Since the passage of the Bland–Allison Act in 1878, there had been little discussion of gold versus silver coinage.
Silver had been hardly mentioned in the 1888 campaign, and Harrison's exact position on the issue was initially unclear, but his appointment of a silverite Treasury Secretary, William Windom, encouraged the free silver supporters.
Silver supporters' numbers had grown in Congress with the addition of new Western states.
The drop in agricultural prices, which made farmers' debts harder to pay, broadened their cause's appeal.
Harrison attempted to steer a middle course between the two positions, advocating a free coinage of silver, but at its own value, not at a fixed ratio to gold.
This served only to disappoint both factions.
Windom suggested keeping the Bland–Allison system, but doubling the amount of silver allowed to be coined.
The intrinsic value of the silver dollar had fallen to 72.3 cents, but Windom believed (though gold supporters doubted) that coining more silver would increase demand and raise its value.
Harrison was willing to sign whatever bill would satisfy the largest group of people, as long as it did not make the currency unsound.

Both Houses of Congress were majority-Republican, but their solutions differed.
The House passed a bill in June 1890 requiring the government to purchase 4.5 million ounces of silver each month (in addition to the $2 – $4 million required to be coined under Bland–Allison).
The Senate passed a bill by Republican Preston B. Plumb of Kansas for free coinage of silver at the legal (16:1) ratio.
Sherman voted against Plumb's bill, but was appointed to the conference committee to produce a compromise bill that, now called the Sherman Silver Purchase Act, passed that July.
The Treasury would buy 4.5 million ounces of silver and would issue Treasury Notes to pay for it, which would be redeemable in gold or silver.
The law also provided that the Treasury could coin more silver dollars if the Secretary believed it necessary to redeem the new notes.
Sherman thought the bill was the least harmful option.
Harrison believed it would end the controversy, and he signed it into law.
The effect of the bill, however, was the increased depletion of the nation's gold supply.

In 1893, a financial panic struck the stock market, and the nation soon faced an acute economic depression.
The panic was worsened by the acute shortage of gold that resulted from the increased coinage of silver, and President Cleveland, who had replaced Harrison that March, called Congress into session and demanded repeal of the part of the Act requiring the government to purchase silver.
The effects of the panic had driven more moderates to support repeal; even so, the silverites rallied their following at a convention in Chicago, and the House debated for fifteen weeks before passing the repeal by a considerable margin.
In the Senate, the repeal of silver purchase was equally contentious, but Cleveland convinced enough Democrats to stand by him that they, along with eastern Republicans, formed a 48–37 majority.
Sherman voted for repeal of "his" bill.
After repeal, depletion of the Treasury's gold reserves continued, but at a lesser rate and subsequent bond issues replenished supplies of gold.
Academic debate continues over the efficacy of the bond issues, but the consensus is that the repeal of the Silver Purchase Act was, at worst, unharmful and, at best, useful in restoring the nation's financial health.
Since the passage of the Bland–Allison Act in 1878, there had been little discussion of gold versus silver coinage. Silver had been hardly mentioned in the 1888 campaign, and Harrison's exact position on the issue was initially unclear, but his appointment of a silverite Treasury Secretary, William Windom, encouraged the free silver supporters. Silver supporters' numbers had grown in Congress with the addition of new Western states. The drop in agricultural prices, which made farmers' debts harder to pay, broadened their cause's appeal. Harrison attempted to steer a middle course between the two positions, advocating a free coinage of silver, but at its own value, not at a fixed ratio to gold. This served only to disappoint both factions. Windom suggested keeping the Bland–Allison system, but doubling the amount of silver allowed to be coined. The intrinsic value of the silver dollar had fallen to 72.3 cents, but Windom believed (though gold supporters doubted) that coining more silver would increase demand and raise its value. Harrison was willing to sign whatever bill would satisfy the largest group of people, as long as it did not make the currency unsound.
Both Houses of Congress were majority-Republican, but their solutions differed. The House passed a bill in June 1890 requiring the government to purchase 4.5 million ounces of silver each month (in addition to the $2 – $4 million required to be coined under Bland–Allison). The Senate passed a bill by Republican Preston B. Plumb of Kansas for free coinage of silver at the legal (16:1) ratio. Sherman voted against Plumb's bill, but was appointed to the conference committee to produce a compromise bill that, now called the Sherman Silver Purchase Act, passed that July. The Treasury would buy 4.5 million ounces of silver and would issue Treasury Notes to pay for it, which would be redeemable in gold or silver. The law also provided that the Treasury could coin more silver dollars if the Secretary believed it necessary to redeem the new notes. Sherman thought the bill was the least harmful option. Harrison believed it would end the controversy, and he signed it into law. The effect of the bill, however, was the increased depletion of the nation's gold supply.
In 1893, a financial panic struck the stock market, and the nation soon faced an acute economic depression. The panic was worsened by the acute shortage of gold that resulted from the increased coinage of silver, and President Cleveland, who had replaced Harrison that March, called Congress into session and demanded repeal of the part of the Act requiring the government to purchase silver. The effects of the panic had driven more moderates to support repeal; even so, the silverites rallied their following at a convention in Chicago, and the House debated for fifteen weeks before passing the repeal by a considerable margin. In the Senate, the repeal of silver purchase was equally contentious, but Cleveland convinced enough Democrats to stand by him that they, along with eastern Republicans, formed a 48–37 majority. Sherman voted for repeal of "his" bill. After repeal, depletion of the Treasury's gold reserves continued, but at a lesser rate and subsequent bond issues replenished supplies of gold. Academic debate continues over the efficacy of the bond issues, but the consensus is that the repeal of the Silver Purchase Act was, at worst, unharmful and, at best, useful in restoring the nation's financial health.
John Sherman