Part 56 (1/2)

The Democratic party selected Grover Cleveland for the third time and chose Adlai E. Stevenson for Vice President. The platform condemned trusts and combines, advocated the reclamation of the public lands from corporations and syndicates, the exclusion of the Chinese and of the criminals and paupers of Europe, denounced ”the Sherman Act of 1890,”

and called for ”the coinage of both gold and silver without discriminating against either metal or charge for mintage,” with ”the dollar unit of coinage of both metals” ”of equal intrinsic and exchangeable value.”

The Republicans nominated Benjamin Harrison and Whitelaw Reid, expressed their sympathy with the cause of temperance, their opposition to trusts, and called for the coinage of both gold and silver in such way that ”the debt-paying power of the dollar, whether silver, gold, or paper, shall be at all times equal.”

%555. Grover Cleveland reelected.%--The election was a complete triumph for the Democratic party. Mr. Cleveland was again elected, and for the first time since 1861 the House, Senate, and President were all three Democratic.

Mr. Cleveland was inaugurated March 4,1893. Never in its history had the country been seemingly more prosperous; the crops were bountiful; business was flouris.h.i.+ng, manufactures were thriving. But the prosperity was not real. Business was inflated, and during the following summer an industrial and financial panic which had long been brewing swept over the business world, wrecking banks and destroying industrial and commercial establishments.

To understand what now happened, two facts must be remembered:

1. Under the Resumption of Specie Payment Act of 1875, the Secretary of the Treasury was authorized to buy specie by the issue of bonds and keep it to redeem United States notes.

2. In May, 1878, it was ordered that when a greenback was redeemed in specie, it should ”not be retired, canceled, or destroyed, but shall be reissued and paid out again and kept in circulation.” There were then $346,681,000 in greenbacks unredeemed.

%556. The Gold Reserve.%--Meantime, under the law of 1875, and before January 1, 1879, the secretary issued $95,500,000 in bonds, the proceeds of which, with other gold then in the Treasury, made a fund deemed sufficient to redeem such notes as were likely to be presented. This has since been called our gold reserve, and has been fixed by the secretaries at $100,000,000. January 1, 1879, the reserve was $114,000,000, and though it often rose and fell, it never went below that amount till July, 1892. By that time there were other gold obligations. The silver purchased under the law of 1890 was paid for with notes exchangeable for ”coin”; but as the secretaries always construed ”coin” to mean gold, and as by 1893 these notes amounted to $150,000,000, our gold obligations--that is, notes exchangeable for gold--were nearly $500,000,000 (greenbacks, $346,000,000; silver purchase notes, $150,000,000). This immense and steadily increasing sum caused a doubt of our ability to pay in gold, and a fear that we might be forced to pay in silver. Now silver, since 1873, had fallen steadily in value from $1.30 an ounce to $0.81 an ounce in 1893, so that the bullion value of a silver dollar was about 67 cents. The fear, then, that our debts might be paid in silver (1) led foreigners to cease investing money in this country, and to send our stocks and bonds home to be sold, and (2) led people in this country to draw gold out of the banks and the Treasury and h.o.a.rd it, so that in April, 1893, the gold reserve, for the first time since it was created, fell below $100,000,000 (to $97,000,000).

%557. The Panic of 1893.%--Business depression and ”tight money”

followed. Over three hundred banks suspended or failed, manufactories all over the country shut down, and a period of great distress set in.

People, alarmed at the condition of the banks, began to draw their deposits and h.o.a.rd them, thereby causing such a scarcity of bills of small denominations that a ”currency famine” was threatened.

%558. The Purchase of Silver stopped.%--Believing that the fear that we should soon be ”on a silver basis” had much to do with this state of affairs, and that the compulsory purchase of silver each month had much to do with the fear, the President a.s.sembled Congress in special session, August 7, and asked for the repeal of that clause of the Sherman Act of 1890 which required a monthly purchase of silver. After a struggle in which both of the old parties were split, the compulsory purchase clause was repealed, November 1, 1893.

%559. The Silver Movement.%--The steady fall in the bullion value of silver was a serious blow to the prosperity of the great silver-producing states,--Colorado, Montana, Idaho, South Dakota, Wyoming, Nevada, Utah, and the territories of Arizona and New Mexico,--where silver mining was ”the very heart from which every other industry receives support.” In Colorado alone 15,000 miners were made idle. To the people of this section, some 2,000,000 in number, the silver question was of vital importance; and, alarmed at the call for the special session of Congress and the possible repeal of the silver-purchase clause, they held a convention at Denver, with a view to affecting public sentiment. A few weeks after, the National Bimetallic League met at Chicago. Both opposed the repeal, and demanded that if the government ceased to buy silver, the mints should be opened to free coinage. This the friends of silver in the Senate attempted in vain to bring about.

%560. The Industrial Depression; the Wilson Bill.%--The industrial revival which it was hoped would follow the repeal of the silver-purchase law did not take place. Prices did not rise; failures continued; the long-silent mills did not reopen; gold continued to leave the country, imports fell off, and, when the year ended, the receipts of the government were $34,000,000 behind the expenditures. With this condition of the Treasury facing it, Congress met in December, 1893. The Democrats were in control, and pledged to revise the tariff; and true to the pledge, William L. Wilson of West Virginia, Chairman of the House Committee on Ways and Means, presented a new tariff bill (the Wilson Bill) which after prolonged debate pa.s.sed both Houses and became a law at midnight, August 27, 1894, without the President's signature. As it was expected that the revenue yielded would not be sufficient to meet the expenses of government, one section of the law provided for a tax of two per cent on all incomes above $4000. This the Supreme Court afterwards declared unconst.i.tutional.

%561. The Bond Issues.%--We have seen that in April, 1893, the gold reserve fell to $97,000,000. But it did not stop there; for, the business depression and the demand for the free and unlimited coinage of silver continuing, the withdrawal of gold went on, till the reserve was so low that bonds were repeatedly sold for gold wherewith to maintain it. In this wise, during 1894-95, $262,000,000 were added to our bonded debt.

%562. Foreign Relations; the Hawaiian Revolution.%--when Cleveland took office, a treaty providing for the annexation of the Hawaiian Islands was pending in the Senate. In January, 1983, these islands were the scene of a revolution, which deposed the Queen and set up a ”provisional government.” Commissioners were then dispatched to Was.h.i.+ngton, where a treaty of annexation was negotiated and (February 15) sent to the Senate for approval. In the course of the revolution, a force of men from the United States steamer _Boston_ was landed at the request of the revolutionary leaders, and our flag was raised over some of the buildings. When these facts became known, the President, fearing that the presence of United States marines might have contributed much to the success of the revolution, recalled the treaty from the Senate, and sent an agent to the islands to investigate. His report set forth in substance that the revolution would never have taken place had it not been for the presence and aid of United States marines, and that the Queen had practically been deposed by United States officials. A new minister was thereupon sent, with instructions to announce that the treaty of annexation would not be confirmed, and to seek for the restoration of the Queen on certain conditions. But President Dole of the Hawaiian republic denied the right of Cleveland to impose conditions, or in any way interfere in the domestic concerns of Hawaii, and refused to surrender to the Queen.

%563. The Venezuelan Boundary Dispute.%--During 1895, the boundary dispute which had been dragging on for more than half a century between Great Britain and Venezuela, reached what the President called ”an acute stage,” and made necessary a statement of the position of the United States under the Monroe Doctrine. Great Britain was therefore informed ”that the established policy of the United States is against a forcible increase of any territory of a European power” in the New World, and ”that the United States is bound to protest against the enlargement of the area of British Guiana against the will of Venezuela”; and she was invited to submit her claims to arbitration. Her answer was that the Monroe Doctrine was ”inapplicable to the state of things in which we live at the present day” and a refusal to submit her claims to arbitration. The President then asked and received authority to appoint a commission to examine the boundary and report. ”When such report is made and accepted,” said Cleveland, ”it will in my opinion be the duty of the United States to resist by every means in its power, as a willful aggression upon its rights and interests, the appropriation by Great Britain of any lands, or the exercise of any governmental jurisdiction, over any territory which after investigation we have determined of right belongs to Venezuela.” For a time the excitement this message aroused in Great Britain and our own country was extreme. But it soon subsided, and on February 2, 1897, a treaty of arbitration was signed at Was.h.i.+ngton between Great Britain and Venezuela.

%564. The Election of 1896%.--By that time the presidential election was over. When in the spring the time came to choose delegates to the party nominating conventions, the drift of public sentiment was so strong against the administration, that it seemed certain that the Republicans would ”sweep the country.” Little interest, therefore, was taken by the Democrats, while the Republicans were most concerned in the question whether Mr. McKinley or Mr. Reed should be their presidential candidate. But as delegates were chosen by the Democrats in the Western and Southern States, it became certain that the issue was to be the free and unlimited coinage of silver and gold at the ratio of 16 to 1.

The Republican convention met in June, nominated William McKinley and Garret A Hobart, and declared the party ”opposed to the free coinage of silver except by international agreement,” whereupon thirty-four delegates representing the silver states (Colorado, Idaho, Montana, Nevada, South Dakota, and Utah) seceded from the party. The Democratic convention a.s.sembled early in July, and after a most exciting convention chose William J. Bryan and Arthur Sewall, and declared for ”the free and unlimited coinage of both silver and gold at the present legal ration of 16 to 1, without waiting for the aid and consent of any other nation.” A great defection followed this declaration, scores of newspapers refused to support the candidates, and in September a convention of ”gold Democrats,” taking the name of the National Democratic party, nominated John M. Palmer and Simon B. Buckner, on a ”gold standard” platform.

Meanwhile, the Prohibitionists, the National party (declaring for woman suffrage, prohibition, government owners.h.i.+p of railroads and telegraphs, an income tax, and the election of the President, Vice President, and senators by direct vote of the people), the Socialist Labor party, the Silver party, and the Populists, had all put candidates in the field.

The Silver party indorsed Bryan and Sewall; the Populists nominated Bryan and Thomas E. Watson.

[Ill.u.s.tration: William McKinley]

%565. McKinley, President.%--An ”educational campaign” was carried on with a seriousness never before approached in our history, and resulted in the election of Mr. McKinley. He was inaugurated on March 4, and immediately called a special session of Congress to revise the tariff, a work which ended in the enactment of the ”Dingley Tariff,” on July 24, 1897.

%566. The Cuban Question.%--Absorbing as were the election and the tariff, there was another matter, which for two years past had steadily grown more and more serious. In February, 1895, the natives of Cuba for the sixth time in fifty years rebelled against the misrule of Spain and founded a republic. A cruel, b.l.o.o.d.y, and ruinous war followed, and as it progressed, deeply interested the people of our country. The island lay at our very doors. Upwards of $50,000,000 of American money were invested in mines, railroads, and plantations there. Our yearly trade with Cuba was valued at $96,000,000. Our ports were used by Cubans in fitting out military expeditions, which the government was forced to stop at great expense.

%567. Shall Cuba be given Belligerent Rights?%--These matters were serious, and when to them was added the sympathy we always feel for any people struggling for the liberty we enjoy, there seemed to be ample reason for our insisting that Spain should govern Cuba better or set her free. Some thought we should buy Cuba; some that we should recognize the Republic of Cuba; others that we should intervene even at the risk of war. Thus urged on, Congress in 1896 declared that the Cubans were ent.i.tled to belligerent rights in our ports, and asked the President to endeavor to persuade Spain to recognize the independence of Cuba; and the House in 1897 recommended that the independence of Cuba be recognized. But nothing came of either recommendation, and so the matter stood when McKinley was inaugurated.

During the summer of 1897 matters grew worse. A large part of the island became a wilderness. The people who had been driven into the towns by order of Captain General Weyler, the ”reconcentrados,” were dying of starvation, and our countrymen, deeply moved at their suffering, began to send them food and medical aid.