When Bryan Set the Gold Standard for Convention Speeches

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“There are two ideas of government. There are those who believe that, if you will only legislate to make the well-to-do prosperous, their prosperity will leak through on those below. The Democratic idea, however, has been that if you legislate to make the masses prosperous, their prosperity will find its way up through every class which rests upon them.”

There couldn’t be a more concise presentation of the current partisan standoff in Congress and also of this year’s presidential race.

Yet those aren’t the words of a modern political analyst, but a passage from William Jennings Bryan’s address to the Democratic National Convention in Chicago on July 9, 1896 -- his famous “Cross of Gold” speech.

We may lament that nothing ever changes or deplore any hint of class warfare, but there is no doubt that familiar themes are resonating into a third century of U.S. politics.

Bryan represented Nebraska. In the years after Reconstruction, agricultural interests in the rapidly expanding West and in the war-torn South desperately needed cash to lubricate their economies. Then, as now, the financial establishment was leery of increasing liquidity for fear of inflation. Borrowers always favor soft money because it allows them to pay back loans with cash that is worth less than what they borrowed. Lenders always prefer hard money.

Silver Coinage

The fulcrum of debate in Bryan’s time was the gold standard and the free coinage of silver. The Coinage Act of 1792 authorized unlimited coinage of silver at a value of 15-to-1 against gold. But when the value of gold rose, people hoarded it, which had the effect of putting the economy on a silver standard. The ratio was changed officially in 1837 to 16-to-1. With an effective gold standard restored, silver coinage was ended in 1873, with a brief return from 1890 to 1893, setting the stage for Bryan’s fireworks.

In January 1896, physical gold reserves fell to dangerously low levels, causing a public outcry. Nevertheless, when the Republican National Convention met in St. Louis in June, it nominated William McKinley for president on a platform defending the gold standard and imposing high tariff protections. The following month, the Democrats met in Chicago. The clarion call was free coinage of silver at 16-to-1, but the convention was roiled by chaos. Bryan captivated the 20,000 fractious delegates as he laid out a compelling argument for fairness and equity.

“When you come before us and tell us that we are about to disturb your business interests, we reply that you have disturbed our business interests by course,” he said.

The famous speech continued:

“We say to you that you have made the definition of a business man too limited in its application. The man who is employed for wages is as much a business man as his employer; the attorney in a country town is as much a business man as the corporation counsel in a great metropolis; the merchant at the crossroads store is as much a business man as the merchant of New York; the farmer who goes forth in the morning and toils all day -- who begins in the spring and toils all summer -- and who by the application of brain and muscle to the natural resources of the country creates wealth, is as much a business man as the man who goes upon the Board of Trade and bets upon the price of grain; the miners who go down a thousand feet into the earth, or climb 2,000 feet upon the cliffs, and bring forth from their hiding-places the precious metals to be poured in the channels of trade, are as much business men as the few financial magnates who, in a back room, corner the money of the world.”

Bryan then went for the kill.

The hall sat in stunned silence, then exploded in euphoria. Bryan was nominated as the Democratic candidate for president. Later than month, a group of progressive Republicans bolted their party and endorsed him. Then a group of goldbug Democrats bolted their party, but didn’t endorse McKinley. Instead they nominated John Palmer, a former Illinois governor.

‘General Welfare’

Few would argue with Bryan’s original assessment, even if they disagree with his conclusions. The challenge, however, was to convince those who have much that they will actually be better off in the long run by parting with a little of it, while at the same time convincing those who have little that they bear the primary responsibility for improving their own situation. Striking that balance to “promote the general welfare,” as the Constitution puts it, eludes most elected officials today just as it ultimately eluded Bryan and his contemporaries.

One simple reason is the resentment at the core of the debate on both sides. Bryan’s speech is almost 3,500 words, and he spends most of it professing an admiration for opposing politicians and insisting he has no quarrel with the wealthy cities of the East Coast. But then he crosses into righteous indignation and confrontation:

“We have petitioned, and our petitions have been scorned; we have entreated, and our entreaties have been disregarded; we have begged, and they have mocked when our calamity came. We beg no longer; we entreat no more; we petition no more. We defy them.”

If the Great Orator cannot steer clear of high dudgeon, what chance does anyone else have?

Ironically, Bryan’s disdain for hard money extended to fundraising for the campaign. The McKinley camp spent an estimated $7 million -- and won -- compared with Bryan’s modest outlay of $300,000. The electoral count was overwhelming, but the popular vote was very close: 7,104,799 to 6,502,925. Whether Bryan could have prevailed if he had spent more money is an open question.

Even as the echoes of Bryan’s oratory reverberated across the Old Northwest Territory of the U.S., the last great gold rush in North America was starting in the not-so-old northwestern territories of Canada on the Klondike Creek. It took a year for the first steamers to arrive in San Francisco in July 1897, with gold from the Yukon. Annual production averaged $10 million, more than the cost of the U.S. election, and enough to take the edge off the gold debate for a time.

McKinley fostered the Gold Standard Act of 1900, making the gold dollar the unit of value for the country. That held until the depths of the Great Depression in 1933, when President Franklin D. Roosevelt suspended specie payments and coinage. At the time, gold was fixed at $35 an ounce. In 1971, in the face of soaring inflation, President Richard Nixon took the U.S. off the gold standard for good.

(Gregory Morris is a member of the editorial board of the Museum of American Finance, a Smithsonian affiliate, and a contributor to the Echoes blog. The opinions expressed are his own.)

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To contact the author of this story:
Gregory D L Morris at gdlm@enterpriseandindustry.com

To contact the editor responsible for this story:
Max Berley at mberley@bloomberg.net