Webisode 10. Segment 7
President Cleveland didn't believe it was his job to do anything about the unemployed. But he did feel he should keep America's money sound. It had always been backed by gold. If you wanted to turn your dollars in for gold, you could. Then in 1890, Congress passed a bill saying that the government had to buy millions of dollars' worth of silver each year. Now both gold and silver backed America's dollars.
This was good for farmers in the South and Westit lowered interest rates and made debt easier to settle. And it was good for western silver miners, too. But the financial and business communities didn't like it at all. They wanted to return to the gold standard. President Grover Cleveland spoke on their behalf. "The people are entitled to a sound and stable currency," he said. "Their government has no right to injure them by financial experiments."
That experiment was silver. Cleveland led the nation back to a strict gold standard. The Silver Purchase Act was repealed. But it didn't help a bit. The gold reserves kept going down. The nation was in danger of going bankrupt. In desperation, Cleveland went to the country's leading financier, J.P. Morgan, and asked for his help. Morgan, with other bankers, gave the government gold in return for government bonds. For a while, that helped stabilize the currency. But it was humiliating for the President of the United States to have to go to a private banker for help.
In 1894 and 1895, everyone in the nation seemed concerned about money. People argued a lot about what was needed to bring back prosperity. Silver versus gold became the big political issue of the 1890s.
A stockpile of gold or silver in the Treasury is important to maintaining a stable economy. But it isn't the only thing that determines a country's wealth. Its industry, resources, and people also have much to do with it. But you wouldn't have thought that in 1895. Gold and silver divided the nation. Then, into the fray marched a silver-tongued orator. He was young, handsome, and sincere. And he wanted to be president.
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