The Crime of 1873

When the civil war ended, the federal debt was about $2,800,000,000; the debts of the various states, townships and municipalities, about $1,400,000,000; of railways and canals about $2,500,000,000; and of other corporations about $300,000,000; together about $7,000,000,000.

Between a fourth and a third of this sum was owing to investors in Europe, who had lent or advanced it, in paper dollars, which cost them on the average about half a dollar each in gold or silver coins. An equal proportion had been advanced by American capitalists on similar terms. The balance was advanced before the war, or else before the paper currency depreciated; and was therefore lent in coins or their equivalent. Leaving this portion of the debt out of view, it is probably near the mark to say that at the close of the civil war there were owing nearly $5,000,000,000, which cost the lenders (Europeans and Americans), about half that sum in coins.

The whole of this debt was payable, under the act of February 25, 1862, in greenbacks; the interest on a portion of it was payable in coins of gold or silver.

The first move of the lenders after the war closed was to open a newspaper war upon the paper money which they had themselves lent to the government. The greenbacks, it was contended, were "dishonest" dollars; indeed, not really dollars at all, only worthless, disreputable rags, a disgrace to civilization, disseminators of fraud and disease, etc. This question was fought in the Presidential campaign of 1868, in which, by referring to the newspapers of the day, it will be seen that the writer hereof bore no inactive part.

As the election day approached every sign indicated the triumph of Governor Seymour, the champion of greenbacks, and the defeat of General Grant, the champion of coins. All of a sudden, on the eve of election, and without a note of warning, the then trusted organ of the Democratic party, to wit, the New York World, edited by Manton Marble, but owned, as it was commonly believed, by August Belmont, hauled down its flag, deserted the ticket on the eve of election, and left nearly two million voters to the effects of treachery, panic and disorder.

The first fruit of this nefarious transaction was the passage of a so-called "Credit Strengthening Act," dated March 18, 1869, by which the United States government pledged itself to pay the principal as well as the interest, of its paper debt, in gold or silver coins. In other words, without any consideration whatever, it undertook to pay for every paper dollar which it had borrowed, a gold or silver dollar, of the long-established weight and fineness; and by this act and its subsequent action, it compelled all indebted persons and corporations to do the like.

Having by these means secured to themselves the payment of a whole metal dollar for each half of a metal dollar advanced to the government, thus clearing cent-per-cent profit at a single bound, the conspirators next attempted to double the value or purchasing power of such metal dollars, by means of destroying one-half of them, to wit, the silver ones.

The following is a brief account of their operations: At that time and for several years previously, a government commission had been occupied in the work of revising and codifying the statues of the United States. The Revision Commissioners being lawyers, and not financiers, merchants, nor metallurgists, were not familiar with the technical branches of administration; therefore they made it a practice to visit the executive departments and consult with the principal officers concerning the practical interpretation and administration of the laws. When they reached the Mint Bureau, its principal officer had already in his hands a proposed codification of the coinage laws, the model for which had been forwarded to him by certain friends or agents of the Bank of England in London.

This new American Mint Code apparently embodied all the existing laws on the subject, nay, it even purported to follow their very language, and to blend them all into an harmonious whole; but such appearance was deceptive. This deception is not charged upon the Director of the Mint (since dead), but upon the men who prepared and placed the codification in his hands, some of whom are still living and who will doubtless take pleasure in reading this communication.

The old law (not the proposed codification) made it the duty of the Director of the Mint to receive deposits of either gold or silver; to coin such metal into dollars—the silver ones to contain exactly sixteen times as much metal as the gold ones—and to return the same to the depositor; and it declared all such dollars to be money of the United States and legal tenders for all purposes and to any amount.

The public debt was made payable under the act of March 18, 1869, in such dollars, whether of silver or gold. The proposed codification (not the law) dropped the silver dollar. It did not demonetize it, but by omitting to include it in the various coins which the Mint Director was authorized to strike, it was rendered unlawful and impracticable for him to strike any more of them.

As to the means by which this modification was palmed upon the Director of the Mint and afterwards—that is to say, before the Revision Commissioners dealt with it—how it was palmed upon Congress, the subject has been frequently dealt with already. The dupes who afterwards attempted to defend it, utterly failed and are dead; the men who worked the trick are some of them still living and may yet be named and impeached.

The act (embodying the codification) when passed, was not read in both Houses at length, and it is notorious that this transcendant change in the monetary system of the country, affecting the most vital and widespread interests, was carried through without the knowledge or observation of the people.

It was neither demanded by the resolutions of public meetings or political conventions, nor asked for in petitions from electors. As paper money was the actual currency of the country at that time, a coinage act was not likely to attract general attention. While it was pending, the press of the country was entirely unobservant or silent. After it passed, no notice was taken of it for more than two years afterwards. If it had been known that any such vital question as the demonetization of silver was lurking in the bill it would have aroused the most widespread discussion throughout the country; as is shown by the present contest upon remonetizing it; which is only the same question reversed, and which is likely to dominate all other public questions until it is settled.

The most striking evidence, perhaps, of the public inattention to the effect of the coinage act of 1873, is the fact that President Grant, who signed it, had no knowledge of what it really accomplished in relation to the demonetization of silver, and was still uninformed about it so late as October 3, 1873, as is proved by his letter of that date to Mr. Cowdrey. In this letter he wonders why silver is not brought to the mints and coined into money! If the President of the United States, in daily intercourse with the public men of the country, had failed to hear during certainly seven or eight months that the laws no longer permitted money to be coined from silver, it must be inferred that ignorance on the subject was general and profound.

It has since been contended by the apologists for demonetization that the word "dollar" was omitted from the enumeration of silver coins in the codification, because the silver dollar had lost value. On the contrary, the French mint was at that time paying about three percent, more for silver bullion than the American mints; and for this reason, and as a matter of fact, the American silver dollar was at a premium of three percent in American gold dollars. It has also been pleaded that but comparatively few American silver dollars had ever been coined and circulated; but this plea omits from view the vast number of Spanish silver dollars and of American halves and quarters which were coined and made full legal tender under the American law for two-thirds of a century and which in fact amply filled the metallic circulation of this country.

It has also been pleaded that the American silver dollar was dropped because Germany had demonetized silver. But this is not true. It was dropped by the adoption of the New Mint Code of February 12, 1873, whereas Germany did not demonetize silver until July 9, 1873. It has also been pleaded that the silver dollar was dropped because of the vast quantities of silver produced from the Comstock lode; whereas, in fact, of the entire product of the lode one-half in value was of gold.

All these and other pleas, subterfuges and excuses were invented after the deed was done. The silver dollar was dropped purely and simply to enhance the value of the gold dollar, and thus to double the debt of the American people. That was the motive and there was no other motive. The proof of it is that the very same men (I do not merely mean the same class of men, I mean the identical individuals) who betrayed their party in 1868 and who doubled the public indebtedness by promoting the act of March 18, 1869, assisted to again double the debt, by promoting the surreptitious mint codification act of February 12, 1873, and the further surreptitious act of June, 1874. I quote from the official report of the United States Monetary Commission of 1876, page 90:

"The demonetization of silver coined and uncoined was affirmatively completed in June, 1874, by the following section (3,586) of the Revised Statutes: 'The silver coins of the United States shall be a legal tender at their nominal value for any amount not exceeding five dollars in any one payment.'

"No law was ever passed by Congress of which this language can be considered a 'revision.' The Revised Statutes were enacted in bulk. They were intended to be a revision merely of the existing laws, without change or introduction of new matter, and Congress was assured by its Committee on Revision that no new matter had been introduced into them. It was not possible for the members of the committee to have personally verified the exact accuracy of the revision. They must necessarily have relied upon assurances given to them by the persons actually engaged in the work. [These were the codification or Revision Commissioners previously mentioned.] Whoever may be responsible for this error in the Revised Statutes, the ancient money of the country, instead of being legislated out of existence by Congress, was revised out of existence."

It will be seen that the legislation of 1865-74 was no "academic experiment," but a sordid crime, hatched abroad and brought into this country by the treacherous people who governed the utterances of the New York World. Every one of the conspirators engaged in the commission of this crime suddenly acquired riches. Some of them have since delivered to admiring audiences iong dissertations on academic finance, and one of them has been distinguished by an unsuspecting President of the United States with high marks of public preferment.