There was a severe decline in agricultural prices, due partially to protectionist activity by principal trading countries, including the McKinley Tariff of 1890 (guided through Congress by William McKinley of Ohio), which raised tariffs to 49.5 percent, and western agrarian and silver-mining interests only approved that tariff in exchange for concessions to the silver-mining industry. Under the Sherman Silver Purchase Act of July 1890, the federal treasury was obligated to buy 4.5 million ounces of silver per month at current prices, and pay for them with notes convertible into gold or silver at the Treasury’s option. This was a form of inflation to combat recessive economic conditions and to spread money around an aggrieved (and normally Republican) area in the West and Southwest. These conditions gave rise to great discontent in the agrarian areas of the West and South, and a good deal of political fermentation, including efforts to unite militant farm and labor organizations in what became known, and persisted intermittently for more than 50 years, as the Populist, or Progressive, movement.
The foreign policy concerns of the Harrison administration were also less than earth-shaking. Cleveland had dispatched commissioners to a conference in Berlin about Samoa. Like most aspects of U.S. foreign policy in this time, it was a somewhat absurd episode. Cleveland told the Congress (January 15, 1889) that the matter was “delicate and critical,” but two months later a feared naval confrontation between the U.S., Germany, and Great Britain was avoided when the combatant ships were overwhelmed by a hurricane in Apia harbor, destroying the German and American ships (three each) and sparing only the British vessel. (Had there been an exchange of fire in harbor, the collateral damage would have been considerable, but it is not clear at whom, if anyone, the British warship would have been firing.) In June 1889, it was agreed in Berlin that Samoa would be “independent and autonomous,” but with a three-power protectorate and an agreed “adviser” to the king of Samoa.
Blaine’s first International American Conference met in Washington starting in October, 1889. All the Latin American countries except the Dominican Republic were present. (Canada was not.) Blaine’s proposals for a customs union and a dispute-resolution mechanism were not accepted, but the International Bureau of American Republics, which became the Pan-American Union, was established as a permanent office for exchange of information.
There were opera bouffe incidents with Italy and Chile. Following a trial of Mafia suspects in New Orleans in October 1890, which led to acquittals, a mob broke into the city jail in March and lynched 11 detainees, including three Italians. Blaine deplored the actions but rejected Italy’s demand for indemnity and prosecution of the mob, as it was a State of Louisiana matter. Both sides withdrew their ambassadors and made unfriendly noises, but the incident was resolved by a payment of $25,000 in April 1892. The rebels in the Chilean civil war of 1891 sent a vessel to San Diego to collect arms and munitions. The ship was intercepted and escorted back to San Diego, but then released, as there was no violation of the Neutrality Act (which did not apply to civil wars). The rebels won the war and American sailors on shore leave were attacked by a mob at Valparaiso in October 1891, and two American sailors were killed. A public exchange of acerbities and demands ensued, and Blaine threatened a total breach of diplomatic relations and Harrison in his message to Congress in January 1892 virtually threatened war. The Chileans thought better of this and apologized, and paid an indemnity of $75,000 to close the incident.
Alone among the world’s Great Powers, the United States had no serious business to conduct diplomatically. It stood noisily on its dignity when offended in the Americas or the Pacific, and could always extract an unembarrassing resolution of small matters, but rarely intersected in any significant way with another important country. In 1892, a dispute developed between the United States and Great Britain over seal hunting in the Bering Strait, separating Alaska from Russia. The problems had started when Americans accused Canada of poaching in 1886. After a sharp exchange of notes with Great Britain, a power that could not be as lightly treated as Chile or even Italy, the matter was referred to an international tribunal of French, Swedes, and Italians, who decided, establishing a long tradition of European resentment of American assertions of sovereignty, that the Canadians and British were right, and the United States eventually (in 1898) paid an indemnity of $473,000. These were terribly trivial matters compared with Bismarkian maneuverings, the revanchist agitations of France, Britain’s tenacious hold on the delicate balance of power, and Japan’s muscle-flexing in the Far East. James G. Blaine had retired as secretary of state for reasons of poor health in 1892, and was succeeded by John W. Foster, a respected career diplomat, whose son-in-law and grandson, Robert Lansing and John Foster Dulles, would also be secretaries of state.
The 1892 election season was riven by the Populist campaign, led by James B. Weaver, who had almost held the balance between Garfield and Hancock in 1880 and was nominated for president in St. Louis in February 1892. Farm prices were still depressed and there had been widespread labor disturbances in 1892, especially the Homestead Strike in July, in which seven people were killed at a Carnegie Steel plant in Pennsylvania, and Carnegie’s manager, Henry Clay Frick, was attacked and wounded in a plot led by socialists Alexander Berkman and Emma Goldman. The platform was a recession-born mish-mash of Know-Nothingism and Progressivism. It included calls for expansion of the money supply by $50 per capita (which would have been spectacularly inflationary), unlimited issuance of silver coinage, sharp curtailment of the private banks, nationalization of the rail and telegraph and interstate shipping systems, a graduated income tax, direct election of U.S. senators (instead of by the state legislatures as the Constitution had provided), a referendary form of government, shorter working hours for all categories of labor, and restricted immigration. It was, as such movements often are, a mixed bag of enlightened and reactionary and quirky policies.
The Republicans met at Minneapolis in June, and renominated President Harrison and chose Whitelaw Reid of New York (editor of the New York Tribune and a friend and protégé of Horace Greeley) for vice president. (Harrison blamed Levi Morton’s mismanagement of the Senate for failure to pass the Force Bill reenfranchising African Americans in the South and sought a change of vice presidents. Morton returned to private life and, apart from one term as governor of New York, soldiered on in ever-increasing prosperity to his death in 1920 on his 96th birthday.) The Democrats met at Chicago two weeks later and renominated Grover Cleveland, the party’s candidate for the third consecutive time, with Adlai E. Stevenson of Illinois for vice president. (Stevenson, as Cleveland’s first-term assistant postmaster general, had made himself a beloved figure to Democrats by firing 40,000 Republican postal workers and replacing them with southern Democrats. His name would be made more famous by his grandson, who ran two stylish (but unsuccessful) campaigns for president in the 1950s, partly singling out for attack the foreign policy of Secretary of State John W. Foster’s grandson, John Foster Dulles.) The main issue was again the tariff, with Cleveland vaguely proposing reductions.
On election day, Cleveland won 5.54 million votes to 5.19 million for Harrison and 1.03 million for Weaver, 46 percent to 44 percent to 9 percent. (The Prohibitionists gained 271,000 votes, as alarm at alcoholism was becoming quite vocal.) McKinley’s tariff and economic conditions generally in agrarian areas cost Harrison the election, as most of the Weaver voters were natural Republicans. Grover Cleveland was about to become the only person in American history to have non-consecutive terms as president. The outgoing secretary of state, John W. Foster, had had a foreign policy background and prior to that, the last secretary who could make this claim was Buchanan, who had been secretary of state under Polk. Since then, the holders of the office had been beneficiaries of political pay-offs by the president to powerful faction heads (Clayton, Webster, Everett, Marcy, Cass, Seward, Washburn, Blaine, Frelinghuysen, Bayard), or had been prominent lawyers (Black, Fish, Everts). Cleveland followed now in both traditions, first with Walter Q. Gresham, who had been Arthur’s postmaster general and secretary of the Treasury, before becoming an appellate judge and defecting to Cleveland and the Democrats. When Gresham died in 1895, Cleveland would select Richard Olney, a former attorney general, best known for taking injunctive action against the Pullman strikers in 1894. In these times, even the Democrats were closer to the capitalists than to the workers, and unions were looked upon as un-American radicalism. Benjamin Harrison had been a mediocre, but not a bad, president. He is one of the more forgettable figures to hold that office, but executed it with more distinction than Pierce or Buchanan, and than several of his eventual successors.
2. CLEVELAND’S SECOND PRESIDENCY
The U.S. economy was rocked by a new perturbation when the London merchant bank Barings failed and there was a disorderly unloading of American securities, causing a stock market crash with some panic selling, aggravated by a reduction in federal government revenues from reduced imports attributable to the McKinley Tariff and the increased expenses of the selective welfare system provided by the engrossed military pension scheme. U.S. gold reserves descended below $100 million on April 21, 1893, and declined further to $80 million in October. Nearly 500 banks and about 15,000 commercial institutions failed in 1892–1893. By 1897, one-third of railway mileage was in the hands of receivers. Amidst these tidal changes, Darwinian upheavals occurred in the economic well-being of millions, but nothing undermined the inexorable advance of the size of the American economy.
Cleveland determined to stop the diminution of gold reserves and summoned a special session of Congress for the summer of 1893, which repealed the Sherman Silver Purchase Act. This was a bitter battle that split his party (the Democrats) almost as grievously as Douglas had done with the Kansas-Nebraska Act and “popular sovereignty” in 1854. Gold reserves dipped to $41 million and attempts to float bond issues failed. Cleveland called on legendary financiers J. Pierpont Morgan and August Belmont, who underwrote a $62 million issue, on which they trousered a $7 million profit. The Populists and bimetallists became very agitated, and when that facility expired, reserves dipped again to under $80 million. The administration did float a public issue directly and confidence in the inviolability of the gold standard hovered through the 1896 election and then revived strongly.
The advocates of silver, bimetallists, took the agrarian and working classes out from under the more conservative Democrats, especially in the East and South, and after the period from 1876 to 1892 when the Democrats won the popular vote in four elections out of five, and only lost in 1880 by 7,000, the political landscape shifted again. Just as the ability of the Republicans to win by waving the “bloody shirt,” quoting Lincoln, and paying off everyone related to a Union army or navy veteran was groaning to an end, they attached themselves like limpets to hard money, pure capitalism, individual enterprise, the ruggedness of the American spirit, and the alleged clear path to patriotism and godliness. There were great agitations by groups of unemployed, often calling themselves “armies.” Coxey’s Army, led by Jacob Coxey of Massillon, Ohio, called for a march of the unemployed on Washington in late 1893. In April, about 400 of them had arrived and they presented a petition calling for a job-creating public works program to dispense up to $500 million. Coxey and his chief collaborators were arrested for trespassing at the Capitol and the movement dispersed and disintegrated. American confidence in the inexorable rise of their country and the invincible strength of meritocracy was not going to be shaken easily. The mighty engine of growth soon resumed and swept up most of the malcontents in its train.
American economic and demographic growth was astounding throughout the period from the Civil War to 1929, but it moved in lurching fluctuations, and unevenly between industrial sectors. What grew consistently was the Gross National Product of the country and the per capita income derived from it, but within those exhilarating surges, there were sharp graphic changes in all directions. Consumer prices (1910–1914=100: Warren-Pearson Wholesale Price Index) moved from the end of each administration: 1865 (Lincoln) 132; 1869 (Johnson) 97.7; 1877 (Grant) 56; 1885 (Arthur) 56.6; 1897 (Cleveland) 46.6; 1901 (McKinley) 56.7; 1909 (Roosevelt) 70; 1913 (Taft) 70; 1921 (Wilson) 154; 1923 (Harding) 100.6; 1929 (Coolidge) 95.3. Throughout this time there were huge accretions of industrial capacity and output, and the price fluctuations did not necessarily imply increases or declines in prosperity, as there was little inflation, and declining prices generally meant increasing investment in supply. Stock prices (U.S. Bureau of the Census, taking 1926 as 100), moved: 1877 (Grant) 24.8; 1893 (Harrison) 43.9; 1897 (Cleveland) 35.2; 1913 (Taft) 63.8; 1921 (Wilson) 64.2; 1923 (Harding) 67.7; and the huge rise in the twenties, 1929 (Coolidge) 190.3.
In foreign affairs, the chief issues of the second Cleveland administration were further afield than the paltry concerns of fish and seals and the lynching of a few people that had inconveniently arisen in the nearly 30 years since Seward had expelled Napoleon III from Mexico. The United States had owned tropical fruit plantations and used the naval anchorage and replenishment station of Pearl Harbor, near Honolulu, for some years. The large, and mainly American, planters had generated a revolution in 1887 that produced a rather liberal and easily suggestible (to their interests) government. The damage done by the McKinley Tariff to Hawaiian sugar interests coincided with the defeat of the pro-American political faction and the accession of a patriotic leader, Queen Liliuokalani, who revoked the liberal constitution and assumed powers to rule by royal decree. The leading American plantation owner, Sanford B. Dole, whose name would soon become famous in the kitchens of America, staged a coup in 1893, and the American minister, John L. Stephens, by prearrangement, purported to legitimize this movement and ordered the landing of a small number of Marines from the visiting cruiser Boston, supposedly to defend American life and property. The Marines effortlessly occupied government buildings, raised the U.S. flag over them, proclaimed the Hawaiian Islands a U.S. protectorate, and recognized Dole as president of Hawaii. A treaty of annexation was composed, but filibustered by Democrats and not ratified by the Senate while Harrison was president. Cleveland withdrew the treaty in March 1893, and appointed a commissioner to investigate the whole status of Hawaii. The commissioner, ex-congressman James Blount, a liberal Democrat, withdrew recognition of the Dole regime, hauled down the American flag, and excoriated Stephens and the Dole-led planters, and said that the majority of Hawaiians were opposed to annexation.