ECON 2200 Lecture Notes - Lecture 38: Sherman Silver Purchase Act, Gold Standard Act, Monetary System
14 May 2018
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ECON 2200
Lecture 38
o “Sound Money Advocates”
1. Tend to be Republicans
2. Tend to be a urban coalition
3. Tend to be in the North and East
4. Push for a gold standard
o “Free Silver Movement”
1. Tend to be Democrats
2. Tend to be a rural coalition
3. Tend to be in the South and West
4. Push for a bimetallic standard
• Bland-Allison Act of 1878
o “limping monetary standard”
1. A compromise of both movements (shown above)
o limited coinage of silver
o Treasury to purchase $2-4 mill of silver per month at market
price
• Price of silver continued to fall despite Treasury purchases
• Sherman Silver Purchase Act of 1890
o Treasury's monthly purchase increased to 4.5 mill ounces at the
market price
o Sellers received special Treasury notes
1. Legal tender
2. Redeemable in gold or silver at discretion of Treasury
3. New kind of money – silver certificates
o Preserved de facto gold standard, but...
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