Bland-Allison Act
Encyclopedia
The Bland–Allison Act was an 1878 act of Congress requiring the U.S. Treasury
to buy a certain amount of silver and put it into circulation
as silver dollars. Though the bill was vetoed by President
Rutherford B. Hayes
, the Congress
overrode
Hayes' veto on February 28, 1878 to enact the law.
caused cheap-money
advocates (led by U.S. Representative
Richard P. Bland
, a Democrat
of Missouri
), to join with silver-producing interests in urging a return to bimetallism
, the use of both silver and gold as a monetary standard.
The controversial Coinage Act of 1873 (also called the Fourth Coinage Act or Mint Act) embraced the gold standard
and de-monetized silver. Silver advocates, decrying the so-called "Crime of '73," demanded restoration of free coinage actually bought more than the $2 million minimum amount and never circulated the silver dollars. The law was replaced in 1890 by the similar Sherman Silver Purchase Act
, which in turn was repealed by Congress in 1893.
After the crisis of 1873, in 1877, Congressman Richard P. Bland and Senator William B. Allison proposed the Act of Bland-Allison, in which they wanted to return to silver coinage. This caused various reactions: some claimed that there should be a free silver
coinage, but conservatives wanted to tie monetary politics to the gold standard. Major banks and companies pressured the president, Rutherford B. Hayes, against the Act, and he vetoed it, but Congress overrode the veto.
This Act reintroduced the bimetallic monetary policy of the U.S., but it led to greater disruption in the economy. The price of gold was more stable than that of silver, largely due to silver discoveries in Nevada and other places in the West, and the price of silver to gold declined from 16-to-1 in 1873 to nearly 30-to-1 by 1893. The term limping bimetallism
describes this problem.
United States Department of the Treasury
The Department of the Treasury is an executive department and the treasury of the United States federal government. It was established by an Act of Congress in 1789 to manage government revenue...
to buy a certain amount of silver and put it into circulation
Circulation (currency)
The social system in which we live has usually developed to the stage for money to be used as the medium for the exchange of goods and services. Hence the money is an important aspect of the general social or macroeconomics system...
as silver dollars. Though the bill was vetoed by President
President of the United States
The President of the United States of America is the head of state and head of government of the United States. The president leads the executive branch of the federal government and is the commander-in-chief of the United States Armed Forces....
Rutherford B. Hayes
Rutherford B. Hayes
Rutherford Birchard Hayes was the 19th President of the United States . As president, he oversaw the end of Reconstruction and the United States' entry into the Second Industrial Revolution...
, the Congress
United States Congress
The United States Congress is the bicameral legislature of the federal government of the United States, consisting of the Senate and the House of Representatives. The Congress meets in the United States Capitol in Washington, D.C....
overrode
Veto override
A veto override is an action by legislators and decision-makers to override an act of veto by someone with such powers - thus forcing through a new decision. The power to override a veto varies greatly in tandem with the veto power itself. The U.S constitution gives a 2/3 majority Congress the...
Hayes' veto on February 28, 1878 to enact the law.
Background and Results
The five-year depression following the Panic of 1873Panic of 1873
The Panic of 1873 triggered a severe international economic depression in both Europe and the United States that lasted until 1879, and even longer in some countries. The depression was known as the Great Depression until the 1930s, but is now known as the Long Depression...
caused cheap-money
Free Silver
Free Silver was an important United States political policy issue in the late 19th century and early 20th century. Its advocates were in favor of an inflationary monetary policy using the "free coinage of silver" as opposed to the less inflationary Gold Standard; its supporters were called...
advocates (led by U.S. Representative
United States House of Representatives
The United States House of Representatives is one of the two Houses of the United States Congress, the bicameral legislature which also includes the Senate.The composition and powers of the House are established in Article One of the Constitution...
Richard P. Bland
Richard P. Bland
Richard Parks Bland , American school teacher, lawyer, and Democratic Congressman between 1873 and 1899, serving except from 1895 to 1897, when he returned to office....
, a Democrat
Democratic Party (United States)
The Democratic Party is one of two major contemporary political parties in the United States, along with the Republican Party. The party's socially liberal and progressive platform is largely considered center-left in the U.S. political spectrum. The party has the lengthiest record of continuous...
of Missouri
Missouri
Missouri is a US state located in the Midwestern United States, bordered by Iowa, Illinois, Kentucky, Tennessee, Arkansas, Oklahoma, Kansas and Nebraska. With a 2010 population of 5,988,927, Missouri is the 18th most populous state in the nation and the fifth most populous in the Midwest. It...
), to join with silver-producing interests in urging a return to bimetallism
Bimetallism
In economics, bimetallism is a monetary standard in which the value of the monetary unit is defined as equivalent both to a certain quantity of gold and to a certain quantity of silver; such a system establishes a fixed rate of exchange between the two metals...
, the use of both silver and gold as a monetary standard.
The controversial Coinage Act of 1873 (also called the Fourth Coinage Act or Mint Act) embraced the gold standard
Gold standard
The gold standard is a monetary system in which the standard economic unit of account is a fixed mass of gold. There are distinct kinds of gold standard...
and de-monetized silver. Silver advocates, decrying the so-called "Crime of '73," demanded restoration of free coinage actually bought more than the $2 million minimum amount and never circulated the silver dollars. The law was replaced in 1890 by the similar Sherman Silver Purchase Act
Sherman Silver Purchase Act
The Sherman Silver Purchase Act was enacted on July 14, 1890 as a United States federal law. It was named after its author, Senator John Sherman, an Ohio Republican, chairman of the Senate Finance Committee...
, which in turn was repealed by Congress in 1893.
After the crisis of 1873, in 1877, Congressman Richard P. Bland and Senator William B. Allison proposed the Act of Bland-Allison, in which they wanted to return to silver coinage. This caused various reactions: some claimed that there should be a free silver
Free Silver
Free Silver was an important United States political policy issue in the late 19th century and early 20th century. Its advocates were in favor of an inflationary monetary policy using the "free coinage of silver" as opposed to the less inflationary Gold Standard; its supporters were called...
coinage, but conservatives wanted to tie monetary politics to the gold standard. Major banks and companies pressured the president, Rutherford B. Hayes, against the Act, and he vetoed it, but Congress overrode the veto.
This Act reintroduced the bimetallic monetary policy of the U.S., but it led to greater disruption in the economy. The price of gold was more stable than that of silver, largely due to silver discoveries in Nevada and other places in the West, and the price of silver to gold declined from 16-to-1 in 1873 to nearly 30-to-1 by 1893. The term limping bimetallism
Limping bimetallism
Limping bimetallism was a monetary system in the United States that was partially dependent on silver but primarily dependent on gold. It was developed after the abandonment of bimetallism and the adoption of the gold standard in 1873. The Bland-Allison Act of 1878 allowed the coining of new silver...
describes this problem.