Free Silver vs. Gold Standard in the late 19th Century

[jimmy olsen]

The defining economic issue for a good three decades in the U.S., from the 1870s-1900s. What's your stand?

No crazy talk like chartering a Third Bank of the United States 

[Habbaku]

Sound money.  Just because farmers want to fuck everyone else over so they can get out of their loan agreements doesn't mean the rest of the country has to go along with it.

[Eddie Teach]

That German feller Marx has some interesting ideas. 

[Valmy]

Could somebody please explain to me why Gold is sound but Silver is not?  They both seem equally sound as a basis of currency.

[jimmy olsen]

Could somebody please explain to me why Gold is sound but Silver is not?  They both seem equally sound as a basis of currency.

Disclaimer - from wikipedia.

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. Essentially, anyone who possessed uncoined gold, such as successful prospectors, or those to whom they might have sold it, could bring it to one of the United States mints and trade it for its equivalent in gold coins, less a small deduction for seignorage. Free-silver advocates wanted the mints to accept silver on the same principle, so that anyone would be able to deposit silver bullion at a mint and in return receive nearly its weight in silver dollars and other currency.[3]

Through most of the years when silver dollars and smaller denominations were minted in actual silver, the melt value of the silver was substantially less than their face value. As a result, their monetary value was based on government fiat rather than on the commodity value of their contents, and this became especially true following the huge silver strikes in the West, which further depressed the silver price. From that time until the early 1960s the silver in United States dimes, quarters, halves, and silver dollars was worth only a fraction of their face values.[4]

Since I support a fiat money system, sounds good to me.

[Josquius]

Silver sounds like a thoroughly bad idea then.
Gold or silver, not both.

[Admiral Yi]

Could somebody please explain to me why Gold is sound but Silver is not?  They both seem equally sound as a basis of currency.

The way I understand it, including silver would have increased the money supply, which would have had the effect of lowering interest rates.  As Habbaku mentioned, the whole point of the debate was the farmers who were overextended on credit.

[Habbaku]

Gold or silver, not both.

  Bimetallism is insane.

[mongers]

Gold or silver, not both.

  Bimetallism is insane.

Pot calling the electric kettle non-functional.

[jimmy olsen]

Silver sounds like a thoroughly bad idea then.
Gold or silver, not both.

Elaborate

[lustindarkness]

Who is this Silver we are talking about? Why is he locked up? And why should we want to free him?

[Eddie Teach]

The Lone Ranger's horse.