What Was the Crime of 1873?
The "Crime of 1873" was the notable omission of the standard silver dollar from the coinage law passed by Congress on February 12, 1873, and signed into law by President Ulysses S. Grant. This omission subsequently paved the way for the United States' adoption of the gold standard, which was highly controversial at the time, especially for those no longer able to turn their silver into legal tender.
Key Takeaways
- The Crime of 1873 refers to dropping silver dollars from official coinage by act of Congress in that year, setting the stage for the adoption of the gold standard in the U.S.
- The gold standard is a fixed monetary regime under which the government's currency is fixed and may be freely converted into gold, but this law notably left out the conversion of silver coins.
- The law was labeled a "crime" by those who were left holding relatively worthless silver coins, as well as those who opposed the gold standard as monetary rule.
History of Coinage Law and Reasons for Abandoning Silver
Coinage law oversees the coinage and legal tender that circulates in the United States and sets the standard for the relative worth of each form of tender in use. The first Coinage Act, passed in 1792, established the U.S. Mint and set the dollar as the official standard unit of money in America and legal tender.
The Coinage Act of 1873 revised the laws of its predecessor to pivot the country toward the gold standard and away from silver. Section fifteen of the Act specified the exact silver coins to be minted in the future and their respective weights, but the standard silver dollar was not included.Section seventeen stated that "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 meant that only the coins explicitly included in the Coinage Act would be legal tender from that point forward.
Earlier in the century,the United States hadessentially adhered to a silver standard, but gold rushes such as the infamous California Gold Rush brought gold back into the equation. Subsequent silver rushes in places such as South Africa increased silver production in the 1860s and threatened to push gold out of circulation. The United States saw the gold standard as the only rational economic approach and pushed through the Coinage Act in 1873. The gold standard was officially adopted in 1900.
Criticism of the Coinage Law and Reasons for Calling It a Crime
Until 1873, the United States used a system of bimetallism, which used both gold and silver as comparison points for the relative value of legal tender and set a fixed exchange rate between the two. When the Coinage Act of 1873 removed silver from the equation, people who owned large amounts of silver were no longer able to turn that silver into money.
Many critics argued that this monometallism would have negative consequences for the economy, including unstable prices and a lower amount of money circulating in the economy. They also claimed that the law was pushed through corruptly, although no evidence confirms this. However, industrial advances and a few gold rushes, including the South African and the Klondike rushes, pumped more gold into circulation and provided economic reassurance.
The Modern Economic World
The gold standard was officially abolished in 1971. Since then, most modern economies are based on fiat money— or money whose value and theinflation rate is assigned by a government rather than an inherent worth — instead of relying on gold or silver.One example of fiat moneyis the U.S. dollar.
FAQs
What Was the Crime of 1873? The "Crime of 1873" was the notable omission of the standard silver dollar from the coinage law passed by Congress on February 12, 1873, and signed into law by President Ulysses S. Grant.
What did the Crime of 1873 do? ›
"Crime of '73"
It noted the abolition of the two-cent piece and the authorization of the Trade dollar, but did not mention the ending of the standard silver dollar. There was no widespread objection to the 1873 act until 1876.
What was considered the Crime of 73 during the panic of 1873? ›
Congress had discontinued the minting of silver coins in 1873 in an act that came to be known as the “Crime of '73.” Professor of government Elizabeth Sanders includes the demonetization of silver as one of a few significant policies of the period that led many working people, especially farmers, to believe that a “ ...
What was the Demonetization Act of 1873? ›
The act of 1873, however, dropped the dollar piece out of the list of silver coins. In discontinuing the coinage of the silver dollar, the act of 1873 thereby simply recognized a fact which had been obvious to everybody since 1849. It did not introduce anything new, or begin a new policy.
What does the Crime of 1873 refer to quizlet? ›
Silverites referred to the 1873 Coinage Act as the "Crime of 1873," and swore to bring back the "Dollar of Our Daddies," the silver dollar. By the way, this was the act that resulted in the elimination of the Two-Cent, Three-Cent, and Half-Dime coins.
What significant thing happened in 1873? ›
Library of Congress Prints & Photographs Division. The Panic of 1873 triggered the first 'Great Depression' in the United States and abroad. Lasting from September 1873 until 1878/9, the economic downturn then became known as the Long Depression after the stock market crash of 1929.
What was most responsible for causing the Panic of 1873? ›
Railroads were the nation's largest non-agricultural employer. Banks and other industries were putting their money in railroads. So when the banking firm of Jay Cooke and Company, a firm heavily invested in railroad construction, closed its doors on September 18, 1873, a major economic panic swept the nation.
What was the Federal Act of 1873? ›
The Comstock Act – an 1873 anti-vice law banning the mailing of obscene matter and articles used to produce abortion – could be used by a future presidential administration opposed to abortion rights to sharply restrict abortion nationwide.
Why did the Coinage Act of 1873 cause protests? ›
The Act moved the United States to a de facto gold standard, which meant it would no longer buy silver at a statutory price or convert silver from the public into silver coins, but it would still mint silver dollars for export in the form of trade dollars.
What monetary standard was the nation on after 1873? ›
The gold standard was the basis for the international monetary system from the 1870s to the early 1920s, and from the late 1920s to 1932 as well as from 1944 until 1971 when the United States unilaterally terminated convertibility of the US dollar to gold, effectively ending the Bretton Woods system.
The Coinage Act of 1873 (also called the "Crime of 1873" by silver miners) demonetized silver, effectively causing a slump in silver demand and prices.
What did the Comstock Act of 1873 prohibit quizlet? ›
The Comstock Act of 1873: Barred the mailing of obscene publications.
What is the only crime specifically mentioned in the United States Constitution ________? ›
Treason is the only crime defined in the Constitution. It is the act of waging war against the United States or materially aiding its enemies.
What was the significance of the Act of 1873? ›
The Coinage Act of 1873 revised the laws of its predecessor to pivot the country toward the gold standard and away from silver. Section fifteen of the Act specified the exact silver coins to be minted in the future and their respective weights, but the standard silver dollar was not included.
What were the effects of the Coinage Act 1873? ›
The Coinage Act of 1873 was enacted to enable the United States to gradually move from a bimetallic system, where both gold and silver coins were in circulation, to the gold standard. However, given the deflationary effects of this reform, new laws partially canceled it.
What did the depression of 1873 lead to? ›
The Panic of 1873 was a financial crisis that triggered an economic depression in Europe and North America that lasted from 1873 to 1877 or 1879 in France and in Britain. In Britain, the Panic started two decades of stagnation known as the "Long Depression" that weakened the country's economic leadership.
What was the Crime of 73 and why did it anger farmers? ›
Free Silver Movement, in late 19th-century American history, advocacy of unlimited coinage of silver. The movement was precipitated by an act of Congress in 1873 that omitted the silver dollar from the list of authorized coins (the “Crime of '73”).
