CONGRESS. (THE FINANCIAL MEASURE.) 



157 



ard by regulating the ratio to conform to the 

 commercial values of the metals. 



" Less than three years thereafter, by the act of 

 Jan. 18, 1837, which changed the ratio from 1 

 to 16 to 1 to 15.988 by again modifying the quan- 

 tity of metal in the coins, the effort to maintain 

 the double standard was apparent. The remark- 

 able discovery of gold in California in 1847 and 

 1848 and in Australia in 1851 had a material in- 

 fluence upon the relative value of gold and silver, 

 and the bullion in the silver coins of the United 

 States increased in value beyond the value noted 

 by their face. This condition bore fruit in the 

 act of Feb. 21, 1853, which provided for the re- 

 duction of the amount of metal in the silver half 

 dollar, quarter, and dime, and prohibited the fur- 

 ther coinage of subsidiary silver coins, except 

 upon Government account. The bullion value of 

 a silver dollar prior to 1853, and, indeed, prior to 

 1873, was, the great proportion of the time, in 

 excess of the face value, and comparatively few 

 were coined. 



" The difference between the bullion and face 

 value of silver coin accounted for their with- 

 drawal from the channels of trade as a medium 

 of exchange, and their conversion into commodi- 

 ties, regulated in value by the laws governing 

 trade and commerce, irrespective of the statute 

 making provision for their circulation as money 

 at fixed valuations. The necessity for small 

 change created the demand for the half dollars, 

 quarters, and dimes, which remained in circula- 

 tion because the bullion was reduced and circu- 

 lated at par because of the guarantee of the Gov- 

 ernment. By the provision of the law these sub- 

 divisions of the dollar \vere ' paid out at the mint 

 in exchange for gold coins at par,' and there has 

 never been a doubt but that their redemption 

 Avould be equally at par. The struggle of the 

 Government to maintain the double standard by 

 law r continued for nearly sixty years. The shift- 

 ing of the ratio between the two metals was met 

 by the change of statute. 



" The universal experience in business transac- 

 tions marked the withdrawal from circulation of 

 the undervalued coin. The debates in Congress 

 just prior to the passage of the act of Feb. 21, 

 1853, clearly mark the change of sentiment 

 against the further effort to maintain a double 

 standard. It was plainly claimed upon the floor 

 of the House that in practice the gold standard 

 was in force, and that it was the clear purpose 

 of the Government to accept the single gold stand- 

 ard. While no statute was made to this end, the 

 operations of the laws of trade gave recognition 

 to this basis of values. No effort was made to 

 change this sentiment, and for twenty years the 

 question of coinage commanded but little atten- 

 tion by the American people. The struggle of 

 the Government through the civil war crippled 

 the credit of the republic, and for a time specie 

 payments were suspended and the Government de- 

 generated to a paper basis. 



"The act of March 18, 1869, 'to strengthen the 

 public credit,' pledged the Government to the pay- 

 ment of its demand notes and obligations in coin. 

 This was the dawn of a new day in American 

 finance and marked the resurrection of Govern- 

 ment credit from the abyss into which it had 

 fallen. The only coin in circulation at the time 

 of the passage of the act of March 18, 1869, was 

 gold. The subsequent provision for the redemp- 

 tion of the demand notes, and the universal policy 

 of the Government to make redemption in the 

 best coin known at the time of redemption, dem- 

 onstrates beyond doubt that this pledge of the 

 Government has been faithfully kept. It was but 



a short step, in principle as well as in time, to the 

 provisions in the act of July 14, 1870, ' to au- 

 thorize the refunding of the national debt,' which 

 made the bonds of that issue ' redeemable in coin 

 at the present standard of value.' 



" The steps approaching the adoption of the gold 

 standard became short and rapid. For five years 

 prior to 1873 the question of legalizing the gold 

 standard was under discussion in financial circles. 

 As early as the winter of 1869 a bill was prepared 

 in the Treasury Department containing provision 

 for the discontinuance of the coinage of the silver 

 dollar and the adoption of the gold dollar piece, 

 at the standard weight of 25.8 grains, as the 

 unit of value. This proposed measure was widely 

 circulated among experts in finance, whose sug- 

 gestions and criticisms were invited. On April 

 25, 1870, this bill, as S. 819, was introduced, and 

 on Dec. 19 following "was favorably reported. 



" From the date of its preparation, in all of its 

 forms, and throughout its. discussions, covering 

 several sessions, the provisions before mentioned 

 remained intact. Not only that, but these two 

 provisions were the only provisions relative to the 

 standard of value and the silver dollar ever con- 

 tained in the bill, either as it was originally drawn 

 or throughout its entire consideration. The old 

 standard silver dollar was never mentioned in 

 the bill. The bill became a law Feb. 12, 1873. 

 For more than a quarter of a century preceding 

 that date the commercial world had treated gold 

 as the standard of measurement of values. The 

 ' act of 1873 ' was merely the policy and pfactice 

 of our people crystallized into statute Iaw r . The 

 change from the unwritten to the written law 

 w r as simple and unattended by the slightest dis- 

 turbance in trade. 



" If there had been no further legislation con- 

 cerning the coinage of silver, there would exist to- 

 day no single doubt of the monev standard of 

 the United States. The law of Feb. 12, 1873. 

 clearly adopts the gold one-dollar piece, at the 

 standard weight of 25.8 grains of gold, as the unit 

 of value. That statute has never been repealed 

 nor directly amended, and by legal construction 

 is in force to-day. Yet subsequent acts have so 

 affected it that there is some doubt as to whether 

 gold is fully recognized as our monetary stand- 

 ard. The act of Feb. 28, 1878, authorizing the 

 coinage of the standard silver dollar, and the act 

 of July 14, 1890, directing the purchase of silver 

 bullion and the issue of Treasury notes thereon, 

 brought into circulation such a tremendous quaii- 

 tity of silver guaranteed by the Government to 

 circulate at par that the burden of the Govern- 

 ment was so increased as to make doubtful the 

 strength and stability of the standard. 



" The fall in the price of silver gave courage to 

 the advocates of cheap money, w r ho sought, by re- 

 storing the silver dollar to circulation at less than 

 its intrinsic value, to accomplish what they had 

 failed to accomplish in their battle for cheap 

 money at an earlier period. Public sentiment so 

 suddenly changed upon this question that a free- 

 coinage bill passed the House of Representatives 

 on the 13th of December, 1876, by a vote of lt>7 

 to 53. Fortunately it was not acted upon by the 

 Senate. A similar measure passed the House 

 on Nov. 3, 1877, by a vote of 163 to 34. Early in 

 the year 1878 this bill was considered by the 

 Senate and a compromise effected, resulting in 

 the passage of the so-called ' Bland- Allison act ' 

 on the 15th of February, 1878. 



" With all the ills which this measure brought 

 upon the country, it was far to be preferred to an 

 absolute free-coinage bill which threatened the 

 country at that date. 





