Question

What was the intention of the 1890 Sherman Silver Purchase Act?

A. Gold would be used by the states, and silver would be used by the federal government
B. The Gold industry had gotten too powerful and needed to be cut back
C. All currency was going to be backed in silver instead of gold
D. Treasury had to mint silver each month, increasing supply of money for more people

Answer 1

D. The Sherman Silver Purchase Act required the U.S. Treasury to purchase a certain amount of silver each month and coin it into silver dollars. The goal was to increase the money supply and provide easier credit for farmers and other debtors. The act led to rapid inflation which contributed to the Panic of 1893.