PHILOSOPHICAL SOCIETY OF WASHINGTON. gt 



in other words, a diminution of the quantity of gold in the dollar 

 was resolved on and became a law. 



Three years later, in 1837, a revision of the coinage laws was 

 made in vvhich the quantity of silver in the silver dollar was 

 slightly increased. The act of 1192 provided for 311^ grains of 

 fine silver and 416 grains standard ; while the act of ISoT made 

 it 375 grains fine and 412|- grains standard, which is precisely 

 the same as the present silver dollar. The last-named act 

 made no material change in the gold coinage from the act 

 of 1834. Hence subsequent to 183T the mint ratio for the 

 values of the two inetals was 1: 16, i.e., the legal tender 

 power of an ounce of gold was made equal to that of 16 ounces 

 of silver very nearly. It is now very generally conceded that 

 this ratio overvalued gold somewdiat and undervalued silver, 

 and its effect was very speedy. In a i'ew years silver coin be- 

 came very scarce, while gold became as abundant as could be 

 expected in a country where the chief currency was paper. So 

 far as coin became a basis or standard of valuation gold at 

 length took the place which had formerly been occupied by sil- 

 Ter. Very soon after 1837 we became a monometallic gold- 

 using nation by virtue of these changes, though at what precise 

 period it is difficult to say, but as nearly as can be now inferred, 

 the change took place about 1840 to 1842. 



The discoveries of gold in California and Australia introduced 

 an important element of disturbance into the relations of gold 

 and silver. As soon as it became manifest that these rich mine- 

 ral districts would for an indefinite period yield large quantities 

 of gold, all students of monetary science foi'esaw that one efiect 

 would most probably be a gradual fall in the price of that metal 

 relatively to the price of silver. These anticipations were quicklj 

 verified, and in the course of a few years the value of gold bullion 

 rated in silver had evidently depreciated. Besides this cause, 

 which was of world-wide operation, there was another cause at 

 work in America which tended to make silver comparatively 

 scarce, and the silver coins in circulation of inferior quality. 

 Ever since colonial times Spanish coins had been extensively- 

 used, and the coinage acts of our government had made them 

 unlimited legal tender. The rating of silver coins in other coun- 

 tries had become such that America was an exceptionally good 

 market for them, and they circulated freely for change. They 

 became much abraded, and no effort had been made to call them 

 in and recoin them. The national fractional coinage was of full 

 weight, and also unlimited legal tender. The abraded condition; 

 of the Spanish coins rendered them of inferior value, and by the 

 well know^n law they displaced the better coinage of our own 

 country. By the act of 1853 the fractional silver coins were de- 

 based. The silver dollar, however, was retained at its full value, 

 412^ grains standard and 375 grains fine, with unlimited legal 

 tender. The Spanish coins were demonetized in 1857 and under- 



