86 BULLETIN OP THE 



Europe sent back silver. The want of gold was a real want. 

 It was needed to pay domestic exchanges. The extent of mon- 

 etary transactions had so much increased that silver was too 

 bulky and inconvenient, not only for the gross transactions and 

 clearances, but even for many of the smaller local settlements of 

 accounts. An agitation arose for the restoration of gold to the 

 currency, and waxed stronger and more clamorous. Nothing, 

 however, was accomplished by legislation until 1834. The 

 proper remedy for the scarcity of gold was easy to discern. 



When the first coinage act of 1792 was passed, its intention 

 was to make the bullion values of the gold and silver dollars 

 equal to each other, and also equal to the old Spa,nish dollar as 

 then current. The projectors and authors of that act were fully 

 aware that Mith the lapse of time the bullion values of the two 

 might diverge, and the result would be that the metal of lower 

 value would monopolize the coin circulation. But they pre- 

 sumed that their successors would judge for themselves whether 

 both standards were necessary or advantageous, and would, if 

 they desired both, again equalize their values by altei'ing the 

 coinage to conform to the changed market values of the two 

 metals. In this they were justified by the action of Congress in 

 1834. The expedient required for bringing back gold must ob- 

 viously be either to diminish the quantity of gold in the gold 

 dollar or to increase the quantity of silver in the silver dollar. 

 But of which metal should the rating be changed ? 



It is well to look carefully into this question, for it involves far 

 more than appears upon the surface. The answer to this ques- 

 tion as applied to 1834 is that the rating of gold should be 

 changed and that of silver preserved. The reasoning upon 

 which this answer is founded is as follows : Silver was at that 

 time, " by a large majority," the coin in daily use. It had been 

 so for fifteen years. Most of the obligations which had been in- 

 curred involving the payment or receipt of money, so far as they 

 involved the functions of coin, meant silver coin. People so 

 understood and accepted. If dollars were spoken of, they meant 

 silver dollars or bank paper redeemable in silver dollars. Gold 

 was out of the question, and banks and merchants never dealt in 

 gold except with an eye to foreign exchange. To have altered 

 the rating of silver, therefore, would have altered every time 

 obligation and every form of valuation. It would have been a 

 virtual violation of the constitutional provision which prohibits 

 the passage of any law impairing the obligation of contracts. 

 On the other hand, no such difficulty or evil attached to a change 

 in the rating of gold. Possibly a few contracts might have 

 been I'unning specifying gold coin as the medium of payments, 

 but they could have been but of small magnitude in comparison 

 with those which were payable implicitly or explicitly in silver 

 or its equivalent. Hence an increase in the rating of gold, or. 



