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The key issue for “Free Silver” is not paper certificates, nor unlimited coinage, but the fixed exchange rate between silver and gold, in which the two metals w

The key issue for “Free Silver” is not paper certificates, nor unlimited coinage, but the fixed exchange rate between silver and gold, in which the two metals were considered primarily as money, and not as commodities with separately varying supply and demand patterns. Imagine briefly a market in which APPL and TSLA common stock were subject to a fixed price ratio. Crazy idea, yes? But a 16:1 ratio for silver:gold makes just as much sense from a market point of view. For the consumer, investor, banker, a fixed ratio is a nice convenience, but if the supply or demand for either gold or silver were to change significantly, opportunities for arbitrage could become very profitable. Now think of the California gold rush, the Comstock silver lode, and the hundreds of other mining booms between 1850 and 1896. Who benefited, and who paid? Were WJ Bryan and other orators and politicians champions of the masses or tools of the robber barons?

skak 5y ago
Ultimately, WJ Bryan was both a tool of capital and a champion of the masses, but the free silver effort was an the exceptional issue for the reasons you explained. I think farmers loans are worth mentioning specifically. The fixed ratio was terrible for farmers who had to seasonally borrow money and pay it back with interest.
- AnimalMuppet 5y ago
  Could you expand on that a bit? Why did the fixed ratio hurt farmers (or anyone who had to borrow)? Or, how would a float between silver and gold have helped them? It's not like a bank is going to lend you gold dollars and accept being paid back in silver dollars (or vice versa) if the ratio between them isn't fixed... [Edit: Never mind, ffggvv answered this question below.]
cratermoon 5y ago
Oh, there's the gap in my history class. We never learned about the economics and the fixed exchange ratio. I always looked back and presumed they were independently trading commodities the way they are today. To answer your question, Bryan was a champion of the masses in the same way the prior occupant of the Oval Office was a champion of the masses.

skak 5y ago

Ultimately, WJ Bryan was both a tool of capital and a champion of the masses, but the free silver effort was an the exceptional issue for the reasons you explained. I think farmers loans are worth mentioning specifically. The fixed ratio was terrible for farmers who had to seasonally borrow money and pay it back with interest.

AnimalMuppet 5y ago
Could you expand on that a bit? Why did the fixed ratio hurt farmers (or anyone who had to borrow)? Or, how would a float between silver and gold have helped them? It's not like a bank is going to lend you gold dollars and accept being paid back in silver dollars (or vice versa) if the ratio between them isn't fixed... [Edit: Never mind, ffggvv answered this question below.]

cratermoon 5y ago

Oh, there's the gap in my history class. We never learned about the economics and the fixed exchange ratio. I always looked back and presumed they were independently trading commodities the way they are today. To answer your question, Bryan was a champion of the masses in the same way the prior occupant of the Oval Office was a champion of the masses.