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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