June 8, 2012 at 9:33 am #15713
Hello everyone, just joined this website a few weeks back and have watched several of the lectures. I’m taking a US History Since 1877 course at the Georgia Institute of Technology, so I decided to supplement my learning with the great material you have provided!
Anyway, I have a few questions regarding populism and the Gilded Age.
1) When the populists wanted to increase the money supply by allowing silver as legal tender, was it only an intended effect that inflation would occur, or would inflation actually occur? (I’m wondering if introducing silver side by side with gold as legal tender actually increases the money supply or just introduces a separate medium of exchange. Or would the money supply still increase because new paper money must be printed in exchange for the silver?)
2) The textbook for my course is Give Me Liberty! by Eric Foner. In it, Foner states “Farmers increasingly believed that their plight derived from … the fiscal policies of the federal government that reduced the supply of money and helped to push down farm prices.” Is this referring to the policy of silver not being legal tender?
3) Regarding the Homestead Strike, Foner states that “In 1892, Carnegie and Henry Clay Frick, his local supervisor, decided to operate the plant on a nonunion basis. Henceforth, only workers who agreed not to join the union could work at Homestead.” This is his reasoning for why the workers decided to strike. In the first place, is this factually correct? Secondly, is this the real reason the workers decided to strike or was the strike more about the wage contracts involving the sliding scale?
Thanks for your time!July 8, 2012 at 4:25 pm #15714gutzmankParticipant
The Populists advocated free coinage of silver precisely because they wanted inflation. This was trumpeted as a mechanism for transferring wealth to “the people” (as in the name “People’s Party,” aka “Populist Party”).July 9, 2012 at 11:08 am #15715
To clarify my question in the simplest way possible, were they correct? Would that actually do what they thought it would do?July 9, 2012 at 1:59 pm #15716Brion McClanahanMember
Yes because you increase the amount of money in circulation and at the same time you devalue the currency. This is why the so-called “Gold Democrats” were able to say that they wanted the working class to receive 100 cents for every dollar earned. The legislative mechanisms that put this into place, the Bland-Allison Act and the Sherman Silver Purchase Act, (also the high McKinley tariff) wrecked the economy, particularly the latter. When Grover Cleveland began his second term in 1893 he had to rescue the economy from the silverites and a severe panic caused by a run on gold in the treasury and high inflation. He took heat for this, primarily because he said it was not the government’s job to support the people, but he made the hard and correct decisions and the economy eventually rebounded.July 10, 2012 at 11:42 am #15717woodsParticipant
Here are my thoughts on your questions:
(1) An inflation of prices would occur as a result of monetizing silver. It would be the same effect as a sudden, massive discovery of gold.
(2) Yes, presumably Foner has in mind the federal government’s lack of interest in Greenback or silver schemes.
(3) Foner is way off here, if we’re not taking him out of context. Homestead did not become nonunion until after the strike. The strike was about wages. I recommend the article by Charles Baird, linked on the Populism lecture page.July 10, 2012 at 3:57 pm #15718
Thanks everyone!July 11, 2012 at 11:31 am #15719jmherbenerParticipant
Concerning your first question, take a look at Part 1 in Murray Rothbard’s A History of Money and Banking in the United States.July 11, 2012 at 11:34 am #15720
Thank you Dr. Herbener, will do.
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