1873 | Commerce
Commerce
The Fourth Coinage Act makes gold the sole U.S. monetary standard. Passed by Congress February 12, it establishes the Bureau of the Mint, places all mint and assay office activities under control of the new Treasury Department bureau, stops coinage of 412.5-grain silver dollars, and authorizes only 420-grain trade dollars for export. The act inadvertently makes trade dollars legal tender in amounts up to $5, but a joint resolution of Congress in late July 1876 will deprive the trade dollar of its legal status (see Bland-Allison Act, 1878).
Demonetization of silver comes amidst new silver discoveries in Nevada (see 1872). J. W. Mackay, James G. Fair, James C. Flood, and William T. O'Brien have spent 10 months following a narrow vein of ore until it widened into a vein 300 feet wide. They open the new Big Bonanza vein February 5 in the Panamint Mountains, and it is the biggest silver strike since the Comstock Lode of 1859. Temperatures in the mine are so high that workers can stand the heat for only 15 minutes at a time and must then rest for 30, but the Big Bonanza will yield $150 million for Mackay and Fair, who will establish the Bank of Nevada with Flood at San Francisco in 1878. The Comstock Lode has yielded more than $120 million in silver, $80 million in gold (a millionaire miner named John Percival Jones has become a U.S. senator from Nevada). The U.S. silver yield reaches $36 million for the year, up from $157,000 in 1860, and will continue to mount, but although gold production is declining from its 1854 peak the Nevada mines will have produced $397 million worth of ore by 1882.
"The country is fast becoming filled with gigantic corporations wielding and controlling immense aggregations of money and thereby commanding great influence and power," reports a congressional investigating committee: "It is notorious in many state legislatures that these influences are often controlling."
Congress formally censures Rep. James Brooks (D. N.Y.) and Rep. Oakes Ames (R. Mass.) in connection with last year's Crédit Mobilier scandal. House investigators have established that Ames distributed Crédit Mobilier stock to some congressional colleagues, including Rep. James G. Blaine (R. Me.) and Rep. James A. Garfield (R. Ohio), all of whom received substantial dividends. There is evidence that former vice president Schuyler Colfax also received stock (he denies it) and there is no doubt that he received a $4,000 campaign contribution from a contractor who supplied envelopes to the government while Colfax was chairman of the House Committee on Post Offices and Post Roads. Brooks dies of fever at Washington, D.C., April 30 at age 62, having contracted malaria in India last year while on a world tour; shovel maker Ames returns to his native Easton, Massachusetts, and dies there May 8 at age 69, having risked his fortune to support construction of the Union Pacific Railroad and thereby multiplied that fortune (he leaves an estate valued at about $6 million that is so encumbered with debts that his son Oliver III, now 42, is obliged to put up his own fortune as collateral to satisfy the creditors). But while enormous corruption and waste attended the building of the great transcontinental rail line, it will turn out that Congress invested wisely when it loaned the Central Pacific and Union Pacific $64,623,512 in 1868 and 1869: when the 30-year bonds that it authorized mature in 1898 and 1899, the federal government will receive $63,023,512 of principal plus $104,722,978 in interest, a total of $167,746,490 at a time when dollars will actually be worth more than they were in the inflationary post-war years of 1868 and 1869.
The U.S. Supreme Court rules April 14 in the Slaughterhouse Cases that the Fourteenth Amendment to the Constitution is to be only narrowly interpreted (the court upholds a Louisiana supreme court's ruling that supported a law enacted by that state's legislature in March 1869). Justice Salmon P. Chase joins in the dissent but dies at New York May 7 at age 65.
Germany adopts mark coinage. Austria adopts the decimal system for her coinage, following the example of Germany and Italy, whose unification has made it imperative to standardize the coinage systems of their constituent nations and city-states (see Vienna Coin Treaty, 1857). The United States adopted decimal coinage in 1792 and Mexico in 1862, Siam will do so in 1889, Japan and the Ottoman Empire in 1891, Egypt in 1892, Tunis in 1895, Russia in 1900, but Britain will cling to her arcane system of guineas, pounds, sovereigns, crowns, half crowns, shillings, pence, and farthings until 1971, with 4 farthings to the pence, 12 pence to the shilling, 20 shillings (or 240 pence) to the pound, 1 pound plus 1 shilling to the gold guinea.
Financial panic strikes Vienna in May and soon spreads to other European money centers.
The Victoria government at Melbourne passes Australia's first factory act to protect female and juvenile mill hands and maintain safe and sanitary working conditions.
Britain's "golden age" comes to an end after 23 years as Germany and the United States challenge British industrial preeminence.
European investors withdraw capital from the United States, and the Wall Street banking house Jay Cooke & Company that has been financial agent for the Northern Pacific Railway fails September 18. Black Friday on the stock exchange sends prices tumbling September 19, the exchange closes for 10 days, and by year's end some 5,000 business firms have failed, millions of working Americans are obliged to depend on soup kitchens and other charities, tens of thousands come close to starvation.
The Greenback Party claims that a shortage of money is the cause of hard times. If the government will issue greenbacks until as much money is in circulation as in the boom times of 1865 the country will again enjoy prosperity, say the Greenbackers, who have been organized by Midwesterners and who also demand control of the corporations, honesty in government, conservation of natural resources, and wide-scale reforms.
The panic on Wall Street accompanies a $20 million failure that nearly wipes out the fortune of Sen. William Sprague (D. R.I.), now 43, who has attacked on the Senate floor what he called the grip of capital and industry on the government and faced charges that he engaged in illicit cotton trading in Texas during the War of the Rebellion. Three trustees chosen by his creditors refuse to act unless they receive protection against personal liability for their conduct of the business, so Providence lawyer Zechariah Chafee, 58, agrees December 1 to accept responsibility as trustee of the Sprague properties.