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Chapter 19 - From Stalemate to Crisis

 1)The Politics of Equilibrium

a)The Party System

i)Party system of late 19th century very stable w/ little fluctuation in state loyalties. Repubs held most presidencies and Senate, Dems lead House

ii)Public intensely loyal to parties, voter turnout was tremendous- loyalty result of region (Dems in S, Repubs in N), religion and ethnicity (Dems attracted Catholics, new immigrants, poor; Repubs middle class, N Protestants)

iii)Party identification more cultural than of economic interest

b)The National Government

i)Federal govt held little power/responsibility- aside from supporting economic development (land grant subsidies, strike intervention), delivering pensions to Civil War veterans. Party leaders cared more about holding office than policy

c)Presidents and Patronage

i)President had little power save to make govt appointments (patronage used)

ii)Pres Rutherford B. Hayes had to deal w/ factional Repub party split btwn Stalwarts (favored machine politics) and the Half-Breeds (favored reform). Patronage system overshadowed presidency, civil service system effort failed

iii)Repubs won presidency in 1880 election, Pres James Garfield (Half-Breed) and VP Chester Arthur (Stalwart). Garfield attempted to defy Stalwarts, create civil service reform- assassinated 1881

iv)New Pres Chester attempted supported civil service reform over Stalwarts- 1883 Congress passed Pendleton Act requiring exams for some govt jobs

d)Cleveland, Harrison, and the Tariff

i)In 1884 election Repub nominee Sen James Blaine symbol of party politics, “liberal” Repubs flocked to Dem reform candidate Grover Cleveland

ii)Cleveland opposed to graft and special interest, wished to see limited govt- asked Congress to reduce protective tariff rate 1887 to reduce govt surpluses and size. Dems passed bill, Republicans opposed it—>issue in 1888 elections

iii)Dems renominated Cleveland; Repubs named Benjamin Harrison, won Pres

e)New Public Issues

i)Pres Harrison made little effort to influence Congress, but public opinion forced govt to begin to confront social and economic issues- especially trusts

ii)By mid 1880s some states limiting combinations preventing competition, but reformers wanted nat’l movement- 1890 Sherman Antitrust Act passed, but little enforced, weakened by courts, and had little impact

iii)Repubs main issue was dealing w/ tariff- passed McKinley Tariff 1890 (highest protective tariff ever).  Public opposed bill, by 1892 Pres election Repubs lost both House + Senate, Dem nominee Cleveland won Pres election

iv)Cleveland’s 2nd term like 1st (devoted to minimal govt). Supported tariff reduction (Wilson-Gorman Tariff passed). Movement 1880s in may states to regulate RRs- after 1886 Supreme Court case Wabash, St. Louis and Pacific Railroad vs Illinois ruled only fed govt able to regulate interstate commerce

v)To appease public Congress passed 1887 Interstate Commerce Act- banned rate discrimination + injustice, Interstate Commerce Commission formed

2)The Agrarian Revolt

a)The Grangers

i)First major effort to organize farmers was Grange movement of 1860s (at firs goal to teach new scientific techniques), not until 1873 recession + fall of farm prices did it become highly political and large

ii)Grange urged cooperative political action to fight monopolistic RR and warehouse practices, setup up co-op stores, insurance companies, and Montgomery Ward mail-order business (sought to challenge middle-men)

iii)Elected Grange politicians 1870s to state legislatures to focus on RR reform; regulations destroyed by courts, temporary boom late-1870s destroyed Grange

b)The Farmers’ Alliance

i)Farmers’ Alliances formed in South, Northwest- like Grange focused on local problems (co-op banks, processing plants) but also larger goal to create society of cooperation. Like Grange cooperatives not very successful, harnessed frustrations into creating national political organization 1880s

ii)1889 Southern and Northwestern Alliances merged, issued Ocala Demands (party platform), won seats in 1890 elections. Sentiments forming toward national third party, 1892 created People’s Party (Populists)

iii)In 1892 elections Populists did surprising well, won seats in states + Congress

c)The Populist Constituency

i)Populism appealed mainly to small farmers, those whose farming becoming less viable in face of mechanized, consolidated commercial agriculture

ii)Populists failed to attract much labor support, but attracted miners in Rocky Mountain states w/ “free silver” policy that allowed for silver to be currency, expand money supply. African Americans allowed limited involvement in S

d)Populist Ideas

i)Ocala platform 1892 outlined Populist reform programs- “subtreasuries” to strengthen cooperatives; govt warehouse system; abolish national banks; direct election of US Senators, other ways for ppl to influence political system; regulation and ownership of RRs, telephones; graduated income tax; currency inflation; silver remonetization. Populism associated w/ anti-Semitism

ii)Rejection of laissez-faire, uphold absolutism of ownership

3)The Crisis of the 1890s

a)The Panic of 1893

i)Panic of 1893 led to severe depression- caused by bankruptcy of few corporations that led to bank failure, led to credit contraction. Also caused by depressed farm prices of late 1880s, Eur depression, RR expansion beyond market demand- showed how dependent economy was on powerful RRs

ii)Businesses, banks, RRs failed. Unemployment soared, led to social unrest- 1894 Populist Jacob Coxey called for massive public works program for unemployed + currency inflation, protested in D.C. w/ “Coxey’s Army”

b)The Silver Question

i)Financial panic weakened monetary system, Pres Cleveland believed currency instability cause of depression. Many ppl believed specie (precious metal) must back money to give it value

ii)“Bimetal” standard discontinued 1873 by Congress b/c market value of silver high than 16:1 standard. Late 1870s silver became less valuable than standard but ppl unable to convert silver b/c of “Crime of ‘73”; opposition by silver-miners + farmers who wanted greater $ circulation (inflation) to ease debts

iii)At same time decreasing govt gold reserves led Pres Cleveland 1893 to seek repeal of Sherman Silver Purchase Act of 1890- divided Dem party

iv)Presidential of 1986 incredibly fierce b/c supporters of gold standard saw it as essential to national stability, supporters of “free silver” (guided by William Harvey’s 1894 Coin’s Financial School) saw gold standard as tyrannous and advantageous to wealthy, silver would decrease debt

4)“A Cross of Gold”

a)The Emergence of Bryan

i)Repubs in 1896 election confident of victory b/c of Cleveland+ Dems failure to deal w/ depression nominated William McKinley w/ platform opposed to free coinage of silver 

ii)Dems of West sought to weaken People’s Party by adopting Populist demands, debated platform of free silver, tariff reduction, income tax, RR and trust regulation- opposed by eastern Dems

iii)William Jennings Bryan delivered “Cross of Gold” speech opposed to gold standard at convention, next day voted nominee

iv)Populists split as to whether or not to fuse w/ Dem party b/c felt some of their unique needs addressed; concluded no other alternative, supported Bryan

b)The Conservative Party

i)Business + finance communities donated heavily to Repubs, Bryan’s national stump and camp-meeting style alienated Cath + ethnic voters who feared he embodied Protestants who so firmly opposed them

ii)McKinley carried election b/c Dem platform had proved to be too narrow (sectional) to win nationally. B/c of “fusion” gamble w/ Democrats the People’s Party began to dissolve in wake of defeat

c)McKinley and Recovery

i)McKinley administration saw return to calm b/c labor unrest and agrarian protest had subsided by 1897, economic crisis gradually easing

ii)McKinley focused on implementing high tariff rate, Congress soon passed Dingley Tariff. Repubs passed Currency (Gold Standard) Act of 1900 that confirmed nation’s gold standard, pegged dollar to specific gold value

iii)Foreign crop failures resulted in economic uptick, nation entered period of expansion once again—clear trend btwn prosperity + gold standard support

iv)Free-silver movement had failed- during late 19th century money supply had expanded much more slowly than increase in production and population, but by late 1890s increase in gold supply inflated money, satisfied free-silver ppl

 

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