The Cross of Gold and the Wizard of Oz
from The History of Money

Populism had tremendous appeal in the southern states where poverty and resentment seemed the greatest. The people felt trapped between the republican bankers of the North and the new1y freed slaves, against whom they had to compete in the open labor market. Populist politicians found that they could do relatively little to control the bankers and the wealthy elite, but in the newly freed slaves they found a scapegoat for all their problems and complaints. In addition to their quest for a looser money supply, the Populists, particularly in the states of the former Confederacy, advocated a radically new system of racial segregation.

Even though they lost all national elections, the Populists managed to win control of all of the southern states and several western ones. By the 1890s the southern Populists had managed to remove all African-Americans and people of mixed racial ancestry, as well as all republicans, from political office by severely restricting the number of nonwhites who could vote. As they took the South, the Populists segregated schools, housing, public buildings, and all modes of public transportation. They prohibited racially mixed marriages, disinherited all mixed-race children from their white parent, and classified as a Negro anyone with as little as one-sixteenth African heritage. The institutions of legal segregation that they established lasted for well over half a century, from the 1890s until the passage of the federal Civil Rights Act of 1964, long after most people had forgotten precisely how the system originated.

Even though the Populist programs had a tremendous impact on the lives of African-Americans, they had comparatively little on the bankers or on the monetary system of the country, which became even more gold-oriented. During most the remainder of the nineteenth century, different political factions fought over whether the United States should have only the gold standard or both the gold and the silver standard. Farmers usually lived in debt to banks for the mortgages of their farms and sometimes for the equipment and even the seed for planting. They borrowed in gold notes and had to repay their debts in gold notes, but the price of gold increased over the course of the century as the price of their commodities dropped. At harvesttime they received less money for their produce; yet they had to pay the bankers in gold notes, which were ever more costly. They wanted more money put in circulation, and one way to do that was by the free coinage of silver. The Populist farmers of the West and the South wanted silver as well as gold currency. With more currency around, they believed they would be less at the mercy of bankers and politicians from the cities.

Populist senator William Jennings Bryan from the farm state of Nebraska, the perennial Democratic candidate for president during a consistently Republican era, campaigned tirelessly for bimetallism, the use of both silver and gold as a monetary standard. In his famous acceptance speech after receiving the presidential nomination at the 1896 Democratic convention, Bryan aimed carefully at the bankers, financiers, Republicans, and all other goldbugs: "You came to tell us that the great cities are in favor of the gold standard; we reply that the great cities rest upon our broad and fertile plains. Burn down your cities and leave our farms, and your cities will spring up again as if by magic; but destroy our farms and the grass will grow in the city." He concluded his speech with one of the most famous lines in nineteenth-century political oratory: "You shall not press down upon the brow of labor this crown of thorns. You shall not crucify mankind upon a cross of gold." Despite the thunderous applause of his fellow Democrats, he suffered a decisive defeat by the Republican nominee, William McKinley, in 1896 and again in 1900.

Although William Jennings Bryan continued to run for office, he never won a national election. Not until after the election of Woodrow Wilson, the first Democratic president since the Civil War, did Bryan receive a prominent office when he became the secretary of state in 1913. He resigned in 1915, though, when it became clear that Wilson was leading the United States toward involvement in the war in Europe, a move that the staunch isolationist Bryan opposed almost as vehemently as the gold standard.

The most memorable work of literature to come from the debate over gold and silver in the United States was The Wonderful Wizard of Oz, published in 1900, by journalist L. Frank Baum, who greatly distrusted the power of the city financiers and who supported a bimetallic dollar based on both gold and silver. Taking great literary license, he summarized and satirized the monetary debate and history of the era through a charming story about a naive but good Kansas farm girl named Dorothy, who represented the average rural American citizen. Baum seems to have based her character on the Populist orator Leslie Kelsey, nicknamed "the Kansas Tornado."

After the cyclone violently rips Dorothy and her dog out of Kansas and drops them in the East, Dorothy sets out on the gold road to fairyland, which Baum calls Oz, where the wicked witches and wizards of banking operate. Along the way she meets the Scarecrow, who represents the American farmer; the Tin Woodman, who represents the American factory worker; and the Cowardly Lion, who represents William Jennings Bryan. The party's march on Oz is a re-creation of the 1894 march of Coxey's Army, a group of unemployed men led by "General" Jacob S. Coxey to demand another public issue of $500 million greenbacks and more work for common people.

Marcus Hanna, the power behind the Republican Party and the McKinley administration, was the wizard controlling the mechanisms of finance in the Emerald City. He was the Wizard of the Gold Ounce--abbreviated, of course, to Wizard of Oz--and the Munchkins were the simpleminded people of the East who did not understand how the wizard and his fellow financiers pulled the levers and strings that controlled the money, the economy, and the government.

In the Emerald City ruled by the Wizard of Oz, the people were required to wear green-colored glasses attached by a gold buckle. Beyond the city, the Wicked Witch of the West had enslaved the yellow Winkies, a reference to the imperialist aims of the Republican administration, which had captured the Philippines from Spain and refused to grant them independence.

In the end, all the good American citizens had to do was expose the wizard and his witches for the frauds they were, and all would be well in the bimetal monetary world of silver and gold. In the process, the farmer Scarecrow found out how intelligent he was, the lion found his courage, and the working Tin Man received a new source of strength in a bimetallic tool--a golden ax with a blade of silver--and he would never rust again as long as he had his silver oil can encrusted with gold and jewels.

In the book, Dorothy's magic silver slippers got her back to Kansas, but in movie starring child actress Judy Garland, the magic slippers were ruby red, a more dramatic color on the screen than silver. By this time, however, few people realized that the book, which they now perceived as a children's story, had anything to do with U.S. monetary policy at the opening of the twentieth century. In the same year that Baum published his allegorical tale, Congress passed the Gold Standard Act of 1900, further committing the United States to a currency based on the single commodity of gold.

The Populists continued to press the United States to follow a policy of bimetallism using gold and silver, but they eventually lost that struggle. The discovery of vast new deposits of gold in South Africa, Alaska, and Colorado roughly doubled the world's supply, thereby easing the currency shortage. The Populists got their inflated money without having to switch to silver, and between 1897 and 1914 prices rose nearly 50 percent in the United States and about 26 percent in Britain. The United States and most of the rest of the world stayed on the gold standard, and yet there was more money for everyone.