ECON 2 Lecture Notes - Lecture 12: William Jennings Bryan, Three-Cent Silver, Fiat Money
ECON 2 verified notes
12/19View all
Document Summary
A 3 cent coin, but it was only made with 2 1/2 cents worth of silver. First time a coin was not fully backed by silver. The trime was used because it had less silver than it"s value, and other silver coins stopped being used. Reduced the amount of silver in most silver coins, intended to alleviate the silver shortage. Ended up pushing the us to stop using silver coins (bimetallism) and instead use the gold standard. Effectively ended silver coin usage in us, beginning of the gold standard. Lenders lose and borrowers gain from unexpected inflation, and lenders gain and borrowers lose from unexpected deflation. Farmers in the west were borrowing from banks in the northeast. There was some deflation that was occuring, which put farmers in a really bad spot. This led to a rise of populist political views amongst the farmers. Populist ideas appeal to the masses, in contrast to appealing to the elite.
