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This page was last updated on February 12, 2026.

Silver Mining In Utah

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Panic of 1893

There were multiple causes of the Panic of 1893, and the financial troubles of the Groesbecks and their various enterprises were just a few of the many thousands of businesses across the nation that struggled and/or failed when the price of silver crashed.

Some historians point to the 1890 Sherman Silver Purchase Act as the primary cause of the Panic of 1893 and what followed. The act required the federal government to keep a predetermined ratio of gold to silver, and as the demand for gold went up to feed new Treasury bonds to back up the increase in paper money, so too did the governments demand for silver.

Silver mining and silver production went into overdrive to meet the ratio of silver to the inflated stocks of gold. The increased stocks of gold followed the rising stocks of silver in a self-feeding loop of pending ruin. Then fears of inflation brought about an increasing demand for the metal itself as a hedge against inflation. Gold began to flow out of the treasury in worrying amounts, which sparked rumors that the government was low on gold. As private ownership of gold metal grew, and government inventories fell, the government's ratio of gold to silver went into free-fall as the government stocks of gold fell.

The price of gold stayed low because its price was fixed by the Treasury. Of course, gold was still being mined, but its fixed price and its scarcity kept mining activity at a minimum. Gold couldn't be had at any price, forcing the government to borrow gold from J. P. Morgan. In the years since the Sherman Act, the increasing amount of silver in the Treasury had resulted in more silver coins in circulation. The low inventory of gold forced the government to reduce its stock of silver metal, which in-turn ended the making of silver coinage. The demand for silver metal plummeted, since at that time the government was essentially the only buyer of silver.

The open-market price of silver continued to decline, and mining it became barely profitable. Many mines closed, throwing men out of work, and those who remained were forced to accept severe pay cuts. The mines of Eureka and the Tintic district saw an immediate decline.

The glut of silver coinage increased the nation's circulating money supply, which fed inflation, forcing banks to call in their loans to beat the increasing devaluation of the money they had lent. Businesses who relied on credit saw their rates begin to climb and credit began to tighten. This in-turn resulted in less business activity overall, thus bringing about the Panic of 1893.

Pittman Act of 1918

The Pittman Silver Act was passed on April 23, 1918, and allowed silver dollars to be converted to silver bullion for re-sale due to wartime shortages. Of the 270,232,722 silver dollars converted to bullion, 259,121,554 were converted to bullion and sold to Great Britain and India at $1 per ounce. Then, the same quantity of silver was purchased from the silver mining industry and converted to silver dollars, at less than the current price on the open market. The Pittman Act expired on June 15, 1923, which in-turn affected the operations of the Tintic mines, which were shipping silver and lead, with varying amounts of gold and copper. As a result of the expiration of the Pitman Act, the price of silver in the United States collapsed from $1.29 before the Act, down to 65 cents by the end of 1923.

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