Library of Congress |
Congressman Richard Bland of Missouri, who wrote the Bland bill, which eventually became the Bland-Allison Act of 1878. |
Library of Congress |
T. V. Powderly, the general master workman of the Knights of Labor, was a fervent advocate of free silver. |
Library of Congress |
Senator Daniel W. Voorhees of Indiana, who was a strong supporter of free silver. |
the Treasury, or only one-tenth of the 1 % of the year’ s coinage.”
“ There will be more money in the hands of the people,” wrote Powderly,“ in bonafide circulation, if free coinage of silver is restored to where it was up to 1873.” Free silver existed from 1853 to 1873 for no denomination except for the silver dollar. That was a nod to merchants, who shipped them in trade to China, for the silver dollar never circulated domestically. There were virtually no silver dollars“ in the hands of the people” from 1794 to 1873.
Free silver was government policy from 1794 to 1853. It was dropped via the Coinage Act of 1853, for the California Gold Rush( 1848 – 1855) saw the price of silver rise. That resulted in all silver coins having an intrinsic value greater than their face value. Thus, they were hoarded, sold for their bullion value or exported. The Act of 1853 made subsidiary coins worth less than their face value to prevent their export— and ended the free silver policy for such coins.
Powderly wrote,“ The cry that‘ we will have too much money if silver is remonetized’ is unworthy of consideration … Hard times and panics are due to contractions and not expansions of the currency.”
Powderly was dead wrong. Silver was not remonetized and the United States indeed had“ too much money.” The overproduction of over-valued silver dollars beginning in 1878( and printing of silver
certificates)— plus the issuance of Treasury notes on silver bullion from 1890 to 1893— increased the nation’ s silver and paper circulation by 75 % from 1879 to 1893. The expansion of the money supply was a key policy of the free silver movement. And that policy— forced upon America via Bland-Allison and the Sherman Silver Purchase Act— was instrumental in causing the Panic of 1893.
The Repeal of Silver Legislation
President Grover Cleveland delivered a message to Congress in August of 1893, urging the repeal of the Sherman Silver Purchase Act. The government, he urged, should avoid“ financial experiments” and in their place enact“ sound and stable” currency reform. He noted that repealing the law may be unpopular, for some businesses and speculators profited from this silver legislation. Nonetheless, Cleveland argued that Congress should act quickly to end the draining of the gold reserve and set the US economy on the right path. Shortly thereafter, Congress repealed the Sherman Silver Purchase Act.
Eric Brothers is a regular contributor to Numismatic News. He also writes for ANS Magazine, a publication of the American Numismatic Society in New York. This is his ninth article for Financial History.
Sources
Brothers, Eric.“ Coin or Paper? The Story of the Silver Certificate.” Financial History. Spring 2025.
Brothers, Eric.“ Return of the Silver Dollar: Free Silver and the Bland-Allison Act.” Financial History. Fall 2024.
Carnegie, Andrew and John Lubbock.“ The Silver Problem.” The North American Review. Vol. 157, No. 442. September 1893.
Carothers, Neil.“ Silver: A Senate Racket.” The North American Review. Vol. 233, No. 1. January 1932.
Ford, Worthington Chauncey.“ Silver or Legal Tender Notes.” Political Science Quarterly. Vol. 4, No. 4. December 1889.
Laughlin, J. Laurence. The History of Bimetallism in the United States. New York: D Appleton and Co. 1898( 1885).
Leech, Edward O.“ Silver Legislation and Its Results.” The North American Review. Vol. 157, No. 440. July 1893.
Powderly, T. V.“ The Workingman and Free Silver.” The North American Review. Vol. 153, No. 421. December 1891.
Reed, Lawrence W.“ The Silver Panic.” Foundation for Economic Education. June 1, 1978.
Vorhees, D. W.“ A Plea for Free Silver.” The North American Review. Vol. 153, No. 420. November 1891.
Walker, Francis A.“ The Free Coinage of Silver.” Journal of Political Economy. Vol. 1, No. 2. March 1893.
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