A 53 cent dollar? Or a 5 cent dollar?

What's a dollar worth?  53 cents?  Or a nickel?

The campaign manager for William McKinley flooded the country in literature in response to Bryan's crusade for "free coinage of silver."

According to AuthenticHistory.com,

[McKinley campaign manager Mark] Hanna ... engineered a masterful response to Bryan's Cross of Gold Speech. The Republicans combined the bimetallism issue with the tariff question and promised a return to prosperity, social order, and morality. They argued that inflation caused by free coinage of silver would create a "53-cent dollar" that would rob the workingman of his buying power. They also argued that uncontrollable inflation would put a burden on creditors, such as banks, whose loans' interest rates would then fall lower than the inflation rate and garner a loss for the creditor. Hanna also sent nearly 1500 speakers on the campaign trail to attack Bryan, most notably Theodore Roosevelt, who denounced Bryan as a dangerous radical. Hanna flooded the country with an estimated 250 million pieces of campaign literature (published in various languages) so that at times each American home was receiving pro-McKinley material on a weekly basis. The culmination of the campaign was a decree, issued by Hanna, that November 2 would be designated Flag Day for Republicans, who were expected to "assemble in the cities, villages, and hamlets nearest their homes and show their patriotism, devotion to country and the flag, and their intention to support the party which stands for protection, sound money, and good government." [New York Times, October 27, 1896, page 2]. The suggestion was that McKinley was only true choice for patriotic Americans.

Through a convoluted, slow motion, historical process, however, Bryan's monetary mania eventually would prevail.  After three unsuccessful bids for the presidency, this gifted orator -- and icon of the populist faction of the Democratic Party -- was appointed Secretary of State by President Wilson.   Bryan became instrumental in forming -- or deforming, depending on your perspective -- the Federal Reserve System. 

From “Historical Beginnings.  The Federal Reserve” by Roger T. Johnson, (published by The Federal Reserve Bank of Boston, revised 2010), pp. 22-23:



Buffeted by this conflict within his Administration, President Wilson sought a compromise that could please both Glass and Bryan and then win the support of Congress, yet a compromise that would genuinely resolve the banking and currency problem. To sharpen his own thinking, Wilson sought the advice of the man whose opinions on economic matters he respected above all others, the prominent attorney Louis D. Brandeis. Brandeis, a man of undeniable brilliance, sided with Bryan on two key points: first, he believed that bankers must be excluded from control of the new system; and second, he believed that the Federal Reserve currency must be made an obligation of the United States government. “The conflict between the policies of the Administration and the desires of the financiers and of big business, is an irreconcilable one,” Brandeis told Wilson. “Concessions to the big business interests must in the end prove futile.’’ After several conferences, Wilson met on June 17 with Glass, Secretary of the Treasury William G. McAdoo, and Senator Robert Owen of Oklahoma (chairman of the newly created Senate Banking and Currency Committee and a supporter of Bryan’s views), and he told them that he would insist upon exclusive government control of the Federal Reserve Board and would insist upon making Federal Reserve notes the obligation of the United States. The former was clearly a victory of substance for the Bryan group, while the latter point was merely a victory of form.




What Bryan and his followers really wanted was the retirement of national bank notes and their replacement by a supply of paper money issued on the initiative of public officials and backed up only by the government’s promise to pay. What Bryan really got, however, was just the addition of relatively meaningless language to the basic provisions of the Glass bill. The Glass bill provided that Federal Reserve notes would be issued by the regional reserve banks against their own commercial assets and a 331/3 percent gold reserve, and the change which placated Bryan and other progressives was the mere declaration that these notes were obligations of the federal government. This additional language did not change the essential character of Federal Reserve notes as asset currency. Glass had been initially disappointed with Wilson’s request for a public board to control the new system, but seeing that this was the absolute minimum that Bryan demanded, Glass had no real alternative but to accept it."

Since the formation of the Federal Reserve System the dollar's value has dropped, slowly, not by 43%, but by 95%.  Mark Hannah's prediction of a 53 cent dollar that "would rob the working man of his buying power" proved far too optimistic.  We today have a 5 cent dollar.