The Bland-Allison Act of 1878 stands as a significant piece of legislation in the economic history of the United States. Passed during a time of heated debate over the country’s monetary standard, this law marked the federal government’s return to silver coinage after a five-year hiatus. The act attempted to strike a compromise between competing financial interests, especially those of silver miners and advocates of a gold standard. Though its economic effectiveness was limited, the Bland-Allison Act had lasting implications—politically, economically, and numismatically.

Background: The “Crime of ’73”

To understand the origins of the Bland-Allison Act, one must look back to the Coinage Act of 1873. This law eliminated the standard silver dollar from the list of authorized coins, effectively placing the United States on a de facto gold standard. At the time, silver’s market value had declined due to large new discoveries, particularly in the American West (e.g., the Comstock Lode in Nevada). Silver interests viewed the 1873 law as a betrayal—a move that reduced demand for silver and devalued its role in the economy.

This legislation became known in Western and populist circles as the “Crime of ’73”, especially among farmers, miners, and debtors who believed that demonetizing silver created deflationary pressures and hurt the common man. These groups wanted a return to “free silver”—a policy that would allow citizens to bring silver bullion to the U.S. Mint and have it coined into legal tender without restriction.

The Push for Remonetization of Silver

The agitation for the remonetization of silver led to intense lobbying by Western mining interests and pro-silver legislators. At the same time, the country was still recovering from the Panic of 1873, a severe financial crisis that had deepened distrust in banking and finance. A growing number of Americans believed that expanding the money supply through silver coinage would stimulate the economy and provide relief to debtors.

Enter Congressman Richard P. Bland of Missouri, a staunch advocate of silver coinage. He introduced a bill mandating the free and unlimited coinage of silver at a fixed ratio to gold—essentially reestablishing bimetallism.

However, opposition came from Eastern bankers, creditors, and supporters of the gold standard, who feared that overproduction of silver would lead to inflation and monetary instability. A compromise was needed, and that compromise came in the form of an amendment proposed by Senator William B. Allison of Iowa.

Provisions of the Bland-Allison Act

The resulting legislation, known as the Bland-Allison Act, passed Congress in February 1878, despite a veto from President Rutherford B. Hayes, which was overridden.

The main provisions of the act included:

• The U.S. Treasury was required to purchase between $2 million and $4 million worth of silver each month from the open market.

• This silver was to be coined into silver dollars, each containing 412.5 grains (approximately 26.73 grams) of silver, with a face value of one dollar.

• These silver dollars were to be legal tender for all debts, public and private.

Importantly, the act did not restore free coinage of silver. The silver purchased and coined was under the control of the Treasury, not the general public.

Economic and Political Impact

While the Bland-Allison Act marked a symbolic victory for silver supporters, its practical impact was more limited. The Treasury generally purchased the minimum required amount of silver, avoiding the inflation feared by gold standard advocates. As a result, silver coinage increased, but not dramatically enough to change the overall economic trajectory of the country.

Nevertheless, the law helped restore confidence among silver interests and marked a partial return to bimetallism. The newly coined Morgan Silver Dollar, first minted in 1878 as a direct result of the act, became an emblem of this policy shift.

Politically, the Bland-Allison Act deepened the divide between Western and Eastern economic interests and fueled ongoing battles over monetary policy that would continue into the 1890s, especially during the rise of the Populist movement and debates around the Sherman Silver Purchase Act of 1890 and the Election of 1896.

Legacy and Repeal

The Bland-Allison Act remained in effect until it was superseded by the Sherman Silver Purchase Act in 1890, which increased the amount of silver the government was required to buy. However, the Sherman Act too proved controversial and was eventually repealed in 1893, as confidence in U.S. financial markets wavered during another economic panic.

Despite its relatively modest effect on the economy, the Bland-Allison Act is historically significant for several reasons:

• It marked the resurgence of silver in U.S. coinage, directly resulting in the mass production of Morgan Silver Dollars.

• It reflected the growing regional tensions in U.S. economic policy.

• It showed the power of compromise legislation in a deeply divided political environment.

Conclusion

The Bland-Allison Act of 1878 was born out of economic hardship, regional conflict, and the growing pains of a nation struggling to define its monetary future. Though it failed to fully satisfy either side of the gold vs. silver debate, it played a crucial role in shaping U.S. monetary history and left a lasting numismatic legacy in the form of the Morgan Dollar.