Wizard of Oz

The book The Wonderful Wizard of Oz, by L. Frank Baum, is one of the most famous of American children’s stories and the inspiration of a movie classic that is shown annually on television in the United States. What is often lost in the movie is that the book, published in 1900, incorporated allegorically an important monetary debate in the United States in the 1890s.
The book was written against the background of the free silver movement in the United States. From 1880 until 1896 the United States saw the average level of prices fall by 23 percent, a strong downdraft of deflation that worked a severe hardship on debtors, mostly farmers of the South and West. The bankers and financiers concentrated in the Northeast benefited from the deflation. One proposal for mitigating the hardship of deflation was to supplement the money supply, then tied to the gold standard, with silver, creating a bimetallic standard of gold and silver to replace the gold standard. Under a bimetallic standard both silver and gold could be minted and circulated as money. The infusion of silver would put an end to deflation by increasing the amount of money in circulation.
The political agitation for a bimetallic standard was called the free silver movement. Its most memorable spokesman, William Jennings Bryan, four times a presidential candidate, said in one of the epochal orations in American history: “You shall not press down upon the brow of labor this crown of thorns, you shall not crucify mankind upon a cross of gold.” The “cross of gold” referred to the gold standard.
In the Wonderful Wizard of Oz, the heroine Dorothy represents traditional American values—honesty, kindheartedness, and pluck. The cyclone, representing the free silver agitation, carries Dorothy to the land of “Oz,” as in ounce (oz) of gold, where the gold standard reigns unchallenged. When Dorothy’s house lands on the Wicked Witch of the East, the Witch dries up, leaving only her silver shoes, which become Dorothy’s. The silver shoes (which were changed to ruby in the movie version) possess a magical power, representing the magical advantages of adding silver to the money supply.
Dorothy cannot find out how to return to Kansas, but learns that she should follow the yellow brick road that leads to the Emerald City. The yellow brick road represents the gold standard and the Emerald City represents Washington, D.C. On her journey to the Emerald City Dorothy is joined by the Scarecrow, representing western farmers, the Tin Woodman, representing the industrial worker, and the Cowardly Lion, representing William Jennings Bryan. The joints of the Tin Woodman had become rusty because the depression of the 1890s had put the industrial workers out of work.
The Cowardly Lion goes to sleep in the poppy field that represents all the issues, such as anti-imperialism and antitrust, that threatened to distract Bryan away from the central issue of the free silver movement in the 1900 presidential election.
Dorothy’s group reaches the Emerald City, where everyone looks through green-colored glasses, as in money-colored glasses. Everyone in the city, including Dorothy’s group, must wear the glasses and they are locked on with a gold buckle, another reference to the gold standard. In other words, the financial establishment of the city required that everything be looked at from the perspective of money.
Dorothy and her friends reach the Emerald Palace, representing the White House, and Dorothy is led to her room through seven passages and up three flights of stairs, a reference to the Crime of ’73, an act of legislation passed in 1873 that eliminated the coinage of silver. The next day the group meets the Wizard, who was probably Marcus Alonzo Hanna, the chairman of the Republican Party and the brains behind President McKinley’s presidency. The Wizard sends the group to find and destroy the Wicked Witch of the West, which may have been President McKinley himself. Dorothy’s group finds the Wicked Witch of the West, who, knowing the magical power of the silver slippers, snatches one of Dorothy’s slippers in a trick. The separation of the silver slippers, destroying their magical power, refers to the efforts of the Republican Party to diffuse the silver issue by calling for an international conference on the subject. Dorothy angrily pours a bucket of water on the Wicked Witch of the West, destroying her, and getting back her slipper.
Dorothy with her friends returns to the Emerald City, expecting the Wizard to tell her how to return to Kansas. The Wizard turns out to be a fraud and Dorothy seeks out the Good Witch of the South. The South is ruled by a good witch because the South was sympathetic with the free silver movement. The Good Witch of the South tells Dorothy that she can return to Kansas if she clicks her silver slippers together three times, representing the magical power of silver to solve the problems of the western farmers, made possible by the support of the South.
Despite the agitation for free silver, the United States remained on the gold standard. Discoveries of gold in Alaska, Australia, and South Africa substantially increased the world supply of gold, ending the era of tight money. From 1896 until 1910 prices rose 35 percent in the United States, diffusing the social protest that found its expression in the Wonderful Wizard of Oz.

See also:

Littlefield, Henry M. 1964. The Wizard of Oz: Parable on Populism. American Quarterly, 16 (Spring): 47–58. 
Rockoff, Hugh. 1990. The Wizard of Oz as a Monetary Allegory. Journal of Political Economy, 98, no. 4: 739–760.