The Currency, or Gold Standard, Act of 1900 placed the United States firmly on the gold standard. What may seem to be a trivial event, however, was the result of one of the most turbulent battles in U. S. history. Disputes over currency raged during the final decades of the 19th century. For nearly a hundred years, the United States had used two metals, gold and silver, for coining legal currency. In 1873 this practice changed. Due primarily to the high price of silver, the United States passed a law that made gold the basis of its currency. At first this act drew scant attention. Soon after, however, due to major ore discoveries, silver became more plentiful and less expensive. As a result, American farmers and silver miners called for the coinage of silver. They referred to the Act of 1873 as the “Crime of 1873.” In 1878, this pressure led to the issuance of silver certificates, and silver dollars. Many farmers believed that these measures were not sufficient to carry out the business of the country. This argument was especially prevalent in the southern and western states. As borrowers, farmers also were concerned with deflation of the economy and falling agricultural prices. To increase the flow of currency and spur on inflation, they rallied around the call for the free coinage of silver, “Free Silver.”
Their pleas were finally recognized when William Jennings Bryan became the presidential nominee for the Democratic Party in 1896. In Bryan’s famous “Cross of Gold” speech, he stated that “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 opponent, Republican candidate William McKinley promised to pass a law that would settle the question once and for all. McKinley’s supporters believed that gold was the only stable basis for currency, and that the U. S. position in the world economy required that it base its currency on gold. If he were elected, the United States would officially convert to the gold standard.
The sides were clearly drawn, and the election was heated. Bryan was at a significant disadvantage. Businessmen, fearful of many of his policies, foremost of which was his stance on currency, donated unprecedented amounts to the Republican Party. McKinley spent as much as $7 million on the election. Bryan had only $300,000 to spend. The election was a landslide victory for McKinley. He received 271 electoral votes. Bryan received only 176.
As promised, the McKinley administration sponsored the Currency Act of 1900. Its advocates claimed that prosperity followed closely behind the passage of the act, but it had little to do with the new prosperity. New discoveries of gold increased the flow of currency. Gold became even more plentiful than McKinley and his supports had hoped. Regardless of the policy’s merits, gold standard advocates won the battle. As a result, gold remained the standard until the 1970s.
—Steve Freund
World History
