Editing Cross of Gold speech (section)

=== Monetary standards and the United States ===
In January 1791, at the request of Congress, [[United States Secretary of the Treasury|Secretary of the Treasury]] [[Alexander Hamilton]] issued a report on the currency.  At the time, there was no mint in the United States; foreign coins were used. Hamilton proposed a monetary system based on [[bimetallism]], in which the new currency would be equal to a given amount of gold, or a larger amount of silver; at the time a given weight of gold was worth about 15 times as much as the same amount of silver. Although Hamilton understood that adjustment might be needed from time to time as precious metal prices fluctuated, he believed that if the nation's unit of value were defined only by one of the two precious metals used for coins, the other would descend to the status of mere merchandise, unusable as a store of value. He also proposed the establishment of a [[mint (coin)|mint]], at which citizens could present gold or silver, and receive it back, struck into money.{{sfn|Taxay|pp=48–49}} On April 2, 1792, Congress passed the [[Mint Act of 1792]]. This legislation defined a unit of value for the new nation, to be known as a [[United States dollar|dollar]]. The new unit of currency was defined to be equal to {{convert|24.75|gr}} of gold, or alternatively, {{convert|371.25|gr}} of silver, establishing a ratio of value between gold and silver of 15:1. The legislation also established the [[United States Mint|Mint of the United States]].{{sfn|Coin World Almanac|p=455}}

In the early 19th century, the economic disruption caused by the [[Napoleonic Wars]] caused United States gold coins to be worth more as [[bullion]] than as money, and they vanished from circulation. Governmental response to this shortage was hampered by the fact that officials did not clearly understand what had happened.{{sfn|Lange|pp=42–43}} In 1830, Treasury Secretary [[Samuel D. Ingham]] proposed adjusting the ratio between gold and silver in US currency to 15.8:1, which had for some time been the ratio in Europe.{{sfn|Taxay|p=193}} It was not until 1834 that Congress acted, changing the gold/silver ratio to 16.002:1. This was close enough to the market value to make it uneconomic to export either US gold or silver coins.{{sfn|Lange|pp=42–43}} When silver prices rose relative to gold as a reaction to the [[California Gold Rush]], silver coinage was worth more than face value, and rapidly flowed overseas for melting. Despite vocal opposition led by [[Tennessee]] Representative (and future president) [[Andrew Johnson]], the precious metal content of smaller silver coins was reduced in 1853.{{sfn|Taxay|pp=217–221}}  Silver was now undervalued at the Mint; accordingly little was presented for striking into money.{{sfn|Jones|p=7}}

The [[Coinage Act of 1873]] eliminated the standard silver dollar. It also repealed the statutory provisions allowing silver bullion to be presented to the Mint and returned in the form of circulating money. In passing the Coinage Act, Congress eliminated bimetallism.{{sfn|Coin World Almanac|p=456}}  During the economic chaos of the [[Panic of 1873]], the price of silver dropped significantly, but the Mint would accept none for striking into legal tender.<!-- Note: the phrasing "legal tender" is to exclude the Trade dollar, which could be still be struck and was not legal tender then, but is way off track for this story. --> Silver producers complained, and many Americans came to believe that only through bimetallism could the nation achieve and maintain prosperity. They called for the return to pre-1873 laws, which would require the Mint to take all the silver offered it and return it, struck into silver dollars.{{sfn|Jones|p=7}} This would inflate the money supply, and, adherents argued, increase the nation's prosperity. Critics contended that the inflation which would follow the introduction of such a policy would harm workers, whose wages would not rise as fast as prices would, and the operation of [[Gresham's law]] would drive gold from circulation, effectively placing the United States on a silver standard.{{sfn|Jones|pp=7–13}}