In 1890 the Sherman Silver Act directed the Secretary of the Treasury to buy in the market silver bullion aggregating 4,000,000 ounces, or as much thereof as was offered at less than the mint price, and to issue for it treasury notes of the United States. These notes were made redeemable in coin by the Treasury on de mand and were reissuable and full legal tender. This act, which repealed the Act of 1878, contains the famous parity clause, which pledged the United States Treasurer to maintain the two metals on a parity with each other at the legal ratio. No method was prescribed for the accomplishment of this pledge by the Secre tary. Provision was also made for the coinage of part of this bullion. After three years' operation and the coinage of $187,000, 000, this compulsory purchase clause was repealed.3 Gold Standard Act The silver movement came to a crisis in the election of 1896, and in 1900 was finally settled by what has come to be known as the Gold Standard Act. This act fixed the gold dollar, weighing 25.8 grains of standard gold, nine-tenths fine, as the standard unit of value, and provided that "all forms of money issued or coined by the United States shall be maintained at a parity of value with this standard," and that "it shall be the duty of the Secretary of the Treasury to maintain such parity." The manner of keeping gold and silver at par is not defined, but the probable operation of the Treasury would be to stand ready to redeem one with the other.
The Pittman Act In 1918 the adverse balance of trade between the United States and India, in the face of the necessity of conserving and fortifying our gold reserves during the war, led to the passage of the Pittman Act, which authorized the Treasury to reduce silver dollars, in number not to exceed $350,000,000, to bullion and to sell it at a minimum price of $1 per fine ounce. At the same time the Secretary was authorized to enter into contracts with pro ducers of silver, to buy silver at the price of $1 per fine ounce for the purpose of restoring the bullion taken from the Treasury and sold to exporters to India.
The object of the sales and purchases arrangement was tem porarily to provide silver in large quantities for immediate use. The hoard of silver in the Treasury was thus seized upon to settle the adverse trade balance and conserve the gold supply against shipment to the East. As most of the silver dollars were being circulated by silver certificates, the reduction of silver dollars to bullion forced the recall of an equivalent amount of certificates. To provide against the reduction of the currency in this manner, the federal reserve banks were enabled to issue federal reserve bank notes secured by treasury certificates of indebtedness and one-year treasury notes. These federal reserve bank notes will be retired later, according to the plan, by the issue of silver certifi cates as silver is repurchased by the Treasury.
The Secretary of the Treasury in executing the Pittman Act decided that, in order to provide for the various items of expense involved in the operations of withdrawing silver dollars and recoining new bullion, it was necessary to fix the price of silver sold by the Treasury at $1.015 per fine ounce. Silver exportations were subjected to licenses, and any silver for which more than $1.015 had been paid by the applicant was denied export license. These restrictions on silver exports were removed in May, 1919. In the interim 271,000,000 silver dollars were melted and sold at $1.015 per ounce, although the market price of silver ranged much higher. In the spring of 1920 the market price of silver fell below $1 per ounce, and on May 17 the Secretary of the Treasury gave standing orders to the Director of the Mint, under the mandatory provisions of the Pittman Act, to purchase, at $1 per ounce, silver —the production of mines and reduction plants located in the United States—up to an aggregate amount of 207,000,000 ounces. This will establish a minimum price of $1 per ounce for American silver for some time to come, but the price of foreign silver may fall below that figure. In February, 1921, was resumed the coinage of silver dollars, of which none had been minted since 1905.
Other Coinage Laws The Act of 1906 provided for the redemption of copper and nickel coins in lawful money, when presented in sums of not less than $20. When they are presented for redemption in such quan tity as to indicate that they are redundant, the Treasury orders their coinage temporarily to be stopped. Numerous other coin age laws of minor importance have been enacted, but the above constitute the fundamental history of our coinage. Coinage is sometimes held to include the making of gold and silver bars.
Bullion Bars Gold bars are carried by the banks for the convenience of their customers in the city or elsewhere, and are shipped upon request. Gold bullion as held in banks bears the official stamp of the United States Mint or assay office. This stamp, like that on the coins, is the government attest of the weight and purity of the bars. Besides the official seal, weight, value, and fineness, all bars are stamped with the bar and lot number. They are weighed to the one hundredth part of an ounce, and are computed by the fineness at $2o.671834625 per ounce for pure gold. Small gold bars are made with values ranging from $105 to $600; these are used exclusively for domestic purposes and are not exported. The bars in a certain New York bank's vaults on a certain date, for example, ranged in weight and value from 5.14 ounces and $106.19 value, to 525.6 ounces and $10,849.61 value. The larger bars are used almost exclusively for shipment abroad and the smaller ones for reserve and industrial purposes.