A victorious Democratic Party in 1892 split over monetary issues, isolating President Cleveland and enabling Republican domination in the 1896 election.
Following the election of 1892, Grover Cleveland became the first and only president to achieve two non-consecutive terms as chief executive. The primary issues separating the two major parties concerned monetary policy and the tariff. Cleveland opposed high tariff schedules enacted by Republicans, equating protectionism with governmental paternalism. Additionally, Cleveland was a “gold-bug,” using up most of his political capital during his second administration to force the repeal of the Sherman Silver Purchase Act. Cleveland’s four years, however, did little to alleviate alarming social and economic problems, resulting in Republican Party domination in 1896.
Cleveland Inherits an Expanding Financial Panic
The platform of the People’s Party in 1892 demonstrated the views of many farmers and industrial workers: “The fruits of the toil of millions are boldly stolen to build up colossal fortunes for a few…” The United States, according to radical progressives, was a two class nation of tramps and millionaires. By the end of 1893, the first year of the second Cleveland administration, $87 million in gold had left American shores, according to historian Page Smith.
The decrease in the gold reserve helped to drive down stocks in a market that was characterized by “wide fluctuations” according the New York Times on May 5, 1893. Business and bank failures, attributed in part to over production and expansion, caused widespread unemployment, reaching 20%. Cleveland entered the White House at a time Democrats controlled both houses of Congress, the first time that happened since 1859. The economic crisis, however, altered political leadership, beginning with the 1894 mid-term elections.
Populism Helps Republicans Gain Control in 1896
James Weaver was the candidate of the People’s Party in 1892. Considered radical by many Americans, populism was politically synonymous with socialism. During Cleveland’s second term, Coxey marched his “army” to Washington and the Chicago Pullman strike enabled the President to use military force to break the strike, ostensibly to protect mail delivery. Populists were viewed as a socialist fifth column determined to destroy the American way of life and the nation’s exceptionalism.
In the quest for political leadership, Republican gains in the 1894 mid-term election and the party’s spectacular victory in the 1896 presidential election demonstrated Americans not only reacted to the social upheavals blamed on populist-inspired anarchy, but to the perception the Democrats were hopelessly splintered and had been unable to solve the nation’s problems. Political loyalties in the period before McKinley’s first administration fluctuated as widely as the stock market.
Foreign Affairs Opportunities were too little, too late
When confronted with British threats against Venezuela, the Cleveland administration stood firm, reminding Britain U.S. interests prevailed. Although Britain backed down while refusing offers of mediation in the dispute, the American nation was preoccupied with economic concerns. Cleveland also opposed American actions in Hawaii resulting in the overthrowing of the monarchy. Finally, events in Cuba might have given the administration a reason to intervene, but a new liberal government in Spain took the sting out of Cuban repression.
Division within the Democratic Party
Historian Charles Calhoun, whose focus is on the role of the tariff and the gold-silver debate, writes of the Democrats that, “The party’s bumbling incapacity to deal with the nation’s economic crisis” helped Republicans to win control of both houses of Congress and the White House in 1896. There was no question in 1896 whether Cleveland would be re-nominated. According to Calhoun, he “…was fast becoming a pariah to many sections of his party.”
The Democrats nominated William Jennings Bryan, equated with everything in populism dangerous to America, including the gold reserve. Democrats, especially those from farming states, were convinced silver coinage would end the economic crisis. Cleveland opposed this, supporting instead the “hard money” principles of bankers and business leaders. The nation’s economic problems, according to Cleveland, were “chargeable to Congressional legislation touching the purchase and coinage of silver…” (1893)
Republicans were helped by the deep divisions within the Democratic party, a perception of alarming revolutionary trends growing out of a “class warfare” mentality, and the inability of Democrats to craft a viable monetary and tariff policy designed to harness the nation’s resources and establish profitable foreign markets for expanding industries.