gold standard

Examples of gold standard in the following topics:

• Silverties Versus Goldbugs

  • This put the U.S. on a mono-metallic gold standard.
  • The gold advocates said silver would permanently depress the economy, but that sound money produced by a gold standard would restore prosperity.
  • Bryan, the eloquent champion of the cause, gave the famous "Cross of Gold" speech at the National Democratic Convention on July 9, 1896 asserting that "The gold standard has slain tens of thousands. " However, his presidential campaign was ultimately unsuccessful; this can be partially attributed to the discovery of the cyanide process by which gold could be extracted from low grade ore.
  • The Silverites were members of a political movement in the United States in the late 1800s that advocated that silver should continue to be a monetary standard along with gold, as authorized under the Coinage Act of 1792.
  • They wanted to lower the gold standard of the United States to silver, which would have simultaneously allowed more money to be printed and made available to the public which would cause inflation.

• Banking and Finance Reform

  • One of Roosevelt's main goals was to address problems with the banking and financial sectors and the gold standard.
  • Another series of reforms removed the United States' monetary system from the Gold Standard.
  • Under the Gold Standard, dollars were convertible to gold at a fixed exchange rate.
  • In a series of laws and executive orders, the government suspended the gold standard.
  • This order was part of Roosevelt's suspension of the Gold Standard, part of his reform of the monetary system.

• Strengthening the Monetary System

  • Prior to the Great Depression, the gold standard was the foundation of the U.S. monetary system.
  • However, during World War I, many countries went off the gold standard to fund their war effort by printing paper money.
  • While some European countries aimed to return to the gold standard, others were not able to do it and backed their currencies with the currencies that were backed with gold (like the U.S. dollar).
  • Whether a country was on or off the gold standard, the connection of the most powerful national economies and currencies (most notably, U.S., Great Britain, and France) to the gold standard had impact on all. 
  • First, the government suspended the gold standard.

• The People's Party and the Election of 1896

  • Many Republicans in the western states, dismayed by the strong allegiance of eastern Republicans to the gold standard, considered forming their own party.
  • When the Republicans nominated former Ohio Governor William McKinley for president in June 1896 and passed at his request a platform strongly supporting the gold standard, a number of "Silver Republicans" walked out of the convention.
  • Gold Democrats looked to the President for leadership, but Cleveland, trusting few in his party, did not involve himself further in the gold efforts; he spent the week of the convention fishing off the New Jersey coast.
  • He decried the gold standard, concluding the speech, "you shall not crucify mankind upon a cross of gold. " Bryan's address helped catapult him to the Democratic Party's presidential nomination; it is considered one of the greatest political speeches in American history.
  • 1896 Democratic Convention where Bryan delivered his famous "Cross of Gold" speech.

• The Nixon Shock

  • The "Nixon Shock" ended the direct convertibility of the United States dollar to gold, otherwise known as the gold standard.
  • France, in particular, repeatedly made aggressive demands, and acquired $191 million in gold, further depleting the U.S. gold reserves.
  • Most importantly, Nixon "closed the gold window," ending convertibility between US dollars and gold on August 15, 1971.
  • The return to a gold standard is supported by some economists (most notably, adherents to the Austrian School) largely because they object to the role of the government in issuing fiat currency through central banks.
  • A number of gold standard advocates also call for a mandated end to fractional reserve banking.

• Inadequate Currency

  • Proponents of bimetalism argued that the gold standard left an inadequate supply of currency in circulation.
  • He decried the gold standard, concluding the speech, "you shall not crucify mankind upon a cross of gold".
  • For twenty years, Americans had been bitterly divided over the nation's monetary standard.
  • The gold standard, which the United States had effectively been on since 1873, limited the money supply but eased trade with other nations, such as the United Kingdom, whose currency was also based on gold.
  • The Coinage Act of 1873 eliminated the standard silver dollar.

• The Economy and the Silver Solution

  • Its advocates were in favor of an inflationary monetary policy using the "free coinage of silver" as opposed to the less inflationary Gold Standard.
  • The Silverites promoted Bimetallism, the use of both silver and gold as currency at the ratio of 16 to 1, 16 ounces of silver would be worth 1 ounce of gold.
  • In major elections, Free Silver was consistently defeated, and after 1896 the nation moved to the gold standard.
  • To understand exactly what is meant by "free coinage of silver", it is necessary to understand the way mints operated in the days of the gold standard.
  • That plan backfired, as people, mostly investors, turned in the new coin notes for gold dollars, thus depleting the government's gold reserves.

• Economic Conditions

  • This put the United States on a monometallic gold standard.
  • To understand exactly what is meant by "free coinage of silver," it is necessary to understand the way mints operated in the days of the gold standard.
  • Mints and trade it for its equivalent in gold coins.
  • They claimed that the gold standard was the only currency that offered stability.
  • Silverites, who did not realize that most transactions were handled by bank checks, not sacks of gold, believed the new prosperity was spurred by the discovery of gold in the Yukon.

• Nixon and the Economy

  • Due to both the excess printed dollars and the negative U.S. trade balance, other nations began demanding fulfillment of America's "promise to pay" – that is, the redemption of their dollars in exchange for gold.
  • Meanwhile, European countries began leaving the Bretton Woods international financial system, which had based the value of foreign currencies on the value of the gold-backed dollar.
  • He also suspended the gold standard, allowing the dollar to float against other currencies and ending the convertibility of the dollar into gold.
  • The "Nixon Shock" ended the direct convertibility of the United States dollar to gold, otherwise known as the gold standard.

• Scandals

  • Grant's standards in many of his cabinet appointments were low, leading to widespread charges of corruption.
  • The first scandal to taint the Grant administration in 1869 was Black Friday (also known as the "Gold Panic"), which was an attempt by two financiers to corner the price of gold without consideration for the nation's economic welfare.
  • On September 6, 1869, Gould bought the Tenth National Bank with the intention of using it as a buying house for gold, and Gould and Fisk began buying gold in earnest.
  • The gold market crashed, foiling Gould and Fisk, while ruining many investors financially.
  • The gold panic devastated the U.S. economy for months.