The 15:1 ratio as ascertained by Hamilton was soon found to be too low. The French had a higher ratio, 15.5: 1, and gold flowed to France where its coinage value was higher. Silver only was coined, and much of that was exported to South America. Bimetallism gave place to silver monometallism. In 1834 Congress attempted to restore bimetallism by readjusting the mint ratio; the gold dollar, which had weighed one-fifteenth of 371.25 grains, or 24.75 grains, was reduced to 23.2 grains, or one-sixteenth of 371.25. This was a 7 per cent debasement of gold, but probably it was better thus to favor the debtor class than to favor the creditor class by increasing the weight of the silver dollar until the mint ratio equaled the market ratio. In 1837 the fineness of gold and silver coins was made uniform, at nine-tenths, and the ratio was thus slightly changed until it stood at 15.98:1, where it still stands.
But this new ratio overvalued gold. As gold could be profitably brought from France, silver coins were melted or transported abroad, gold drifted to the mints, and gold monometallism resulted. In 1853, to preserve the fractional silver coinage, the weights of the half-dollar, quarter, dime, and half-dime were reduced, their legal-tender quality limited to $5, and their free coinage stopped.
Thereafter, when new issues of subsidiary silver were found necessary, the mint was empowered to purchase bullion in the market and coin it, charging the profits from seigniorage to the Treasurer of the United States.1 It was now unprofitable either to melt or export subsidiary silver, since coined silver was overvalued by the amount of the seigniorage. Between 1834 and 1853 gold was increasingly the circulating metal.
1 United States Coinage Before 1878 (In millions)*