The Free Silver Movement was a late 19th-century American political movement that advocated for the unlimited coinage of silver to expand the money supply. It emerged primarily in the 1870s and 1880s as a response to concerns about the country’s monetary system, particularly using gold as the sole basis for currency.
Many circumstances led to the Free Silver Movement and its eventual demise. The movement gained significant support from farmers and miners and became a primary political debate late in the 19th century.
Bimetallism
Bimetallism, established by the Coinage Act of 1792, was the cornerstone of monetary policy in the country’s early days. This system allowed gold and silver to circulate as legal tender at fixed exchange rates, ensuring economic stability by providing flexibility in the currency supply. Under bimetallism, the government guaranteed the convertibility of both metals into currency, maintaining their value.
The arrangement was designed to accommodate fluctuations in the supply and demand of each metal. By allowing the coexistence of gold and silver as monetary standards, bimetallism aimed to prevent extreme deflation or inflation. It provided a mechanism where either metal could be used for payments, providing some resilience against economic shocks.
The Long Depression
The Depression of the 1870s in the United States, often referred to as the “Long Depression,” was a period of significant economic downturn characterized by widespread unemployment, deflation, and financial distress. Several factors contributed to the economic challenges during this time:
- Post-Civil War Economic Transition
- Monetary Issues
- Overexpansion and Speculation
- Agricultural Challenges
- Global Economic Factors
- Labor Disputes and Unemployment
The United States faced economic instability following the Civil War. There was debate over the best monetary system to adopt – whether it should be based on gold or silver. The bimetallic standard was causing fluctuations in the money supply due to changes in the value of silver relative to gold.
Crime of ’73
The “Crime of ’73” refers to the Coinage Act of 1873 in the United States, significantly changing the country’s monetary system. The Act stopped the production of silver dollars for circulation and discontinued using silver as part of the country’s coinage standard for most denominations. This effectively put the United States on the gold standard.
The Act was controversial and sparked significant outrage, particularly among advocates for silver coinage, who saw it as a betrayal and an attack on their interests. They believed the cessation of the coinage of silver dollars and the shift toward a gold standard favored creditors and those who held significant amounts of gold. It was thought to have adverse effects on debtors, particularly farmers and small businesses that had debts to pay, as they preferred inflationary policies that would make it easier for them to repay their debts with cheaper dollars.
The term “Crime of ’73” was coined by opponents of the Act, especially silver supporters and populists, to highlight what they perceived as a deliberate and harmful manipulation of the monetary system to benefit a privileged few. This issue led to campaigns like the Free Silver Movement that sought to reintroduce silver as part of the coinage standard.
The Free Silver Movement
After the Crime of ’73, Citizens wanted to “free silver,” creating the Free Silver Movement. Driven by a coalition of farmers, miners, and politicians, the movement advocated for the unlimited coinage of silver. Its proponents believed this would inflate the currency, ease debt burdens, and stimulate economic growth.
The Bland-Allison Act
In 1878, the Bland-Allison Act marked a significant legislative response to the demands of the Free Silver Movement. This Act required the U.S. Treasury to purchase and coin a minimum of $2 million to a maximum of $4 million monthly, effectively reintroducing silver as part of the nation’s currency.
While it increased the silver circulating in the economy, the Bland-Allison Act didn’t fully satisfy the Free Silver advocates’ aspirations for a bimetallic standard, as it didn’t allow for unlimited silver coinage. Nonetheless, it represented a significant step in the ongoing debate over monetary policy and the role of silver in the nation’s currency.
Economic Recovery
The late 19th century, following the passage of the Bland-Allison Act, witnessed gradual economic recovery. The increase in silver coinage and other economic factors played a role in this improvement. This period saw a steady rise in prices, easing the deflationary pressures that had burdened the economy during the Long Depression.
The economic recovery did not fully satisfy the demands of the Free Silver Movement, but it did contribute to a more stable economic environment. This stability was precarious as debates over monetary standards dominated political discourse, leading to further legislative actions like the Sherman Silver Purchase Act.
The Sherman Silver Purchase Act
The Sherman Silver Purchase Act of 1890 was a direct result of the intensifying political pressure from the Free Silver Movement and the ongoing economic challenges of the era. Leading up to the Act, there was a growing demand for increased silver coinage among western mining interests and farmers struggling with deflation and high debts.
Responding to these pressures, the Sherman Silver Purchase Act significantly expanded the government’s purchase of silver, mandating 4.5 million ounces monthly. This was a substantial increase from the Bland-Allison Act and aimed to infuse the economy with silver further and increase the money supply.
| Bland-Allison Act of 1878 | Sherman Silver Purchase Act of 1890 | |
| Silver Purchase Requirement | A minimum of $2 million to a maximum of $4 million of silver each month | 4.5 million ounces of silver per month |
| Economic Impact | A moderate increase in the money supply | Significant increase in money supply, heightened economic tensions |
| Primary Objective | Partial reintroduction of silver to appease the Free Silver Movement | Increase silver purchases to boost the economy and satisfy silver mining interests |
The enactment of the Sherman Act was a balancing act, attempting to appease both the silver advocates and those who were wary of moving too far from a gold standard. While it temporarily satisfied the silver mining interests, it also heightened concerns among gold standard proponents, leading to economic and political repercussions that eventually necessitated its repeal.
Repealing the Sherman Silver Purchase Act
The United States Congress repealed the Sherman Silver Purchase Act in 1893. The Act’s repeal was primarily driven by the Panic of 1893, an economic depression that heightened concerns about the stability of the gold reserve. Critics of the Sherman Act blamed it for undermining confidence in the U.S. economy and contributing to the financial crisis.
The panic led to a run on the U.S. Treasury’s gold reserves, as people exchanged silver certificates for gold, fearing further devaluation of silver. This crisis forced President Grover Cleveland to call a special session of Congress, where he advocated for repealing the Sherman Act to restore confidence in the gold standard and stabilize the economy. The repeal was a significant setback for the Free Silver Movement, underscoring the nation’s complex relationship with bimetallism and setting the stage for future monetary debates.
William Jennings Bryan and the Cross of Gold Speech
After the Sherman Silver Purchase Act was repealed, the Free Silver Movement was propelled by William Jennings Bryan. He delivered an impassioned “Cross of Gold” speech at the 1896 Democratic National Convention, which ignited the crusade. Bryan’s rallying cry painted silver as the salvation for the ordinary people, advocating for the unlimited coinage of silver to combat economic woes.
In William Jennings Bryan’s iconic “Cross of Gold” speech, he fervently advocated for the Free Silver movement, denouncing the gold standard’s stranglehold on the nation’s economy. Bryan passionately declared, “You shall not press down upon the brow of labor this crown of thorns. You shall not crucify mankind upon a cross of gold!”
His powerful rhetoric resonated deeply, as he vividly painted a picture of economic oppression faced by farmers and the working class, rallying support for the unlimited coinage of silver as a solution to alleviate their hardships. After his speech, the convention selected Bryan to be the Democratic presidential candidate at only 36 years of age.
The 1896 and 1900 Presidential Elections: Shaping Monetary Policy
The 1896 and 1900 Presidential Elections were pivotal in determining America’s monetary future, showcasing a clash between the Free Silver Movement and the gold standard. William Jennings Bryan, the Democratic nominee in both elections, championed bimetallism, targeting the economic frustrations of farmers and workers. His opponent, Republican William McKinley, favored the gold standard, symbolizing industrial capitalism’s interests. McKinley’s victory in 1896 marked a preference for the stability of the gold standard, sidelining the inflationary tendencies linked with silver.
McKinley’s first presidency fortified the gold standard, aligning U.S. monetary policies with global financial trends that preferred gold. This shift marginalized the Free Silver Movement and mirrored the nation’s shift towards industrialization.
The 1900 election, a repeat of the 1896 contest, further endorsed the gold standard, reflecting the country’s economic growth and prosperity under McKinley. His re-election not only marked a personal triumph but also symbolized the waning influence of the Free Silver Movement, ushering in a new era in U.S. monetary policy centered on gold.
Triumph of the Gold Standard
After William McKinley won the election of 1900, the United States solidified the position of the gold standard through the Gold Standard Act of 1900. The Act signaled the end of the Free Silver Movement and marked a turning point in American economic history.
Adopting the gold standard was more than a monetary decision; it reflected the nation’s transition into a more modern industrial economy. It brought stability and international credibility to the U.S. financial system, aligning it with other major global powers. This shift had profound implications for the nation’s economic growth and development and the precious metals market. The gold standard era, lasting until the mid-20th century, set a precedent in monetary policy that still influences economic thought and practice.
Lasting Impact
The Free Silver Movement is a testament to the clash of economic ideologies, political influences, and the far-reaching impact of monetary policy. For investors and numismatists, understanding this movement sheds light on the intricate history of monetary systems, their evolution, and enduring effects on financial markets and economies. The movement’s legacy persists, influencing future monetary policy debates, economic equality discussions, and the role of precious metals in currency.
