The Revolt
of the Debtor
1889-1900
The American Pageant
Chapter 28
Reps. Return w/ Harrison
 1889: “chilly” Harrison inaugurated, Reps. hungry for offices after 4year absence.
 Blaine appointed Sec. of State, T. Roosevelt to Civil Service
Commission.
 Slim Rep majority in House allowed Dems to delay action.
Reps. Return w/ Harrison (2)
 Rep. House Speaker Reed sought to rewrite House rules by declaring
Dems present who hadn’t answered roll in order to achieve quorum –
Dems objected.
 “Czar” Reed won, resulted in “Billion-Dollar” Congress.
Political Gravy for All
 Harrison’s pension commis-sioner wanted to spend budget surplus on
veterans.
 Congress obliged: Pension Act of 1890 – pensions for veterans (90+
days of service) who were now unable to do manual labor.
Political Gravy for All (2)
 Veterans benefits solved 2 problems: treasury surplus gone, protective
tariff needed.
 GOP earned votes from GAR.
 1890: Czar Reed also drove through Sherman Anti-Trust Act,
Sherman Silver Purchase Act.
Political Gravy for All (3)
 Western miners & indebted farmers were unsatisfied with BlandAllison: wanted unlimited coinage of silver.
 Easterners wanted yet higher protective tariff.
 Set stage for Congressional logrolling:
Political Gravy for All (4)
 Easterners agreed to support Sherman Silver Purchase Act –
Westerners agreed to support McKinley Tariff in exchange.
 Silver Act: U.S. to buy 4.5 million ounces/month (double Bland-
Allison) with notes redeemable in gold/silver.
Political Gravy for All (5)
 McKinley: highest peacetime tariff rate yet - 48.4% avg., plus sugar
subsidy, farm tariff.
 1890: Western discontent over tariff resulted in landslide defeat for
Reps: Dems won 235-88 House majority, plus 9 reps. from Farmers’
Alliance.
1892 Populist Challenge
 1892 election: Rep tariff gave Dems high hopes, nominated former
pres. Cleveland.
 Reps renominated Harrison, championed tariff.
 People’s party (Populists), rooted in Farm. Alliance, grew from
farmers in South/West.
1892 Populist Challenge (2)

1.
2.
3.
4.
5.
Populists platform demanded:
Free/unlimited silver at 16:1
Graduated income tax
Gov’t ownership of telephone, telegraph, RR.
Direct election of US Senators.
1-term limit on presidency.
1892 Populist Challenge (3)
6.
7.

Use of initiative & referen-dum to propose/review laws.
To get labor support, demanded shorter workday, immigration
restrictions.
Nominated former Greenback Labor party nominee Gen. James
Weaver.
1892 Populist Challenge (4)
 Summer, 1892: strike epidemic raised Populists’ hopes of joining with
labor.
 Federal troops called in to break strikes at Carnegie’s Homestead steel
plant (following Pinkerton detectives battle) & ID silver mines.
1892 Populist Challenge (5)
 1892: Populists received over 1 million popular votes, 22 EC votes for
Weaver, but largely failed to attract labor.
 Supported by western states, esp. KA, CO, ID, NV.
 Failed in South b/c of white reaction to courting blacks.
1892 Populist Challenge (6)
 Reminder of potential black political power resulted in near complete
loss of Southern black suffrage through literacy tests, poll taxes,
“grandfather clause.”
1892 Populist Challenge (7)
 Accompanying Jim Crow laws also enforced racial segrega-tion in
public places.
 Populist party, Watson abandoned interracial appeals, lapsed into
racism – after 1896 advocated black disfranchise-ment.
“Old Grover” Again
 1893: Cleveland takes office – only president ever reelected after
defeat.
 Depression of 1893, 1st large-scale depression of industrial age, hit
urban masses hard.
“Old Grover” Again (2)
 Causes: overbuilding, over-speculation, labor disorders, pre-existing
agricultural depression, damaged U.S. credit from free-silver push.
 8,000 businesses & dozens of RRs failed.
“Old Grover” Again (3)
 Soup kitchens, charities attempted to care for unemployed, hoboes.
 Gov’t did nothing: laissez-faire philosophy dominated.
 Cleveland’s problem: under Sherman Silver act, gold was being
drained from treasury.
“Old Grover” Again (4)
 Federal gold reserve dipped below $100M, Cleveland called special
Congressional session to repeal Silver Purchase Act (summer, 1893).
 W. J. Bryan led opposition in House, but Cleveland pre-vailed, divided
Dem party.
Gold/Job Shortages
 Repeal of Silver Act only slowed gold drainage: by Feb. 1894, U.S.
reserve down to only $41M.
 Danger: going off gold stand-ard would make currency unreliable,
cripple internation-al trade.
Gold/Job Shortages (2)
 To save sound money, Cleve-land issued bonds to get gold, but
“endless-chain” continued to drain gold from reserve.
 Cleveland borrowed $65M in gold from J.P. Morgan, other bankers, to
restore confidence.
Gold/Job Shortages (3)
 Unemployed demonstrated for help, e.g. Coxey march.
 Jacob Coxey, wealthy quarry owner, led “Commonweal Army” to
D.C. to demand unemployment relief through public works paid for by
$500M in inflationary notes.
Pullman Strike Crushed
 1894: Pullman strike most sev-ere of violent labor protests.
 Pullman co. cut wages by 1/3, but did not lower rent on workers’
homes.
 Eugene Debs’ American Railway Union led paralyzing strike against
Pullman.
Pullman Strike Crushed (2)
 IL Attorney Gen. Olney argued for federal troops needed to guarantee
mail: Cleveland agreed, U.S. troops crushed strike.
 1st use of court injunction to end strike: Debs sent to prison 6 mos. for
defying court.
Pullman Strike Crushed (3)
 Concern of labor: “gov’t by injunction” could imprison labor leaders
w/o jury trial.
 Labor saw in Pullman strike alliance between big business and federal
courts.
Dem Tariff Tinkering
 McKinley Tariff resulted in $61M budget deficit by 1894.
 Dems passed Wilson-Gorman Bill: reduced tariff slightly, added
popular 2% tax on incomes over $4,000, but full of lobbyist-sponsored
pork for various industries.
Dem Tariff Tinkering (2)
 Cleveland disapproved, but wanted lower tariff, so allowed bill to
become law w/o his sig.
 1895: Sup. Ct. struck down income tax – more evidence for Populists
that courts were tools of wealthy.
Dem Tariff Tinkering (3)
 1894: Dems paid price for tariff/depression – Reps won House in
landslide, 244-105.
 Populists, debtors increasingly believed in free silver as cure-all, e.g.
pamphlet Coin’s Financial School.
McKinley: Hanna’s Boy
 1896 campaign: Ohio resident, war veteran, former congressman
McKinley was best Rep. candidate.
 McKinley nomination engineered & financed by wealthy presidentmaker, Marcus A. Hanna.
McKinley: Hanna’s Boy (2)
 Hanna: Hamiltonian, believed prosperity would “trickle down” to
laborers.
 Platform: came out for gold standard and international bimetallism, an
empty gesture toward free silver supporters.
Bryan: Silverite Messiah
 Conservative, unpopular Cleveland rejected by Dems.
 William Jennings Bryan (NE) delivered “Cross of Gold” speech at
convention, received Dem nomination next day.
 Platform: unlimited coinage of silver at 16:1.
Bryan: Silverite Messiah (2)
 Conservative “Gold Bugs” (incl. Cleveland) bolted Dem party,
nominated their own ticket or supported McKinley.
 Democrats stole Populist plank, so most Populists endorsed Bryan,
Dems.
Hanna Leads “Gold Bugs”
 Bryan forced free silver to center of campaign by stumping through 27
states.
 Silverites saw Bryan as mes-siah to save them from debt.
 Hanna used fear of Eastern conservatives to amass huge campaign war
chest.
The Pocketbook Vote
 Hanna used $ to flood voters with pamphlets, speakers.
Complexity of
bimetallism meant loudest voice won.
 Reps also reminded voters of “Democratic panic” – campaigned for
“McKinley and the Full Dinner Pail.”
The Pocketbook Vote (2)
 Just before election, increased wheat prices dampened concerns of
farmers.
 But fear of Bryan motivated factory owners & business-people to tie
future orders or wages to McKinley victory.
Class Conflict
 Fear, hope brought record numbers to polls: McKinley won decisively,
but regionally.
 Labor went with McKinley to keep jobs, no desire for inflation.
 Bryan’s defeat: end of winning w/ mostly agrarian votes.
Class Conflict (2)
 Future of politics lay in cities.
 1896 victory was 1st of string of Rep victories (16 years).
 Rep dominance also brought diminished voter turnout, end of
money/civil service debate.
 New era called “fourth party system.”
Republican Standpattism
 Cautious McKinley gave busi-ness free reign, trusts grew.
 Mainly went along with party, good relations with Congress.
 Problems: Wilson-Gorman tariff not providing enough revenue, Rep.
campaign con-tributers wanted higher tariff.
Republican Standpattism (2)
 1897: “Czar” Reed oversaw passage of Dingley Tariff, raised rates to
46.5% avg.
 Lobbyists got over 850 amendments added in Senate.
 Higher than Dem. Wilson-Gorman tariff, in some cases higher than
McKinley.
Inflation Without Silver
 1897: prosperity returned, farm prices rose, Reps took credit.
 1900: Gold Standard Act passed: paper currency to be redeemed freely
in gold.
 Prosperity dampened opposition of silverites.
Inflation Without Silver (2)
 In retrospect, gradual inflation was needed, but free silver generated
too much fear.
 Gold discoveries in Canada, AK, S. Africa, Australia & cyanide
extraction process increased money supply, provided needed inflation.