By Eric Brothers

The Coinage Act of 1873 — which put an end to the silver dollar as a monetary standard — was not without controversy . Bimetallists claimed Congress passed the act due to the unscrupulous influence of a coterie of government bondholders who schemed with Treasury officials and highranking congressmen .

This cabal , through creating a single gold unit of account , presumably hoped to raise the market value of its public securities . Free Silver 1 supporters called this conspiracy theory surrounding silver demonetization the “ Crime of 1873 ,” although from 1873 to 1876 , few Americans complained about demonetization of silver or asserted

The Coinage Act of 1873 , which abolished production of the standard silver dollar , was called the “ Crime of 1873 ” by the Free Silver movement . Pictured is a Seated Liberty ( standard ) dollar dated 1873 and struck at the Philadelphia Mint . that a heinous “ crime ” had taken place . The eventual remedy for this alleged “ crime ” was the Bland-Allison Act of 1878 .

Production and Price of Silver

Silver production in the western mines soared during the 1870s , reaching 17,789,000 ounces in 1871 , surging to 27,650,000 ounces in 1873 and rising even further to 29,996,200 ounces by 1876 . A significant amount of this silver was extracted from the Comstock Lode in Nevada . As production ramped up , the price of silver began to fall . Allen Weinstein , author of Prelude to Populism : Origins of the Silver Issue , 1867 – 1878 , attributes the decline in the price to “ silver ’ s demonetization by both Germany and the United States during the early 1870s .”

However , that analysis appears to be suspect , as it was causal . The falling price of silver was due to its overproduction , which led Germany ( 1871 ) and the United States ( 1873 ) to demonetize it . Other nations also demonetized silver or halted coinage of silver during the early 1870s . The bullion value of the 412.5 grain US silver dollar was around one dollar in 1873 and fell to less than 90 cents in 1876 , the year the movement for silver remonetization began .

The Free Silver Movement ( 1876 – 1878 )

The battle for the return to bimetallism and free silver was first waged in the midst of the lowest point of the Long Depression ( 1873 – 1877 ) after the Panic of 1873 , when a highly speculative period following the Civil War resulted in an inevitable collapse of credit and prices . The year 1876 saw every aspect of commerce and production hit a new low . Thus , it was no coincidence that the Free Silver movement was sparked during that watershed year .

In those difficult times , there was conflict between the debtor and creditor classes , which was in essence a regional conflict between the western ( debtor ) states and eastern ( creditor ) states . Supporters of remonetization were both inflationists

38 FINANCIAL HISTORY | Fall 2024 | www . MoAF . org