Much of it was due to the gold standard. Fixing the money supply to a finite amount of gold meant the money supply was also finite. This resulted in periodic deflation: a burst of economic activity would result in a greater demand for money, and so the value of money would rise compared to the value of goods.

This was perfectly fine for people who had currency. Bankers like J.P. Morgan would be able to take advantage of the imbalance and use it to their advantage in investing. Established manufacturers were often shielded from international competition by tariffs, and might not suffer too greatly. But if they had debts to service, they would face a rise in what they owed: both the value of the loan and the value of the interest increased, compared to the value of what they produced.

The people probably affected the worst by this were farmers. They typically made their money once a year, when their harvests were in. They had little control over when they sold: a wheat crop couldn't simply be saved for later, it had to go to market. Unlike an investor in stocks, bonds, or other securities, farmers could not move from one asset to another, depending on how the market was running. They had to simply sit and wait for their crops to be ready for harvest, and sell it for what they could when the harvest was in . For 19th c. rural US, there would also be a lack of institutions providing credit: few banks to provide a loan for seed, equipment or fertilizer.

The result was a regional division. Republicans like William McKinley , bankers and the established business elite of the northeast liked the gold standard. Farmers and the more precarious agricultural businesses of the mid-west and west wanted Free Silver or Bimetallism, and found a spokesman in William Jennings Bryan, whose Cross of Gold speech was emblematic.

The question was also tied into that of tariffs: the farmers got little benefit from tariff protection, and when the value of money went up, they got less of the benefit of imported goods becoming cheaper. This was also a regional division earlier in the 19th c., when northeastern manufacturers wanted the protection of high tariffs, and southern cotton growers wanted to use their cotton exports to buy foreign goods. It would later be claimed by the south as a big reason for the Civil War, and that claim would become a part of the Lost Cause mythology. However, the tariff (unlike slavery and the gold standard) was always negotiable, rising and falling depending on which party was in power. If the South had only demanded low tariffs in exchange for not seceding, it likely would have been able to get a lot of reductions.

The gold standard is a very big subject in US economic history,. There was a pretty good earlier discussion of it here.