Sherman Silver Purchase Act

Last updated

The Sherman Silver Purchase Act was a United States federal law enacted on July 14, 1890. [1]

Contents

The measure did not authorize the free and unlimited coinage of silver that the Free Silver supporters wanted. It increased the amount of silver the government was required to purchase on a recurrent monthly basis to 4.5 million ounces. [2] [3] The Sherman Silver Purchase Act had been passed in response to the growing complaints of farmers' and miners' interests. Farmers had immense debts that could not be paid off due to deflation, and they urged the government to pass the Sherman Silver Purchase Act to boost the economy and cause inflation, allowing them to pay their debts with cheaper dollars. [4] [ better source needed ] Mining companies, meanwhile, had extracted vast quantities of silver from western mines. The resulting oversupply drove down the price of their product, often to below the point at which the silver could be profitably extracted. They hoped to enlist the government to increase the demand for silver. [5]

Originally, the bill was simply known as the Silver Purchase Act of 1890. Only after the bill was signed into law did it become the "Sherman Silver Purchase Act." [6] Senator John Sherman, an Ohio Republican and chairman of the Senate Finance Committee, was not the author of the bill, but once both houses of Congress had passed the Act and the Act had been sent to a Senate/House conference committee to settle differences between the Senate and House versions of the Act, Senator John Sherman was instrumental in getting the conference committee to reach agreement on a final draft of the Act. [6] Nonetheless, once agreement on the final version was reached in the conference committee, Sherman found that he disagreed with many sections of the act. [6] So tepid was Sherman's support that when he was asked his opinion of the act by President Benjamin Harrison, Sherman ventured only that the bill was "safe" and would cause no harm if the President signed it. [2]

The act was enacted in tandem with the McKinley Tariff of 1890. William McKinley, an Ohio Republican and chairman of the House Ways and Means Committee, worked with John Sherman to create a package that could both pass the Senate and receive the President's approval.

Under the Act, the federal government purchased millions of ounces of silver, with issues of paper currency. It became the second-largest buyer in the world, after the British Crown in India, where the Indian rupee was backed by silver rather than gold. Instead of the $2 million to $4 million that had been required by the Bland–Allison Act of 1878, the US government was now required to purchase 4.5 million ounces of silver bullion every month. [2] The law required the Treasury to buy the silver with a special issue of Treasury (Coin) Notes that could be redeemed for either silver or gold. The result was the substantial expansion in the volume of circulating dollars without a proportionate growth in the gold stock. The crash in the silver dollar's bullion value in the 1890s from 80 cents to approximately 50 cents increased public anxiety on their continued ability to convert silver dollars and banknotes into gold. The result was a run on the Treasury's gold stock and the onset of the Panic of 1893. President Grover Cleveland summoned an emergency session of Congress on August 7, 1893, for the repeal of the act to prevent the further depletion of the government's gold reserves. [7]

In 1890, the price of silver dipped to $1.16 per ounce. By the end of the year, it had fallen to $0.69. By December 1894, the price had dropped to $0.60. On November 1, 1895, US mints halted production of silver coins, and the government closed the Carson City Mint. Banks discouraged the use of silver dollars. [5] The years 1893–95 had the lowest productions of Morgan dollars for the entire series, creating several scarce coins. [8]

Related Research Articles

<span class="mw-page-title-main">Bland–Allison Act</span> 1878 United States law on monetary policy

The Bland–Allison Act, also referred to as the Grand Bland Plan of 1878, was an act of the United States Congress requiring the U.S. Treasury to buy a certain amount of silver and put it into circulation as silver dollars. Though the bill was vetoed by President Rutherford B. Hayes, the Congress overrode Hayes's veto on February 28, 1878, to enact the law. The text of the act can be found in the Congressional Record under the further reading section of this article.

<span class="mw-page-title-main">Gold Standard Act</span> 1900 U.S. legislation which established gold as the standard for the U.S. dollar

The Gold Standard Act was an Act of the United States Congress, signed by President William McKinley and effective on March 14, 1900, defining the United States dollar by gold weight and requiring the United States Treasury to redeem, on demand and in gold coin only, paper currency the Act specified.

<span class="mw-page-title-main">Coinage Act of 1873</span> Revision of the laws relating to the Mint of the United States

The Coinage Act of 1873 or Mint Act of 1873 was a general revision of laws relating to the Mint of the United States. By ending the right of holders of silver bullion to have it coined into standard silver dollars, while allowing holders of gold to continue to have their bullion made into money, the act created a gold standard by default. It also authorized a Trade dollar, with limited legal tender, intended for export, mainly to Asia, and abolished three small-denomination coins. The act led to controversial results and was denounced by critics as the "Crime of '73".

<span class="mw-page-title-main">Silver certificate (United States)</span> Paper currency used between 1878 and 1964

Silver certificates are a type of representative money issued between 1878 and 1964 in the United States as part of its circulation of paper currency. They were produced in response to silver agitation by citizens who were angered by the Fourth Coinage Act, which had effectively placed the United States on a gold standard. The certificates were initially redeemable for their face value of silver dollar coins and later in raw silver bullion. Since 1968 they have been redeemable only in Federal Reserve Notes and are thus obsolete, but still valid legal tender at their face value and thus are still an accepted form of currency.

<span class="mw-page-title-main">Executive Order 6102</span> 1933 U.S. executive order prohibiting the hoarding of gold currency

Executive Order 6102 is an executive order signed on April 5, 1933, by US President Franklin D. Roosevelt "forbidding the hoarding of gold coin, gold bullion, and gold certificates within the continental United States." The executive order was made under the authority of the Trading with the Enemy Act of 1917, as amended by the Emergency Banking Act in March 1933.

<span class="mw-page-title-main">American Silver Eagle</span> Silver bullion coin of the United States

The American Silver Eagle is the official silver bullion coin of the United States.

<span class="mw-page-title-main">Free silver</span> Economic policy issue in the United States

Free silver was a major economic policy issue in the United States in the late 19th century. Its advocates were in favor of an expansionary monetary policy featuring the unlimited coinage of silver into money on-demand, as opposed to strict adherence to the more carefully fixed money supply implicit in the gold standard. Free silver became increasingly associated with populism, unions, and the struggle of ordinary Americans against the bankers, monopolists, and robber barons of the Gilded Age. Hence, it became known as the "People's Money".

The history of the United States dollar began with moves by the Founding Fathers of the United States of America to establish a national currency based on the Spanish silver dollar, which had been in use in the North American colonies of the Kingdom of Great Britain for over 100 years prior to the United States Declaration of Independence. The new Congress's Coinage Act of 1792 established the United States dollar as the country's standard unit of money, creating the United States Mint tasked with producing and circulating coinage. Initially defined under a bimetallic standard in terms of a fixed quantity of silver or gold, it formally adopted the gold standard in 1900, and finally eliminated all links to gold in 1971.

<span class="mw-page-title-main">Morgan dollar</span> U.S. dollar coin (1878–1904, 1921, 2021–present)

The Morgan dollar is a United States dollar coin minted from 1878 to 1904, in 1921, and beginning again in 2021 as a collectible. It was the first standard silver dollar minted since the passage of the Coinage Act of 1873, which ended the free coining of silver and the production of the previous design, the Seated Liberty dollar. It contained 412.5 Troy grains of 90% pure silver. The coin is named after its designer, United States Mint Assistant Engraver George T. Morgan. The obverse depicts a profile portrait representing Liberty, modeled by Anna Willess Williams, while the reverse depicts an eagle with wings outstretched. The mint mark, if present, appears on the reverse above between D and O in "Dollar".

<span class="mw-page-title-main">Seated Liberty dollar</span> United States silver dollar coin minted from 1840 to 1873

The Seated Liberty dollar was a dollar coin struck by the United States Mint from 1840 to 1873 and designed by its chief engraver, Christian Gobrecht. It was the last silver coin of that denomination to be struck before passage of the Coinage Act of 1873, which temporarily ended production of the silver dollar for American commerce. The coin's obverse is based on that of the Gobrecht dollar, which had been minted experimentally from 1836 to 1839. However, the soaring eagle used on the reverse of the Gobrecht dollar was not used; instead, the United States Mint (Mint) used a heraldic eagle, based on a design by late Mint Chief Engraver John Reich first utilized on coins in 1807.

<span class="mw-page-title-main">Trade dollar (United States coin)</span> Silver coin for use in East Asia (1873–1885)

The United States trade dollar was a dollar coin minted by the United States Mint to compete with other large silver trade coins that were already popular in East Asia. The idea first came about in the 1860s, when the price of silver began to decline due to increased mining in the western United States. A bill providing in part for the issuance of the trade dollar was eventually put before Congress, where it was approved, and signed into law as the Coinage Act of 1873. The act made trade dollars legal tender up to five dollars. A number of designs were considered for the trade dollar, and an obverse and reverse created by William Barber were selected.

<span class="mw-page-title-main">Benjamin Harrison</span> President of the United States from 1889 to 1893

Benjamin Harrison was an American politician who served as the 23rd president of the United States from 1889 to 1893. He was a member of the Harrison family of Virginia—a grandson of the ninth president, William Henry Harrison, and a great-grandson of Benjamin Harrison V, a Founding Father.

<span class="mw-page-title-main">Coinage Act of 1965</span> Federal law of the United States

The Coinage Act of 1965, Pub. L.Tooltip Public Law  89–81, 79 Stat. 254, enacted July 23, 1965, eliminated silver from the circulating United States dime and quarter dollar coins. It also reduced the silver content of the half dollar from 90 percent to 40 percent; silver in the half dollar was subsequently eliminated by a 1970 law.

<span class="mw-page-title-main">Presidency of Benjamin Harrison</span> U.S. presidential administration from 1889 to 1893

Benjamin Harrison's term as the president of the United States lasted from March 4, 1889, until March 4, 1893. Harrison, a Republican, took office as the 23rd United States president after defeating Democratic incumbent President Grover Cleveland in the 1888 election. Four years later he was defeated for re-election by Cleveland in the 1892 presidential election.

<span class="mw-page-title-main">American Arts Commemorative Series medallions</span> Gold bullion medallions minted 1980–1984

American Arts Commemorative Series Medallions are a series of ten gold bullion medallions that were produced by the United States Mint from 1980 to 1984. They were sold to compete with the South African Krugerrand and other bullion coins.

<span class="mw-page-title-main">Three-cent nickel</span> US copper-nickel three-cent coin (1865–1889)

The copper-nickel three-cent piece, often called a three-cent nickel piece or three-cent nickel, was designed by US Mint Chief Engraver James B. Longacre and struck by the United States Bureau of the Mint from 1865 to 1889. It was initially popular, but its place in commerce was supplanted by the five-cent piece, or nickel.

<span class="mw-page-title-main">John Sherman</span> American cabinet secretary and senator (1823–1900)

John Sherman was an American politician from Ohio who served in federal office throughout the Civil War and into the late nineteenth century. He was the younger brother of Union general William Tecumseh Sherman, with whom he had a close relationship.

<span class="mw-page-title-main">McKinley Birthplace Memorial gold dollar</span> Commemorative gold coin featuring President McKinley

The McKinley Birthplace Memorial gold dollar was a commemorative coin struck by the United States Bureau of the Mint in 1916 and 1917, depicting the 25th President of the United States, William McKinley. The coin's obverse was designed by Charles E. Barber, Chief Engraver of the Mint, and the reverse by his assistant, George T. Morgan. As McKinley had appeared on a version of the 1903-dated Louisiana Purchase Exposition dollar, the 1916 release made him the first person to appear on two issues of U.S. coins.

The Louisiana Purchase Sesquicentennial half dollar was a proposed United States commemorative coin, legislation for which passed both houses of Congress, but was vetoed in 1954 by President Dwight Eisenhower. Intended to celebrate the 150th anniversary of the Louisiana Purchase (1803), the coin was lobbied for by both the Missouri Historical Society (MHS) and the Louisiana Purchase 150th Anniversary Association of New Orleans, who hoped to be able to buy the entire coin issue from the government and sell it at a profit.

<span class="mw-page-title-main">Coinage Act of 1853</span>

The Coinage Act of 1853, 10 Stat. 160, was a piece of legislation passed by the United States Congress which lowered the silver content of the silver half dime, dime, quarter dollar, and half dollar, and authorized a three dollar gold piece. Although intending to stabilize the country's silver shortage, it, in effect, pushed the United States closer to abandoning bimetallism entirely and adopting the gold standard.

References

  1. ↑ Charles Ramsdell Lingley, Since the Civil War, first edition: New York, The Century Co., 1920, ix–635 p., LCCN   21-574. Re-issued: Plain Label Books, unknown date, under a new title: The United States Since the Civil War, 310 p. See: page 173 (Google Books).
  2. 1 2 3 Socolofsky & Spetter 1987 , p. 59.
  3. ↑ Allen 1999 , p. 252.
  4. ↑ Answers.com, Sherman Silver Purchase Act; accessed 2009.04.08.
  5. 1 2 Van Dusen 2013 , pp. 141–142.
  6. 1 2 3 Socolofsky & Spetter 1987 , p. 58.
  7. ↑ Morris, Edmund (1979). The Rise of Theodore Roosevelt. New York: Random House. p. 485. ISBN   9781400069651.
  8. ↑ Morgan Silver Dollars (1878–1921)

Sources

This page is based on this Wikipedia article
Text is available under the CC BY-SA 4.0 license; additional terms may apply.
Images, videos and audio are available under their respective licenses.