By 1877, silver had fallen to the ratio of seventeen to one as compared with gold, and silver mine owners were anxious to have the government buy their bullion at the old rate existing before the "demonetization" of 1873. In this they were supported by the farmers and the debtor classes generally, who thought that the gold market was substantially controlled by a relatively few financiers and that the appreciation of the yellow metal meant lower prices for their commodities and the maintenance of high interest rates. Criticism was leveled particularly against the bondholders, who demanded the payment of interest and principal in gold, in spite of the fact that, at the time the bonds were issued, the government had not demonetized silver and could have paid in silver dollars containing 412-½ grains each. In addition to the holders of the national debt, there were the owners of industrial, state, and municipal bonds and railway and other securities who likewise sought payment in a metal that was appreciating in value.
In the Forty-fourth Congress, the silver party, led by Bland, of Missouri, attempted to force the passage of a law providing for the free and unlimited coinage of silver approximately at the ratio of sixteen to one, but their measure was amended on the motion of Allison, of Iowa, in the Senate, in such a manner as simply to authorize the Secretary of the Treasury to purchase not less than two million nor more than four million dollars' worth of silver each month to be coined into silver dollars. The measure thus amended was vetoed by Hayes, but was repassed over his protest and became a law in 1878, popularly known as the Bland-Allison Act. The opponents of contraction were able to secure the passage of another act in the same year forbidding the further retirement of legal tender notes and providing that the Treasury, instead of canceling such notes on receiving them, should reissue them and keep them in circulation.
None of the disasters prophesied by the gold advocates followed the enactment of the Bland-Allison bill, but no one was satisfied with it. The value of silver as compared with gold steadily declined, until the ratio was twenty-two to one in 1887. The silver party claimed that the trouble was not with silver, but that the appreciation of gold had been largely induced by the government's discriminating policy. The gold party pointed to the millions of silver dollars coined and unissued filling the mints and storage vaults to bursting, all for the benefit of the silver mine owners. The retort of the silver party was a law issuing silver certificates in denominations of one, two, and five dollars, in 1886. This was supplemented four years later by the Sherman silver purchase act of 1890 (repealed in 1893), which provided for the purchase of 4,500,000 ounces of silver monthly and the issue of notes on that basis redeemable in gold or silver at the discretion of the Treasury. Congress took occasion to declare also that it was the intention of the United States to maintain the two metals on a parity--a vague phrase which was widely used by both parties to conciliate all factions. Neither the Republicans nor the Democrats were as yet ready for a straight party fight on the silver issue.