XXXIV THE MINT BILL AND THE "CRIME OF 1873"
Of the many measures of my administration of the Treasury Department, the Mint Bill of 1873 is the only one which has been made a party issue, and which has entered permanently into the policy of the country.
In the month of March, in the year 1869, I came to the head of the Treasury Department. At an early day my attention was directed to the disordered condition of the mint service, which was then, as it ever had been, without a responsible head. The proceedings at the mints were unsystematic, and I resolved upon an attempt to codify the laws and to place the administration in the hands of a recognized, responsible officer. President Grant appointed John Jay Knox comptroller of the currency. For many years Mr. Knox had held the office of deputy comptroller. He had been a careful, constant student, and he was already a recognized authority in financial matters.
I appointed Mr. Knox commissioner to codify the mint laws and to suggest alterations. He was assisted by Dr. Linderman, then an eminent expert in the theory and practice of coinage, by Mr. Patterson, superintendent of the mint at Philadelphia, and by others.
When the codification of the laws relating to the mint service had been completed the statute, as passed, contained seventy-one sections, including a number of new provisions. The political and personal controversy of twenty years and more was directed to a single section, which was in these words: "No coins, either of gold, silver, or minor coinage, shall hereafter be issued from the mints other than those of the denominations, standards and weights herein set forth." The coinage of the silver dollar piece was discontinued in the bill as prepared by the commissioners and the purpose to discontinue its coinage was thus announced in the report that was made to Congress:
"The coinage of the silver dollar piece, the history of which is here given, is discontinued in the proposed bill. . . . The present gold dollar piece is made the dollar unit in the proposed bill, and the silver piece is discontinued."
In 1873 I had come to believe that it was wise for every nation to recognize, establish, and maintain the gold standard. I was of the opinion then, as I am of the opinion now, that nations cannot escape from the gold standard in all inter-state transactions. The value of every article is resolved finally by the ascertainment of its value in gold. Silver or paper may be used for domestic purposes, but the value of that silver or paper is determined by its value in gold.
In America, as in England, all the attempts to fix a ratio between gold and silver coins and to maintain that ratio in business had failed, and hence it was that I determined to abandon the idea of a double standard, reserving in mind, however, the possibility that an agreement by commercial countries might overcome the difficulty. That possibility has now disappeared. The history of the United States is an instructive history. The coin ratio between gold and silver was fixed in Mr. Hamilton's time and with the concurrence of Mr. Jefferson.
In 1870 silver was at a premium upon the legal ratio between gold and silver coins, and such had been the fact from the year 1837, and probably from the year 1792. Indeed, there has never been a day, from the organization of the government, when the actual standard was silver. Until the act of 1878 was passed, silver coins had had no appreciable influence upon the volume of currency or the business of the country. The total coinage of silver dollars had been 8,000,000 pieces only. The coinage was suspended in 1805 or 1806, and the silver dollars had been exported or they had disappeared in melting pots. Such was the commercial demand for American silver coins that in 1853 Congress authorized the debasement of the subsidiary silver coins as the only means of securing their circulation.
It is quite doubtful whether in the year 1860 there was a person living who had seen an American silver dollar doing duty in the channels of trade. From 1806 to 1873 the business standard of the country was the gold standard. Silver had been recognized in the Coinage Act, but practically it had not played any part in the financial policy or fortunes of the country.