D) Cause prices for their crops to decline.
The concept of free silver is based on an economic policy that was propagated in the United States as an alternative to the established gold standards, where anyone with silver bullion could go the State mints and convert their bullion into coinage, which would be introduced into circulation on the payment of certain seigneurial charges.
Further Explanation:
In late nineteenth: century America, a new economic and monetary policy favoring an unlimited supply of Silver coinage into the money supply against the more restrictive and careful supply of money under the norms of the gold standard was being formulated. The increased amount of money circulation in the economy would cause inflation and the rise in prices. The value of silver coinage to gold was substantially lower than the value of gold coinage, which could cause the gold coins to go out of circulation. However, this economic move that was supposedly aimed at making the American economy buoyant, eventually backfired, affecting the agricultural producers and cattle farmers, by a sharp decline in the prices of agricultural products and high unemployment in the industrial areas. Several debates emerged between the supporters of this economic policy, who believed that an inflationary policy by introducing unlimited silver coinage into the economy would allow the indebted farmers to pay off their loans, and this would affect the growing prosperity of the creditors and bankers who advanced loans at an extra credit and impoverished the peasantry. However, international trade and economic exchanges followed gold standards, which was in a precarious state as the United States government was forced to buy silver bullion to meet the increased demand for silver coinage, which depleted its gold reserves. This severely affected the country’s exports, causing the policy to be repealed under Grover Cleveland.
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Answer Details:
Grade: High School
Subject: History
Chapter: The American Economy in the Early Nineteenth Century.
Keywords:
Unlimited supply of silver coinage, inflationary policy, bullion, Grover Cleveland.
