fis200_week1_reading3 (1)

Needed fewer and fewer farmers and farmers were

Info icon This preview shows pages 14–16. Sign up to view the full content.

View Full Document Right Arrow Icon
needed fewer and fewer farmers, and farmers were forced by falling prices into industry. The Populist Party was officially formed in 1892, adopting “free coinage of silver” as a main part of its platform. The party was made up largely of farmers in debt to eastern banks and suffering from declining prices for agricultural products. In 1894, a bill per- mitting the coinage of silver then in the Treasury (the result of the silver purchase acts) passed House and Senate, but was vetoed by President Cleveland. (The bill would have constituted a devalua- tion.) The debate finally had to be settled in a presidential election, when silver advocates managed, in 1896, to get William Jennings Bryant nominated as the Democratic presidential candidate on a platform of free coinage of silver. The Republican candidate, McKinley, favored a monometallic gold standard. After Bryant’s nomination July 10, the flight from U.S. assets by both U.S. and GOLD: THE ONCE AND FUTURE MONEY 52
Image of page 14

Info iconThis preview has intentionally blurred sections. Sign up to view the full version.

View Full Document Right Arrow Icon
foreign investors intensified. Gold flowed out of reserves and interest rates rose on fears of devaluation. The crisis passed instantly after Bryant lost the election. The cit- izenry of the United States had voted to maintain the gold standard. Silver would continue to be used in India and China, but in the major Western countries it had finally been abandoned. After thou- sands of years of experimentation, the global citizenry had, at the end of a long debate, finally whittled its monetary options down to one and one only. No longer would the United States, or any other major world financial power, allow itself to be wracked by the vagaries of bimetallism or any other basket standard. The United States formally adopted a monometallic gold standard with the Gold Standard Act of 1900. The closure of the western frontier with the creation of the state of Arizona in 1912 was followed in 1913 by the Sixteenth Amendment, which legalized the federal income tax. There was nowhere left to run from the tax collector. However, this allowed the federal govern- ment to finally free itself from its dependence on tariff revenue, which had offered continuous temptation toward protectionism. Since 1861, protection of big business had become standard policy. The purpose of protectionism is to achieve what every big business desires, monopoly control and the suppression of competitors. In response, antimonopoly agitation arose in the latter decades of the nineteenth century. Democratic president Woodrow Wilson desired lower tariffs, but felt he had to make up for lost revenue by enacting an income tax, which began at 1 percent on personal or corporate income over $4,000 (about $70,000 today) and had a top rate of 7 percent on income over $500,000 ($8.750 million today). Though these rates may seem minuscule by today’s standards, they were, except for during the Civil War, the first income taxes the country had ever seen. Even with the tariff reduction, the economy went into recession in 1913–1915 until the flood of overseas demand for war materials and domestic war spending counteracted the contraction in 1916. Northeastern business interests attempted once more, in Money in America 53
Image of page 15
Image of page 16
This is the end of the preview. Sign up to access the rest of the document.

{[ snackBarMessage ]}

What students are saying

  • Left Quote Icon

    As a current student on this bumpy collegiate pathway, I stumbled upon Course Hero, where I can find study resources for nearly all my courses, get online help from tutors 24/7, and even share my old projects, papers, and lecture notes with other students.

    Student Picture

    Kiran Temple University Fox School of Business ‘17, Course Hero Intern

  • Left Quote Icon

    I cannot even describe how much Course Hero helped me this summer. It’s truly become something I can always rely on and help me. In the end, I was not only able to survive summer classes, but I was able to thrive thanks to Course Hero.

    Student Picture

    Dana University of Pennsylvania ‘17, Course Hero Intern

  • Left Quote Icon

    The ability to access any university’s resources through Course Hero proved invaluable in my case. I was behind on Tulane coursework and actually used UCLA’s materials to help me move forward and get everything together on time.

    Student Picture

    Jill Tulane University ‘16, Course Hero Intern