Although the Populist Party emerged as a legitimate third party of the 1890s, its rural appeal was too parochial to challenge the Democrats and Republicans.
Benjamin Harrison’s administration (1889 – 1893) featured high-tariff policies. Eliminating foreign competition through high tariffs enabled American businesses to monopolize manufactured goods, which allowed them to raise prices on their products. Since the Democrats made their 1892 presidential campaign theme “lower tariffs,” they felt they could run their candidate Grover Cleveland against Harrison again and win this time.
1892 Campaign and the Populist Party
Although lower tariffs appealed to Midwest farmers, they didn’t trust the Democratic Party. Therefore, the Populist Party emerged as a realistic third option. Most likely descendants of the 1870s Granger movement, the Populists were low-income farmers primarily from Idaho, Kansas, Nevada and Colorado. They ran James B. Weaver on a platform of government control and regulation of telegraphs, railroads and telephones. The party also advocated for the dissemination of free silver coins at a ratio of 16 ounces of silver to 1 ounce of gold.
After the administrations of Hayes, Garfield, Arthur and Harrison allowed the Ku Klux Klan to run rampant, African Americans distrusted the Republican Party. Since the Democrats represented the Confederate South, the Populists attracted rural African Americans who joined the Populists’ ranks in large numbers. However, the southern white conservative elite used its influence to convince poor white farmers that they were better than poor black farmers. Falsely believing they were in a better economic position than blacks, many poor whites joined clandestine groups to stop African Americans from voting.
Grover Gets Over Again
In the 1892 election, Cleveland beat Harrison by more than 360,000 popular votes and he acquired more than half of the electoral votes. Populist candidate Weaver received 1,029, 846 popular votes and, unlike the first woman presidential candidate Ann Lockwood, he captured 22 electoral votes. Weaver would have obtained more African American votes had southern whites not limited their voting privileges. However, even with more votes Weaver still would have lost the election. His rural political base was too limited, and southern whites disliked his party’s integrationist appeal.
Shortly after Cleveland took office for his second (split) term, a terrible depression hit America’s economy that lasted throughout his presidency. The high tariffs on exports caused the depression. Many European countries couldn’t afford to purchase American products at high prices, so they cut back considerably. As a result, American manufacturers had to decrease production, fire workers and lower wages. As these trends continued throughout the country, Wall Street crashed in 1893. Investors reacted by quickly selling their stocks and many companies went bankrupt.
After a year of Cleveland’s presidency, more than 3 million Americans lost their jobs. The unemployed moved from city to city looking for work without success. Many of them turned into tramps and rummaged garbage cans for food. In addition, farmers didn’t do well at the market because the cost of growing crops and raising livestock exceeded the profit margins. However, wealthy people in the cities often gave elaborate $100,000 dollar parties.
Cleveland and J.P. Morgan
The economic conditions got so bad that by 1894 the gold reserve had shrunk from $100 million to $41 million, and the U.S. was about to fall off its gold standard. Faced with difficult political decisions, Cleveland panicked. At the beginning of 1895 he sought assistance from J. P. Morgan of “shady deal” Wall Street fame. After lengthy meetings with the president, J. P. Morgan’s bankers agreed to lend the government $65 million in gold and charged $7million dollars for it.
However, the loan did not stabilize the economy and when the news of Morgan’s loan reached the public, most people reacted unfavorably. According to The Brief American Pageant, “Cleveland’s secretive dealings with mighty ‘Jupiter’ Morgan were savagely condemned as a ‘sellout’ of the national government.” Although Cleveland later admitted to meeting with Morgan, he denied rumors that he was “Morgan’s errand boy.” Nevertheless, Cleveland inadequately dealt with America’s economic problems.
Most people saw Cleveland as the president who caused the depression. Many Democrats agreed with this view of Cleveland, so they nominated William Jennings Bryan from Nebraska. He ran on a platform of free silver coinage to improve the economy. Since the Populists also wanted silver coins, they nominated Bryan as their presidential candidate. The Republicans nominated William (high tariffs) McKinley from Ohio. He promised economic recovery and prosperity and spoke against “free silver,” arguing that it would cause inflation. Bryan captured 47 percent of the popular vote, but McKinley won decisively with 271 electoral votes to 176.
By the time McKinley took office, Americans had discovered gold in Alaska. The new gold supplemented the existing revenue and the economy recovered rather quickly. Therefore, people associated McKinley’s presidency and the Republican Party with economic stability and prosperity. Furthermore, it appeared that McKinley was correct about improving the economy without distributing free silver.
- Kennedy, David, Cohen, Lizabeth, Bailey, Thomas, Piehl, Mel. The Brief American Pageant – Sixth Edition. Boston/New York: Houghton Mifflin Company, 2004.
- Nash, Jeffrey, Howe, Davis, Frederick, Winkler. The American People –Creating a Nation and a Society, Brief Fourth Edition. New York: Longman, 2003