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Unformatted text preview: allowing debts to be paid with inflated currency. Conservative groups and the financial classes, on the other hand, responded that the 16:1 price ratio was nearly twice the market price for silver. A policy of unlimited purchase would denude the U.S. Treasury of all its gold holdings, sharply devalue the dollar, and destroy the purchasing power of the working and middle classes. Only the gold standard, they said, offered stability. The financial panic of 1893 heightened the tension of this debate. Bank failures abounded in the South and Midwest; unemployment soared and crop prices fell badly. The crisis and President Grover Cleveland's defense of the gold standard sharply divided the Democratic Party. Democrats who were silver supporters went over to the Populists as the presidential elections of 1896 neared....
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- Fall '10