The election of 1896 was just as much a partisan battle over the future of American economic policy as the 2012 election. On this day in 1896, William Jennings Bryan delivered his rousing speech as a delegate to the Democratic convention declaring that mankind would not be “crucified on a cross of gold.” In the speech, Bryan, who was from the western farming state of Nebraska, advocated the inclusion of a silver standard for U.S. currency, which rallied the populist base of the Democratic Party and helped Bryan win the nomination for the presidency.

To take a step back in history, the source of the issue began with the Gold Rush in 1849, which altered the bi-metallism status quo. For decades, both gold and silver backed U.S. currency and both silver and gold specie could be turned into a Sub-Treasury Mint for dollars. The government valued silver at a ratio of 16:1 to gold in ounces. With the flood of gold to the market following the Gold Rush, people could sell their silver privately and to foreign markets at a lower ratio, thus making more money. However, when silver was discovered in Nevada in the 1860s, the ratio of silver to gold sold privately or abroad increased, but the government continued to offer the 16:1 ratio. In short, the government policy increased currency circulation, benefitting westerners, rural farmers, and the poor who could more easily pay off debts or make purchases. Meanwhile, Wall Street and banks in the East mobilized against the government’s policy because they would not receive as much profit on loans to farmers and the poor.

However, by 1873, the flood of silver into government coffers created an economic crisis. Congress responded by passing the Coinage Act of 1873, which effectively ended bi-metallism by eliminating the silver dollar and by making gold the only metallic standard (though the U.S. did not accept the Gold Standard de jure until 1900). Western miners and farmers termed it the “Crime of 1873.” Their “Free Silver” movement became a core constituency of the Democratic Party, represented by William Jennings Bryan.

A clear partisan divide in the elections of 1896 and 1900 centered on the bi-metallism debate. Republican candidate William McKinley blamed the Democrats and their platform of bi-metallism for the Panic of 1893, while Republicans and Eastern banking interests called the gold standard “sound money” policy.  One article of campaign propaganda is illustrative: McKinley’s campaign issued fake dollar bills that read “In God We Trust…for the Other 53 Cents” to argue that the dollar backed by silver would only be worth 47 cents. Another campaign poster linked the Republican Party’s gold coin as “sound money” policy to the beneficial aspects of the party’s protectionist policy compared to the detrimental impact of the Democratic Party’s free trade policy.

In the “Cross of Gold” speech, Bryan argued that the Democratic Party’s focus on bi-metallism in its platform was justified because a gold standard alone could not solve the country’s problems at the time, including debt, small business failure, and monopolies. According to Bryan, if silver was restored, “all other necessary reforms will be possible.” He compared the situation to fights over the national bank, arguing that “What we need is an Andrew Jackson to stand, as Jackson stood, against the encroachments of organized wealth.” In the speech, Bryan also connects the Democratic Party’s tradition since Thomas Jefferson and Andrew Jackson against moneyed interests in favor of the little guy. Bryan favored a regulatory role for government in issuing money and called for banks to “go out of the governing business.”

The excerpt from the “Cross of Gold” speech below resounds with populist rhetoric, though the speech itself took the wind out of the Populist Party’s sails, rallying supporters to the Democratic Party. The excerpt also links the issue to the Democratic Party’s position on international trade.

Mr. Carlisle said in 1878 that this was a struggle between "the idle holders of idle capital" and "the struggling masses, who produce the wealth and pay the taxes of the country";  and, my friends, the question we are to decide is: Upon which side will the Democratic party fight; upon the side of "the idle holders of idle capital" or upon the side of "the struggling masses"? That is the question which the party must answer first, and then it must be answered by each individual hereafter. The sympathies of the Democratic party, as shown by the platform, are on the side of the struggling masses who have ever been the foundation of the Democratic party. There are two ideas of government. There are those who believe that, if you will only legislate to make the well-to-do prosperous, their prosperity will leak through on those below. The Democratic idea, however, has been that if you legislate to make the masses prosperous, their prosperity will find its way up through every class which rests upon them.

No, my friends, that will never be the verdict of our people. Therefore, we care not upon what lines the battle is fought. If they say bimetallism is good, but that we cannot have it until other nations help us, we reply that, instead of having a gold standard because England has, we will restore bimetallism, and then let England have bimetallism because the United States has it. If they dare to come out in the open field and defend the gold standard as a good thing, we will fight them to the uttermost. Having behind us the producing masses of this nation and the world, supported by the commercial interests, the laboring interests and the toilers everywhere, we will answer their demand for a gold standard by saying to them: You shall not press down upon the brow of labor this crown of thorns, you shall not crucify mankind upon a cross of gold.

Bryan of course lost the 1896 and 1900 elections on this platform to McKinley, and he lost on the platform in the 1908 election to William Howard Taft. However, as one of the most liberal members of his party, he continued to influence and promote Progressive Era ideas and reforms that advocated a positive role of government in protecting the little guy. Fast forward a century and we can observe similar partisan alignments and divisions over the government's role in economic policy, with taxes, deficits and debt replacing bi-metallism as the “cross of gold” in this election.