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]
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 Andrew Jackson and a contingent of elected officials and bureaucrats led by Nicholas Biddle and Senators John C. Calhoun, Henry Clay and Daniel Webster over the fate of the United States Bank.[6] Biddle, the Bank’s president, believed that it served to facilitate the exchange of goods and payments by providing a national currency; however, Jackson feared that an institution as large as the U.S. national bank would be manipulated by powerful financiers to exploit the nation’s volatile financial system.[7] Furthermore, he argued that the Constitution did not give Congress the power to charter a corporation which could operate outside the District of Columbia . Therefore, in the summer of 1832, he vetoed a bill that sought to renew the corporate charter for the Bank placing the heated debate over the fate of the national bank squarely in the political spotlight during his re-election campaign. After handily winning re-election, Jackson appointed his Attorney General, Roger B. Taney, as Secretary of the Treasury in 1833. Taney sympathized with Jackson’s hostility towards the national bank and mandated that all federal deposits be withdrawn from BUS as quickly as possible severely curtailing the amount of loans the Bank could issue thereby precipitating a national credit shortage.[8] When Congress convened in December 1833 (known as the “Panic Session”), the credit shortage had managed to intensify the already bitter dispute over the fate of the Bank. While the president’s opponents controlled the Senate, his supporters in the House of Representatives managed to push his agenda in the form of coinage legislation that sought to undermine the circulation of U.S. Banknotes in favor of gold currency. The proposed bill was intended to devalue the overvalued silver (revalue the undervalued gold) from which the bank notes derived their monetary worth. After months of drafting and revision, The Coinage Act of 1834 was passed in the House by a vote of 145 to 36 and the Senate passed its version of the bill soon after.[9]
Economic and historical significanceedit
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]
^Stevens, Edward (1971). "Composition of the Money Stock Prior to the Civil War". Journal of Money, Credit, and Banking. 1. 3 (1): 84–101. doi:10.2307/1991437. JSTOR 1991437.
^Leech, Edward (1895). The North American Review. 464. 161: 34–42. {{cite journal}}: Missing or empty |title= (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.
^O'Leary, Paul (1937). "The Coinage Legislation of 1834". The Journal of Political Economy. 1. 45: 80–94. doi:10.1086/255020. S2CID 155067696.
^Govan, Thomas (July 1958). "Fundamental Issues of the Bank War". The Pennsylvania Magazine of History and Biography. 82 (3): 305–315.
^O'Leary, Paul (1937). "The Coinage Legislation of 1834". The Journal of Political Economy. 1. 45: 80–94. doi:10.1086/255020. S2CID 155067696.
^O'Leary, Paul (1937). "The Coinage Legislation of 1834". The Journal of Political Economy. 1. 45: 80–94. doi:10.1086/255020. S2CID 155067696.
^Stevens, Edward (1971). "Composition of the Money Stock Prior to the Civil War". Journal of Money, Credit, and Banking. 1. 3 (1): 84–101. doi:10.2307/1991437. JSTOR 1991437.
^Hayes, H. Gordon (December 1933). "Bimettalism Before and After 1834". The American Economic Review. 23 (4): 677–679.
^Stevens, Edward (1971). "Composition of the Money Stock Prior to the Civil War". Journal of Money, Credit, and Banking. 1. 3 (1): 84–101. doi:10.2307/1991437. JSTOR 1991437.
coinage, 1834, passed, united, states, congress, june, 1834, raised, silver, gold, weight, ratio, from, 1792, level, established, coinage, 1792, thus, setting, mint, price, silver, level, below, international, market, price, redefined, eagle, coin, dollars, co. 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 Contents 1 Historical context 2 Economic and historical significance 3 See also 4 References 5 Further reading 6 External linksHistorical context editOn 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 Andrew Jackson and a contingent of elected officials and bureaucrats led by Nicholas Biddle and Senators John C Calhoun Henry Clay and Daniel Webster over the fate of the United States Bank 6 Biddle the Bank s president believed that it served to facilitate the exchange of goods and payments by providing a national currency however Jackson feared that an institution as large as the U S national bank would be manipulated by powerful financiers to exploit the nation s volatile financial system 7 Furthermore he argued that the Constitution did not give Congress the power to charter a corporation which could operate outside the District of Columbia Therefore in the summer of 1832 he vetoed a bill that sought to renew the corporate charter for the Bank placing the heated debate over the fate of the national bank squarely in the political spotlight during his re election campaign After handily winning re election Jackson appointed his Attorney General Roger B Taney as Secretary of the Treasury in 1833 Taney sympathized with Jackson s hostility towards the national bank and mandated that all federal deposits be withdrawn from BUS as quickly as possible severely curtailing the amount of loans the Bank could issue thereby precipitating a national credit shortage 8 When Congress convened in December 1833 known as the Panic Session the credit shortage had managed to intensify the already bitter dispute over the fate of the Bank While the president s opponents controlled the Senate his supporters in the House of Representatives managed to push his agenda in the form of coinage legislation that sought to undermine the circulation of U S Banknotes in favor of gold currency The proposed bill was intended to devalue the overvalued silver revalue the undervalued gold from which the bank notes derived their monetary worth After months of drafting and revision The Coinage Act of 1834 was passed in the House by a vote of 145 to 36 and the Senate passed its version of the bill soon after 9 Economic and historical significance editIn 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 nbsp Money portal nbsp Numismatics portal nbsp United States portalSee also editCoinage 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 1965References edit Stevens Edward 1971 Composition of the Money Stock Prior to the Civil War Journal of Money Credit and Banking 1 3 1 84 101 doi 10 2307 1991437 JSTOR 1991437 Leech Edward 1895 The North American Review 464 161 34 42 a href Template Cite journal html title Template Cite journal cite journal a Missing or empty title 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 O Leary Paul 1937 The Coinage Legislation of 1834 The Journal of Political Economy 1 45 80 94 doi 10 1086 255020 S2CID 155067696 Govan Thomas July 1958 Fundamental Issues of the Bank War The Pennsylvania Magazine of History and Biography 82 3 305 315 O Leary Paul 1937 The Coinage Legislation of 1834 The Journal of Political Economy 1 45 80 94 doi 10 1086 255020 S2CID 155067696 O Leary Paul 1937 The Coinage Legislation of 1834 The Journal of Political Economy 1 45 80 94 doi 10 1086 255020 S2CID 155067696 Stevens Edward 1971 Composition of the Money Stock Prior to the Civil War Journal of Money Credit and Banking 1 3 1 84 101 doi 10 2307 1991437 JSTOR 1991437 Hayes H Gordon December 1933 Bimettalism Before and After 1834 The American Economic Review 23 4 677 679 Stevens Edward 1971 Composition of the Money Stock Prior to the Civil War Journal of Money Credit and Banking 1 3 1 84 101 doi 10 2307 1991437 JSTOR 1991437 Further reading editAllen Larry 2009 The Encyclopedia of Money 2nd ed Santa Barbara CA ABC CLIO pp 76 77 ISBN 978 1598842517 External links editFull text of act Retrieved from https en wikipedia org w index php title Coinage Act of 1834 amp oldid 1203312179, wikipedia, wiki, book, books, library,
