The decision of the German Empire to…

Before the Act, the United States had backed its currency with both gold and silver, and it minted both types of coins.

The Act moves the United States to a de facto gold standard, which means it will no longer buy silver at a statutory price or convert silver from the public into silver coins (though it will still mint silver dollars for export in the form of trade dollars).

The Act, promptly signed into law by President Grant on February 12, 1873, has the immediate effect of depressing silver prices.

This hurts Western mining interests, who label the Act "The Crime of '73."

Its effect is offset somewhat by the introduction of a silver trade dollar for use in the Orient, and by the discovery of new silver deposits at Virginia City, Nevada, resulting in new investment in mining activity.

But the coinage law also reduces the domestic money supply, which raises interest rates, thereby hurting farmers and anyone else who normally carry heavy debt loads.

The resulting outcry raises serious questions about how long the new policy will last.

This perception of instability in United States monetary policy causes investors to shy away from long-term obligations, particularly long-term bonds.

The problem is compounded by the railroad boom, which is in its later stages at this time.