In the late 1800s, an ongoing battle between silver and gold for Legal Tender supremacy was being played out to conclusion. Silver was widely traded for routine transactions, gold for large transactions. In the bimetallic economy, the value ratio between silver and gold [historically 10:1 to 15:1 for millenniums] was a moving target determined by the Market. Law continuously tried to legislate and fix the value ratio to accommodate debt contracts. Since both gold and silver were Legal Tender, arbitragers could, and did, make plays on slight differences between the Market ratio and the Legal ratio that allowed debtors to pay off debts at the expense of the lender. Both forms of money could not coexist as Legal Tender if debt contracts were to function, one had to go.
The Crime of 1873 is best explained by Alexander del Mar [1836-1926] - a political economist, historian and author. He was born in New York City, 1836, and was educated as a Civil and Mining Engineer at Polytechnic. He became the Director of the Bureau of Statistics of the United States and Mining Commissioner to the United States Monetary Commission of 1876 and nominated for Secretary of Treasury.
In his book, History of Monetary Systems 1895, Alexander del Mar lists the Laws that were concurrently passed in the United States, Europe, Russia, Japan, India, and South America to undermine the Legal Tender status of silver. This is the Crime of 1873. Gold and Law combined to undermine Silver on an international scale, and gold became the singular form of Legal Tender throughout the world. Debt and taxes still had to be paid with Legal Tender, now gold only, no more arbitrage games. Silver took on a commodity status and was greatly devalued, no longer accepted as Legal Tender for debt and taxes. This was a truly spectacular collaborative conspiring effort. But alas, eventually, even gold had to drop out the Legal Tender race, not able to keep up with the exponential growth demands of Legal Tender.
Coinage Act of 1873 - Wikipedia – questionably slanted.
History of Monetary Systems by Alexander Del Mar, 1895, Excerpts
Crime of 1873 – The New Mint Code
There is no mistaking the identity of that golden thread which runs through the Latin Union Codes of 1867, the British Mint Code of 1870, the German Mint Code of 1871, the New Mint Code of the United States of 1873, and the Codes of numerous other countries. It is of precisely the same issue in all of them.
France and the Latin Union - A conference between the four states whose monetary system rests on a numeration by francs - France, Belgium, Switzerland and Italy - resulted in the Latin Monetary union of December 23rd, 1865. When the international delegates met again [June 17th, 1867], it discussed the entire monetary question, and carried a resolution in favor of what is called gold monometallism in the shape of a New Mint Code. In 1873, France and the Latin Union limited the coinage of silver.
Scandinavia - On September 20th, 1872, a monetary union was adopted by
Norway and Denmark, which
was followed by a New Mint Code. Under this code the private coinage of silver
was suspended, and the legal-tender of silver coins limited.
Austro-Hungary - The decree of March, 1879, suspended the Private Coinage of silver, but did not limit the legal-tender of silver coins.
Chili - Law of November 26th, 1892, stopped the Private Coinage of silver, limited the legal-tender of silver.
Mr. Carlisle, since Secretary of the Treasury, said in the House of Representatives, February 21st, 1878, "The conspiracy which seems to have been formed here and in
Europe to destroy by legislation and otherwise from
three-sevenths to one-half of the metallic money of the world, is the most
gigantic crime of this or any other age. The consummation of such a scheme
would ultimately entail more misery upon the human race than all the wars,
pestilences and famines that ever occurred in the history of the world."
Mr. John Jay Knox, one of the officials who in 1869-70 lent his assistance to
the preparation of the American Mint Code, when the matter was brought home to
him acknowledged his part in it, and boasted that he was "proud of his
From the foregoing recital it will be observed that the practical political outcome of the Gold Movement of 1865-73 has been to concentrate the gold coins in the world banks of four or five principal States.
The election of 1896, between Williams Jennings Bryant and McKinley, was all about whether silver or gold was going to be the preferred form of Legal Tender. Bryant delivered his famous ‘Cross of Gold’ speech.
"You shall not press down upon the brow of labor a crown of thorns.
You shall not crucify mankind upon a cross of gold."
Gold won the election, silver’s last hurrah. Eventually the growth of debt outstripped the growth capacity of gold, and Legal Tender had to disconnect itself from gold, no longer a commodity based money, to become Fiat Legal Tender: the perfect form of money for a debt based monetary system. A severely flawed form of money.