Free silver

Free silver was a major policy issue in late 19th century American politics. Its advocates were in favor of an inflationary monetary policy using the "free coinage of silver" as opposed to the deflationary gold standard. Its supporters were "Silverites". 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). Because the actual value ratio was about 32 to 1 at the time, most economists warned that the cheaper silver would drive the more expensive gold out of circulation. Everyone agreed that free silver would raise prices; the question was whether or not this inflationary measure would be beneficial. The issue peaked from 1893 to 1896, when the economy was in a severe depression—called the Panic of 1893—characterized by falling prices (deflation), high unemployment in industrial areas, and severe distress for farmers.