"The coinage of the silver dollar piece, the history of which is here given, is discontinued in the proposed bill. . . . The present gold dollar piece is made the dollar unit in the proposed bill, and the silver piece is discontinued."
In 1873 I had come to believe that it was wise for every nation to recognize, establish, and maintain the gold standard. I was of the opinion then, as I am of the opinion now, that nations cannot escape from the gold standard in all inter-state transactions. The value of every article is resolved finally by the ascertainment of its value in gold. Silver or paper may be used for domestic purposes, but the value of that silver or paper is determined by its value in gold.
In America, as in England, all the attempts to fix a ratio between gold and silver coins and to maintain that ratio in business had failed, and hence it was that I determined to abandon the idea of a double standard, reserving in mind, however, the possibility that an agreement by commercial countries might overcome the difficulty. That possibility has now disappeared. The history of the United States is an instructive history. The coin ratio between gold and silver was fixed in Mr. Hamilton's time and with the concurrence of Mr. Jefferson.
In 1870 silver was at a premium upon the legal ratio between gold and silver coins, and such had been the fact from the year 1837, and probably from the year 1792. Indeed, there has never been a day, from the organization of the government, when the actual standard was silver. Until the act of 1878 was passed, silver coins had had no appreciable influence upon the volume of currency or the business of the country. The total coinage of silver dollars had been 8,000,000 pieces only. The coinage was suspended in 1805 or 1806, and the silver dollars had been exported or they had disappeared in melting pots. Such was the commercial demand for American silver coins that in 1853 Congress authorized the debasement of the subsidiary silver coins as the only means of securing their circulation.
It is quite doubtful whether in the year 1860 there was a person living who had seen an American silver dollar doing duty in the channels of trade. From 1806 to 1873 the business standard of the country was the gold standard. Silver had been recognized in the Coinage Act, but practically it had not played any part in the financial policy or fortunes of the country.