Silver Coin Commerce

One of the things we’re attempting to do here at SilverCoinCommerce™ is to present information that is not only interesting, but also well researched and easy to read. If you can imagine, this means we get to go out and explore different topics, and learn about them ourselves (with the disclosure that we are learning with you). We do not claim to be experts, we’re simply following our own path in the belief that we need to be more aware of the inner workings of our economic system in the U.S.

In line with that train of thought, I would like to present the following:

We all hear the newsies and economic forecasters referring back to the depression in the earlier part of the 20th century. But what was going on beforehand? Something I ran across recently was The Free Silver Movement. Sounds good, right? Well, this happened in the 1870’s.

Here is a synopsis:

During the last quarter of the 19th century, “Free silver” meant that silver bullion could be brought into the mint and exchanged for silver coins. The math was 3.7125 grains of silver could be exchanged for $1 silver dollar.

In 1873 Congress enacted the Coinage Act of 1873, which included no provision for the coinage of silver. Silver’s market value was much higher than the mint price so no silver coins were being minted. The Coinage Act of ’73 would later be condemned as the “Crime of ‘73”.

There were two sides to this story, on one hand we had the working people (populist), farmers, miners and such, who wanted to be able to conduct trade in silver dollars. In their view, silver would add to the money supply in such a way as to raise prices [of their goods and services] and reduce their debt burden.

The other side which consisted of bankers and elite, believed doing so would devalue their holdings. The world was rushing to a gold standard that left little room for silver. From 1850 to 1872 the market price for an ounce of silver stood above $1.32.

The free silver movement enjoyed limited success in Congress. In 1878 Congress enacted the Brand-Allison Act, which required the Treasury to coin between 2-5 million dollars worth of silver coins per month. In 1890 the Sherman Silver Act required the Treasury to purchase $4 million dollars worth of silver per month, and issue silver certificates.

The Sherman Silver Act was blamed for a crisis of confidence in the American monetary system. President Cleveland, a staunch advocate of the gold standard, prompted Congress to do away with the silver purchase provisions in the Sherman Silver Act.

So, what is the relevance of this today? Well, interestingly, I think it may exhibit the same issue we are trying to address at SilverCoinCommerce™ How do we determine the worth of a dollar? And who has control over this value? Obviously, we feel the same about paper and digital creation of money, as the Bankers might have thought about silver back during this time. They thought it would de-value their “gold backed” dollars. And they were probably right. But silver still takes effort to get out of the ground and has proven, through time and utility, that it has real, tangible value, digital and paper dollars –don’t-.

The bigger, and more inherent point, is that SilverCoinCommerce™ is, and always will be, good for us common folk.

Pete Skenandore
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