A discussion on the Gold Standard
I just wanted to share a closed book, 30 minute essay I wrote for my school finals last year.
"A federally-mandated gold standard was a good thing for America." Define "gold standard" and then respond to this statement, arguing for or against it with specific pieces of legislation as well as economic and political events of the gilded age. Include in your answer information about the populists and at least two presidents who took a stand on the issue.
The American economy had run on the gold standard for decades during the presidential election of 1896, and the gold standard was front and center in a presidential election for the first time in American history. Candidates like William McKinely argued that "A federally-mandated gold standard was a good thing for America," but others, such as William Jennings Bryan disagreed, I agree with William Jennings Bryan for more than one reason.
In economics, a "gold standard" is when a government's paper currency or specie is exchangeable at a set rate for gold bullion. Alexander Hamilton founded the United States monetary system in 1793 upon a 16-1 silver to gold exchange rate. While this worked for the first two decades of the Treasury's existence, it eventually became unreasonable as silver decreased in value in relation to gold. This made the silver dollar, which was no longer legal tender and temporarily discontinued in 1873 as a part of the Bland-Allison Act, worth more as bullion or silverware, than as money. Silver specie being melted led to an economic disaster for farmers; there wasn't enough money in circulation to pay for farmer's crops, at least, that's what the farmer's and their Populist Party thought.
In the election of 1896, William Jennings Bryan was a household name. He supported the idea of "free silver." Free silver is the theory that when silver and gold are legal tender, the economy will thrive because there is more money changing hands, fueling businesses to expand. In order to make this reality, the treasury would have to buy all silver offered to the at the 16-1 silver to gold ratio, making all silver dollars worth exactly 1/16th of a gold dollar. The treasury, in theory, would give this silver to the mint to coin. Free silver and bimetallism has obvious advantages over the gold standard as demonstrated through William Jennings Bryan's economic theory.
The election of 1896 was between William McKinley, the Democratic candidate, and William Jennings Bryan, who rallied the support of the Republican Party, the Populist Party, and a few other "third" parties. William McKinley supported the limited coinage of silver, but believed that America should remain on the gold standard. William Jennings Bryan may have had the widest range of public support in the history of the United States, excepting George Washington and Abraham Lincoln during his second election. He attracted miners from the far west, as they wanted more clients for their silver, farmers from the Midwest and South, as he appealed to their want of "free silver," he also attracted the attention of Northern business owners who needed customers to be able to pay for their services. William McKinley won the presidential election and free silver never came to be, but the effects and principles left behind still affect us today.
Free silver never again became a central issue in a presidential election as the influx of gold from the Klondike Gold Rush lowered the value of gold to a more manageable level. America stayed on the gold standard until Franklin Delano Roosevelt recalled all gold coins and made it illegal to privately own gold in 1933, yet silver coins kept on being minted until 1964 when the U.S. dollar finally became fiat, a process that took more than half a decade to happen. We are still feeling the ripples of the gold standard today, yet many question the feasibility of it, looking to alternatives like cryptocurrency.
I had no idea that the gold standard and “free silver” had an impact on a presidential election. Some good information on American history of bimetallism.
Very good. As stated above a Bibliography would be nice.
Nicely done. I hope you got a good grade for this. Thanks.
Really interesting blog! Great subject! ; )
Well written bibliography please. Some of use would like to read more Thanks.
Thanks for the comment, as this was part of a school test, I wrote all of it from the top of my head
I. R. Bama
This was interesting and well done.