checkered past that included slave-catching in the Kansas Territory prior to the Civil War, Whitley’ s agents were responsible for combatting the widespread counterfeiting of paper currency and infiltrating white supremacist groups such as the Ku Klux Klan in the South during the Reconstruction period of the Grant presidency. Whitley was extremely effective at both, but he could never shed his penchant for intrigue and double-dealing. In June 1874, after Boutwell had left Treasury to become a US senator from Massachusetts, Whitley was fired over his involvement in a Washington, DC, Watergate-style botched burglary and political scandal.
The American economy in the early 1870s was expanding rapidly, with few regulatory controls and little oversight. Business corporations that maximized profit and limited the liability of their owners were proliferating and were described by Charles Francis Adams of Boston as“ a new power, for which our language contains no name. We know what aristocracy, autocracy, democracy are, but we have no word to express government by moneyed corporations.” As Mark Twain would famously quip, the Gilded Age with its attendant extravagance and corruption was coming into its own.
In addition to promoting efficiency and transparency in Treasury Department operations, Boutwell worked with Congress to stabilize the American economy following the devastation of the Civil War and the disruptions of the Johnson presidency. The Public Credit Act in 1869 was followed by the Currency and Funding Acts in 1870 and the Coinage Act of 1873. The main objective of all four was to gradually reduce the circulation of excess paper currency, reduce inflation without over-tightening credit for farmers and tradesmen, increase exports and the country’ s creditworthiness overseas and bring the nation back to the gold standard.
Despite much progress, ever-present political considerations complicated Boutwell’ s task. This was especially true with the issues of gold and silver. Although the country had been operating on a bimetallic system of hard currency since 1792, silver had fallen out of favor with the onset of the California gold rush in the early 1850s. This changed in the late 1860s with new discoveries of silver at the Comstock Lode in Nevada and increased political pressure to restore silver to an equal role
Cartoon depicting Ulysses S. Grant as Treasury Secretary Boutwell’ s puppet.
with gold in redeeming paper currency and financing overseas trade.
For his part, Boutwell opposed a return to full bimetallism, arguing that the United States should join England and Germany on a unilateral gold standard to boost America’ s foreign trade and overseas credit. To that end, Boutwell and Ohio Senator John Sherman, chair of the Senate Finance Committee and himself a future Treasury Secretary( and brother of Union general William Tecumseh Sherman) successfully helped pass the Coinage Act of 1873 to limit silver’ s role in the domestic economy.
Things went south, however, when the Panic of 1873 led to a lengthy recession that critics charged could have been softened had silver coins been available as legal tender. Leading the charge was William M. Stewart, Nevada’ s“ Silver Senator,” who later criticized the Coinage Act as the“ Crime of 1873” while profiting handsomely from its provisions to restrict silver for export use as a“ China trade dollar.” Stewart had in fact voted in favor of the Coinage Act while conspiring with Henry Lindemann, longtime head of the Philadelphia Mint, and banker William Ralston, to have the inside track in selling silver to the San Francisco Mint for production of the“ China trade dollar.” Boutwell was no longer at Treasury at that point, but he was appointed to a government Silver Commission which, over his objection, recommended reintroducing $ 2 million a month of silver coin as legal tender.
As is well known, the politics of silver and gold would divide the country for the next 20 years, culminating in presidential candidate William Jennings Bryan admonishing the country in 1896 not to crucify American farmers and workers on the tight money policy of a“ cross of gold.” Evaluating the“ Crime of 1873” a century later, economists Milton Friedman
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40 FINANCIAL HISTORY | Spring / Summer 2026 | www. MoAF. org