Bland-Allison Act of 1878

Definition

The Bland-Allison Act of 1878 was a U.S. federal law that mandated the government to purchase and coin silver, specifically aiming to increase the money supply and stabilize the economy during a period of deflation. This act was a response to the growing demands from silver miners and agrarian interests who believed that increasing the money supply through silver would alleviate economic hardships and enhance inflation, thereby supporting farmers and debtors. The act highlighted the ongoing controversies over the role of government in regulating the economy and addressing monetary policy.

5 Must Know Facts For Your Next Test

1. The Bland-Allison Act required the U.S. Treasury to purchase between $2 million and $4 million worth of silver each month and coin it into silver dollars.
2. Although the act was passed over President Hayes' veto, it did not fully satisfy proponents of bimetallism, as it allowed for only limited purchases of silver.
3. This act marked a significant victory for silver supporters, but ultimately led to further debates over monetary policy, including the eventual passage of the Sherman Silver Purchase Act in 1890.
4. The act contributed to a political divide between those who favored inflationary policies (mainly farmers and silver miners) and those who supported a strict gold standard (mainly bankers and industrialists).
5. The Bland-Allison Act is often seen as an early indicator of the growing conflict between agricultural interests and industrial capitalism in the United States.

Review Questions

• How did the Bland-Allison Act reflect the economic tensions between different social groups in the late 19th century?
  • The Bland-Allison Act reflected significant economic tensions between agrarian interests, particularly farmers, and industrial capitalists. Farmers supported inflationary measures to ease their debts, advocating for increased silver coinage to expand the money supply. On the other hand, bankers and industrialists preferred maintaining a gold standard to protect their financial interests. This conflict highlighted how differing economic priorities shaped political debates and policy decisions during this time.
• Evaluate the impact of the Bland-Allison Act on subsequent monetary policy discussions in the United States.
  • The passage of the Bland-Allison Act set a precedent for ongoing debates surrounding U.S. monetary policy, particularly regarding bimetallism versus a strict gold standard. While it allowed for some silver purchases, many advocates felt it fell short of what was needed to stimulate the economy. This led to further legislative efforts, like the Sherman Silver Purchase Act of 1890, and illustrated how governmental roles in economic regulation were increasingly contested as different groups sought to influence monetary policy.
• Analyze how the controversies surrounding the Bland-Allison Act illustrated broader themes in U.S. history regarding government intervention in the economy.
  • The controversies surrounding the Bland-Allison Act illustrate broader themes in U.S. history regarding government intervention in economic matters. The act emerged during a time of economic crisis and reflected conflicting views on how much influence the government should exert over monetary supply and stability. Supporters argued that increasing silver coinage would benefit struggling farmers by promoting inflation, while opponents warned against such measures, fearing they could destabilize the economy. This tension is emblematic of ongoing debates about balancing government involvement with free-market principles throughout American history.

Related terms

Silver Standard: A monetary system in which the value of currency is directly linked to a specific quantity of silver.

Gold Standard: A monetary system where a country's currency or paper money has a value directly linked to gold, limiting the amount of currency that can be printed.

Populist Movement: A political movement in the late 19th century that sought to represent the interests of farmers and laborers against the elite, advocating for policies like currency inflation through silver.