FREE SILVER

A U.S. political movement of the late 1800s, "Free Silver" advocates argued for unlimited government coinage of silver. Like members of the Green-back Party, Free Silver supporters included many farmers who, in the 1870s, found themselves in debt from the effects of a drop in farm prices and an increase in costs. The agrarians were joined in their fight by silver mining interests in the West and members of the People's (Populist) and Democratic parties. "Silverites" believed the government purchase and coinage of silver would have an inflationary effect which would raise prices and put more money in circulation thereby allowing debts to be paid. In 1878 Congress passed a compromise to appease the Free Silver alliance: The Bland-Allison Act required the U.S. Treasury to buy silver bullion and coin in the amount of two to four-million dollars worth each month. Nonetheless the Free Silver forces continued lobbying for an unlimited coinage of silver.

Though they were opposed by gold-standard interests, mostly creditors who were opposed to any silver coinage, silver supporters got another boost. In 1890 Congress passed the Sherman Silver Purchase Act which doubled government purchase of silver to increase the money in circulation. The legislation back-fired: The resumption of silver as a monetary standard increased the overproduction in western silver mines; thus, prices collapsed. Americans responded by trading their silver for gold dollars thereby draining federal reserves. In 1893 the Sherman Silver Purchase Act was repealed and the United States returned to the gold standard. The presidential election of 1896, which pitted Republican candidate William McKinley (1897–1901) against Democrat William Jennings Bryan (1860–1925) was dominated by the debate over Free Silver. The silverite candidate, Bryan, lost. An increase in the world supply of gold and a return to prosperity made the silver issue moot for the next three decades: Gold remained the monetary standard until 1933.