What is a gold bug?
October 29, 2004
What does a short story written in 1843 by Edgar Allen
Poe have to do with being a gold enthusiast?
In Poe’s story, called “The Gold Bug”,
the main character is a moody chap by the name of Legrand, who discovers
a rare “gold bug” (a beetle). After being bitten by
the gold bug, Legrand leads the narrator on a treasure hunt, which,
in the end, is fruitful, netting a large chest filled with gold
and precious jewels.
About fifty years later the United States was divided:
farmers and miners in the west wanted “free and unlimited
coinage of silver” while Republicans in the east wanted to
remain on a gold standard. In 1896 the US presidential election
hinged around whether the US would remain on a gold standard or
adopt a bimetallic monetary system. It turned out to be one of the
most controversial elections in US history.
The presidential candidates were William McKinley
and William Bryan. Democrat Bryan wanted the United States to use
silver to back the dollar at a value that would inflate the prices
farmers received for their crops, easing their debt burden. This
position was known as the Free Silver Movement. Facing a tough contest
(Democrats had the White House for the previous term and were blamed
for the depression of 1893), Bryan decided the best strategy for
a Democratic victory was to bring his message to the people by speaking
in person around the country. This was a new tactic, since presidential
candidates traditionally stayed home and let others speak on their
behalf.
Another political campaign tactic that made its debut
in this election was the campaign button that consisted of mounted
paper images protected by a thin coating of celluloid. McKinley
supporters took it a step further and sported brass pins depicting
a bug, and referred to themselves as “gold bugs”. The
Democrats followed suit, with silver bug pins. Whether the bug reference
had anything to do with Edgar Allen Poe’s gold bug I don’t
know, but I could find no other reference to a bug that had anything
to do with gold.
McKinley won the elections, defeating Jennings in
the greatest electoral sweep in twenty-five years, and put an end
to designs of a bimetallic dollar standard. He also, by the way,
led the US into its first international war with a European power
since the war of 1812 by aiding Cuba in its struggle to throw off
Spanish rule. To secure a position in the Pacific McKinley annexed
the Hawaiian Islands and after defeating Spain, the US gained control
over the Philippines, Puerto Rico and Guam. It was the beginning
of the American Empire.
About a year ago I caught a glimpse of a gold bug
crawling up a friend’s suit. The friend was Brien Lundin,
president and CEO of Jefferson Financial and editor of the Gold
Newsletter. Brien had exact replicas of the 1896 gold bug pins cast
in twenty-two carat gold.
The term “Gold Bug” is still used to refer
to supporters of the gold standard and investors who buy gold, which,
I guess, makes me a gold bug too. I was therefore amused when I
saw Brien’s gold bug and after I learned that he was making
only a few of them I decided to buy one. My wife hates it, but I
think it’s great. Here it is:
I don’t know how many Brien has left, or if
he’s going to make any more of them, but if you’re interested
in owning a “real” gold bug I suggest you give him a
call at (504) 837-3033 or (800) 648-8411.
Paul van Eeden
Paul van Eeden works primarily to find investments for his
own portfolio and shares his investment ideas with subscribers to his weekly
investment publication. For more information please visit his website (www.paulvaneeden.com)
or contact his publisher at (800) 528-0559 or (602) 252-4477.
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