Crime of '73

Definition

The 'crime of '73' refers to the Coinage Act of 1873, which effectively ended the minting of silver dollars and established the gold standard in the United States. This act ignited a fierce debate over monetary policy, as many people, especially farmers and debtors, felt that the move favored the wealthy elite by limiting the money supply and creating deflationary pressures, which they argued harmed the economy.

5 Must Know Facts For Your Next Test

1. The Coinage Act of 1873 is often viewed as a pivotal moment that transitioned the U.S. from bimetallism to a strict gold standard.
2. Many supporters of silver saw the 'crime of '73' as a betrayal, claiming it disproportionately hurt farmers who relied on inflation to pay off debts.
3. The act led to widespread protests and calls for the free coinage of silver, culminating in political movements such as the Populist Party in the late 19th century.
4. The economic conditions following the passage of this act contributed significantly to the Panic of 1873, which led to a severe economic depression lasting several years.
5. The 'crime of '73' is often cited in discussions about monetary policy, economic inequality, and the role of government in regulating currency.

Review Questions

• How did the 'crime of '73' impact different socio-economic groups in the United States during its time?
  • The 'crime of '73' had significant impacts on various socio-economic groups, particularly farmers and urban workers. Farmers viewed the end of silver dollar minting as detrimental because it reduced the money supply, leading to deflation that made their debts harder to pay off. In contrast, wealthier industrialists and bankers generally supported the gold standard since it stabilized currency values and their financial interests. This divide fueled social unrest and led to political movements advocating for bimetallism.
• Discuss how the Coinage Act of 1873 relates to broader themes in American economic history.
  • The Coinage Act of 1873 exemplifies broader themes such as class conflict, economic policy debates, and the transition from agrarian to industrial economies. The act's emphasis on a gold standard reflected industrial interests while neglecting agricultural needs, showcasing a tension between urban and rural America. This shift also highlights how government monetary policies can favor certain economic groups over others, leading to long-term implications for wealth distribution and economic stability.
• Evaluate the long-term consequences of the 'crime of '73' on American monetary policy and its relevance today.
  • The 'crime of '73' had lasting consequences on American monetary policy by establishing a precedent for using a gold standard that would influence U.S. economics until the 20th century. It catalyzed debates on currency regulation that continue today, especially regarding inflation, debt management, and government intervention in economic crises. The historical implications also inform contemporary discussions about monetary systems and their effects on social equity, as similar tensions between different socio-economic classes persist in current fiscal policies.

Related terms

Gold Standard: A monetary system where a country's currency or paper money has a value directly linked to gold, which was adopted in the U.S. following the Coinage Act of 1873.

Silverites: Supporters of bimetallism who advocated for the use of both gold and silver as currency, believing it would increase the money supply and help farmers and working-class individuals.

Panic of 1873: A financial crisis triggered by over-speculation in railroads and a collapse of major banks, which was exacerbated by the deflationary effects of the Coinage Act of 1873.