ECON 2200 Lecture Notes - Lecture 33: Sherman Antitrust Act, Monetary Base, Money Supply
14 May 2018
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ECON 2200
Lecture 33
• Some believe that 2nd merger wave (vertical) was actually inspired
by the Sherman Act. Firms bought out competition in order to avoid
violations of the Act.
• Impact of late-19th century deflation
o Unanticipated deflation is bad for debtors
1. Particularly for farmers in late 19th century.
• Bimetallic standard
o Coinage Act of 1792
1. Established both gold and silver as the official Monetary
base of the US
Thus, the Federal Government Mint coined both silver
and gold coins of equal values.
Obviously, these coins have different weights based on
their market values.
o Mint value v. Market value
1. Whenever the market value (as bullion) of the metals did not
equal the mint value, only one metal would circulate as
money. This frequently happens.
Which one?
• Only the metal that is over-valued at the Mint will circulate as money.
o So, only ONE metal circulated, even though it was by law a
“bimetallic” standard (meaning two metals).
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