Silver Dollar Blog - The Crime of 1873

Feb 21, 2012

Discovery of gold at Sutter's Mill

Let's step back just a little bit further in history before we go into the crime of 1873. 

Between 1792 - 1873 the United States Dollar  was backed by both gold and silver at a ratio of 15:1 this was known as bimetallism. Bimetallism is a system of allowing two metals as legal tender at a a fixed ratio to each other. By 1834 the value of silver had dropped to a ratio of 16:1. Silver production was on the rise as was gold with the discovery of gold in California.

What year was gold discovered in California?

The California gold rush began on January 24th, 1848 at the Sutter's Mill in Coloma, California. The gold rush brought about 300,000 people to California. People from all over the United States and abroad found their way to California. Gold-seekers were also called the "forty-niners" since they were rushing to California in 1849.

At the same time that more gold was being produced so was the silver. Dr. Henry Linderman understood that silver production was on the rise as more and more mines opened more and more silver would be found. Plus the transcontinental railroad would be complete in 1869. Before the market was flooded with silver Linderman called for the demonetization of silver. By doing so he would lower the price of silver which would make it possible to bring cheap Silver in to be coined into dollars thus inflating the economy.

The Coinage Act of 1873 or the Crime of 73?

This is the where the coinage act of 1873 comes in. The coinage act of 1873 embraced the gold standard and demonetized silver. This is why it's also called the crime of 73 because gold became the only metallic standard for the United States.

Why was everyone calling it a crime?  Now you could only deposit gold bullion for coinage. If you brought silver bullion you could have it cast into bars or coined into a trade dollar. This was also the last year for the Seated Liberty Dollar. This act ended the production of the silver dollar and authorized the creation of the trade dollar.

In 1878 the Bland-Allsion Act enters the picture!



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