FREE SILVER

FREE SILVER, the unlimited coinage of silver by the U.S. government for anyone bringing the metal into the U.S. Mint, functioned as an important political slogan in the latter half of the nineteenth century. At that time, social unrest, political ambitions, and vested economic interests combined to cause a powerful push for legislation to increase the money supply.

From 1834 to the early 1870s silver metal had enjoyed a higher market price, in relation to gold, than the 16 to 1 ratio maintained by the U.S. Treasury, so that silver was too valuable to use as coinage. Moreover, European monetary policies varied widely. Continental conditions had long enabled France to retain bimetallism, while powerful Britain was gravitating to the gold standard. The U.S. Treasury hoped to bring the value of the wartime paper dollar—the greenback—up to par by accumulating gold. This left the currency system in disarray. Congress brought some order to the monetary system with a new coinage act in 1873; the rare silver dollar was simply omitted from mention in the act, a piece of absentmindedness that shortly took on the exciting quality of a "crime" against the public welfare.

As the congressional election of 1878 approached, leaders in both major parties strove to keep their faithful from joining third parties of laborites, greenbackers, bimetallists, and groups favoring the free coinage of silver. Several senators were silver mine owners, and the producer lobby was untiring; but the "sound money" administration of President Rutherford B. Hayes would not yield. Consequently, the Bland-Allison Act of 1878 fell far short of free silver. The Treasury was required to buy monthly not less than $2 million but not more than $4 million of silver and to coin it at the 16 to 1 ratio.

As the 1870s closed, good crops helped to cool inflationary ardor, but a mild recession in the early 1880s heated it up again. Republican campaign underwriters, in particular, demanded high tariff increases in silver purchases. The Sherman Silver Purchase Act of 1890 enlarged the government's monthly silver purchases to 4.5 million ounces and stipulated payment for 2 million of those ounces in "Treasury notes" redeemable in "coin" on demand. The act was admirably adapted to draining off the gold supply. Democratic President Grover Cleveland forced Congress to repeal the act in 1893, amidst a serious nationwide depression.

The calls for free silver reached a crescendo in the next three years. Presidential candidate William Jennings Bryan's famous sermon, "You shall not crucify mankind upon a cross of gold!" nourished the debtor's faith in cheap money, the Populist's hope for a fiat currency of paper, and the mine owner's expectation of high silver prices. Alarmed, creditor interests seized hold of the Republican platform. Close to the election of 1896, the weather turned gold standard, improving crop prospects sufficiently to prevent farmer desertion of Republican leadership. Of nearly 14 million votes, silver got about 6.25 million and gold about 7.1 million. Although government subsidy of silver production recurred occasionally in the twentieth century, the Gold Standard Act of 1900 ended free silver as an effective implement of American politics, declaring the gold dollar to be the U.S. standard of value.

BIBLIOGRAPHY

Calomiris, Charles W. "Greenback Resumption and Silver Risk: The Economics and Politics of Monetary Regime Change in the United States, 1862–1900." In Monetary Regimes in Transition. Edited by Michael D. Bordo and Forrest Capie. New York: Cambridge University Press, 1994.

Friedman, Milton, and Anna Jacobson Schwartz. A Monetary History of the United States, 1867–1960. Princeton, N.J.: Princeton University Press, 1963.

Glad, Paul W. McKinley, Bryan, and the People. Philadelphia: Lippincott, 1964.

Weinstein, Allen. Prelude to Populism: Origins of the Silver Issue,1867–1878. New Haven, Conn.: Yale University Press, 1970.

Jeannette P.Nichols/a. r.

See alsoCrime of 1873 ; Cross of Gold Speech ; Currency and Coinage ; Greenback Movement ; Populism ; Silver Legislation .