Before leaving Washington on 4 March 1889 the Clevelands
sold their home at Oak View for about $140,000 turning a $100,000 profit.
While exiting from the President’s Mansion Mrs. Frances Cleveland told
the head butler Jerry Smith, “We are coming back just four years from now.”1
They went to New York, and after a fishing trip in the Adirondacks
they rented a four-story brownstone house at 816 Madison Avenue.
Cleveland had saved half his salaries as President, and he associated
with the law firm Bangs, Stetson, Tracy, and MacVeagh.
He paid ten percent of his legal fees for office expenses but mostly
acted as a referee in his office when called upon to do so by courts.
After the head lawyer Francis Stetson got the financier J. P. Morgan’s account,
Cleveland became friends with Morgan who was also Tracy’s brother-in-law.
Cleveland mostly held to the ex-Presidents’ tradition
of not commenting much on the current President’s policies.
On December 12 he spoke to about 400 businessmen
at the Merchants’ Association in Boston on ballot reform.
He said he was glad to address those who
represented that factor in civilized life
which measures the progress of a people,
which constitutes the chief care
of every enlightened government
and which gives to a country the privilege
of recognized membership in the community of nations.2
That same week he addressed 250 leading authors at the American Copyright League
and expressed his doubts about running for a second term.
Yet he began to criticize the Harrison administration on the high tariffs and silver issues,
though he commended Harrison’s judicial appointments as superior to his own.
On 13 November 1890 he spoke in Columbus, Ohio
at a birthday banquet for his 1888 running mate Allan Thurman.
He criticized William McKinley and his tariff for slighting the working class.
On 8 January 1891 Cleveland addressed the annual Jackson Day Dinner
of the Philadelphia Young Men’s Democratic Association
on “The Principles of True Democracy.”
He described those principles as
Equal and exact justice to all men;
peace, commerce, and honest friendship with all nations—
entangling alliance with none;
the support of the state governments in all their rights;
the preservation of the general government
in its whole constitutional vigor;
a jealous care of the right of election by the people;
absolute acquiescence in the decisions of the majority;
the supremacy of the civil over the military authority;
economy in the public expenses;
the honest payment of our debts
and sacred preservation of the public faith;
the encouragement of agriculture,
and commerce as its handmaid, and freedom of religion,
freedom of the press, and freedom of the person.3
In 1891 he began speaking nearly once a month.
Cleveland was concerned about the Sherman Silver Purchase Act especially
when Democratic conventions in 21 states supported unlimited silver coinage.
In January all but one Democrat in the U. S. Senate voted for a free coinage bill.
In February he sent a letter on that issue to the New York Reform Club, writing,
If we have developed an unexpected capacity for the
assimilation of a largely increased volume of this currency,
and even if we have demonstrated
the usefulness of such an increase,
these conditions fall far short of insuring us against disaster
if, in the present situation,
we enter upon the dangerous and reckless experiment
of free, unlimited, and independent silver coinage.4
Some eastern capitalists opposed the high
McKinley tariffs and the Sherman Silver Act.
These included Cleveland’s former Treasury Secretary Charles Fairchild,
his Navy Secretary William Whitney, the merchant brothers Oscar and Isidor Straus,
and Henry Villard who was a journalist and a railroad financier.
The former New York Governor David B. Hill
had just been elected a U. S. Senator.
He hoped to get the Democratic nomination for President by courting
free-silver Democrats in Congress, the South, and the New York delegation.
The state party chairman Edward Murphy tried to aid Hill by calling for
an early state convention on February 22 in Albany;
and this backfired when the New York World called it
“an act of midwinter folly; illogical, unfair, undemocratic and unwise.”
Most of the other Democratic newspapers agreed with that.
Cleveland’s backers could not get the committee to cancel the Albany convention,
and they planned one to meet at Syracuse in May.
On Washington’s birthday Cleveland spoke at the
University of Michigan in Ann Arbor and said,
Interest yourselves in public affairs as a duty of citizenship;
but do not surrender your faith to those who discredit
and debase politics by scoffing at sentiment and principle,
and whose political activity consists
in attempts to gain popular support
by cunning devices and shrewd manipulation.5
Cleveland suggested that the virtue and honesty
of George Washington’s time was still relevant.
The speech was published in the major newspapers.
Cleveland decided that he would obey “the cause of the country and of my party.”
The Rhode Island convention in March pledged their delegates to Cleveland,
followed by the Massachusetts Democrats
and then on May 14 by the Georgia convention.
The Democratic Convention met at Chicago on June 21, and after a very long
session the next day they nominated Cleveland for President on the first ballot.
Adlai E. Stevenson of Illinois, who advocated free silver,
was nominated for Vice President.
When he was Assistant Postmaster General under Cleveland,
Stevenson had replaced 40,000 Republicans with Democrats.
The 1892 presidential campaign and the election are discussed in
“Harrison & U. S. Elections in 1892” in the previous chapter.
Cleveland had some trouble at first getting people to accept cabinet positions.
Thomas Bayard declined to return to being Secretary of State because
he wanted to be the ambassador to Great Britain to which he was appointed.
Cleveland then chose the former Republican and U. S. Appeals Court
Judge Walter Q. Gresham who had been Postmaster General in 1883
and Treasury Secretary in 1884.
Charles Fairchild declined to be Treasury Secretary again.
Cleveland’s choice of the U. S. Senator John G. Carlisle of Kentucky
was respected because he was an expert and had a brilliant intellect.
The U. S. Senator George Gray of Delaware declined to be Attorney General,
and Cleveland named the Boston railroad lawyer Richard Olney.
Cleveland chose his friend Wilson Bissell to be Postmaster
as he was capable and loyal to civil service reform.
He picked Hoke Smith, the owner of the Atlanta Journal,
as Interior Secretary because he advocated tariff reform and sound money.
He also wanted to aid the Indians and protect
public land and forests from private exploitation.
The Alabama Congressman Hilary Herbert became the Navy Secretary.
Daniel Lamont had worked closely with Cleveland for many years,
and he was made Secretary of War and was his closest advisor.
J. Stanley Morton had been the Secretary and then
the Acting Governor of the Nebraska Territory.
He had founded Arbor Day on 10 April 1872
when about one million trees were planted in Nebraska.
He had stood up to free-silver Democrats
and was appointed Secretary of Agriculture.
On 1 March 1893 the U. S. Congress passed the Diplomatic Appropriations Act
which authorized funds of varying amounts for envoys extraordinary and ministers
plenipotentiary in 35 nations and for ministers resident and consuls-general in 5 nations.
After a heavy snowfall President Grover Cleveland
gave his second inaugural address on 4 March 1893.
He called for a frugal government and continued civil service,
and he summarized the policies of his first administration.
He described the relations of business and labor, his Indian policy, and tariff reform.
He here is his entire second inaugural address:
My Fellow-Citizens:
In obedience of the mandate of my countrymen
I am about to dedicate myself to their service
under the sanction of a solemn oath.
Deeply moved by the expression of confidence and
personal attachment which has called me to this service,
I am sure my gratitude can make no better return than
the pledge I now give before God and these witnesses
of unreserved and complete devotion to the interests
and welfare of those who have honored me.
I deem it fitting on this occasion, while indicating the
opinion I hold concerning public questions of present
importance, to also briefly refer to the existence of certain
conditions and tendencies among our people which seem to
menace the integrity and usefulness of their Government.
While every American citizen must contemplate with the
utmost pride and enthusiasm the growth and expansion of our
country, the sufficiency of our institutions to stand against the
rudest shocks of violence, the wonderful thrift and enterprise
of our people, and the demonstrated superiority of our free
government, it behooves us to constantly watch for every
symptom of insidious infirmity that threatens our national vigor.
The strong man who in the confidence of sturdy health courts
the sternest activities of life and rejoices in the hardihood of
constant labor may still have lurking near his vitals the
unheeded disease that dooms him to sudden collapse.
It can not be doubted that, our stupendous achievements
as a people and our country's robust strength have given rise
to heedlessness of those laws governing our national health
which we can no more evade than human life can escape
the laws of God and nature.
Manifestly nothing is more vital to our supremacy as a
nation and to the beneficent purposes of our Government
than a sound and stable currency.
Its exposure to degradation should at once arouse to
activity the most enlightened statesmanship, and the
danger of depreciation in the purchasing power of the
wages paid to toil should furnish the strongest
incentive to prompt and conservative precaution.
In dealing with our present embarrassing situation as
related to this subject we will be wise if we temper our
confidence and faith in our national strength and resources
with the frank concession that even these will not permit us
to defy with impunity the inexorable laws of finance and trade.
At the same time, in our efforts to adjust differences of
opinion we should be free from intolerance or passion,
and our judgments should be unmoved by alluring
phrases and unvexed by selfish interests.
I am confident that such an approach to the subject
will result in prudent and effective remedial legislation.
In the meantime, so far as the executive branch of the
Government can intervene, none of the powers with
which it is invested will be withheld when their exercise
is deemed necessary to maintain our national credit
or avert financial disaster.
Closely related to the exaggerated confidence in our
country's greatness which tends to a disregard of the rules of
national safety, another danger confronts us not less serious.
I refer to the prevalence of a popular disposition
to expect from the operation of the Government
especial and direct individual advantages.
The verdict of our voters which condemned the injustice
of maintaining protection for protection's sake enjoins
upon the people's servants the duty of exposing
and destroying the brood of kindred evils which
are the unwholesome progeny of paternalism.
This is the bane of republican institutions and the
constant peril of our government by the people.
It degrades to the purposes of wily craft the plan
of rule our fathers established and bequeathed
to us as an object of our love and veneration.
It perverts the patriotic sentiments of our countrymen
and tempts them to pitiful calculation of the sordid gain
to be derived from their Government's maintenance.
It undermines the self-reliance of our people and substitutes
in its place dependence upon governmental favoritism.
It stifles the spirit of true Americanism and stupefies
every ennobling trait of American citizenship.
The lessons of paternalism ought to be unlearned and
the better lesson taught that while the people should
patriotically and cheerfully support their Government
its functions do not include the support of the people.
The acceptance of this principle leads to a refusal
of bounties and subsidies, which burden the labor and
thrift of a portion of our citizens to aid ill-advised or
languishing enterprises in which they have no concern.
It leads also to a challenge of wild and reckless pension
expenditure, which overleaps the bounds of grateful
recognition of patriotic service and prostitutes to vicious
uses the people's prompt and generous impulse to aid
those disabled in their country's defense.
Every thoughtful American must realize the importance
of checking at its beginning any tendency in public or
private station to regard frugality and economy
as virtues which we may safely outgrow.
The toleration of this idea results in the waste of the people's
money by their chosen servants and encourages prodigality
and extravagance in the home life of our countrymen.
Under our scheme of government the waste of public
money is a crime against the citizen, and the contempt
of our people for economy and frugality in their personal
affairs deplorably saps the strength and sturdiness
of our national character.
It is a plain dictate of honesty and good government
that public expenditures should be limited by public necessity,
and that this should be measured by the rules of strict economy;
and it is equally clear that frugality among the people is the best
guaranty of a contented and strong support of free institutions.
One mode of the misappropriation of public funds is avoided
when appointments to office, instead of being the rewards
of partisan activity, are awarded to those whose efficiency
promises a fair return of work for the compensation paid to them.
To secure the fitness and competency of appointees to office
and remove from political action the demoralizing madness
for spoils, civil-service reform has found a place
in our public policy and laws.
The benefits already gained through this instrumentality and
the further usefulness it promises entitle it to the hearty support
and encouragement of all who desire to see our public service
well performed or who hope for the elevation of political
sentiment and the purification of political methods.
The existence of immense aggregations of kindred
enterprises and combinations of business interests
formed for the purpose of limiting production and
fixing prices is inconsistent with the fair field which
ought to be open to every independent activity.
Legitimate strife in business should not be superseded
by an enforced concession to the demands of combinations
that have the power to destroy, nor should the people
to be served lose the benefit of cheapness which
usually results from wholesome competition.
These aggregations and combinations frequently
constitute conspiracies against the interests of the
people, and in all their phases they are unnatural
and opposed to our American sense of fairness.
To the extent that they can be reached and restrained
by Federal power the General Government should relieve
our citizens from their interference and exactions.
Loyalty to the principles upon which our Government
rests positively demands that the equality before the law
which it guarantees to every citizen should be justly
and in good faith conceded in all parts of the land.
The enjoyment of this right follows the badge of citizenship
wherever found, and, unimpaired by race or color, it appeals
for recognition to American manliness and fairness.
The existence of immense aggregations of kindred
enterprises and combinations of business interests
formed for the purpose of limiting production and fixing
prices is inconsistent with the fair field which ought
to be open to every independent activity.
Legitimate strife in business should not be superseded
by an enforced concession to the demands of combinations
that have the power to destroy, nor should the people
to be served lose the benefit of cheapness
which usually results from wholesome competition.
These aggregations and combinations frequently
constitute conspiracies against the interests of the
people, and in all their phases they are unnatural
and opposed to our American sense of fairness.
To the extent that they can be reached and restrained by
Federal power the General Government should relieve
our citizens from their interference and exactions.
Loyalty to the principles upon which our Government
rests positively demands that the equality before the law
which it guarantees to every citizen should be justly
and in good faith conceded in all parts of the land.
The enjoyment of this right follows the badge of citizenship
wherever found, and, unimpaired by race or color, it appeals
for recognition to American manliness and fairness.
Our relations with the Indians located within our border
impose upon us responsibilities we can not escape.
Humanity and consistency require us to treat them with
forbearance and in our dealings with them to honestly
and considerately regard their rights and interests.
Every effort should be made to lead them,
through the paths of civilization and education,
to self-supporting and independent citizenship.
In the meantime, as the nation’s wards, they should
be promptly defended against the cupidity of designing
men and shielded from every influence or temptation
that retards their advancement.
The people of the United States have decreed that on this
day the control of their Government in its legislative and
executive branches shall be given to a political party pledged
in the most positive terms to the accomplishment of tariff reform.
They have thus determined in favor of a more
just and equitable system of Federal taxation.
The agents they have chosen to carry out their purposes are
bound by their promises not less than by the command of their
masters to devote themselves unremittingly to this service.
While there should be no surrender of principle, our task
must be undertaken wisely and without heedless vindictiveness.
Our mission is not punishment, but the rectification of wrong.
If in lifting burdens from the daily life of our people we reduce
inordinate and unequal advantages too long enjoyed,
this is but a necessary incident of our return to right and justice.
If we exact from unwilling minds acquiescence in the theory
of an honest distribution of the fund of the governmental
beneficence treasured up for all, we but insist upon a
principle which underlies our free institutions.
When we tear aside the delusions and misconceptions
which have blinded our countrymen to their condition under
vicious tariff laws, we but show them how far they have
been led away from the paths of contentment and prosperity.
When we proclaim that the necessity for revenue to support
the Government furnishes the only justification for taxing the
people, we announce a truth so plain that its denial would seem
to indicate the extent to which judgment may be influenced
by familiarity with perversions of the taxing power.
And when we seek to reinstate the self-confidence and
business enterprise of our citizens by discrediting an abject
dependence upon governmental favor, we strive to stimulate
those elements of American character which support
the hope of American achievement.
Anxiety for the redemption of the pledges which my party
has made and solicitude for the complete justification of the
trust the people have reposed in us constrain me to remind
those with whom I am to cooperate that we can succeed in
doing the work which has been especially set before us only
by the most sincere, harmonious, and disinterested effort.
Even if insuperable obstacles and opposition prevent the
consummation of our task, we shall hardly be excused; and if
failure can be traced to our fault or neglect we may be sure
the people will hold us to a swift and exacting accountability.
The oath I now take to preserve, protect, and defend the
Constitution of the United States not only impressively
defines the great responsibility I assume, but suggests
obedience to constitutional commands as the rule
by which my official conduct must be guided.
I shall to the best of my ability and within my sphere of duty
preserve the Constitution by loyally protecting every grant of
Federal power it contains, by defending all its restraints when
attacked by impatience and restlessness, and by enforcing its
limitations and reservations in favor of the States and the people.
Fully impressed with the gravity of the duties that confront
me and mindful of my weakness, I should be appalled if it were
my lot to bear unaided the responsibilities which await me.
I am, however, saved from discouragement when I remember
that I shall have the support and the counsel and cooperation
of wise and patriotic men who will stand at my side in Cabinet
places or will represent the people in their legislative halls.
I find also much comfort in remembering that my countrymen
are just and generous and in the assurance that they will not
condemn those who by sincere devotion to their service
deserve their forbearance and approval.
Above all, I know there is a Supreme Being who rules
the affairs of men and whose goodness and mercy have always
followed the American people, and I know He will not turn
from us now if we humbly and reverently seek His powerful aid.6
The country was facing the worst economic depression in twenty years,
and Cleveland often worked as late as 2 or 3 in the morning.
The Cleveland White House had only seven servants including
a chef, a nurse, and a telephone operator.
In his first term there was only one phone, and he often answered it himself.
On March 5 a New York Times editorial wrote that President Cleveland
has an absolutely sound conception of the
functions of the Government of these
United States and of the principles upon which
its administration must be conducted
if its popular character is to be maintained.
He has the unerring instinct of a clear common sense
as to the policy that must be maintained to guard
our great heritage of popular institutions from
the insidious influences that tend to undermine it.7
For the first time since the 1856 election the Democratic Party
controlled both houses of the U. S. Congress.
The Midwest was suffering from economic deflation.
In Kansas from 1887 to 1893 over 11,000 farms were foreclosed while
three-quarters of the land in 15 counties was taken over by mortgage companies.
The Kansas Governor Lorenzo Dow Lewelling sent his
“Executive circular to metropolitan police commissioners”
which was also called the “Tramp Circular” advising them
to be lenient toward the wandering vagrants and the unemployed.
The U. S. Supreme Court in United States
v. Workingmen’s Amalgamated Council on March 25 upheld the conviction
of union leaders for conspiracy to violate the Sherman Anti-trust Act
because they were trying to prevent interstate commerce.
On March 9 President Cleveland withdrew the Hawaiian treaty from the Senate.
The New York Times and the New York World called for an investigation,
and Cleveland sent to Hawaii Rep. James H. Blount of Georgia,
who had just retired from being the chairman of the Foreign Relations Committee,
to find out the truth and to restore American honor and justice.
He had the new flag taken down and the Hawaiian flag raised again.
Secretary of State Gresham agreed with Cleveland that for the sake of justice
the Hawaiian government should be restored.
The New York Commercial Advertiser criticized Cleveland for throwing away a “prize.”
Albert S. Willis replaced Stevens as minister and urged reconciliation.
In the debate most Democrats supported Cleveland,
and some wanted to continue the American expansion
begun by Presidents Jefferson and Polk.
Stevens complained that the McKinley Tariff Act had cost Americans
most of the $12 million loss to the sugar industry.
When Blount arrived in Hawaii, he stopped U. S. forces from being police
for the provisional government and took down the flag
and withdrew the marines back to the USS Boston.
He stayed in a hotel instead of with a wealthy supporter.
He learned that most of the natives opposed United States annexation
while sugar planters pressured some to sign petitions on its behalf.
Blount completed his report for the State Department and the President on July 11,
and it was kept secret until late November.
He and Cleveland agreed that annexation was not justified.
President Sanford B. Dole declined to dismantle his government,
and Queen Liliʻuokalani refused to grant amnesty and wanted to be returned to power.
On October 18 Secretary of State Gresham presented to Cleveland
and the Cabinet a plan for Hawaii.
Willis told Queen Liliʻuokalani that she must promise clemency to her adversaries
and accept their actions during the interval in order for her authority
to be recognized by the United States.
On November 13 President Dole met with her,
and she refused to grant amnesty to revolutionaries.
Willis eventually persuaded her to do so on December 16,
and then Dole refused to resign.
Most Hawaiians opposed her restoration.
On December 4 Cleveland condemned the forcible intervention and worked
to resolve the situation, and three days later he and his Cabinet turned the
Hawaiian emergency over to the U. S. Congress.
On December 18 Cleveland sent a 12-page special message
to Congress on the Hawaiian issue.
In the second and third paragraphs he wrote,
I suppose that right and justice should determine the path
to be followed in treating this subject.
If national honesty is to be disregarded and a desire for territorial
extension or dissatisfaction with a form of government
not our own ought to regulate our conduct,
I have entirely misapprehended the mission and character
of our Government and the behavior which the conscience
of our people demands of their public servants.
When the present Administration entered upon its duties, the Senate
had under consideration a treaty providing for the annexation
of the Hawaiian Islands to the territory of the United States.
Surely under our Constitution and laws the enlargement of our limits
is a manifestation of the highest attribute of sovereignty,
and if entered upon as an Executive act all things relating
to the transaction should be clear and free from suspicion.
Additional importance attached to this particular treaty of annexation
because it contemplated a departure from unbroken American
tradition in providing for the addition to our territory of islands
of the sea more than 2,000 miles removed from our nearest coast. 8
Thus he urged the United States “to make all possible reparations.”
He again asked Congress to devise a legislative plan
“consistent with American honor, integrity, and morality.”
The U. S. Senate decided to stay out of Hawaii’s affairs and insisted
that other nations do the same.
Some Americans including church groups who supported the Christian missionaries
protested the result; and most newspapers opposed restoring a monarch,
and some prominent thinkers praised Cleveland for his wisdom.
The great historian Allan Nevins compared this crisis to the situation
faced by the Roman Senate in 464 BC when they decided to extend their power
beyond the Italian peninsula to Sicily in order to defend the Mamertines.
That was also the year Rome began holding gladiatorial contests in the city.
Nevins wrote,
In an era of international land-grabbing
Cleveland, despite angry sneers,
had insisted that the United States should meet
the loftiest obligations of honesty and unselfishness;
in an era when the rights of small nations
were almost universally trampled on,
he had displayed a sensitive consideration
for one of the weakest of them all.9
To reduce the number of office-seekers Cleveland decided he would
not appoint
anyone who had served during his first term, and he excluded newspapermen.
In mid-March he would not recognize the patronage boards set up by legislators.
After dealing with the job-seekers for nine weeks he refused to see them
during the time arranged for talking with Congressmen.
He filled the State and Treasury Departments with partisan Democrats,
and the Post Office Department followed the nonpartisan civil service reforms.
Secretary of State Gresham did not know Democrats well, and he was aided
by the Assistant Secretary Josiah Quincy for six months.
Cleveland asked Theodore Roosevelt to stay on as the Civil Service Commissioner,
and he did so until the spring of 1895.
The Sherman Silver Act of 1890 had committed the United States
to annual purchases of 54 million ounces of silver at market value,
and this was inflating the currency by some $50 million each year.
When Cleveland left the presidency in 1889 the U. S. cash balance was
$281 million with $196,689,514 of it in gold.
When he returned in 1893 Harrison had left only
$112,450,577 in cash and $103,500,000 in gold.
The legal minimum of the latter was $100 million.
Henry Villard predicted a financial panic.
The Philadelphia and Reading Railroad owed $125 million
and declared bankruptcy, signaling what could happen.
On April 20 a Boston banker warned U. S. Attorney General Olney that people
would go into a panic if the federal gold reserve fell below $100 million.
In 1892 the U. S. Government had lost $50 million in gold,
and in the current fiscal year ending on June 30
the drain of gold to Europe would be $87.5 million.
Treasury Secretary Carlisle got an emergency loan of $6 million from
New York bankers to raise the reserve up to $107 million by March 25,
and for the first time it fell below $100 million on April 23.
Cleveland maintained gold payments,
and Andrew Carnegie said that he had saved the country from a panic.
Cleveland attended the International Columbian Naval Review
on the Hudson River in New York City on April 27.
Then on May 1 he officially opened the World’s Columbian Exposition at Chicago
where a quarter million people gathered.
Millions had attended since it began in October 1892,
and 27 million more would visit during the summer.
Cleveland began noticing pain in his mouth while returning to Washington on May 3.
He agreed to be examined by Dr. R. M. O’Reilly who found an ulcer
from the molar teeth to the soft palate.
Then Dr. James H. Welch of John Hopkins found that a biopsy specimen was malignant.
Cleveland’s personal physician Joseph D. Bryant confirmed this,
and the President became concerned that this must be kept secret
so as to avoid increasing the financial panic.
If Vice President Adlai Stevenson replaced Cleveland,
he likely would put the U. S. on the silver standard.
The U. S. Supreme Court on May 15 upheld the Geary Act of 1892
that had strengthened the Chinese Exclusion Act of 1882
which had prohibited the immigration of Chinese workers.
On 4 May 1893 the daring Wall Street speculator, Stephen Van Cullen White,
after having paid a 100% dividend in January,
had his National Cordage Company fail along with two other important firms.
Panic occurred at the New York Stock Exchange the next day.
On Tuesday May 9 the Chemical National Bank of Chicago failed,
followed two days later by the Columbia National Bank.
European banks and governments tried to get their U. S. notes redeemed for gold.
Harvey Fisk & Co. estimated that the value of a silver dollar was down to 53 cents,
and it was diminishing every day.
The Panic of 1893 had begun.
One quarter of the nation’s railroads failed involving $2.5 billion of capital
and 40,000 miles of railways.
New York banks in May and June refused to discount the notes
of western and southern institutions, causing many to close down.
Farms were especially hard hit.
By August about two million people or 15% of the labor force were unemployed.
Cleveland agreed to have surgery, and the operation took place
on the Oneida yacht of his friend Elias Benedict where he had spent much time.
He liked to smoke cigars and chew tobacco,
and they may have caused the cancer in his mouth.
He was 56, corpulent, and exhausted from working hard,
and they decided to use ether as an anesthetic despite the risk.
A team of top surgeons and the expert dentist Ferdinand Hasbrouck
removed two teeth and the tumor on July 1.
Cleveland survived and gradually recovered
as his friend Lamont told the press that he had dental surgery.
Some more diseased tissue was removed in a second operation on the 17th.
After he regained his ability to speak, the Attorney General Olney reported that he said,
“My God, Olney, they nearly killed me!”10
He was fitted with an artificial jaw.
He had lost some weight, and there was no outward sign on his face.
On June 9 George Pullman and about 200 prominent men that included tycoons
such as retailer Marshal Field, grocery wholesaler Franklin MacVeagh,
flour miller Charles Pillsbury, and various railroad executives attended a dinner
in St. Paul, Minnesota to celebrate the completion of James Jerome Hill’s
Great Northern Railroad connecting St. Paul, Minnesota
to Puget Sound in the state of Washington.
That summer because of the economic decline
David B. Hill began cutting wages for the lowest paid workers to a dollar a day.
Yet in 1893 a good wheat crop with low prices on equipment and supplies
enabled Hill to make large profits.
The Northern Pacific Railroad, which had been completed in 1883,
declared bankruptcy on October 20.
In May and June 1893 the New York banks refused to
rediscount notes from western and southern financial institutions.
India was the last country to demonetize silver which
caused the price of U. S. silver to fall to 77 cents an ounce on June 27
because it no longer had a market.
Mines in Colorado were shut down, putting 30,000 men out of work.
Delegates from silver-mining states met at Denver; they promised to accept
repeal of the Sherman Act if free and unlimited coinage of silver was maintained.
They blamed the world’s capitalists for demonetizing silver,
and they warned against a single gold standard.
U. S. Supreme Court Justice Samuel Blatchford died on July 7,
and Cleveland nominated William Hornblower of New York;
David Hill, the senior senator from that state, got the votes to defeat the nomination.
Hill wanted Rufus W. Peckham, whom Cleveland knew in Albany,
and he nominated his brother Wheeler H. Peckham instead.
He was rejected by even more votes.
Finally on 12 March 1894 Cleveland nominated Senator Edward D. White of Louisiana
who opposed the President on the tariff,
and on the same day the Senate confirmed him unanimously.
On August 1 savings banks required sixty days of notice before withdrawing funds.
New York banks cashed only small checks, and 642 banks failed.
Democrats blamed the Republican tariff that increased the prices of imports.
Plentiful and cheap silver enabled people and banks to use it to purchase paper money
and then redeem that for gold, reducing the U. S. Government’s supply
while hoarding the precious metal.
Also 194 railroads declared they were bankrupt.
The U. S. Congress had adjourned on June 30, and the next day Cleveland
summoned them to reconvene for a special session on August 7
in order to repeal the Sherman Silver Act.
He wrote a message that was delivered to the U. S. Congress on August 8
in which he asked them to direct their attention to the “alarming and extraordinary
business situation, involving the welfare and prosperity of all our people.”
He urged them to repeal the Silver Act by which the U. S. Government
had purchased over $147 million worth of silver, some of it paid for with gold.
The value of money had increased, making it hard for those with heavy debts.
William L. Wilson of West Virginia, Bourke Cockran of New York,
and the former Speaker Thomas Reed of Maine spoke for the repeal in the House.
Those opposed were led by Joseph W. Bailey of Texas and
young William Jennings Bryan of Nebraska
who made an influential 3-hour speech on August 16, saying,
On the one side stand
the corporate interests of the United States,
the moneyed interests, aggregated wealth and capital,
imperious, arrogant, compassionless….
On the other side stand an unnumbered throng,
those who gave to the Democratic party a name
and for whom it has assumed to speak.
Work-worn and dust-begrimed,
they make their mute appeal, and too often find
their cry for help beat in vain against the outer walls,
while others, less deserving,
gain ready access to legislative halls.11
On August 20 the House voted to repeal the Sherman Silver Act 239-108
with 78 Democrats, 22 Republicans, and 8 Populists voting no.
Cleveland returned to Washington on the 30th, and Dr. Bryant declared him “all healed.”
When a story about his operation leaked out in the Philadelphia Press on August 29,
it was denied by his advisors and generally not believed.
The secrecy was fairly well kept,
and the public would not learn about the cancer until 1917.
In the Senate much debate and filibustering went on for nearly two months
with William V. Allen of Nebraska speaking continuously for 15 hours.
On October 17 John Sherman argued for repealing his own bill, saying,
If we dispose of the question as we think best
for the people of the United States,
we will gladden the hearts of millions of laboring men
who are now being deprived of employment;
we will relieve the business care of thousands of men
whose fortunes are embarked in trade;
we will relieve the farmer and facilitate
the transportation of his products to foreign countries,
which is now clogged by the want of money.12
On October 23 President Cleveland still insisted they pass the repeal,
and one week later the Congress finally approved the bill with the Senate voting 48-37.
A few minutes later Cleveland signed it into law.
About 16,000 businesses had become bankrupt.
Half the laborers in Paterson, New Jersey were not working.
Silver miners in Colorado went to Denver to apply for relief.
Poorhouses became bankrupt, and many public schools closed
because they lacked funding.
About 5,000 Polish immigrants in East Buffalo were in danger of starving.
On September 16 in the largest land rush over 100,000 American settlers
had bought lots in the six million acres of the Cherokee Strip between Kansas
and the Oklahoma Territory which Cherokees had sold for $8,595,736
in an 1891 treaty the U. S. Congress had finally ratified on 3 March 1893.
That treaty also established the Dawes Commission with the power
to dissolve tribal governments and allot land to individuals
as preparation for Oklahoma becoming a state.
In the First Annual Message of his second term to the
U. S. Congress on December 4 Cleveland in 26 pages he wrote about the Hawaii issue:
Just prior to the installation of the present Administration the
existing Government of Hawaii had been suddenly overthrown,
and a treaty of annexation had been negotiated between the
Provisional Government of the islands and the United States
and submitted to the Senate for ratification.
This treaty I withdrew for examination and dispatched
Hon. James H. Blount of Georgia to Honolulu as a special
commissionner to make an impartial investigation of the
circumstances attending the change of government and of all
the conditions bearing upon the subject of the treaty.
After a thorough and exhaustive examination Mr. Blount
submitted to me his report, showing beyond all question that
the constitutional Government of Hawaii had been subverted
with the active aid of our representative to that Government
and through the intimidation caused by the presence of an
armed naval force of the United States, which was landed
for that purpose at the instance of our minister.
Upon the facts developed it seemed to me
the only honorable course for our Government to pursue
was to undo the wrong that had been done
by those representing us and to restore as far as practicable
the status existing at the time of our forcible intervention.
With a view of accomplishing this result
within the constitutional limits of executive power,
and recognizing all our obligations and responsibilities
growing out of any changed conditions brought about
by our unjustifiable interference,
our present minister at Honolulu
has received appropriate instructions to that end.13
He also noted that in the previous year the U. S. had exported gold
worth $108,680,844 which was nearly double that of the year before.
The sugar bounty had increased from $2,033,053 to $9,375,131.
The latest annual deficit of the U. S. Government was $28 million.
The U. S. Army had 25,778 enlisted men and 2,144 officers
while the state militias had 112,597 officers and men.
The War Department spent less than $52 million of which
$15,296,876 was used to improve rivers and harbors.
The U. S. Army was not needed for any Indian outbreaks or for domestic violence.
Cleveland reported that the Railroad Mail Service had speeded up all mail deliveries.
He estimated that 110,000 of the 248,000 Indians on 161 reservations
with 86,116,531 acres of land had “adopted civilized customs.”
In the House of Representatives the chairman of the Ways and Means Committee,
William L. Wilson, held hearings daily on a revised tariff bill until September 20.
Andrew Carnegie advised the President not to do “radical surgery” on the tariffs.
Cleveland helped write a conservative bill that added lumber, coal, iron, and wool
to the free list along with raw and refined sugar,
and the reductions on manufactured clothing were moderate.
Wilson introduced the tariff bill named after him on December 19.
The American Federation of Labor (AFL) held their annual convention in December.
They estimated that more than three million Americans were unemployed,
and they demanded an 8-hour day so that more people would have jobs.
They urged the U. S. Government to issue
$500 million in paper money to finance public works.
Detroit’s Mayor Hazen Pingree expanded public welfare programs
and hired the unemployed to grow vegetables on vacant lots.
His “potato-patch plan” spread to Buffalo,
Brooklyn, New York, Cincinnati, and other cities.
On 20 April 1894 over 100,000 coal workers in Columbus, Ohio
went on strike for better pay.
The next day about 126,00 United Mine Workers led by John McBride
joined the strike that grew to 160,000 a few days later,
and it spread from Pennsylvania to Alabama and Colorado.
On April 28 the Great Northern Railroad’s owner James Hill
sent a telegram to President Cleveland complaining about mobs in North Dakota
and Montana saying they were interfering with the U. S. mail, though they were not.
The U. S. Attorney General Olney disliked Hill and advised Cleveland
not to interfere because the workers could be right.
President Cleveland agreed to let Olney be U. S. Attorney General
while still working for his $10,000 salary as counsel for the
Chicago, Burlington & Quincy Railroad.
As a cabinet officer he made only $8,000.
Olney had been a corporation lawyer for 35 years and was also a director
on the boards of the New York Central and the Santa Fe railroads.
The U. S. Attorney Thomas Milchrist in Chicago told the
General Managers Association (GMA) that he would get arrest warrants for strikers
who interfere with U. S. mail which had been greatly expedited by railroads.
The U. S. Attorney Edwin Walker had been the lawyer for the
Chicago, Milwaukee, St. Paul & Pacific Railroad since 1870.
Olney sent him to Chicago to command the federal response to the boycott.
He worked with the GMA against the strike and reported to Olney by telegram.
Olney ordered Chicago’s chief U. S. Marshal John W. Arnold to gather a force,
and he quickly appointed 400 deputies and would eventually
deploy 5,000 marshals from Chicago.
Railroad companies paid for most of these men
who arrested about 800 strikers in Chicago.
The police arrested some deputy marshals who shot at people indiscriminately.
Colorado’s Gov. Davis H. Waite protested that the deputy marshals like
“a private army” were arresting strikers without warrants.
Illinois Gov. John Peter Altgeld had written the essay
“Our Penal Machinery and Its Victims” in 1884.
Altgeld after listening to Clarence Darrow on 26 June 1893
courageously pardoned three Haymarket convicts.
Although he believed that troops would be used to help the railroad interests
to defeat the workers, on June 30 he sent 300 state militiamen
because of the alleged public danger.
The next day Altgeld sent 265 soldiers to Decatur and 220 to Danville.
On Sunday July 1 Olney ordered U. S. Attorney Milchrist to use the law,
and he worked many hours on a petition for an injunction
which two sympathetic federal judges helped write
before forbidding Eugene Debs and the American Railway Union (ARU) directors
from aiding the boycott in any way or communicating with members about the strike.
Strikers were ordered not to oppose replacement workers or employees
or even persuade them not to perform their duties.
Those violating the writ could be arrested for contempt of court.
Many considered this un-American.
The injunction also prohibited public nuisance, obstructing the mail,
and even restraining interstate commerce according to the Sherman Antitrust Act
which was intended to curtail monopolies.
During the Pullman Railroad strike in 1894 on July 3 Attorney General Olney
showed President Cleveland, who had been sheriff of Erie County for 3 years,
telegrams from Illinois, New Mexico, Colorado, and California asking for Federal troops.
Cleveland called an emergency cabinet meeting with Army Commander John Schofield
and General Nelson Miles, and at 4 p.m. the President decided to send troops.
Miles asked about firing on rioting strikers,
and Cleveland replied that Miles was to be the judge of that.
War Secretary Lamont wired orders to Fort Sheridan,
and Miles booked a train to Chicago.
Cleveland said,
If it takes every dollar in the Treasury and every
soldier in the United States to deliver a postal card
in Chicago, that postal card should be delivered.14
On July 5 rioters burned or overturned freight cars,
and General Miles asked General Schofield to send more troops.
On that day Gov. Altgeld wrote to President Cleveland objecting that
he had not requested them, and he asked him to respect “local self-government”
and withdraw the Federal troops.
He told reporters that Olney was representing the great trusts and using the government.
On Friday July 6 the nation’s largest labor conflict escalated as mobs overturned
at least 150 boxcars while fire destroyed 250 on sidings.
Outside the stockyards about 700 freight cars of the Panhandle Railroad were burned.
Some 200 open cars with coal were set aflame.
Property damage in Chicago on that day was estimated at $1 million.
City officials found that railroad losses that day were $340,000.
On Saturday Federal troops were directed to shoot anyone who set fires,
destroyed property, threw objects, or attacked marshals of trainmen.
State militia and police were given similar instructions.
On the Sunday evening of July 8 Cleveland met with his cabinet
and read a letter from Debs and the Knights of Labor leader James Sovereign
in which they claimed that the railroads disrupted the mail,
that the military was deployed too quickly,
and that workers needed to be protected from the ravages of corporate greed.
Cleveland proclaimed that strikers were “public enemies,”
and the next day he sent his prohibitions to western states with major disorders.
Citizens were required to disperse by 3 p.m. on July 10.
He also ordered eight infantry companies in New York to go to Chicago,
and he called out the Navy and Marines in San Francisco
to go against the Sacramento strikers.
General Miles wired that Chicago rioters had 6,000 rifles and many dynamite bombs,
and he threatened death to anyone who came within 100 feet of railroad tracks.
The general strike began on July 11,
and incidents in Illinois and California resulted in a few people being killed.
U. S. Secretary of State Gresham commented that Pullman’s men made
a serious mistake when they refused to negotiate with employees
and when they used the U. S. Government to crush labor unions.
He called for Pullman to resign.
Senator John Sherman urged government to regulate sleeping-car fares
as they did for freight rates.
On July 12 a Knights of Labor committee with U. S. Senator James H. Kyle
urged President Cleveland to invoke the Arbitration Act of 1888 to settle the disputes.
He promised that after the disorders ended, he would appoint a commission to investigate.
Also on that day about 10,000 people gathered at Cooper Union in New York,
and Henry George criticized the use of the standing Federal army against citizens.
On July 26 Cleveland appointed the Labor Commissioner Carrol D. Wright
to head the investigating commission on the Pullman strike.
They began holding hearings on August 15, and over two weeks
they listened to more than 200 witnesses and examined many documents.
They found much to criticize in how Pullman’s employees were treated.
Debs explained that local unions decided whether to strike,
and delegates had called off the boycott on August 2.
He suggested that government ownership of the railroads would be better.
Debs said he was not a socialist and was for harmonious relations.
Pullman himself appeared on August 27
and faced tough questioning on his business decisions.
The commissioners in their report found that concentration of power and wealth
greatly changed business, and corporations needed to be restrained by laws.
They criticized Pullman for refusing arbitration and for his stingy treatment of employees,
and they blamed the GMA for refusing to deal with the ARU.
They found no evidence that the ARU officers had advised or participate
in any “intimidation, violence, or destruction of property.”
They suggested that government facilitate arbitration and require unions
to ban violence in their by-laws.
They recommended a law to prevent corporations from barring employees in unions.
Reforms they favored included restricting immigration, compulsory arbitration,
worker pensions, limiting work hours, and a minimum wage.
Mormons had broken the 1882 law against polygamy,
and on 4 January 1894 President Cleveland granted amnesty to them
for as long as they observed the law thereafter.
On January 8 a fire in Chicago destroyed most of the exhibits
at the International Columbian Exposition that resulted in $2 million damage.
On February 8 the U. S. Congress repealed the Enforcement Act of 1871
so that control over elections would be returned to the states.
On May 15 New Jersey became the first state that prohibited employers
from discriminating against union members in hiring.
Frederick Douglass in June published the pamphlet The Lesson of the Hour
that described in detail how and why Negroes are lynched.
In summarizing he wrote,
I have shown that the Negro’s accusers
in this case have violated their oaths,
and have cheated the Negro out of his vote;
that they have robbed and defrauded the Negro
systematically and persistently, and have boasted of it.15
On June 28 the U. S. Congress made Labor Day
a national holiday on the first Monday in September.
The provisional government in Hawaii established a republic on July 4
which Cleveland quickly recognized.
The U. S. House of Representatives on February 1 had voted 204-140
for the Wilson Tariff Bill.
Wilson persuaded President Cleveland to add a small income tax
to make up for revenue losses.
Farmers complained about the free wool;
mine owners did not want iron on the free list;
and the sugar trust objected to no duties on sugar.
In the U. S. Senate three Populists usually voted with the 44 Democrats
who still outnumbered the 38 Republicans, and on tariffs the Populists wanted duties
cut more on all manufactured goods so that foreigners
would import more of America’s farm products.
During the debate at least six Democrats opposed Cleveland, and their numbers increased.
He called them “obstructionists,” and Maryland’s Democratic Senator Arthur Pue Gorman,
who co-sponsored Wilson’s bill, said it was wrong to reform tariffs during a depression.
During months of debate the senators added 634 amendments
for their states’ special interests, and the bill finally passed 39-34 on July 3.
Cleveland complained his opponents were using
the worst political methods and bringing about a dangerous situation.
On July 18 he was informed that the conference committee
could not resolve the differences between the two bills.
He wrote a letter criticizing the bill,
and Gorman replied with a retaliatory speech in the Senate.
Cleveland got support from state conventions by Democrats in Massachusetts,
Florida, Indiana, and Iowa and from the Baltimore Sun and the New York Herald.
The Congress finally sent the bill to the President on August 18.
Cleveland had caught malaria and had left town for a while returning on August 22.
He refused to sign it, and he let it become law by not using the veto.
The nation was still suffering from the depression,
and the Democratic Party was weakened by division.
Crops were damaged by a plague of grasshoppers and chinch bugs,
and blizzards destroyed starving cattle.
Farmland was enlarged in the U. S. by about 305 million acres
as the number of farms increased from 4 million to 5.7 million.
Many farmers had debt from buying equipment and land,
and overproduction in grains, beef, and pork lowered prices.
Wheat prices fell below 55 cents a bushel in the Chicago market
when the farmers growing costs were at least 50 cents.
In 1894 corn sold in central markets for less than 30 cents.
Cotton had sold for 11 cents a pound in the 1880s,
and its price had fallen below 7 cents.
Total farm mortgages passed $2.2 billion with annual interest over $200.
Kansas and Nebraska were especially hit hard by drought and foreclosures.
The price of grain was so low that often they could not afford to ship it to markets.
The Wilson-Gorman Tariff became law on August 27
reducing the McKinley Act tariffs by about 20%,
and it included the first peace-time income tax
which was for 2% of income over $4,000 a year.
On 8 April 1895 the U. S. Supreme Court in Pollock v. Farmers' Loan & Trust Co.
voted 5-4 that the income tax was unconstitutional,
and they ordered the $80,000 already collected be given back
to about 4,500 people most of whom had attached protests to their returns.
President Cleveland was committed to maintaining the gold standard
that most nations used, and populists in the West especially
were keen on the rising production of silver.
The total gold in the U. S. fell below $600 million.
The U. S. Government’s gold reserve was down to $80 million when
the Silver Purchase Act was repealed on 30 December 1893,
and it fell to $69 million in January 1894.
The federal gold deficit for the next fiscal year beginning in July
was predicted to be $78 million.
U. S. gold was being exported at a rate of nearly $74 million a year.
Cleveland ordered Treasury Secretary Carlisle to sell bonds for gold at 4% interest.
The Treasury had enough silver bullion to coin $55,150,000 in silver dollars,
and Congress passed the Bland’s seigniorage bill on March 25 to do that;
Cleveland vetoed it four days later.
To prevent their overriding his veto he persuaded House Speaker Charles Crisp
to put it to a vote before any debate, and the veto was sustained.
Democrats opposing Cleveland called themselves the “Wild Horses.”
The U. S. Treasury’s cash balance was barely above the required minimum of $100 million.
On August 18 the U. S. Carey Act granted one million acres of desert land
to the states Idaho and Wyoming on the condition that they irrigate and reclaim it
for the use of settlers.
On September 4 about 12,000 garment workers in New York City
went on strike protesting sweatshop conditions and piecework pay.
In the fall elections of 1894 the House of Representatives had its greatest
turnaround so far going from a 198-143 Democratic advantage
to a 253-93 Republican majority.
A total of 24 states had no Democrat in the House, and six others had only one.
Republicans became governors in Wisconsin, New York, and Illinois,
and they took over the state legislatures in
West Virginia, Missouri, Maryland, and Delaware.
In the U. S. Senate the Democrats edge over Republicans was reduced to one seat
while there were 4 Populists and one Silverite.
On November 14 the U. S. gold reserve was down to $61 million,
and Treasury Secretary Carlisle issued a call for bids on $50 million worth of
10-year 5% bonds for ten days.
This increased the U. S. gold reserve to $111 million in early December.
In the year ending on November 30 the U. S. had exported $73.7 million dollars in gold.
On November 22 in Washington the U. S. and a representative
from Japan signed a commercial treaty.
In his 33-page Second Annual Message on December 3 Cleveland
discussed U. S. relations with various nations and financial issues.
On the condition of the Samoan Islands which were being governed
by the United States, Britain, and Germany, he wrote,
The present Government has utterly failed to correct,
if indeed it has not aggravated,
the very evils it was intended to prevent.
It has not stimulated our commerce with the islands.
Our participation in its establishment
against the wishes of the natives was in plain defiance
of the conservative teachings and warnings
of the wise and patriotic men
who laid the foundations of our free institutions,
and I invite an expression of the judgment of Congress
on the propriety of steps being taken by this Government
looking to the withdrawal from its engagements
with the other powers on some reasonable terms
not prejudicial to any of our existing rights.16
The U. S. Congress did not agree on withdrawing from the Samoan Islands,
and they refused to follow his advice.
Then the President reported on numerous financial issues of the government.
He noted that imprisoned Apaches were being given
“an opportunity to demonstrate their capacity for self-support” and that other Indians
such as the “Cheyennes and Arapahoes” were making “steady and healthy progress.”
He discussed agriculture and animal husbandry.
In that message to Congress Cleveland also wrote
that he would fight to maintain the gold standard.
He complained that the Congress was restricting the sale of bonds
with the 1875 Resumption Act.
A second issue in December added $58,538,500 in gold
but was good for only ten weeks.
As people hoarded gold, more banks failed.
By the end of 1894 the U. S. Treasury had only $31 million in gold.
In his last paragraph in the Message he wrote:
I conclude this communication fully appreciating that the
responsibility for all legislation affecting the people of the
United States rests upon their representatives in the
Congress, assuring them that, whether in accordance
with recommendations I have made or not, I shall be
glad to cooperate in perfecting any legislation that
tends to the prosperity and welfare of our country.17
On December 12 Carl Schurz spoke to the National Civil Service Reform League.
He criticized the American spoils system that began in 1829 and which had already
wasted hundreds of millions of dollars in government spending for selfish interests.
Corrupt money was used in party contests and elections.
He said,It creates the boss and the machine,
putting the boss into the place of the statesman
and the despotism of the machine
in the place of an organized public opinion….
It leads to the usurpation, in a large measure,
of the executive power of appointment
by members of the legislative branch,
substituting their irresponsible views of personal
or party interest for the judgment as to the public good
and the sense of responsibility of the executive.18
On civil service reform Schurz wrote,
It means simply that, with regard to all the public offices
and employments concerned,
rules for appointment and promotion be introduced
which rigidly exclude political and personal favoritism,
and secure place and preferment only to those who
in some prescribed manner establish the superiority
of their mental and moral fitness for the work to be done.19
Also in 1894 the Immigration Restriction League formed in Boston
and began campaigning for accepting only literate immigrants.
On 8 January 1895 Rep. Joseph C. Sibley of Pennsylvania criticized
President Cleveland in the U. S. House of Representatives saying the people
needed a government with more than “brains, belly, and brass.”
A panic in late January withdrew $20 million in gold
from the U. S. Treasury in only nine days.
On January 28 Cleveland sent a special message to Congress
to approve issuing 3% long-term bonds.
Three days later with the gold reserve down to $45 million
Assistant Treasury Secretary William Curtis met with the financiers J. P. Morgan
and August Belmont who represented England’s House of Rothschild.
They arranged a bond sale of $100 million bringing gold from Europe.
Bimetallists in the West favoring silver helped the House defeat an otherwise
popular bill by William Springer on February 7.
The next day with under $9 million in gold coins left in the New York subtreasury
Cleveland made a deal with Morgan who bought 3.5 million ounces of gold with more
than half coming from Europe for $65,116,244 in 30-year 4% gold bonds
which were worth 104.5 which they then sold for 112.25.
This increased the U. S. gold reserve to over $107,550,000
and was to prevent gold flowing out of the U. S. Treasury.
Cleveland asked the Congress to recognize the “gold bonds”
so that the U. S. could save $16 million, but they refused to use the word “gold.”
On January 21 the U. S. Supreme Court in United States v. E. C. Knight Co.
decided 8-1 that the American Sugar Refining Company could monopolize the
manufacturing of a product in a state, and only a state government could correct that.
Justice Harlan dissented arguing that the federal government
is justified in acting during such an emergency.
Attorney General Olney was not bothered by corporate power.
Cleveland disagreed with him but allowed his cabinet officers some autonomy.
On February 20 the syndicate sold the bonds at 112.25,
and those subscribing raised the price on the open market to 119.
The next day the New York World accused the Morgan syndicate
of making a profit of more than $5 million on the deal.
Morgan declined to tell a U. S. Congress committee how much he made,
but evidence indicated it could have been $7 million.
The Farmers’ Alliance claimed that the people had been defrauded
of over $8 million that left them with a $62 million debt.
Also on February 20 the former slave and long-time abolitionist and advocate
of equal rights Frederick Douglass died after attending a meeting on women’s suffrage.
The new U. S. sugar tariff had devastated the Cuban economy,
and another insurrection broke out there against Spanish rule in February.
On March 8 a Spanish gunboat fired on the USS Alliance six miles from Cuba.
Alabama’s Senator John T. Morgan urged sending warships to Havana,
and he advocated making Cuba “an American colony.”
Pulitzer’s New York World and William Randolph Hearst’s New York Journal
competed for readers by reporting Spanish atrocities against the Cuban rebels;
but most newspapers and journals opposed war,
and many business leaders agreed with Cleveland’s neutrality.
On June 12 President Cleveland declared United States’ neutrality.
He asked citizens not to aid the insurgents,
and he promised that violators would be prosecuted.
His administration persuaded the Spanish government to release captured Americans
even though they complained that most of the money and ammunition
for the rebels were coming from the United States.
In December the U. S. Senate’s Foreign Relations Committee approved a resolution
recognizing Cuban independence which could lead to war against Spain.
Cleveland ignored it because he was strongly opposed to war.
On May 27 the U. S. Supreme Court reinforced the Geary Act that
excluded the return of Chinese immigrants by denying them the right of habeas corpus.
The U. S. Assistant Attorney General Edward B. Whitney argued the case
for the Federal income tax which the U. S. Supreme Court declared unconstitutional,
and then he wrote “Political Dangers of the Income-Tax Decision”
for the August issue of Forum.
He maintained that the U. S. Congress should be the judge
of the need for any tax at all.
He concluded,
Any tax levied may properly be called a war tax so long as
the Treasury is struggling with an immense annual deficit,
where, but for pensions to veterans of the Civil War,
we should have an annual surplus of double the amount.20
U. S. Supreme Court Justice Howell Jackson died on August 8.
Cleveland nominated Rufus W. Peckham again, and this time
he asked New York’s Senator David B. Hill to help get him confirmed which he did.
Free-coinage Democrats met at Washington in August
preparing for the convention in 1896.
William Jennings Bryan, who left the House and lost a Senate race in 1894,
was on a lecture tour in the West and the South.
That summer J. P. Morgan with another bond issue
increased the U. S. Treasury’s supply of gold.
On September 14 the gold reserve was below the legal limit at $96.3 million.
Those following Cleveland’s gold policy were called “gold bugs,”
and those for silver were named “silverites.”
President Cleveland, Vice President Stevenson, and six cabinet officers
attended the Cotton States International Exposition at Atlanta in late October.
Cleveland spoke to 50,000 people on the currency crisis,
hoping to retain southern Democrats in the next election.
He warned the silverites in his party that Republicans advocating sound money
could defeat the Democrats again,
and with the presidency they would dominate the government.
The Tuskegee Institute founder Booker T. Washington sent a copy of his speech
at the Cotton States and International Exposition at Atlanta
on September 18 to President Cleveland who wrote back,
Your words cannot fail to delight and encourage
all who wish well for your race;
and if our coloured fellow-citizens do not
from your utterances gather new hope
and form new determinations to gain
every valuable advantage offered them by their citizenship,
it will be strange indeed.21
The Venezuelan government in August 1894 had hired William L. Scruggs,
who was President Harrison’s former minister to that nation,
as a legal advisor and diplomat in Washington.
He published British Aggressions in Venezuela, or the Monroe Doctrine on Trial
n October and sent copies to newspaper editors and politicians,
and it had four editions by December.
The Cleveland administration began conveying to the British their desire
to help mediate the dispute over Venezuela’s border with Britain on January 23.
They influenced congressmen to consider a resolution
advising Britain and Venezuela to accept arbitration.
Both houses passed it unanimously, and Cleveland signed it on February 20.
He asked Secretary of State Gresham to prepare a policy paper on Venezuela,
but he died on May 28.
The Attorney General Olney became the new Secretary of State on June 10,
and the former Cincinnati judge and lawyer, Judson Harmon, became Attorney General.
Senator Henry Cabot Lodge of Massachusetts wrote in the June North American Review,
“The supremacy of the Monroe Doctrine should be established and at once—
peaceably if we can, forcibly if we must.”22
Influenced by Lodge’s article Olney wrote very aggressive messages to Britain
in regard to the Venezuela dispute, asserting that the U. S.
was in a position to be “master of the situation.”
In a few weeks he completed an aggressive draft of a memorandum
for Ambassador Bayard and showed it to Cleveland.
Olney wrote that the U. S. should maintain its dominance in the western hemisphere
and must not allow European powers to take over Latin American nations.
Cleveland toned down Olney’s letter, which he called a “20-inch gun,” to one
offering impartial arbitration in the boundary quarrel, and he sent it to London on July 20.
Not until December 7 did the British Prime Minister Salisbury
through his envoy Julian Pauncefote inform Olney that he denied that
a European power must submit such conflicts to arbitration.
He also stated that the Monroe Doctrine had no validity under international law
and that it did not apply to the Venezuelan border dispute.
In a special message to Congress on the 17th the President discussed the issues
between Great Britain and the Republic of Venezuela,
and concluded by asking Congress to fund a commission that he would appoint.
He asserted that the United States must resist any appropriation
by Britain of Venezuelan land, and he ended by saying,
There is no calamity which a great nation can invite
which equals that which follows
a supine submission to wrong and injustice
and the consequent loss of national self-respect and honor,
beneath which are shielded
and defended a people’s safety and greatness.23
The House of Representatives unanimously approved
he commission and $100,000 for expenses.
Enthusiasm for intervention spread; and as people realized that
the coast of Venezuela was defenseless against Britain’s powerful navy,
the war fever calmed down.
On October 8 the Ohio Valley Improvement Association at Cincinnati
began work to make the Ohio River navigable for commerce.
The U. S. Army Corps of Engineers would build 49 locks and movable dams
on 980 miles between Pittsburgh and Cairo, Illinois.
On November 5 Utah’s new constitution for statehood
granted women the right to vote, and Utah was admitted as a state on 4 January 1896.
Cleveland in his long annual message to Congress on December 2
discussed several foreign policy issues including the successful U. S. arbitration
of a border dispute between Argentina and Brazil, U. S. claims against Chile
the developing war between the Chinese empire and Japan which the U. S. was helping
to prevent, defending a U. S. diplomat in Madagascar
during France’s takeover,
trade relations with Germany, resolution of Bering Straits’ issues with Britain,
Hawaii’s situation, relations with Mexico and Nicaragua, concerns regarding Russia,
a naval incident with Spain near Cuba, Turkey’s massacre of Christians in Armenia,
and then how to solve the boundary dispute between Venezuela and Britain.
The President reviewed extensively the financial issues regarding gold and silver,
concluding, “Even the continued agitation of the subject adds greatly to the difficulties
of a dangerous financial situation already forced upon us.”24
Judson Harmon had become Attorney General and was requesting
remedial legislation in regard to trusts that the railroad lawyer Olney had ignored.
Near the end of his message Cleveland wrote this about the effect of trusts:
Their tendency is to crush out individual independence
and to hinder or prevent the free use of human faculties
and the full development of human character.
Through them the farmer, the artisan,
and the small trader is in danger of dislodgment
from the proud position of being his own master,
watchful of all that touches his country’s prosperity,
in which he has an individual lot,
and interested in all that affects
the advantages of business of which he is a factor,
to be relegated to the level of a mere appurtenance
to a great machine, with little free will,
with no duty but that of passive obedience,
and with little hope or opportunity of rising
in the scale of responsible and helpful citizenship.25
In response the Congress approved $100,000 for the boundary commission
despite Britain’s refusal to recognize that.
Some people supported Cleveland’s policy that
was influenced by Olney’s aggressiveness, and others opposed threatening war.
Pulitzer in his New York World and Godkin in the Evening Post called the
President’s message a mistake while the Springfield Republican wrote that
armed intervention by the United States was unacceptable.
On 2 January 1896 Carl Schurz in a speech to New York state’s
Chamber of Commerce commended the commission,
and he advised that the British would not accept arbitration under a threat of war.
Some suspected that Cleveland wanted to run for a third term.
In July he rejected any suggestion of sending a man-of-war to Havana
because he did not want to provide any excuse for trouble with Spain.
On December 20 Cleveland notified the U. S. Congress
that the U. S. gold reserve was barely $79 million, and he asked them for aid
in protecting the peoples’ interests and to prevent impairing the public credit.
On 6 January 1896 President Cleveland and Treasury Secretary Carlisle
announced the fourth bond issue of $100 million for gold.
Bids were submitted, and on February 5 the Treasury unsealed them to find
4,640 offers totaling $568,269,000 mostly between 110 and 112.
They decided that bonds worth $66.8 million went to 780 bidders
who had subscribed rates over 110.6877.
Morgan got $33,179,250.
The Federal gold reserve had fallen to $44.5 million,
and the sale raised it to a record high at $128,713,000.
The U. S. Congress on January 1 had approved $100,000
for a 3-man commission on the boundary dispute between Venezuela and Britain.
On January 13 the U. S. ambassador Bayard wired Cleveland
that both British political parties wanted the Venezuela dispute
“promptly settled by friendly co-operation.”
The U. S. Boundary Commission was inclining against British claims,
and on November 12 the Brits signed a treaty with Venezuela agreeing to arbitration.
Former U. S. President Benjamin Harrison was a lawyer for Venezuela,
and the final decision of the Tribunal of Arbitration in favor of the British
was not announced until 3 October 1899.
The ratio of silver to gold had doubled to 32 to 1,
and Treasury Secretary Carlisle warned that that would cut the value of the dollar in half.
The U. S. Senate passed a free coinage bill 48-41 on February 1
with Democrats providing half the votes for silver.
The House of Representatives defeated the bill
while Democrats were voting 58-31 for passage.
This issue was making Cleveland very unpopular in his own party.
He spoke near the end of March at Carnegie Hall in New York
at a rally in support of the Presbyterian home missions.
He accused selfish interests of making the silver-mining states
corrupted for their “lawlessness, the dram-shops and gambling dens.”
Westerners naturally reacted negatively against that,
and they wanted to get control of the presidency.
Cleveland released a statement to the New York Herald Tribune in which
he warned against a monetary disaster, and he predicted that the Democratic Party
adopting the soft-money policy would give the Republicans the advantage in the future.
After his term the Republicans controlled
both houses of Congress and the Presidency until 1910.
Silver Democrats wanted their convention to be in St. Louis
while those favoring the gold standard were for New York.
They compromised by deciding to meet in Chicago.
Cleveland sent the New York financier William Whitney, his top fiscal advisor,
to Chicago to organize the strategy for the gold advocates,
and he was assisted by the former Governor of Massachusetts, William E. Russell.
Cleveland went to his summer home on Cape Cod.
On February 20 the young Senator Henry Cabot Lodge of Massachusetts
gave a speech urging the United States to recognize and support
the Cubans rebelling against Spanish rule.
He suggested they offer “good offices to mediate between Spain and the Cubans
in order to restore peace and give independence to the island
which Spain can no longer hold.”26
He noted that the insurgents were holding more land than the Spanish armies.
He argued, “Free Cuba would mean a great market to the United States;
it would mean an opportunity for American capital.”27
He believed the American people would welcome
bringing the Cuban war to an end to establish liberty and independence.
On March 16 the U. S. Supreme Court determined
what would be the border between the state of Texas and the Oklahoma Territory.
Senator Lodge made a speech on March 16 advocating a literacy requirement
for new immigrants in order to reduce the number of
Italians, Russians, Poles, Hungarians, Greeks, and Asiatics while allowing in
more English speakers, Germans, Scandinavians, and French.
He warned that illiterate immigrants would take unskilled jobs for lower pay
and compete with Americans because they are
“alien or lower races of less social efficiency and less moral force.”28
On April 4 Cleveland had Secretary of State Olney send a diplomatic message
to Spain offering U. S. mediation for a peaceful resolution to the conflict in Cuba.
On May 18 the U. S. Supreme Court in Plessy v. Ferguson decided 7-1 that,
even though Plessy was only one-eighth African, racial segregation was allowed
if the separate facilities for blacks were equal to those for white citizens.
Justice Henry B. Brown for the majority argued that political equality
does not have to extend to color distinctions and social issues,
and he noted that state legislatures had established
“separate schools for white and colored children” which state courts had upheld.
Justice Harlan in dissent referred to the equal rights
implied in the 13th, 14th, and 15th amendments,
and he argued that whites and blacks
have the right to occupy the same public conveyance.
He also noted that the Louisiana law implied that whites are superior.
He wrote,
In the view of the Constitution,
in the eye of the law, there is in this country
no superior, dominant, ruling class of citizens.
There is no caste here.
Our Constitution is color-blind, and neither knows
nor tolerates classes among citizens.
In respect of civil rights,
all citizens are equal before the law.29
He warned,
The present decision, it may well be apprehended,
will not only stimulate aggressions,
more or less brutal and irritating,
upon the admitted rights of colored citizens,
but will encourage the belief that it is possible,
by means of state enactments,
to defeat the beneficent purposes which the people
of the United States had in view when they adopted
the recent amendments of the Constitution.30
On May 29 the Prohibition Party nominated for President
the Baptist preacher Joshua Levering
and the lawyer Hale Johnson of Illinois for Vice President.
The Socialist Labor Party on July 4 nominated the organizer
Charles H. Matchett of New York for President.
The Republican national convention met at St. Louis June 16-18,
and they nominated Ohio’s Gov. William McKinley overwhelmingly on the first ballot.
Their platform advocated the gold standard,
and McKinley’s manager Mark Hanna persuaded delegates to nominate
Garret A. Hobart of New Jersey for Vice President
rather than have another Gold Bug on the ticket.
The Democratic convention met July 7-11, and the silver faction
gained the two-thirds needed because they controlled the credentials committee
27 to 16 and added delegates from the West
while disqualifying some of those from the East who were for gold.
Their platform criticized Cleveland’s policies on gold bond trafficking
with banking syndicates, injunctions against the Pullman strike,
and sending in federal troops.
Senator Hill of New York led the debate for the gold faction;
and he disliked Cleveland and was happy when the convention
rejected a resolution commending Cleveland’s policies 357-564.
On July 9 the last speech was by the 36-year-old
William Jennings Bryan of Nebraska, a former two-term Congressman.
He aroused most of the 20,000 delegates by talking about the common people—
the businessmen, wage earners, farmers, miners, rural lawyers, and local merchants.
He said they needed an Andrew Jackson who would stand up against organized wealth.
His speech reached a climax when he said,
If they dare to come out in the open field
and defend the gold standard as a good thing,
we shall fight them to the uttermost, having behind us
the producing masses of the nation and the world.
Having behind us the commercial interests
and the laboring interests and all the toiling masses,
we shall 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.31
For five seconds he stood there with his arms out as if crucified in silence.
Then he lowered his arms and walked toward his seat
as the thunderous applause began.
The cheering and demonstration lasted 35 minutes,
and the platform was approved 628-301.
That evening nominations went on until nearly 1 a.m.
Voting began the next morning at 10.
On the first ballot Richard P. Bland of Missouri
had nearly twice as many votes as Bryan;
but with each ballot Bryan gained more votes until he took the lead
on the fourth ballot and then won overwhelming on the fifth.
A similar voting pattern for Vice President nominated Arthur Sewall,
a ship-builder from Maine who also advocated free silver.
The Populists’ convention nominated Bryan,
and they chose Thomas E. Watson of Georgia instead of Sewall for VP.
Bryan also gained the presidential nomination of several minor parties—
Single Taxers who followed Henry George,
Nationalists who were influenced by Edward Bellamy,
and Christian Socialists who were led by Rev. W. D. P. Bliss.
In the South the Louisville Courier-Journal, the New Orleans Picayune,
the Charleston News and Courier, and the Richmond Times each opposed Bryan.
The former governor William E. Russell of Massachusetts died of heart failure
suddenly on July 16 at the age of 39,
and Cleveland went to his funeral in Boston on the 20th.
About 900 gold Democrats met in Indianapolis on August 7,
and they scheduled their convention for September 2.
They nominated the 79-year-old Union General John Palmer of Illinois for President
and the Confederate General and former governor of Kentucky,
Simon Bolivar Buckner, who was 73, for vice president.
They would get only 135,000 votes,
and many more Democrats voted for McKinley.
Bryan began his campaign with his prepared acceptance speech
on a hot August 12 at Madison Square Garden in New York
where 12,000 filled the arena with 15,000 gathered outside.
Bryan was popular as an extemporaneous speaker;
and as he read this speech for 100 minutes, half the audience walked out.
Printed copies of his speech were distributed through the press,
but his message did not resonate in the East.
On August 16 gold was discovered in a creek by the Klondike River
14 miles from Dawson City in the Yukon Territory of Canada.
About a hundred thousand prospectors traveled north,
and the gold mined helped the U. S. economy recover.
Mark Hanna led the Republican National Committee and raised money
to pay off a $100,000 note that McKinley had signed for a friend.
Hanna distributed information to newspapers and magazines
on his candidate’s accomplishments and virtues.
His committee raised $3.5 million compared to $1.5 million Republicans got in 1892.
All together the Republican national and local committees spent about $16 million.
Hanna asked banks for 0.25% of their capital,
and Standard Oil contributed over $250,000.
McKinley followed the tradition of not traveling to campaign,
and from his front porch in Ohio he made speeches to visitors that journalists distributed.
Interior Secretary Hoke Smith of Georgia informed Cleveland
that he was for Bryan because he was worried the Republicans
might restore reconstruction in the South.
Cleveland accepted his resignation for September 1
and later invited him to the cabinet’s last annual dinner at the White House.
The former Governor of Missouri, David R. Francis, replaced Smith on September 3.
Cleveland did not campaign, though he made a political speech
at Princeton College in October.
On October 1 the U. S. Postal Office Department
began its Rural Free Delivery (RFD) service to reach isolated people
and aid the business of mail-order companies
such as Sears Roebuck and Montgomery Ward.
South Carolina allowed only whites to vote in the Democratic primary.
In the election on November 3 McKinley won the popular vote by 3.4%
and the electoral college 271-176 winning all the northern states east of the Mississippi
plus Kentucky, Iowa, Minnesota, North Dakota, California and Oregon
while Bryan took all the southern states and the rest of the western states.
In the U. S. Senate Republicans gained 4 seats while the Democrats lost 7.
With 2 Silver Republicans they outnumbered Democrats 48-32.
The Populists gained one seat giving them 5.
In the House of Representatives the Republicans lost 48 seats
as the Democrats gained 31; the Republicans still had a 206-124 advantage.
Populists won 13 more seats giving them 22,
and the Silver Republican Party got 3 seats.
Cleveland in his last message to Congress on December 7 discussed
the desire of some to intervene in the Cuban rebellion against Spain,
and then he gave his own view:
These inevitable entanglements of the United States
with the rebellion in Cuba,
the large American property interests affected,
and considerations of philanthropy and humanity in general
have led to a vehement demand in various quarters
for some sort of positive intervention
on the part of the United States….
The United States has, nevertheless,
a character to maintain as a nation, which plainly dictates
that right and not might should be the rule of its conduct.
Further, though the United States is not a nation
to which peace is a necessity, it is in truth
the most pacific of powers and desires nothing so much as
to live in amity with all the world.
Its own ample and diversified domains
satisfy all possible longings for territory,
preclude all dreams of conquest,
and prevent any casting of covetous eyes
upon neighboring regions, however attractive.32
When Cleveland left the presidency in 1897, he had over $300,000.
1. Grover Cleveland: A Study in Character by Alyn Brodsky, p. 250.
2. Indiana State Sentinel, Indianapolis, Marion County, 18 December 1889.
3.Grover Cleveland by Alyn Brodsky, p. 262.
4. Ibid., p. 264.
5. Ibid., p. 271.
6. Messages and Papers of the Presidents 1789-1908
ed. James D. Richardson, Volume 9, p. 389-393.
7. Grover Cleveland by Alyn Brodsky, p. 5-6.
8. Messages and Papers of the Presidents, Volume 9, p. 461.
9. Grover Cleveland: A Study in Courage by Allan Nevins, p. 561.
10. Grover Cleveland: A Study in Courage by Allan Nevins, p. 532.
11. Ibid., p. 540.
12. Ibid., p. 545.
13. Messages and Papers of the Presidents, Volume 9, p. 441.
14. Grover Cleveland by Henry F. Graff, p. 119.
15. The Life and Writings of Frederick Douglass by Philip S. Foner,
Volume 4, p. 504.
16. Messages and Papers of the Presidents, Volume 9, p. 532.
17.
Ibid., p. 556.
18. The Annals of America, Volume 11, p. 495.
19. Ibid., p. 497.
20. The Annals of America, Volume 12, p. 74.
21. Up from Slavery: An Autobiography by Booker T. Washington, p. 119.
22. American Review, CLX (June 1895), 658
in A History of American Foreign Policy by Alexander DeConde, p. 332.
23. Messages and Papers of the Presidents, Volume 9, p. 658.
24. Ibid., p. 655.
25. Ibid., p. 744-745.
26. The Annals of America, Volume 12, p. 85.
27. Ibid., p. 86.
28. Ibid., p. 91.
29. Plessy v. Ferguson, 163 U.S. 537 (1896).
30. The Annals of America, Vol. 12, p. 98.
31. Speeches of William Jennings Bryan, Volume 1, p. 249.
32. Messages and Papers of the Presidents, Volume 9, p. 719.
Evaluating US Presidents Volume 1: Washington to Lincoln 1789-1865
Evaluating US Presidents Volume 3: Wilson, Harding & Coolidge 1913-1929