an Eldorado indeed, yielding $10,000,000 in 1848 and $40,000,000 in 1849. In the following decade the annual output continued large, the maximum being $65,000,000 in 1853. This enormous production dazzled the world at that time, attracted foreigners and foreign capital, and proved of the greatest value to our currency and credit. But the country was denuded of silver, only the abraded foreign coins remaining in circulation. The inconvenience suffered by the public for Dearth of want of small change became a crying evil, and Congress was impressed with the necessity for action. Thomas Corwin, Secretary of the Treasury, in an elaborate report early in 1852,1 recommended the reduction of the amount of silver in coins as the only remedy, and suggested that the weight of all silver pieces, including the dollar, be reduced so as to give the ratio of 14.88 to 1. silver coin. Senator Hunter, in the same year, made a compre- Hunter's hensive report 2 in which he referred to the fears report. existing that the great gold production would unsettle values. This he believed would not result, in view of the great increase of wealth and capital, if natural laws were permitted to operate. But paper currency was interfering with natural laws. He favored a system Remedies of subsidiary silver coinage in place of bank-notes of smaller denominations than one dollar which had become prevalent. He added, "The great measure of readjusting the legal ratio between gold and silver cannot be safely attempted until some permanent relations between the market values of the two metals shall be established." The act of July 3, 1852, established the mint in San 1 Special Report, Finance Report, 1852. 2 Senate Reports, 32d Congress, 1st Sess., No. 104. proposed. Corwin on scarcity of silver. Subsidiary coinage act, 1853. Francisco, to provide for the official handling of the large gold product of the Pacific slope. Corwin, in January, 1853, again called attention to the general conditions, saying that no indication of relief was near, rather a prospect of reduced supplies of silver. He added: "This state of things has banished almost entirely from circulation all silver coins of full weight, and what little remains in the hands of the community consists principally of the worn pieces of Spanish coinage of the fractional parts of a dollar, all of which are of light weight, and many of them ten or twenty per cent below their nominal value." 1 He discussed the objection which had been seriously raised that the proposed silver currency could not, without a violation of contracts, be made a legal tender for the payment of debts, and that the gold thereafter would be the only legal tender. He said : "It is true that heretofore the laws of the United States have recognized the coin of either metal as a legal tender, and if it was at the option of the creditor to select what he would receive there would be a very serious objection to changing either the weight or standard fineness of any portion of the coin. But this is not the fact, as it rests with the debtor to say with which description of coin he will pay his debts, and the natural and inevitable consequences of the premium which silver now bears have been to establish, practically, gold as the only legal tender." These efforts finally resulted in the act of February 21, 1853,2 which provided that after June 1, 1853, the weight of the half dollar or piece of fifty cents should be 192 grains, the quarter dollar, dime, and half dime respectively one-half, one-fifth, and one-tenth of the weight of the half dollar; the fineness to continue at 1 Finance Report, 1853. .900; the silver coins thus ordered to be legal tender in payment of debts for all sums not over five dollars. The mint was authorized to purchase silver bullion for coinage, and further deposits for coinage into fractional silver pieces for private account was prohibited, but the deposit of gold and silver for casting into bars or ingots of either pure or standard metal at a charge of one-half of one per cent was permitted. The law also authorized the coinage of $3 gold pieces. The coinage of $20 gold pieces had been previously authorized in 1849. The weight thus prescribed for the small silver coins, 384 grains of standard silver or 345.6 grains fine to the dollar, gave, as compared with gold, the ratio of 14.882 to I, but as it proved, the question of the ratio of these coins was of no importance so long as it reduced their value below the export point. In a short time the country possessed a fairly adequate supply of small silver. The act of 1853 did not disturb the coinage of silver dollars. It related solely to the establishment of a subsidiary currency of silver to take the place of fractional bank-notes and to establish a circulation of domestic coin in place of the light weight foreign coins. Yet Gold standspeaking on the question in the House, Chairman Dunham of the Ways and Means Committee said:1 "We propose, so far as these coins are concerned, to make silver subservient to the gold coin of the country. We intend to do what the best writers on political economy have approved, what experience, where the experiment has been tried, has demonstrated to be the best, and what the Committee believe to be necessary and proper, to make but one standard of currency and to make all others subservient to it. We mean to make gold the standard coin, and to make these new silver coins applicable and convenient, not for large but for small transactions." 1 Congressional Globe, XXVI., p. 190. ard contem plated. Dunham's views. L Andrew Johnson's view. Farther on in his speech he said :— "Another objection urged against this proposed change is that it gives us a standard of currency of gold only. . . . The constant though sometimes slow change in the relative value of the two metals has always resulted in great inconvenience and frequently in great loss to the people. Wherever the experiment of a standard of a single metal has been tried it has proved eminently successful. Indeed, it is utterly impossible that you should long at a time maintain a double standard. The one or the other will appreciate in value when compared to the other. It will then command a premium when exchanged for that other, when it ceases to be a currency and becomes merchandise. It ceases to circulate as money at its nominal value, but it sells as a commodity at its market price. This was the case with gold before the act of 1834, but it is now the case with silver. Gentlemen talk about a double standard of gold and silver as a thing that exists, and that we propose to change. We have had but a single standard for the last three or four years. That has been and now is, gold. We propose to let it remain so and to adapt silver to it, to regulate it by it." Despite this manifest purpose the silver dollar remained in the law, with full legal tender power equally with gold. The principal opponent of the bill was Andrew Johnson of Tennessee, later Vice-President and President. The following extract from his remarks is of interest: "I look upon this bill as the merest quackery — the veriest charlatanism so far as the currency of the country is concerned. The idea of Congress fixing the value of currency is an absurdity, notwithstanding the language of the Constitution not the meaning of it. . If we can, by law, make $107 out of $100,1 we can, by the same process, make it worth $150. Why, Sir, of all the problems that have come up for solution, from the time of the alchemists down to the present time, none 1 The act of 1853 altered the value of the silver in the subsidiary coin about 7 per cent. can compare with that solved by this modern Congress. They tion of 1853. By an act of March 3, 1853,2 the date fixed for the Other legislabeginning of the subsidiary coinage was changed from June 1 to April 1, 1853, and the weight of the threecent silver piece was changed to correspond with the new standard for subsidiary coin. Over $1,000,000 in these pieces had been coined at the lower fineness under the law of March, 1851, showing the great need for small coin, especially for postage, then three cents. Another act of the same date 3 provided for the establishment of an assay office at New York and permitted the deposits therein of gold and silver bullion, dust or foreign coin, for manufacture into bars or coin at the will of the depositor and the issue of certificates of deposit for the kind of metal deposited, which certificates were made receivable in payment of customs dues at the port of New York, for sixty days from date thereof. increase of specie. The estimates of specie in the country show an Great increase of $170,000,000 from 1841 to 1861. Of this increase $130,000,000 occurred subsequent to the year 1849. The principal cause was, of course, the domestic production of gold which was in large measure retained despite the exports due to adverse trade balances and the inflated condition of the paper currency from 1850 to 1860.4 1 Congressional Globe, XXVI., p. 475. 2 See Appendix. 3 Ibid. 4 Treasury Circular of Information, No. 113, 1900, pp. 61 and 62. |