The Cleveland Era
by
Henry Jones Ford
Part 2 out of 3
To deal with this situation, the House had refused to adopt the
rules of the preceding Congress; and after electing John G.
Carlisle as Speaker and authorizing the appointment of a
committee on rules, it deferred the appointment of the usual
legislative committees until after a new set of rules had been
adopted. The action of the Speaker in constituting the Rules
Committee was scrupulously fair to the contending interests. It
consisted of himself, Samuel J. Randall of Pennsylvania, and
William R. Morrison of Illinois from the Democratic side of the
House; and of Thomas B. Reed of Maine and Frank Hiscock of New
York from the Republican side. On the 14th of December, the
committee made two reports: a majority report presented by Mr.
Morrison and a minority report presented by Mr. Randall and
signed by him alone.
These reports and the debates which followed are most
disappointing. What was needed was a penetrating discussion of
the means by which the House could establish its authority and
perform its constitutional functions. But it is a remarkable
circumstance that at no time was any reference made to the only
way in which the House can regain freedom of action--namely, by
having the Administration submit its budget demands and its
legislative proposals directly to the committee of the whole
House. The preparatory stages could then be completed before the
opening of the legislative session. Congress would thus save the
months of time that are now consumed in committee incubation and
would almost certainly be assured of opportunity of considering
the public business. Discrimination in legislative privilege
among members of the House would then be abolished, for every
member would belong to the committee on appropriations. It is
universally true in constitutional governments that power over
appropriations involves power over legislation, and the only
possibility of a square deal is to open that power to the entire
membership of the assembly, which is the regular practice in
Switzerland and in all English commonwealths. The House could not
have been ignorant of the existence of this alternative, for the
whole subject had been luminously discussed in the Senate Report
of February 4,1881. It was, therein, clearly pointed out that
such an arrangement would prevent paralysis or inaction in
Congress. With the Administration proposing its measures directly
to Congress, discussion of them and decisions upon them could not
be avoided.
But such a public forum could not be established without sweeping
away many intrenchments of factional interest and private
opportunity, and this was not at all the purpose of the committee
on rules. It took its character and direction from an old feud
between Morrison and Randall. Morrison, as chairman of the Ways
and Means Committee in 1876, had reported a tariff reform measure
which was defeated by Randall's influence. Then Randall, who had
succeeded to the Speakership, transferred Morrison from the
chairmanship of the Ways and Means Committee to the chairmanship
of the committee on public lands. But Morrison was a man who
would not submit to defeat. He was a veteran of the Civil War,
and had been severely wounded in leading his regiment at Fort
Donelson. After the war, he figured in Illinois politics and
served as Speaker of the State Legislature. He entered Congress
in 1873 and devoted himself to the study of the tariff with such
intelligence and thoroughness that his speeches are still an
indispensable part of the history of tariff legislation. His
habitual manner was so mild and unassuming that it gave little
indication of the force of his personality, which was full of
energy and perseverance.
Randall was more imperious in his mien. He was a party leader of
established renown which he had gained in the struggles over
force bills at the close of the reconstruction period. His
position on the tariff was that of a Pennsylvania protectionist,
and upon the tariff reform issue in 1883, he was defeated for the
Speakership. At that time, John G. Carlisle of Kentucky was
raised to that post, while Morrison again became chairman of the
Ways and Means Committee. But Randall, now appointed chairman of
the Appropriations Committee, had so great an influence that he
was able to turn about forty Democratic votes against the tariff
bill reported by the Ways and Means Committee, thus enabling the
Republicans to kill the bill by striking out the enacting clause.
Only this practical aim, then, was in view in the reports
presented by the committee on rules. The principal feature of the
majority report was a proposal to curtail the jurisdiction of the
Appropriations Committee by transferring to other committees five
of the eleven regular appropriation bills. What, from the
constitutional point of view, would appear to be the main
question--the recovery by the House of its freedom of action--was
hardly noticed in the report or in the debates which followed.
Heretofore, the rules had allotted certain periods to general
business; now, the majority report somewhat enlarged these
periods and stipulated that no committee should bring more than
one proposal before the House until all other committees had had
their turn. This provision might have been somewhat more
effective had it been accompanied by a revision of the list of
committees such as was proposed by William M. Springer. He
pointed out that there were a number of committees "that have no
business to transact or business so trifling and unimportant as
to make it unnecessary to have standing committees upon such
subjects"; he proposed to abolish twenty-one of these committees
and to create four new ones to take their place; he showed that
"if we allow these twenty useless committees to be again put on
our list, to be called regularly in the morning hour... forty-two
days will be consumed in calling these committees"; and, finally,
he pointed out that the change would effect a saving since it
would "do away with sixteen committee clerkships."
This saving was, in fact, fatal to the success of Springer's
proposal, since it meant the extinction of so many sinecures
bestowed through congressional favor. In the end, Springer
reduced his proposed change to the creation of one general
committee on public expenditures to take the place of eight
committees on departmental expenditures. It was notorious that
such committees did nothing and could do nothing, and their
futility, save as dispensers of patronage, had been demonstrated
in a startling manner by the effect of the Acts of July 12, 1870,
and June 20, 1874, requiring all unused appropriations to be paid
into the Treasury. The amounts thus turned into the Treasury
aggregated $174,000,000 and in a single bureau there was an
unexpended balance of $36,000,000, which had accumulated for a
quarter of a century because Congress had not been advised that
no appropriation was needed. Mr. Springer remarked that, during
the ten years in which he had been a member of Congress, he had
observed with regard to these committees "that in nearly all
cases, after their appointment, organization, and the election of
a clerk, the committee practically ceased to exist, and nothing
further is done." William R. Morrison at once came to the rescue
of the endangered sinecures and argued that even although these
committees had been inactive in the past they "constituted the
eyes, the ears, and the hands of the House." In consequence,
after a short debate Mr. Springer's motion was rejected without a
division.
The arrangements subsequently made to provide time and
opportunity for general legislation, turned out in practice to be
quite futile and indeed they were never more than a mere formal
pretense. It was quite obvious, therefore, that the new rules
tended only to make the situation worse than before. Thomas Ryan
of Kansas told the plain truth when he said: "You do not propose
to remedy any of those things of which you complain by any of the
rules you have brought forward. You propose to clothe eight
committees with the same power, with the same temptation and
capacity to abuse it. You multiply eightfold the very evils of
which you complain." James H. Blount of Georgia sought to
mitigate the evils of the situation by giving a number of other
committees the same privilege as the appropriation committees,
but this proposal at once raised a storm, for appropriation
committees had leave to report at any time, and to extend the
privilege would prevent expeditious handling of appropriation
bills. Mr. Blount's motion was, therefore, voted down without a
division.
While in the debate, the pretense of facilitating routine
business was ordinarily kept up; occasional intimations of actual
ulterior purpose leaked out, as when John B. Storm of
Pennsylvania remarked that it was a valuable feature of the rules
that they did hamper action and "that the country which is least
governed is the best governed, is a maxim in strict accord with
the idea of true civil liberty." William McKinley was also of the
opinion that barriers were needed "against the wild projects and
visionary schemes which will find advocates in this House." Some
years later, when the subject was again up for discussion, Thomas
B. Reed went to the heart of the situation when he declared that
the rules had been devised not to facilitate action but to
obstruct it, for "the whole system of business here for years has
been to seek methods of shirking, not of meeting, the questions
which the people present for the consideration of their
representatives. Peculiar circumstances have caused this. For a
long time, one section of the country largely dominated the
other. That section of the country was constantly apprehensive
of danger which might happen at any time by reason of an
institution it was maintaining. Very naturally, all the rules of
the House were bent for the obstruction of action on the part of
Congress." It may be added that these observations apply even
more forcibly, to the rules of the Senate. The privilege of
unrestricted debate was not originally granted by those rules but
was introduced as a means of strengthening the power of sectional
resistance to obnoxious legislation.
The revision of the rules in 1885, then, was not designed really
to facilitate action by the House, but rather to effect a
transfer of the power to rule the House. It was at least clear
that under the proposed changes the chairman of the committee on
appropriations would no longer retain such complete mastery as
Randall had wielded, and this was enough to insure the adoption
of the majority report. The minority report opposed this
weakening of control on the ground that it would be destructive
of orderly and responsible management of the public funds.
Everything which Randall said on that point has since been amply
confirmed by much sad experience. Although some leading
Republicans, among whom was Joseph G. Cannon of Illinois, argued
strongly in support of Randall's views, the temper of the House
was such that the majority in favor of the change was
overwhelming, and on December 18, 1885, the Morrison plan was
finally adopted without a roll call.
The hope that the change in organization would expedite action on
appropriation bills, was promptly disappointed. Only one of the
fourteen regular appropriation bills became law before the last
day of the fiscal year. The duress to which the House was subject
became tighter and harder than before, and the Speakership
entered upon a development unparalleled in constitutional
history. The Speaker was practically in a position to determine
what business the House might consider and what it might not, and
the circumstances were such as to breed a belief that it was his
duty to use his discretion where a choice presented itself. It is
obvious that, when on the floor of the House there are a number
of applicants for recognition, the Speaker must choose between
them. All cannot be allowed to speak at once. There is no chance
to apply the shop rule, "first come first served," for numerous
applications for the floor come at the same time. Shall the
Speaker choose at random or according to some definite principle
of selection? In view of the Speaker's interest in the welfare of
the party which raised him to the office, he would naturally
inquire in advance the purpose for which the recognition of the
chair was desired. It was a manifest step towards orderly
procedure in session, however, when instead of crowding around
the clerk's desk bawling for recognition, members applied to the
Speaker in advance. In Speaker Blaine's time, this had become a
regular practice and ever since then, a throng of members at the
Speaker's office trying to arrange with him for recognition has
been a daily occurrence during a legislative session. Samuel W.
McCall, in his work on "The Business of Congress," says that the
Speaker "usually scrutinizes the bill and the committee's report
upon it, and in case of doubt he sometimes refers them to a
member in whom he has confidence, for a more careful examination
than he himself has time to give."
Under Speaker Carlisle, this power to censor proposals was made
conspicuous through the factional war in the Democratic party.
For several sessions of Congress, a bill had been pending to
repeal the internal revenue taxes upon tobacco, and it had such
support that it might have passed if it could have been reached
for consideration. On February 5, 1887, a letter was addressed to
Speaker Carlisle by three prominent Democrats: Samuel J.
Randall of Pennsylvania, George D. Wise of Virginia, and John S.
Henderson of North Carolina, saying: "At the instance of many
Democratic members of the House, we appeal to you earnestly to
recognize on Monday next, some Democrat who will move to suspend
the rules for the purpose of giving the House an opportunity of
considering the question of the total repeal of the internal
revenue taxes on tobacco." The letter went on to argue that it
would be bad policy to let a Republican have credit for a
proposal, which it was declared "will command more votes than any
other measure pending before the House looking towards a
reduction in taxation; and favorable action on this proposition
will not interfere with other efforts that are being made to
reduce the burden of the people."
Speaker Carlisle, however, refused to allow the House to consider
the matter on the ground that negotiations with Randall and his
friends for concerted party action had so far been fruitless.
"Among other things," he wrote, "we proposed to submit the entire
subject to a caucus of our political friends, with the
understanding that all parties would abide by the result of its
action.... We have received no response to that communication,
and I consider that it would not be proper under the
circumstances for me to agree to a course of action which would
present to the House a simple proposition for the repeal of the
internal revenue tax on tobacco, snuff and cigars, to the
exclusion of all other measures for the reduction of taxation."
The letter closed by "sincerely hoping that some plan may yet be
devised which will enable the House to consider the whole subject
of revenue reduction."
No one was less of an autocrat in temper and habit of thought
than Speaker Carlisle, and he assumed this position in deference
to a recognized function of his office, supported by a long line
of precedents. The case was, therefore, a signal illustration of
the way in which the House has impaired its ability to consider
legislation by claiming the exclusive privilege of proposing
legislation. If the rules had allowed the President to propose
his measures directly to the House, then the way would have been
opened for a substitute or an amendment. As it was, the House was
able to act only upon matters within the control of a few persons
advantageously posted, and none of the changes of rules that have
been made from time to time have seriously disturbed this
fundamental situation.
Notwithstanding the new rules adopted in December, 1885, nothing
of importance was accomplished by the House. On February 15,
1886, William R. Morrison introduced a tariff bill making a
moderate reduction in rates of duty, which, after considerable
amendment in the committee of ways and means, was reported to the
House on the 12th of April; but no further action was taken until
the 17th of June, when Morrison moved that the House go into
committee of the whole to consider the bill. Thirty-five
Democrats voted with the Republicans against the motion, which
was defeated by 157 nays to 140 yeas. No further attempt was made
to take up the bill during that session, and in the ensuing fall
Morrison was defeated as a candidate for reelection. Before
leaving Congress he tried once more to obtain consideration of
his bill but in vain. Just as that Congress was expiring, John S.
Henderson of North Carolina was at last allowed to move a
suspension of the rules in order to take a vote on a bill to
reduce internal revenue taxes, but he failed to obtain the
two-thirds vote required for suspension of the rules.
That the proceedings of the Forty-ninth Congress were not
entirely fruitless, was mainly due to the initiative and address
of the Senate. Some important measures were thus pushed through,
among them the act regulating the presidential succession and the
act creating the Interstate Commerce Commission. The first of
these provided for the succession of the heads of departments in
turn, in case of the removal, death, resignation, or inability of
both the President and the Vice-President.
The most marked legislative achievement of the House was an act
regulating the manufacture and sale of oleomargarine, to which
the Senate assented with some amendment, and which was signed
with reluctance by the President, after a special message to the
House sharply criticizing some of the provisions of the act. A
bill providing for arbitration of differences between common
carriers and their employees was passed by the Senate without a
division, but it did not reach the President until the closing
days of the session and failed of enactment because he did not
sign it before the final adjournment. Taken as a whole, then, the
record of the Congress elected in 1884 showed that while the
Democratic party had the Presidency and the House of
Representatives, the Republican party, although defeated at the
polls, still controlled public policy through the agency of the
Senate.
CHAPTER VI. PRESIDENTIAL KNIGHT-ERRANTRY
Although President Cleveland decisively repelled the Senate's
attempted invasion of the power of removal belonging to his
office, he was still left in a deplorable state of servitude
through the operation of old laws based upon the principle of
rotation in office. The Acts of 1820 and 1836, limiting
commissions to the term of four years, forced him to make
numerous appointments which provoked controversy and made large
demands upon his time and thought. In the first year of his
administration, he sent about two thousand nominations to the
Senate, an average of over six a day, assuming that he was
allowed to rest on Sunday. His freedom of action was further
curtailed by an Act of 1863, prohibiting the payment of a salary
to any person appointed to fill a vacancy existing while the
Senate was in session, until the appointment had been confirmed
by the Senate. The President was thus placed under a strict
compulsion to act as a party employment agent.
If it is the prime duty of a President to act in the spirit of a
reformer, Cleveland is entitled to high praise for the stanchness
with which he adhered to his principles under most trying
circumstances. Upon November 27, 1885, he approved rules
confirming and extending the civil service regulations. Charges
that Collector Hedden of the New York Customs House was violating
the spirit of the Civil Service Act, and was making a party
machine of his office, caused the Civil Service Commission to
make an investigation which resulted in his resignation in July,
1886. On the 10th of August, Daniel Magone of Ogdensburg, New
York, a widely known lawyer, was personally chosen by the
President with a view to enforcing the civil service law in the
New York Customs House. Before making this appointment, President
Cleveland issued an order to all heads of departments warning all
officeholders against the use of their positions to control
political movements in their localities. "Officeholders," he
declared, "are the agents of the people, not their masters. They
have no right, as officeholders, to dictate the political action
of their associates, or to throttle freedom of action within
party lines by methods and practices which prevent every useful
and justifiable purpose of party organization." In August,
President Cleveland gave signal evidence of his devotion to civil
service reform by appointing a Republican, because of his special
qualifications, to be chief examiner for the Civil Service
Commission.
Democratic party workers were so angered and disgusted by the
President's policy that any mention of his name was enough to
start a flow of coarse denunciation. Strong hostility to his
course of action was manifested in Congress. Chairman Randall, of
the committee on appropriations, threatened to cut off the
appropriation for office room for the commission. A "rider" to
the legislative appropriation bill, striking at the civil service
law, caused a vigorous debate in the House in which leading
Democrats assailed the Administration, but eventually the "rider"
was ruled out on a point of order. In the Senate, such party
leaders as Vance of North Carolina, Saulsbury of Delaware, and
Voorhees of Indiana, openly ridiculed the civil service law, and
various attempts to cripple it were made but were defeated.
Senator Vance introduced a bill to repeal the law, but it was
indefinitely postponed by a vote of 33 to 6, the affirmative vote
being cast mainly by Republicans; and in general the strongest
support for the law now came from the Republican side. Early in
June, 1887, an estimate was made that nine thousand civil offices
outside the scope of the civil service rules were still held by
Republicans. The Republican party press gloated over the
situation and was fond of dwelling upon the way in which old-line
Democrats were being snubbed while the Mugwumps were favored. At
the same time, civil service reformers found much to condemn in
the character of Cleveland's appointments. A special committee of
the National Civil Service Reform League, on March 30, 1887,
published a report in which they asserted that, "tried by the
standard of absolute fidelity to the reform as it is understood
by this League, it is not to be denied that t this Administration
has left much to be desired." At a subsequent session of the
League, its President, George William Curtis, proclaimed that the
League did not regard the Administration as "in any strict sense
of the words a civil service reform administration." Thus while
President Cleveland was alienating his regular party support, he
was not getting in return any dependable support from the
reformers. He seemed to be sitting down between two stools, both
tilting to let him fall.
Meanwhile, he went on imperturbably doing his duty as he saw it.
Like many of his predecessors, he would rise early to get some
time to attend to public business before the rush of office
seekers began, but the bulk of his day's work lay in the
discharge of his compulsory duties as an employment agent. Many
difficult situations were created by contentions among
Congressmen over appointments. It was Cleveland's habit to deal
with these cases by homely expostulation and by pleas for mutual
concessions. Such incidents do not of course go upon record, and
it is only as memoirs and reminiscences of public men are
published that this personal side of history becomes known.
Senator Cullom of Illinois in his "Fifty Years of Public Service"
gives an account that doubtless fairly displays Cleveland's way
of handling his vexatious problems. "I happened to be at the
White House one day, and Mr. Cleveland said to me, 'I wish you
would take up Lamar's nomination and dispose of it. I am between
hay and grass with reference to the Interior Department. Nothing
is being done there; I ought to have some one on duty, and I
cannot do anything until you dispose of Lamar.'" Mr. Lamar, who
had entered the Cabinet as Secretary of the Interior, was
nominated for associate justice of the Supreme Court on December
6, 1887. He had been an eminent member of the Senate, with
previous distinguished service in the House, so that the Senate
must have had abundant knowledge of his character and
attainments. It is impossible to assign the delay that ensued to
reasonable need of time for inquiry as to his qualifications, but
Senator Cullom relates that "the nomination pended before the
Judiciary Committee for a long time." Soon after the personal
appeal, which was made by the President to every Senator he could
reach, action was finally taken and the appointment was confirmed
January 16, 1888.
Senator Cullom's reminiscences also throw light upon the process
by which judges are appointed. President Cleveland had selected
Melville W. Fuller of Illinois for the office of chief justice of
the Supreme Court. According to Senator Cullom, Senator Edmunds
"was very much out of humor with the President because he had
fully expected that Judge Phelps, of his own State, was to
receive the honor.... The result was that Senator Edmunds held
the nomination, without any action, in the Judiciary Committee
for some three months." Senator Cullom, although a party
associate of Edmunds, was pleased that the President had selected
an Illinois jurist and he was determined that, if he could help
it, Edmunds should not have the New Hampshire candidate
appointed. He therefore appealed to the committee to do something
about the nomination, either one way or the other. The committee
finally reported the nomination to the Senate without
recommendation. When the matter came up in executive session,
"Senator Edmunds at once took the floor and attacked Judge Fuller
most viciously as having sympathized with the rebellion." But
Cullom was primed to meet that argument. He had been furnished
with a copy of a speech attacking President Lincoln which Phelps
had delivered during the war, and he now read it to the Senate,
"much to the chagrin and mortification of Senator Edmunds."
Cullom relates that the Democrats in the Senate enjoyed the
scene. "Naturally, it appeared to them a very funny performance,
two Republicans quarreling over the confirmation of a Democrat.
They sat silent, however, and took no part at all in the debate,
leaving us Republicans to settle it among ourselves." The result
of the Republican split was that the nomination of Fuller was
confirmed "by a substantial majority."
Another nomination which caused much agitation at the time was
that of James C. Matthews of New York, to be Recorder of Deeds in
the District of Columbia. The office had been previously held by
Frederick Douglass, a distinguished leader of the colored race;
and in filling the vacancy the President believed it would be an
exercise of wise and kindly consideration to choose a member of
the same race. But in the Washington community, there was such a
strong antipathy to the importation of a negro politician from
New York to fill a local office that a great clamor was raised,
in which Democrats joined. The Senate rejected the nomination,
but meanwhile Mr. Matthews had entered upon the duties of his
office and he showed such tact and ability as gradually to soften
the opposition. On December 21,1886, President Cleveland
renominated him, pointing out that he had been in actual
occupation of the office for four months, managing its affairs
with such ability as to remove "much of the opposition to his
appointment which has heretofore existed." In conclusion, the
President confessed "a desire to cooperate in tendering to our
colored fellow-citizens just recognition." This was a shrewd
argument. The Republican majority in the Senate shrank from what
might seem to be drawing the color line, and the appointment was
eventually confirmed; but this did not remove the sense of
grievance in Washington over the use of local offices for
national party purposes. Local sentiment in the District of
Columbia is, however, politically unimportant, as the community
has no means of positive action.*
* It is a singular fact, which contains matter for deep
consideration, that the District of Columbia, the national
capital, is the only populated area in the civilized world
without any sort of suffrage rights.
In the same month in which President Cleveland issued his
memorable special message to the Senate on the Tenure of Office
Act, he began another struggle against congressional practice in
which he was not so fortunate. On March 10, 1886, he sent to
Congress the first of his pension vetoes. Although liberal
provision for granting pensions had been made by general laws,
numerous special applications were made directly to Congress, and
congressmen were solicited to secure favorable consideration for
them. That it was the duty of a representative to support an
application from a resident of his district, was a doctrine
enforced by claim agents with a pertinacity from which there was
no escape. To attempt to assume a judicial attitude in the matter
was politically dangerous, and to yield assent was a matter of
practical convenience. Senator Cullom relates that when he first
became a member of the committee on pensions he was "a little
uneasy" lest he "might be too liberal." But he was guided by the
advice of an old, experienced Congressman, Senator Sawyer of
Wisconsin, who told him: "You need not worry, you cannot very
well make a mistake allowing liberal pensions to the soldier
boys. The money will get back into the Treasury very soon."
The feeling that anything that the old soldiers wanted should be
granted was even stronger in the House, where about the only
opportunity of distinction allowed by the procedure was to
champion these local demands upon the public treasury. It was
indeed this privilege of passing pension bills which partially
reconciled members of the House to the actual control of
legislative opportunity by the Speaker and the chairmen of a few
dominating committees. It was a congressional perquisite to be
allowed to move the passage of so many bills; enactment followed
as a matter, of course. President Cleveland made a pointed
reference to this process in a veto message of June 21, 1886. He
observed that the pension bills had only "an apparent
Congressional sanction" for the fact was that "a large proportion
of these bills have never been submitted to a majority of either
branch of Congress, but are the results of nominal sessions held
for the express purpose of their consideration and attended by a
small minority of the members of the respective houses of the
legislative branch of government."
Obviously, the whole system of pension legislation was faulty.
Mere individual effort on the part of the President to screen the
output of the system was scarcely practicable, even if it were
congruous with the nature of the President's own duties; but
nevertheless Cleveland attempted it, and kept at it with stout
perseverance. One of his veto messages remarks that in a single
day nearly 240 special pension bills were presented to him. He
referred them to the Pension Bureau for examination and the labor
involved was so great that they could not be returned to him
until within a few hours of the limit fixed by the Constitution
for the President's assent.
There could be no more signal proof of President Cleveland's
constancy of soul than the fact that he was working hard at his
veto forge, with the sparks falling thickly around, right in his
honeymoon. He married Miss Frances Folsom of Buffalo on June 2,
1886. The ceremony took place in the White House, and immediately
thereafter, the President and his charming bride went to Deer
Park, Maryland, a mountain resort. The respite from official
cares was brief; on June 8th, the couple returned to Washington
and some of the most pugnacious of the pension vetoes were sent
to Congress soon after. The rest of his public life was passed
under continual storm, but the peace and happiness of his
domestic life provided a secure refuge.
On the other hand, the rebuffs which Democratic Congressmen
received in the matter of pension legislation were, it must be
admitted, peculiarly exasperating. Reviewing the work of the
Forty-ninth Congress, "The Nation" mentioned three enactments
which it characterized as great achievements that should be
placed to the credit of Congress. Those were the act regulating
the presidential succession, approved January 18, 1886; the act
regulating the counting of the electoral votes, approved February
3, 1887; and the repeal of the Tenure of Office Act, approved
March 3, 1887. But all three measures originated in the Senate,
and the main credit for their enactment might be claimed by the
Republican party. There was some ground for the statement that
they would have been enacted sooner but for the disturbance of
legislative routine by political upheavals in the House; and
certainly no one could pretend that it was to get these
particular measures passed that the Democratic party was raised
to power. The main cause of the political revolution of 1884 had
been the continuance of war taxes, producing revenues that were
not only not needed but were positively embarrassing to the
Government. Popular feeling over the matter was so strong that
even the Republican party had felt bound to put into its national
platform, in 1884, a pledge "to correct the irregularities of the
tariff and to reduce the surplus." The people, however, believed
that the Republican party had already been given sufficient
opportunity, and they now turned to the Democratic party for
relief. The rank and file of this party felt acutely, therefore,
that they were not accomplishing what the people expected.
Members arrived in Washington full of good intentions. They found
themselves subject to a system which allowed them to introduce
all the bills they wanted, but not to obtain action upon them.
Action was the prerogative of a group of old hands who managed
the important committees and who were divided among themselves on
tariff policy. And now, the little bills which, by dint of
persuasion and bargaining, they had first put through the
committees, and then through both Houses of Congress, were cut
down by executive veto, turning to their injury what they had
counted upon to help them in their districts.
During the campaign, Democratic candidates had everywhere
contended that they were just as good friends of the old soldiers
as the Republicans. Now, they felt that to make good this
position they must do something to offset the effect of President
Cleveland's vetoes. In his messages, he had favored "the most
generous treatment to the disabled, aged and needy among our
veterans"; but he had argued that it should be done by general
laws, and not by special acts for the benefit of particular
claimants. The Pension Committee of the House responded by
reporting a bill "for the relief of dependent parents and
honorably discharged soldiers and sailors who are now disabled
and dependent upon their own labor for support." It passed the
House by a vote of 180 to 76, with 63 not voting, and it passed
the Senate without a division. On the 11th of February, President
Cleveland sent in his veto, accompanied by a message pointing out
in the language of the act defects and ambiguities which he
believed would "but put a further premium on dishonesty and
mendacity." He reiterated his desire that provision should be
made "for those who, having served their country long and well,
are reduced to destitution and dependence," but he did not think
that the bill was a proper means of attaining that object. On the
19th of February, the House committee on pensions submitted an
elaborate report on the veto in which they recited the history of
the bill and the reasons actuating the committee. Extracts from
Cleveland's messages were quoted, and the committee declared
that, in "hearty accord with these views of the President and
largely in accordance with his suggestions, they framed a bill
which they then thought, and still continue to think, will best
accomplish the ends proposed." A motion to pass the bill over the
veto on the 24th of February received 175 votes to 125, but
two-thirds not having voted in the affirmative the bill failed to
pass. The Republicans voted solidly in support of the bill,
together with a large group of Democrats. The negative vote came
wholly from the Democratic side. Such a fiasco amounted to a
demonstration of the lack of intelligent leadership. If the
President and his party in Congress were cooperating for the
furtherance of the same objects, as both averred, it was
discreditable all around that there should have been such a
complete misunderstanding as to the procedure.
Meanwhile, the President was making a unique record by his
vetoes. During the period of ninety-six years, from the
foundation of the Government down to the beginning of Cleveland's
administration, the entire number of veto messages was 132. In
four years, Cleveland sent in 301 veto messages, and in addition
he practically vetoed 109 bills by inaction. Of 2042 private
pension bills passed by Congress, 1518 were approved and 284
became laws by lapse of time without approval. The positive
results of the President's activity were thus inconsiderable,
unless incidentally he had managed to correct the system which he
had opposed. That claim, indeed, was made in his behalf when "The
Nation" mentioned "the arrest of the pension craze" as a
"positive achievement of the first order.'" But far from being
arrested, "the pension craze" was made the more furious, and it
soon advanced to extremes unknown before.*
* March 19, 1887.
The Democratic politicians naturally viewed with dismay the
approach of the national election of 1888. Any one could see that
the party was drifting on to the rocks and nobody deemed to be at
the helm. According to William R. Morrison, who certainly had
been in a position to know, President Cleveland had "up to this
time taken no decided ground one way or the other on the question
of tariff." He had included the subject in the long dissertation
on the state of the Union, which ever since Jefferson's time the
President has been wont to send to Congress at the opening of a
session, but he had not singled it out as having precedence. He
now surprised the country, roused his party, and gave fresh
animation to national politics on December 6, 1887, by devoting
his third annual message wholly to the subject of taxation and
revenue. He pointed out that the treasury surplus was mounting up
to $140,000,000; that the redemption of bonds which had afforded
a means for disbursement of excess revenues had stopped because
there were no more bonds that the Government had a right to
redeem; and that, hence, the Treasury "idly holds money uselessly
subtracted from the channels of trade," a situation from which
monetary derangement and business distress would naturally ensue.
He strongly urged that the "present tariff laws, the vicious,
inequitable and illogical source of unnecessary taxation, ought
to be at once revised and amended." Cleveland gave a detailed
analysis of the injurious effects which the existing tariff had
upon trade and industry, and went on to remark that "progress
toward a wise conclusion will not be improved by dwelling upon
the theories of protection and free trade. This savors too much
of bandying epithets. It is a condition which confronts us, not a
theory." The effect of the message was very marked both upon
public opinion and party activity. Mr. Morrison correctly summed
up the party effect in saying that "Mr. Mills, obtaining the
substantial support of the Administration, was enabled to press
through the House a bill differing in a very few essential
measures from, and combining the general details and purposes of,
the several measures of which I have been the author, and which
had been voted against by many of those who contributed to the
success of the Mills Bill."
An incident which attracted great notice because it was thought
to have a bearing on the President's policy of tariff revision,
was the veto of the Allentown Public Building Bill. This bill was
of a type which is one of the rankest growths of the
Congressional system--the grant of money not for the needs of
public service but as a district favor. It appropriated $100,000
to put up a post-office building at Allentown, Pennsylvania,
where adequate quarters were being occupied by the post-office at
an annual rent of $1300. President Cleveland vetoed the bill
simply on the ground that it proposed an unnecessary expenditure,
but the fact was at once noted that the bill had been fathered by
Congressman Snowden, an active adherent of Randall in opposition
to the tariff reform policy of the Administration. The word went
through Congress and reverberated through the press that "there
is an Allentown for every Snowden." Mr. Morrison said in more
polite phrase what came to the same thing when he observed that
"when Mr. Cleveland took decided ground in favor of revision and
reduction, he represented the patronage of the Administration, in
consequence of which he was enabled to enforce party discipline,
so that a man could no longer be a good Democrat and favor
anything but reform of the tariff."
After the Mills Bill had passed the House* and had been sent to
the Senate, it was held in committee until October 3, 1888. When
it emerged it carried an amendment which was in effect a complete
substitute, but it was not taken up for consideration until after
the presidential election, and it was meant simply as a
Republican alternative to the Mills Bill for campaign use.
Consideration of the bill began on the 5th of December and lasted
until the 22nd of January, when the bill was returned to the
House transformed into a new measure. It was referred to the Ways
and Means Committee, and Chairman Mills reported it back with a
resolution setting forth that "the substitution by the Senate
under the form of an amendment.... of another and different
bill," is in conflict with the section of the Constitution which
"vests in the House of Representatives the sole power to
originate such a measure." The House refused to consider the
resolution, a number of Democrats led by Mr. Randall voting with
the Republicans in the negative. No further action was taken on
the bill and since that day the House has never ventured to
question the right of the Senate to amend tax bills in any way
and to any extent. As Senator Cullom remarks in his memoirs, the
Democrats, although they had long held the House and had also
gained, the Presidency, "were just as powerless to enact
legislation as they had been before."
* The Mills Bill was passed July 21, 1888, yeas 162, nays 149,
not voting 14. Randall, Snowden, and two other Democrats joined
the Republicans in voting against the bill.
CHAPTER VII. THE PUBLIC DISCONTENTS
While President and Congress were passing the time in mutual
obstruction, the public discontents were becoming hot and bitter
to a degree unknown before. A marked feature of the situation was
the disturbance of public convenience involving loss, trouble,
and distress which were vast in extent but not easily expressed
in statistical form. The first three months of 1886 saw an
outbreak of labor troubles far beyond any previous record in
their variety and extent. In 1885, the number of strikes reported
was 645 affecting 2284 establishments, a marked increase over
preceding years. In 1886, the number of strikes rose to 1411,
affecting 9861 establishments and directly involving 499,489
persons. The most numerous strikes were in the building trades,
but there were severe struggles in many other industries. There
was, for example, an interruption of business on the New York
elevated railway and on the street railways of New York,
Brooklyn, and other cities.
But the greatest public anxiety was caused by the behavior of the
Knights of Labor, an organization then growing so rapidly that it
gave promise of uniting under one control the active and
energetic elements of the working classes of the country. It
started in a humble way, in December, 1869, among certain garment
cutters in Philadelphia, and for some years spread slowly from
that center. The organization remained strictly secret until
1878, in which year it held a national convention of its fifteen
district assemblies at Reading, Pennsylvania. The object and
principles of the order were now made public and, thereafter, it
spread with startling rapidity, so that in 1886 it pitted its
strength against public authority with a membership estimated at
from, 500,000 to 800,000. Had this body been an army obedient to
its leaders, it would have wielded great power; but it turned out
to be only a mob. Its members took part in demonstrations which
were as much mutinies against the authority of their own
executive board as they were strikes against their employers. The
result of lack of organization soon began to be evident. In
March 1886, the receiver of the Texas Pacific Railroad
discharged an employee prominent in the Knights of Labor and thus
precipitated a strike which was promptly extended to the Missouri
Pacific. There were riots at various points in Missouri and
Kansas, and railroad traffic at St. Louis was completely
suspended for some days, but the strike was eventually broken.
The Knights of Labor, however, had received a blow from which it
never recovered, and as a result its membership declined. The
order has since been almost wholly superseded by the American
Federation of Labor, established in 1886 through shrewd
management by an association of labor unions which had been
maintained since 1881. The Knights had been organized by
localities with the aim of merging all classes of working men
into one body. The Federation, on the other hand, is composed of
trades unions retaining their autonomy--a principle of
organization which has proved to be more solid and durable.
To these signs of popular discontent the Government could not be
blind. A congressional committee investigated the railroad
strikes, and both parties in Congress busied themselves with
labor legislation. But in spite of this apparent willingness to
cope with the situation, there now followed another display of
those cross purposes which occurred so often during the Cleveland
administration. The House had already passed a bill providing
means of submitting to arbitration controversies between
railroads engaged in interstate commerce and their employees.
President Cleveland now sent a special message recommending that
"instead of arbitrators chosen in the heat of conflicting claims
and after each dispute shall arise, there be created a Commission
of Labor, consisting of three members, who shall be regular
officers of the government, charged among other duties with the
consideration and settlement when possible, of all controversies
between labor and capital." In spite of the urgency of the
situation, the Senate seized this occasion for a new display of
party tactics, and it Allowed the bill already passed by the
House to lie without action while it proceeded to consider
various labor measures of its own. For example, by June 1, 1886,
the Senate had passed a bill providing that eight hours should be
a day's work for letter-carriers; soon afterwards, it passed a
bill legalizing the incorporation of national trades unions, to
which the House promptly assented without a division; and the
House then continued its labor record by passing on the 15th of
July a bill against the importation of contract labor. This last
bill was not passed by the Senate until after the fall elections.
It was approved by the President on February 23, 1887.
The Senate also delayed action on the House bill, which proposed
arbitration in labor disputes, until the close of the session;
and then the President, in view of his disregarded suggestion,
withheld his assent. It was not until the following year that the
legislation recommended by the President was enacted. By the Act
of June 13, 1888, the Department of Labor was established, and by
the Act of October 1, 1888, in addition to provision for
voluntary arbitration between railroad corporations and their
employees, the President was authorized to appoint a commission
to investigate labor conflicts, with power to act as a board of
conciliation. During the ten years in which the act remained on
the statute books, it was actually put to use only in 1894, when
a commission was appointed to investigate the Pullman strike at
Chicago, but this body took no action towards settling the
dispute.
Thus far, then, the efforts of the Government to deal with the
labor problem had not been entirely successful. It is true that
the labor conflicts arose over differences which only indirectly
involved constitutional questions. The aims of both the Knights
of Labor and of the American Federation were primarily economic
and both organizations were opposed to agitation of a
distinctively political character. But parallel with the labor
agitation, and in communication with it, there were radical
reform movements of a type unknown before. There was now to arise
a socialistic movement opposed to traditional constitutionalism,
and therefore viewed with alarm in many parts of the country.
Veneration of the Constitution of 1787 was practically a national
sentiment which had lasted from the time the Union was
successfully established until the Cleveland era. However violent
political differences in regard to public policy might be, it was
the invariable rule that proposals must claim a constitutional
sanction. In the Civil War, both sides felt themselves to be
fighting in defense of the traditional Constitution.
The appeal to antiquity--even such a moderate degree of antiquity
as may be claimed for American institutions--has always been the
staple argument in American political controversy. The views and
intentions of the Fathers of the Constitution are exhibited not
so much for instruction as for imitation, and by means of glosses
and interpretations conclusions may be reached which would have
surprised the Fathers to whom they are imputed. Those who examine
the records of the formative period of American institutions, not
to obtain material for a case but simply to ascertain the facts,
will readily observe that what is known as the principle of
strict construction dates only from the organization of national
parties under the Constitution. It was an invention of the
opposition to Federalist rule and was not held by the makers of
the Constitution themselves. The main concern of the framers was
to get power for the National Government, and they went as far as
they could with such success that striking instances may be
culled from the writings of the Fathers showing that the scope
they contemplated has yet to be attained. Strict construction
affords a short and easy way of avoiding troublesome
issues--always involved in unforeseen national developments--by
substituting the question of constitutional power for a question
of public propriety. But this method has the disadvantage, that
it belittles the Constitution by making it an obstacle to
progress. Running through much political controversy in the
United States is the argument that, even granting that a proposal
has all the merit claimed for it, nevertheless it cannot be
adopted because the Constitution is against it. By strict logical
inference the rejoinder then comes that, if so, the Constitution
is no longer an instrument of national advantage. The traditional
attachment of the American people to the Constitution has indeed
been so strong that they have been loath to accept the inference
that the Constitution is out of date, although the quality of
legislation at Washington kept persistently suggesting that view
of the case.
The failures and disappointments resulting from the series of
national elections from 1874 to 1884, at last, made an opening
for party movements voicing the popular discontent and openly
antagonistic to the traditional Constitution. The Socialist Labor
party held its first national convention in 1877. Its membership
was mostly foreign; of twenty-four periodical publications then
carried on in the party interest, only eight were in the English
language; and this polyglot press gave justification to the
remark that the movement was in the hands of people who proposed
to remodel the institutions of the country before they had
acquired its language. The alien origin of the movement was
emphasized by the appearance of two Socialist members of the
German Reichstag, who made a tour of this country in 1881 to stir
up interest in the cause. It was soon apparent that the growth of
the Socialist party organization was hindered by the fact that
its methods were too studious and its discussions too abstract to
suit the energetic temper of the times. Many Socialists broke
away to join revolutionary clubs which were now organized in a
number of cities without any clearly defined principle save to
fight the existing system of government.
At this critical moment in the process of social disorganization,
the influence of foreign destructive thought made itself felt.
The arrival of Johann Most from Europe, in the fall of 1882,
supplied this revolutionary movement with a leader who made
anarchy its principle. Originally a German Socialist aiming to
make the State the sole landlord and capitalist, he had gone over
to anarchism and proposed to dissolve the State altogether,
trusting to voluntary association to supply all genuine social
needs. Driven from Germany, he had taken refuge in England, but
even the habitual British tolerance had given way under his
praise of the assassination of the Czar Alexander in 1881 and his
proposal to treat other rulers in the same way. He had just
completed a term of imprisonment before coming to the United
States. Here, he was received as a hero; a great mass meeting in
his honor was held in Cooper Union, New York, in December, 1882;
and when he toured the country he everywhere addressed large
meetings.
In October 1883, a convention of social revolutionists and
anarchists was held in Chicago, at which a national organization
was formed called the International Working People's Association.
The new organization grew much faster than the Socialist party
itself, which now almost disappeared. Two years later, the
International had a party press consisting of seven German, two
Bohemian, and only two English papers. Like the Socialist party,
it was, therefore, mainly foreign in its membership. It was
strongest in and about Chicago, where it included twenty groups
with three thousand enrolled members. The anarchist papers
exhorted their adherents to provide themselves with arms and even
published instructions for the use of dynamite.
Political and industrial conditions thus supplied material for an
explosion which came with shocking violence. On May 4, 1885,
towards the close of an anarchist meeting held in Chicago, a
dynamite bomb thrown among a force of policemen killed one and
wounded many. Fire was at once opened on both sides, and,
although the battle lasted only a few minutes, seven policemen
were killed and about sixty wounded; while on the side of the
anarchists, four were killed and about fifty were wounded. Ten of
the anarchist leaders were promptly indicted, of whom one made
his escape and another turned State's evidence. The trial of the
remaining eight began on June 21, 1886, and two months later the
death sentence was imposed upon seven and a penitentiary term of
fifteen years upon one. The sentences of two of the seven were
commuted to life imprisonment; one committed suicide in his cell
by exploding a cartridge in his mouth; and four met death on the
scaffold. While awaiting their fate they were to a startling
extent regarded as heroes and bore themselves as martyrs to a
noble cause. Six years later, Illinois elected as governor John
P. Altgeld, one of whose first steps was to issue a pardon to the
three who were serving terms of imprisonment and to criticize
sharply the conduct of the trial which had resulted in the
conviction of the anarchists.
The Chicago outbreak and its result stopped the open spread of
anarchism. Organized labor now withdrew from any sort of
association with it. This cleared the field for a revival of the
Socialist movement as the agency of social and political
reconstruction. So rapidly did it gain in membership and
influence that by 1892 it was able to present itself as an
organized national party appealing to public opinion for
confidence and support, submitting its claims to public
discussion, and stating its case upon reasonable grounds.
Although its membership was small in comparison with that of the
old parties, the disparity was not so great as it seemed,
since the Socialists represented active intelligence while the
other parties represented political inertia. From this time on,
Socialist views spread among college students, artists, and men
of letters, and the academic Socialist became a familiar figure
in American society.
Probably more significant than the Socialist movement, as an
indication of the popular demand for radical reform in the
government of the country, was the New York campaign of Henry
George in 1886. He was a San Francisco printer and journalist
when he published the work on "Progress and Poverty" which made
him famous. Upon the petition of over thirty thousand citizens,
he became the Labor candidate for mayor of New York City. The
movement in support of George developed so much strength that the
regular parties felt compelled to put forward exceptionally
strong candidates. The Democrats nominated Abram S. Hewitt, a man
of the highest type of character, a fact which was not perhaps so
influential in getting him the nomination as that he was the
son-in-law of Peter Cooper, a philanthropist justly beloved by
the working classes. The Republicans nominated Theodore
Roosevelt, who had already distinguished himself by his energy of
character and zeal for reform. Hewitt was elected, but George
received 68,110 votes out of a total of 219,679, and stood second
in the poll. His supporters contended that he had really been
elected but had been counted out, and this belief turned their
attention to the subject of ballot reform. To the agitation which
Henry George began, may be fairly ascribed the general adoption
of the Australian ballot in the United States.
The Socialist propaganda carried on in large cities and in
factory towns hardly touched the great mass of the people of the
United States, who belonged to the farm rather than to the
workshop. The great agricultural class, which had more weight at
the polls than any other class of citizens, was much interested
in the redress of particular grievances and very little in any
general reform of the governmental system. It is a class that is
conservative in disposition but distrustful of authority,
impatient of what is theoretical and abstract, and bent upon the
quick practical solution of problems by the nearest and simplest
means. While the Socialists in the towns were interested in labor
questions, the farmers more than any other class were affected by
the defective system of currency supply. The national banking
system had not been devised to meet industrial needs but as a war
measure to provide a market for government bonds, deposits of
which had to be made as the basis of note issues. As holdings of
government bonds were amassed in the East, financial operations
tended to confine themselves to that part of the country, and
banking facilities seemed to be in danger of becoming a sectional
monopoly, and such, indeed, was the case to a marked extent. This
situation inspired among the farmers, especially in the
agricultural West, a hatred of Wall Street and a belief in the
existence of a malign money power which provided an inexhaustible
fund of sectional feeling for demagogic exploitation.
For lack of proper machinery of credit for carrying on the
process of exchange, there seemed to be an absolute shortage in
the amount of money in circulation, and it was this circumstance
that had given such force to the Greenback Movement. Although
that movement was defeated, its supporters urged that, if the
Government could not supply additional note issues, it should at
least permit an increase in the stock of coined money. This
feeling was so strong that as early as 1877 the House had passed
a bill for the free coinage of silver. For this, the Senate
substituted a measure requiring the purchase and coinage by the
Government of from two to four million dollars' worth of silver
monthly, and this compromise was accepted by the House. As a
result, in February, 1878, it was passed over President Hayes's
veto.
The operation of this act naturally tended to cause the hoarding
of gold as the cheaper silver was equally a legal tender, and
meanwhile the silver dollars did not tend to pass into
circulation. In 1885, in his first annual message to Congress,
President Cleveland mentioned the fact that, although 215,759,431
silver dollars had been coined, only about fifty million had
found their way into circulation, and that "every month two
millions of gold in the public Treasury are paid out for two
millions or more of silver dollars to be added to the idle mass
already accumulated." The process was draining the stock of gold
in the Treasury and forcing the country to a silver basis without
really increasing the amount of money in actual circulation or
removing any of the difficulties in the way of obtaining supplies
of currency for business transactions. President Cleveland
recommended the repeal of the Silver Coinage Act, but he had no
plan to offer by which the genuine complaints of the people
against the existing monetary system could be removed. Free
silver thus was allowed to stand before the people as the only
practical proposal for their relief, and upon this issue a
conflict soon began between Congress and the Administration.
At a convention of the American Bankers' Association in
September, 1885, a New York bank president described the methods
by which the Treasury Department was restricting the operation of
the Silver Coinage Act so as to avoid a displacement of the gold
standard. On February 3, 1886, Chairman Bland of the House
committee on coinage reported a resolution reciting statements
made in that address, and calling upon the Secretary of the
Treasury for a detailed account of his administration of the
Silver Coinage Act. Secretary Manning's reply was a long and
weighty argument against continuing the coinage of silver. He
contended that there was no hope of maintaining a fixed ratio
between gold and silver except by international concert of
action, but "the step is one which no European nation... will
consent to take while the direct or indirect substitution of
European silver for United States gold seems a possibility."
While strong as to what not to do, his reply, like most of the
state papers of this period, was weak as to what to do and how to
do it. The outlook of the Secretary of the Treasury was so narrow
that he was led to remark that "a delusion has spread that the
Government has authority to fix the amount of the people's
currency, and the power, and the duty." The Government certainly
has the power and the duty of providing adequate currency supply
through a sound banking system. The instinct of the people on
that point was sounder than the view of their rulers.
Secretary Manning's plea had so little effect that the House
promptly voted to suspend the rules in order to make a free
coinage bill the special order of business until it was disposed
of. But the influence of the Administration was strong enough to
defeat the bill when it came to a vote. Though for a time, the
legislative advance of the silver movement was successfully
resisted, the Treasury Department was left in a difficult
situation, and the expedients to which it resorted to guard the
gold supply added to the troubles of the people in the matter of
obtaining currency. The quick way of getting gold from the
Treasury was to present legal tender notes for redemption. To
keep this process in check, legal tender notes were impounded as
they came in, and silver certificates were substituted in
disbursements. But under the law of 1878, silver certificates
could not be issued in denominations of less than ten dollars. A
scarcity of small notes resulted, which oppressed retail trade
until, in August, 1886, Congress authorized the issue of silver
certificates in one and two and five dollar bills.
A more difficult problem was presented by the Treasury surplus
which, by old regulations savoring more of barbarism than of
civilized polity, had to be kept idle in the Treasury vaults. The
only apparent means by which the Secretary of the Treasury could
return his surplus funds to the channels of trade was by
redeeming government bonds; but as these were the basis of bank
note issues, the effect of any such action was to produce a sharp
contraction in this class of currency. Between 1882 and 1889,
national bank notes declined in amount from $356,060,348 to
$199,779,011. In the same period, the issue of silver
certificates increased from $63,204,780 to $276,619,715, and the
total amount of currency of all sorts nominally increased from
$1,188,752,363 to $1,405,018,000; but of this, $375,947,715 was
in gold coin which was being hoarded, and national bank notes
were almost equally scarce since they were virtually government
bonds in a liquid form.
As the inefficiency of the monetary system came home to the
people in practical experience, it seemed as if they were being
plagued and inconvenienced in every possible way. The conditions
were just such as would spread disaffection among the farmers,
and their discontent sought an outlet. The growth of political
agitation in the agricultural class, accompanied by a thorough-
going disapproval of existing party leadership, gave rise to
numerous new party movements. Delegates from the Agricultural
Wheel, the Corn-Planters, the Anti-Monopolists, Farmers'
Alliance, and Grangers, attended a convention in February, 1887,
and joined the Knights of Labor and the Greenbackers to form the
United Labor party. In the country, at this time, there were
numerous other labor parties of local origin and composition,
with trade unionists predominating in some places and Socialists
in others. Very early, however, these parties showed a tendency
to division that indicated a clash of incompatible elements.
Single taxers, greenbackers, labor leaders, grangers, and
socialists were agreed only in condemning existing public policy.
When they came to consider the question of what new policy should
be adopted, they immediately manifested irreconcilable
differences. In 1888, rival national conventions were held in
Cincinnati, one designating itself as the Union Labor party, the
other as the United Labor party. One made a schedule of
particular demands; the other insisted on the single tax as the
consummation of their purpose in seeking reform. Both put
presidential tickets in the field, but of the two, the Union
Labor party made by far the better showing at the polls though,
even so, it polled fewer votes than did the National Prohibition
party. Although making no very considerable showing at the polls,
these new movements were very significant as evidences of popular
unrest. The fact that the heaviest vote of the Union Labor party
was polled in the agricultural States of Kansas, Missouri, and
Texas, was a portent of the sweep of the populist movement which
virtually captured the Democratic party organization during
President Cleveland's second term.
The withdrawal of Blaine from the list of presidential candidates
in 1888 left the Republican Convention at Chicago to choose from
a score of "favorite sons." Even his repeated statement that he
would not accept the nomination did not prevent his enthusiastic
followers from hoping that the convention might be "stampeded."
But on the first ballot, Blaine received only thirty-five votes
while John Sherman led with 229. It was anybody's race until the
eighth ballot, when General Benjamin Harrison, grandson of
"Tippecanoe," suddenly forged ahead and received the nomination.
The defeat of the Democratic party at the polls in the
presidential election of 1888 was less emphatic than might have
been expected from its sorry record. Indeed, it is quite possible
that an indiscretion in which Lord Sackville-West, the British
Ambassador, was caught may have turned the scale. An adroitly
worded letter was sent to him, purporting to come from Charles
Murchison, a California voter of English birth, asking
confidential advice which might enable the writer "to assure many
of our countrymen that they would do England a service by voting
for Cleveland and against the Republican system of tariff." With
an astonishing lack of astuteness, the British minister fell into
the trap and sent a reply which, while noncommittal on
particulars, exhibited friendly interest in the reelection of
President Cleveland. This correspondence, when published late in
the campaign, caused the Administration to demand his recall. A
spirited statement of the case was laid before the public by
Thomas Francis Bayard, Secretary of State, a few days before the
election, but this was not enough to undo the harm that had been
done, and the Murchison letter takes rank with the Morey letter
attributed to General Garfield as specimens of the value of the
campaign lie as a weapon in American party politics.
President Cleveland received a slight plurality in the total
popular vote; but by small pluralities Harrison carried the big
States, thus obtaining a heavy majority in the electoral vote. At
the same time, the Republicans obtained nearly as large a
majority in the House as the Democrats had had before.
CHAPTER VIII. THE REPUBLICAN OPPORTUNITY
The Republican party had the inestimable advantage in the year
1889 of being able to act. It controlled the Senate which had
become the seat of legislative authority; it controlled the
House; and it had placed its candidate in the presidential chair.
All branches of the Government were now in party accord. The
leaders in both Houses were able men, experienced in the
diplomacy which, far more than argument or conviction, produces
congressional action. Benjamin Harrison himself had been a member
of the ruling group of Senators, and as he was fully imbued with
their ideas as to the proper place of the President he was
careful to avoid interference with legislative procedure. Such
was the party harmony that an extensive program of legislation
was put through without serious difficulty, after obstruction had
been overcome in the House by an amendment of the rules.
In the House of Representatives, the quorum is a majority of the
whole membership. This rule enabled the minority to stop business
at any time when the majority party was not present in sufficient
strength to maintain the quorum by its own vote. On several
occasions, the Democrats left the House nominally without a
quorum
by the subterfuge of refusing to answer to their names on the
roll call. Speaker Reed determined to end this practice by
counting as present any members actually in the chamber. To the
wrath of the minority, he assumed this authority while a revision
of the rules was pending. The absurdity of the Democratic
position was naively exposed when a member arose with a law book
in his hand and said, "I deny your right, Mr. Speaker, to count
me as present, and I desire to read from the parliamentary law on
the subject." Speaker Reed, with the nasal drawl that was his
habit, replied, "The Chair is making a statement of fact that the
gentleman from Kentucky is present? Does he deny it?" The
rejoinder was so apposite that the House broke into a roar of
laughter, and the Speaker carried his point.
Undoubtedly, Speaker Reed was violating all precedents.
Facilities of obstruction had been cherished by both parties, and
nothing short of Reed's earnestness and determination could have
effected this salutary reform. The fact has since been disclosed
that he had made up his mind to resign the Speakership and retire
from public life had his party failed to support him. For three
days, the House was a bedlam, but the Speaker bore himself
throughout with unflinching courage and unruffled composure.
Eventually he had his way. New rules were adopted, and the power
to count a quorum was established.* When in later Congresses a
Democratic majority returned to the former practice, Reed gave
them such a dose of their own medicine that for weeks the House
was unable to keep a quorum. Finally, the House was forced to
return to the "Reed rules" which have since then been permanently
retained. As a result of congressional example, they have been
generally adopted by American legislative bodies, with a marked
improvement in their capacity to do business.
* The rule that "no dilatory motion shall be entertained by the
Speaker" was also adopted at this time.
With the facilities of action which they now possessed, the
Republican leaders had no difficulty in getting rid of the
surplus in the Treasury. Indeed, in this particular they could
count on Democratic aid. The main conduit which they used was an
increase of pension expenditures. President Harrison encouraged a
spirit of broad liberality toward veterans of the Civil War.
During the campaign he said that it "was no time to be weighing
the claims of old soldiers with apothecary's scales," and he put
this principle of generous recognition into effect by appointing
as commissioner of pensions a robust partisan known as "Corporal"
Tanner. The report went abroad that on taking office he had
gleefully declared, "God help the surplus," and upon that maxim
he acted with unflinching vigor. It seemed, indeed, as if any
claim could count upon being allowed so long as it purported to
come from an old soldier. But Tanner's ambition was not satisfied
with an indulgent consideration of applications pending during
his time; he reopened old cases, rerated a large number of
pensioners, and increased the amount of their allowance. In some
cases, large sums were granted as arrears due on the basis of the
new rate. A number of officers of the pension bureau were thus
favored, for a man might receive a pension on the score of
disability though still able to hold office and draw its salary
and emoluments. For example, the sum of $4300 in arrears was
declared to be due to a member of the United States Senate,
Charles F. Manderson of Nebraska. Finally, "Corporal" Tanner's
extravagant management became so intolerable to the Secretary of
the Interior that he confronted President Harrison with the
choice of accepting his resignation or dismissing Tanner. Tanner
therefore had to go, and with him his system of reratings.
A pension bill for dependents, such as Cleveland had vetoed, now
went triumphantly through Congress.* It granted pensions of from
six to twelve dollars a month to all persons who had served for
ninety days in the Civil War and had thereby been incapacitated
for manual labor to such a degree as to be unable to support
themselves. Pensions were also granted to widows, minor children,
and dependent parents. This law brought in an enormous flood of
claims in passing, upon which it was the policy of the Pension
Bureau to practice great indulgence. In one instance, a pension
was granted to a claimant who had enlisted but never really
served in the army as he had deserted soon after entering the
camp. He thereupon had been sentenced to hard labor for one year
and made to forfeit all pay and allowances. After the war, he had
been convicted of horse stealing and sent to the state
penitentiary in Wisconsin. While serving his term, he presented a
pension claim supported by forged testimony to the effect that he
had been wounded in the battle of Franklin. The fraud was
discovered by a special examiner of the pension office, and the
claimant and some of his witnesses were tried for perjury,
convicted, and sent to the state penitentiary at Joliet,
Illinois. After serving his time there, he posed as a neglected
old soldier and succeeded in obtaining letters from sympathetic
Congressmen commending his case to the attention of the pension
office, but without avail until the Act of 1890 was passed. He
then put in a claim which was twice rejected by the pension
office examiners, but each time the decision was overruled, and
in the end he was put upon the pension roll. This case is only
one of many made possible by lax methods of investigating pension
claims. Senator Gallinger of New Hampshire eventually said of the
effect of pension policy, as shaped by his own party with his own
aid:
"If there was any soldier on the Union side during the Civil War
who was not a good soldier, who has not received a pension, I do
not know who he is. He can always find men of his own type,
equally poor soldiers who would swear that they knew he had been
in a hospital at a certain time, whether he was or not--the
records did not state it, but they knew it was so--and who would
also swear that they knew he had received a shock which affected
his hearing during a certain battle, or that something else had
happened to him; and so all those pension claims, many of which
are worthless, have been allowed by the Government, because they
were 'proved.'"
* June 27, 1890.
The increase in the expenditure for pensions, which rose from
$88,000,000 in 1889 to $159,000,000 in 1893, swept away much of
the surplus in the Treasury. Further inroads were made by the
enactment of the largest river and harbor appropriation bill in
the history of the country up to this time. Moreover, a new
tariff bill was contrived in such a way as to impose protective
duties without producing so much revenue that it would cause
popular complaint about unnecessary taxation. A large source of
revenue was cut off by abolishing the sugar duties and by
substituting a system of bounties to encourage home production.
Upon this bill as a whole, Senator Cullom remarks in his memoirs
that "it was a high protective tariff, dictated by the
manufacturers of the country" who have "insisted upon higher
duties than they really ought to have." The bill was, indeed,
made up wholly with the view of protecting American manufactures
from any foreign competition in the home market.
As passed by the House, not only did the bill ignore American
commerce with other countries but it left American consumers
exposed to the manipulation of prices on the part of other
countries. Practically all the products of tropical America,
except tobacco, had been placed upon the free list without any
precaution lest the revenue thus surrendered might not be
appropriated by other countries by means of export taxes. Blaine,
who was once more Secretary of State, began a vigorous agitation
in favor of adding reciprocity provisions to the bill. When the
Senate showed a disposition to resent his interference, Blaine
addressed to Senator Frye of Maine a letter which was in effect
an appeal to the people, and which greatly stirred the farmers by
its statement that "there is not a section or a line in the
entire bill that will open the market for another bushel of wheat
or another barrel of pork." The effect was so marked that the
Senate yielded, and the Tariff Bill, as finally enacted, gave the
President power to impose certain duties on sugar, molasses,
coffee, tea, and hides imported from any country imposing on
American goods duties, which, in the opinion of the President,
were "reciprocally unequal and unreasonable." This more equitable
result is to be ascribed wholly to Blaine's energetic and capable
leadership.
Pending the passage of the Tariff Bill, the Senate had been
wrestling with the trust problem which was making a mockery of a
favorite theory of the Republicans. They had held that tariff
protection benefited the consumer by the stimulus which it gave
to home production and by ensuring a supply of articles on as
cheap terms as American labor could afford. There were, however,
notorious facts showing that certain corporations had taken
advantage of the situation to impose high prices, especially upon
the American consumer. It was a campaign taunt that the tariff
held the people down while the trusts went through their pockets,
and to this charge the Republicans found it difficult to make a
satisfactory reply.
The existence of such economic injustice was continually urged in
support of popular demands for the control of corporations by the
Government. Though the Republican leaders were much averse to
providing such control, they found inaction so dangerous that on
January 14, 1890, Senator John Sherman reported from the Finance
Committee a vague but peremptory statute to make trade
competition compulsory. This was the origin of the AntiTrust Law
which has since gone by his name, although the law actually
passed was framed by the Senate judiciary committee. The first
section declared that "every contract, combination in the form of
trust or otherwise, or conspiracy, in restraint of trade or
commerce among the several States, or with foreign nations, is
hereby declared to be illegal." The law made no attempt to define
the offenses it penalized and created no machinery for enforcing
its provisions, but it gave jurisdiction over alleged violations
to the courts--a favorite congressional mode of getting rid of
troublesome responsibilities. As a result, the courts have been
struggling with the application of the law ever since, without
being able to develop a clear or consistent rule for
discriminating between legal and illegal combinations in trade
and commerce. Even upon the financial question, the Republicans
succeeded in maintaining party harmony, notwithstanding a sharp
conflict between factions. William Windom, the Secretary of the
Treasury, had prepared a bill of the type known as a "straddle."
It offered the advocates of free coinage the right to send to the
mint silver bullion in any quantity and to receive in return the
net market value of the bullion in treasury notes redeemable in
gold or silver coin at the option of the Government. The monthly
purchase of not less than $2,000,000 worth of bullion was,
however, no longer to be required by law. When the advocates of
silver insisted that the provision for bullion purchase was too
vague, a substitute was prepared which definitely required the
Secretary of the Treasury to purchase 4,500,000 ounces of silver
bullion in one month. The bill, as thus amended, was put through
the House under special rule by a strict party vote. But when
the bill reached the Senate, the former party agreement could no
longer be maintained, and the Republican leaders lost control of
the situation. The free silver Republicans combined with most of
the Democrats to substitute a free coinage bill, which passed the
Senate by forty-three yeas to twenty-four nays, all the negative
votes save three coming from the Republican side.
It took all the influence the party leaders could exert to
prevent a silver stampede in the House when the Senate substitute
bill was brought forward; but by dexterous management, a vote of
non-concurrence was passed and a committee of conference was
appointed. The Republican leaders now found themselves in a
situation in which presidential non-interference ceased to be
desirable, but president Harrison could not be stirred to action.
He would not even state his views. As Senator Sherman remarked in
his "Recollections," "The situation at that time was critical. A
large majority of the Senate favored free silver, and it was
feared that the small majority against it in the other House
might yield and agree to it. The silence of the President on the
matter gave rise to an apprehension that if a free coinage bill
should pass both Houses, he would not feel at liberty to veto
it."
In this emergency, the Republican leaders appealed to their free
silver party associates to be content with compelling the
Treasury to purchase 4,500,000 ounces of silver per month, which
it was wrongly calculated would cover the entire output of
American mines. The force of party discipline eventually
prevailed, and the Republican party got together on this
compromise. The bill was adopted in both Houses by a strict party
vote, with the Democrats solidly opposed, and was finally enacted
on July 14, 1890.
Thus by relying upon political tactics, the managers of the
Republican party were able to reconcile conflicting interests,
maintain party harmony, and present a record of achievement which
they hoped to make available in the fall elections. But while
they had placated the party factions, they had done nothing to
satisfy the people as a whole or to redress their grievances. The
slowness of congressional procedure in matters of legislative
reform allowed the amplest opportunity to unscrupulous business
men to engage, in the meantime, in profiteering at the public
expense. They were able to lay in stocks of goods at the old
rates so that an increase of customs rates, for example, became
an enormous tax upon consumers without a corresponding gain to
the Treasury; for the yield was largely intercepted on private
accounts by an advance in prices. The Tariff Bill, which William
McKinley reported on April 16, 1890, became law only on the 1st
of October, so there were over five months during which
profiteers could stock at old rates for sales at the new rates
and thus reap a rich harvest. The public, however, was
infuriated, and popular sentiment was so stirred by the methods
of retail trade that the politicians were both angered and
dismayed. Whenever purchasers complained of an increase of price,
they received the apparently plausible explanation, "Oh, the
McKinley Bill did it." To silence this popular discontent, the
customary arts and cajoleries of the politicians proved for once
quite ineffectual.
At the next election, the Republicans carried only eighty-eight
seats in the House out of 332--the most crushing defeat they had
yet sustained. By their new lease of power in the House, however,
the Democratic party could not accomplish any legislation, as the
Republicans still controlled the Senate. The Democratic leaders,
therefore, adopted the policy of passing a series of bills
attacking the tariff at what were supposed to be particularly
vulnerable points. These measures, the Republicans derided as
"pop-gun bills," and in the Senate they turned them over to the
committee on finance for burial. Both parties were rent by the
silver issue, but it was noticeable that in the House which was
closest to the people the opposition to the silver movement was
stronger and more effective than in the Senate.
Notwithstanding the popular revolt against the Republican policy
which was disclosed by the fall elections of 1890, President
Harrison's annual message of December 9, 1891, was marked by
extreme complacency. Great things, he assured the people, were
being accomplished under his administration. The results of the
McKinley Bill "have disappointed the evil prophecies of its
opponents and in large measure realized the hopeful predictions
of its friends." Rarely had the country been so prosperous. The
foreign commerce of the United States had reached the largest
total in the history of the country. The prophecies made by the
antisilver men regarding disasters to result from the Silver
Bullion Purchase Act, had not been realized. The President
remarked "that the increased volume of currency thus supplied for
the use of the people was needed and that beneficial results upon
trade and prices have followed this legislation I think must be
clear to every one." He held that the free coinage of silver
would be disastrous, as it would contract the currency by the
withdrawal of gold, whereas "the business of the world requires
the use of both metals." While "the producers of silver are
entitled to just consideration," it should be remembered that
"bimetallism is the desired end, and the true friends of silver
will be careful not to overrun the goal." In conclusion, the
President expressed his great joy over "many evidences of the
increased unification of the people and of the revived national
spirit. The vista that now opens to us is wider and more glorious
than before. Gratification and amazement struggle for supremacy
as we contemplate the population, wealth, and moral strength of
our country."
Though the course of events has yet to be fully explained,
President Harrison's dull pomposity may have been the underlying
reason of the aversion which Blaine now began to manifest.
Although on Harrison's side and against Blaine, Senator Cullom
remarks in his memoirs that Harrison had "a very cold, distant
temperament," and that "he was probably the most unsatisfactory
President we ever had in the White House to those who must
necessarily come into personal contact with him." Cullom is of
the opinion that "jealousy was probably at the bottom of their
disaffection," but it appears to be certain that at this time
Blaine had renounced all ambition to be President and
energetically discouraged any movement in favor of his candidacy.
On February 6, 1892, he wrote to the chairman of the Republican
National Committee that he was not a candidate and that his name
would not go before the convention. President Harrison went ahead
with his arrangements for renomination, with no sign of
opposition from Blaine. Then suddenly, on the eve of the
convention, something happened--exactly what has yet to be
discovered--which caused Blaine to resign the office of Secretary
of State. It soon became known that Blaine's name would be
presented, although he had not announced himself as a candidate.
Blaine's health was then broken, and it was impossible that he
could have imagined that his action would defeat Harrison. It
could not have been meant for more than a protest. Harrison was
renominated on the first ballot with Blaine a poor second in the
poll.
In the Democratic convention, Cleveland, too, was renominated on
the first ballot, in the face of a bitter and outspoken
opposition. The solid vote of his own State, New York, was polled
against him under the unit rule, and went in favor of David B.
Hill. But even with this large block of votes to stand upon, Hill
was able to get only 113 votes in all, while Cleveland received
616. Genuine acceptance of his leadership, however, did not at
all correspond with this vote. Cleveland had come out squarely
against free silver, and at least eight of the Democratic state
conventions--in Colorado, Florida, Georgia, Idaho, Kansas,
Nevada, South Carolina, and Texas--came out just as definitely in
favor of free silver. But even delegates who were opposed to
Cleveland, and who listened with glee to excoriating speeches
against him forthwith, voted for him as the candidate of greatest
popular strength. They then solaced their feelings by nominating
a free silver man for Vice-President, who was made the more
acceptable by his opposition to civil service reform. The ticket
thus straddled the main issue; and the platform was similarly
ambiguous. It denounced the Silver Purchase Act as "a cowardly
makeshift" which should be repealed, and it declared in favor of
"the coinage of both gold and silver without discrimination,"
with the provision that "the dollar unit of coinage of both
metals must be of equal intrinsic and exchangeable value." The
Prohibition party in that year came out for the "free and
unlimited coinage of silver and gold." A more significant sign of
the times was the organization of the "People's party," which
held its first convention and nominated the old Greenback leader,
James B. Weaver of Iowa, on a free silver platform.
The campaign was accompanied by labor disturbances of unusual
extent and violence. Shortly after the meeting of the national
conventions, a contest began between the powerful Amalgamated
Association of Steel and Iron Workers, the strongest of the
trade-unions, and the Carnegie Company over a new wage scale
introduced in the Homestead mills. The strike began on June 29,
1892, and local authority at once succumbed to the strikers. In
anticipation of this eventuality, the company had arranged to
have three hundred Pinkerton men act as guards. They arrived in
Pittsburgh during the night of the 5th of July and embarked on
barges which were towed up the river to Homestead. As they
approached, the strikers turned out to meet them, and an
engagement ensued in which men were killed or wounded on both
sides and the Pinkerton men were defeated and driven away. For a
short time, the strikers were in complete possession of the town
and of the company's property. They preserved order fairly well
but kept a strict watch that no strike breakers should approach
or attempt to resume work. The government of Pennsylvania was,
for a time, completely superseded in that region by the power of
the Amalgamated Association, until a large force of troops
entered Homestead on the 12th of July and remained in possession
of the place for several months. The contest between the strikers
and the company caused great excitement throughout the country,
and a foreign anarchist from New York attempted to assassinate
Mr. Frick, the managing director of the company. Though this
strike was caused by narrow differences concerning only the most
highly paid classes of workers, it continued for some months and
then ended in the complete defeat of the union.
On the same day that the militia arrived at Homestead, a more
bloody and destructive conflict occurred in the Coeur d'Alene
district of Idaho, where the workers in the silver mines were on
strike. Nonunion men were imported and put into some of the
mines. The strikers, armed with rifles and dynamite, thereupon
attacked the nonunion men and drove them off, but many lives were
lost in the struggle and much property was destroyed. The
strikers proved too strong for any force which state authority
could muster, but upon the call of the Governor, President
Harrison ordered federal troops to the scene and under martial
law order was soon restored.
Further evidence of popular unrest was given in August by a
strike of the switchmen in the Buffalo railway yards, which
paralyzed traffic until several thousand state troops were put on
guard. About the same time, there were outbreaks in the Tennessee
coal districts in protest against the employment of convict labor
in the mines. Bands of strikers seized the mines, and in some
places turned loose the convicts and in other places escorted
them back to prison. As a result of this disturbance, during 1892
state troops were permanently stationed in the mining districts,
and eventually the convicts were put back at labor in the mines.
Such occurrences infused bitterness into the campaign of 1892 and
strongly affected the election returns. Weaver carried Colorado,
Idaho, Kansas, and Nevada, and he got one electoral vote in
Oregon and in North Dakota; but even if these twenty-two
electoral votes had gone to Harrison, he would still have been
far behind Cleveland, who received 277 electoral votes out of a
total of 444. Harrison ran only about 381,000 behind Cleveland in
the popular vote, but in four States, the Democrats had nominated
no electors and their votes had contributed to the poll of over a
million for Weaver. The Democratic victory was so sweeping that
it gained the Senate as well as the House, and now for the first
time a Democratic President was in accord with both branches of
Congress. It was soon to appear, however, that this party accord
was merely nominal.
CHAPTER IX. THE FREE SILVER REVOLT
The avenging consequences of the Silver Purchase Act moved so
rapidly that when John Griffin Carlisle took office as Secretary
of the Treasury in 1893, the gold reserve had fallen to
$100,982,410--only $982,410 above the limit indicated by the Act
of 1882--and the public credit was shaken by the fact that it was
an open question whether the government obligation to pay a
dollar was worth so much or only one half so much. The latter
interpretation, indeed, seemed impending. The new Secretary's
first step was to adopt the makeshift expedient of his
predecessors. He appealed to the banks for gold and backed up by
patriotic exhortation from the press, he did obtain almost
twenty-five millions in gold in exchange for notes. But as even
more notes drawing out the gold were presented for redemption,
the Secretary's efforts were no more successful than carrying
water in a sieve.
Of the notes presented for redemption during March and April,
nearly one-half were treasury notes of 1890, which by law the
Secretary might redeem "in gold or silver coin at his
discretion." The public was now alarmed by a rumor that Secretary
Carlisle, who while in Congress had voted for free silver, would
resort to silver payments on this class of notes, and regarded
his statements as being noncommittal on the point. Popular alarm
was, to some extent, dispelled by a statement from President
Cleveland, on the 23rd of April, declaring flatly and
unmistakably that redemption in gold would be maintained. But the
financial situation throughout the country was such that nothing
could stave off the impending panic. Failures were increasing in
number, some large firms broke under the strain, and the final
stroke came on the 5th of May when the National Cordage Company
went into bankruptcy. As often happens in the history of panics,
the event was trivial in comparison with the consequences. This
company was of a type that is the reproach of American
jurisprudence--the marauding corporation. In the very month in
which it failed, it declared a large cash dividend. Its stock,
which had sold at 147 in January, fell in May to below ten
dollars a share. Though the Philadelphia and Reading Railway
Company, which failed in February, had a capital of $40,000,000
and a debt of more than $125,000,000, the market did not
break completely under that strain. The National Cordage had a
capital of $20,000,000 and liabilities of only $10,000,000, but
its collapse brought down with it the whole structure of credit.
A general movement of liquidation set in, which throughout the
West was so violent as to threaten general bankruptcy. Nearly all
of the national bank failures were in the West and South, and
still more extensive was the wreck of state banks and private
banks. It had been the practice of country banks, while firmly
maintaining local rates, to keep the bulk of their resources on
deposit with city banks at two per cent. This practice now proved
to be a fatal entanglement to many institutions. There were
instances in which country banks were forced to suspend, though
cash resources were actually on the way to them from depository
centers.*
* Out of 158 national bank failures during the year, 153 were in
the West and South. In addition there went down 172 state banks,
177 private banks, 47 savings banks, 13 loan and trust companies,
and 6 mortgage companies.
Even worse than the effect of these numerous failures on the
business situation was the derangement which occurred in the
currency supply. The circulating medium was almost wholly
composed of bank notes, treasury notes, and treasury certificates
issued against gold and silver in the Treasury, coin being little
in use except as fractional currency. Bank notes were essentially
treasury certificates issued upon deposits of government bonds.
In effect, the circulating medium was composed of government
securities reduced to handy bits. Usually, a bank panic tends to
bring note issues into rapid circulation for what they will
fetch, but in this new situation, people preferred to impound the
notes, which they knew to be good whatever happened so long as
the Government held out. Private hoarding became so general that
currency tended to disappear. Between September 30, 1892 and
October 31, 1893, the amount of deposits in the national banks
shrank over $496,000,000. Trade was reduced to making use of the
methods of primitive barter, though the emergency was met to some
extent by the use of checks and clearinghouse certificates. In
many New England manufacturing towns, for example, checks for use
in trade were drawn in denominations from one dollar up to
twenty. In some cases, corporations paid off their employees in
checks drawn on their own treasurers which served as local
currency. In some Southern cities, clearing-house certificates in
small denominations were issued for general circulation--in
Birmingham, Alabama, for sums as small as twenty-five cents. It
is worth noting that a premium was paid as readily for notes as
for gold; indeed, the New York "Financial Chronicle" reported
that the premium on currency was from two to three per cent,
while the premium on gold was only one and one half per cent.
Before the panic had ended, the extraordinary spectacle was
presented of gold coins serving as a medium of trade because
treasury notes and bank notes were still hoarded. These
peculiarities of the situation had a deep effect upon the popular
attitude towards the measures recommended by the Administration.
While this devastating panic was raging over all the country,
President Cleveland was beset by troubles that were both public
and personal. He was under heavy pressure from the office
seekers. They came singly or in groups and under the escort of
Congressmen, some of whom performed such service several times a
day. The situation became so intolerable that on the 8th of May
President Cleveland issued an executive order setting forth that
"a due regard for public duty, which must be neglected if present
conditions continue, and an observance of the limitations placed
upon human endurance, oblige me to decline, from and after this
date, all personal interviews with those seeking office."
According to the Washington papers, this sensible decision was
received with a tremendous outburst of indignation. The President
was denounced for shutting his doors upon the people who had
elected him, and he was especially severely criticized for the
closing sentence of his order stating that "applicants for office
will only prejudice their prospects by repeated importunity and
by remaining at Washington to await results." This order was
branded as an arbitrary exercise of power compelling free
American citizens to choose exile or punishment, and was featured
in the newspapers all over the country. The hubbub became
sufficient to extract from Cleveland's private secretary an
explanatory statement pointing out that in the President's day a
regular allotment of time was made for congressional and business
callers other than the office seekers, for whom a personal
interview was of no value since the details of their cases could
not be remembered. "What was said in behalf of one man was driven
out of mind by the remarks of the next man in line," whereas
testimonials sent through the mails went on file and received due
consideration. "So many hours a day having been given up to the
reception of visitors, it has been necessary, in order to keep up
with the current work, for the President to keep at his desk from
early in the morning into the small hours of the next morning.
Now that may do for a week or for a month, but there is a limit
to human physical endurance, and it has about been reached."
Such were the distracting conditions under which President
Cleveland had to deal with the tremendous difficulties of
national import which beset him. There were allusions in his
inaugural address which showed how keenly he felt the weight of
his many responsibilities, and there is a touch of pathos in his
remark that he took "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." This hope of Cleveland's
was eventually justified, but not until after his public career
had ended; meanwhile he had to undergo a storm of censure so
blasting that it was more like a volcanic rain of fire and lava
than any ordinary tempest, however violent.
On the 30th of June, President Cleveland called an extra session
of Congress for the 7th of August "to the end that the people may
be relieved through legislation from present and impending danger
and distress." In recent years, the fact has come to light that
his health was at that time in a condition so precarious that it
would have caused wild excitement had the truth become known, for
only his life stood in the way of a free silver President. On the
same day on which he issued his call for the extra session,
President Cleveland left for New York ostensibly for a yachting
trip, but while the yacht was steaming slowly up the East River,
he was in the hands of surgeons who removed the entire left upper
jaw. On the 5th of July they performed another operation in the
same region for the removal of any tissues which might possibly
have been infected. These operations were so completely
successful that the President was fitted with an artificial jaw
of vulcanized rubber which enabled him to speak without any
impairment of the strength and clearness of his voice.*
Immediately after this severe trial, which he bore with calm
fortitude, Cleveland had to battle with the raging silver
faction, strong in its legislative position through its control
of the Senate.
* For details, see New York "Times," Sept. 21, 1917.
When Congress met, the only legislation which the President had
to propose was the repeal of the Silver Purchase Act, although he
remarked that "tariff reform has lost nothing of its immediate
and permanent importance and must in the near future engage the
attention of Congress." It was a natural inference, therefore,
that the Administration had no financial policy beyond putting a
stop to treasury purchases of silver, and there was a vehement
outcry against an action which seemed to strike against the only
visible source of additional currency. President Cleveland was
even denounced as a tool of Wall Street, and the panic was
declared to be the result of a plot of British and American
bankers against silver.
Nevertheless, on the 28th of August, the House passed a repeal
bill by a vote of 240 to 110. There was a long and violent
struggle in the Senate, where such representative anomalies
existed that Nevada with a population of 45,761 had the same
voting power as New York with 5,997,853. Hence, at first, it
looked as if the passage of a repeal bill might be impossible.
Finally, the habit of compromise prevailed and a majority
agreement was reached postponing the date of repeal for twelve or
eighteen months during which the treasury stock of silver bullion
was to be turned into coin. Cleveland made it known that he would
not consent to such an arrangement, and the issue was thereafter
narrowed to that of unconditional repeal of the Silver Purchase
Act. The Senators from the silver-mining States carried on an
obstinate filibuster and refused to allow the question to come to
a vote, until their arrogance was gradually toned down by the
discovery that the liberty to dump silver on the Treasury had
become a precarious mining asset. The law provided for the
purchase of 4,500,000 ounces a month, "or, so much thereof as may
be offered at the market price." Secretary Carlisle found that
offers were frequently higher in price than New York and London
quotations, and by rejecting them he made a considerable
reduction in the amount purchased. Moreover, the silver ranks
began to divide on the question of policy. The Democratic silver
Senators wished to enlarge the circulating medium by increasing
the amount of coinage, and they did not feel the same interest in
the mere stacking of bullion in the Treasury that possessed the
mining camp Senators on the Republican side. When these two
elements separated on the question of policy, the representatives
of the mining interests recognized the hopelessness of preventing
a vote upon the proposed repeal of the silver purchase act. On
the 30th of October, the Senate passed the repeal with no
essential difference from the House bill, and the bill became law
on November 1, 1893.
But although the repeal bill stopped the silver drain upon the
Treasury, it did not relieve the empty condition to which the
Treasury had been reduced. It was manifest that, if the gold
standard was to be maintained, the Treasury stock of gold would
have to be replenished. The Specie Resumption Act of 1875
authorized the sale of bonds "to prepare and provide for"
redemption of notes in coin, but the only classes of bonds which
it authorized were those at four per cent payable after thirty
years, four and a half per cent payable after fifteen years, and
five per cent payable after ten years from date. For many years,
the Government had been able to borrow at lower rates but had in
vain besought Congress to grant the necessary authority. The
Government now appealed once more to Congress for authority to
issue bonds at a lower rate of interest. Carlisle, the Secretary
of the Treasury, addressed a letter to the Senate committee of
finance, setting forth the great saving that would be thus
effected. Then ensued what must be acknowledged to be a breakdown
in constitutional government. Immediately after a committee
meeting on January 16, 1894, the Chairman, Senator Voorhees,
issued a public statement in which he said that "it would be
trifling with a very grave affair to pretend that new legislation
concerning the issue of bonds can be accomplished at this time,
and in the midst of present elements and parties in public life,
with elaborate, extensive, and practically indefinite debate."
Therefore, he held that "it will be wiser, safer and better for
the financial and business interests of the country to rely upon
existing law." This plainly amounted to a public confession.that
Congress was so organized as to be incapable of providing for the
public welfare.
Carlisle decided to sell the ten-year class of bonds,
compensating for their high interest rate by exacting such a
premium as would reduce to three per cent the actual yield to
holders. On January 17, 1894, he offered bonds to the amount of
fifty millions, but bids came in so slowly that he found it
necessary to visit New York to make a personal appeal to a number
of leading bankers to exert themselves to prevent the failure of
the sale. As a result of these efforts, the entire issue was sold
at a premium of $8,660,917, and the treasury stock of gold was
brought up to $107,440,802.
Then followed what is probably the most curious chapter in the
financial history of modern times. Only gold was accepted by the
Treasury in payment of bonds; but gold could be obtained by
offering treasury notes for redemption. The Act of 1878 expressly
provided that, when redeemed, these notes "shall not be retired,
canceled, or destroyed, but they shall be reissued and paid out
again and kept in circulation." The Government, as President
Cleveland pointed out, was "forced to redeem without redemption
and pay without acquittance." These conditions set up against the
Treasury an endless chain by which note redemptions drained out
the gold as fast as bond sales poured it in. In a message to
Congress on January 28, 1895, President Cleveland pointed out
that the Treasury had redeemed more than $300,000,000 of its
notes in gold, and yet these notes were all still outstanding.
Appeals to Congress to remedy the situation proved absolutely
fruitless, and the only choice left to the President was to
continue pumping operations or abandon the gold standard, as the
silver faction in Congress desired. By February 8, 1895, the
stock of gold in the Treasury was down to $41,340,181. The
Administration met this sharp emergency by a contract with a New
York banking syndicate which agreed to deliver 3,500,000 ounces
of standard gold coin, at least one half to be obtained in
Europe. The syndicate was, moreover, to "exert all financial
influence and make all legitimate efforts to protect the Treasury
of the United States against the withdrawals of gold pending the
complete performance of the contract."
The replenishing of the Treasury by this contract was, however,
only a temporary relief. By January 6, 1896, the gold reserve was
down to $61,251,710. The Treasury now offered $100,000,000 of the
four per cent bonds for sale and put forth special efforts to
make subscription popular. Blanks for bids were displayed in all
post-offices, a circular letter was sent to all national banks,
the movement was featured in the newspapers, and the result was
that 4635 bids were received coming from forty-seven States and
Territories, and amounting to $526,970,000. This great
oversubscription powerfully upheld the public credit and,
thereafter, the position of the Treasury remained secure; but
altogether, $262,000,000 in bonds had been sold to maintain its
solvency.
Consideration of the management of American foreign relations
during this period does not enter into the scope of this book,
but the fact should be noted that the anxieties of public finance
were aggravated by the menace of war.* In the boundary dispute
between British Guiana and Venezuela, President Cleveland
proposed arbitration, but this was refused by the British
Government. President Cleveland, whose foreign policy was always
vigorous and decisive, then sent a message to Congress on
December 17, 1895, describing the British position as an
infringement of the Monroe Doctrine and recommending that a
commission should be appointed by the United States to conduct an
independent inquiry to determine the boundary line in dispute. He
significantly remarked that "in making these recommendations I am
fully alive to the responsibility incurred and keenly realize all
the consequences that may follow." The possibility of conflict,
thus hinted, was averted when Great Britain agreed to
arbitration, but meanwhile, American securities in great numbers
were thrown upon the market through sales of European account and
added to the financial strain.
* See "The Path of Empire," by Carl Russell Fish (in "The
Chronicles of America").
The invincible determination which President Cleveland showed in
this memorable struggle to maintain the gold standard will always
remain his securest title to renown, but the admiration due to
his constancy of soul cannot be extended to his handling of the
financial problem. It appears, from his own account, that he was
not well advised as to the extent and nature of his financial
resources. He did not know until February 7, 1895, when Mr. J. P.
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