Background
From 1880 to 1896, the US price level fell by 23%. Most of the western United States farmers are debtors, their creditors, bankers east. Decline in the price level leads to the real value of the debt rises, so rich bankers, loss of farmers. At that time, the United States adopted the gold standard, the amount of gold determines the money supply, which determines the price level. Some politicians believe that should be allowed to freely cast silver, which would increase the money supply, causing prices to rise, which can reduce the debt burden of farmers.
The debate about the coin has become the focus of American politics in the 1890s. 1896 Democratic presidential candidate William Johnny Bryan is a well-known advocate of free silver. He said in a speech: "You shall not crucify mankind upon a cross of gold." However, he lost to Republican William McKinley in the election, the United States continue to implement the gold standard.
Policy Implications
sense of freedom casting, that can make the coin value and the value of the metal it contains is consistent. Because the high market value, such as coins, it will be shipped to the noble metal Mint, Mint cast required, increasing the number of coins in circulation; such as low, it will melt into gold bullion coins, to reduce the number of coins in circulation. With the dwindling circulation of precious metals coins or even completely out of circulation, this mechanism would not exist.