369 AP US HISTORY
AMERICA: PAST AND PRESENT
EIGHTH EDITION
CHAPTER 20: POLITICAL REALIGNMENTS IN THE 1890’S
LEARNING TARGETS
1. Discuss the stalemate of partisan politics in the 1870’s and 1880’s
2. Explain the rise of the early state regulatory commissions
3. Trace the reassertion presidential power from the 1876 to 1888
4. Identify and describe the legislation passed by the Republican Party in 1890 and the
voters’ response to that “billion-dollar Congress.”
5. Describe the evaluate the American agrarians’ grievances in the late nineteenth century
6. Trace the growth of the farmers’ protest from the Grange through the Farmers’ Alliance
7. Detail the establishment of the Populist party, its platform, and its first presidential
election
8. Discuss the march of “Coxey’s Army” and the “great” Pullman strike of 1894
9. Explain the divisions between capital and labor and between “old” and “new” miners in
the Midwestern coal strike of 1894
10. Describe the changes in American attitudes toward poverty brought by the depression of
the 1890’s
11. Describe the changes in the American work force brought by the depression of the 1890’s
12. Trace the rise of the new realist and naturalist movements in American literature
13. Explain how the silver issue served as a symbol for a social political movement
14. Compare and contrast the Democratic and Republican presidential campaigns of 1896
15. Evaluate the role of the elections and administration of William McKinley in the
emergence of modern urban, industrial government and politics.
TERMS/PEOPLE TO KNOW
Munn vs. Illinois (1877)
Wabash vs. Illinois (1886)
Interstate Commerce Act (1887)
Bland-Allison Act (1878)
Pendleton Act (1883)
McKinley Tariff Act (1890)
Sherman Antitrust Act (1890)
U.S. vs. E.C. Knight Co. (1895)
Sherman Silver Purchase Act (1890)
Populism / The People’s Party (1890)
Coxey’s Army (1894)
Panic of 1893
Pullman Strike (1894)
In re Debs (1895)
Wilson-Gorman Tariff Act (1894)
Election of 1896
Dingley Tariff (1897)
Gold Standard Act (1900)
CHAPTER 20 ID’S
1877
Munn vs. Illinois
Pg. 576
As states gave commissions more power to regulate the railroads, the railroads fought
back. Illinois had one of the most powerful commissions, and the state declared the railroad to
be a public highway and authorized the legislature to establish maximum rates and outlaw rate
discrimination. The Supreme Court case of Munn v. Illinois in 1877 upheld the Illinois laws and
said that private property that had public interest had to be controlled by the public for the public
good.
1886
Wabash v. Illinois
Pg. 576
The Wabash case weekend the Munn ruling by saying that states could not regulate
commerce outside their own borders. That was Congress’ job. As a result of the Wabash
decision, the federal government established the Interstate Commerce Commission to investigate
the railroads and oversee their activities.
1887
Interstate Commerce Act
Pg. 576
As a result if the Wabash decision, the federal government passed the Interstate
Commerce Act in 1887. It established the ICC outlawed rebates and pooling agreements.
1878
Bland-Allison Act
Pg. 576
Hayes’ presidency was constantly under a cloud of doubt because of the controversial
election of 1876. Hayes was committed to the gold standard, and to that end, he vetoed the
Bland-Allison Silver Purchase bill. The bill called for the partial coinage of silver. Although
Hayes vetoed it, Congress still passed it.
1883
Pendleton Act
Pg. 577
Garfield’s successor to the presidency was Chester A. Arthur. Arthur turned out to be a
better president that anyone expected. He got many things accomplished. One of those was the
passing of the Pendleton Act in 1883. The Pendleton Act’s purpose was to reform the civil
service. It created a bipartisan Civil Service Commission to give competitive tests and appoint
officeholders on the basis of merit.
1890
McKinley Tariff Act
Pg. 578
In the election of 1888, the Republicans gained control of both houses of Congress. The
Democrats used the disappearing quorum rule to prevent Congress from doing anything. They
would debate, and then refuse to vote so Congress wouldn’t have a quorum. On Jan. 29, 1890,
Speaker of the House, Thomas B. Reed told the clerk of the House to record the names of
representatives refusing to vote so that a bill could be passed. After that, the Republican
Congress did a lot. One of those bills was the McKinley Tariff Act. It raised tariff duties 4%,
allowed the president to lower tariffs in response to the same happening in other countries, and
used the revenues to help industry.
1890
Sherman Antitrust Act
Pg. 578
Another act passed by the Republican Congress was the Sherman Antitrust Act. It
declared anything that would restrain commerce illegal. These included trusts, monopolies,
pools, and many other common business practices of the day. The penalties for violation were
high. It was an experimental law so it was very vague in some parts and very open to
interpretation. It was the first time any country had tried to regulate big business.
1895
U.S. v. E.C. Knight Co.
Pg. 578
After the Sherman Antitrust Act was passed, the Supreme Court weakened the law with
the case of U.S. v. E.C. Knight Co. The Supreme Court said that the Antitrust Act applied only
to commerce and not to manufacturing. This meant that it didn’t apply to people like Carnegie
and Rockefeller.
1890
Sherman Silver Purchase
Pgs. 578
Silver had always been a problem in the U.S. Silver had been one of the two precious
metals that currency was based on. After the huge silver finds in Nevada, silver production
skyrocketed, and filled the world market. European countries switched their currency to the rarer
gold. People in the South and West supported a U.S. silver currency while the North and East
were against it. Harrison took the middle road with the passage of the Sherman Silver Purchase.
It said that the Treasury would buy 4.5 million ounces of silver a month and issue Treasury notes
to pay for it. It didn’t give free coinage of silver, yet it did buy up most of the country’s silver
production. The Treasury notes could be redeemed in either gold or silver.
Populism/The People’s Party
Pg. 582
Between 1870 and 1890, farmer discontent was a growing problem in the U.S. The
farmers saw many problems with their position like falling crop prices, a decrease in their
condition, and widely varying income. Many of their complaints were exaggerated or
completely false. Originally, the Farmers’ Grange was created to help farmers deal with their
problems. As it turned to politics, the Grange died out. It was replaced by the National Farmers’
Alliance in the North and the Southern Alliance in the South. In 1889, the Southern Alliance
took over the Alliance movement. The Alliance in the west started its own political party while
the Southern Alliance tried to gain control of the Democratic Party. Two men rose up to the lead
the Alliance. Thomas E. Watson and Leonidas L. Polk led a meeting in Ocala, Florida. In
Ocala, the Alliance adopted the Ocala Demands that became its platform. The biggest demand
was that the government create a sub-treasury in which farmers would store their crops in
government warehouses. After the elections of 1890 in which the Alliance won a great amount
of influence in the government, the organization decided to create a new political party. In 1892,
at a convention in Omaha, Alliance leaders created the People’s Party. The People’s Party
brought together whites and blacks in the South and formed a strong political party. In the
elections of 1892, the Populist candidate, James B. Weaver, lost by a lot, and the Populists were
written off. Many of the party’s ideas were later espoused and put into action by the major
parties.
1890
1893
Panic of 1893
Pg. 583
As soon as Grover Cleveland became president, the Panic of 1893 hit the U.S. The
economy had expanded too rapidly and collapsed on itself. Railroads had overbuilt, businesses
had overextended their markets, and farms and businesses had borrowed heavily. Business
sagged and consumer confidence died. The stock market crashed. In 1894, a drought and heat
wave in the Midwest killed crops and cotton prices bottomed out. Unemployment reached 20%.
1894
Pullman Strike
Pgs. 584-85
The Panic of 1893 caused many strikes as the jobless tried to get work, and the
employees tried to get money to survive. One of the biggest strikes was the Pullman Strike of
1894. The employees of the Pullman Palace Car Company, living in a company town, struck.
The American railway Union joined them by refusing to handle any trains that carried Pullman
cars. The strike threw the nation into chaos and stopped the economy. Cleveland decided to end
the strike with a court injunction and ordered troops into Chicago. Violence broke out and
Eugene Debs, the leader of the ARU was arrested.
1880’s-1890’s
1895
Horatio Alger
Pg. 589
In re Debs
Pgs. 585
After Debs was arrested for the violence following the court injunction for the ARU to go
back to work, the Supreme Court upheld his sentence in In re Debs. The Supreme Court
endorsed the used of the injunction to end strikes, giving business a great advantage.
1894
Wilson-Gorman Tariff Act
Pg. 587
One of the promises that the Democrats had made when they came into power in 1890
was to reduce the tariff. The Wilson-Gorman Tariff Act in 1894 was supposed to achieve that
end. It reduced the tariff on coal, iron ore, wool, and sugar, while raising other tariffs. It
repealed the McKinley Tariff’s provision that the U.S. would lower tariffs in response to like
action by other countries. It also imposed a small income tax that the Supreme Court overturned
in 1895.
1896
Election of 1896
Pg. 590-91
During the election of 1896 Republican William McKinley ran against Democrat
William Jennings Bryan. McKinley ran on a pro-gold platform. The Democratic party was split,
but pro-silver members took control and the party took hold in the South and became a sectional
party once again. Bryan ran on a pro-silver platform. The People’s party didn’t know what to
do, so it nominated Bryan for president and Tom Watson for VP. The press deserted Bryan so he
took his campaign directly to the people. McKinley brought voters into Ohio, his hometown and
spoke to them from his front porch. McKinley won. The Populists were crushed and died out.
1897
Dingley Tariff
Pg. 696
Shortly after McKinley became president, he called a special session of Congress to work
on the tariff. In July of 1897, Congress passed the Dingley Tariff. The tariff raised duties to a
record level. It caused problems for the Republican Party because people began to wonder how
necessary a tariff really was.
1900
Gold Standard Act
Pg. 607
Fulfilling his campaign of pro-gold, McKinley passed the Gold Standard Act in 1900 that
put the U.S. on the gold standard with the rest of the world.
THE BIMETALLIC DEBATE
I.
THE POLICY
Bimetallism—Since its beginnings, the United States government had adopted a policy of
backing its money with both gold and silver at a fixed ratio. Under this policy of
bimetallism, it was, in the early 1870’s, coining gold and silver without charge at a
ratio of 16 oz. of silver to one oz. of gold (free and unlimited coinage at 16 to 1).
II.
THE STORY
A.
Segments of U.S. society want cheap money:
Segments of U.S. society want hard money:
B.
DEMONITIZATION OF SILVER: For many years before 1873, sliver miners
had stopped bringing their silver to the Mint for coinage because they could get a
higher price for it from the silversmiths on the “market” than they received from
the government. Since facilities for coining silver were lying unused, the
government quietly stopped coining or “demonetized” silver dollars in 1873.
C.
THE “CRIME OF ‘73”: In the mid-1870’s, large silver deposits were discovered
and mined in Nevada (Comstock Lode) and Colorado. As silver poured onto the
market, its value decreased rapidly. When miners who had formerly sold their
silver to commercial outlets, tried to sell it to the Mint they became painfully
aware that silver had been demonetized. They now demanded that the
government resume free and unlimited coinage of silver, and denounced the
demonetization act as the “Crime of ‘73”. Farmers joined the silver miners
because they were convinced that free silver would raise farm prices.
D.
PANIC OF 1873:
CAUSES:
Overexpansion of railroads and industry
Granting of unsound back loans
Insufficient farm purchasing power because of low agricultural prices: drought,
oversupply
Economic distress in Europe
SOLUTION:--? Reissue soft money (greenbacks) or remonitize silver
(Suggestion: Wouldn’t this make the panic less severe asked farmers and
manufacturers?)
--? Eventually the economy will recover on its own if it is allowed
to do so. Stick with the “sound money” policies so that when recovery
does come, the country will be solidly on firm ground with a Gold
Standard (to match the standard set by its other major world trading
partners).
E.
RESUMPTION ACT OF 1875: In 1866 the Federal Government began to
withdraw unbacked paper currency (which had been issued during the Civil War)
called Greenbacks. Farmers and expansionist minded manufacturers were
angered because this meant they would have to repay their mortgage debts in
dollars worth more than those they had originally borrowed.
Grant vetoed an 1874 Congressional authorization of new greenbacks and then
further antagonized the newly formed Greenback Party (officially organized in
1876) by enacting the SPECIES RESUMPTION ACT OF 1875: After 1879 the
government would redeem greenbacks dollars at par with gold; that is, the present
greenbacks, whose value constantly fluctuated, could be exchanged for new paper
currency, whose value would be firmly pegged to the price of gold. Result =
inflation.
THE REALITY: The gold-based money supply was never able to expand as
much as some segments of society believed was necessary. Farmers, laborers,
some manufacturers—and debtor regions—the South and the West—continued to
clamor for a currency based not on gold reserves but on the productive capacity of
the nation. Otherwise, they claimed they would continue to be strangled by an
overvalued dollar circulating in insufficient quantities. These malcontents
questioned if this issue--maintenance of the gold standard was conspiracy by
entrenched financiers to keep them in economic bondage, in other words to make
them SLAVES.
F.
THE SILVER PURCHASE ACTS
BLAND-ALLISON ACT (1878)—To meet the demands of the “silverites” this
act provided for the purchase by the Treasury Department, for coinage in to silver
dollars in 2-4 million dollars’ worth of silver bullion each month. When this
failed to halt the decline in the value of silver Congress passed the
SHERMAN SILVER PURCHASE ACT (1890)—Increased government silver
purchases to 4.5 million oz. per month. Payment for such silver to be made in
legal tender treasury notes, redeemable in gold or silver.
Initial Reaction: The North and East are happy because “free coinage” of all
silver didn’t happen. The South and West are happy because this is a gesture
toward a bimetallic economy.
The Problem: Everyone wants redemption of their Silver Certificates in gold
creating a run on the gold reserves, destabilizing the soundness of the dollar
internationally and by 1893 prolonging the depression.
G.
PANIC OF 1893 CAUSES:
Overexpansion of the railroads and industry
Continued low agricultural prices
Fear among businessmen for the stability of our currency, due to shrinking of the
gold reserve and the battle of a bimetallic currency.
CLEVELAND’S SOLUTION:
1893--Congress repealed the Sherman Silver Purchase Act
1895--Directed the treasury to borrow a large sum of gold from J.P.
Morgan (large Eastern backing syndicate). Because the bankers made
a large profit on the sale of the government bonds they received in
exchange for the gold, Cleveland was bitterly denounced by the
Western and Southern wings of this Democratic Party as a “tool of
Wall Street.”
III.
PERCEPTION IS REALITY—ELECTION OF 1896
DEMOCRATS AND POPULISTS
Farmers and industrialists came to believe that Eastern Industrialists and bankers
controlled both the Democratic and Republicans parties. They formed the Populist Party.
Other “silver interests”--laborers and that only Cleveland had “sold out” to Eastern
interests. Both Populists and Democrats nominated Wm. Jennings Bryan who delivered
an emotional attack upon the Gold Standard in his famous “Cross of Gold” speech:
“YOU WILL NOT LAY UPON THE BROW OF LABOR THIS CROWN OF
THORNS; YOU WILL NOT CRUCIFY MANKIND UPON A CROSS OF GOLD.”
REPUBLICANS
Conservative Eastern industrial and banking interests controlled the Republican
convention. They nominated the skillful Ohio politician William McKinley, who
opposed free silver, supported the gold standard, and advocated high protective tariffs.
IV.
THE RESULTS
This campaign was among the most spectacular of the 19th century. Historians have
contended that Bryan made a spectacular effort against the odds:
McKinley spent $4 million on his campaign while Bryan spent $300,000. McKinley’s
campaign manager alerted his friends to warn workers and mortgagors that, if Bryan
were elected, they would lose their jobs and farms. McKinley’s managers sent 1,200
professional public speakers across the country to remind voters of the economic
necessity of a Republican presidency. Millions of dollars poured into the McKinley
campaign, some contend as much as 10 times the amount Bryan had to work with.
McKinley also benefited from the almost unanimous support of the press, which ridiculed
Bryan as a radical, irresponsible “boy orator.”
McKinley carried all the industrial states and even won the older agrarian states.
McKinley had ½ million more popular votes than Bryan. With 271 electoral votes to
Bryan’s 176, McKinley won the election.
THE END: The Bi-metallic Debate dies by 1897-1900 (the beginning of the end of the
Depression)
1) GOLD STANDARD ACT OF 1900—declared gold the standard to back the
currency of the U.S.; ends the silverite controversy.
2) GOLD TECHNOLOGY—New ways to extract small veined gold deposits were
discovered and added to the amount of gold in circulation caused by the Alaska Gold
Rush.
3) DINGLEY TARIFF—Highly protectionist tariff (Tariff are at an all time high)
PRESIDENTIAL ADMINISTRATIONS
1863
ANDREW JOHNSON (R)
Acquitted of impeachment charges
Alaska Purchased from Russia (1867)
1869
ULYSSES S. GRANT (R)
Spoils System vs. Civil Service debated
First transcontinental railroad completed 1869
Scandals = Credit Mobilier, Whiskey Ring [Tweed Ring in New York exposed]
Panic of ‘73/Specie Resumption Act of 1879
“Waving the Bloody Shirt”
1877
RUTHERFORD B. HAYES (R)
“His Fraudulency”
Republican Party divide into two powerful factions = the STALWARTS and the
MUGWUMPS/HALF-BREEDS
Bland-Allison Act 1878
1881
JAMES GARFIELD (R)
“Dark Horse”
Assassinated after 4 months in office (by Charles A. Guiteau, a jobless and
mentally disturbed STALWART)
1881
CHESETER A. ARTHUR (R)
Pendleton Act (presently covers 90% of all government jobs)
1885
GROVER CLEVELAND (D)
Honest Reputation-A Reformer “A public office is a public trust”
Pushed for lower tariffs but Congress would not pass it
ICC and AFL Formed
Haymarket Affair
Dawes Act (1887)
1889
BENJAMIN HARRISON (R)
Sherman Anti-trust Law (1890)
McKinley tariff (1890)
Sherman Silver Purchase Act (1890)
Wage Cuts become prevalent
Populist Party formed
1893
GROVER CLEVELAND (D)
Panic of 1893-(Cleveland repeals Sherman Silver Act this year)
Push for a Bimetallic Standard
Wilson Gorman Tariff of 1894-resulted in a minor reduction and an income tax
on large incomes was ruled unconstitutional by the Supreme Court.
1897
WILLIAM MCKINLEY (R)
Spanish-American War 1898
Dingley Tariff of 1897-raised the average tariff duties to an all time high
Gold Standard Act of 1900-declared gold the standard for U.S. currency and
effectively ended the bimetallic debate
Assassinated in the beginning of his 2nd term by 28 year old Leo Czolgosz, a 28
year old unemployed laborer and anarchist who shot him in the head while
going through a receiving line
Theodore Roosevelt becomes the youngest president at the age of 41
1901
THEODORE ROOSEVELT (R)
Use of the Sherman Anti-Trust for its lawful purpose
Hepburn Act of 1906 (Strengthened the ICC)
Pure and Food Drug Act
Conservationist Movement Launched
Newlands Reclamation Act (1902)
Panic of 1907 (through 1914)
1909
WILLIAM HOWARD TAFT
Payne-Aldrich Tariff Bill (1909)
Pinchot-Ballinger Affair
(TR runs against Taft on NEW NATIONALISM platform)
1913
WOODROW WILSON (D)
Underwood Simmons tariff (1913)
Sixteenth (Income Tax) and Seventeenth (Direct Election of Senators)
Amendments Passed (1913)
Federal Reserve Act (1913)
Federal Trade Commission Act (1914)
Clayton Anti-Trust Act (1914)
Keating-Owen Act (1916)