AP United States History
Mr. M. Pecot
Bailey, Chapter 28: The Revolt of the Debtor, 1889-1900
I. The State of Politics in 1888
a) Benjamin Harrison elected in 1888
b) The Billion-Dollar Congress -- The 51st Congress
1. Speaker Thomas B. Reed ("Czar" Reed)
§ master debater ("crack of the quip")
§ adopts reforms of rules to prevent minority filibusters and speed up legislative process
2. Spending the federal surplus
§ Pension Act of 1890 - offers pensions to all Union vets who served at least 90 days and are now unable to work
§ # of pensioners 1891-1895 goes up from 676,000 to 970,000; annual pensions up from $81 million to $135 million
§ secures GOP votes from the GAR
3. East-West wrangling: a silver purchase bill for the West in exchange for a high tariff for the East
§ Sherman Silver Purchase Act (1890) - Treasury silver purchases raised to 4.5 million oz. per month.
§ McKinley Tariff Bill (1890) - William McKinley = the "high priest of high protection"; raises tariff to an average of 48.4%; encourages domestic sugar by giving a bounty of 2¢/lbs.
c) Growing Discontent with Congress
1. Increase in tariff leads to increased prices; hurts Midwest and Southern farmers most
2. Election of 1890
§ Republican membership in Congress drops from 166 to 88 members; Democrats increase to 235.
§ 9 members of the Farmers' Alliance elected to the 52nd Congress
II. The Pitchfork People at the Door: The Populist Challenge of 1892
a) The Election of 1892
1. Democrats
§ hope to seize on anti-tariff sentiment to take back White House
§ nominate Grover Cleveland
2. Republicans
§ stick with Harrison and the high-tariff platform (are they daft, man?)
3. People's Party (Populists)
§ new political coalition of farmers from west and south
§ nominate General James B. Weaver
b) The Populist Party
1. Platform
§ free silver @ 16:1; graduated income tax; gov't ownership of telephone, telegraph, and railroad companies; subtreasury system; popular election of senators; term limit for president; restrict immigration; 8-hour day; secret ballot
2. Labor unrest in 1892 raises possibility of an farmer-worker alliance against the capitalist order
§ Homestead Strike, July 1892 - Andrew Carnegie's Homestead Steel plant in Pittsburgh; 300 Pinkerton agents sent in to crush strike by steelworkers angry over pay cuts; armed clash results in 10 killed and 60 wounded; troops called in.
3. First Third Party to seriously contend in Presidential politics
§ 1,029,847 popular votes and 22 electoral votes (all electoral votes from 6 midwest/western states:
§ fail to draw urban, eastern votes
4. Southern blacks disfranchised by Democratic "Bourbons" afraid of a poor black & poor white alliance in the south
§ over one million black farmers are members of the Colored Farmers' National Alliance, threaten to unite with whites at the polls
§ conservative white elite plays on racial antagonisms to prevent this bloc from forming
§ fear of the black vote leads to annihilation of black suffrage in the south -- literacy tests; poll taxes; grandfather clauses; Jim Crow laws and renewed intimidation.
c) Results of the 1892 election
1. Grover Cleveland elected -- only president to every serve two nonconsecutive terms
§ same old Cleveland but a very different nation: debtors up in arms and the shadows of panic on the horizon
III. The Cleveland Presidency
a) The Panic of 1893
1. The most devastating economic downturn of the century
§ The first large-scale depression in the new industrial economy
§ 8,000 business collapse in six months
§ devastates urban classes; gangs of unemployed aided by local charities, but efforts are feeble
2. Causes
§ overbuilding and overspeculation
§ ongoing agricultural depression
§ questions about American credit brought on by free silver agitation
§ European banks begin to call in loans from the United States
b) Threats to the Gold Standard
1. Depletion of gold in treasury brings about repeal of the Sherman Silver Purchase Act by Cleveland in 1893
§ Under SSPA, Treasury must buy silver in exchange for notes redeemable in either silver or gold
§ owners of currency cash it in for gold, the notes are reissued, and keep getting cashed in for gold…drains reserves of gold.
§ by 1893, gold reserves had dropped to $100 million, below the "safe" minimum
§ during debates, William Jennings Bryan, a 33-year old Democratic congressman from NE makes a name for himself through his eloquent, but uneffective defense of "free silver"
2. Depletion of gold reserves continues
§ as more and more outstanding currency is cashed in for gold, reserves drop to $41 million
§ Cleveland floats bonds to correct the problem by infusing the treasury with gold, but depletion continues to threaten the gold standard.
§ 1895 - Government eventually bailed out by a loan of $65 million dollars in gold financed by JP Morgan…raises suspicions of Wall Street control of the government.
c) Labor unrest during the Panic of 1893
1. Coxey's Army - 1894
§ "General" Jacob S. Coxey - Ohio businessman leads a march to Washington
§ starts with 100 men in Massillon, Ohio; hopes to amass an "army" of 100,000 by the time he arrives in Washington. Winds up with 500.
§ demands government relief of unemployment through a public works programs, funded by the release of $500 million dollars in paper money.
§ the marchers are disbanded by police in Washington, but other "armies" form throughout 1894, the largest on the West Coast.
2. Pullman Strike - 1894
§ Eugene V. Debs - president of the American Railway Union (ARU)
§ organizes ARU (150,000 members) in a strike against the Pullman Palace Car Company, which had fired 1/3 of its workers, cut wages by nearly ⅓ , but retained the same rent on company houses and prices on food in its company town of Pullman, IL, just outside of Chicago
§ ARU workers refuse to service any line carrying Pullman Cars.
§ Attorney General Olney pleads to Grover Cleveland for assistance. Cleveland sides with Olney and the Pullman Company, orders a federal injunction against the strike on the grounds that it is interrupting US mail service
§ Debs refuses to stop the strike, and is arrested. Six-months later he is released from jail a socialist, and will later go on to lead the Socialist Party in America, running for president several times in the 1920s.
IV. Tariff and Tax Policy under Cleveland (more excitement to come…)
a) Wilson-Gorman Bill
1. McKinley Tariff (a high protection, low surplus bill) had left the nations with a $61 million dollar deficit in 1894
2. Democrats sought to make good on campaign promises by enacting a "moderate protection, adequate revenue" tariff
3. Wilson-Gorman Bill is drafted
§ contains a 2% income tax on incomes over $4000 - decried by many as socialistic and communistic
§ the bill is amended in the Senate at the behest of numerous industrial lobbyists -- 630 amendments added
§ Cleveland reluctantly signs the bill, although it hardly achieves a "low tariff"
4. Found unconstitutional by the Supreme Court in 1895 -- income tax violates the prohibition of direct taxation by the federal government on citizens (16th Amendment in 1913 will open door to a federal income tax)
V. Money Issues Dominate National Politics
a) Free Silver
1. Debtors turning to free-silver as a panacea throughout the 1890s
2. Coin's Financial School (1894) -- William Hope Harvey
§ illustrated pamphlet extolling the economic virtues of bimetallism. Capitalizing on rural distrust of the urban East and of British monetary power, Harvey denounced attempts to restrict bimetallism as a conspiracy against farmers and debtors.
§ The appeal of the book lay in its simple, accessible style and its graphic cartoons. The eponymous hero, youthful and uncorrupted, lectured financiers and politicians, many of them real-life figures, on the errors of their ways. The depression, he argued, was caused by reliance on gold monometallism, which restricted the money supply and lowered prices. Free and unlimited coinage of silver was the only solution
§ Sold over a million copies.
b) William McKinely and the Republicans
1. W. McKinley - leading candidate for GOP nomination in 1896
§ military record
§ years of service in Congress
§ a resident of Ohio = key electoral votes
§ "Advance Agent of Prosperity"; the "Napoleon of Protection"
2. Marcus Alonzo Hanna -- the man behind McKinley
§ Cleveland businessman and a dedicated Hamiltonian (function of government to aid business)
§ funds McKinley's campaign
3. Campaign platform endorses the Gold Standard
c) William Jennings Bryan and the Democrats
1. Democratic Party drops Grover Cleveland like a bad habit.
§ Nominating convention refuses to endorse the current administration
§ become a party without a leader
2. WJB takes the stage, delivers a stunning oratory -- "The Cross of Gold" speech -- against the gold standard
§ "Boy Orator of the Platte" -- honest, sincere: a "great voice rather than a great brain"
§ Nominated on 5th ballot
3. Democratic Platform endorses "free coinage of silver at 16:1"
§ the market value of silver in 1896 was about 32:1, thereby making the silver in a dollar worth about 50¢
d) The Populists
1. Democrats steal their major issue, therefore Populist Convention nominates WJB as well
VI. The Election of 1896
a) Bryan on the campaign trail -- a crusade for free silver
1. WJB's stump tour
§ 18,000 miles; 27 states; 500-600 speeches
2. Strikes fear into eastern conservatives
§ threatens to convert their holdings into 50¢ dollars overnight
b) Hanna leads the "Gold Bugs" against "silver lunacy"
1. Fear of WJB pushes business, banking, and campaign contributions into McKinley's camp
§ GOP raises $16 million v. Dems $1 mill (16:1!)
2. The McKinley Campaign
§ McKinley runs a "front porch campaign" from his home in Canton, Ohio.
§ Employs "spellbinders" to deliver passionate speeches decrying free silver schemes
§ Tens of millions of pamphlets, leaflets, and posters disseminated -- often in native languages of immigrant groups
§ Focus on Cleveland's "Democratic Panic" and promised "McKinley and the Full Dinner Pail"
3. Business & industry rallies behind McK
§ Some employers told workers not to come in if WJB won, or threatened to pay workers in 50¢ pieces instead of dollars if WJB won.
c) Results of the Election
1. A McKinley victory
§ Electoral vote: 271-176
§ Popular vote: 7,102,246 to 6, 492,559
2. Dissecting the victory
§ McKinley sweeps the industrial east, the industrial midwest, and the upper Mississippi Valley
§ Bryan runs strong in the less populous south and trans-Mississippi west
§ Results indicate Bryan's lack of appeal to the unmortaged farmer and eastern laborer
§ A watershed of American politics: appeals to agrarian votes no longer enough to carry the White House -- the future of politics lay in cities
VII. The McKinley Era and Republican Ascendancy
a) Victory in 1896 begins a 16-year GOP occupation of the White House
1. "The Fourth Party System"
§ "systems" are 40 year spans marked by an overall characteristic. The Election of 1896 marked the end of the Democratic-Republican equilibrium of the Gilded Age and began a period of Republican ascendancy, not to be undone until FDR.
b) McKinley at the helm
1. Conservative, safe, "ear-to-the-ground" politician
2. Skilled at reconciling competing interests, a consumate politician
c) Tariff and Monetary Policies under McKinley
1. Dingley Tariff Bill - 1897
§ sets rates at 46.5% -- higher than the Wilson-Gorman Bill (41%) but lower than the McKinley Tarriff of 1890 (48.6%)
2. End of the Depression
§ Panic of 1893 runs its course, prosperity begins to resume
§ Republicans take credit
3. Return of the Gold Standard -- Gold Standard Act (1900)
§ paper currency can be redeemed freely in gold
§ need for inflation met by discoveries of gold deposits in Canada, Alaska, South Africa, and Australia, as well as by the perfection of the inexpensive cyanide method for extracting gold from low grade ore.
§ marks the end of the free silver movement.