Silver Dollar Blog - Sherman Silver Purchase Act

Mar 19, 2012

Sherman Silver Purchase Act

On July 14th, 1890 the Sherman Silver Purchase Act was enacted. This was due to growing complaints of farmers and  miner interests. During the late part of the 1880's farm prices continued to drop. The farmers believed if the government would issue enough silver this would boost the economy and cause inflation thus they could pay their debts with cheaper dollars. Of course the silver mines were fond of this idea as well because it would put more money in their pockets. 

What was the total amount of silver purchased during the Sherman Act?

With the Sherman Silver Purchase Act the United States Treasury was now to purchase 4,500,000 ounces of silver bullion each month! Under the Sherman act 168,674,682.53 ounces of silver were purchased this cost a total of $155,931,002.25. 

The law stated the United States Treasury was to buy the silver with a special issue of Treasury Notes that could be redeemed for either gold or silver. The problem was everyone wanted the gold!  Fear sets in when you believe all the gold reserves are being depleted thus we have the financial panic of 1893.

Come 1893 farm prices are sill on the decline. In 1893 the United States President is Grover Cleveland who never cared much for the silver interest. So on November 1st, 1893 President Cleveland repealed the Sherman Act. But the nations gold supply had already dwindled by a ton.

As for the Morgan Dollar they were having a hard time right about now there is still a large amount of uncirculated Morgan Dollars, the Sherman Act has been repelled and President Cleveland doesn't seem to care about the silver interests. 

Under the Sherman Purchase Act the Treasury was required to purchase the silver, but didn't have to immediately  turn around and coin it into silver dollars. Therefore there was still some at the treasury office. In 1898 an act was passed that stated the remaining silver from the Sherman Silver Purchase Act would be coined into the standard Silver Dollar. The 1904 was the last coin to be struck resulting from the Sherman Silver Act.



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