Free Silver Movement. Traditionally the United States had a bimetallic monetary system in which sixteen ounces of silver equaled one ounce of gold. As the world supply of silver became scarce by the 1850s, the value of silver rose and it was rarely used to coin money. In the 1860s, western miners discovered new supplies of silver, which decreased the commodity's value. By then more nations were adopting the
gold standard. To maintain a stable currency, Congress passed a Coinage Act in 1873 that demonetized silver. At first there was little reaction, but as the price of silver fell, demands for the free and unlimited coinage of silver increased. To pacify the silver forces, Congress passed the Bland‐Allison Act (1878) authorizing the Treasury to coin $2–$4 million in silver each month, and the Sherman Silver Purchase Act (1890), providing for the monthly coinage of 4.5 million ounces of silver.
To this point, the silver issue had not been deeply divisive. In 1893, however, in response to the Depression of 1893–1896, President Grover
Cleveland persuaded Congress to repeal the Sherman Silver Purchase Act, thereby again demonetizing silver. Many people then exchanged silver money for gold and the Treasury's gold reserve became seriously depleted. To bolster the reserve, the Cleveland administration sold bonds to New York bankers in return for gold bullion.
These developments revitalized the free silver movement. Within the
Democratic party, William Jennings
Bryan assumed leadership of the silver forces, and in 1896 the Democrats nominated Bryan for president on a free‐silver platform, as did the
Populist party. The
Republican party, rallying behind William
McKinley, endorsed the gold standard. In the ensuing campaign, the two sides offered competing visions. Silverites argued that instead of rigidly adhering to the gold standard, the government should devise a more flexible monetary system; Republicans insisted that gold be the sole basis for money. Silverites desired price inflation to combat depression; Republicans feared that inflation would worsen the economy. Silverites charged that eastern bankers used the gold standard to exploit farmers and the working class; Republicans responded that only the gold standard could ensure prosperity for all.
McKinley won the election, and the silver issue soon faded. Free silver appealed mostly to indebted farmers and mine owners and the movement failed to bridge the division separating agriculturists and wage laborers. After 1897, however, new discoveries of gold enabled the nation to enjoy economic expansion and moderate inflation while maintaining the gold standard.
See also
Agriculture: 1770s to 1890;
Agriculture: The “Golden Age” (1890s–1920);
Depressions, Economic;
Farmers’ Alliance Movement;
Gilded Age;
Gold Rushes;
Mining;
Monetary Policy, Federal;
Morgan, J.P.;
Populist Era.
Bibliography
Walter T.K. Nugent , The Money Question during Reconstruction, 1967.
Gretchen Ritter , Goldbugs and Greenbacks: The Antimonopoly Tradition and the Politics of Finance in America, 1997.
William F. Holmes
