What was the Crime of ‘73?
The Crime of ‘73 refers to the Coinage Act of 1873, which temporarily ended the production of silver dollars by the U.S. Mint. Pro-Silver advocates, known as “Silverites” rallied support for their Free Silver Movement, which was popular in the West, but ultimately failed when the United States adopted the Gold Standard in 1900.
Facts About the Crime of ‘73 and the Coinage Act
Summary of the Crime of ‘73
These facts provide a summary overview of the Crime of ‘73 and the impact of the 1873 Coinage Act, which played a significant role in the economy of the United States and the government’s economic policies during the Gilded Age.
Bimetallism — Gold and Silver
- Bimetallism is a monetary policy that allows the unrestricted use of two metals — in this case, gold and silver.
- Under this policy, one metal is typically valued higher than the other.
End of Bimetallism
- In the early years, the U.S. operated on a “bimetallic standard,” using both gold and silver as currency.
- In 1873, the United States shifted from Bimetallism, which recognized both gold and silver as the basis for the dollar, to the Gold Standard.
- Before this change, the government had been minting silver at a ratio of 16 to one, meaning there was 16 times more silver in a silver dollar than gold in a gold dollar.
Effect of the California Gold Rush on the Price of Silver
- This ratio undervalued silver since the 1849 California Gold Rush, which lowered the price of gold.
- Because of the low price of silver, owners of silver mines started began selling their silver commercially, instead of to the U.S. Treasury, which made it into coins.
- This created a scarcity of silver dollars in circulation.
- With the disappearance of silver dollars, some monetary experts advised Congress to stop making silver coins and adopt the Gold Standard.
Hard Money and Soft Money
- Gold and silver coins are typically referred to as “Specie” or “Hard Money.”
- A currency that is printed on paper is known as “Paper Money” or “Soft Money/”
Greenbacks
- During the Civil War and the administration of President Abraham Lincoln, the government issued $450 million in paper money, known as Greenbacks.
- Greenbacks were first issued in 1862.
- Greenbacks were “Fiat Money” — government-issued currency that is not backed by a physical commodity, like gold or silver.
- The use of Greenbacks led to a decrease in the use of hard money as currency.
Exchanging Greenbacks for Gold and Silver
- Following the war, the government worked to reduce the amount of Greenbacks in circulation and increase the amount of hard money.
- During the administration of President Andrew Johnson, the government implemented a policy that allowed people to exchange Greenbacks for hard money.
- Because gold was more valuable than silver, most people wanted to exchange their Greenbacks for gold.
- The preference for gold was not only in the U.S. but also worldwide, because many nations started shifting to the Gold Standard.
The Coinage Act of 1873
- In 1873, the administration of President Ulysses S. Grant and Congress passed the Coinage Act.
- The act demonetized silver and established the gold dollar as the national monetary standard.
- The Coinage Act was intended to simplify the financial system by eliminating silver and going away from the Bimetallic System.
- Silver coins that were in circulation were still usable, but new ones were not made.
- This move followed the lead of many European nations.
The Panic of 1873
- That same year, Europe suffered an economic downturn, which affected the U.S., causing the Panic of 1873.
- The Panic of 1873 triggered the “First Great Depression,” which lasted until 1877, but lingered as part of a period known as the “Long Depression.”
- The depression hurt American farmers, as agricultural prices declined.
New Silver Mines Discovered and the Crime of ‘73
- Ironically, not long after the act was passed, new silver mines were discovered in Nevada and other parts of the West.
- The discoveries increased silver production and lowered the price of silver.
- As the U.S. suffered from the economic downturn, owners of Greenbacks wanted to be able to trade their paper money for silver coins, but they were not being minted due to the Coinage Act.
- Critics of the Coinage Act referred to it as the “Crime of ‘73.”
Free Silver Policy and the Crime of ‘73
- Before the passage of the Coinage Act, people could take gold or silver to the U.S. Mint and have it pressed into coins that were legal — or “legal tender.”
- The ability to convert as much silver as needed to money was called the “Free Silver Policy.”
- The Coinage Act ended the Free Silver Policy, which had been very popular in the United States.
- However, gold could still be converted to legal tender coins.
The Free Silver Movement
- A coalition formed between farming and western silver interests, advocating for the unlimited coinage of silver at the 16-to-1 ratio.
- Farmers supported the Free Silver Movement, which they believed would increase the nation’s money supply and boost agricultural prices.
- Meanwhile, owners of silver mines in the West looked to the government to start buying silver again to make silver coins.
The Crime of ‘73 and the Debate over Silver Coinage
- Advocates of Free Silver argued it was the result of a conspiracy led by eastern creditors, such as bankers and financiers, that was intended to control the money supply and prevent price recovery.
- Free Silver advocates argued supporters of the Gold Standard sought to replace silver, considered the “people’s money,” with gold, which was seen as the currency favored by bankers and big business.
- In defense of the Coinage Act, proponents argued it was enacted in anticipation of a decline in silver prices due to discoveries in the West, which had increased the silver supply by 20 percent.
- Supporters of gold said that if silver had not been demonetized, maintaining Bimetallism at the 16-to-one ratio would have led to a depletion of the nation’s gold reserve and the removal of gold from circulation.
Free Silver Advocates and Legislative Responses
- Supporters of Free Silver pushed for the reinstatement of the unlimited coinage of silver at the 16-to-one ratio but found limited success.
The Bland-Allison Act of 1878
- Missouri Representative Richard Bland led the way toward remonetizing silver, and was known as “Silver Dick.”
- In the Senate, William B. Allison of Iowa led the way.
- Congress enacted the Bland-Allison Act in 1878.
- President Rutherford B. Hayes vetoed the bill, but Congress overrode the veto.
- The bill required the government to buy $2-4 million worth of silver each month and use it to make silver dollars.
- Silver had to be purchased at market rates, not at a rate that was tied to the value of gold.
- The Bland-Allison Act fell short in terms of satisfying the demand for unlimited silver coinage.
The Crime of ‘73 and the Battle of the Standards
While the Crime of ‘73 contributed to the passage of the Bland-Allison Act, it intensified the debate over gold and silver and ultimately led to the adoption of the Gold Standard in 1900.
- Despite the Bland-Allison Act, the administration of President Rutherford B. Hayes bought the minimum amount of silver, appeasing bankers and industrialists who supported the Gold Standard.
- The Free Silver Movement continued to grow in the West, supported by the National Farmers’ Alliance, the Populist Party, and many industrial unions.
- As the nation expanded, adding new states in the West, so did the Free Silver Movement.
- The Sherman Silver Purchase Act (1890) allowed the government to buy more silver and make more silver dollars.
- The increase in the silver supply drove the value of silver down because it reduced scarcity.
- Mining operations responded by cutting wages, which led to labor unrest.
- The Panic of 1893 plunged the United States into another severe economic depression and intensified the debate over Free Silver.
- The debate over gold and silver is sometimes referred to as the “Battle of the Standards.”
- William Jennings Bryan, a Democrat, ran for President three times on a pro-silver platform and lost each time.
- The Gold Standard Act of 1900, passed despite opposition from silver advocates, ensured that paper currency could be freely redeemed in gold.
Crime of ‘73 APUSH
Use the following links and videos to study the Crime of ‘73, the Free Silver Movement, and the Gilded Age for the AP US History Exam. Also, be sure to look at our Guide to the AP US History Exam.
Crime of ‘73 Definition
The Crime of ‘73 refers to the passage of the Coinage Act of 1873 by the United States Congress, which effectively demonetized silver and transitioned the country to a Gold Standard. This decision, made without sufficient public debate, angered silver mining interests and agrarian groups who relied on the coinage of silver by the U.S. Mint. The Act fueled political tensions leading to the emergence of the Free Silver Movement and the Populist Party in the late 19th century, during the Gilded Age.
Crime of ‘73 APUSH Units
The Crime of ‘73 and the Coinage Act are part of the following APUSH units and chapters:
