Coinage Act of 1834
The Coinage Act of 1834 was passed by the United States Congress on June 28, 1834. It raised the silver-to-gold weight ratio from its 1792 level of 15:1 (established by the Coinage Act of 1792) to 16:1 thus setting the mint price for silver at a level below its international market price.[1][2]
The Act redefined the U.S. Eagle coin (ten U.S. Dollars) as containing 232 grains of fine gold, compared to 247.5 grains in the prior Act. This fixed the official basis of the dollar as $20.69 per troy ounce.[3] This standard prevailed until 1933, when the official price rose to $35 as a consequence of the Great Depression.[4]
The pure silver content of the silver dollar was left unchanged at 371.25 grains.[5]
Historical context
On June 28, 1834 the Coinage Act of 1834 was signed by Andrew Jackson. It defined the coin weights and allowed the Treasury Department to pay 5 days after deposit at the mint the full amount of the gold. This sped up the process of getting minted coins for gold. The coinage legislation of 1834 was passed during a contentious political battle between President
Economic and historical significance
In the first half of the nineteenth century, U.S. money was circulated in both metallic and paper currency. As established by the Coinage Act of 1792, silver coins were authorized in denominations of $0.05, $0.10, $0.25, $0.50 and $1.00. After the Coinage Act of 1834, silver (which was previously overvalued with respect to gold) became significantly undervalued and was exported to European markets where it was traded at a higher price.[10][11] This led to its near disappearance from circulation after 1834. Despite the attempts by Jackson, Taney and members of Congress to supplant paper currency in favor of “hard-money,” there were over a thousand banks issuing their own notes in small denominations (between $0.01 and $2.50).[12]
See also
- Coinage Act of 1792
- Coinage Act of 1849
- Coinage Act of 1853
- Coinage Act of 1857
- Coinage Act of 1864
- Coinage Act of 1873
- Coinage Act of 1965
References
- JSTOR 1991437.
- ^ Leech, Edward (1895). The North American Review. 464. 161: 34–42.
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(help) - ^ 480 grains per troy ounce; $10 * (480 grains/troy oz) / 232 grains = $20.69/troy oz
- ^ "Roosevelt's Gold Program". Federal Reserve History. Retrieved August 4, 2020.
- ^ Leavens, Dickson. "3". Silver Money. pp. 20–21.http://cowles.econ.yale.edu/P/cm/m04/
- S2CID 155067696.
- ^ Govan, Thomas (July 1958). "Fundamental Issues of the Bank War". The Pennsylvania Magazine of History and Biography. 82 (3): 305–315.
- S2CID 155067696.
- S2CID 155067696.
- JSTOR 1991437.
- ^ Hayes, H. Gordon (December 1933). "Bimettalism Before and After 1834". The American Economic Review. 23 (4): 677–679.
- JSTOR 1991437.
Further reading
- Allen, Larry (2009). The Encyclopedia of Money (2nd ed.). ISBN 978-1598842517.