ABSTRACT
Following the election of 1896, the gold forces--bankers, business leaders, academicians and politicians--gathered at the Indianapolis Monetary Convention to capitalize on the defeat of free silver and to continue the sound money crusade. The convention was a festival of laissez-faire that called on McKinley and the Republicans to establish an exclusive gold standard and to “get the government out of the banking business” by retiring all government-backed currency and empowering banks to issue money. Without disputing the need for currency and banking reform, William McKinley diffused the polarizing money issue by focusing on the protective tariff as the means for restoring prosperity and by pursuing international bimetallism as a moderate alternative to free silver and gold monometalism. A rebounding economy, the collapse of international silver negotiations and the financial strength that the government exhibited during the Spanish-American War convinced McKinley and the Republicans to strengthen, rather than dismantle, the government's financial responsibilities. The Gold Standard Act of 1900 reinforced the treasury's responsibility to redeem all money in gold, enlarged the supply of bond-secured national bank notes and made it easier to establish national banks in rural areas. With the enactment of the Gold Standard Act, the Republicans emerged from the political turmoil of the 1890s strengthened by a party consensus that affirmed the National Banking System and that contrasted with the financial divisions that afflicted the Democrats.
