Sherman Silver Purchase Act

The Sherman Silver Purchase Act was a United States federal law enacted on July 14, 1890.

The measure did not authorize the free and unlimited coinage of silver that the Free Silver supporters wanted; however, it increased the amount of silver the government was required to purchase on a recurrent monthly basis to 4.5 million ounces. The Sherman Silver Purchase Act had been passed in response to the growing complaints of farmers' and miners' interests. Farmers had immense debts that could not be paid off due to deflation caused by overproduction, and they urged the government to pass the Sherman Silver Purchase Act in order to boost the economy and cause inflation, allowing them to pay their debts with cheaper dollars. Mining companies, meanwhile, had extracted vast quantities of silver from western mines; the resulting oversupply drove down the price of their product, often to below the point at which the silver could be profitably extracted. They hoped to enlist the government to increase the demand for silver.

Originally, the bill was simply known as the Silver Purchase Act of 1890. Only after the bill was signed into law, did it become the "Sherman Silver Purchase Act." Senator John Sherman, an Ohio Republican and chairman of the Senate Finance Committee was not the author of the bill, but once both houses of Congress had passed the Act and the Act had been sent to a Senate/House conference committee to iron out differences between the Senate and House versions of the Act, Senator John Sherman was instrumental in getting the conference committee to reach agreement on a final draft of the Act. Nonetheless, once agreement on the final version was reached in the conference committee, Sherman found that he disagreed with many sections of the act. So tepid was Sherman's support that when he was asked his opinion of the act by President Benjamin Harrison, Sherman ventured only that the bill was "safe" and would cause no harm if the President signed it.

The act was enacted in tandem with the McKinley Tariff of 1890. William McKinley, an Ohio Republican and chairman of the House Ways and Means Committee worked with John Sherman to create a package that could both pass the Senate and receive the President's approval.

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