During the various financial panics of the late nineteenth century, numerous different interests brought pressure to bear on the federal government to back United States currency with silver as well as the traditional gold. If the government utilized silver as well as gold, the value of paper money would decrease, since the government could print so much more currency. The more money is in circulation, the less valuable it becomes. The less valuable an item is, usually the easier it is for consumers to acquire the item. This is referred to as the law of supply and demand. With money, more currency in circulation leads to higher inflation. Money becomes worth less, and thus, it becomes more difficult to purchase items. At the same time, employers usually pay their workers more or farmers acquire more money when they sell their crops, because currency is worth less. In theory, if pay did not increase at the same rate of inflation, it would be difficult for consumers to purchase new goods with free silver in place. However, farmers, workers, and other people in debt would have an easier time paying off debts made before free silver became the official policy of the government.
Farmers and other indebted people in the U.S. welcomed free silver so that they could pay off earlier debts. Throughout the late nineteenth century, these groups, including the Farmers' Alliances and eventually the Populist Party, lobbied the federal government to print currency backed with both gold and silver. Listening to the desires of these groups, President Benjamin Harrison signed into law the Sherman Silver Purchase Act in 1890. This law backed currency with both silver and gold. As the Panic of 1893 gripped the United States, President Grover Cleveland determined that the government must repeal the Sherman Silver Purchase Act. Cleveland's action angered many in the United States, possibly preventing him from winning the election of 1896. The issue of free silver remained at the forefront of political debates throughout the late 1800s and the early 1900s. Generally, the Democratic Party supported free silver, while the Republican Party endorsed only backing United States currency with gold.