The Cleveland Record
The nation confronted
numerous problems and conflicts during the second presidential
administration of Grover Cleveland (1893-1897). Shortly
after Cleveland assumed office in March 1893, the nation sank
into a deep economic depression, which lasted the duration of
his term. Much of the agricultural sector had been
suffering since the 1880s, but it experienced even lower crop
prices in the early 1890s. The newly dominant industrial
sector was hit severely, causing over 20% unemployment, along
with reduced production and consumption. By July 1893, the
stock market had lost 35% of its value from early in the year,
and during the entire year almost 30% of the railroad system
went bankrupt, 500 banks closed their doors, and 15,000
the president rejected direct economic relief as outside the
constitutional authority of the federal government, he did
attempt to counteract the depression through monetary policy.
As a staunch defender of the gold standard, Cleveland believed
that the Sherman Silver Purchase Act of 1890 was causing a
severe drain on the nation’s gold reserve. At his request,
a special session of Congress (1893) repealed the legislation.
But since the nation’s gold supply had already declined to what
gold standard supporters believed was a dangerously low level,
President Cleveland directed Treasury Secretary John Carlisle on
four occasions to sell U.S. bonds to New York bankers for gold.
The tactic provoked his political opponents to charge that the
Cleveland administration was hostage to wealthy financiers.
Cleveland also attacked the economic depression from the fiscal
side by attempting to reduce the nation’s high tariffs. In
1893, he worked with Congressman William Wilson of West
Virginia, a Democrat, to introduce into the U.S. House a bill
lowering tariff rates. After the House passed a slightly
revised version, Senator Arthur Pue Gorman of Maryland, a
Democrat, and other senators radically altered the legislation
into a high-tariff bill that only reduced the overall rate from
48% to 41%. The president denounced the betrayal of
genuine reform, but allowed the Wilson-Gorman Act to become law
in 1894 without his signature.
depression sparked social unrest, including riots in Chicago,
Cleveland, and Buffalo. In March 1894, Jacob Coxey, an
Ohio businessman, organized a march of 500 unemployed laborers,
known as Coxey’s Army, to Washington, D.C., to demand a federal
public works program. Coxey was arrested for trespassing
on the Capitol lawn, and his plan went unheeded. In June
1894, a strike began at the Pullman Palace Car Company in
reaction to reduced wages and higher prices at company stores.
The strike spread to other railroad companies, interrupted the
nation’s transportation system, and erupted into violence.
At the request of railroad executives, but against the wishes of
Governor John Atgeld of Illinois, President Cleveland secured an
injunction against the strikers and sent federal troops to
Illinois, thereby ensuring transit of the commerce and the U.S.
mails and breaking the strike.
In 1895, the
U.S. Supreme Court issued three controversial decisions
concerning the economy and labor-capital relations. It
nullified the recently passed income tax as unconstitutional;
ruled that the American Sugar Refining Company, which controlled
98% of sugar refineries in the United States, was not in
violation of the Sherman Antitrust Act; and refused to grant a
writ of habeas corpus to Eugene Debs, president of the American
Railway Union, who had been arrested for participating in the
Pullman Strike. The latter decision had the effect of
approving the use of court injunctions against strikers.
During his time in jail, Debs became a socialist and would later
be the five-time presidential nominee of the Socialist Party
(1900, 1904, 1908, 1912, and 1920).
played a more important role during Cleveland’s second
administration than the first (1885-1889). In early 1893,
American business interests, with the assistance of a contingent
of U. S. marines, overthrew Hawaiian Queen Liliuokalani and
requested that the United States annex the island chain.
The outgoing administration of Republican Benjamin Harrison
(1889-1893) had sent an annexation treaty to the U.S. Senate for
ratification, but upon taking office, President Cleveland
rescinded it. When a border dispute arose between
Venezuela and Great Britain, Cleveland’s secretary of state,
Richard Olney, invoked the Monroe Doctrine and pressured Britain
to the negotiating table. The onset of a Cuban revolt
against Spanish rule in 1895, prompted Cleveland to declare
The Money Question
Monetary policy had been preeminent
in American politics for decades, but the economic depression of
the early 1890s increased and bolstered advocates of expanding
the money supply. By that time, the preferred method of
inflationists was “free silver”—unlimited coinage of silver at a
ratio of 16 to 1 against gold coins. Its backers hoped to
raise prices and ease debt for struggling farmers, but
gold-standard supporters argued that inflation would hurt
consumers and undermine the economy further.
Free silver was a key plank of
the Populist Party, which won nine congressional seats in 1890
and collected over a million popular votes and 22 electoral
votes for its 1892 presidential nominee, James B. Weaver.
In the latter election, however, the Populists lost six of its
congressional seats and failed to break the Democratic hold on
the South. The economic depression boosted the number of
Populist votes in the 1894 elections to almost 1,500,000.
In retrospect, that was the peak of the party’s power, although
it continued to have influence, particularly in the Great Plains
and Mountain States of the West. Even Republican
politicians in those areas joined the free-silver bandwagon,
which put them at odds with the majority of their party.
The GOP, though, was united behind protective tariffs, which
party leaders promoted as the main issue of the 1896 campaign.
Free silver caused an enormous
rift in the Democratic Party. In early 1895, Congressman
Richard “Silver Dick” Bland of Missouri and William Jennings
Bryan of Nebraska, a former congressman (1891-1894), led the
revolt against President Cleveland, arguing that the chief
executive did not represent the party’s mainstream. Bryan
promoted a statement signed by 31 House Democrats urging
Democrats to become the party of free silver. In the
summer of 1895, Bryan was received enthusiastically on a
speaking tour in the Midwest and South during which he attacked
the “money power” in Washington and appealed for new party
leadership. In the summer of 1895, Silver Democrats formed
two committees with the goal of controlling the national party
organization. Bryan did not join either, but worked alone
to build a national movement of Democrats, Republicans, and
Populists for the silver cause. In response, President
Cleveland used patronage and persuasion in the increasingly
difficult task of keeping the Democratic Party committed to the