University of Virginia Library

Free coinage. Crime of 1873:

A general revision of the coinage laws occurred in 1873. Several years of debate preceeded the final enactment and the legislative history of the bill occupies hundreds of pages in the Congressional Globe. The final enactment has been considered by many as a clumsy attempt and a failure. The law has sometimes been called the "Crime of '73." One consequence of the bill, which was finally enacted February 12, 1873, was the elimination of the silver dollar. The silver dollar's replacement of greater weight, the Trade Dollar, was issued for purposes of commerce with the Orient to compete with the Mexican Dollar. The legal tender provision, which gave the Trade Dollar legal tender status within the United States, was repealed the following year.

The act also reduced the charge for converting standard gold bullion into coins to one-fifth of one percent. The same charge was levied on silver bullion, but only for coinage of Trade Dollars.

Surprisingly, the silver dollar had not circulated to great extent in the United States after 1803. Even though it had been produced steadily since 1840, it was virtually an unknown coin due to exportation, melting and holding in bank vaults. In effect, the law of 1873 demonitized silver and placed the United States on a gold standard. A few years later, the silver interests in the country realized what had occurred and for the next quarter century, their adamant protests continued. During this time, there was a constant struggle for the return to a bimetal monetary system.

Economically, the inadequate supply of gold caused a gradual decline in prices worldwide and the United States sunk slowly into a depression. The South and the Mid-west were the most heavily affected. A great number of private silver interests influenced large sections of the West for a return to bimetallism to combat the falling price levels. Historians have since concluded that a world-wide adoption of bimetallism would have improved economic conditions. However, if the United States alone had adopted bimetallism, the situation would have grown worse.

The features of the law of 1873 that interest collectors the most are those that affected the the status and physical properties of the coins themselves. The weight of the half dollar, quarter and dime was slightly changed and arrows were placed at the date during those years to denote the difference in weight. Silver three cent pieces, half dimes and two cent pieces were abolished, and the manufacture of minor coins was the sole responsibility of the Philadelphia Mint.