Sentiment against the Coinage Act of 1873 gained strength as the economy worsened following the Panic of 1873.
Democratic Representative Richard P. Bland of Missouri proposed a bill that would require the United States buy as much silver as miners could sell the government and strike it into coins, a system that would increase the money supply and aid debtors.
In short, silver miners would sell the government metal worth fifty to seventy cents and receive back a silver dollar.
The pro-silver idea cut across party lines, and William B. Allison, a Republican from Iowa, led the effort in the Senate.
Allison offered an amendment in the Senate requiring the purchase of two to four million dollars per month of silver, but not allowing private deposit of silver at the mints.
Thus the seignorage, or the difference between the face value of the coin and the worth of the metal contained within it, accrued to the government's credit, not private citizens.
The resulting Bland–Allison Act passed both houses of Congress in 1878.
Hayes feared that the act would cause inflation through the expansion of the money supply that would be ruinous to business.
Sherman's opinion was more complicated.
He knew that silver was gaining popularity, and opposing it might harm the party's candidates in the 1880 elections, but he also agreed with Hayes in wanting to avoid inflation.

Sherman pressured his friends in the Senate to defeat the bill, or to limit it to production of a larger silver dollar, which would actually be worth 1/16th its weight in gold.
These efforts were unsuccessful, but Allison's amendment made the bill less financially risky.
Sherman thought Hayes should sign the amended bill but did not press the matter, and the President vetoed it. "
In view of the strong public sentiment in favor of the free coinage of the silver dollar", he later wrote, "I thought it better to make no objections to the passage of the bill, but I did not care to antagonize the wishes of the President."
Congress overrode Hayes's veto and the bill became law.
The effects of the Bland–Allison Act were limited: the premium on gold over silver continued to grow, and financial conditions in the country continued to improve.
Sentiment against the Coinage Act of 1873 gained strength as the economy worsened following the Panic of 1873. Democratic Representative Richard P. Bland of Missouri proposed a bill that would require the United States buy as much silver as miners could sell the government and strike it into coins, a system that would increase the money supply and aid debtors. In short, silver miners would sell the government metal worth fifty to seventy cents and receive back a silver dollar. The pro-silver idea cut across party lines, and William B. Allison, a Republican from Iowa, led the effort in the Senate. Allison offered an amendment in the Senate requiring the purchase of two to four million dollars per month of silver, but not allowing private deposit of silver at the mints. Thus the seignorage, or the difference between the face value of the coin and the worth of the metal contained within it, accrued to the government's credit, not private citizens. The resulting Bland–Allison Act passed both houses of Congress in 1878. Hayes feared that the act would cause inflation through the expansion of the money supply that would be ruinous to business. Sherman's opinion was more complicated. He knew that silver was gaining popularity, and opposing it might harm the party's candidates in the 1880 elections, but he also agreed with Hayes in wanting to avoid inflation.
Sherman pressured his friends in the Senate to defeat the bill, or to limit it to production of a larger silver dollar, which would actually be worth 1/16th its weight in gold. These efforts were unsuccessful, but Allison's amendment made the bill less financially risky. Sherman thought Hayes should sign the amended bill but did not press the matter, and the President vetoed it. "In view of the strong public sentiment in favor of the free coinage of the silver dollar", he later wrote, "I thought it better to make no objections to the passage of the bill, but I did not care to antagonize the wishes of the President." Congress overrode Hayes's veto and the bill became law. The effects of the Bland–Allison Act were limited: the premium on gold over silver continued to grow, and financial conditions in the country continued to improve.
John Sherman