The single gold standard was legally established in 1873, and after resumption of specie payments in 1879 gold became the actual standard. The act of 1900, therefore, in providing that the gold dollar consisting of 25.8 grains should be the standard of value of the United States, merely reaffirmed the earlier acts. The act provided that all forms of money issued or coined by the United States should be maintained at par with gold and that it should be the duty of the Secretary of the Treasury to maintain such parity. Though the act did not provide adequate machinery for maintaining this parity, it corrected several of the defects of the old system. It provided for the redemption of the legal tender notes in gold on demand, for which purpose a reserve of $150,-000,000 in gold must be kept in the Treasury. If this fund should at any time fall below $100,000,000, the Secretary of the Treasury is required to restore it to $150,000,000 by the sale of bonds. This gold reserve cannot be used to meet a deficit in revenue. To prevent a repetition of the "endless chain" operations of the period following the crisis of 1893, the act provided that legal tender or treasury notes once redeemed should not be reissued except in exchange for gold. It also provided for the gradual retirement of the treasury notes by directing the Secretary of the Treasury to cancel them as fast as silver dollars could be coined and silver certificates issued under the terms of the Sherman Act of 1890 and the act of 1898. The Federal Reserve Act passed December 23, 1913, specifically reaffirmed the parity provisions of the act of 1900, and provided that the Secretary of the Treasury, in order to maintain such parity and to strengthen the gold reserve, may borrow gold on the security of bonds as authorized by the act of 1900, or on one-year gold notes, or to sell the same if necessary to obtain gold.

1 Noyes: Forty Years of American Finance, p. 254.

Summarizing the evolution of our standard, the monetary history of the United States may be divided into five periods: (1) 1792-1834, the period of bimetallism with silver overvalued at the mint; (2) 1834-1862, bimetallism with gold overvalued; (3) 1862-1879, the greenback period; (4) 1879-1900, the period of the limping standard; (5) 1900 to date, the period of the unequivocal gold standard.

Reading References

Bullock: Essays on the Monetary History of the United States, Ch. III.

Dewey: Financial History of the United States, Ch. X. Hepburn: Contest for Sound Money, Chs. II, III, IX, X, XII, XIII, XVII, XVIII. Johnson: Money and Currency, Chs. X, XI, XVI. Laughlin: History of Bimetallism in the United States. Mitchell: A History of the Greenbacks. Noyes: Forty Years of American Finance, Chs. I-X. White: Money and Banking, Bk. I, Chs. III, VI; Bk. II.

Chs. III-VI.