Question

In 1896, American politician William Jennings Bryan made a speech at the Democratic National Convention in which he stated “You shall not crucify mankind on a cross of gold.” He was arguing in favor of increasing the American money supply to help farmers, who were heavily in debt. Why would in-debted farmers be in favor of substantially increasing the money supply? Who would be hurt by his policy?

Answer 1

The in-debted farmers would be in favor of substantially increasing the level of money supply in the economy because increase in the level of money supply in the economy would reduce the rate of interest in the economy and reduction in the rate of interest benefits borrowers as they will have to pay back less money in the form of interest. Increase in monrey supply would also increase aggregate demand which will increase demand for farmers products also and increase their income and would help in paying back off debts easily. The persons who are debtors or those who have lent money are hurt with the fall in the rate of interest because they receive a lower level of interest for their invested money.