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The five-year period that followed the Panic caused cheap-money advocates, such as Democratic Party Representative Richard P. Bland from Missouri, and silver advocates to join together and urge a return to bimetallism. (This was the use of both silver and gold as a standard for US currency). Bland, along with Senator William B. Allison of Iowa, agreed to a proposal that allowed silver to be purchased at market rates, to be minted into silver dollars. This would require the US Treasury to purchase between $2 million to $4 million silver each month from western mines.
In 1873, under the previous administration of Ulysses Grant, the Coinage Act of 1873 stopped the coinage of silver for all coins worth a dollar or more. The idea had been to tie the dollar to the value of gold. As a result, the money supply contracted and the effects of the Panic of 1873 grew worse, making it more expensive for debtors to pay debts they had incurred when currency was less valuable. Farmers and laborers, among others, wanted the government to return of coinage in both metals. The theory was that the increased money supply would restore wages and property values.
The Bland–Allison Act passed both houses of Congress in 1878. But President Rutherford B. Hayes was opposed to this grand Bland plan. Hayes was worried that the Act would cause inflation that would be ruinous to business, effectively impairing contracts that were based on the gold dollar. He was also concerned that the bill would benefit special interests, and accordingly, Hayes vetoed the bill.
Hayes' veto was overturned by Congress on February 23, 1878. As a result, the Hayes administration purchased the fixed amount of silver each month. This act helped restore bimetallism with gold and silver both supporting the currency. However, gold remained heavily favored over silver, which paving way for the gold standard.
The price of gold was more stable than that of silver, largely due to silver discoveries in Nevada and other places in the West. By 1893 the price of silver to gold declined from 16-to-1 in 1873 to nearly 30-to-1. During the administration of Grover Cleveland the Bland-Allison Act was replaced by the Sherman Silver Purchase Act of 1890. The Sherman Silver Purchase Act was in turn was repealed by Congress in 1893.
Opponents who repealed the act advocated for the gold standard. The removal of the bi-metal standard, including the Bland-Allison Act and the acceptance of the gold standard led to monetary stability in the late 19th century.