On July 9, 1896, William Jennings Bryan delivered his “Cross of Gold” speech advocating bi-metallist inflationism at the 1896 Democratic National Convention in Chicago, Illinois, a triumph of rhetoric over reason that solidified the takeover of the Democratic Party by reformers utterly ignorant of basic economics.
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“Cross of gold”
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Bryan found an audience in no small part because the adoption of a gold standard — legally in 1873 and in fact in 1879 — shifted wealth from one significant share of the population to another.
Many people imagine the gold standard as if it prevailed from 1776 or from still earlier. But the dollar was originally a coin of a standard weight of silver, and dollar-denominated debt was thus to be ultimately payable in silver.
During the US Civil War, redemption of paper currency was suspended, and it remained so until 1879. In 1873, during that suspension, the Federal state passed legislation to effect a switch, redefining “dollar” to be a more dear weight of gold.
Upon resumption of redemption, creditors found themselves legally owing a debt of greater value than they would had their debts been payable in proper silver dollars.
Adoption of a gold standard was a major subversion of sound money, because it set a precedent for the US to rebase money at will.