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Samuel J. Tilden, Iron Money and the Election of 1876

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Public Choice Analyses of American Economic History

Part of the book series: Studies in Public Choice ((SIPC,volume 39))

Abstract

Tilden, a hard money Democrat, was castigated during the Presidential election of 1876 by Republican newspapers for his involvement with mining company scrip. The attacks were countered with testimonials as to the redemption of his company’s scrip, and had no impact on the election. Mining company scrip in fact served the interests of Michigan’s upper peninsula during a time that it was an isolated region, under-served by banks. Use of the scrip was ended by the assertion of the federal government’s prohibitory tax on privately-issued bank notes.

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Notes

  1. 1.

    ‘President Van Buren’s First Message,’ ‘The Divorce of Bank and State,’ ‘Currency, Prices and Wages’ and ‘Speech Against Imposing Constitutional Limits Upon the Issue of Bank Notes’ (Bigelow 1885, pp. 55–57, 78–87, 101–164, 221–31).

  2. 2.

    The state’s Free Banks were regulated specifically as to collateral, being required after the free banking act was amended in 1839 to back their bank notes with New York State bonds. The arrangement served the purpose of divorcing entry into banking from politics while securing the value of bank notes because New York State bonds were themselves secure in their value. The U.S. experience with Free Banks was not always so fortunate. For an anthology of experiences with Free Banks see Dowd (1992).

  3. 3.

    For an overview of free banking, see Dowd (1994). Other classics in this literature include Hayek (1976), Selgin (1988), and White (1992).

  4. 4.

    He also had a major interest in the Iron Cliffs Mining Co., and a minor interest in the Michigan Iron Co. During the election of 1876, a Republican newspaper said he was the principal owner of the Jackson Iron Mine Co. (Jackson [OH] Standard 1876), but this does not appear to have been the case.

  5. 5.

    Copper mining companies also issued scrip, “copper money;” for example, the Quincy Mining Company (Hyde 1978, p. 50).

  6. 6.

    Other companies, including the New York Iron Mine Co., also issued due bills at this time (Wheeling Daily Intelligencer, 1876).

  7. 7.

    A second blow to iron money was a ruling in a state court on June 22, 1874 concerning three persons charged with passing counterfeit iron money into circulation. Since iron money was a “bogus currency” to begin with, said Judge O’Grady, there could be no crime in its imitation (Jefferson City [MO] State Journal, 1876).

  8. 8.

    E.g., ‘Tilden’s Iron Currency,’ July 19; ‘A Swindler of Labor, ’August 23; ‘The Sham Reformer,’ October 3; ‘Tilden and the Iron Money,’ October 4; ‘The Tilden Iron Money Question,’ October 5; and, ‘Tilden’s Sharp Tricks,’ October 19.

  9. 9.

    Private bankers charged discounts of up to 5 to 10% (Paw Paw [MI] True Northerner 1876).

  10. 10.

    During which year, Gold Democrats mounted a third-party effort Beito and Beito (2000).

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Acknowledgements

The author thanks Christopher Bailey, Bruce Gouldey, Mike Holmes, Jeff Hummel, Gary Pecquet, Tom Sturrock and Mark Wilson for comments on earlier versions.

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Authors and Affiliations

  1. Shenandoah University, 1460 University Dr., Winchester, VA, 22601, USA

    Clifford F. Thies

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Correspondence to Clifford F. Thies .

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Editors and Affiliations

  1. Department of Economics, West Virginia University, Morgantown, WV, USA

    Joshua Hall

  2. Department of Economics, West Virginia University, Morgantown, WV, USA

    Marcus Witcher

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Thies, C.F. (2019). Samuel J. Tilden, Iron Money and the Election of 1876. In: Hall, J., Witcher, M. (eds) Public Choice Analyses of American Economic History. Studies in Public Choice, vol 39. Springer, Cham. https://doi.org/10.1007/978-3-030-11313-1_2

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