John Fredrick Parker
Donor
If had vetoed the bill, would it have prevented or softened the Panic later that year? What about the Depression that followed?
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Right, so vetoing the bill, keeping the US on 'softer' money should slightly ease the panic.I think the general economic consensus (among monetarists, keynesians, etc) is that when you constrict the money supply during a recession, you make it worse; AIUI, that's what happened when the Panic of 1873 hit after this law.
IIRC the Panic of 1873 started in Austria-Hungary first, then spread to the rest of Europe and the United States. The US keeping the silver standard wouldn't really help things, since the demand for silver was falling internationally anyway after the Franco-Prussian War.That's actually a very good point, certainly about the inevitable crash of the post Civil War boom; the global depression is true, though AIUI it had it's origins in the US Panic. I think where this leaves it is, even at the most optimistic, Grant vetoing the bill would only delay and soften the economic crisis, and even then it may only soften it.
(Oh, and not to nitpick, but didn't the boll weevil not arrive in the US until 1892?)
a constrictive money supply wasn't really the problem facing the economy during that era anyway
Wikipedia said:The primary cause of the price depression in the United States was the tight monetary policy that the U.S. followed to get back to the gold standard after the Civil War. The U.S. was taking money out of circulation to achieve this goal, therefore, there was less available money to facilitate trade. Because of the monetary policy described above the price of silver started to fall causing considerable losses of asset values, however, by most accounts, after 1879 production was growing, thus further putting downward pressure on prices due to increased industrial productivity, trade and competition.