Political Ferment and Legislative Compromise
The demands for unlimited silver coinage led to the passage (1878) of a compromise measure, the Bland-Allison Act, over President Hayes's veto. The act provided for definitely limited coinage at a ratio of 16 to 1 with gold, but its provisions were insufficient to halt the decline of silver prices, or to increase the circulation of money. Meanwhile, sectional lines over money were becoming sharply drawn. The financial interests in the East favored sound money and the gold standard. The indebted agrarian classes of the South and West demanded inflation, to ease debt burdens in the face of falling prices of farm products. Their demands were reinforced by Western silver-mining interests.
As the prosperity of the early 1880s vanished, demands arose again for free silver. By 1890 the political strength of the silver advocates, especially in the West, was so great that the Sherman Silver Purchase Act, another compromise, was passed, to replace the Bland-Allison Act and to provide for increased government purchases of silver. The West's discontent was further emphasized by the rise of the Populist party, with demands including free silver. The silver advocates were no longer content with compromise measures and were displeased by the 1892 presidential candidacy of Grover Cleveland, a supporter of the gold standard. Many silver Democrats deserted Cleveland to support James B. Weaver, the Populist candidate. This coalition of silverites and Populists was able to gain control of half a dozen Western states.
Advocates of free silver were enraged when the Panic of 1893 brought repeal of the Sherman Silver Purchase Act. By the middle of his second term, Cleveland's Western and Southern opponents had captured the Democratic party. Publication of Coin's Financial School, by William Hope Harvey (1894), made many converts to free silver by presenting the complicated money question in easily understood terms.
Sections in this article:
The Columbia Electronic Encyclopedia, 6th ed. Copyright © 2012, Columbia University Press. All rights reserved.
See more Encyclopedia articles on: Economics: Terms and Concepts