TJie Standard of Value. 



275 



silver. " And he predicts that "the revolutions which may take place 

 in the comparative value of gold and silver, will be changes in the 

 state of the latter, rather than in the former." He further says: 

 " There is scarcely any point in the economy of national affairs, of 

 greater moment than the uniform preservation of the intrinsic value 

 of the money unit. On this the security and steady value of property 

 depend." (Hamilton's Works, 1850, vol. 3, pp. 155", etc.) 



Congress, on Hamilton's advice, established the coinage of the 

 United States on the ratio of fifteen of silver to one of gold. This 

 ratio, although conforming closely to the then European ratio of 

 valuation of the two metals, soon proved to be an over-valuation of 

 silver. Both gold and silver were made equally a legal tender, and 

 a measure of value. 



This ratio was changed in 1834 owing to the depreciating value of 

 silver, to about sixteen to one, by which gold was over-valued. This 

 change was made by reducing the weight of the gold coin something 

 more than six per cent.* This was in fact a depreciation of our 

 standard of value to that extent, to keep pace with the actual depre- 

 ciation of silver in the world's markets. 



In the organization of the mint, Congress had provided that the 

 fractional coins should be exact aliquot weights and of the same 

 standard of fineness as the dollar coin, and they were equally a full 

 lawful tender. Owing to the French mint offering full free coinage 

 to all holders of either metal at the ratio of 15.5 to 1, it was now 

 found that most of our fractional coins, as well as the dollars, coined 

 by the mint, were being drawn off to the European mints, attracted 

 thereto by the something more than three per cent of pure silver metal 

 contained in them over the French coin. Meantime our own circula- 

 tion of fractional silver as well as the dollar coin was filled up with 

 Spanish and Mexican coin — mostly in a much worn condition. This 

 state of things induced Congress in 1853 to reduce the weight of the 

 fractional coin nearly eight per cent, and limiting its legal tender 

 capacity, to insure its retention at home. From this time our frac- 

 tion silver coin supplied the circulation, and the heterogeneous mass 

 of foreign silver coin vanished from the country. 



These are the only changes in our coinage affecting the relations of 

 gold and silver down to 1873, when it was decided after long delibera- 

 tion through two Congresses, to drop the coinage of the silver dollar. 

 D own to this time, through eighty years of our history, during ^the 



