Money Supply and Deflation
Money supply is the amount of money in the national economy. Deflation is a drop in the prices on goods due to the reduced supply and the value of each dollar is greater. People who lent money are helped by deflation because they money they received is worth more than what they lent.
Bimetallic Standard Vs. Free Silver
Bimetallic standard is currency that consisted of gold or silver coins. To prevent inflation and stabilize the economy, congress put the currency on a gold standard. This reduced the amount of money in the money supply.
Free silver is the unlimited coining of silver dollars to increase money supply. The Greenback party who pushed for paper money joined the silverites.
This act required The federal government to purchase and coin more silver and cause inflation. Even though it was vetoed by the president congress overrode the presidents veto. The act had a limited effect because the treasury department only bought the minimal amount of silver. The treasury also refused to circulate the silver dollars the Law required it to mint.
Sherman Silver Purchase Act
The treasury bought the minimum amount of silver they could. The Sherman Silver Purchase Act increased the amount of silver the government was required to purchase every month. The governments gold grew less and less. The government nearly went bankrupt when foreign investors withdrew gold. The Act was later repealed.
The Grange, or the Patrons of husbandry, helped farmers form cooperatives. These cooperatives bought goods in large quantities for low prices. The Grange also pressured state legislative to create business that farmers depended on such as the operators of grain elevators that stored crops and railroads that shipped goods.
Many farmers joined a network of a Farmer's Alliance. The alliances launched harsh attacks on monopolies. In Texas, it called for actions that many of the farmers could support. Such as, federal regulations of the railroads, more money in circulation, creation of state departments of agriculture, antitrust laws, and farm credit.
Interstate Commerce Act
This regulate prices that railroads charged to move freight between states, requiring the rates to be set in proportion to the distance traveled. It also made it illegal to give different or special rates to some customers. This showed that the congress could regulate the railroads.