Nevada's Mining Depression, 1880-1900
Nevada attempted to combat its depression after the Comstock boom ended by pushing for inflation of the money supply and federal irrigation programs.
Silver-Congress demonetized silver in the so-called "Crime of '73." Then in 1875, Congress passed the Resumption Act to resume taking greenbacks (paper money) out of circulation. Congress, and esp. the Republicans, sought to deflate the money supply. Just as a balloon is deflated by taking much of the air out, so too the nation's money supply can be "deflated" by taking silver and paper money out and leaving only gold. With deflation, prices fall as the gold dollar rises in value due to its scarcity. (Diamonds are valuable because they are scarce). In deflation, prices fall (so, farm prices and therefore farm income fall), as one gold dollar (like a diamond) can buy lots of potatoes and corn. Workers get cost of living decreases (wage cuts) in deflationary times. So, it's harder to pay back debts. Banks foreclosed on many farms in the 1880s and '90s when farmers could not make their mortgage payments.
But farmers (who are debtors) wanted inflation--inflate the balloon with more air--inflate the money supply by minting silver and printing greenbacks. In inflation, the govt. increases the amount of money per person. Prices=food prices=farm income rise as the dollars become so numerous that their value drops. So, it takes more dollars to buy a bushel of corn. Workers get cost of living increases. So, it is easier to pay back debts.
But the Republicans and Dem. Pres. Grover Cleveland pushed deflation. Nevada was hurt because the government stopped minting silver and miners lost their jobs. So, in the 1870s the Far West mining states allied with the Midwest farm states to push inflation. In 1878 Congress passed the Bland-Allison Act in which the federal government agreed to buy $2-4 million worth of silver each month, but Pres. Hayes, a Republican, ignored it. Later in 1890, Congress passed the Sherman Silver Purchase Act to force the govt. to buy 4 1/2 million ounces of silver each month. But when the Panic of 1893 hit, President Cleveland got it repealed. In Nevada, banker George Nixon formed Silver Clubs to push the unlimited coinage of silver. In 1896, even Republican Senator William Stewart supported the Populist-Silver-Democratic party ticket of William Jennings Bryan against Wm. McKinley.
Irrigation-Nevada also supported federal reclamation. Sen. Wm. Stewart chaired the Senate Irrigation Committee and got John Wesley Powell to come West. He prepared topographical maps of all Nevada river systems, but there was not enough water. Nevada and other western states could not build dams, because they lacked the money (little population and mine depression). Stewart also helped start the National Irrigation Congress, a lobby group, and got Francis Newlands to represent Nevada. Congress passed the Carey Act (1894) in which the federal govt. agreed to give one million acres to any western state that would irrigate it. But, with many silver mines closed, states like Nevada could not afford it. Unfortunately, Congress did nothing else until President Teddy Roosevelt signed the Newlands Act in 1902.