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What Future for the Reconstructed Us? The Gold Approach Reply in the Greenback Debate: Evidence from Hugh McCulloch’s and John Sherman’s Monetary and Tariff Policies

Valeonti Sofia, Université Paris I Panthéon-Sorbonne

After the establishment of an inconvertible monetary standard during the United States Civil War, a debate emerged during the Reconstruction period opposing the defenders of the maintenance of an inconvertible standard and those of a resumption of specie payments – which I call the gold approach. This paper focuses on the main advocators of this latter: Hugh McCulloch and John Sherman. It was during their respective secretaryship in the Treasury that the specie resumption policies were pursued. Nugent (1967) and Bensel (1990) have treated the gold approach as homogeneous in that the adoption of the gold standard along with free trade would have helped promoting specific economic interests (finance capital), a section (Northeast), a party (Republican) and an economic philosophy (utilitarian liberalism). However, the advocators of the gold approach differed in their trade policy propositions: Sherman endorsed a protectionist policy, while McCulloch advocated free trade. By both extending the existing literature and explaining the diverging trade policies, this paper shows that the coherence of the gold approach can be situated in their shared vision of economic development, i.e. integration of international markets.


Keywords: Gold Approach ; John Sherman ; Hugh McCulloch ; Greenbacks ; Free Trade; Protectionism

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