Bimetallism and the Gilded Age

1873–1900

Bimetallism is a monetary policy that allows the unrestricted use of two metals, such as gold and silver, as currency. The United States largely operated on a “bimetallic standard” until 1873, when it started moving toward the Gold Standard.

William Jennings Bryan, Free Silver, Bimetallism, Cross of Gold, Cartoon, LOC

This 1896 political cartoon criticizes Presidential Candidate William Jennings Bryan for support of Bimetallism and the Free Silver Movement. Image Source: Library of Congress.

What was Bimetallism in the Gilded Age?

Bimetallism was primarily the monetary policy of the United States until Greenbacks were issued during the Civil War. In the early years, the U.S. operated on a “bimetallic standard,” using both gold and silver coins as currency, with gold valued 16 times higher than silver, or a 16-1 ratio. In 1873, the Coinage Act demonetized silver and started the U.S. on the path to the Gold Standard. The debate over Bimetallism contributed to the Free Silver Movement and an intense debate over monetary policy in the U.S. during the Gilded Age.

Facts About Bimetallism

Summary of Bimetallism in the United States

These facts provide a summary overview of the history of Bimetallism in the United States, focusing on its role during the Gilded Age, from 1873 to 1900. During that time, the U.S. started to shift away from the coinage of silver, which led to a debate over the role of gold and silver in the U.S. economy. Mining and agricultural factions supported Bimetallism, while banking and manufacturing interests supported the Gold Standard. Ultimately, the “Battle of the Standards” was resolved in 1900 when the Gold Standard Act was passed by Congress and signed by President William McKinley.

William McKinley, 1897, Portrait, Benziger
William McKinley. Image Source: National Portrait Gallery.

Bimetallism — Gold and Silver

  • Bimetallism is a monetary policy that allows the unrestricted use of two metals — in this case, gold and silver.
  • Under this policy, one metal is typically valued higher than the other.

End of Bimetallism

  • In the early years, the U.S. operated on a “bimetallic standard,” using both gold and silver as currency.
  • In 1873, the United States shifted from Bimetallism, which recognized both gold and silver as the basis for the dollar, to the Gold Standard. 
  • Before this change, the government had been minting silver at a ratio of 16 to one, meaning there was 16 times more silver in a silver dollar than gold in a gold dollar.

Effect of the California Gold Rush on the Price of Silver 

  • The 16-1 ratio undervalued silver since the 1849 California Gold Rush, which lowered the price of gold. 
  • Because of the low price of silver, owners of silver mines started began selling their silver commercially, instead of to the U.S. Treasury, which made it into coins.
  • This created a scarcity of silver dollars in circulation. 
  • With the disappearance of silver dollars, some monetary experts advised Congress to stop making silver coins and adopt the Gold Standard.

Hard Money and Soft Money

  • Gold and silver coins are typically referred to as “Specie” or “Hard Money.”
  • A currency that is printed on paper is known as “Paper Money” or “Soft Money.”

Greenbacks During the Civil War

  • During the Civil War and the administration of President Abraham Lincoln, the government issued $450 million in paper money, known as Greenbacks.
  • Greenbacks were first issued in 1862.
  • Greenbacks were “Fiat Money” — government-issued currency that is not backed by a physical commodity, like gold or silver.
  • The use of Greenbacks led to a decrease in the use of hard money as currency.

Exchanging Greenbacks for Gold and Silver

  • Following the war, the government worked to reduce the amount of Greenbacks in circulation and increase the amount of hard money.
  • During the administration of President Andrew Johnson, the government implemented a policy that allowed people to exchange Greenbacks for hard money.
  • Because gold was more valuable than silver, most people wanted to exchange their Greenbacks for gold.
  • The preference for gold was not only in the U.S. but also worldwide, because many nations started shifting to the Gold Standard.

The Coinage Act of 1873

  • In 1873, the administration of President Ulysses S. Grant and Congress passed the Coinage Act.
  • The act demonetized silver and established the gold dollar as the national monetary standard. 
  • The Coinage Act was intended to simplify the financial system by eliminating silver and going away from the Bimetallic System.
  • Silver coins that were in circulation were still usable, but new ones were not made.
  • This move followed the lead of many European nations.
President Ulysses S. Grant, Photograph, LOC
President Ulysses S. Grant. Image Source: Library of Congress.

The Panic of 1873

  • That same year, Europe suffered an economic downturn, which affected the U.S., causing the Panic of 1873.
  • The Panic of 1873 triggered the “First Great Depression,” which lasted until 1877, but lingered as part of a period known as the “Long Depression.”
  • The depression hurt American farmers, as agricultural prices declined. 

Bimetallism Movement — New Silver Mines and the Crime of ‘73

  • Ironically, not long after the act was passed, new silver mines were discovered in Nevada and other parts of the West.
  • The discoveries increased silver production and lowered the price of silver. 
  • As the U.S. suffered from the economic downturn, owners of Greenbacks wanted to be able to trade their paper money for silver coins, but they were not being minted due to the Coinage Act.
  • Critics of the Coinage Act referred to it as the “Crime of ‘73.”

Bimetallism, Free Silver Policy, and the Crime of ‘73

  • Before the passage of the Coinage Act, people could take gold or silver to the U.S. Mint and have it pressed into coins that were legal — or “legal tender.”
  • The ability to convert as much silver as needed to money was called the “Free Silver Policy.”
  • The Coinage Act ended the Free Silver Policy, which had been very popular in the United States.
  • However, gold could still be converted to legal tender coins.

The Free Silver Movement Supports Bimetallism

  • American farmers believed the amount of currency in circulation influenced the market prices for their crops.
  • They believed that if there were more silver coins in circulation, it would inflate the market prices, allowing them to make more money, which could be used to pay off old debts.
  • Silver-mine operators also supported the coinage of silver, hoping for increased government purchases of their product.
  • A coalition formed between farming and western silver interests, advocating for the unlimited coinage of silver at the 16-to-1 ratio. 
  • Farmers supported the Free Silver Movement, which they believed would increase the nation’s money supply and boost agricultural prices. 
  • Meanwhile, owners of silver mines in the West looked to the government to start buying silver again to make silver coins.
  • Advocates of the unlimited coinage of silver were known as “Silverites.”
  • Silverites supported Free Silver and Bimetallism and used the slogan, “16 to 1.

The Debate Over Bimetallism and Silver Coinage

  • Advocates of Free Silver argued it was the result of a conspiracy led by eastern creditors, such as bankers and financiers, that was intended to control the money supply and prevent price recovery. 
  • Free Silver advocates argued supporters of the Gold Standard sought to replace silver, considered the “people’s money,” with gold, which was seen as the currency favored by bankers and big business.
  • In defense of the Coinage Act, proponents argued it was enacted in anticipation of a decline in silver prices due to discoveries in the West, which had increased the silver supply by 20 percent. 
  • Supporters of gold said that if silver had not been demonetized, maintaining Bimetallism at the 16-to-one ratio would have led to a depletion of the nation’s gold reserve and the removal of gold from circulation.

Bimetallism Returns — the Bland-Allison Act of 1878

  • Missouri Representative Richard Bland led the way toward remonetizing silver, and was known as “Silver Dick.”
  • In the Senate, William B. Allison of Iowa led the way.
  • Congress enacted the Bland-Allison Act in 1878. 
  • President Rutherford B. Hayes vetoed the bill, but Congress overrode the veto.
  • The bill required the government to buy $2-4 million worth of silver each month and use it to make silver dollars.
  • Silver had to be purchased at market rates, not at a rate that was tied to the value of gold.
  • The Bland-Allison Act fell short in terms of satisfying the demand for unlimited silver coinage.

President Hayes Stalls the Coinage of Silver

  • The Hayes Administration responded by purchasing the least amount of silver possible.
  • Hayes was influenced by bankers and industrialists who supported the Gold Standard.
Rutherford B Hayes, 19th President
President Rutherford B. Hayes. Image Source: Wikimedia.

Support for Bimetallism Grows

Various groups called for the government to “Free Silver” and allow the unlimited coinage of silver, including:

  1. National Farmers’ Alliance
  2. Populist Party
  3. Industrial Unions

Support for Bimetallism in the West

  • By 1890, western farmers and companies that mined silver were pushing for Free Silver.
  • The additions of new states, including Idaho, Washington, Wyoming, North Dakota, and South Dakota, increased pressure on the government from Western interests.

The Sherman Silver Purchase Act (1890) Strengthens Bimetallism

  • In 1890, Congress enacted the Sherman Silver Purchase Act to address the demands of silver advocates.
  • The Sherman Silver Purchase Act was part of a compromise:
    • Republicans supported the Sherman Silver Purchase Act.
    • Democrats supported the Tariff of 1890, also known as the “McKinley Tariff.”
  • Per the act, the Treasury would purchase 4.5 million ounces of silver each month at market rates.
  • The Treasury would issue notes that could be redeemed in either gold or silver.

The Price of Silver Drops

  • The amount of silver the Treasury planned to buy was essentially the same as what the mines were outputting each month.
  • The increase in the silver supply drove the value of silver down because it reduced scarcity.
  • Mining operations responded by cutting wages, which led to labor unrest.

Shrinking Gold Reserves Threaten Bimetallism

Two things led to a decrease in the amount of gold held in the nation’s Gold Reserve and played an important role in how President Grover Cleveland responded to the Panic of 1893

  1. As silver decreased in value, owners of the silver certificates cashed them in for gold, instead of silver.
  2. The 51st Congress and President Benjamin Harrison increased federal spending and set a budget of $1 billion which was aimed at internal improvements, expansion of the U.S. Navy, and provided subsidies for steamship companies. The 51st Congress is also known as the “Billion Dollar Congress.”

Panic of 1893

  • The financial collapse of the Philadelphia and Reading Railroad and the National Cordage Company contributed to an economic downturn.
  • The situation was worsened by a drought that affected the production of crops in the South and the West.
  • President Grover Cleveland and many members of Congress believed the downturn was part of the natural economic cycle.

Repeal of the Sherman Silver Purchase Act Hurts Bimetallism

  • President Grover Cleveland, a Democrat, was concerned about the Gold Reserves and believed the Sherman Act was partially responsible for the Panic of 1893.
  • A few weeks after President Cleveland was sworn in, the Gold Reserves fell under $100 million, which weakened trust in the financial stability of the nation.
  • Cleveland called Congress into a special session.
  • Republicans were joined by enough Democrats and the Sherman Act was repealed.
  • However, the move failed to help ease the economic downturn, especially in the West and South.
  • Democrats and Free Silver advocates were upset with Cleveland.

President Cleveland’s Bond Deal Moves Further Away from Bimetallism

  • President Grover Cleveland took measures to boost the Gold Reserves.
  • The government sold bonds at discounted rates to wealthy investors, including J.P. Morgan.
  • The Gold Reserves were boosted and trust in the government was restored.
  • President Cleveland’s deal with Morgan and others angered groups within the Democratic Party that supported the interests of farmers, which created a divide in the party.
Grover Cleveland, Portrait
President Grover Cleveland. Image Source: Wikimedia.

Populist Party and Democratic Party Align on Bimetallism

  • The depression that followed the Panic of 1893 and President Cleveland’s policies boosted the growing Populist Movement.
  • Between 1893 and 1896, the Free Silver Movement gained significant traction. 
  • Many Democrats aligned with the Populist Party on the Free Silver issue.

Free Silver and the Presidential Election of 1896

  • Free Silver was an important issue during the 1896 Presidential Election.
  • The debate over gold and silver is sometimes called the “Battle of the Standards.”
  • The Democratic Party supported Free Silver and nominated William Jennings Bryant as its candidate for President. 
  • The Populist Party also endorsed Bryan.

Bryan’s Cross of Gold Speech Supports Bimetallism

  • During the Democratic National Convention, William Jennings Bryan delivered a speech in favor of Free Silver.
  • Bryan criticized the Gold Standard and warned its advocates that they “…shall not crucify mankind upon a cross of gold!”
  • Because of this phrase, it is known as the “Cross of Gold Speech.”
  • The speech propelled him to the nomination.
William Jennings Bryan, Politician, Portrait, LOC
William Jennings Bryan. Image Source: Library of Congress.

Gold Bugs, Bimetallism, and the Battle of the Standards

  • Supporters of the gold standard were often referred to as “Gold Bugs.”
  • Gold Bugs argued against Free Silver, on the grounds it harmed the working class.
  • The Republican Party supported the Gold Standard.
  • The party nominated William McKinley for President in 1896.
  • The debate over gold and silver is sometimes referred to as the “Battle of the Standards.”

Bimetallism Leads to the Silver Party and the Silver Republican Party

The debate over Free Silver led to the development of new political parties:

  1. Republican Silver Party — an offshoot of the Republican Party, which was supported by western mining interests. The party supported William Jennings Bryan for President. This party lasted from 1896 to 1901.
  2. Silver Party — Founded in 1892, the Silver Party was organized in the West and held some influence in Nevada. The party was aligned with the Populist Party and was eventually absorbed into the Democratic Party, ending in 1911.

William McKinley, the Gold Standard, and the End of Bimetallism

  • William McKinley won the 1896 Presidential Election.
  • The economy rebounded under the gold standard by 1896.
  • The Gold Standard Act of 1900 established the gold dollar as the official American standard of value.
  • The U.S. remained on the Gold Standard until 1971, during the administration of President Richard Nixon.

Bimetallism APUSH

Use the following links and videos to study the Bimetallism, William Jennings Bryan, and the Gilded Age for the AP US History Exam. Also, be sure to look at our Guide to the AP US History Exam.

Bimetallism Definition

Bimetallism is an economic system where a country’s currency is based on two metals, typically gold and silver, allowing both to be used as legal tender at a fixed ratio. During the Gilded Age, the debate over Bimetallism reached its climax in the United States. Supporters, known as “Silverites,” argued it brought stability to the monetary system and provided flexibility for people, especially during economic depressions. Opponents, known as “Gold Bugs,” supported the Gold Standard and was better for the economy in the long term. Ultimately, the U.S. adopted the Gold Standard.

Bimetallism Political Cartoon

This political cartoon depicts a husband and wife looking at Free Silver posters outside the headquarters of the Democratic Party. The caption below the illustration begins with the wife saying, “What awful poor wages they get in all those free silver countries!”

Free Silver, Bimetallism, Political Cartoon, 1896
This 1896 political cartoon criticizes Bimetallism and the Free Silver Movement. Image Source: The Wasp, August 22, 1896, Archive.org.

“That’s so, wife, but the politicians say it will be different in America.”

“I wouldn’t take a chance on it John, it’s easy to lower wages and hard to raise them. Politicians will tell you anything to get votes. We know there was a good wages when we had protection. We could never buy clothes and food for the children on what they get in those free silver countries, could we?”

Bimetallism APUSH Units

Bimetallism is part of the following:

Citation Information

The following information is provided for citations, including APA Style, Chicago Style, and MLA Style.

  • Article Title Bimetallism and the Gilded Age
  • Date 1873–1900
  • Author
  • Keywords Bimetallism, Gilded Age, Who supported Bimetallism, What is Bimetallism, When did Bimetallism end, Where were the supporters of Bimetallism, Why did silver mines and farmers support Bimetallism, How did the government respond to Bimetallism
  • Website Name American History Central
  • Access Date July 20, 2024
  • Publisher R.Squared Communications, LLC
  • Original Published Date
  • Date of Last Update March 15, 2024

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