| Crime Of 1873 |
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In United States History , "''The Crime of '73''" was a much debated shift from a Bi-metallic standard to a Gold ( Coinage ) only standard, with passage of the Fourth Coinage Act in 1873 , thereby creating a Gold Standard . Western miners and others such as farmers called this the "Crime of '73". Over time as the world prices for gold and silver fluctuate with supply and demand, the world price will be different, or becomes out-of-balance with, the government set standard. This means that if one metal goes up in relation to the other, miners and people holding the lower price metal will go to the U.S. mint and switch, or exchange, it for the higher priced metal. This leaves someone, in this case the government and the tax payer, suffering a loss. This practice becomes inflationary, wasteful spending with no productivity gain, and thus bad for an individual, company, or country. As countries go off the silver standard (or bimetallic standard) there becomes an increased supply of silver, this coupled with the fact that more silver is being found, the world silver-to-gold supply-demand ratio was rising (it would get to 40:1 by 1908). The U.S. Government was being hurt economically to help out the silver miners. So on February 12 1873 the Fourth Coinage Act or Coinage Act of 1873 was passed. Silver miners had a hard time over this change in government policy, calling it the "Crime of `73!". Western miners wanted the government to use more silver in coinage (helping them out) and the Eastern bankers did not. Besides the silver miners, the common man that innocently held silver coins was also hurt. The Kansas farmer who didn’t know to switch to gold before the change was left with devalued money. The bankers in New York, and elsewhere, who knew that the policy change was coming, and switched, were well off. Countries that hold their currency to gold, silver, bimetallic, or in the last half of the twentieth century the U.S. Dollar , must continually evaluate and adjust it to meet "real-world" supply and demand. They can not hold the line for years, then just flip a switch like the U.S. did in 1873 , or deny what is really happening in the world and their own country. The U.S. Government finally caved to the pressure from the western states (anything west of the to purchase between $2 and 4 million of silver per month. The government would always stick to the minimum purchase of $2 million. SEE ALSO EXTERNAL LINKS |
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