The Power Of Money In The Gilded Age

The Federal Government used an effective strategy to make money more powerful and dominant when it was decided to limit the currency to gold. During this period in the Gilded Age, gold was restricted therefore its purchase would be harder than acquiring silver, greenbacks, or even paper money. Hampering to obtain gold would, consequently, drive up the purchase itself. The equation made by the Federal Government was simple: when the money in circulation is limited the power of its currency increases and when the money in circulation is unlimited the power of its currency decreases. In the first equation, the growth of money power is known as the hard money in contrast to the decrease of money power known as soft money. Many powerful people supported the hard money such as businessmen, bankers, and even investors since they believed that this was the key to industrialization. …show more content…
They strongly support the soft money equation where the currency is weakening by the unlimited money available. Farmers and debtors would find impractical the limitation of the currency. They would imply that the inflation due to soft money would offer an important debtor relief which means that people that were in debt would find easier ways to repay those they owe to. One of the major issues in this whole Federal Government “strategy” was a cycle where farmers had to repay principal and interest on their debts. At the end, they had to repay way more than they originally borrowed for their agriculture. This issue hit the farmers the hardest during the Gilded Age and powers such as businessmen, bankers, and investors took advantage of this