SOFT MONEY

SOFT MONEY has two unrelated meanings. In the nineteenth century "soft money" denoted a monetary policy opposite that of "hard money," which is based on specie. The term originated about 1876 when the Greenback Party was formed by debtor farmers and others from the Republican and Democratic ranks who sought to raise agricultural prices by means of an inflated currency. Greenbackers opposed the resumption of specie payments on the paper notes circulating since the Civil War and called for the free coinage of silver on a par with gold. Later, the Populists held similar views.

In the late twentieth century, "soft money" referred to a popular strategy offinancing political campaigns. To elude the campaign finance laws limiting the amount of direct cash contributions, wealthy individuals, corporations, and unions instead wrote their checks to political parties or advocacy groups. Hundreds of millions of dollars, all unregulated, were put to blatantly partisan purposes, most notably, advertisements attacking the opposing candidate. By the closing years of the millennium the practice was coming under greater scrutiny, and calls for reform were growing louder. The McCain-Feingold Act of 2002 attempted to address this problem.

BIBLIOGRAPHY

Magleby, David B., ed. Outside Money: Soft Money and Issue Advocacy in the 1998 Congressional Elections. Lanham, Md.: Rowman and Littlefield, 2000.

Timberlake, Richard H. Monetary Policy in the United States. Chicago: University of Chicago Press, 1993.

James D.Magee/a. r.

See alsoCampaign Financing and Resources ; Greenback Movement ; Hard Money .