Editing Coinage Act of 1873 (section)

== Consideration and passage ==

[[File:John Sherman, Brady-Handy photo portrait, ca1860-1875.jpg|thumb|Senator [[John Sherman]] shepherded the bill through Congress.]]
Sherman introduced the bill on April 28, 1870, and it was referred to the [[Senate Finance Committee]], of which he was chairman.{{sfn|Van Ryzin|p=59}} He did not seek its passage in that session of Congress, as lawmakers were busy with other financial legislation.{{sfn|Nugent|p=138}} The bill attracted next to no newspaper attention throughout the period of almost three years it was under consideration, though monetary experts and others watched its progress closely.{{sfn|Nugent|p=140}} On January 9, 1871, Sherman brought the bill to the Senate floor for debate. That it abolished the silver dollar, and thus bimetallism, was not discussed, as senators focused on the omission of the coinage charge (the fee for the Mint's services in converting bullion to money). This was of importance to the Senate—especially members from the Far West—because it affected what mining companies and refiners (an important economic interest) could get for their product.{{sfn|Nugent|p=145}} Sherman offered an amendment to retain the coinage charge, but it was attacked by Western senators as an unjust tax on miners and refiners of gold, and the amendment was defeated, 26–23. On January 10, the bill passed the Senate, 36–14, with Sherman voting against his own bill.{{sfn|Weinstein|p=318}} It was then sent to the House of Representatives and referred to the Committee on Coinage, Weights, and Measures from which it was briefly brought forth on February 25 by Pennsylvania's [[William D. Kelley]], the chairman, before being recommitted to committee.{{sfn|Taxay|p=254}} The bill was not considered by the House during the remainder of the [[41st Congress]], which expired on March 3, 1871, and the Senate-passed bill died with it.{{sfn|Carothers|p=231}}

Kelley reintroduced the bill in the House when Congress reconvened in December 1871.{{sfn|Nugent|p=147}} Chairman Kelley was from Philadelphia, and was influenced by industrialist [[Joseph Wharton]], who owned a nickel refinery in nearby [[Camden, New Jersey]], from which the Mint purchased, without competitive bidding, much of the metal for the three-cent and five-cent base metal coins. The bill at that time proposed that the cent, then made of bronze, be made of nickel alloy as well—when it was debated on January 9, 1872, Wharton's interest was an immediate target.{{sfn|Nugent|pp=149–151}} Kelley was quizzed by New York Representative [[Clarkson Nott Potter|Clarkson Potter]], who called the bill "this Pennsylvania contrivance" which would give "a monopoly to the gentleman in Pennsylvania [Wharton]."{{sfn|Taxay|p=254}} Another New Yorker, [[Dwight Townsend]], moved to scuttle the bill in disgust over how long it was taking to pass; his motion on voice vote would have succeeded, but there was no [[quorum]] and it failed on a roll call vote.{{sfn|Nugent|pp=149–150}} On January 10, Missouri Congressman [[James Robinson McCormick|James R. McCormick]], who represented nickel producers in his home state, introduced an amendment for competitive bidding for nickel purchases by the Mint.{{sfn|Taxay|p=254}} Rather than accede to McCormick's amendment, Kelley sent the bill back to committee.{{sfn|Nugent|p=152}}

When the bill was brought back to the House floor on April 9, 1872, it was managed by Massachusetts Representative [[Samuel Hooper]], chairman of the [[United States House Committee on Financial Services|House Committee on Banking and Currency]]. He went through the bill section by section, and stated the bill would place the United States on the gold standard. In the ensuing debate, other representatives, including Potter and Kelley, showed their understanding of that. The bill now provided for competitive nickel bidding, but was again withdrawn, this time by Hooper, after Kelley accused Potter of trying to benefit New York bullion merchants. This fracas caused other New Yorkers to oppose the bill.{{sfn|Nugent|pp=152, 156}} On May 27, Hooper presented a substitute bill, which he got passed, 110–13, without it even being read. Among the changes that the House made to Knox's bill were a slight increase in weight of the subsidiary{{efn|Even with the increase, a dollar's worth of the smaller coins weighed less than the to-be-abolished silver dollar, thus they were subsidiary.}} silver coins (the [[dime (United States coin)|dime]], [[quarter (United States coin)|quarter dollar]], and half dollar), making a dollar in them weigh {{convert|25|g}}.{{sfn|Carothers|p=232}}{{sfn|Taxay|pp=256–257}}

The bill then awaited Congress reconvening in December. Early in that month, Secretary Boutwell issued his annual report, calling for the passage of the legislation. On the 16th, the bill was referred to Sherman's committee. It emerged without the plan to make the cent from copper-nickel, and with the lightweight silver dollar{{efn|Bimetallism would not have remained with the retention of the lightweight dollar.  The new coins would only have been issued on government order: thus, depositors of bullion could not have had their metal converted into the lightweight pieces. The proposed piece was to be struck to the standard of the subsidiary coins, thus two half dollars would have weighed the same as one of the new dollars. See {{harvnb|Taxay|p=257}}, {{harvnb|Van Ryzin|p=107}}.}} replaced with a [[Trade dollar]] intended for commerce in the Far East, having limited legal tender status in the U.S. The bill was reported back to the Senate on January 7, 1873.{{sfn|Van Ryzin|p=107}}{{sfn|Taxay|pp=257}} It was debated there on the 17th.{{sfn|Nugent|pp=160–161}}

One topic of discussion was the bill's requirement that an eagle appear on larger U.S. coins. Linderman had requested an amendment to require that gold and silver coins bear a statement of their weight and fineness, which would mean sacrificing the eagle. California's [[Eugene Casserly]] opposed the amendment, which was sponsored by Sherman, stating "it will hardly be possible to think of a half dollar or a quarter dollar as being such a coin without the eagle upon it".{{sfn|Van Ryzin|p=96}} The eagle was saved when the amendment failed, 24 in favor and 26 against. Casserly was less successful with an amendment to remove entirely the reduced coinage charge of 0.2 percent, which failed.{{sfn|Van Ryzin|p=96}} Sherman moved the bill along as quickly as he could, and it passed without a recorded vote. The House initially refused to agree to the Trade dollar; representatives of both houses, led by Sherman and Potter, met in a [[conference committee]], and the House acceded to the Senate amendment for the Trade dollar.{{sfn|Nugent|pp=160–161}}{{sfn|Van Ryzin|pp=96–97}} The bill passed both houses without further debate, and was signed by President [[Ulysses S. Grant]] on February 12, 1873.{{sfn|Taxay|p=258}} At no point in its almost three-year journey through the legislative process did the bill provide for the retention of the standard silver dollar, into which depositors could have their bullion coined.{{sfn|Van Ryzin|p=117}}

=== Intent of the bill's authors ===
[[File:1873 $1 Seated Liberty.jpg|thumb|left|450px|The standard [[Seated Liberty dollar|silver dollar]] was abolished by the Coinage Act of 1873.]]
When, several years after its passage, the 1873 law became a political issue, some of those involved in enacting it, including Sherman and Linderman, stated that there had been no intent to end bimetallism in the elimination of the authority for private citizens to have silver bullion coined into dollars. They argued that the 1853 legislation had ended the practice of having bullion struck into smaller-denomination coins; the 1873 act simply rectified an omission and eliminated a coin with a low mintage that did not circulate.{{sfn|Nugent|pp=168–170}} They were not always consistent in their denials: Boutwell wrote in his memoirs that "in 1873 I had come to believe that it was wise for every nation to recognize, establish, and maintain the gold standard&nbsp;... hence it was that I determined to abandon the idea of a double [i.e., bimetallic] standard.{{sfn|Nugent|p=169}}

Within a few years, the idea that the omission of the silver dollar from the Coinage Act had not been with intent to place the United States on the gold standard became the establishment position. Part of this was in reaction against the conspiracy theories that were circulating about the "Crime of '73", as advocates of bimetallism called the act. This was accepted by many historians well into the 20th century.{{sfn|Nugent|p=168}} Neil Carothers, in his 1930 history of small-denomination U.S. currency, wrote that "many others have demonstrated that this was not a corrupt or surreptitious action by the enemies of silver. The elimination of the standard silver dollar was simply in the interests of clarifying the coinage law&nbsp;... Not one party to the passage of the law of 1873 recognized the significance of the abolition of the legally existing double standard."{{sfn|Carothers|p=235}} According to historian [[Allen Weinstein]], "Silver's demonetization, according to the traditional account, came as an unplanned if fortunate by-product of a complex and largely technical revision of the mint laws in the Coinage Act of 1873."{{sfn|Weinstein|p=310}}

Economist [[Milton Friedman]] wrote, "what is not open to question is that the standard silver dollar was omitted from the list of coins to be minted intentionally, in full knowledge of the likely consequences, and in the belief that those consequences were desirable."{{sfn|Friedman|p=1166}} He cited Walter T. K. Nugent's 1968 book, ''Money and American Society, 1865–1880'',

{{quote|
as Nugent documents in great detail, Senator John Sherman, chairman of the Senate Finance Committee, had been determined to demonetize silver from at least 1867 and had arranged to have a bill to that effect drafted at the end of 1869. From then on, Sherman, Linderman, John Jay Knox (deputy comptroller of the currency and then comptroller), and Secretary of the Treasury George Boutwell cooperated to push a coinage bill that included the demonitization of silver.{{sfn|Friedman|p=1166}}
}}

Knox and Linderman were both personally familiar with mining conditions in the Far West. They knew that the amount of bullion produced was only going to increase, and would likely drop the price of silver below the level ($1.2929 per troy ounce) at which the metal in a silver dollar was worth more as bullion than as money. In his explanatory statement accompanying his draft bill, Knox explained the discontinuance of the silver dollar would mean the United States was no longer a bimetallic nation.{{sfn|Nugent|p=136}}{{sfn|Friedman|p=1172}} Boutwell, in his 1872 annual report, urged Congress to end the coinage of silver from private deposits, lest the government take a loss from paying out gold in exchange for the silver dollars, and ultimately having to melt them when they could not be circulated.{{sfn|Van Ryzin|p=106}} According to Nugent, "Were Knox, Linderman, Boutwell, Sherman, and others aware of what they were doing when they planned to drop the silver dollar? It is inconceivable that they were not; Knox's statement was explicit. But did they urge it because they feared a drop in silver prices? No one made an explicit statement to that effect, but it was undoubtedly the case."{{sfn|Nugent|pp=136–137}}