Q. David Bowers
The Sherman Silver Purchase Act
The 1890 edition of the Annual Report of the Director of the Mint printed this information:
"The silver legislation of the first session of the Fifty-First Congress will mark an epoch in currency legislation in the United States.
"Upon the assembling of Congress the secretary of the Treasury presented in his annual report an elaborate plan for the utilization of the silver product of the United States.
"The measure recommended by the secretary was in substance a proposition to receive on deposit at the United States mints the domestic product of silver bullion, to be paid for in Treasury notes at the market price of silver at the time of deposit, such notes to be redeemable in a quantity of silver bullion equal in value at the market price of silver at the date of presentation to the number of dollars expressed on the face of the notes, or in gold coin at the option of the government, or in silver dollars at the option of the holder.
"This measure, as well as various modifications of it, and also measures looking to the free coinage of silver, occupied the attention of Congress for many months, the result being the enactment of the following law:
AN ACT directing the purchase of silver bullion and the issue of Treasury notes thereon, and for other purposes.
"Be it enacted by the Senate and the House of Representatives of the United States of America in Congress assembled, That the secretary of the Treasury is hereby directed to purchase, from time to time, silver bullion to the aggregate amount of 4.5 million ounces, or so much thereof as may be offered ineach month, at the market price thereof, not exceeding one dollar for three hundred and seventy-one and twenty-five hundredths grains of pure silver, and to issue in payment for such purchases of silver bullion Treasury notes of the United States to be prepared by the secretary of the Treasury, in such form and of such denominations, not less than one dollar nor more than one thousand dollars, as he may prescribe, and a sum sufficient to carry into effect the provisions of this act is hereby appropriated out of any money in the Treasury not otherwise appropriated.
"SEC. 2. That the Treasury notes issued in accordance with the provisions of this act shall be redeemable on demand, in coin, at the Treasury of the United States or at the office of any assistant treasurer of the United States, and when so redeemed may be reissued; but no greater or less amount of such notes shall be outstanding at any time than the cost of the silver bullion and the standard silver dollars coined there from then held in the Treasury purchased by such notes; and such Treasury notes shall be a legal tender in payment of all debts, public and private, except where otherwise expressly stipulated in the contract, and shall be receivable for customs, taxes, and all public dues, and when so received may be reissued; and such notes, when held by any national banking association, may be counted as a part of its lawful reserve. That upon demand of the holder of any of the Treasury notes herein provided for, the secretary of the Treasury shall, under such regulations as he may prescribe, policy of the United States to maintain the two metals on a parity with each other upon the present legal ratio, or such ratio as may be provided by law.
"SEC. 3 That the secretaryof the Treasury shall each month coin two million ounces of the silver bullion purchased under the provisions of this act into standard silver dollars until the first day of July 1891, and after that time he shall coin of the silver bullion purchased under the provisions of this act as much as may be necessary to provide for the redemption of the Treasury notes herein provided for, and any gain or seignorage arising from such coinage shall be accounted for and paid into the Treasury.
"SEC. 4 That the silver bullion purchased under the provisions of this act shall be subject to the requirements of existing law and the regulations of the Mint service governing the methods of determining the amount of pure silver contained, and the amount of charges or deductions, if any, to be made.
"SEC. 5 That so much of the Act of February 28, 1878, entitled 'An act to authorize the coinage of the standard silver dollar and to restore its legal-tender character,' as requires the monthly purchase and coinage of the same into silver dollars of not less than two million dollars, nor more than four million dollars' worth of silver bullion, is hereby repealed.
"SEC. 6 That upon the passage of this act the balances standing with the Treasurer of the United States to the respective credits of national banks for deposits made to redeem the circulating notes of such banks, and all deposits thereafter received for like purpose, shall be covered into the Treasury as a miscellaneous receipt, and the Treasury of the United States shall redeem from the general cash in the Treasury the circulating notes of such banks which may come into his possession subject to redemption; and upon the certificate of the Comptroller of the Currency that such notes have been received by him andthat they have been destroyed and that no new notes will be issued in their place, reimbursement of their amount shall be made to the Treasurer, under such regulations as the secretary of the Treasury may prescribe, from an appropriation hereby created, to be known as national bank notes: Redemption account, but the provisions of this act shall not apply to the deposits received under section three of the Act of June twentieth, eighteen hundred and seventy-four, requiring every national bank to keep in lawful money with the Treasurer of the United States a sum equal to 5% of its circulation, to be held and used for the redemption of its circulating notes; and the balance remaining of the deposits so covered shall, at the close of each month, be reported on the monthly public debt statement as debt of the United States bearing no interest.
"SEC. 7 That this act shall take effect thirty days from and after its passage.
"Approved, July 14, 1890.
"The essential provisions of the new silver law are these: