<P> The intention was to use gold for large denominations, and silver for smaller denominations . A problem with bimetallic standards was that the metals' absolute and relative market prices changed . The mint ratio (the rate at which the mint was obligated to pay / receive for gold relative to silver) remained fixed at 15 ounces of silver to 1 ounce of gold, whereas the market rate fluctuated from 15.5 to 1 to 16 to 1 . With the Coinage Act of 1834, Congress passed an act that changed the mint ratio to approximately 16 to 1 . Gold discoveries in California in 1848 and later in Australia lowered the gold price relative to silver; this drove silver money from circulation because it was worth more in the market than as money . Passage of the Independent Treasury Act of 1848 placed the U.S. on a strict hard - money standard . Doing business with the American government required gold or silver coins . </P> <P> Government accounts were legally separated from the banking system . However, the mint ratio (the fixed exchange rate between gold and silver at the mint) continued to overvalue gold . In 1853, the US reduced the silver weight of coins to keep them in circulation and in 1857 removed legal tender status from foreign coinage . In 1857 the final crisis of the free banking era began as American banks suspended payment in silver, with ripples through the developing international financial system . Due to the inflationary finance measures undertaken to help pay for the US Civil War, the government found it difficult to pay its obligations in gold or silver and suspended payments of obligations not legally specified in specie (gold bonds); this led banks to suspend the conversion of bank liabilities (bank notes and deposits) into specie . In 1862 paper money was made legal tender . It was a fiat money (not convertible on demand at a fixed rate into specie). These notes came to be called "greenbacks". </P> <P> After the Civil War, Congress wanted to reestablish the metallic standard at pre-war rates . The market price of gold in greenbacks was above the pre-War fixed price ($20.67 per ounce of gold) requiring deflation to achieve the pre-War price . This was accomplished by growing the stock of money less rapidly than real output . By 1879 the market price matched the mint price of gold . The coinage act of 1873 (also known as the Crime of' 73) demonetized silver . This act removed the 412.5 grain silver dollar from circulation . Subsequently silver was only used in coins worth less than $1 (fractional currency). With the resumption of convertibility on June 30, 1879 the government again paid its debts in gold, accepted greenbacks for customs and redeemed greenbacks on demand in gold . Greenbacks were therefore perfect substitutes for gold coins . During the latter part of the nineteenth century the use of silver and a return to the bimetallic standard were recurrent political issues, raised especially by William Jennings Bryan, the People's Party and the Free Silver movement . In 1900 the gold dollar was declared the standard unit of account and a gold reserve for government issued paper notes was established . Greenbacks, silver certificates, and silver dollars continued to be legal tender, all redeemable in gold . </P> <Table> <Tr> <Th_colspan="2"> US gold stock </Th> </Tr> <Tr> <Td> 1862 </Td> <Td> 59 tons </Td> </Tr> <Tr> <Td> 1866 </Td> <Td> 81 tons </Td> </Tr> <Tr> <Td> 1875 </Td> <Td> 50 tons </Td> </Tr> <Tr> <Td> 1878 </Td> <Td> 78 tons </Td> </Tr> </Table>

Who put the us on the gold standard