From Stalemate to Crisis

1. From Stalemate to Crisis Ch. 19

2. The Politics of Equilibrium The Party System • stability and even division • North = Republican / South = Democrat… five states in between • voter turnout at 78% from 1860-1900 • Campaigns = spectator sports • fierce loyalty based on tradition and personal factors rather than issues • Republicans: northern Protestants and citizens of old stock, nativists • Democrats: • south, symbol of triumph over Reconstruction • west and north, Catholics and immigrants

3. The National Government • federal government does very little • delivering the mail • maintaining the national military • foreign policy • collecting tariffs and taxes • Civil War pension vs. believers in “good government” • “state of courts and parties”

4. Presidents and Patronage • series of undistinguished presidents: analyze cause and effect • feeding the machine with appointments • “His fraudulency” v. the Half-breeds and the Stalwarts • battle over patronage • Hayes tried to please all and ended up pleasing none • Opposition from both sides made his presidency a study in frustration

5. Stalwarts = Republicans who supported patronage (synonymous with strong or stout) all in opposition to Hayes attempts to reconcile with the South! Opposed reforms • Half-Breeds = Republicans who supported reforming patronage (moderates) term coined by Stalwarts

6. Presidents and Patronage Cont. James A. Garfield, a Half-breed from Ohio, president for four months • showed support for civil service reform and opposed Stalwarts • Pres. for one month, Shot and died three months later • discredited the spoils system

7. Presidents and PatronageCont. Chester A. Arthur keeps Garfield’s nominees and passes Pendleton Act

8. The Return of the Democrats • Election of 1884: “frick v. frack” / Blaine (Rep) v. Cleveland (Dem) • Mugwumps = Republicans who left Rep. party in this election by voting for Clev. Because Blaine was “corrupt”, so they thought they were the real leaders of reform. • Changed election in New York and thus national election • Mugwumps = flip-floppers of today! • President Grover Cleveland • “veto governor” not afraid to say no • unwavering commitment to economy (Pullman Strike) • “thought the people support the Government, the Government should not support the people”

9. Election of 1888: economics on the table… Cleveland v. Harrison • One of three elections in history where the winner of the popular vote lost the election • “Benjamin Harrison’s record as president was little more substantial that that of his grandfather, who had died a month after taking office.”

10. II. Tariffs, Trusts and Railroads Era of weak government and leadership, strong political parties and big business

11. Trusts • by mid 1880s fifteen western and southern states had adopted laws prohibiting combinations that restrained competition… but corporations found it easy to escape limitations by incorporating in states such as New Jersey and Delaware • If anti-trust legislation was going to be effective it would have to come from national government…

12. Sherman Antitrust Act • Passed without opposition… but toothless • Gave Justice Department authority to take legal action against combinations • Weakness: failure to specify what combinations would be forbidden • Not a result of oversight • Results • in ten years, 14 suits and few convictions • law used more frequently against labor unions • United States v. E.C. Knight Co. weakened the act • The company controlled manufacturing sugar (90+%) but Sherman Anti-trust Act only defined interstate trade (aka distributing)

13. Tariff • Republicans instead focus on passage of protective tariff, McKinley Tariff • Whoops! Weak action on trusts and focus on tariff = mistake by Republicans and leads to major backlash • 1890 congress elections… Rep. go from a majority in the Senate to 8 and only 88 of 323 seats in the House • 1892 Presidential Elections: Cleveland is back… but still the same…

14. Railroads • Grangers helped pass successful legislation to limit power of the railroads…but the Supreme Court intervenes in Wabash, St.Louis and Pacific Railway Co. v. Illinois (Wabash Case) rules Granger Laws as unconstitutional stating that it limited the power of Congress • Courts would go on to limit the powers of states to regulate commerce within their own boundaries • Clear that regulation of RR would have to come from Federal Government • Congress passes Interstate Commerce Act

15. Interstate commerce act • “reasonable and just” rates… although the bill did not define what it meant • established ICC, but it had to rely on the courts for rulings • haphazardly enforced and narrowly interpreted by the courts • without practical effect for nearly 20 years Enough!

16. The Agrarian Revolt The Grangers • First started as a organization of social assistance and self help • Oliver H. Kelley • Bring farmers together to keep up with technology and farming techniques • Feeling of community

17. Cont. • … 1873 depression changed it into a political organization • membership increased 800,000 members and 20,000 lodges • strongest areas were in the South and Midwest • marketing co-operatives to eliminate middlemen • urged political action to curb monopolistic powers of railroad • July 4, 1873 “Farmer’s Declaration of Independence” • Politics on a small level… “Anti-monopoly” and “Reform” parties • Agricultural prosperity and railroad power = Federal/Judicial Defeat

18. Grange Enterprises • Grange Enterprises • cooperative stores, creameries, warehouses, insurance companies and factories • mail-order catalogs: Montgomery Ward and Sears Roebuck • failure: opposition from middlemen

19. The Farmers Alliance • by 1880 more than 4 million members • similar enterprises to grange movement to free farmers from “furnishing merchants” • Alliance speakers traveled criticizing corporations • Women played a large role (Mary Lease “raise less corn and more hell”) • economic frustrations force the creation of a national political organization

20. The Farmers Alliance Cont. • Candidates supported by Alliances were part of the reason for the 1890 shift in Congress • Little open endorsement for Alliances by these candidates… talk of third party • Ocala Demands (Florida) 1890 • July 1892 Omaha Platform, Nebraska formation of the People’s Party, known as Populists • Presidential Nominee, James Weaver, pulls 8.5% of popular vote • 1,500 Populist candidates elected to state legislatures • 3 governors, 5 US Senators, and 10 Congressmen • also could claim support from many Democrats and Republicans who were elected by appealing to Populist demands

21. The Populist Constituency • Appealed principally to farmers… small farmers • Midwest: farmers who were struggling to hold onto land or who had lost it • South: sharecroppers, tenant farmers or small landowners • Sense of belonging to a community for the geographically isolated • Failure to gain support of labor: economic interests often at odds • Miners and “Free Silver” • make gold, with silver, the basis of currency • expand supply of currency causes inflation, meaning money loses value but prices (like for farm goods) GO UP!!!! • Rise and fall of “Colored Alliances” Black Populists in the South • “Southern Demagogues” strong speakers v. “Bourbons” • Chautauquas provided large audiences for ideas to be spread, as well as entertainment to the masses

22. Populist IdealsIssues • system of “subtreasuries” to replace and strengthen and replace cooperatives • government would establish a network of warehouses where farmers could deposit their crops • crops as collateral… farmers could barrow money from the government with low interest rates and wait for the price of their goods to increase before selling them • getting rid of the national banks system • end absentee ownership of land • direct election of US Senators • regulation of government ownership of railroads, telephones and telegraphs • graduated income tax • inflation of currency (“Free Silver”)

23. Populist IdealsIdeology • Overwhelmingly Protestant… but many openly anti-Semitic • Strange evolution of leaders: Ignatius Donnelly and Tom Watson • Rejection of laissez-faire orthodoxies • Offered the strongest challenge to the direction the American capitalist system was going • Progress should be defined by the needs of individuals in communities • Wizard of Oz (political allegory?)

24. The Crisis of the 1890s Overview of Problems 1. agrarian protest • oppression from monopolistic railroads • Populist movement • 2. labor unrest • low wages • violent strikes • 3. severe depression • Panic of 1893 • Conservative leadership does nothing… failure of either major party to respond to growing distress

25. The Panic of 1893 • The Collapse of the Stock Market • Reading and Philadelphia Railroads declare bankruptcy • Two months later, the National Cordage Company declares bankruptcy • Stock market collapses in response • Many banks collapse in response • Calling in of credit… small businesses begin to collapse • 1 million workers lose their jobs • Showed the dependency of the American economy on the health of the railroads

26. The Panic of 1893 Cont. • Populist Jacob S. Coxey and “Coxey’s Army” • advocating a massive public works program… creation of jobs • inflation of currency • March on foot from Ohio to Washington • 500 make it • Leadership resists pressures for a more active government in the face of this crisis • Congress • President Cleveland • Coxey and his followers arrested or herded into camps

27. The Silver Question • Confusing issue: • Center of the debate was the basis of the dollar, what would lie behind it and give it value. People today have trouble understanding the passion it aroused, because today the value of the dollar is based on public confidence in the government. However in the late 19th century it was widely believed that currency was worthless unless there was something concrete behind it. • In the 1870s the mint stopped coining silver because the value ratio compared to gold was 16:1 (16 ounces of silver = one ounce of gold) • Congress 1873 passes law recognizing discontinuation of sliver • a. conspiracy of big bankers • b. “Crime of ‘73”

28. The Silver Question Cont. • Two opposition groups urged the return of the coinage of silver • silver miners (aka SILVERITES) • farmers – inflationist • raise the prices on farm produce • ease payments of farmers debts • Business, industrialists, bankers, etc. (GOLD BUGS) • President Cleveland calls a special session of Congress to repeal the Sherman Silver Purchase Act…causes a major rift in Democratic party • Northeast Democrats: gold standard essential to the honor and stability of US • South and Western Democrats: “Free Silver” became a symbol of liberation

29. “A Cross of Gold” • The Emergence of Bryan • Populists: In the middle of a depression, they realized they could gain support by raising the “money question” • Republicans: smelling blood in the water due to Democrat division, nominate Governor William McKinley of Ohio • opposed free coinage of silver • 34 delegates from the mountain and plains states walked out of the convention in protest and joined the Democrat Party

30. Democrats • Democrats • convention of 1896, Southern and Western Democrats have two goals • 1 = neutralize the Populists • 2 = gain control of the party from North Eastern Democrats • But defenders of the gold standard (N.E Democrat / Republican Platform) dominate the debate… until…

31. William Jennings Bryan • one of the best in the age of orators • 1896 Convention • “Cross of Gold” speech brings convention to a frenzy • age 36, youngest presidential candidate to ever appear on the ballot of a major party • 1896 Election • Republicans and Conservative Democrats attack him as a dangerous demagogue • Admirers hailed him as the “Great Commoner” • The Populists decide to support Bryant based on the platform of free silver… understanding that it might destroy their party

32. The Conservative Victory • Spending • Republicans, dead afraid of a Bryant victory raise $7 million • Democrats only able to spend $300,000 • Campaigning • McKinley never gets off his front porch in Canton, Ohio • Bryant becomes the first presidential candidate in US history to stump every section in the country systematically • traveled 18,000 miles and spoke to an estimated 5 million people • Pleased Protestants, alienated Catholics • Redefined the modern form of presidential politics, but at the time, many considered the campaign undignified • Results • McKinley polled 271 electoral votes and garnered 51.1% of the vote • Bryan polled 176 electoral votes and garnered 47.7% of the vote • Disaster for Populists who had gambled on Democrats and lost

33. McKinley and Recovery • A return to calm • the exhaustion of dissent • middle class Americans afraid of labor • decline of agrarian protest • McKinley politically shrewd and gradual easing of the economic crisis • McKinley tact and issues • committed himself to the issue that all Republicans agreed: the need for higher tariff rates (again) and produced the Dingley Tariff • sent a commission to Europe to explore the option of a silver agreement with GB and France… as expected, no agreement could be produced • in response the Currency or “Gold Standard” Act of 1900 is passed

34. McKinley and Recovery Cont. • Conservatives win “the battle of the standards” • passage of act timed with economic recovery • prosperity and gold standard seem closely allied • lucky that so much more gold was found in Alaska, South Africa and Australia • New Issue: United States presence in world affairs and the possibility of the United States becoming an imperialist nation