11. CAPITALISM ... AND INDUSTRIAL GROWTH
NATIONAL POLITICS DURING THE LATE 1800s
CONTENTS
 Dealing with the "spoils system"
 The election of 1880 ... and Garfield's brief presidency
 Chester A. Arthur
 Grover Cleveland
 Benjamin Harrison
 Cleveland's second term in office
 William McKinley brings the 19th century to a close
The textual material on this webpage is drawn directly from my work
America – The Covenant Nation © 2021, Volume One, pages 351-360
DEALING WITH THE "SPOILS SYSTEM"1 |
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Presidential and congressional politics were
fairly tame during the late 1800s. With the issue of Reconstruction
simply fading away and with the government-financed railroad to the
Pacific completed, the federal government seemed to be called on to
play only a secondary role in the further development of American
society. America seemed to run mostly on the basis of its own
industrial-economic dynamics, rather than on the deep involvement of
the Washington government in the life of the nation, such as was the
case during the Civil War and Reconstruction.
Social reform would be a big issue during
this time. But the initiative for action came not from the halls of
Congress or the White House but from the public itself. Through the
publicity of America's newspapers, from books written by social
reformers, from Christian pulpits, much energy would be given to the
idea of perfecting American society. And it would eventually involve
the national government, in the form of legislation designed to firm up
a reform that the public was demanding. But in this, the government
played not the initiating role but merely the confirming role.
One issue however did occupy much
governmental attention: the vast corruption going on within its own
ranks. President Hayes had tried to clean up some of the corruption
left behind by the Grant administration. But Hayes's effort to do so
only weakened his position in the face of the considerable political
forces benefitting from the spoils system of awarding political
appointments as reward for the political support needed to bring
politicians to power. The spoils system was understood simply as how
politics was expected to work. To try to change things would merely
upset the entire political system.
But such spoils became easy targets for
journalists looking for a spectacular story to uncover and report.
Consequently, there was considerable pressure coming from such molders
of public opinion to do something about the problem.
Hayes tried to answer this call for
reform when he took action to remove Chester A. Arthur from the
lucrative (in terms of spoils) job of director of the New York
customs-house. This brought the wrath of New York Boss Conkling, and
the anti-reformist Stalwarts in the U.S. Senate who, with the
Democrats, held up confirmation of Hayes's subsequent government
appointments. Then the Democrats reversed the publicity spotlight,
turning it on the Republican Hayes, bringing up the corrupt nature of
the deal Hayes had worked with the Louisiana governor to get himself
elected to the presidency. But this merely unified Republican Party
support for Hayes, though it hardly appeased the press.
1This
involved the assigning of government jobs and contracts as the reward
for the support needed to bring politicians to power.
THE ELECTION OF 1880 ... AND GARFIELD'S BRIEF
PRESIDENCY |
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But when election-time came around again, Hayes
could not muster enough support from his Republican Party to get
himself re-nominated. There were a large number of contenders,
including Grant, who was supported by the Stalwarts for a third term.
Finally, after 36 ballots, the Republicans turned to a relatively
unknown James A. Garfield, and, to Hayes’s great shock, Chester A.
Arthur as his vice-presidential running-mate.
Garfield was actually an excellent
choice, hard-working, intelligent (once a college president), brave
(rose to the rank of brigadier general during the Civil War), and
politically experienced (having served in both houses of Congress).
Running against him as the Democratic Party nominee was the well-known
(but politically inexperienced) former Union General Winfield Scott
Hancock. The election was close, except again in the electoral college
where Garfield gained 214 votes to Hancock's 155.
Chester Arthur's vice-presidential
nomination had been the price paid to get Conkling's New York support.
But once in office, Garfield had other ideas about how much he owed
Conkling in patronage and worked hard to get truly qualified
individuals posted to government jobs. In the end, Conkling overplayed
his hand, and New Yorkers turned against Conkling.
But also in the end, it was this
patronage question that made Garfield's presidency short-lived. He was
in office only a few months when he was shot by an unhappy and mentally
unstable office seeker – and Garfield died 2½ months later of the wound
doctors were unable to heal (they could not find the bullet).
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James A.
Garfield
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Actually, the man who had been dismissed from his
job at the New York customs house proved, in inheriting the office of
U.S. president, to be one of the country's leading anti-corruption
reformers. He personally vetoed bills coming out of Congress (most
importantly the Rivers and Harbors Act) that were merely opportunities
for more political patronage and financial corruption. He also signed
into law the 1883 Pendleton Act which turned an increasing number of
civil service appointments over to a Civil Service Commission charged
with the responsibility of filling government positions on the basis of
proven merit rather than political connections.
Finally gaining the deep respect that few at the outset of his
presidency ever would have expected, he nonetheless chose to retire
from politics after one term in office rather than run for re-election
(he was suffering from poor health).
The 1884 election was fought largely over
the issue of personal integrity, the Republican candidate, James
Blaine, suffering from a well-known history of deep involvement in the
railroad industry spoils system and the Democrat candidate, Grover
Cleveland, on the other hand well-recognized for his incredible
integrity – except for the claim raised by opponents that the unmarried
Cleveland (but he would soon marry in the White House) had once
fathered a child out of wedlock.
The election was so very close that it
came down to the electoral vote of New York, in which the final tally
gave Cleveland a little over a thousand more votes than Blaine out of a
total of over a million votes cast in New York. Part of what ended this
long Republican control of the presidency was when a number of
reformist Republicans, the Mugwumps,2 cast their votes for the Democrat Cleveland because they viewed Blaine as being simply too corrupt.
2From
an old Algonquin term meaning "a person of importance," implying that
those who bolted from the party were being ridiculously sanctimonious
or morally condescending in refusing to support their party's
candidate, Blaine.
Chester Arthur
James Blaine
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During his first term in office (1885-1889)
Cleveland faced the usual problem of filling government jobs with
personal appointments, a deep change in personnel usually accompanying
the election of a new president, especially if from a different party
than the previous president. But Cleveland announced that he would not
remove office holders because of their political affiliation, though he
did intend to reduce the size of a greatly inflated federal bureaucracy
(because of the spoils system). But eventually he bent to pressure from
fellow Democrats to replace some of the Republican officeholders with
Democrats, though he was even then restrained in doing so by comparison
to previous presidential administrations.
He also tackled the job of improving the
navy, by getting rid of inferior ships built by corrupt contractors. He
also had much of the railroad land in the West claimed by the
railroads, but undeveloped by them, returned to federal government
control. And being a limited-government supporter, he cut back on the
government's financial support of veterans and farmers that he felt
appeared more like spoils than compassion, and which he was certain
would merely set up a form of dependency on continuing government
bail-outs.
Another troubling (and persistent) issue
he faced was over this matter of the value of the national currency,
the U.S. dollar. The country was caught in deep controversy over the
matter of inflation, easy credit, and a cheap dollar – versus a tight
money policy. Logically speaking, it would seem that this was a matter
for the government's financial experts to handle. But after the Civil
War this issue had become a matter of almost religious dimensions, so
much had been printed and proclaimed on the subject. It had become a
matter of simple faith, especially among America's large farming and
industrial working-class sectors, that the road to happiness would be
easy credit and inflation: to gain higher wages at the workplace or to
be able to pay back a loan later in currency that was cheaper in value
than when the loan was first assumed. The best way to do that was
simply to have the government print dollars, lots of them. Industrial
owners and financiers however were very concerned about rising labor
costs and the relative loss of the value of their investments through
just such inflation and therefore they wanted dollars to remain
relatively scarce and thus of ever-greater value.
For most ordinary Americans, the monetary
theories involved in this matter were far too complex to follow, so
they used the symbols of silver and gold to represent their respective
positions. Gold was scarce, and the tight money people insisted that
each dollar printed be backed up in the nation's treasury by an
equivalent value of gold, and gold alone. Silver, on the other hand,
was considered to be abundant and ever-increasing through the
relatively easy possibility of more silver mining, and the easy-money
people demanded that instead of gold (or at least in addition to gold)
silver be the metallic basis for the nation's dollar supply.
So, silver versus gold became the hot
national issue, symbolizing the deeper antagonisms between the
industrial workers on the one hand and the business owners on the
other, between the much humbler American classes in rural America and
the growing numbers of up-East financiers – especially problematic if
they happened to be Jewish.
In short, gold and silver became the
rallying points in a growing class or social-cultural struggle tearing
at the nation. Of course these tensions had complex causes, but how
easy it was to sum it all up in the question of gold versus silver! And
it all made for great conspiracy theories so appealing to the people
who struggled to make sense of the difficult times they faced.
Like Grant before him, Cleveland was a
gold man. Cleveland responded by attempting to cut back on the silver
coinage which the government was required to mint under the
Bland-Allison Act of 1878. This cutback merely put Southerners and
Westerners and their representatives in Congress in a deeply angry
mood, inspiring Bland, author of the 1878 bill, to try to pass a new
bill in 1886 calling for the unlimited minting of silver currency. The
bill did not pass, but left a bitter issue unresolved.
Another issue Cleveland was forced to
tackle was the U.S. tariff. Cleveland strongly opposed the high tariffs
imposed on foreign goods in order to protect the pricing of goods
produced in America. The tariff revenues collected on imports by the
government were so high (about 47 percent of the value of the product
itself) that the government was actually registering an embarrassing
surplus in its operating budget. But in trying to reduce those tariffs,
Cleveland encountered stiff opposition from congressmen fearing that
American industry might be damaged badly if those tariff protections
were lowered. Thus he got nowhere on this issue.
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Grover
Cleveland
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Benjamin Harrison wins the election of 1888
Although Cleveland won the popular vote in the
election, he lost the electoral vote and thus his bid for a second
term. A big part of his defeat occurred because of his position on the
tariff issue (he lost most of the northern industrial states). Also the
team of his Republican opponent, Benjamin Harrison, had conducted a
very aggressive (and somewhat questionable) campaign. Cleveland even
lost (narrowly) his home state of New York, because of the opposition
organized against him by Tammany Hall. If a mere 600 New York votes had
gone to Cleveland instead of Harrison it would have given Cleveland the
New York electoral vote (and the presidency), the voting being so close.
Harrison was the grandson of the Harrison
who served only briefly as U.S. president before dying from a cold
caught during his long inaugural address; grandson Benjamin's speech
was half the length, also conducted in the rain, under an umbrella held
by outgoing President Cleveland!
Harrison reversed Cleveland's course with
respect to the tariff and veteran pensions, but tried to emulate
Cleveland in appointing government personnel on the basis of proven
merit rather than mere political connections. But his idea of merit
tended to favor those of his home state of Indiana and his Presbyterian
church affiliation, to the anger of politicians from other parts and
religious convictions of the nation. And his generous pension payments
to Civil War veterans (regardless of the merit) merely opened the
opportunity for graft within the Pension Bureau, and a much-criticized
reduction in the federal surplus. And with the passage of the McKinley
Tariff, Congress went even further than Harrison wanted to go,
increasing the tariff even more, purposefully making some products
impossible to import.
In answer to the clamor of farmers and
miners, Harrison stood behind an Act sponsored by Senator John Sherman,
thus the Sherman Silver Purchase Act of 1890. Government purchase of
silver had long been a goal of the farming world, and to this was added
the voice of the mining world which was panicking because of the
oversupply of silver produced by the metal's easy availability. The
price of silver dropped away (making it even more attractive to debtors
as currency) putting the silver mining industry in a panic. Silverites
wanted full acceptance of silver as currency backing, at a fixed rate
(well above the actual market value of the metal). Sherman did not meet
the full expectations of the Silverites, but did commit the government
to a fixed amount of silver purchase, helping to keep the silver market
from collapsing and confirming the government's commitment to silver as
currency backing. This was not a good long-term solution to any problem
– and would ultimately serve as a major contributor to the Panic of
1893.
On the more positive side of the
political ledger during Harrison's presidency was the antitrust
legislation sponsored by the same Senator John Sherman (the Sherman
Antitrust Act as it has been known subsequently) which Harrison signed
into law in 1890. Actually, the motivation behind the law was
originally aimed as much at organized labor (labor unions) as it was at
the huge financial trusts that controlled a great deal of the American
rail, steel and financial industry.
Harrison also attempted to extend through the Justice Department
protection of the civil rights of Black Americans by prosecuting those
violating protective legislation already in place. But this effort was
stymied by the unwillingness of White juries to convict these
violators. Harrison's civil rights push for Blacks in other areas also
failed in the face of opposition which arose in both Congress and the
Supreme Court.
But towards the end of his presidential
term the economic picture of the nation was worsening (just ahead of
the Panic of 1893). Things were not looking good for his re-election.
Republicans had already lost seats in the 1890 elections and Harrison
was experiencing the loss of support by members of his own party (many
still upset over the lack of government appointments by Harrison). Also
American producers were awakening to the fact that the McKinley Tariff
was hurting themselves badly as consumers. As a consequence, though
re-nominated by the Republican Party, Harrison faced the national
election without the party support nor the popular enthusiasm needed to
retain the presidency.
Harrison found himself facing his old
opponent, the Democrat and former President Grover Cleveland, replaying
the same issues as four years earlier. But unlike previous elections
this one would be clean, and quiet. In the end, the 1892 election would
prove to be a sad event for Harrison, not only in losing the election
rather decisively but also his wife to tuberculosis just two weeks
prior to the election itself.
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Benjamin
Harrison
CLEVELAND'S SECOND TERM IN OFFICE (1893-1897) |
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Cleveland returns to office just in time for the Panic of 1893!
A combination of bad economic news that hit at
about the same time (early 1893) caused a run on America's scarce gold
supply, leaving the federal treasury nearly out of gold and facing
financial default. The Philadelphia and Reading Railroad had become too
ambitious and instead found itself in deep debt, so much so that just
before Cleveland was sworn into office in March of 1893 the railroad
company declared bankruptcy. This was combined with a huge drop in
wheat prices, a major international income earner for the nation.
Nervous investors, both at home and abroad, holding national and
corporate bonds began to demand banks, including the U.S. Treasury, to
exchange their bonds for gold. Seeing this trend, others jumped in
quickly, including the holders of silver coinage – which was greatly
overvalued because of the nation's huge silver production stimulated by
the Sherman Silver Purchase Act.
Seeing the Sherman Silver Purchase Act as
part of the problem, Cleveland convinced Congress to repeal the Act,
ending the requirement of the government to purchase a fixed amount of
silver. This in turn caused the price of silver to drop drastically,
hurting people who held cash reserves in silver (which included a lot
of people!).
But Cleveland's action did not bring the Panic to an end. Businesses
and then banks began to fail, one after another as investors backed out
of the world of investment, or simply just failed as stock values
crashed.3 Soon
unemployment went from 3 percent in 1892 to nearly 12 percent in 1893,
to over 18 percent the following year, and then it hung at around the
14 percent figure for the next three years after that.
Labor unrest rocked the nation. In 1894
Ohio businessman Jacob Coxey led a march of unemployed workers on
Washington. Many dropped out along the way and the final demonstration
was fairly tame, though it certainly alerted the nation to the growing
discontent of the U.S. workforce. More violent was the Pullman Company
strike by workers (organized by the Socialist leader Eugene Debs)
demanding an end to the policy of low wages and the twelve-hour work
day. The strike quickly spread to other railway workers until by
mid-1894, 125 thousand of them were on strike, virtually shutting down
the U.S. rail network. Since the trains carried the mail, Cleveland
went after the strikers for violating federal law, resorting finally to
sending troops to various points across the nation to make his point.
Meanwhile, Cleveland's assault on the
silver market led the Populists (widely popular among American wheat
and cotton farmers) to claim that undercutting silver and trying to
rebuild the nation's gold holdings was simply an international
conspiracy – predominantly Jewish – designed to destroy the American
economy. However, at this point America was bleeding its gold reserves
badly, not rebuilding them.
Then the formidable J.P. Morgan proposed
to Cleveland that he would join with the Rothschild bankers of Paris to
sell the government 3.5 million ounces of gold (about $65 million in
value at the time) in exchange for thirty-year bonds. As previously
mentioned, at first U.S. President Cleveland turned down the offer but
finally in 1895 accepted Morgan's offer. Thus the U.S. Treasury was
spared default.
Cleveland's efforts to resolve the
complexities of the Panic seemed merely to undercut his standing with
the agrarian and labor wings of his Democratic Party, which suffered a
huge setback in the 1894 Congressional elections. Then when in the
summer of 1896 the Democratic Party gathered to nominate a presidential
candidate, Cleveland was faced by William Jennings Bryan, of the
strongly populist and Silverite wing of the party – a fiery orator who
roused the convention with his challenge, "you shall not crucify
mankind upon a cross of gold." Bryan was subsequently nominated by the
Democratic Party, and Cleveland went into political retirement at
Princeton, New Jersey (becoming a trustee of the university).
3Estimates are that 500 banks and 15 thousand businesses failed during the 1893-1898 years of the Panic.
"Coxey's Army" of unemployed -
1894
His political opponent, William Jennings
Bryan – speaking (c. 1896)
WILLIAM McKINLEY BRINGS THE 1800s TO A
CLOSE |
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 The victor in that election, the Republican candidate William McKinley,
represented the transition from the late 19th century governmental
minimalism and the governmental activism initiating the 20th century.
He was the last president to have served in the Civil War (starting as
a private but advancing to brevet major) and as president was an
unapologetic supporter of American imperialism, viewed at that time as
a natural part of the international responsibilities thrust on America
as a rising power.
He had been an Ohio lawyer elected in
1876 as a Republican representative to Congress where he sponsored the
McKinley Tariff protecting American industries from overseas
competition. He lost his seat in 1890 with the huge Democratic victory
of that year, but the next year he was elected Ohio governor and again
two years after that (1893). As governor he gained a reputation as a
skillful mediator between business and labor, and his very skillful
political campaigning for the Republican Party in 1892 and in 1894
brought much party attention to him as a possible future presidential
candidate.
 His close friend Mark Hanna
skillfully worked those expectations into a reality at the 1896
convention where he was chosen as the Republican Party candidate to
come up against the Democratic Party candidate Bryan. The Democratic
Party was deeply divided over the gold-silver issue (as was also the
Republican Party – although to a lesser extent) which undercut severely
national support for the dynamic speaker Bryan, despite his strong
standing among midwestern farmers. Indeed, McKinley barely left his
front porch during the campaign and yet was able to gain a substantial
victory in the hotly contested November elections that year, largely
because Hanna had been as busy as the Democrats in issuing endless
publications, focused heavily on the gold-silver issue. Also with
McKinley's high tariff and pro-gold stance, he easily drew strong
support from the industrial East.
Protective tariffs and the gold standard
As president, McKinley made good on his
campaign promises, signing into law in 1897 the Dingley Tariff,
offering strong protection of American industry, and in 1900 the Gold
Standard Act, establishing gold as the sole standard in the redemption
of the dollar, making the dollar very strong, and expensive (the gold
standard was dropped in 1933 as one of the first acts of Roosevelt's
New Deal).
But it was in the area of foreign affairs
that the most notable feature of the McKinley presidency stands out.
America had long been taking a protective interest in the events
occurring to the South of the country in Latin America. But a rebellion
in Cuba by those seeking independence from Spain became a major
political issue in America when the uprising turned particularly
brutal. In 1898 McKinley led the nation to war against Spain,
eventually securing not only Cuban independence (under American
protection) but also full American possession of the former Spanish
colonies of Puerto Rico, Guam and the Philippines. And on top of that,
it was during McKinley's presidency that America seized the Republic of
Hawaii as a new U.S. territory.
 The
election of 1900. When the reelection campaign rolled around again in
1900, McKinley again found himself facing Bryan as his opponent.
McKinley's vice-presidential running mate ended up being New York's
governor, Theodore (Teddy) Roosevelt,
put forward by New York's Republican Party boss Thomas Platt, who
promoted Roosevelt in order to remove him from New York politics! The
vice-presidential position was intended by Platt to shift Roosevelt to
a place of little significance.
Although the campaign might have appeared
as a replay of the 1896 election, America had changed greatly during
the four years of McKinley's first term. The nation was experiencing a
"Full Dinner Pail" as the Republicans termed the prosperity that the
nation was experiencing. Also American victory in the war with Spain
had American pride (and support for their president) running strong.
And Bryan's running on the silver platform now had none of the impact
that it did in 1896. Also his criticism of American imperialism under
McKinley lost him a lot of national support. Otherwise the campaign
style did not change much, Bryan on the road delivering endless
speeches and McKinley greeting visitors from his porch in Ohio.
And the results were again the same,
although McKinley registered a slightly larger majority of the votes
than in the previous election. Thus McKinley took office for a second
four-year term.
But McKinley was only six months into his
second term when he was shot in the stomach twice by a deranged
anarchist at a presidential reception at the Pan-American Exposition in
Buffalo, New York. A week and a half later he died of his wounds. The
insignificant Vice President Roosevelt was thus thrust into the office
as the nation's new president.
This would move the pace of political change started under McKinley even further, much further.
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The McKinley and Hannah families
Hannah (left) dining with McKinley (right)
Bryan on the campaign trail
Assassination of William
McKinley - September 6th, 1901.
Czolgosz shoots President McKinley with
a concealed revolver,
at
the Pan-American Exposition reception. He dies a week later.
His assassin – Leon Czolgosz
 Miles
H. Hodges
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