THE UNIT OF VALUE AND COINAGE LAws OF THE UNITED STATES. In 1785 con gress adopted the silver dollar as the unit of money. On April 2, 1792, in the law establishing a mint, it enacted that "The money of the United States shall be expressed in dollars or units;" the dollar "to be of the value of a Spanish milled dollar as the same is now current," and to contain 3711 grains of pure silver. The same act fixed the weight of the gold eagle at 217A grains, or grains to the dollar, which made the ratio of value of silver to gold, by weight, as one to fifteen. In 1834 the weight of pure gold in the eagle was reduced to 232 grains, no change being made in the weight or fine ness of the silver-unit dollar. This made an ounce in gold equal as a legal tender to 16.045 oz. of silver, thus increasing the legal value of the previous coinage of U. S. gold coins nearly 7 per cent. In 1837 the composition of both the gold and silver coinage was changed, but the dollar retained the same quantity of pure silver, while the quan tity of pure gold in the eagle was increased to 232-k grains so that the legal equivalency of gold to silver by weight was 15.988 of silver to 1 of gold. That has been the legal relationship of U. S. coins of the two metals to the present time. The quantity of pure silver in the unit dollar of the United States has remained unchanged since its adoption in 1785 and its confirmation by the coinage act of 1792. The weight of the gold eagle has been changed twice. While the legal value of silver to gold was as 1 to 15, gold was at a premium, and disappeared from circulation to pay foreign debts, as it would pay more than at home. After the ratio of 16 to 1, made by the law of 1834, until 1874, the silver dollar bore a premium over the gold dollar in the London market of from 1 to A per cent. Silver in consecpience became scarcer, but did not entirely disappear, as gold would have done under the same condition, on account of its indispensableness for small change and the greater expense of its shipment. But to counteract the tendency to its export in consequence of its under-valuation relatively to gold, congress found it neces sary to pass the act of Feb. 21. 1853, reducing the old proportion of pure silver in coins smaller than the dollar, and limiting the amount of these that could be used as legal tender to five dollars. Before that time no silver coin except the 3-cent piece was below the,standard fineness of the silver-unit dollar. This act retained in the country all the small coins minted by the United States; but the standard silver dollars, being exported as fast as made, were coined less and less.
Soon after the breaking out of the rebellion in 1861, the U. S. government was obliged to provide money for carrying on the war on a scale gigantic compared with what had previously been known; and during the four succeeding years had recourse to the issue of U. S. legal tender notes and bonds for that purpose, and the organization of the U. S. national bank system. The history of the monetary legislation of this period, and the subsequent legislation that resulted from it, will be found under the heads— BANKS and BANKING, and DEBT, NATIONAL. Also, see GREENBACKS.
We now resume the history of recent leoislation pertaining to metallic money.
The act of Feb. 12, 1873, now known as the demonetizing act, was one of 67 sections, matured in committee and presented to congress as an act to regulate the details of coin age at the mint. It was presumed to collate and embrace in one act all previous legis lation on the subject of U.S. money. It did not demonetize the standard silver dollar. It did not make anything else the unit of value. But it only authorized the coinage of silver into half and quarter dollars and dimes (according to the reduced standard of 1853), and into a trade dollar the standard of the unit dollar; and prohibited these coins from being a legal tender ior more than five dollars in any one payment. The act con tamed no change in the old unit dollar. It simply omitted to mention it as one of the coins to be made at the mint, and practically accomplished its demonetization by the following words in "Sec, 17. No coins either of gold,. silver, or minor coinage, shall hereafter be issued from the mint, other than those of the denominations, standards, and weights, herein set forth." This act which thus in effect, though not in terms, demonetized silver, except for small change, was not generally known to have that effect until two or three years after its passage. Eminent and careful statesmen of both houses of congress then admitted frankly that the nature and effect of this part of the bill were a complete surprise to them. It was a part of a well concerted policy begun in Europe to bring about the single gold standard, but which inaugurated a revolution in money far more momentous in its consequences, than its supporters themselves had any conception of. See MONETARY CONGRESSIONAL, 1876; and .MONETARY CONFERENCE, PARIS, 1878. • The legislation in congress to complete the demonetization of silver was closed by these words in section 3,586 of the revised statutes: "The silver coins of the United States shall be a legal tender at their nominal value for any amount not exceeding five dollars in any one payment." Thus the stop of coinage of silver dollars by the act of Feb., 1873, was phrased in the revised statutes so as to destroy the legal tender of the silver dollar without any act having been passed to that purport. In the language of the report of the joint monetary commission of the 44th congress appointed Aug. 15, 1876, "the ancient money of the country, instead of being intentionally legislated out of exist ence by congress, was revised out of existence." The main reason given in congress at the time of the passage of the coinage act for ceasing to coin the silver dollar, was that its value was 3 per cent above the standard for a gold dollar. It was "standing guard against a rise in gold." The following is a copy of the provisions of the revised statutes down to Mar. 4, 1875, concerning all forms of legal tender money then recognized :— " Sec. 3,584. No foreign gold or silver coins shall be a legal tender in payment of debts.