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The Gold Standard, Bimetallism, or 'Free Silver'?

The bitter controversy surrounding the issues of "free silver" and "sound money," so central to the 1896 campaign, has proved difficult for historians to explain. Partisans on both sides made exaggerated claims of the impact monetary policy could have on the nation's economic health. They implied that coinage of silver (on Bryan's side) or adherence to the gold standard (on the Republican side) was the single key to prosperity--and sometimes to the nation's honor.

Oddly, before 1896 both McKinley and Bryan had focused more attention on the tariff than on currency issues. Despite his party's platform, McKinley sought to emphasize the tariff and to avoid being labelled a "monometallist" or "bimetallist," leading to accusations of waffling. While he was a Congressman, Bryan allegedly once said that "the people of Nebraska are for free silver, so I am for free silver. I will look up the arguments later." His 1896 campaign became a free silver crusade.

Since the Civil War. a series of third parties had criticized Republicans' policy of contracting the money supply. Lincoln's issue of Greenbacks, the first national paper money, had helped finance the war but it also stimulated inflation. In subsequent decades, national Republican leaders sought to withdraw the greenbacks until each dollar had 100% backing in metal reserves. During the economic depressions of the 1870s and 1890s, in particular, this policy was roughly opposite to that which today's Federal Reserve might pursue in an economic downturn. It drew criticism as tending to favor bankers and lenders--who needed the value of a borrowed dollar to hold steady, or increase, until it was repaid--and detrimental to borrowers and workers.

Heirs to the Greenback Party of the 1870s believed that paper money was the solution. In post-war decades, however, the opening of vast silver veins (such as Nevada's Comstock Lode) had sharply increased the nation's silver supply. To Silver Democrats, federal coinage of silver (at a weight ratio of 16 ounces to 1 ounce of gold, hence the slogan "16 to 1") was a moderate solution to the currency problem. After all, silver was a precious metal, not mere paper. "Free silver" thus temporarily allowed a spectrum of currency reformers--from Southern Democrats to Populists--to unite. To horrified Gold Democrats and Republicans, "free silver" was an appeal for cheaper dollars. It would cheat lenders of an honest return on their money, allowing profligate borrowers to steal value from those who had extended loans.

Free silver at "16 to 1" would have expanded the money supply, but as a lone measure it would hardly have solved the nation's economic woes, and it would have (as Republicans argued) substantially raised the value of silver in relation to gold. Yet adherence of 'sound money' was not solely--or even primarily--responsible for the country's return to prosperity after 1896. To the extent that McKinley's victory reassured investors and financial institutions, whose leaders were frightened of Bryan, resolution of the issue may have had an indirect economic impact. After the campaign, however, the currency question faded quite rapidly from political debate.

'Free silver' and 'sound money' may have been most important as shorthand slogans for broader philosophies of finance and public

policy, and opposing beliefs about justice, order, and 'moral economy.' Cartoons and commentary from the campaign, focusing heavily on the currency question, provide insights into these differing worldviews.

To the Editor, Boston Daily Globe:

I am a voter upward of 60 years of age. Never exercised my right to vote, and never considered politics worth my attention, as I have never considered the "machinery of politics" is a square deal with the masses. Lies are told constantly by both democratic and republican newspapers and speechmakers.

Not until the sentiment and utterances of Wiliam J. Bryan at Chicago, which caused his nomination, have I ever been impressed with any desire to cast a vote. The ringing sentiment of that speech has aroused my patriotism, and I must as a duty to my country vote the silver ticket. We want no class candidates elected. Let us have 16 to 1, and continue that ratio. The speech of Mr. Bryan is remarkable: will go down in the history of ages and be remembered as long as the English language is spoken.

My first vote will be for a president who is fearless, firm and right, and a master of his convictions

--J. W. Harris, Roxbury, Mass. Boston Globe. 5 Septemer 1896

A "Silver Bug Pin" for sale in the campaign

Gold.

You men who work from sea to sea,

All our country through,

Under the flag that flutters free

Its burning stars and field of blue,

You want no coin but gold, gold,

Gold as in the days of old,

You want no coin but gold.

Thus guard the honor of your land,

Honest hearts and hands,

Keep faith, for hearth and home demand

The care of patriot bands

Whose standard shall be gold, gold,

Gold, like a shield of old,

Whose standard shall be gold.

--Ruth Lawrence, Bar Harbor, Maine, in New York World. 11 October 1896

THE LOVING CUP THAT IS TO BE PRESENTED TO MAJ. M'KINLEY.

The loving cup designed for Maj. McKinley by the Silversmiths of New York is a splendid specimen of the art that produced it. S. George Dessaur, the Western agent of the house whose employees purchased the silver and designed the cup, has gone to Conton to make the presentation. The vessel is emblematic of American patriotism. On each side of the bowl is an American eagle with outspread wings. On the neck of the cup is a panel surrounded by a wreath and bearing the inscription: "In Silver We Believe, When Redeemable in Gold.". The silversmtihs were struck with the idea of giving this present to the major and wasted no time. They are Democrats, and believe in the kind of money metal that Maj. McKinley stands for.

Jacksonville, Fla. Sept. 10--

At St. Augustine tonight James P. Weldman and Joe Allen quarreled while discussing the silver question. Allen drew a knife and cut Weldman, and the latter shot Allen twice, causing almost instant death. Both men leave families, and were active in politics.

Anti-Silver Cartoons on This Site

Source: projects.vassar.edu

Category: Forex

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