I. Benjamin Harrison’s presidency
A. Thomas B. Reed, Republican Speaker of
the House; "Czar Reed"
1. Perhaps most powerful
Speaker in history of Congress
-- Manipulated House rules to prevent Democrats from blocking legislation.
2. Presided over the
"Billion Dollar" Congress that created expensive legislation
-- Republicans eager to spend money to offset the surplus created by high
tariffs.
B. Sherman Anti-Trust Act passed in 1890
C. Sherman Silver Purchase Act of 1890 (system
of bimetallism)
1. Treasury would approximately
double minimum amount of silver purchased under the
Bland-Allison Act.
2. Western pro-silver advocates
agreed to support a protective tariff in return
for eastern protectionist support for a silver bill.
a. Silverites detested limited silver purchasing under Bland-Allison Act.
b. Easterners saw potential profits from a boost in tariffs
-- Still, hated the thought of inflated currency
c. Result: Did not significantly inflate currency
D. McKinley Tariff Bill (1890)
1. Republicans’ reward for
supporting Sherman Silver Purchase Act.
2. Raised tariffs to
highest peacetime level: 48% on dutiable goods.
3. Disposed of surplus
by giving a 2 cent subsidy to American sugar producers.
-- Also increased pensions to GAR and lowered internal taxes on tobacco.
4. Raised tariffs on agricultural
products.
a. Seen by farmers as a hollow gesture as Europeans could not compete
with American farmers anyway.
b. Some eastern manufacturers raised their prices before the law went into
effect.
c. Democratic party helped foster anti-Republican sentiment
5. McKinley and 77 other
Republican congressmen lost their seats in the 1890
mid-term
elections.
a. New Congress included 9 members of the Farmers’ Alliances
b. Tariff faded as main issue replaced by silver issue.
E. Harrison’s Sec. of Treasury permanently reduced
gov’t surplus by increasing GAR pensions.
1. Helped save the protective
tariff and reduce the gov’t surplus
2. GAR continued vigorous
support of the Republican GOP (Grand Old Party)
II. Farmers rise politically
A. National Grange of the Patrons of Husbandry(The
Grange) organized in 1867
1. Led by Oliver H. Kelley
2. Primary objective was
to stimulate minds of farmers by social, educational, and
fraternal activities such as picnics, music, and lectures.
-- By 1775, movement claimed 800,000, mostly in Midwest & South
3. Eventually, established
cooperatives for both consumers and producers.
a. Grain elevators, dairies to store & process products, cooperative
stores to
purchase supplies.
b. Demanded end to railroad monopoly practices
c. Attempt to manufacture harvesting machinery ended in financial disaster.
4. Grangers went
into politics with success in IL, WI, IO, and MN.
a. Strove to regulate railroad rates and storage fees charged by railroads
and by the operators of warehouses and grain elevators.
b. Granger Laws created to apply principle of public control over
private
business for the general welfare.
c. Munn vs. Illinois (1877): Supreme Court ruled
that private property
becomes subject to regulation by gov’t through its "police powers"
when
the property is devoted to the public interest.
d. Many Granger Laws written badly and overturned by higher courts who
were persuaded by high-priced lawyers of wealthy interests.
-- Wabash case (1886): Individual states don’t have
right to regulate
interstate commerce (effectively overturned Munn decision)
e. Due to Supreme Court reverses, esp. Wabash case, Grangers faded rapidly
in influence.
B. Greenback Labor Party
1. Combined inflationary
appeal of the earlier Greenbackers with a program for
improving
conditions for laborers.
2. Election of 1878, Greenback-Laborites
polled over a million votes and elected
14 members to Congress.
3. Election of 1880, Greenback
Party ran General James B. Weaver, an old Granger
and Civil War veteran.
-- Polled only 3% of total popular vote.
C. Populism -- Rise of Populist Party
1. Farmers’ Alliances
in the South (formed in 1877) and Midwest (formed in 1880)
increasingly voicing discontent (Colored Alliance formed in 1889)
a. Like Grangers, sponsored social events, active politically, organized
cooperatives,
sought heavy regulation of railroads and manufacturers.
b. 3 Alliances met in 1889 and boasted over 3 million members
-- Demanded free siliver and subtreasury plan.
c. Many supported or joined Knights of Labor; saw similar goals.
d. Major demand of Southern Alliance in 1880s: subtreasury plan
i. Called for est. of fed. subtreasury offices alongside warehouses or
elevators.
ii. Farmers could store nonperishables and subtreasury would loan them
up to 80% of
value of crop at modest interest and fees.
iii. Reason: farmers had poor cash flow during much of the year but large
harvests drove
prices down.
e. Defeat of the Subtreasury scheme in Congress in 1890 led to Alliances
taking
political matters into their own hands and forming a third party.
-- Since Civil War, Greenbackers, Workingmen’s and Knights of Labor parties,
and
Farmers’ Alliances saw national banks as monopolistic culprits who kept
the
"producing classes" poor.—the "Eastern Establishment"
2. The People’s
Party (Populist Party) emerged in early 1890s as the culmination
of the
Farmer’s Alliances (started in Topeka, Kansas)
a. Attracted recruits from Farmer’s Alliances & disenfranchised southern
whites.
b. Ignatius Donnelly, elected 3X to Congress, a major figure.
-- Formerly known as utopian author (like George & Bellamy)
c. Mary E. Lease -- Made about 160 speeches in 1890 denouncing the
moneyed aristocracy in Wall Street
-- Kansas should raise "less corn & more hell."
d. "Sockless" Jerry Simpson, along with Lease, traveled to the South
to rouse
up Southern Alliance support for Populist unity.
e. Tom Watson: elected to Congress in 1890, fought for subtreasury plan,
and fought for
Populist unity in 1892; became VP runningmate of Bryan in 1896.
D. Disenfranchisement and anti-black violence
1. "Pitchfork"
Ben Tillman and the beginning of disenfranchisement of blacks
a. Tillman, a Democrat, used his Southern Alliance influence to win the
governorship of
South Carolina and dominate the democratic party there.
b. Succeeded in disenfranchising blacks in the state constitution.
c. Widespread southern fears of African-Americans in Farmers’ Alliances
led to major
push for disenfranchisement in the 1890s & Jim Crow.
-- Following South Carolina’s lead, southern states made black voting limited
in their
state constitutions.
d. Suffrage restriction essentially a ruling-class campaign against
lower-class voters in
general, not just blacks.
i. Deliberate attempt by New South’s political and economic elite, threatened
by the
Populists, to destroy party opposition and widespread political participation.
ii. Disenfranchised whites from the South also sought reforms despite their
race-supremacy ideas since they saw themselves as secondary victims.
iii. For 200 years the South had been racially divided but in 1890s white
hatred toward
blacks became almost genocidal; huge increase in number of lynchings.
III. Election of 1892
A. Democrats nominated Grover Cleveland (had
been president four years earlier)
-- Now more conservative:
his law practice in NYC represented wealthy businessmen.
B. Republicans renominated President Harrison who
championed protective tariff.
C. People’s party (Populists) nominated
General
James B. Weaver
1. Delegates from Alliances,
Knights of Labor, Nationalists (Bellamy Clubs) and Land and
Labor parties met in Omaha, Nebraska
2. Omaha Platform (written
by Ignatius Donnelly
a. Free and unlimited coinage of silver at ratio of 16 to 1 (flexible
currency)
b. A graduated income-tax (redistribute wealth)
c. Gov’t ownership of the telephone and telegraph, and railroads.
d. initiative & referendum
e. postal savings banks (safe repository run by gov’t)
f. limiting gov’t land grants to settlers rather than to railroads (a la
Henry George)
g. direct election of senators
h. 8-hour work day
i. (subtreasury plan not included because it had been defeated and was
a Southern
idea—many southerns didn’t support Populists due to racial reasons)
3. Weaver: former abolitionist
and general in Union Army; Greenback-Labor Party
presidential nominee in 1880.
D. Campaign centered on the tariff
1. Epidemic of strikes damaging
to Harrison’s cause as workers refuted Harrison’s claim that
higher tariffs meant higher wages.
2. Homestead Strike
led to loss of thousands of Republican votes.
E. Result: Cleveland d. Harrison 277-145; 5,557,000
to 5,176,000
1. Populists won over 1
million votes and 22 electoral votes for Weaver.
a. One of few 3rd parties in U.S. history to win electoral votes.
b. Support came predominantly from KA, CO, ID, and NV
c. 3 governors; 5 U.S. Senators & 10 representatives; 1,500 candidates
overall won office
2. Indebted white farmers
of the "Solid South" refused to desert Democratic party
for fear of losing political power to blacks who claimed more than a million
members in
a segregated Colored Farmers’ Alliance.
IV. Cleveland’s 2nd term in office (1893-1897)
A. Panic of 1893 (depression lasted until
1897)
1. Worst depression of the
century
a. 1st large-scale depression in the new urban and industrial age.
-- 20% unemployed in winter of 1893-94 (rivaled Great Depression)
b. Brought hardship to masses living in cities.
c. 8,000 business collapsed in 6 mos. (including dozens of railroads.)
2. Causes
a. Immediate cause: collapse of the stock market.
b. Long-term causes:
i. Overbuilding of railroads, heavy loans to farmers, overspeculating.
ii. Reduced money supply from gradual withdrawal of European capital from
U.S.
-- Free-silver agitation damaged American credit abroad and European bankers
called in their loans
iii. Labor disorders
iv. Existing agricultural depression.
3. Deficit resulted
a. Gold reserves dwindled to below $100 million (regarded as safe minimum
to support about $350 million in outstanding paper money)
-- Reason: gov’t paid out more for silver purchases than it received
for gold with legal tender notes – "endless chain" activities
b. Cleveland saw no alternative but to repeal Sherman Silver Purchase
Act.
i. William Jennings Bryan argued against repeal
ii. Cleveland alienated Democratic silverites and disrupted the party.
B. Morgan bond transaction
1. By Feb. 1894, gold reserve
sank to $41 million
a. U.S. in danger of going off the gold standard
b. Money would be volatile and unreliable and int’l trade would be crippled
2. Cleveland opted to sell
gov’t bonds for gold and deposit proceeds in the Treasury but
scheme failed as "endless-chain" operations continued nevertheless.
3. Early 1895, Cleveland
persuaded J.P. Morgan and other bankers to lend the gov’t $65
million in gold @ commission of $7 million.
-- Bankers made a concession to obtain one-half of the gold abroad and
send it
to the Treasury.
4. Confidence in the nation’s
finances restored for the short-term.
C. Coxey’s Army (1894) – "Commonweal of Christ"
1. Led most famous of the
"industrial armies" of the unemployed on Washington, D.C.--
gained national attention.
2. Coxey was a wealthy businessman
who curiously was a currency reformer.
-- Had left Democratic pasrty for Greenback-Labor party and later People’s
Party.
3. Coxey’s platform included
a demand for gov’t to relieve unemployment by
an inflationary public works program + increase money supply by
$500 million
4. Coxey and his 500 followers
arrested in Washington, DC for walking on the grass of the
nation’s capital.
D. Pullman Strike, 1894 (see Industrialism
chapter)
1. Eugene V. Debs
helped to organize the American Railway Union of about 150K
2. Attorney General Richard
Olney sent federal troops stating strikers interfering with
transit of U.S. mail.
3. First time gov’t used
an injunction to break a strike
4. Increased worker disenchantment
with government.
E. Wilson Gorman Bill, 1894
1. McKinley tariff of 1890
had resulted in deficit of $61 million
-- Democrats sought to reduce high tariff of 48.4%
2. Wilson-Gorman Bill passed
the Senate after significant revision by 634 amendments
driving tariffs upwards.
a. 2% income tax on incomes over $4,000 put in to please populists.
-- Wealthy lawyer Joseph H. Choate: "Communistic, socialistic"
b. Bill fell short of establishing a low tariff; 41.3% instead of 48.4%
c. Cleveland allowed the bill to pass despite being outraged with its high
tariff.
3. Income tax shot down
a year later in the Supreme Court (5-4) as it violated the "direct
tax" clause – Pollock v. Farmers’ Loan and Trust Co. (1895)
a. Thus, only popular feature of the tariff law was axed.
b. Populists further incensed by alliance of business and courts.
4. Republicans benefited
from ill-fated Democrat sponsored bill; won Congress in 1894
F. William Hope Harvey: Coin’s Financial School(1894)
– best seller
1. "Coin" Harvey
a fictional character parading as fact
-- "Little professor" overwhelmed bankers and professors of economics with
brilliant arguments in favor of free silver as cure-all for economy &
debtor woes.
2. Fed public feelings of
a nat’l & int’l conspiracy to elevate gold above silver esp. the "crime
of 1873."
V. Election of 1896
A. William McKinley, ex-Congressman fro Ohio,
Republican nominee for President.
1. The creation of Marcus
Hanna, an iron tycoon, who had bailed McKinley
out of a $100,000 obligation
a. Hanna believed function of gov’t was to aid business.
i. Became symbol of big industry in politics.
ii. Believed that prosperity "trickled down" to the laborer.
iii. Critics lambasted Hanna for this idea.
b. Hanna raised a huge war chest of $3.5 million compared to only $300k
for Democrats.
2. Republican platform supported
the gold standard but advocated bimetallism (world wide
gold-silver standard)
a. Really a sham as all other leading nations would have to agree; they
wouldn’t
b. Platform also praised protective tariff.
B. William Jennings Bryan, Democratic nominee;
Tom
Watson, v.p. nominee from GA
1. Democrats refused to
endorse Cleveland for his silver-purchase repeal, Pullman strike,
and Morgan bond deal; move suicidal to the party’s hopes in 96’
-- Cleveland left office an extremely unpopular man.
2. Bryan a 36-yr-old from
NB. who was the premier orator of his day
a. More heart and passion than brains and intellect.
b. First politician of his generation to lead a major party as a champion
of the poor
3. Cross of Gold speech
given at Democratic convention in Chicago
"You come to us and tell us that the great cities are in favor of the gold
standard. We reply that
the great cities rest upon our broad and fertile prairies. Burn down your
cities and leave our
farms, and your cities will spring up again as if by magic. But destroy
our farms, and the
grass will grow in the streets of every city in the country... Having behind
us the producing masses of
the nation … we will answer their demands for a gold standard by saying
to them: ‘You shall not
press down upon the brow of labor this crown of thorns, you shall not crucify
mankind upon a cross
of gold."
4. Democratic platform:
unlimited coinage of sliver at ration of 16 to 1 (16 oz of silver
to 1 oz of gold); silver in a dollar would be worth about 50 cents
5. Bryan also nominated
by People’s party but Bryan did not acknowledge the Populist
nomination early enough and the campaign began with uncertainty
a. Populists frozen out as Democratic party absorbed their 16 to 1 platform.
b. Endorsed Bryan rather than submit to hard-money McKinley.
6. Cleveland and other conservative
Democrats: futile attempt to form their own ticket.
C. Campaign
1. Bryan forced silver issue
to the forefront despite Hanna wanting to focus on tariff.
2. Hanna waged high pressure
campaign against silver.
3. McKinley remained at
his Ohio home waging his "front-porch" campaign.
-- United middle-class voters by characterizing Bryan as threat to their
way of life.
D. McKinley d. Bryan 271-176 in Electoral Col.
; 7,102,246 to 6,492,559 in popular votes
1. McKinley won in Northeast
and North; Bryan in South and West (except CA & OR)
2. Most significant election
since Lincoln’s victories.
a. Last serious effort by to win White House with agrarian votes.
-- Not enough farmers to constitute a majority; even with a personality
as compelling as Bryan.
b. Republicans remained White House for 16 consecutive years (28 of next
36 yrs)
c. Diminished voter participation as Republican party seen as party of
the rich.
d. Beginning of the "4th party system" -- large population centers
determined elections;
farmers discouraged and less politically active subsequently.
e. African Americans rights abandoned by Republicans since African American
vote in the South not important in 1896 election
E. 1896 election and the Wizard of Oz (L.
Frank Baum)
1. Dorothy – represents
everyman of the west; seen as pure and likeable
2. Yellow Brick Road = Gold
standard
3. Dorothy’s silver slippers
= Soft Money (but no one knows how to use their power)
4. Scarecrow = Midwestern
farmers (who are seen as stupid but actually have wisdom)
5. Tin Man = Eastern Labor
victimized by Wicked Witch of the East
6. Wizard and city of OZ
= Eastern Establishment
7. Cowardly Lion with Big
Roar and no bite = William Jennings Bryan
8. Wicked Witch of the East
= Corporations of Eastern Finance
9. OZ = An ounce of gold
or silver
10.The Wizard of Oz = McKinley
(or any other president during Gilded Age)
11. Flying monkeys = plains Indians
who were once free but now subdued by witch.
12. Wicked Witch of the West =
Forbidding frontier environment (drought, tornados, etc.)
13. water = boon that will
thwart drought (Wicked Witch of the West)
F. Legacy of Populism
1. Populism fails as a 3rd
Party cause but has a political influence for 25 years after its failure
in the 1896 elections.
2. Ideas that carry forward
during the Progressive Era (1900-1920):
a. railroad legislation
b. income tax
c. expanded currency and credit structure
d. direct election of Senators
e. initiative and referendum
f. postal savings banks
3. Populist ideas are geared
to rural life. Many of its ideas will appeal to the urban
progressives.
VI. McKinley’s Presidency: Domestic matters
A. Dingley Tariff Bill (1897)
1. Sought to recover lost
revenues as Wilson-Gorman not raising enough.
2. Tariff rate raised to
46.5% up from 41.3%
B. Gold Standard Act of 1900
1. Republicans could not
pass it until 1900 when silverites had left Congress.
2. Paper money was to be
redeemed freely in gold.
-- Inflationists dealt one last mortal blow as they faded into the past.
C. Moderate and necessary inflation from rapidly expanding economy
finally occurred
1. In 1880s & 1890s, prices
remained depressed, money was tight, and volume of currency
in circulation lagged far behind increasing volume of business.
-- Silver too radical a solution:
i. Discredited cause for expanded currency
ii. Set back movement for agrarian reform
2. New gold discoveries
in Canada, Alaska, South Africa, and Australia.
3. New cyanide process for
extracting gold from low-grade ore.
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