September 19, 2023: AmericanStudying the Panic of 1873: The Coinage Act

[On September20th, 1873, the New York Stock Exchange closed for tendays, a key moment in the developing economic crisis that came to be known as the Panicof 1873. So for the 150th anniversary of that moment this weekI’ll AmericanStudy a handful of Panic contexts, leading up to a weekend post on2023 echoes of those histories!]

On complexfinancial realities, simpler ones, and causes and contingencies.

This mightmean I have to give back my Gilded Age Historian membership card (and I’d liketo think I’ve thoroughly earned it, between the diss/firstbook and the many-times-taughtclass), but I’ve never entirely gotten the whole silver/gold debate. I doknow that the Populists were entirely opposed to the late 19thcentury move to a gold standard, as exemplified by perennial presidential loserWilliam Jennings Bryan’s famous 1896“Cross of Gold” speech. And apparently a key stage in that shift was the April1873 Coinage Act (also known as the Mint Act), a federal law which made itillegal for silver bullion to be converted into dollars while allowing for theconversion for gold. That law was caused at least in part by the GermanEmpire’s ending the minting of silver coins in 1871, which put morepressure on the US silver supply and pushed the federal government to hastenthis shift toward a gold standard. But the law also significantly reduced theoverall domestic money supply, which contributed to the runs on banks that Idiscussed yesterday and that blossomed into thePanic of 1873.

Okay, Ithink that has about exhausted my take on the silver and gold debate (and aswith literally everything I write about in this space, I welcome additions,corrections, impassioned rebuttals, and what have you). But one thing I do geton a broader level is the narratives and realities alike that came to definethe Gilded Age, and it’s important to note that while Mark Twain and CharlesDudley Warner didn’t coin that phrase until their 1874novel of the same name, the period’s trends were of course well underway by1873. For example, it seems clear to me that the Coinage Act came to becolloquially known as the Crime of 1873 notbecause of specific details about silver and gold so much as due to a broaderunderstanding that this was a law that benefitted the wealthy (who were able toobtain and stockpile gold much more easily) at the expense of poorer Americans.While that doesn’t seem to have been a main impetus for or purpose of the act,it’s fair to say that President Grant’scorrupt corporate buddies weren’t sorry when he signed it into law.

So theCoinage Act was unquestionably controversial, and reflects developing divisionsthat would only deepen alongside the Gilded Age over the next few decades(perhaps culminating in Bryan’s 1896 speech). But was there really enough timebetween its April passage and the September start of the Panic for the Act tohave played a key role in causing that financial crisis? Given the earlier contributingfactors like the 1871 and 1872 fires on which I focused in yesterday’s post(among other long-term factors like the collapsingrailroad boom), was the writing already on the wall for the Panic longbefore Grant put pen to paper? The relationship between causes andcontingencies when it comes to historical events always makes for compelling(if ultimately unanswerable) questions, and that’s certainly the case for thispair of 1873 events. And wherever we come down on those questions, putting theAct and the Panic in conversation helps us see both as stages in the evolvingand deepening Gilded Age, an example of historical interconnection with a lotto tell us about late 19th century America.

Next 1873contexts tomorrow,

Ben

PS. Whatdo you think?