The late 19th-century monetary policy of the United States revolved around a heated debate concerning the nation’s currency standard. A central point of contention was the maintenance of a fixed exchange rate between the dollar and gold, commonly referred to as the “gold standard.” This system, while favored by some, faced significant opposition from various sectors of American society, particularly farmers and laborers. The core of the dispute lay in the perception that this monetary system disproportionately benefited wealthy creditors and industrialists in the Northeast, while simultaneously harming the economic interests of those in the agricultural and working-class sectors of the country.
The system was believed to contribute to deflation, causing prices for agricultural goods to decline. Farmers, often heavily in debt, found it increasingly difficult to repay their loans as the value of their crops decreased. This situation fostered a sense of economic injustice and fueled the demand for monetary reform. Advocates of change argued that a more flexible currency system, one that allowed for inflation, would alleviate the debt burden on farmers and stimulate economic growth in rural areas. The belief was that increasing the money supply would drive up crop prices, making it easier for farmers to meet their financial obligations.
