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By Root 342 0

Not long after the outbreak of the Civil War, the United States had replaced its bimetallic standard, under which gold and silver, or notes convertible into gold and silver, served as money, with a greenback standard, under which paper money not convertible into anything else was designated legal tender. The resulting wartime inflation produced a price level more than twice what it had been. When the war ended, there was a widespread desire to return to a commodity standard. But to do so at the prewar legal price of the precious metals, which meant at the prewar exchange rate between the dollar and the British pound, required the cutting of the price level by more than half. That took fourteen years. As chapter 3 explains, the Coinage Act of 1873 was passed to prepare for resumption, though its real function was to replace the pre-Civil War bimetallic standard with a monometallic gold standard. The Resumption Act of 1875 was the next major step. It specified that resumption of specie payments—that is, the full convertibility of paper money into gold, and conversely—should take place on January 1, 1879.

Resumption on the basis of gold did occur on schedule in 1879. Together with the roughly concurrent adoption of a gold standard by most European nations, the result produced worldwide deflation in the 1880s and 1890s. That deflation, particularly serious in the United States, was what energized the free-silver movement, which had arisen after the demonetization of silver, and ultimately led to Bryan's nomination in 1896 on a free-silver platform.

By making gold more valuable in terms of other goods, the price deflation also encouraged the invention of the cyanide process. And the successful application of the cyanide process in South Africa, in turn, doomed Bryan and the cause of free silver to defeat and political decline by producing a flood of gold that achieved the free-silver movement's primary objective—inflation—by other means.

Bryan's Nomination and Subsequent Political Career

The Democratic national convention of 1896 was held in Chicago, in tents erected in open fields at Sixty-third Street and Cottage Grove. The site was near the terminus of the recently constructed elevated railway, enabling delegates to reach the tent city rapidly from their Loop hotels. (The area later became highly developed and acquired an unsavory reputation. In the 1930s, when I was a student at the nearby University of Chicago, Sixty-third Street and Cottage Grove was known as "Sin Corner.")

This was the convention at which William Jennings Bryan, a delegate and a masterful orator, electrified the audience with his famous speech containing the passage "You shall not press down upon the brow of labor this crown of thorns, you shall not crucify mankind upon a cross of gold."

Bryan's previous activities on behalf of the free coinage of silver at a ratio of 16 ounces of silver to 1 ounce of gold had made him a leading contender for the presidential nomination on the Democratic ticket. Prior to the convention, the western and southern Silver Democrats had wrested control of the party machinery from the eastern Gold Democrats, with whom it had long resided. However, Bryan was only one of a number of Silver Democrats considered as possible candidates. His stirring speech—characterized by historian Richard Hofstadter (1966, 2:573) as "probably the most effective speech in the history of American party politics"—settled the matter and led to his nomination at age thirty-six as the presidential candidate of the Democratic party. He later was nominated also by the Populist and the National Silver parties.

After a bitter and hard-fought campaign, Bryan was defeated by his Republican opponent, William McKinley, who received 271 electoral votes to Bryan's 176. Though the electoral vote exaggerates the margin of victory, McKinley's victory was decisive. His popular vote majority was nearly 10 percent, a remarkable accomplishment under the circumstances. Eighteen ninety-six was itself a year of deep depression, following a number of years of hard