Bland-Allison Act

In 1873, the US Congress decided to follow the lead of many European nations and stop buying silver and minting silver coins. Silver was becoming relatively scarce, and it was thought that this new plan would simplify the monetary system. Several other factors exacerbated the situation, and a financial panic quickly set in. Silver prices began dropping rapidly when the government stopped buying silver, and many owners of primarily western silver mines were immediately hurt. The owners of silver weren’t the only ones effected. Farmers and others who carried substantial debt loads attacked the so-called “Crime of ’73.” Theirs might not have been an exact reason, but they believed that it caused a tighter supply of money, which in turn made it more difficult for them to pay off their debts.

Most Americans today wouldn’t really understand the problems surrounding the elimination of the coinage of silver. Nevertheless, in the late 19th century, it was a topic of keen political and economic interest. Our money, these days is basically “secured” by faith in the stability of the government, but prior to that time, money was backed by actual deposits of silver and gold, the so-called “bimetallic standard.” The US also minted both gold and silver coins. The fact that we went away from the “bimetallic standard” or for that matter, the “gold standard” has been a detriment to this country since that time. When money can be made without any gold or silver backing, it weakens the money.

Enter the Bland-Allison Act, which provided for a return to the minting of silver coins. A nationwide drive to return to the “bimetallic standard” began sweeping the nation, and many Americans began to place their undying faith in the ability of silver to solve their economic difficulties. Missouri Congressman Richard Bland led the fight to remonetize silver. Bland was no stranger to the struggles of the small farmers, but his background was in mining. Bland became a fervent believer in the silver cause. William B Allison was a US representative from 1863 to 1871 and senator from 1873 to 1908 from Iowa. He was also the cosponsor of the Bland-Allison Act of 1878. Both men were against the “faith in the stability of the government” form of currency.

The best part of Bland’s part in this was that he had the backing of powerful western mining interests. He quickly secured passage of the Bland-Allison Act, which became law on February 28, 1878. Although the act did not provide for a return to the old policy of unlimited silver coinage, it did require the US Treasury to resume purchasing silver and minting silver dollars as legal tender. Americans could once again use silver coins as legal tender, and this helped some struggling western mining operations. Other than that, however, the act had little economic impact, and it failed to satisfy the greater desires and dreams of the silver backers. The battle over the use of silver and gold continued to occupy Americans well into the 20th century.