Free coinage was one of the nifty features of economics
under the gold standard
and silver standard
systems. If you happened to have gold
lying around, you could take it to a local mint
and have the government coin
it for you for free. What happened under this system was that, because of bimetallism
(where currencies were pegged to both gold and silver), whenever gold became undervalued (such as in late 1600's Britain
), people would coin all the gold they could find, and melt their silver coins into bars to sell on the foreign market. On the other hand, when silver became undervalued (as in late 1700's America
), people would coin their silver and melt their gold coins for export.
Free coinage means constant prosperity, employment and higher wages and goverment of the people, and for the people, and not of Hanna, for the trusts, and by the plutocrats. - William Jennings Bryan
By the mid-1800's in America, there was so much gold flowing through the country that the government had stopped minting silver coins altogether, and unofficially adopted the gold standard. As other countries began adopting the gold standard, silver prices fell through the floor and gold-based currencies began to deflate
. Many early proletarian
movements like the Populist Party
began to demand a return to free coinage of both gold and silver: hence the WJB quote above.
However, new gold refining techniques in the two decades before World War I saved the gold standard, and free coinage disappeared in 1914.