Hard Money

The history of hard money is a long one. Those who have had the good fortune to inherit or accumulate wealth have always had a strong interest in seeing its value retained, not least that part of it which has been held in the form of cash or its equivalents. There has always, therefore, been strong pressure from the rich and powerful within all societies to keep inflation low, and the price level stable. There has also, however, been a correspondingly continuous tendency for those who are the world’s borrowers to see price inflation as a helpful way of reducing the real burden of their debts. Included among such borrowers have generally been found entrepreneurs, farmers, the young and the irresponsible, who have not always made up an easy coalition, as William Jennings Bryan (1860–1925) found out during the nineteenth century in the USA. The Frontier was in debt to the East Coast, whose bankers wanted repayment in gold rather than paper money — the Greenback. Bryan’s rhetoric, ‘You shall not press down upon the brow of labour this crown of thorns. You shall not crucify mankind upon a cross of gold’,1 has often subsequently been echoed, but it fell on deaf ears at the time, as frequently was to be the case in the future with similar exhortations. The United States adopted the Gold Standard rather than the softer Silver Standard favoured by Bryan’s supporters. Prices fell and debts became correspondingly harder to repay.