoned the silver standard
in 1935.
The act (H. R. 2934) also placed the United States Mint
within the jurisdiction of 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.
Finally, the act also ended production of three minor coins, the half dime
, the silver Three-cent piece
, and the Two-cent piece
. None of these were still necessary, and both the half dime and Three-cent piece had been replaced by other coins.
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.
The U.S. government finally capitulated to the pressure from the western mining states and agreed to the Bland-Allison Act
of 1878, which directed the Treasury to purchase silver at a high price. It was replaced in 1890 by the Sherman Silver Purchase Act
. The Bland-Allison Act (named for Richard P. Bland
, D–Mo.
, and William Allison
, R–Iowa
) required the U.S. Treasury to buy between $2 million to $4 million of silver per month at about double the market value, with a ratio of silver to gold at 16:1. President Grover Cleveland
forced the repeal of these 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"http://www.micheloud.com/FXM/MH/crime/index.htm, and the movement became known as Free Silver
. The silverite
movement took control of the Democratic party in 1896 under William Jennings Bryan
. The 1896 and 1900 presidential elections focused on silver and gold, but both times, William McKinley
, advocate of gold, won the election. This period is best remembered by the cross of gold speech that was made by William Jennings Bryan
at the 1896 Democratic National Convention
in Chicago
on July 6, 1896, in which he expressed his hope that mankind would not be crucified upon a cross of gold.
had already been on the gold standard
since 1853, as had Newfoundland
since 1865. The new coinage act of 1873 now put the USA onto the gold standard 'de facto', and, as mentioned, it had the effect of depressing the value of silver
in relation to gold
. As such, silver dollars (worldwide) fell in value against the US dollar, the Canadian dollar
and the Newfoundland dollar
. This did not affect the Spanish dollar
accounts that were being used in the British territories in the Eastern Caribbean because these were merely paper units that were being used in conjunction with sterling
coinage at a fixed rate of $1 = 4s 2d. It did however have the effect of making silver dollar coins return to the West Indies. Silver dollars had very much disappeared in the West Indies following the discovery of gold in Australia
in 1851. The return of silver dollars to the West Indies after 1873 threatened the gold standard there that had been in operation since 1704, and so by the year 1876, the British West Indies
territories began to pass legislation to demonetize the silver dollars. In the Far East
and in Latin America
, the silver dollars dropped in value against the US unit, and by the year 1900 they had dropped to exactly one half of their pre-1873 gold value. The Mexican Peso
, the Philippine Peso
, and the Japanese Yen
were now worth only 50 US cents. In the Philippines
, this 2:1 exchange rate continued right up until November 1965 on the eve of the reign of President Ferdinand Marcos
.
United States Congress
The United States Congress is the bicameral legislature of the federal government of the United States, consisting of the Senate and the House of Representatives. The Congress meets in the United States Capitol in Washington, D.C....
in 1873 and embraced the gold standard
Gold standard
The gold standard is a monetary system in which the standard economic unit of account is a fixed mass of gold. There are distinct kinds of gold standard...
and demonetized silver
Silver
Silver is a metallic chemical element with the chemical symbol Ag and atomic number 47. A soft, white, lustrous transition metal, it has the highest electrical conductivity of any element and the highest thermal conductivity of any metal...
. Western
Western United States
.The Western United States, commonly referred to as the American West or simply "the West," traditionally refers to the region comprising the westernmost states of the United States. Because the U.S. expanded westward after its founding, the meaning of the West has evolved over time...
mining
Mining
Mining is the extraction of valuable minerals or other geological materials from the earth, from an ore body, vein or seam. The term also includes the removal of soil. Materials recovered by mining include base metals, precious metals, iron, uranium, coal, diamonds, limestone, oil shale, rock...
interests and others who wanted silver in circulation years later labeled this measure the "Crime of '73"http://hoohila.stanford.edu/workingpapers/getWorkingPaper.php?filename=E-89-12.pdf. Gold became the only metallic standard in the United States, hence putting the United States de facto
De facto
De facto is a Latin expression that means "concerning fact." In law, it often means "in practice but not necessarily ordained by law" or "in practice or actuality, but not officially established." It is commonly used in contrast to de jure when referring to matters of law, governance, or...
on the gold standard
Gold standard
The gold standard is a monetary system in which the standard economic unit of account is a fixed mass of gold. There are distinct kinds of gold standard...
.
The U.S. did not actually adopt the gold standard de jure
De jure
De jure is an expression that means "concerning law", as contrasted with de facto, which means "concerning fact".De jure = 'Legally', De facto = 'In fact'....
until 1900, following a lengthy period of debate that was made famous by William Jennings Bryan
William Jennings Bryan
William Jennings Bryan was an American politician in the late-19th and early-20th centuries. He was a dominant force in the liberal wing of the Democratic Party, standing three times as its candidate for President of the United States...
's cross of gold speech
Cross of Gold speech
The Cross of Gold speech was delivered by William Jennings Bryan at the 1896 Democratic National Convention in Chicago on July 8, 1896. The speech advocated bimetallism. Following the Coinage Act , the United States abandoned its policy of bimetallism and began to operate a de facto gold...
at the 1896 Democratic convention. By this time, most major nations had moved to a gold standard
Gold standard
The gold standard is a monetary system in which the standard economic unit of account is a fixed mass of gold. There are distinct kinds of gold standard...
. The only major nation that continued on the silver standard
Silver standard
The silver standard is a monetary system in which the standard economic unit of account is a fixed weight of silver. The silver specie standard was widespread from the fall of the Byzantine Empire until the 19th century...
into the twentieth century was China
China
Chinese civilization may refer to:* China for more general discussion of the country.* Chinese culture* Greater China, the transnational community of ethnic Chinese.* History of China* Sinosphere, the area historically affected by Chinese culture...
. China
China
Chinese civilization may refer to:* China for more general discussion of the country.* Chinese culture* Greater China, the transnational community of ethnic Chinese.* History of China* Sinosphere, the area historically affected by Chinese culture...
and Hong Kong
Hong Kong
Hong Kong is one of two Special Administrative Regions of the People's Republic of China , the other being Macau. A city-state situated on China's south coast and enclosed by the Pearl River Delta and South China Sea, it is renowned for its expansive skyline and deep natural harbour...
abandoned the silver standard
Silver standard
The silver standard is a monetary system in which the standard economic unit of account is a fixed weight of silver. The silver specie standard was widespread from the fall of the Byzantine Empire until the 19th century...
in 1935.
The act (H. R. 2934) also placed the United States Mint
United States Mint
The United States Mint primarily produces circulating coinage for the United States to conduct its trade and commerce. The Mint was created by Congress with the Coinage Act of 1792, and placed within the Department of State...
within the jurisdiction of the United States Department of the Treasury
United States Department of the Treasury
The Department of the Treasury is an executive department and the treasury of the United States federal government. It was established by an Act of Congress in 1789 to manage government revenue...
, and specified four United States
United States
The United States of America is a federal constitutional republic comprising fifty states and a federal district...
mints at Philadelphia
Philadelphia Mint
The Philadelphia Mint was created from the need to establish a national identity and the needs of commerce in the United States. This led the Founding Fathers of the United States to make an establishment of a continental national mint a main priority after the ratification of the Constitution of...
, San Francisco
San Francisco Mint
The San Francisco Mint is a branch of the United States Mint, and was opened in 1854 to serve the gold mines of the California Gold Rush. It quickly outgrew its first building and moved into a new one in 1874. This building, the Old United States Mint, also known affectionately as The Granite Lady,...
, Carson City
Carson City Mint
The Carson City Mint was a branch of the United States Mint in Carson City, Nevada. Built at the peak of the silver boom, 50 issues of silver coins and 57 issues of gold coins minted here between 1870 and 1893 bore the "CC" mint mark...
, and Denver
Denver Mint
The Denver Mint is a branch of the United States Mint that struck its first coins on February 1, 1906. The mint is still operating and producing coins for circulation, as well as mint sets and commemorative coins. Coins produced at the Denver Mint bear a D mint mark...
, and two assay-offices at New York
New York City
New York is the most populous city in the United States and the center of the New York Metropolitan Area, one of the most populous metropolitan areas in the world. New York exerts a significant impact upon global commerce, finance, media, art, fashion, research, technology, education, and...
and Boise City, Idaho.
Finally, the act also ended production of three minor coins, the half dime
Half dime
The half dime, or half disme, was a silver coin, valued at five cents, formerly minted in the United States.Some numismatists consider the denomination to be the first coin minted by the United States Mint under the Coinage Act of 1792, with production beginning on or about July 1792...
, the silver Three-cent piece
Three-cent piece (United States coin)
The United States three cent piece was a unit of currency equaling 3/100th of a United States dollar. The mint produced two different three-cent coins: the three-cent silver and the three-cent nickel. Its purchasing power in 1851 would be equivalent to $ today.-History:The three cent coin has an...
, and the Two-cent piece
Two-cent piece (United States coin)
The two-cent coin was produced in the United States from 1864–1873 with decreasing mintages throughout that time. In terms of consumer price indexes, the 1864 coin would be comparable to $ in today's money....
. None of these were still necessary, and both the half dime and Three-cent piece had been replaced by other coins.
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
Ulysses S. Grant
Ulysses S. Grant was the 18th President of the United States as well as military commander during the Civil War and post-war Reconstruction periods. Under Grant's command, the Union Army defeated the Confederate military and ended the Confederate States of America...
, he promptly signed it into law on February 12, 1873.
Political results
As countries abandoned silver and bimetallic standards in favor of gold, the supply of silver not being used for coinage increased. Coupled with the fact that more silver was being discovered, this caused the world's gold-to-silver price ratio to rise. By 1908, the ratio had reached 40:1.The U.S. government finally capitulated to the pressure from the western mining states and agreed to the Bland-Allison Act
Bland-Allison Act
The Bland–Allison Act was an 1878 act of Congress requiring the U.S. Treasury to buy a certain amount of silver and put it into circulation as silver dollars. Though the bill was vetoed by President Rutherford B...
of 1878, which directed the Treasury to purchase silver at a high price. It was replaced in 1890 by the Sherman Silver Purchase Act
Sherman Silver Purchase Act
The Sherman Silver Purchase Act was enacted on July 14, 1890 as a United States federal law. It was named after its author, Senator John Sherman, an Ohio Republican, chairman of the Senate Finance Committee...
. The Bland-Allison Act (named for Richard P. Bland
Richard P. Bland
Richard Parks Bland , American school teacher, lawyer, and Democratic Congressman between 1873 and 1899, serving except from 1895 to 1897, when he returned to office....
, D–Mo.
Missouri
Missouri is a US state located in the Midwestern United States, bordered by Iowa, Illinois, Kentucky, Tennessee, Arkansas, Oklahoma, Kansas and Nebraska. With a 2010 population of 5,988,927, Missouri is the 18th most populous state in the nation and the fifth most populous in the Midwest. It...
, and William Allison
William B. Allison
William Boyd Allison was an early leader of the Iowa Republican Party, who represented northeastern Iowa for four consecutive terms in the U.S. House before representing his state for six consecutive terms in the U.S. Senate...
, R–Iowa
Iowa
Iowa is a state located in the Midwestern United States, an area often referred to as the "American Heartland". It derives its name from the Ioway people, one of the many American Indian tribes that occupied the state at the time of European exploration. Iowa was a part of the French colony of New...
) required the U.S. Treasury to buy between $2 million to $4 million of silver per month at about double the market value, with a ratio of silver to gold at 16:1. President Grover Cleveland
Grover Cleveland
Stephen Grover Cleveland was the 22nd and 24th president of the United States. Cleveland is the only president to serve two non-consecutive terms and therefore is the only individual to be counted twice in the numbering of the presidents...
forced the repeal of these laws in 1893, which ruined his popularity among many Democrats. After 1893 Western
Western United States
.The Western United States, commonly referred to as the American West or simply "the West," traditionally refers to the region comprising the westernmost states of the United States. Because the U.S. expanded westward after its founding, the meaning of the West has evolved over time...
miners and wheat and cotton farmers rallied to the silver cause with the slogan the "Crime of '73"http://www.micheloud.com/FXM/MH/crime/index.htm, and the movement became known as Free Silver
Free Silver
Free Silver was an important United States political policy issue in the late 19th century and early 20th century. Its advocates were in favor of an inflationary monetary policy using the "free coinage of silver" as opposed to the less inflationary Gold Standard; its supporters were called...
. The silverite
Silverite
The Silverites were members of a political movement in the United States in the late-19th century that advocated that silver should continue to be a monetary standard along with gold, as authorized under the Coinage Act of 1792...
movement took control of the Democratic party in 1896 under William Jennings Bryan
William Jennings Bryan
William Jennings Bryan was an American politician in the late-19th and early-20th centuries. He was a dominant force in the liberal wing of the Democratic Party, standing three times as its candidate for President of the United States...
. The 1896 and 1900 presidential elections focused on silver and gold, but both times, William McKinley
William McKinley
William McKinley, Jr. was the 25th President of the United States . He is best known for winning fiercely fought elections, while supporting the gold standard and high tariffs; he succeeded in forging a Republican coalition that for the most part dominated national politics until the 1930s...
, advocate of gold, won the election. This period is best remembered by the cross of gold speech that was made by William Jennings Bryan
William Jennings Bryan
William Jennings Bryan was an American politician in the late-19th and early-20th centuries. He was a dominant force in the liberal wing of the Democratic Party, standing three times as its candidate for President of the United States...
at the 1896 Democratic National Convention
1896 Democratic National Convention
The 1896 Democratic National Convention, held at the Chicago Coliseum from July 7 to July 11, was the scene of William Jennings Bryan's nomination as Democratic presidential candidate for the 1896 U.S. presidential election....
in Chicago
Chicago
Chicago is the largest city in the US state of Illinois. With nearly 2.7 million residents, it is the most populous city in the Midwestern United States and the third most populous in the US, after New York City and Los Angeles...
on July 6, 1896, in which he expressed his hope that mankind would not be crucified upon a cross of gold.
Impact on exchange rates
CanadaCanada
Canada is a North American country consisting of ten provinces and three territories. Located in the northern part of the continent, it extends from the Atlantic Ocean in the east to the Pacific Ocean in the west, and northward into the Arctic Ocean...
had already been on the gold standard
Gold standard
The gold standard is a monetary system in which the standard economic unit of account is a fixed mass of gold. There are distinct kinds of gold standard...
since 1853, as had Newfoundland
History of Newfoundland and Labrador
The History of Newfoundland and Labrador is the story of the peoples who have lived in what is now the Canadian province of Newfoundland and Labrador....
since 1865. The new coinage act of 1873 now put the USA onto the gold standard 'de facto', and, as mentioned, it had the effect of depressing the value of silver
Silver
Silver is a metallic chemical element with the chemical symbol Ag and atomic number 47. A soft, white, lustrous transition metal, it has the highest electrical conductivity of any element and the highest thermal conductivity of any metal...
in relation to gold
Gold
Gold is a chemical element with the symbol Au and an atomic number of 79. Gold is a dense, soft, shiny, malleable and ductile metal. Pure gold has a bright yellow color and luster traditionally considered attractive, which it maintains without oxidizing in air or water. Chemically, gold is a...
. As such, silver dollars (worldwide) fell in value against the US dollar, the Canadian dollar
Canadian dollar
The Canadian dollar is the currency of Canada. As of 2007, the Canadian dollar is the 7th most traded currency in the world. It is abbreviated with the dollar sign $, or C$ to distinguish it from other dollar-denominated currencies...
and the Newfoundland dollar
Newfoundland dollar
The dollar was the currency of the colony and Dominion of Newfoundland from 1865 until 1949, when Newfoundland became a province of Canada. It was subdivided into 100 cents.-History:...
. This did not affect the Spanish dollar
Spanish dollar
The Spanish dollar is a silver coin, of approximately 38 mm diameter, worth eight reales, that was minted in the Spanish Empire after a Spanish currency reform in 1497. Its purpose was to correspond to the German thaler...
accounts that were being used in the British territories in the Eastern Caribbean because these were merely paper units that were being used in conjunction with sterling
Pound sterling
The pound sterling , commonly called the pound, is the official currency of the United Kingdom, its Crown Dependencies and the British Overseas Territories of South Georgia and the South Sandwich Islands, British Antarctic Territory and Tristan da Cunha. It is subdivided into 100 pence...
coinage at a fixed rate of $1 = 4s 2d. It did however have the effect of making silver dollar coins return to the West Indies. Silver dollars had very much disappeared in the West Indies following the discovery of gold in Australia
Australia
Australia , officially the Commonwealth of Australia, is a country in the Southern Hemisphere comprising the mainland of the Australian continent, the island of Tasmania, and numerous smaller islands in the Indian and Pacific Oceans. It is the world's sixth-largest country by total area...
in 1851. The return of silver dollars to the West Indies after 1873 threatened the gold standard there that had been in operation since 1704, and so by the year 1876, the British West Indies
British West Indies
The British West Indies was a term used to describe the islands in and around the Caribbean that were part of the British Empire The term was sometimes used to include British Honduras and British Guiana, even though these territories are not geographically part of the Caribbean...
territories began to pass legislation to demonetize the silver dollars. In the Far East
Far East
The Far East is an English term mostly describing East Asia and Southeast Asia, with South Asia sometimes also included for economic and cultural reasons.The term came into use in European geopolitical discourse in the 19th century,...
and in Latin America
Latin America
Latin America is a region of the Americas where Romance languages – particularly Spanish and Portuguese, and variably French – are primarily spoken. Latin America has an area of approximately 21,069,500 km² , almost 3.9% of the Earth's surface or 14.1% of its land surface area...
, the silver dollars dropped in value against the US unit, and by the year 1900 they had dropped to exactly one half of their pre-1873 gold value. The Mexican Peso
Mexican peso
The peso is the currency of Mexico. Modern peso and dollar currencies have a common origin in the 15th–19th century Spanish dollar, most continuing to use its sign, "$". The Mexican peso is the 12th most traded currency in the world, the third most traded in the Americas, and by far the most...
, the Philippine Peso
Philippine peso
The peso is the currency of the Philippines. It is subdivided into 100 centavos . Before 1967, the language used on the banknotes and coins was English and so "peso" was the name used...
, and the Japanese Yen
Japanese yen
The is the official currency of Japan. It is the third most traded currency in the foreign exchange market after the United States dollar and the euro. It is also widely used as a reserve currency after the U.S. dollar, the euro and the pound sterling...
were now worth only 50 US cents. In the Philippines
Philippines
The Philippines , officially known as the Republic of the Philippines , is a country in Southeast Asia in the western Pacific Ocean. To its north across the Luzon Strait lies Taiwan. West across the South China Sea sits Vietnam...
, this 2:1 exchange rate continued right up until November 1965 on the eve of the reign of President Ferdinand Marcos
Ferdinand Marcos
Ferdinand Emmanuel Edralin Marcos, Sr. was a Filipino leader and an authoritarian President of the Philippines from 1965 to 1986. He was a lawyer, member of the Philippine House of Representatives and a member of the Philippine Senate...
.
See also
- Coinage Act of 1792
- Coinage Act of 1834Coinage Act of 1834The Coinage Act of 1834 was passed by the United States Congress on June 27, 1834. It raised the silver-to-gold weight ratio from its 1792 level of 15:1 to 16:1 thus setting the mint price for silver at a level below its international market price...
- Coinage Act of 1849
- Coinage Act of 1857Coinage Act of 1857The Coinage Act of 1857 was an act of the United States Congress which forbade the use of foreign coins as legal tender, repealing all acts "authorizing the currency of foreign gold or silver coins". Specific coins would be exchanged at the Treasury and recoined...
- Coinage Act of 1864
- Coinage Act of 1965Coinage Act of 1965The Coinage Act of 1965, , eliminated silver from the circulating dimes and quarter dollars of the United States, and diminished the silver content of the half dollar from 90% to 40%...
- Political interpretations of The Wonderful Wizard of OzPolitical interpretations of The Wonderful Wizard of OzPolitical interpretations of The Wonderful Wizard of Oz include treatments of the modern fairy tale as an allegory or metaphor for the political, economic and social events of America in the 1890s...
- Resumption Act
- Sherman Silver Purchase ActSherman Silver Purchase ActThe Sherman Silver Purchase Act was enacted on July 14, 1890 as a United States federal law. It was named after its author, Senator John Sherman, an Ohio Republican, chairman of the Senate Finance Committee...
- Bland-Allison ActBland-Allison ActThe Bland–Allison Act was an 1878 act of Congress requiring the U.S. Treasury to buy a certain amount of silver and put it into circulation as silver dollars. Though the bill was vetoed by President Rutherford B...
- John Jay KnoxJohn Jay KnoxJohn Jay Knox was an American financier, born in Knoxboro, New York. He graduated from Hamilton College in 1849 and entered the banking business.He was a vigorous supporter of the national banking plan of Treasury Secretary Salmon P. Chase...
- Henry LindermanHenry LindermanHenry Richard Linderman was an American financier.-Medical practice:...
- Free SilverFree SilverFree Silver was an important United States political policy issue in the late 19th century and early 20th century. Its advocates were in favor of an inflationary monetary policy using the "free coinage of silver" as opposed to the less inflationary Gold Standard; its supporters were called...
- Alexander del MarAlexander del MarAlexander del Mar, also Alex Delmar , was an American political economist, historian, numismatist and author.In business affairs he was frequently referred to in contemporary reports and newspapers as Delmar; however, many of his published works appeared under the name of del Mar. He sometimes...
Further reading
- Robert R. Van Ryzin "Crime of 1873: The Comstock Connection," Krause Publications 2001.
External links
Oddly, this article is missing any text of, or links to the Act of 1893. Maybe it could be added here?- 42nd Congress
- An intense summary of the issue
- On “The Crime of 1873”, a speech by John ShermanJohn Sherman (politician)John Sherman, nicknamed "The Ohio Icicle" , was a U.S. Representative and U.S. Senator from Ohio during the Civil War and into the late nineteenth century. He served as both Secretary of the Treasury and Secretary of State and was the principal author of the Sherman Antitrust Act...