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The Free Silver Movement in America: A Reinterpretation

Published online by Cambridge University Press:  31 January 2005

MARSHALL GRAMM  and
PHIL GRAMM
MARSHALL GRAMM
Affiliation:
Assistant Professor, Department of Economics and Business Administration, Rhodes College, 2000 N. Parkway, Memphis, TN 38112. E-mail: [email protected].
PHIL GRAMM
Affiliation:
Vice Chairman of UBS Investment Bank.
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Abstract

Monetary historians have contended that Free Silver advocates were inflationists seeking debt reduction. We offer an alternative interpretation using a theory of money demand with differential returns on nominal units and a nonoptimum nominal money stock. Our explanation is more logically appealing and more consistent with contemporary evidence. The restrictive coinage laws of the period produced chronic shortages, and our empirical analysis provides clear evidence of these shortages. A shortage of coins valued at a half-day's wage and less, raised transactions costs, produced hardship and spawned protest.

Type
ARTICLES
Information
The Journal of Economic History , Volume 64 , Issue 4 , December 2004 , pp. 1108 - 1129
Copyright
© 2004 The Economic History Association

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