Readings in Money and Banking: Selected and AdaptedPhillips, Chester Arthur
General
Readings in Money and Banking: Selected and Adapted
Phillips, Chester Arthur
Banks and banking; Banks and banking -- United States; Money
The silver act, as passed by the House of
Representatives, provided for complete bimetallism--for the free and
unlimited coinage of the silver dollar at the old ratio of 16 to 1. In
the Senate, it was amended by the substitution of the provisions for a
limited coinage, which were finally enacted. The compromise was meant to
satisfy both those who objected to the cheaper standard and those who
wanted more money; and it afforded a welcome escape to the legislators
who were trying to satisfy all parties. At the time, no one probably
expected that the measure would remain in force for any great length of
time. The conservative element hoped that it would be repealed after a
short trial; the inflationists (for by that name they might, then at
least, fairly be called) believed that it would soon be superseded by
the free and unlimited coinage of silver. As it happened, the act
remained in force, unamended, and indeed without very serious attempt at
amendment, for over twelve years; and the measure which succeeded it in
1890, though different in many details, followed the same method of
forcing a large regular injection into the circulating medium of money
based on silver purchases by the Government.
LIMITED CIRCULATION OF THE SILVER DOLLARS
[23]The Government has made every effort to get the dollar coins out of
its hands.... But the great bulk of the coins thus got out of the
treasury return to it almost at once. The degree of favor which they
meet with of course ... varies in different parts of the country,
apparently reflecting in a curious way the popular feeling as to the
desirability of having silver currency at all. They circulate very
little east of the Alleghanies, but are used more freely and permanently
in the Mississippi Valley. Among the negroes of the South the big pieces
are said to be favorites, and to find a permanent lodgment. Their
greatest circulation ... was reached in 1886; after that time the change
in the denominations of silver certificates caused a decline in the
amount used.
PROVISIONS OF THE ACT OF 1890
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