Coin's Financial School

Coin's Financial School was an 1894 pamphlet written by lawyer, politician and resort founder William Hope Harvey (1851–1936).

[1] It advocated a return to bimetallism, where the value of a monetary unit is defined as a certain amount of two different kinds of metals, often gold and silver.

In the book, Harvey charged that the demonetization of silver caused by the Coinage Act of 1873 led to the Panic of 1893 by halving the supply of available redemption money in the economy.

Harvey argued that by returning silver to the same monetary status as gold, the American economy would benefit from stabilized prices, resulting in higher revenue, and ease of repayment of debts.

Harvey would go on to aid Democratic candidate William Jennings Bryan’s presidential campaign in 1896, which ran on the platform of free coinage of silver.

Over six days, he summarizes the United States’ financial history from the passage of the Coinage Act in 1792 to 1894, when the pamphlet was published.

Coin introduces the audience to what he calls the "Crime of 1873", or the Fourth Coinage Act, which became controversial as the nation's debt and money supply went into doubt after the Civil War.

In between Coin's various lectures, he is interrupted with questions from the audience, which is filled with prominent real-life individuals such as Lyman Gage and Joseph Medill.

His school gradually gains more audience and media attention, most mocking him at first, but showing him more respect as they check the facts that Coin presents throughout his lectures.

Still suffering from the Panic of 1893, the nation's crime rate, government budget deficit and unemployment remained dangerously high.

Coin states that the Founding Fathers chose silver as the principal money because it was very commonly used among the working class as well as business owners.

By eliminating silver as a legal tender, the world reduced its redemption money supply by a little over half, Coin concluded.

This, combined with the halved supply of primary money from silver losing its free coinage, made new debt all the riskier.

The school continued to gain more attention and popularity as more newspapers began to cover the lessons, this time with more positive enthusiasm.

Coin replies that a greenback system, which would rely entirely on a limited supply of paper notes printed by U.S. Mint, could work as long as there is confidence in government credit.

While in wartime, people used greenbacks as a result of precious metal being used for the war effort, they avoided financial damage by storing their good money for use later.

In this case, it would help to have a currency backed by some kind of commodity more reliable, since the government's credit may not survive the war unscathed.

Coin replied that it would work similarly to a greenback system, based on government credit and confidence as well, using postage stamps as an example.

When another man asked Coin on whether abolishing tariffs drove down the prices as a result of increased foreign competition, Coin pointed out that since the rest of the world is experiencing the same financial difficulties, United States would gain nothing by charging extra tariffs on foreign goods.

Coin then went on to explain how silver depreciating in value in comparison to gold had deleterious effects on international trade as well.

As Coin has noted before, abolishing free coinage for silver had reduced the amount of the money supply in the world by half.

To further demonstrate what happened to the value of silver in comparison to gold, Coin cited a hypothetical situation where diamond became the sole legal tender of the United States.

Due to lessening demand and increasing supply of gold, its value would start to fluctuate along with silver in relation to the diamond.

Before a crowd of thousands gathering in the Art Institute, Coin began a fiery speech on the ills brought upon by the abandonment of bimetallism, and lamented the role England has had regarding America's switch to the gold standard.

That was despite the fact that England raked in major profits by forcing other nations to make transactions redeemable in gold only.

In making these points, Coin called for a trade war with England, with promises of the backing of fellow silver nations such as France, most of South America, India and Mexico.

Coin rallied the crowd to back a trade war with England, and lobby Congress for bimetallism for the good of the U.S. economy.

The pamphlet sold around a million copies since 1894, and was instrumental in aiding William Jennings Bryan's 1896 presidential campaign.

Willard Fisher, an economist, summed up the criticism for Coin with connecting the Fourth Coinage Act and the two panics that happened afterwards.

[9] Michigan Banker and editor Edward Wisner made similar comments in his own response, "Cash vs.