Think Freely Media presents Common Sense with Paul Jacob

On Feb. 16, 1878, the Bland-Allison Act, which provided for a return to the minting of silver coins, became U.S. law. Today, the value of American money is secured only by public faith in the stability of the government, but during the 19th Century, money was backed by actual deposits of silver and gold.

Five years earlier, when Congress had stopped buying silver and minting silver coins — following the lead of European nations — a financial panic ensued. Reasons for the suspension, and at the heart of the panic, lay in the fact that the exchange value of silver and gold was fixed at a rate that favored silver producers. Had the United States Treasury let the two standards free float, making a distinction between silver dollars and gold dollars, none of the political strife over bimetallism would have occurred.

In 1893, in the midst of another financial panic, this time as a result of depletion of gold reserves in the U.S. Treasury, President Grover Cleveland called a special session of Congress to repeal the bimetallic standard. He was successful, though agrarian inflationists took over the Democratic Party and offered up, for the next election, William Jennings “Cross of Gold” Bryan as a counter to Cleveland’s old-fashioned fiscal conservative/social liberalism.

By: Redactor

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