The Cleveland Era Part 3

Thus far, then, the efforts of the Government to deal with the labor problem had not been entirely successful. It is true that the labor conflicts arose over differences which only indirectly involved const.i.tutional questions. The aims of both the Knights of Labor and of the American Federation were primarily economic and both organizations were opposed to agitation of a distinctively political character. But parallel with the labor agitation, and in communication with it, there were radical reform movements of a type unknown before. There was now to arise a socialistic movement opposed to traditional const.i.tutionalism, and therefore viewed with alarm in many parts of the country. Veneration of the Const.i.tution of 1787 was practically a national sentiment which had lasted from the time the Union was successfully established until the Cleveland era. However violent political differences in regard to public policy might be, it was the invariable rule that proposals must claim a const.i.tutional sanction. In the Civil War, both sides felt themselves to be fighting in defense of the traditional Const.i.tution.

The appeal to antiquity-even such a moderate degree of antiquity as may be claimed for American inst.i.tutions-has always been the staple argument in American political controversy. The views and intentions of the Fathers of the Const.i.tution are exhibited not so much for instruction as for imitation, and by means of glosses and interpretations conclusions may be reached which would have surprised the Fathers to whom they are imputed. Those who examine the records of the formative period of American inst.i.tutions, not to obtain material for a case but simply to ascertain the facts, will readily observe that what is known as the principle of strict construction dates only from the organization of national parties under the Const.i.tution. It was an invention of the opposition to Federalist rule and was not held by the makers of the Const.i.tution themselves. The main concern of the framers was to get power for the National Government, and they went as far as they could with such success that striking instances may be culled from the writings of the Fathers showing that the scope they contemplated has yet to be attained. Strict construction affords a short and easy way of avoiding troublesome issues-always involved in unforeseen national developments-by subst.i.tuting the question of const.i.tutional power for a question of public propriety. But this method has the disadvantage, that it belittles the Const.i.tution by making it an obstacle to progress. Running through much political controversy in the United States is the argument that, even granting that a proposal has all the merit claimed for it, nevertheless it cannot be adopted because the Const.i.tution is against it. By strict logical inference the rejoinder then comes that, if so, the Const.i.tution is no longer an instrument of national advantage. The traditional attachment of the American people to the Const.i.tution has indeed been so strong that they have been loath to accept the inference that the Const.i.tution is out of date, although the quality of legislation at Washington kept persistently suggesting that view of the case.

The failures and disappointments resulting from the series of national elections from 1874 to 1884, at last, made an opening for party movements voicing the popular discontent and openly antagonistic to the traditional Const.i.tution. The Socialist Labor party held its first national convention in 1877. Its membership was mostly foreign; of twenty-four periodical publications then carried on in the party interest, only eight were in the English language; and this polyglot press gave justification to the remark that the movement was in the hands of people who proposed to remodel the inst.i.tutions of the country before they had acquired its language. The alien origin of the movement was emphasized by the appearance of two Socialist members of the German Reichstag, who made a tour of this country in 1881 to stir up interest in the cause. It was soon apparent that the growth of the Socialist party organization was hindered by the fact that its methods were too studious and its discussions too abstract to suit the energetic temper of the times. Many Socialists broke away to join revolutionary clubs which were now organized in a number of cities without any clearly defined principle save to fight the existing system of government.

At this critical moment in the process of social disorganization, the influence of foreign destructive thought made itself felt. The arrival of Johann Most from Europe, in the fall of 1882, supplied this revolutionary movement with a leader who made anarchy its principle. Originally a German Socialist aiming to make the State the sole landlord and capitalist, he had gone over to anarchism and proposed to dissolve the State altogether, trusting to voluntary a.s.sociation to supply all genuine social needs. Driven from Germany, he had taken refuge in England, but even the habitual British tolerance had given way under his praise of the a.s.sa.s.sination of the Czar Alexander in 1881 and his proposal to treat other rulers in the same way. He had just completed a term of imprisonment before coming to the United States. Here, he was received as a hero; a great ma.s.s meeting in his honor was held in Cooper Union, New York, in December, 1882; and when he toured the country he everywhere addressed large meetings.

In October 1883, a convention of social revolutionists and anarchists was held in Chicago, at which a national organization was formed called the International Working People's a.s.sociation. The new organization grew much faster than the Socialist party itself, which now almost disappeared. Two years later, the International had a party press consisting of seven German, two Bohemian, and only two English papers. Like the Socialist party, it was, therefore, mainly foreign in its membership. It was strongest in and about Chicago, where it included twenty groups with three thousand enrolled members. The anarchist papers exhorted their adherents to provide themselves with arms and even published instructions for the use of dynamite.

Political and industrial conditions thus supplied material for an explosion which came with shocking violence. On May 4, 1885, towards the close of an anarchist meeting held in Chicago, a dynamite bomb thrown among a force of policemen killed one and wounded many. Fire was at once opened on both sides, and, although the battle lasted only a few minutes, seven policemen were killed and about sixty wounded; while on the side of the anarchists, four were killed and about fifty were wounded. Ten of the anarchist leaders were promptly indicted, of whom one made his escape and another turned State's evidence. The trial of the remaining eight began on June 21, 1886, and two months later the death sentence was imposed upon seven and a penitentiary term of fifteen years upon one. The sentences of two of the seven were commuted to life imprisonment; one committed suicide in his cell by exploding a cartridge in his mouth; and four met death on the scaffold. While awaiting their fate they were to a startling extent regarded as heroes and bore themselves as martyrs to a n.o.ble cause. Six years later, Illinois elected as governor John P. Altgeld, one of whose first steps was to issue a pardon to the three who were serving terms of imprisonment and to criticize sharply the conduct of the trial which had resulted in the conviction of the anarchists.

The Chicago outbreak and its result stopped the open spread of anarchism. Organized labor now withdrew from any sort of a.s.sociation with it. This cleared the field for a revival of the Socialist movement as the agency of social and political reconstruction. So rapidly did it gain in membership and influence that by 1892 it was able to present itself as an organized national party appealing to public opinion for confidence and support, submitting its claims to public discussion, and stating its case upon reasonable grounds. Although its membership was small in comparison with that of the old parties, the disparity was not so great as it seemed, since the Socialists represented active intelligence while the other parties represented political inertia. From this time on, Socialist views spread among college students, artists, and men of letters, and the academic Socialist became a familiar figure in American society.

Probably more significant than the Socialist movement, as an indication of the popular demand for radical reform in the government of the country, was the New York campaign of Henry George in 1886. He was a San Francisco printer and journalist when he published the work on "Progress and Poverty" which made him famous. Upon the pet.i.tion of over thirty thousand citizens, he became the Labor candidate for mayor of New York City. The movement in support of George developed so much strength that the regular parties felt compelled to put forward exceptionally strong candidates. The Democrats nominated Abram S. Hewitt, a man of the highest type of character, a fact which was not perhaps so influential in getting him the nomination as that he was the son-in-law of Peter Cooper, a philanthropist justly beloved by the working cla.s.ses. The Republicans nominated Theodore Roosevelt, who had already distinguished himself by his energy of character and zeal for reform. Hewitt was elected, but George received 68,110 votes out of a total of 219,679, and stood second in the poll. His supporters contended that he had really been elected but had been counted out, and this belief turned their attention to the subject of ballot reform. To the agitation which Henry George began, may be fairly ascribed the general adoption of the Australian ballot in the United States.

The Socialist propaganda carried on in large cities and in factory towns hardly touched the great ma.s.s of the people of the United States, who belonged to the farm rather than to the workshop. The great agricultural cla.s.s, which had more weight at the polls than any other cla.s.s of citizens, was much interested in the redress of particular grievances and very little in any general reform of the governmental system. It is a cla.s.s that is conservative in disposition but distrustful of authority, impatient of what is theoretical and abstract, and bent upon the quick practical solution of problems by the nearest and simplest means. While the Socialists in the towns were interested in labor questions, the farmers more than any other cla.s.s were affected by the defective system of currency supply. The national banking system had not been devised to meet industrial needs but as a war measure to provide a market for government bonds, deposits of which had to be made as the basis of note issues. As holdings of government bonds were ama.s.sed in the East, financial operations tended to confine themselves to that part of the country, and banking facilities seemed to be in danger of becoming a sectional monopoly, and such, indeed, was the case to a marked extent. This situation inspired among the farmers, especially in the agricultural West, a hatred of Wall Street and a belief in the existence of a malign money power which provided an inexhaustible fund of sectional feeling for demagogic exploitation.

For lack of proper machinery of credit for carrying on the process of exchange, there seemed to be an absolute shortage in the amount of money in circulation, and it was this circ.u.mstance that had given such force to the Greenback Movement. Although that movement was defeated, its supporters urged that, if the Government could not supply additional note issues, it should at least permit an increase in the stock of coined money. This feeling was so strong that as early as 1877 the House had pa.s.sed a bill for the free coinage of silver. For this, the Senate subst.i.tuted a measure requiring the purchase and coinage by the Government of from two to four million dollars' worth of silver monthly, and this compromise was accepted by the House. As a result, in February, 1878, it was pa.s.sed over President Hayes's veto.

The operation of this act naturally tended to cause the h.o.a.rding of gold as the cheaper silver was equally a legal tender, and meanwhile the silver dollars did not tend to pa.s.s into circulation. In 1885, in his first annual message to Congress, President Cleveland mentioned the fact that, although 215,759,431 silver dollars had been coined, only about fifty million had found their way into circulation, and that "every month two millions of gold in the public Treasury are paid out for two millions or more of silver dollars to be added to the idle ma.s.s already acc.u.mulated." The process was draining the stock of gold in the Treasury and forcing the country to a silver basis without really increasing the amount of money in actual circulation or removing any of the difficulties in the way of obtaining supplies of currency for business transactions. President Cleveland recommended the repeal of the Silver Coinage Act, but he had no plan to offer by which the genuine complaints of the people against the existing monetary system could be removed. Free silver thus was allowed to stand before the people as the only practical proposal for their relief, and upon this issue a conflict soon began between Congress and the Administration.

At a convention of the American Bankers' a.s.sociation in September, 1885, a New York bank president described the methods by which the Treasury Department was restricting the operation of the Silver Coinage Act so as to avoid a displacement of the gold standard. On February 3, 1886, Chairman Bland of the House committee on coinage reported a resolution reciting statements made in that address, and calling upon the Secretary of the Treasury for a detailed account of his administration of the Silver Coinage Act. Secretary Manning's reply was a long and weighty argument against continuing the coinage of silver. He contended that there was no hope of maintaining a fixed ratio between gold and silver except by international concert of action, but "the step is one which no European nation... will consent to take while the direct or indirect subst.i.tution of European silver for United States gold seems a possibility." While strong as to what not to do, his reply, like most of the state papers of this period, was weak as to what to do and how to do it. The outlook of the Secretary of the Treasury was so narrow that he was led to remark that "a delusion has spread that the Government has authority to fix the amount of the people's currency, and the power, and the duty." The Government certainly has the power and the duty of providing adequate currency supply through a sound banking system. The instinct of the people on that point was sounder than the view of their rulers.

Secretary Manning's plea had so little effect that the House promptly voted to suspend the rules in order to make a free coinage bill the special order of business until it was disposed of. But the influence of the Administration was strong enough to defeat the bill when it came to a vote. Though for a time, the legislative advance of the silver movement was successfully resisted, the Treasury Department was left in a difficult situation, and the expedients to which it resorted to guard the gold supply added to the troubles of the people in the matter of obtaining currency. The quick way of getting gold from the Treasury was to present legal tender notes for redemption. To keep this process in check, legal tender notes were impounded as they came in, and silver certificates were subst.i.tuted in disburs.e.m.e.nts. But under the law of 1878, silver certificates could not be issued in denominations of less than ten dollars. A scarcity of small notes resulted, which oppressed retail trade until, in August, 1886, Congress authorized the issue of silver certificates in one and two and five dollar bills.

A more difficult problem was presented by the Treasury surplus which, by old regulations savoring more of barbarism than of civilized polity, had to be kept idle in the Treasury vaults. The only apparent means by which the Secretary of the Treasury could return his surplus funds to the channels of trade was by redeeming government bonds; but as these were the basis of bank note issues, the effect of any such action was to produce a sharp contraction in this cla.s.s of currency. Between 1882 and 1889, national bank notes declined in amount from $356,060,348 to $199,779,011. In the same period, the issue of silver certificates increased from $63,204,780 to $276,619,715, and the total amount of currency of all sorts nominally increased from $1,188,752,363 to $1,405,018,000; but of this, $375,947,715 was in gold coin which was being h.o.a.rded, and national bank notes were almost equally scarce since they were virtually government bonds in a liquid form.

As the inefficiency of the monetary system came home to the people in practical experience, it seemed as if they were being plagued and inconvenienced in every possible way. The conditions were just such as would spread disaffection among the farmers, and their discontent sought an outlet. The growth of political agitation in the agricultural cla.s.s, accompanied by a thorough-going disapproval of existing party leadership, gave rise to numerous new party movements. Delegates from the Agricultural Wheel, the Corn-Planters, the Anti-Monopolists, Farmers' Alliance, and Grangers, attended a convention in February, 1887, and joined the Knights of Labor and the Greenbackers to form the United Labor party. In the country, at this time, there were numerous other labor parties of local origin and composition, with trade unionists predominating in some places and Socialists in others. Very early, however, these parties showed a tendency to division that indicated a clash of incompatible elements. Single taxers, greenbackers, labor leaders, grangers, and socialists were agreed only in condemning existing public policy. When they came to consider the question of what new policy should be adopted, they immediately manifested irreconcilable differences. In 1888, rival national conventions were held in Cincinnati, one designating itself as the Union Labor party, the other as the United Labor party. One made a schedule of particular demands; the other insisted on the single tax as the consummation of their purpose in seeking reform. Both put presidential tickets in the field, but of the two, the Union Labor party made by far the better showing at the polls though, even so, it polled fewer votes than did the National Prohibition party. Although making no very considerable showing at the polls, these new movements were very significant as evidences of popular unrest. The fact that the heaviest vote of the Union Labor party was polled in the agricultural States of Kansas, Missouri, and Texas, was a portent of the sweep of the populist movement which virtually captured the Democratic party organization during President Cleveland's second term.

The withdrawal of Blaine from the list of presidential candidates in 1888 left the Republican Convention at Chicago to choose from a score of "favorite sons." Even his repeated statement that he would not accept the nomination did not prevent his enthusiastic followers from hoping that the convention might be "stampeded." But on the first ballot, Blaine received only thirty-five votes while John Sherman led with 229. It was anybody's race until the eighth ballot, when General Benjamin Harrison, grandson of "Tippecanoe," suddenly forged ahead and received the nomination.

The defeat of the Democratic party at the polls in the presidential election of 1888 was less emphatic than might have been expected from its sorry record. Indeed, it is quite possible that an indiscretion in which Lord Sackville-West, the British Amba.s.sador, was caught may have turned the scale. An adroitly worded letter was sent to him, purporting to come from Charles Murchison, a California voter of English birth, asking confidential advice which might enable the writer "to a.s.sure many of our countrymen that they would do England a service by voting for Cleveland and against the Republican system of tariff." With an astonishing lack of astuteness, the British minister fell into the trap and sent a reply which, while noncommittal on particulars, exhibited friendly interest in the reelection of President Cleveland. This correspondence, when published late in the campaign, caused the Administration to demand his recall. A spirited statement of the case was laid before the public by Thomas Francis Bayard, Secretary of State, a few days before the election, but this was not enough to undo the harm that had been done, and the Murchison letter takes rank with the Morey letter attributed to General Garfield as specimens of the value of the campaign lie as a weapon in American party politics.

President Cleveland received a slight plurality in the total popular vote; but by small pluralities Harrison carried the big States, thus obtaining a heavy majority in the electoral vote. At the same time, the Republicans obtained nearly as large a majority in the House as the Democrats had had before.

CHAPTER VIII. THE REPUBLICAN OPPORTUNITY

The Republican party had the inestimable advantage in the year 1889 of being able to act. It controlled the Senate which had become the seat of legislative authority; it controlled the House; and it had placed its candidate in the presidential chair. All branches of the Government were now in party accord. The leaders in both Houses were able men, experienced in the diplomacy which, far more than argument or conviction, produces congressional action. Benjamin Harrison himself had been a member of the ruling group of Senators, and as he was fully imbued with their ideas as to the proper place of the President he was careful to avoid interference with legislative procedure. Such was the party harmony that an extensive program of legislation was put through without serious difficulty, after obstruction had been overcome in the House by an amendment of the rules.

In the House of Representatives, the quorum is a majority of the whole membership. This rule enabled the minority to stop business at any time when the majority party was not present in sufficient strength to maintain the quorum by its own vote. On several occasions, the Democrats left the House nominally without a quorum by the subterfuge of refusing to answer to their names on the roll call. Speaker Reed determined to end this practice by counting as present any members actually in the chamber. To the wrath of the minority, he a.s.sumed this authority while a revision of the rules was pending. The absurdity of the Democratic position was naively exposed when a member arose with a law book in his hand and said, "I deny your right, Mr. Speaker, to count me as present, and I desire to read from the parliamentary law on the subject." Speaker Reed, with the nasal drawl that was his habit, replied, "The Chair is making a statement of fact that the gentleman from Kentucky is present? Does he deny it?" The rejoinder was so apposite that the House broke into a roar of laughter, and the Speaker carried his point.

Undoubtedly, Speaker Reed was violating all precedents. Facilities of obstruction had been cherished by both parties, and nothing short of Reed's earnestness and determination could have effected this salutary reform. The fact has since been disclosed that he had made up his mind to resign the Speakership and retire from public life had his party failed to support him. For three days, the House was a bedlam, but the Speaker bore himself throughout with unflinching courage and unruffled composure. Eventually he had his way. New rules were adopted, and the power to count a quorum was established.* When in later Congresses a Democratic majority returned to the former practice, Reed gave them such a dose of their own medicine that for weeks the House was unable to keep a quorum. Finally, the House was forced to return to the "Reed rules" which have since then been permanently retained. As a result of congressional example, they have been generally adopted by American legislative bodies, with a marked improvement in their capacity to do business.

* The rule that "no dilatory motion shall be entertained by the Speaker" was also adopted at this time.

With the facilities of action which they now possessed, the Republican leaders had no difficulty in getting rid of the surplus in the Treasury. Indeed, in this particular they could count on Democratic aid. The main conduit which they used was an increase of pension expenditures. President Harrison encouraged a spirit of broad liberality toward veterans of the Civil War. During the campaign he said that it "was no time to be weighing the claims of old soldiers with apothecary's scales," and he put this principle of generous recognition into effect by appointing as commissioner of pensions a robust partisan known as "Corporal" Tanner. The report went abroad that on taking office he had gleefully declared, "G.o.d help the surplus," and upon that maxim he acted with unflinching vigor. It seemed, indeed, as if any claim could count upon being allowed so long as it purported to come from an old soldier. But Tanner's ambition was not satisfied with an indulgent consideration of applications pending during his time; he reopened old cases, rerated a large number of pensioners, and increased the amount of their allowance. In some cases, large sums were granted as arrears due on the basis of the new rate. A number of officers of the pension bureau were thus favored, for a man might receive a pension on the score of disability though still able to hold office and draw its salary and emoluments. For example, the sum of $4300 in arrears was declared to be due to a member of the United States Senate, Charles F. Manderson of Nebraska. Finally, "Corporal" Tanner's extravagant management became so intolerable to the Secretary of the Interior that he confronted President Harrison with the choice of accepting his resignation or dismissing Tanner. Tanner therefore had to go, and with him his system of reratings.

A pension bill for dependents, such as Cleveland had vetoed, now went triumphantly through Congress.* It granted pensions of from six to twelve dollars a month to all persons who had served for ninety days in the Civil War and had thereby been incapacitated for manual labor to such a degree as to be unable to support themselves. Pensions were also granted to widows, minor children, and dependent parents. This law brought in an enormous flood of claims in pa.s.sing, upon which it was the policy of the Pension Bureau to practice great indulgence. In one instance, a pension was granted to a claimant who had enlisted but never really served in the army as he had deserted soon after entering the camp. He thereupon had been sentenced to hard labor for one year and made to forfeit all pay and allowances. After the war, he had been convicted of horse stealing and sent to the state penitentiary in Wisconsin. While serving his term, he presented a pension claim supported by forged testimony to the effect that he had been wounded in the battle of Franklin. The fraud was discovered by a special examiner of the pension office, and the claimant and some of his witnesses were tried for perjury, convicted, and sent to the state penitentiary at Joliet, Illinois. After serving his time there, he posed as a neglected old soldier and succeeded in obtaining letters from sympathetic Congressmen commending his case to the attention of the pension office, but without avail until the Act of 1890 was pa.s.sed. He then put in a claim which was twice rejected by the pension office examiners, but each time the decision was overruled, and in the end he was put upon the pension roll. This case is only one of many made possible by lax methods of investigating pension claims. Senator Gallinger of New Hampshire eventually said of the effect of pension policy, as shaped by his own party with his own aid:

"If there was any soldier on the Union side during the Civil War who was not a good soldier, who has not received a pension, I do not know who he is. He can always find men of his own type, equally poor soldiers who would swear that they knew he had been in a hospital at a certain time, whether he was or not-the records did not state it, but they knew it was so-and who would also swear that they knew he had received a shock which affected his hearing during a certain battle, or that something else had happened to him; and so all those pension claims, many of which are worthless, have been allowed by the Government, because they were 'proved.'"

* June 27, 1890.

The increase in the expenditure for pensions, which rose from $88,000,000 in 1889 to $159,000,000 in 1893, swept away much of the surplus in the Treasury. Further inroads were made by the enactment of the largest river and harbor appropriation bill in the history of the country up to this time. Moreover, a new tariff bill was contrived in such a way as to impose protective duties without producing so much revenue that it would cause popular complaint about unnecessary taxation. A large source of revenue was cut off by abolishing the sugar duties and by subst.i.tuting a system of bounties to encourage home production. Upon this bill as a whole, Senator Cullom remarks in his memoirs that "it was a high protective tariff, dictated by the manufacturers of the country" who have "insisted upon higher duties than they really ought to have." The bill was, indeed, made up wholly with the view of protecting American manufactures from any foreign compet.i.tion in the home market.

As pa.s.sed by the House, not only did the bill ignore American commerce with other countries but it left American consumers exposed to the manipulation of prices on the part of other countries. Practically all the products of tropical America, except tobacco, had been placed upon the free list without any precaution lest the revenue thus surrendered might not be appropriated by other countries by means of export taxes. Blaine, who was once more Secretary of State, began a vigorous agitation in favor of adding reciprocity provisions to the bill. When the Senate showed a disposition to resent his interference, Blaine addressed to Senator Frye of Maine a letter which was in effect an appeal to the people, and which greatly stirred the farmers by its statement that "there is not a section or a line in the entire bill that will open the market for another bushel of wheat or another barrel of pork." The effect was so marked that the Senate yielded, and the Tariff Bill, as finally enacted, gave the President power to impose certain duties on sugar, mola.s.ses, coffee, tea, and hides imported from any country imposing on American goods duties, which, in the opinion of the President, were "reciprocally unequal and unreasonable." This more equitable result is to be ascribed wholly to Blaine's energetic and capable leadership.

Pending the pa.s.sage of the Tariff Bill, the Senate had been wrestling with the trust problem which was making a mockery of a favorite theory of the Republicans. They had held that tariff protection benefited the consumer by the stimulus which it gave to home production and by ensuring a supply of articles on as cheap terms as American labor could afford. There were, however, notorious facts showing that certain corporations had taken advantage of the situation to impose high prices, especially upon the American consumer. It was a campaign taunt that the tariff held the people down while the trusts went through their pockets, and to this charge the Republicans found it difficult to make a satisfactory reply.

The existence of such economic injustice was continually urged in support of popular demands for the control of corporations by the Government. Though the Republican leaders were much averse to providing such control, they found inaction so dangerous that on January 14, 1890, Senator John Sherman reported from the Finance Committee a vague but peremptory statute to make trade compet.i.tion compulsory. This was the origin of the Ant.i.trust Law which has since gone by his name, although the law actually pa.s.sed was framed by the Senate judiciary committee. The first section declared that "every contract, combination in the form of trust or otherwise, or conspiracy, in restraint of trade or commerce among the several States, or with foreign nations, is hereby declared to be illegal." The law made no attempt to define the offenses it penalized and created no machinery for enforcing its provisions, but it gave jurisdiction over alleged violations to the courts-a favorite congressional mode of getting rid of troublesome responsibilities. As a result, the courts have been struggling with the application of the law ever since, without being able to develop a clear or consistent rule for discriminating between legal and illegal combinations in trade and commerce. Even upon the financial question, the Republicans succeeded in maintaining party harmony, notwithstanding a sharp conflict between factions. William Windom, the Secretary of the Treasury, had prepared a bill of the type known as a "straddle." It offered the advocates of free coinage the right to send to the mint silver bullion in any quant.i.ty and to receive in return the net market value of the bullion in treasury notes redeemable in gold or silver coin at the option of the Government. The monthly purchase of not less than $2,000,000 worth of bullion was, however, no longer to be required by law. When the advocates of silver insisted that the provision for bullion purchase was too vague, a subst.i.tute was prepared which definitely required the Secretary of the Treasury to purchase 4,500,000 ounces of silver bullion in one month. The bill, as thus amended, was put through the House under special rule by a strict party vote. But when the bill reached the Senate, the former party agreement could no longer be maintained, and the Republican leaders lost control of the situation. The free silver Republicans combined with most of the Democrats to subst.i.tute a free coinage bill, which pa.s.sed the Senate by forty-three yeas to twenty-four nays, all the negative votes save three coming from the Republican side.

It took all the influence the party leaders could exert to prevent a silver stampede in the House when the Senate subst.i.tute bill was brought forward; but by dexterous management, a vote of non-concurrence was pa.s.sed and a committee of conference was appointed. The Republican leaders now found themselves in a situation in which presidential non-interference ceased to be desirable, but president Harrison could not be stirred to action. He would not even state his views. As Senator Sherman remarked in his "Recollections," "The situation at that time was critical. A large majority of the Senate favored free silver, and it was feared that the small majority against it in the other House might yield and agree to it. The silence of the President on the matter gave rise to an apprehension that if a free coinage bill should pa.s.s both Houses, he would not feel at liberty to veto it."

In this emergency, the Republican leaders appealed to their free silver party a.s.sociates to be content with compelling the Treasury to purchase 4,500,000 ounces of silver per month, which it was wrongly calculated would cover the entire output of American mines. The force of party discipline eventually prevailed, and the Republican party got together on this compromise. The bill was adopted in both Houses by a strict party vote, with the Democrats solidly opposed, and was finally enacted on July 14, 1890.

Thus by relying upon political tactics, the managers of the Republican party were able to reconcile conflicting interests, maintain party harmony, and present a record of achievement which they hoped to make available in the fall elections. But while they had placated the party factions, they had done nothing to satisfy the people as a whole or to redress their grievances. The slowness of congressional procedure in matters of legislative reform allowed the amplest opportunity to unscrupulous business men to engage, in the meantime, in profiteering at the public expense. They were able to lay in stocks of goods at the old rates so that an increase of customs rates, for example, became an enormous tax upon consumers without a corresponding gain to the Treasury; for the yield was largely intercepted on private accounts by an advance in prices. The Tariff Bill, which William McKinley reported on April 16, 1890, became law only on the 1st of October, so there were over five months during which profiteers could stock at old rates for sales at the new rates and thus reap a rich harvest. The public, however, was infuriated, and popular sentiment was so stirred by the methods of retail trade that the politicians were both angered and dismayed. Whenever purchasers complained of an increase of price, they received the apparently plausible explanation, "Oh, the McKinley Bill did it." To silence this popular discontent, the customary arts and cajoleries of the politicians proved for once quite ineffectual.

At the next election, the Republicans carried only eighty-eight seats in the House out of 332-the most crushing defeat they had yet sustained. By their new lease of power in the House, however, the Democratic party could not accomplish any legislation, as the Republicans still controlled the Senate. The Democratic leaders, therefore, adopted the policy of pa.s.sing a series of bills attacking the tariff at what were supposed to be particularly vulnerable points. These measures, the Republicans derided as "pop-gun bills," and in the Senate they turned them over to the committee on finance for burial. Both parties were rent by the silver issue, but it was noticeable that in the House which was closest to the people the opposition to the silver movement was stronger and more effective than in the Senate.

Notwithstanding the popular revolt against the Republican policy which was disclosed by the fall elections of 1890, President Harrison's annual message of December 9, 1891, was marked by extreme complacency. Great things, he a.s.sured the people, were being accomplished under his administration. The results of the McKinley Bill "have disappointed the evil prophecies of its opponents and in large measure realized the hopeful predictions of its friends." Rarely had the country been so prosperous. The foreign commerce of the United States had reached the largest total in the history of the country. The prophecies made by the antisilver men regarding disasters to result from the Silver Bullion Purchase Act, had not been realized. The President remarked "that the increased volume of currency thus supplied for the use of the people was needed and that beneficial results upon trade and prices have followed this legislation I think must be clear to every one." He held that the free coinage of silver would be disastrous, as it would contract the currency by the withdrawal of gold, whereas "the business of the world requires the use of both metals." While "the producers of silver are ent.i.tled to just consideration," it should be remembered that "bimetallism is the desired end, and the true friends of silver will be careful not to overrun the goal." In conclusion, the President expressed his great joy over "many evidences of the increased unification of the people and of the revived national spirit. The vista that now opens to us is wider and more glorious than before. Gratification and amazement struggle for supremacy as we contemplate the population, wealth, and moral strength of our country."

Though the course of events has yet to be fully explained, President Harrison's dull pomposity may have been the underlying reason of the aversion which Blaine now began to manifest. Although on Harrison's side and against Blaine, Senator Cullom remarks in his memoirs that Harrison had "a very cold, distant temperament," and that "he was probably the most unsatisfactory President we ever had in the White House to those who must necessarily come into personal contact with him." Cullom is of the opinion that "jealousy was probably at the bottom of their disaffection," but it appears to be certain that at this time Blaine had renounced all ambition to be President and energetically discouraged any movement in favor of his candidacy. On February 6, 1892, he wrote to the chairman of the Republican National Committee that he was not a candidate and that his name would not go before the convention. President Harrison went ahead with his arrangements for renomination, with no sign of opposition from Blaine. Then suddenly, on the eve of the convention, something happened-exactly what has yet to be discovered-which caused Blaine to resign the office of Secretary of State. It soon became known that Blaine's name would be presented, although he had not announced himself as a candidate. Blaine's health was then broken, and it was impossible that he could have imagined that his action would defeat Harrison. It could not have been meant for more than a protest. Harrison was renominated on the first ballot with Blaine a poor second in the poll.

In the Democratic convention, Cleveland, too, was renominated on the first ballot, in the face of a bitter and outspoken opposition. The solid vote of his own State, New York, was polled against him under the unit rule, and went in favor of David B. Hill. But even with this large block of votes to stand upon, Hill was able to get only 113 votes in all, while Cleveland received 616. Genuine acceptance of his leadership, however, did not at all correspond with this vote. Cleveland had come out squarely against free silver, and at least eight of the Democratic state conventions-in Colorado, Florida, Georgia, Idaho, Kansas, Nevada, South Carolina, and Texas-came out just as definitely in favor of free silver. But even delegates who were opposed to Cleveland, and who listened with glee to excoriating speeches against him forthwith, voted for him as the candidate of greatest popular strength. They then solaced their feelings by nominating a free silver man for Vice-President, who was made the more acceptable by his opposition to civil service reform. The ticket thus straddled the main issue; and the platform was similarly ambiguous. It denounced the Silver Purchase Act as "a cowardly makeshift" which should be repealed, and it declared in favor of "the coinage of both gold and silver without discrimination," with the provision that "the dollar unit of coinage of both metals must be of equal intrinsic and exchangeable value." The Prohibition party in that year came out for the "free and unlimited coinage of silver and gold." A more significant sign of the times was the organization of the "People's party," which held its first convention and nominated the old Greenback leader, James B. Weaver of Iowa, on a free silver platform.

The campaign was accompanied by labor disturbances of unusual extent and violence. Shortly after the meeting of the national conventions, a contest began between the powerful Amalgamated a.s.sociation of Steel and Iron Workers, the strongest of the trade-unions, and the Carnegie Company over a new wage scale introduced in the Homestead mills. The strike began on June 29, 1892, and local authority at once succ.u.mbed to the strikers. In antic.i.p.ation of this eventuality, the company had arranged to have three hundred Pinkerton men act as guards. They arrived in Pittsburgh during the night of the 5th of July and embarked on barges which were towed up the river to Homestead. As they approached, the strikers turned out to meet them, and an engagement ensued in which men were killed or wounded on both sides and the Pinkerton men were defeated and driven away. For a short time, the strikers were in complete possession of the town and of the company's property. They preserved order fairly well but kept a strict watch that no strike breakers should approach or attempt to resume work. The government of Pennsylvania was, for a time, completely superseded in that region by the power of the Amalgamated a.s.sociation, until a large force of troops entered Homestead on the 12th of July and remained in possession of the place for several months. The contest between the strikers and the company caused great excitement throughout the country, and a foreign anarchist from New York attempted to a.s.sa.s.sinate Mr. Frick, the managing director of the company. Though this strike was caused by narrow differences concerning only the most highly paid cla.s.ses of workers, it continued for some months and then ended in the complete defeat of the union.

On the same day that the militia arrived at Homestead, a more b.l.o.o.d.y and destructive conflict occurred in the Coeur d'Alene district of Idaho, where the workers in the silver mines were on strike. Nonunion men were imported and put into some of the mines. The strikers, armed with rifles and dynamite, thereupon attacked the nonunion men and drove them off, but many lives were lost in the struggle and much property was destroyed. The strikers proved too strong for any force which state authority could muster, but upon the call of the Governor, President Harrison ordered federal troops to the scene and under martial law order was soon restored.

Further evidence of popular unrest was given in August by a strike of the switchmen in the Buffalo railway yards, which paralyzed traffic until several thousand state troops were put on guard. About the same time, there were outbreaks in the Tennessee coal districts in protest against the employment of convict labor in the mines. Bands of strikers seized the mines, and in some places turned loose the convicts and in other places escorted them back to prison. As a result of this disturbance, during 1892 state troops were permanently stationed in the mining districts, and eventually the convicts were put back at labor in the mines.

Such occurrences infused bitterness into the campaign of 1892 and strongly affected the election returns. Weaver carried Colorado, Idaho, Kansas, and Nevada, and he got one electoral vote in Oregon and in North Dakota; but even if these twenty-two electoral votes had gone to Harrison, he would still have been far behind Cleveland, who received 277 electoral votes out of a total of 444. Harrison ran only about 381,000 behind Cleveland in the popular vote, but in four States, the Democrats had nominated no electors and their votes had contributed to the poll of over a million for Weaver. The Democratic victory was so sweeping that it gained the Senate as well as the House, and now for the first time a Democratic President was in accord with both branches of Congress. It was soon to appear, however, that this party accord was merely nominal.

CHAPTER IX. THE FREE SILVER REVOLT

The avenging consequences of the Silver Purchase Act moved so rapidly that when John Griffin Carlisle took office as Secretary of the Treasury in 1893, the gold reserve had fallen to $100,982,410-only $982,410 above the limit indicated by the Act of 1882-and the public credit was shaken by the fact that it was an open question whether the government obligation to pay a dollar was worth so much or only one half so much. The latter interpretation, indeed, seemed impending. The new Secretary's first step was to adopt the makeshift expedient of his predecessors. He appealed to the banks for gold and backed up by patriotic exhortation from the press, he did obtain almost twenty-five millions in gold in exchange for notes. But as even more notes drawing out the gold were presented for redemption, the Secretary's efforts were no more successful than carrying water in a sieve.

Of the notes presented for redemption during March and April, nearly one-half were treasury notes of 1890, which by law the Secretary might redeem "in gold or silver coin at his discretion." The public was now alarmed by a rumor that Secretary Carlisle, who while in Congress had voted for free silver, would resort to silver payments on this cla.s.s of notes, and regarded his statements as being noncommittal on the point. Popular alarm was, to some extent, dispelled by a statement from President Cleveland, on the 23rd of April, declaring flatly and unmistakably that redemption in gold would be maintained. But the financial situation throughout the country was such that nothing could stave off the impending panic. Failures were increasing in number, some large firms broke under the strain, and the final stroke came on the 5th of May when the National Cordage Company went into bankruptcy. As often happens in the history of panics, the event was trivial in comparison with the consequences. This company was of a type that is the reproach of American jurisprudence-the marauding corporation. In the very month in which it failed, it declared a large cash dividend. Its stock, which had sold at 147 in January, fell in May to below ten dollars a share. Though the Philadelphia and Reading Railway Company, which failed in February, had a capital of $40,000,000 and a debt of more than $125,000,000, the market did not break completely under that strain. The National Cordage had a capital of $20,000,000 and liabilities of only $10,000,000, but its collapse brought down with it the whole structure of credit. A general movement of liquidation set in, which throughout the West was so violent as to threaten general bankruptcy. Nearly all of the national bank failures were in the West and South, and still more extensive was the wreck of state banks and private banks. It had been the practice of country banks, while firmly maintaining local rates, to keep the bulk of their resources on deposit with city banks at two per cent. This practice now proved to be a fatal entanglement to many inst.i.tutions. There were instances in which country banks were forced to suspend, though cash resources were actually on the way to them from depository centers.*

* Out of 158 national bank failures during the year, 153 were in the West and South. In addition there went down 172 state banks, 177 private banks, 47 savings banks, 13 loan and trust companies, and 6 mortgage companies.

Even worse than the effect of these numerous failures on the business situation was the derangement which occurred in the currency supply. The circulating medium was almost wholly composed of bank notes, treasury notes, and treasury certificates issued against gold and silver in the Treasury, coin being little in use except as fractional currency. Bank notes were essentially treasury certificates issued upon deposits of government bonds. In effect, the circulating medium was composed of government securities reduced to handy bits. Usually, a bank panic tends to bring note issues into rapid circulation for what they will fetch, but in this new situation, people preferred to impound the notes, which they knew to be good whatever happened so long as the Government held out. Private h.o.a.rding became so general that currency tended to disappear. Between September 30, 1892 and October 31, 1893, the amount of deposits in the national banks shrank over $496,000,000. Trade was reduced to making use of the methods of primitive barter, though the emergency was met to some extent by the use of checks and clearinghouse certificates. In many New England manufacturing towns, for example, checks for use in trade were drawn in denominations from one dollar up to twenty. In some cases, corporations paid off their employees in checks drawn on their own treasurers which served as local currency. In some Southern cities, clearing-house certificates in small denominations were issued for general circulation-in Birmingham, Alabama, for sums as small as twenty-five cents. It is worth noting that a premium was paid as readily for notes as for gold; indeed, the New York "Financial Chronicle" reported that the premium on currency was from two to three per cent, while the premium on gold was only one and one half per cent. Before the panic had ended, the extraordinary spectacle was presented of gold coins serving as a medium of trade because treasury notes and bank notes were still h.o.a.rded. These peculiarities of the situation had a deep effect upon the popular att.i.tude towards the measures recommended by the Administration.

While this devastating panic was raging over all the country, President Cleveland was beset by troubles that were both public and personal. He was under heavy pressure from the office seekers. They came singly or in groups and under the escort of Congressmen, some of whom performed such service several times a day. The situation became so intolerable that on the 8th of May President Cleveland issued an executive order setting forth that "a due regard for public duty, which must be neglected if present conditions continue, and an observance of the limitations placed upon human endurance, oblige me to decline, from and after this date, all personal interviews with those seeking office."