The Agrarian Crusade: A Chronicle of the Farmer in Politics

by Solon J. Buck

A remarkable manifesto, dated February 22, 1895, summarized the grievances of the Populists in these words:

As early as 1865-66 a conspiracy was entered into between the gold gamblers of Europe and America to accomplish the following purposes: to fasten upon the people of the United States the burdens of perpetual debt; to destroy the greenbacks which had safely brought us through the perils of war; to strike down silver as a money metal; to deny to the people the use of Federal paper and silver—the two independent sources of money guaranteed by the Constitution; to fasten upon the country the single gold standard of Britain, and to delegate to thousands of banking corporations, organized for private gain, the sovereign control, for all time, over the issue and volume of all supplemental paper currency.

Declaring that the "international gold ring" was summoning all its powers to strike at the prosperity of the country, the authors of this address called upon Populists to take up the gauntlet and meet "the enemy upon his chosen field of battle," with the "aid and coöperation of all persons who favor the immediate free coinage of silver at a ratio of 16-1, the issue of all paper money by the Government without the intervention of banks of issue, and who are opposed to the issue of interest-bearing government bonds in the time of peace."

There was nothing new in this declaration of hostility to bank issues and interest-bearing bonds, nor in this demand for government paper money, for these prejudices and this predilection had given rise to the "Ohio idea," by force of which George H. Pendleton had hoped to achieve the presidency in 1868. These same notions had been the essence of the platforms of the Greenback party in the late seventies; and they had jostled government ownership of railroads for first place in pronunciamentos of labor and agricultural organizations and of third parties all during the eighties. Free silver, on the other hand, although not ignored in the earlier period, did not attain foremost rank among the demands of the dissatisfied classes until the last decade of the century and more particularly after the panic of 1893.

Prior to 1874 or 1875 the "silver question" did not exist. In 1873 Congress, moved by the report of a commission it had authorized, had demonetized silver; that is, it had provided that the gold dollar should be the standard of value, and omitted the standard silver dollar from the list of silver coins. ¹ In this consisted the "Crime of '73." At the time when this law was enacted it had not for many years been profitable to coin silver bullion into dollars because silver was undervalued at the established ratio of sixteen to one. In 1867 the International Monetary Conference of Paris had pronounced itself in favor of a single gold standard of currency, and the principal countries of Europe had preceded the United States in demonetizing silver or in limiting its coinage. In 1874 as a result of a revision of the statutes of the United States, the existing silver dollars were reduced to the basis of subsidiary coins with only limited legal tender value.

¹ The only reference to the dollar was to "the trade dollar" of heavier weight, for use in the Orient.

The Act of 1873 was before Congress for four sessions; every section, including that which made gold the sole standard of value, was discussed even by those who later claimed that the Act had been passed surreptitiously. Whatever opposition developed at this time was not directed against the omission of the silver dollar from the list of coins nor against the establishment of a single standard of value. The situation was quickly changed, however, by the rapid decline in the market price of silver. The bimetallists claimed that this decline was a result of the monetary changes; the advocates of the gold standard asserted that it was due to the great increase in the production of silver. Whatever the cause, the result was that, shortly after silver had been demonetized, its value in proportion to gold fell below that expressed by the ratio of sixteen to one. Under these circumstances the producers could have made a profit by taking their bullion to the mint and having it coined into dollars, if it had not been for the Act of 1873. It is not strange, therefore, that the people of those Western States whose prosperity depended largely on the silver mining industry demanded the remonetization of this metal. At the same time the stringency in the money market and the low prices following the panic of 1873 added weight to the arguments of those who favored an increase in the quantity of currency in circulation and who saw in the free and unlimited coinage of silver one means of accomplishing this end. So powerful was the demand, especially from the West, that in 1878 the Bland-Allison Act, passed over the veto of President Hayes, provided for the restoration of the silver dollar to the list of coins, with full legal tender quality, and required the Treasury to purchase in the open market from two to four million dollars' worth of bullion each month. This compromise, however, was unsatisfactory to those who desired the free coinage of silver, and it failed to please the champions of the single standard.

For ten years the question of a choice between a single standard or bimetallism, between free coinage or limited coinage of silver, was one of the principal economic problems of the world. International conferences, destined to have no positive results, met in 1878 and again in 1881; in the United States Congress read reports and debated measures on coinage in the intervals between tariff debates. Political parties were split on sectional lines: Western Republicans and Democrats alike were largely in favor of free silver, but their Eastern associates as generally took the other side. Party platforms in the different States diverged widely on this issue; and monetary planks in national platforms, if included at all, were so framed as to commit the party to neither side. Both parties, however, could safely pronounce for bimetallism under international agreement, since there was little real prospect of procuring such an agreement. The minor parties as a rule frankly advocated free silver.

In 1890, the subject of silver coinage assumed new importance. The silverites in Congress were reënforced by representatives from new States in the far West, the admission of which had not been unconnected with political exigencies on the part of the Republican party. The advocates of the change were not strong enough to force through a free-silver bill, but they were able by skillful logrolling to bring about the passage of the Silver Purchase Act. This measure, frequently called the Sherman Law, ¹ directed the Secretary of the Treasury to purchase, with legal tender Treasury notes issued for the purpose, 4,500,000 ounces of pure silver each month at the market price. As the metal was worth at that time about a dollar an ounce, this represented an increase, for the time being, over the maximum allowed under the Bland-Allison Act and more than double the minimum required by that measure, which was all the Treasury had ever purchased. But the Silver Purchase Act failed to check the downward trend in the value of the metal. The bullion in a silver dollar, which had been worth $1.02 in 1872, had declined to seventy-two cents in 1889. It rose to seventy-six in 1891 but then declined rapidly to sixty in 1893, and during the next three years the intrinsic value of a "cartwheel" was just about half its legal tender value.

¹ John Sherman, then Secretary of Treasury, had a large share in giving final form to the bill, which he favored only for fear of a still more objectionable measure. See Sherman's Recollections, pp. 1069, 1188.