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The Idea of Money Always Changes
The reality is that we always seem to need more of it
In the late 19th century in the United States, farmers borrowed from banks to pay for land, buildings, tools, and seed, but the price they could get for their harvests didn’t keep pace with the price of gold, so they struggled to repay the banks. Since the gold standard alone didn’t serve many people’s needs, some suggested introducing a silver standard alongside it. There could be more money in circulation with less dependence on urban banks.
This proposal generated fierce political debate. As explained by Jack Weatherford in The History of Money:
“Populist senator William Jennings Bryan from the farm state of Nebraska, the perennial Democratic candidate for president during a consistently Republican era, campaigned tirelessly for bimetallism, the use of both silver and gold as a monetary standard.”
Bryan didn’t win national office, and the U.S. stuck with the gold standard. Dollars were promissory notes for gold, meaning they could be traded in for gold bars—at least theoretically, even if a bank wouldn’t have been thrilled with the request. Officially, the government owed a debt to the person who held the dollar bill.
