Bland–Allison Act

The Bland–Allison Act, also referred to as the Grand Bland Plan of 1878, was an act of the United States Congress requiring the U.S. Treasury to buy a certain amount of silver and put it into circulation as silver dollars. Though the bill was vetoed by President Rutherford B. Hayes, the Congress overrode Hayes's veto on February 28, 1878, to enact the law. The text of the act can be found in the Congressional Record under the further reading section of this article.

Background

The 5 1/2-year depression following the Panic of 1873 caused cheap-money advocates (led by Representative Richard P. Bland, a Democrat of Missouri), to join with silver-producing interests in urging a return to bimetallism, the use of both silver and gold as a standard. Coupled with Senator William B. Allison of Iowa, they agreed to a proposal that allowed silver to be purchased at market rates, metals to be minted into silver dollars, and required the US Treasury to purchase between $2 million to $4 million silver each month from western mines. President Rutherford B. Hayes, who held interests in industrials and banking, vetoed the measure, which was overturned by Congress. As a result, the Hayes administration purchased the limited amount of silver each month. This act helped restore bimetallism with gold and silver both supporting the currency. However, gold remained heavily favored over silver, paving way for the gold standard.

Free-silver movement

The free-silver movement of the late 19th century advocated the unlimited coinage of silver, which would have resulted in inflationary monetary policy.