Question

What was the gold standard? Which groups of Americans supported it, and which groups opposed it?

Answer 1

The gold standard is a monetary system where a country's currency or paper money has a value directly linked to gold.The farmers opposed the gold standard because in order to live on their farms, they needed to take out a mortgage on them because they couldn't pay the entire fee by themselves. Thus, farmers were in debt, and a gold AND silver standard would help them by increasing the amount of currency in circulation. Inflation would help debtors because more currency would be produced, therefore the value of each currency would decrease and the value of their debts would similarly decrease, making it easier to pay off. The amount of debt would stay the same, but they would be getting higher wages because of inflation. The wealthy and eastern industrial workers supported a gold standard because inflation would not help them. The wealthy had savings accounts and such, and inflation would lessen the value of their savings. Similarly, the industrial workers might also have a small savings account, but would not have a mortgage on a farm like the westerners (they would live in tenement buildings), so inflation would not have a positive effect on them either.