Can someone explain to me the issue of silver v. gold in late 19th c. America?

Hi,
I am having trouble understanding the poltics surrounding the gold and silver issue in the late 19th century. I am in school. Right now, I am learning about Chinese interest in silver during the Ming dynasty. THis continued into the Qing dynasty. The Trade Dollars, for instance, were important in consideration to U.S/Britain/China trade. Professors like to skip over the era of Presidential history between 1865 and 1901. But that's when a lot of debate stirred concerning gold and silver in consideration to a monetary standard. Why silver? Why gold? I know of W.J. Bryan's Cross of Gold speech. It seems that it came to a head in various dates, but 1921 was a highlight. Can anyone shed light on any of this? I don't know where to start. The 1870's seem to be a period of depression. Maybe deflation? Sorry. I'm so entrenched in Chinese history now, I've lost focus on U.S. history, concerning coinage.

 

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The real issue was between bankers, (who preferred tight money policy, therefor gold), versus borrowers, like farmers, (who preferred loose money policy, therefor silver). We were in a deflationary environment, so if you borrowed $100 at the time you borrowed it you may have to sell 50 bushel of corn to repay it, but a few years later it would take 70 bushels of corn to repay the same $100.

All of this stems from the background of the Comstock lode. The same thing that drove the mint to strike hundreds of millions of Morgans that are so popular today, was the same thing that drove the divide between tight money, gold standard bearers versus loose money, silver and gold standard people.

Hope that helps.

 

THANKS. That does help. I didn't know of the Comstock lode. Interesting how there was a decline, it seems, in silver output there in the 1870s. So, this is really complex. I have so many questions. I don't know where to start. There MUST have been quite a bit of silver, even without mine output (i.e., Spanish reales, etc...). So was this largely a political issue, to keep the bankers in control by pressuring Congress to pass Gold legislation? How did this impact the shift in political orientation within the Republican and Democratic parties? I see a shift in the late 19th c. that points to the Republican party being geared towards the wealthy. I know that it is generalization. Northern and Southern Democrats weren't exactly populist.

 

Silver producers, i.e. the Comstock lode, also pressed the government to mint silver coins. Hence, as medoraman said, many Morgans that sat in bank vaults until the 1970's and 80's and trade dollars used primarily for trade with China.

 

The Comstock lode unbalanced the ratio worldwide between silver and gold. It was the cause of the increased silver weight in our coins in 1873. The net result of this struggle between the two factions was the US being taken off the bimetallic standard and placed on a gold standard. In effect, the bankers won, and that was the fight Bryant was fighting against.

Numismatically, what evidence we have is the huge Morgan output trying to "use up" as much silver as possible, and the tiny mintages of the mid 1890's when they switched over to the gold standard, (and subsequent deflationary recession).

Its an interesting period, and I am sure others here better suited to discuss it in depth with you. Not my specialty, just pointing you in the right direction.

Chris

 

Yes, I know. It scares me! I am particularly interested in the period that historians, that I have confronted, refer to as the 'Forgotten President Years' (1865 - 1901). I have been studying the impact that money in China had on Eurasia. My hypothetical hypothesis is basically this: Silver was hard to counterfeit. China had woodblock printing as far back as the Sung dynasty, I think (maybe in the Tang). Paper money was so interesting and new then, but it was soon realized that something had to back it. Also, it was easily counterfeited. Silver was hard to find, the government, or prefectures, could control it, and it was identifiable as authentic more easily than the paper currency. Anyway, Ughh. I pick big theses. Is there a comprehensive history of silver? Not that I know of.

 

Thanks for the links!

 

I have the definitive economic hiistory of China, the one translated by a professor at Western Washington. Do you have that? I apologize I don't remember the name of it. Also Kahn covers silver in China during this period extremely well.

Silver in china during the late 1800 was "counterfeited" very well by local coinage authorities. You should read Kahn if you do not think silver can be "counterfeited" easily.

Also be careful, as China does not have a lust for silver like in the west. They never really had this beat into them that "only PM is money" like many here have. To the Chinese, jade or raw silk was just as desirable, or more so, than any PM. Btw, one of the main sources of silver in China used to be tariffs on the silk road trade overland, sources that dried up with the advent of sea traffic. That is why they switched to Mexican silver being the preferred coinage. However, internally, they usually melted these coins into taels for internal use.

Like I said, if this is your area you are interested in, start by reading Kahn. It will be illuminating.

 

You go to Hong Kong or Taiwan and look into the Jewelry shops, all you see is 24 k gold and jade. You ask for silver and you receive askance looks.

 

You might want to read The Crime of 1873: The Comstock Connection by Robert Van Ryzin. It's somewhat of a slow read because of all the footnotes and pictorial inserts that Van Ryzin uses, but it goes into great detail about the discovery of the Comstock Lode and how the politics of the day affected the silver trade in the latter half of the 19th century.

Chris

 

All I know the oldest notes still in existence today are Sung. Yuan and Ming notes are rare, but plentiful enough quite a few are in private hands. They used to be more affordable before the Chinese began buying back up their culture. I do not begrudge them that in the least, I just wish I bought one when I had a chance.

The commonness of notes from the Yuan and Ming is an indication why coins from those dynasties aren't as common as Sung. The Yuan really expanded the use of notes, ang the Ming continued this, and as a result not as many coins were needed for commerce.

Btw Doug, if you would consider it a "note", there is a cunieform tablet the size of a silver dollar promising payment from a money changer. Its in clay, (like all such pieces), but would you consider this a "note"?