A.P.
U.S. History Notes
Chapter 28: “The Revolt of the Debtor”
~
1889 – 1900 ~
I.
The
Republicans Return Under Harrison
1.
New
president Benjamin Harrison was inaugurated on a rainy March 4, 1889.
i.
He
was brusque and abrupt, but also honest and earnest.
2.
After
four years out of the White House, the Republicans were eager to return to
power, especially those seeking political rewards.
i.
James G. Blaine became the secretary of state.
ii.
Theodore Roosevelt was named to the Civil Service Commission.
3.
However,
the Republicans had troubles, for they only had three more members than was
necessary for a quorum, and Democrats could simply not answer to the roll and
easily keep Congress from working.
4.
The
new Speaker of the House, Thomas B. Reed, was a large, tall man, a masterful
debater, and very critical and quick man.
i.
To
solve the problem of reaching quorum in Congress, Reed counted the Democrats
who were present but didn’t answer to the roll call, and after three days of
such chaos, he finally prevailed, opening the 51st, or “Billion
Dollar” Congress—one that legislated a lot of expensive projects, etc…
II.
Political
Gravy for All
1.
Harrison,
a former Civil War general, appointed a Civil War amputee as
commissioner of pensions, and that man practically used up the federal surplus
to give out pensions.
i.
The
Pension Act of 1890 gave pensions to all Union Civil War veterans who
had served at least 90 days in the army and could not do manual labor now.
ii.
Thus,
from 1891 to 1895, the bill for pensions rose from $81 million to $135 million.
a.
This
gained the Republican support of the Grand Army of the Republic (GAR),
whose members were grateful to the GOP (Grand Old Party) for its
handouts.
2.
The
Sherman Anti-Trust Act, passed in 1890, was a pioneering but weak law
that tried to deter the new corporations and monopolies that existed.
3.
The
Sherman Silver Purchase Act of 1890 appealed to those who had hated the
old Bland-Allison Law of 1878 because it allowed the Treasury to buy 4.5
million ounces of silver monthly and pay for it in notes redeemable in silver
OR gold
4.
The
McKinley Tariff Bill of 1890 boosted rates up to 48.4%—the highest level
yet.
i.
The
farmers lost the most from this tariff, as tin peddlers in the Midwest
dishonestly cited rising prices due to Republicans; as a result, in the election
of 1890, Democratic seats in the House rose to 235, while Republicans only had
88 representatives.
ii.
Nine
members of the Farmers’ Alliance, an organization of southern and
western farms, were also elected to the House of Representatives.
III.
The
Populist Challenge of 1892
1.
In
1892, the Democrats nominated conservative Grover Cleveland while
Republicans went with unpopular Harrison, but the splash was made by a new
third party: the People’s Party (aka Populist Party).
i.
The
Populists, made up mainly of the Farmers’ Alliance (and other groups), demanded
free and unlimited coinage of silver at a ratio of sixteen to one, a graduated
income tax, and government ownership of the telephone, telegraph, and
railroads—all to combat injustice.
ii.
They
also wanted direct elections of U.S. Senators, a one-term limit on the
presidency, and the use of the initiative and referendum to allow citizens to
propose and review legislation—all in the true spirit of Democracy.
2.
A
rash of strikes in the summer of ’92 also brought concerns that disgruntled
workers could join the Populist Party.
i.
At
Andrew Carnegie’s Homestead steel plant near Pittsburgh, a strike
resulted in violence that killed ten and wounded sixty, and the eventual
calling of U.S. troops to break the strike and its union backer.
ii.
Silver
miners striking in Idaho’s Coeur d’Alene District were also broken.
3.
Impressively,
the Populist party did get over a million votes and 22 Electoral votes, but
these came all from the Midwest (farmer country).
i.
The
South was unwilling to support the Populists because of race: one million Black
farmers in the Colored Farmers’ National Alliance, along with other
Blacks, were targets of Populist outreach.
ii.
Populist
leaders like Georgia’s Tom Watson reached out to the Black community,
but racist Whites stunted Populist support in the South.
4.
The
Blacks were the real losers in the Election of 1892, for upon seeing that
African-Americans were trying to show their political power, Southern Whites
passed literacy tests, poll taxes, and the infamous “grandfather clause,”
which stated that no Black could not vote unless his forbear had voted in 1860
(none had).
i.
Severe
Jim Crow laws were also passed in many Southern states, and it would not
be for another half century until Blacks finally became a political force.
ii.
Even
Tom Watson became a racist himself following 1892, and after 1896, the Populist
party lapsed into vile racism and Black disfranchisement.
IV.
“Old
Grover” Cleveland Again
1.
Grover
Cleveland won, but no sooner than he had stepped into the presidency did the Depression
of 1893 break out; it was the first such panic in the new urban and
industrial age, and it caused much outrage and hardships.
2.
About
8000 American business houses collapsed in six months, and dozens of railroad
lines went into the hands of receivers.
i.
Now
Cleveland had a deficit, for the Treasury had to issue gold for the notes that
it had paid in the Sherman Silver Purchase Act, and according to law, those
notes had to be reissued, thus causing a steady drain on gold in the
Treasury—the level alarmingly dropped below $100 million at one point!
3.
Meanwhile,
Grover Cleveland had developed a malignant growth under the roof of his mouth,
and it had to be secretly removed in a surgery that took place aboard his private
yacht; had he died, Adlai E. Stevenson, a “soft money” (paper money)
man, would have caused massive chaos with inflation.
4.
Also,
33 year-old William Jennings Bryan was advocating “free silver,” and
gaining support for his beliefs, but an angry Cleveland used his executive
power to break the filibuster in the Senate—thus alienating the
silver-supporting Democrats.
V.
Gold
Shortages and Job Shortages
1.
Finally,
the U.S. repealed the Sherman Silver Purchase Act, but this only partially
stopped the problem, and by 1894, the gold reserve sank to only $41 million!
i.
The
U.S. was in danger of going off the gold standard, sinking into financial
turmoil, and ruining its international trade.
2.
Finally,
Cleveland turned to J.P. Morgan, the “banker’s banker,” who agreed to
have Wall Street loan the government $65 million in gold, obtain half of
the gold from abroad, and take the needed steps to dam up the leaky Treasury.
i.
This
caused an outrage, for silverites saw only corruption and badness in
Cleveland’s dealings with the “evil ‘Jupiter’” Morgan.
3.
Meanwhile,
the unemployed, led by men like “General” Jacob S. Coxey, a wealthy Ohio
quarry owner, demonstrated for much-needed help.
i.
He
and his “Commonweal Army” of Coxeyites marched to Washington D.C., but upon
reaching there, he and his “lieutenants” were arrested for walking on the
grass, while the other people accounted for lots of disorder and pillage.
VI.
Cleveland
Crushes the Pullman Strike
1.
In
Chicago, the infamous Pullman Strike, led by American Railway Union
leader Eugene V. Debs, was a violent flare-up but just one of the many
that occurred.
i.
The
Pullman Palace Car Company had been hit hard by the depression had been
forced to cut wages about one-third.
ii.
In
the opinion of Illinois governor John Peter Atgeld, who had pardoned the
Haymarket Riot anarchists the year before, the riot was serious but not
out of hand.
iii.
However,
Attorney General Richard Olney felt that the strikers were interfering
with U.S. mail delivery to Chicago, and he ordered federal troops to crush the
strike…leading to controversy.
2.
Labor
unions began to think that employers and even the U.S. government were out to
shut the unions down, and were incensed.
VII.
Democratic
Tariff Tinkering
1.
The
Democrats took to revising the existing tariff into one that would follow their
campaign promises by providing moderate protection and adequate revenue.
i.
This
new bill even included a tax of 2% on $4000+ incomes.
ii.
However,
upon reaching the Senate, the opposition of big business forced the Wilson-Gorman
Bill to be amended 630 times, including a scandalous insertion of $20
million a year to itself by the sugar trust.
iii.
Thus,
this bill fell quite short of providing a low tariff, though it was lowered
down to 41.3% on dutiable goods.
iv.
In
1895, though, the Supreme Court struck down the graduated income tax
portion—the most popular one—of the Wilson-Gorman Bill.
2.
As
a result of the unpopular tariff, the Democrats lost a LOT of seats in the
House in 1894, and the Republicans regained control.
3.
Discontented
debtors were turning to free silver as a cure-all, as such pamphlets as Coin’s
Financial School, written by William Hope Harvey, influenced
many toward the free silver cause.
VIII.
McKinley:
Hanna’s Fair-Haired Boy
1.
The
leading Republican candidate in 1896 was William McKinley, a respectable
and friendly former Civil War major who had served many years in Congress
representing his native Ohio.
2.
McKinley
was the making of another Ohioan, Marcus Alonzo Hanna, who financially
and politically supported the candidate through his political years.
3.
McKinley
was a conservative in business, preferring to leaves things alone, and his
platform was for the gold standard, even though he personally was not.
i.
His
platform also called for a gold-silver bimetallism—provided that all the other
nations in the world did the same, which was not bound to happen.
IX.
Bryan:
Silverite Messiah
1.
The
Democrats were in disarray, unable to come up with a candidate, until William
Jennings Bryan, the “Boy Orator of the Platte,” came “to their rescue.”
2.
At
the 1896 Democratic Convention in Chicago, Bryan delivered a movingly
passionate speech in favor of free silver, and his Cross of Gold Speech
created a sensation and got him nominated for the Democratic ticket the next
day.
i.
The
Democratic ticket called for unlimited coinage of silver with the ratio of 16
silver ounces worth as much as one ounce of gold.
ii.
Democrats
who would not stand for this left their party!
iii.
Some
Democrats charged that the Democrats had stolen the Populist ideas, and during
the Election of 1896, it was essentially the “Demo-Pop” party.
X.
Hanna
Leads the “Gold Bugs”
1.
Hanna
thought that he could make the tariff the heart of the campaign issue, but
Bryan turned the tables, making silver the key issue.
i.
Free
silver seemed to be a religion, with Bryan the “savior” of all free silverites.
ii.
Essentially,
Bryan was cutting in half the value of people’s earnings and savings with his
free silver idea, and this worried the eastern conservatives.
2.
With
the public afraid of Bryan’s radical ideas, Hanna campaigned vigorously and
amassed a sizeable amount of money for the Republicans to use in the election.
i.
As
a result, many Democrats accused Hanna of “buying” the election, since the
Democrats only had $1 million for their campaign, as opposed to the Republican
$16 million.
XI.
Appealing
to the Pocketbook Vote
1.
Hanna
launched a full-force attack against free silver, sending many speakers out
onto the stump to appeal to the public in person, but few people could really
understand what all the hoopla was about, and even they disagreed.
i.
It
was mostly shouting and little thinking.
2.
A
sharp rise in wheat prices near the end of the campaign quelled much of the
farmers’ anger against the Republicans, and most people voted for McKinley due
to fear of Bryan and his “dangerous, crazy, radical ideas.”
XII.
Class
Conflict: Plowholders versus Bondholders
1.
McKinley
won decisively, getting 271 Electoral votes, mostly from the populous East and
upper Midwest, as opposed to Bryan’s 176, mostly from the South and the West.
2.
This
election was perhaps the most important since those involving Abraham
Lincoln, for it was the first to seemingly pit the privileged against the
underprivileged, and it resulted in a victory for big business and big cities.
3.
The
Middle Class preserved their comfortable way of life while the Republicans
seized control of the White House of 16 more years.
XIII.
Republican
Standpattism Enthroned
1.
When
McKinley took office in 1897, he was calm and conservative, working well with
his party and avoiding major confrontations.
2.
The
Dingley Tariff Bill was passed to replace the Wilson-Gorman law and
raise more revenue, raising the tariff level to 46.5 percent!
XIV.
Inflation
without Silver
1.
Just
as McKinley came to power, prosperity was returning as the Depression of 1893
was running its course, and the Republicans took credit for this event.
2.
The
Gold Standard Act was not passed until 1900, when many silverites had
left Congress, but it provided that paper currency was to be redeemable in full
in gold.
3.
A
stable expansion of currency was clearly desired in America, since money was
tight at the time, but free silver was a poor method of obtaining that.
4.
Inflation
occurred when new gold was discovered in Alaska, Canada, and South Africa, and
when science perfect a cheap cyanide process for extracting gold from low-grade
ore.
