The old adage of knowledge is power applies to investing in gold and silver just as it applies to most things in life. Understanding the history of precious metals gives investors a better grasp on investing in these precious metals and why things are going the way they are currently in the gold and silver industry.

Way back in 1873 Congress enacted the Fourth Coinage Act. Many silver miners referred to this as the Crime of 73 as effectively it caused the government to stop minting silver dollars. At this point, the American government ceases to manufacture silver dollar coins. This is because the government made a shift from a bimetallic standard to gold which is a monometallic standard.

Silver supply increased as silver was not being used to make coins. Europe moved from a silver to a gold standard. This caused the value of silver to collapse to disastrous levels. At one time, farmers in America were caught in the debt trap and they became the most oppressed people in the land. They attempted all sorts of ways to be able to trade including cooperative trading in an attempt to become free of their debt to the various merchants. As they were unable to access money, none of these strategies were successful. The only solution was to use politics to achieve their objectives and they did this by forming a movement.

The movement expanded to become a group of self-taught people who had developed a sense of purpose. In time they developed courage and a sense of dignity. Furthermore, they held picnics and parties.

The movement was later named the Free Silver Movement and it originated with western miners wanting to have the right to use silver as legal tender. Southern cotton farmers and western grain farmers joined the movement as price deflation became the order of the day to over production of products. The debt situation had much to do with this decision as well.

The Free Silver element and the Populist Party merged and this resulted in the Democratic Party supporting a monometallic gold standard to the Free Silver stance. People who supported the Free Silver movement became known as Silverites. The Silverites were in favor of silver being included in the monetary system along with gold. They put forward that one ounce of gold should equal sixteen ounces of silver. This was as per the 16:1 ratio as required in the 1834 Coinage Act.

Silverites demanded that free coinage of silver should be made law under the 1792 Coinage Act. Effectively, this meant that people who had unused gold coin take it to the Mints in America and exchange the gold for the monetary equivalent in gold coins minus a small fee of course.

Silverites wanted the same to apply to silver as this would make more money available to people and it would help debtors to make good on their debt repayments. Savers and creditors would not be happy about this at all. Bankers, landlords and money lenders would oppose this suggestion vehemently as they wanted gold to be the monometallic standard.

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