644. Character of the Administration.—Although Cleveland began his second administration with a Democratic majority in both houses of Congress,—something that had not been known since the outbreak of the war,—he was not able, for two reasons, to make as successful a record as he had made during his first term. The pension, tariff, and monetary legislation of Harrison’s administration brought about great financial disturbances, which lost the Democrats the control of the House of Representatives and hampered Cleveland; while the latter’s own party, the Democrats, broke away from his leadership and adopted many of the extreme, more or less socialistic views of the People’s Party. Cleveland himself, although he increased the number of offices subject to Civil Service rules and made good appointments, failed to maintain tactful relations with the Democratic leaders and even lost some of his hold upon the people at large. Nevertheless, he administered his duties with such firmness and honesty that it would be unjust to describe his second administration as a failure.

645. Industrial Causes of the Panic of 1893.—On taking up his duties, the new President found himself confronted with a serious financial crisis. The prospect of change in the tariff and in the currency had unsettled financial and commercial activity. The manufacturers of the country relied on the aid of high protective duties, but the Democratic victory had been so sweeping that they feared the tariff would be either greatly modified or swept away. They argued that in this case the country would be flooded with foreign articles, and that prices would be so reduced as to bring disaster to all who had domestic goods on hand. As soon, therefore, as it seemed probable that the Democrats would carry the election, manufacturers very generally suspended operations in their shops, and thousands of workmen were thrown out of employment. From this cause there was an immediate stagnation of business, which helped to bring on financial distress.

646. Financial Causes of the Panic.—There was another cause of business depression, which is more difficult to explain, but which had a still more disastrous influence. The greenbacks not redeemed in 1879 (§ 605), but still subject to redemption, amounted to more than $346,000,000. The Silver Purchase Act of 1890, as we have already seen (§ 635), directed the Treasurer to buy silver bullion at the rate of $4,500,000 a month and pay for it with new notes that were “exchangeable for coin.” Now the government interpreted “coin” to mean gold. In this way the notes in circulation redeemable in gold increased, till, in 1893, they amounted to nearly $500,000,000. As the number was constantly increasing at the rate of $4,500,000 a month, the people began to distrust the ability of the government to redeem the notes. This distrust of itself would have made a financial crash inevitable, but the condition was made worse by the decline in the price of silver, to which reference has several times been made (§ 634).

647. Decline in the Price of Silver.—In twenty years the value of silver had fallen from one dollar and thirty cents an ounce, till in 1893 it was worth only about eighty cents. People in Europe, as well as in America, naturally feared that our government might interpret the word “coin” to mean silver as well as gold, and might choose to redeem its notes in the cheaper metal. This fear led business men everywhere to desire the redemption of their bonds and notes before the government should begin to pay silver. Foreign investors sent back their bonds for redemption, while the people at home in many cases even drew their money from banks through fear that the latter would soon not be able to meet the demands for gold made upon them. These various influences caused a financial crash about two months after Cleveland’s inauguration. More than three hundred banks either failed outright or suspended payment; business men found it impossible to borrow money on any terms, and thousands of failures in business followed.

648. Repeal of the Sherman Act.—As the Treasury was still obliged by the Sherman Act to continue purchasing silver, the President called a special session of Congress to modify or repeal the law. The clause of the bill authorizing the purchase of silver was quickly repealed by the House, when Congress met in August, but the measure was strenuously opposed in the Senate by numerous advocates of the unrestricted use of silver currency. The repealing act was finally carried and became a law, November 1, 1893. Its remedial effects, however, were not speedily visible. At the beginning of winter it was estimated that as many as two hundred and sixty thousand laboring men were unoccupied in Chicago, New York, and Philadelphia. Moreover, the repeal of the Sherman Act and the persistent decline in the price of silver caused nearly all the silver mines in the West to be closed. In Colorado alone, from fifteen to twenty thousand miners not only lost their employment, but became dependent on charity for food and shelter. The demand for free coinage of silver at the rate of sixteen to one consequently became emphatic in the far West and was supported by the Populists and many Democrats in the East.

649. The Wilson Tariff Law.—As the Democrats were pledged to modify the tariff law, this subject was taken up at the beginning of the first regular session of Congress in December, 1893. William L. Wilson of West Virginia, Chairman of the House Committee on Ways and Means, brought in a bill which greatly reduced the tariff on many articles. This measure, after being much altered on account of opposition in the Senate, was finally passed. The President, however, since the bill in its ultimate form reduced duties only about one quarter on an average, regarded it as a modification of a protective tariff, rather than as a measure in the interests of freer trade, and therefore allowed it to become a law without his approval or signature. It was anticipated that the law would fail to produce the necessary revenue, and, largely on this account, a clause was added which provided for an income tax of two per cent on all incomes of more than four thousand dollars. It was expected that the income tax would yield not less than forty million dollars a year. The Supreme Court, however, declared this portion of the act unconstitutional and therefore null and void. The natural consequences followed. The income of the government was insufficient to meet the current expenses; gold continued to be exported for the payment of bonds offered for redemption. To meet these demands new bonds had to be issued; and consequently, before the end of the administration, the public debt had been increased by about two hundred and fifty million dollars. It is no wonder, in view of the unsatisfactory character of the Democratic legislation in 1893–1894, that in the congressional elections of 1894 the Republicans should have swept the country.

FOREIGN AFFAIRS.

650. Revolution in Hawaii.—Early in his administration, President Cleveland was obliged to consider the condition of affairs in Hawaii. While Harrison was in office, discontented resident Americans and Sandwich Islanders had overthrown the government of Queen Liliuokalani and established a republican form of government. The leaders hoped that they could secure the annexation of the Islands to the United States. American seamen were landed for the avowed purpose of protecting American citizens, but it was charged, with probable truthfulness, that they actively supported the revolutionary movement. The insurgents sent commissioners to Washington, who were influential enough to secure the draft of a treaty of annexation, which was sent by Harrison to the Senate for confirmation. Before the Senate was ready to act on the treaty, however, Harrison’s administration came to an end; and one of Cleveland’s first acts was to withdraw the treaty and send a commissioner to the Islands to investigate and report on the condition of affairs. On his arrival the commissioner declared the previously established American protectorate at an end and took down the American flag. In his final report to the President, he asserted that the success of the revolution had resulted chiefly from the efforts of the American Minister and the support of the American troops. The President thereupon withdrew all such support and wrote a letter of regret and sympathy to the queen. He also sent a minister to help her to regain her authority,—an act for which he was much criticised by the many persons who disapproved of his Hawaiian policy. The movement on the Islands, however, had been so successful that the queen was unable to regain her throne and finally sold her rights. The annexationists were completely successful four years later (§ 672).

651. The Venezuelan Dispute.—Two years later, President Cleveland proved to the critics of his Hawaiian policy that he had a firmer grasp on foreign affairs than they thought. For nearly half a century a difference of opinion had existed between Great Britain and Venezuela as to the boundary line between their possessions in South America. Great Britain had received by treaty, nearly a hundred years before, the territory in South America which belonged to Holland; while the rights of Venezuela had been derived from Spain. The boundary line had never been clearly defined, and, as time progressed, disputes with regard to it became more and more serious. Venezuela finally appealed to the United States for assistance. President Cleveland’s Secretary of State, Richard Olney of Massachusetts, entered into correspondence with the British government for the purpose of securing a settlement of the dispute by arbitration. Great Britain took the ground that the question was one not appropriate for arbitration, inasmuch as it involved the possible surrender of territory which had long been believed to be British and had been occupied by British subjects, whose rights should not be put in jeopardy. The correspondence became animated, and finally, in December, 1895, President Cleveland submitted the papers to Congress with a special message. He took the ground that the United States, following out the Monroe Doctrine, would be bound to resist in every possible way any encroachment by Great Britain upon any territory belonging to Venezuela. He asked for an appropriation by Congress to provide for a commission to investigate the whole subject of the boundary dispute. Congress at once appropriated one hundred thousand dollars for that purpose. The message of the President startled every one and made a profound sensation, not only in the United States, but also in Great Britain and in other parts of Europe. The possibility, even the probability, of war was freely talked of,^[292] although the people of neither country desired it. The commission entered promptly upon its work, but before it was ready to report, the British government agreed to submit to arbitration all questions pertaining to lands other than those that could be shown, before a joint commission, to have been occupied by British subjects for at least fifty years. In this way the contentions of both governments were satisfied. The joint commission of arbitration met in Paris in the summer of 1899, and in due form rendered a final judgment, which was on the whole favorable to Great Britain. Cleveland’s action in the matter, while harshly criticised in some quarters, especially on account of the direct language employed in his message, was on the whole supported with great enthusiasm by the people at large, regardless of party. The policy he advocated with respect to the relations of the United States toward the weaker republics to the south may be regarded as an extension of the Monroe Doctrine, to which Congress and the people have given their consent.

DOMESTIC EVENTS.

652. The World’s Columbian Exposition.—One of the most conspicuous events of Cleveland’s second administration was the Columbian Exposition, commemorative of the four hundredth anniversary of the discovery of America by Columbus. There was active competition among the great cities for the privilege of holding the exhibition. Congress decided upon Chicago. The exposition was projected for the year 1892, but the preparations to be made were so vast that postponement till 1893 was necessary. A large appropriation was made by Congress, and the state of Illinois also rendered important assistance; but the remarkable success of the undertaking was chiefly due to the enterprise of the people of Chicago. No other exhibition ever presented so magnificent an appearance. Jackson Park, on the shore of Lake Michigan, was chosen as a site, and the preparation of grounds and buildings was intrusted to a board of the most eminent landscape gardeners and architects in the country. Machinery and manufactured products were brought together from all lands, and an important impulse was given to every form of American and European industry. But while the exhibits were most satisfactory, the beauty of the grounds and buildings was more important, since it encouraged the belief that America could become in time as notable for her artistic as for her industrial achievements. The exposition was visited by more than twenty-seven millions of people—nearly three times as many as visited the Centennial at Philadelphia in 1876 (§ 595).

653. Strikes and Riots.—The Columbian Exposition represented the benefits of industrial peace; but while it was being held, the panic already described (§§ 645-649) was in progress, and the country’s industries were thrown into great confusion. As had so often happened in the twenty years preceding, discontent among the working classes caused much agitation and rioting. An “army” of unemployed men and tramps, under the leadership of a person named Coxey, actually marched to Washington to demand redress for their grievances. They were easily dispersed; but a great strike, which took place at Chicago in the summer of 1894, was put down only with the use of considerable force. General inactivity in business had led the Pullman Car Company to make a reduction in the price of labor in their shops. The strike just mentioned followed; and, after some weeks of turbulence, the American Railway Union ordered the employees of all those railroads in Chicago that did not refuse to use the Pullman cars to cease work. The consequence was a practical cessation of traffic for some days. When an attempt was made to move the trains, the trainmen were assaulted. Cars were wrecked and set on fire, and many men were killed or wounded. President Cleveland, though having no precedent for the act, with characteristic energy and decision sent United States troops to protect United States property, to secure the unhindered transmission of the mails, and to prevent interference with interstate commerce. His firmness restored order in Chicago and prevented outbreaks of lawlessness in other places.

654. The Political Condition of New York City.—The city of New York had long been disgracefully ruled by corrupt politicians affiliated with Tammany Hall. In 1894, an investigating committee exposed the system of blackmail and plunder by which the politicians maintained themselves in power. In consequence of these revelations, a reform ticket was victorious in the fall of 1894 and the government of the city was improved.

655. The Campaign of 1896.—Political conditions at the time of the campaign of 1896 were strangely confused. The President and his supporters were out of sympathy with the chief leaders and the masses of the Democratic party. Many Democrats had become Populists. Many Republicans who favored silver had broken more or less with those of their party who considered the protective tariff the main political issue. The number of Independent voters had increased. In the midst of this confusion, the Republican convention met at St. Louis and adopted a platform favoring protection and, less explicitly, the maintenance of a gold standard. They also declared their willingness to coÖperate with European nations in an effort to restore a policy of bimetalism. The Democrats, on the other hand, meeting at Chicago, declared that the United States should adopt the free coinage of silver at a ratio of sixteen to one, even without the coÖperation of Europe. Other planks, especially one attacking the Supreme Court, which had given offense by its decision with regard to the income tax (§ 649), showed that the party had adopted many of the principles of the Populists. The administration of Cleveland was expressly condemned. The Republicans, rejecting the candidacy of Speaker Reed, nominated, for President, William McKinley,^[293] who had left Congress to become governor of Ohio, and had secured the shrewd support of Marcus A. Hanna of that state. Garret A. Hobart of New Jersey was nominated for Vice President. The Democrats, carried away by a remarkable speech of William J. Bryan,^[294] a young ex-congressman from Nebraska, nominated him for President, and Arthur Sewall of Maine for Vice President. Bryan’s nomination was accepted by the “People’s” Party, but Thomas E. Watson of Georgia was put in place of Sewall for Vice President. Those Democrats that could not advocate a free coinage policy, after much hesitation, met in separate convention at Indianapolis and nominated General John M. Palmer of Illinois for President, and General Simon B. Buckner of Kentucky for Vice President, on a platform advocating a gold basis. The campaign was an exciting one and caused much anxiety in financial circles; but it was conducted with unusual freedom from personal accusations. Bryan made a remarkable tour of the country, stirring large crowds by his eloquence; but his efforts were vain, since the silver policy he supported drove thousands of Democrats and Independents into the Republican ranks. McKinley and Hobart were elected by two hundred and seventy-one electoral votes, while Bryan and Sewall received one hundred and seventy-six. So great was the disaffection within the Democratic party, that the “Solid South” was broken for the first time since the war.

Born in Illinois, 1860. Graduated at Illinois College, Jacksonville, 1881; studied law at Union College of Law, Chicago; practiced law at Jacksonville, Illinois, 1883–1887; went to Lincoln, Nebraska, 1887; representative in Congress, 1891–1895; Democratic candidate for United States senator, 1894; editor of Omaha World-Herald, 1894–1896; delegate to Democratic National Convention in 1896; made a notable speech in advocacy of free silver at sixteen to one, and was nominated for the Presidency; defeated in November, 1896; continued to speak on political matters in various parts of the country, 1896–1900; was unanimously renominated for President at the Democratic Convention, July 5, 1900; defeated, and began to edit a newspaper at his home in Lincoln, Nebraska; made a tour of the world; nominated again for the Presidency and defeated, 1908.