| Line 162: |
Line 162: |
| | But there was also phenomenal successes during this era. Businessmen like Andrew Carnegie, who immigrated from Scotland without any money and ended up with massive wealth from founding the Carnegie Steel Co. (later became U.S. Steel Co.), amassing a fortune that he then donated to build structures like Carnegie Hall, Carnegie-Mellon University, and the enormous New York Public Library (plus 2800 other public libraries). He wrote the "Gospel of Wealth" in 1900 to describe his vision of capitalism. | | But there was also phenomenal successes during this era. Businessmen like Andrew Carnegie, who immigrated from Scotland without any money and ended up with massive wealth from founding the Carnegie Steel Co. (later became U.S. Steel Co.), amassing a fortune that he then donated to build structures like Carnegie Hall, Carnegie-Mellon University, and the enormous New York Public Library (plus 2800 other public libraries). He wrote the "Gospel of Wealth" in 1900 to describe his vision of capitalism. |
| | | | |
| − | From about 1878 to the end of the century there was strong pressure to return the nation’s economic standard to bimetallism by including silver along with gold. Two forces drove this pro-silver or “free silver” movement: Westerners had discovered silver mines so they wanted the silver to become more valuable, and farmers wanted more money in currency to cause inflation. Westerns and Southerners arranged for passage of the Bland-Allison Act in 1878, which required the government to purchase $2-4 million worth of silver each month. Also, a bill passed over President Hayes’ veto which allowed for the free and unlimited coinage by the government of silver, such as silver dollars, at a ratio of 16 to 1 relative to gold. The government began minting silver dollars that are collectors’ items today (and worth much more than one dollar now).
| + | == Bimetallism == |
| − | But the price of silver fell as more was mined, and so the monthly government purchases declined also. Deflation continued for the next ten years. A $100 cost in 1878 was equivalent to only $84.43 in 1890.
| |
| | | | |
| − | The Westerners wanted more silver purchased, and the debtors and farmers wanted more inflation. They forced passage of the Sherman Silver Purchase Act in 1890, which required even greater purchases by the government of silver. The Silver Purchase Act required the government to issue notes (like large-denomination dollar bills) to purchase 4.4 million ounces of silver each month, regardless of its value in dollars. The bill passed in a compromise with the Northerners, who obtained the high tariff in the McKinley Tariff Bill. | + | From about 1878 to the end of the century there was strong pressure to return the nation's monetary standard to "bimetallism" (two metals: silver and gold). Because gold was the standard, advocating "bimetallism" meant adding a silver standard to the gold standard. Two forces drove this pro-silver or "free silver" movement: Westerners had discovered silver mines so they wanted the silver to become more valuable, and farmers wanted more money in currency to cause inflation to increase the prices for their goods and lower the real cost of their debts to the banks. |
| | + | |
| | + | Westerns and Southerners arranged for passage of the Bland-Allison Act in 1878, which required the government to purchase $2-4 million worth of silver each month. In addition, a bill passed over President Rutherford Hayes' veto which allowed for the free and unlimited coinage by the government of silver, such as silver dollars, at a ratio of 16 to 1 relative to gold. The government began minting silver dollars that are collectors' items today (and worth much more than one dollar now). |
| | + | |
| | + | But the price of silver fell as more was mined, because more of something usually means it is less valuable. The monthly government purchases declined also. Deflation continued for the next ten years. $100 in 1878 was equivalent to only $84.43 in 1890. Imagine that! |
| | + | |
| | + | Westerners wanted more silver purchased, and the debtors and farmers wanted more inflation. They forced passage of the Sherman Silver Purchase Act in 1890, which required even greater purchases by the government of silver. The Silver Purchase Act required the government to issue notes (like large-denomination dollar bills) to purchase 4.4 million ounces of silver each month, regardless of its value in dollars. The bill passed in a compromise with the Northerners, who obtained a high tariff at the same time through passage of the McKinley Tariff Bill. |
| | | | |
| | But the notes used to buy the silver each month were redeemable in gold, which was more valuable than the increasingly plentiful silver. So pretty soon the public was demanding gold from the government in return for these new notes. This created a “run” on the gold reserves of our Nation, with its total supply falling below $100 million and headed quickly towards zero. | | But the notes used to buy the silver each month were redeemable in gold, which was more valuable than the increasingly plentiful silver. So pretty soon the public was demanding gold from the government in return for these new notes. This created a “run” on the gold reserves of our Nation, with its total supply falling below $100 million and headed quickly towards zero. |
| Line 175: |
Line 180: |
| | :“There are two ideas of government. There are those who believe that if you just legislate to make the well-to-do prosperous, that their prosperity will leak through on those below. The Democratic idea has been that if you legislate to make the masses prosperous their prosperity will find its way up and through every class that rests upon it. … | | :“There are two ideas of government. There are those who believe that if you just legislate to make the well-to-do prosperous, that their prosperity will leak through on those below. The Democratic idea has been that if you legislate to make the masses prosperous their prosperity will find its way up and through every class that rests upon it. … |
| | :If they dare to come out in the open field and defend the gold standard as a good thing, we shall fight them to the uttermost, having behind us the producing masses of the nation and the world. Having behind us the commercial interests and the laboring interests and all the toiling masses, we shall answer their demands for a gold standard by saying to them, you shall not press down upon the brow of labor this crown of thorns. You shall not crucify mankind upon a cross of gold.” | | :If they dare to come out in the open field and defend the gold standard as a good thing, we shall fight them to the uttermost, having behind us the producing masses of the nation and the world. Having behind us the commercial interests and the laboring interests and all the toiling masses, we shall answer their demands for a gold standard by saying to them, you shall not press down upon the brow of labor this crown of thorns. You shall not crucify mankind upon a cross of gold.” |
| − |
| |
| − | Bland-Allison Act "1878: feds to buy $2M-$4M of silver/mth, to increase inflation & silver prices"
| |
| | | | |
| | '''Debate: it wasn't the "Gilded Age," it was the "Golden Age."''' | | '''Debate: it wasn't the "Gilded Age," it was the "Golden Age."''' |