There was nothing new in this declaration of hostility to bank issues and interest-bearing bonds, nor in this demand for government paper money, for these prejudices and this predilection had given rise to the "Ohio idea," by force of which George H. Pendleton had hoped to achieve the presidency in 1868. These same notions had been the essence of the platforms of the Greenback party in the late seventies; and they had jostled government ownership of railroads for first place in pronunciamentos of labor and agricultural organizations and of third parties all during the eighties. Free silver, on the other hand, although not ignored in the earlier period, did not attain foremost rank among the demands of the dissatisfied classes until the last decade of the century and more particularly after the panic of 1893.
Prior to 1874 or 1875 the "silver question" did not exist. In 1873 Congress, moved by the report of a commission it had authorized, had demonetized silver; that is, it had provided that the gold dollar should be the standard of value, and omitted the standard silver dollar from the list of silver coins. ¹ In this consisted the "Crime of '73." At the time when this law was enacted it had not for many years been profitable to coin silver bullion into dollars because silver was undervalued at the established ratio of sixteen to one. In 1867 the International Monetary Conference of Paris had pronounced itself in favor of a single gold standard of currency, and the principal countries of Europe had preceded the United States in demonetizing silver or in limiting its coinage. In 1874 as a result of a revision of the statutes of the United States, the existing silver dollars were reduced to the basis of subsidiary coins with only limited legal tender value.
¹ The only reference to the dollar was to "the trade dollar" of heavier weight, for use in the Orient.
The Act of 1873 was before Congress for four sessions; every section, including that which made gold the sole standard of value, was discussed even by those who later claimed that the Act had been passed surreptitiously. Whatever opposition developed at this time was not directed against the omission of the silver dollar from the list of coins nor against the establishment of a single standard of value. The situation was quickly changed, however, by the rapid decline in the market price of silver. The bimetallists claimed that this decline was a result of the monetary changes; the advocates of the gold standard asserted that it was due to the great increase in the production of silver. Whatever the cause, the result was that, shortly after silver had been demonetized, its value in proportion to gold fell below that expressed by the ratio of sixteen to one. Under these circumstances the producers could have made a profit by taking their bullion to the mint and having it coined into dollars, if it had not been for the Act of 1873. It is not strange, therefore, that the people of those Western States whose prosperity depended largely on the silver mining industry demanded the remonetization of this metal. At the same time the stringency in the money market and the low prices following the panic of 1873 added weight to the arguments of those who favored an increase in the quantity of currency in circulation and who saw in the free and unlimited coinage of silver one means of accomplishing this end. So powerful was the demand, especially from the West, that in 1878 the Bland-Allison Act, passed over the veto of President Hayes, provided for the restoration of the silver dollar to the list of coins, with full legal tender quality, and required the Treasury to purchase in the open market from two to four million dollars' worth of bullion each month. This compromise, however, was unsatisfactory to those who desired the free coinage of silver, and it failed to please the champions of the single standard.