If the face value of a coin is more than its worth as bullion, it is "overvalued." Thus, if coins of equal face value, but of different bullion value, circulate side by side, there will be a tendency for the possessors of the coins to pa.s.s on the currency with the smaller bullion value and to withdraw the others for sale as bullion and for use in the arts.

[2] Above, p. 164.

[3] Above, pp. 238-240.

[4] The law remained in force about three years. During that interval nearly $156,000,000 worth of silver bullion was purchased with the new treasury notes. The government began retiring these notes in 1900.

[5] The call for the extra session, together with news of the suspension of free-coinage in India, sent the bullion price of silver down twenty-one cents per ounce in two weeks. The President was seriously handicapped at this time by a cancerous growth in the jaw, necessitating an operation, news of which was withheld from the public for fear of its ill effect on the financial situation. Cf. _Sat.u.r.day Evening Post_, 22 Sept., 1917.

[6] Above, p. 274.

CHAPTER XVI

1896

The political situation in 1896, when the parties began to prepare for the presidential election, was more complex than it had been since 1860. The repeal, in 1893, of the purchase clause of the Sherman silver act had divided the Democrats into factions; the financial and industrial distress in the same year had been widely attributed to fear of Democratic misgovernment; the Wilson-Gorman tariff act of 1894 had discredited the party and aroused ill-feeling between the President and Congress; the Pullman strike and the use of the injunction had aroused bitterness in the labor element against the administration; the income tax decision of 1895 had done much to shake popular confidence in the Supreme Court; the Hawaiian and Venezuelan incidents had caused minor dissent in some quarters; and the bond sales had made Cleveland intensely unpopular in the West and South. The Democratic party was demoralized and leaderless. The Republicans were better off because they had been out of power during the years of dissension and panic, but they had been without a leader since the death of Blaine in 1893 and were far from united in regard to the most pressing issues. Indeed, the sectional differences in both parties, and the unexpected strength of the Populist movement caused no little anxiety among the political leaders. And finally, the volume and character of the currency was still undetermined. The Democrats had divided on the question. The Republicans were almost as little united; they had played politics in pa.s.sing the Sherman silver act and three years later had a.s.sisted a President of the opposite party in accomplishing the repeal of its most important provision. From the standpoint of the silver supporters neither party organization was to be trusted. The outstanding political questions of 1896, therefore, were whether the supporters of silver could capture the machinery of one of the parties and whether the other unsettled issues could ride into the campaign on the strength of the financial agitation. The answers to these questions gave the campaign and election its peculiar significance.

The background of 1896 is to be found in the South and West, where the farmers' alliances and the Populist party continued their success in arousing and directing the ambitions of the discontented cla.s.ses. In 1892, it will be remembered, the Populists had cast more than a million ballots and had chosen twenty-two presidential electors, two senators, and eleven representatives. In 1894, at the time of the congressional election, they had increased their voting strength more than forty per cent., and had elected six senators and six members of the House, besides several hundreds of state officials. In the Senate it happened that the two great parties had been almost equally strong, after the election of 1894, so that the Populist group had held the balance of power. The insistence of the South and West that Congress do something further for silver had not lessened. A measure providing for the coinage of a portion of the silver bullion in the treasury had been defeated in 1894 only through the President's veto. Indeed the only hope of the East and of the supporters of the gold standard was the unflinching determination of the head of a party to which the East and the gold supporters were, in the main opposed.

The growing enthusiasm for silver which was sweeping over the South and West and rapidly developing into something resembling frenzy was difficult for the more stolid East to comprehend. Not merely the politician, but the man on the street and in the store, the school-teacher, the farmer and the laborer, in those portions of the country, fell to discussing the virtues of silver as currency and the effect of a greater volume of circulating medium upon prices and prosperity. The two metals became personified in the minds of the people. Gold was the symbol of cruel, sn.o.bbish plutocracy; silver of upright democracy. Gold deserted the country in its hour of need; silver remained at home to minister to the wants of the people. Such arguments as those presented in _Coin's Financial School_, published in 1894, brought financial policy within the circle of the emotions of its readers even if they did not satisfy the more critical student of monetary problems. This influential little volume, written by W.H.

Harvey, acted as a hand-book of free coinage, cleverly setting forth the major arguments for the increased use of silver and bringing forward objections which were triumphantly demolished. Simple ill.u.s.trations enforced the lessons taught by its pages: a wood-cut of a cripple with one leg indicated how handicapped the country was without the free coinage of two metals; in another, Senator Sherman and President Cleveland were depicted digging out the silver portion of the foundations of a house which had been erected on a stable basis of both gold and silver; in a third, western farmers were seen industriously stuffing fodder into a cow which capitalists were milking for the benefit of New York and New England.[1] With the enthusiasm and the sincerity of the early crusaders, the people a.s.sembled in ten thousand schoolhouses to debate the absorbing subject of the currency. Indeed the South and West had become convinced that the miseries inflicted upon mankind by war, pestilence and famine had been less "cruel, unpitying, and unrelenting than the persistent and remorseless exaction" which the contraction of the volume of the currency had made upon society. Low prices, the stagnation of industry, empty and idle stores, workshops and factories, the increase of crime and bankruptcy--all were laid at the door of the gold standard.

The East looked upon the rising in the West at first with amus.e.m.e.nt, and was quite ready to accept the diagnosis of a western newspaper man, quoted by Peck in his _Twenty Years of the Republic_:

What's the matter with Kansas?

We all know; yet here we are at it again. We have an old moss-back Jacksonian who snorts and howls because there is a bath-tub in the State House. We are running that old jay for Governor.... We have raked the ash-heap of failure in the State and found an old human hoop-skirt who has failed as a business man, who has failed as an editor, who has failed as a preacher, and we are going to run him for Congressman-at-large.... Then we have discovered a kid without a law practice and have decided to run him for Attorney-General.

Later the East looked upon tendencies in the West with more concern: Roosevelt, although admitting the honesty of the Populists, characterized their ignorance as "abysmal"; others were more inclined to doubt their sincerity; their conventions were supposed to be made up of cranks and uns.e.xed women; and their principles were looked upon as "wild and crazy notions."

In fact it was no simple task to distinguish between the legitimate grievances and ambitions of the westerners, and their eccentricities and errors. Nor was this difficulty lessened by the reputation with which some of the proponents of silver were justly or unjustly credited. "Sockless Jerry" Simpson and Mrs. Lease were among them--the Mrs. Lease to whom was ascribed the remark "Kansas had better stop raising corn and begin raising h.e.l.l!"[2] Benjamin R. Tillman was another--a rough, forceful character, leader of the poor whites and small farmers of South Carolina, organizer of the "wool hats" against the "silk hats" and the "kid gloves"--Governor of the state and later member of the federal Senate. Although a Democrat, he was thoroughly at odds with Cleveland, and publicly declared it was his ambition to stick his pitchfork into the President's sides.[3] Richard P. Bland, of Missouri, had the disadvantage of having been one of the earliest of the silver supporters, since he had initiated the bill which resulted in the Bland-Allison act, and was looked upon in the East as a thorough-going, free-silver radical. Governor Altgeld, of Illinois, leader of the Democrats of that state from 1892 to 1896, was a successful lawyer who was looked upon by his friends as a liberal-minded humanitarian, the friend of

The mocked and the scorned and the wounded, the lame and the poor,

whose sympathies with the laboring cla.s.ses had given him the support of the reformers and the wage earners. But his pardon of the Haymarket anarchists and his att.i.tude during the Pullman strike had led the East to regard him as a dangerous revolutionist and an enemy to society.[4]

The free-silver movement nevertheless continued to gather momentum. For some years influential silver advocates had been a.s.sociated in the Bimetallic League, an organization which supported the free coinage of both gold and silver. Among its members were prominent Democrats, Republicans and Populists, especially from the western states, and some of the foremost labor leaders. At one of its meetings in 1893 it was determined to invite every labor and industrial organization in the country to send delegates. A few experts, even in the East, gave some scientific support to the argument for the greater use of silver.

Eastern Republicans like Senator Henry Cabot Lodge proposed free coinage of both metals by an international agreement, which, they thought, might be brought about through threats of tariff discrimination against nations refusing to adhere to the arrangement. A silver convention in Nebraska in 1894 was attended by a thousand delegates. From the point of view of party harmony the subject was a nuisance. Democratic state conventions were badly divided. Thirty of them adopted resolutions distinctly favorable to free coinage and fourteen opposed. Ten of the latter committed themselves definitely to the gold standard. The fourteen included all the northeastern states, together with Michigan, Wisconsin and Minnesota. Such gold Democrats as President Cleveland sought to stem the tide, but Cleveland's control over his followers was rapidly dwindling, and it seemed likely that the silver element of the party might reach out to seize the organization and displace the former leaders.

The Republican professional politicians were as ignorant of technical monetary problems as the Democrats, and moreover did not wish to risk popular disapproval in any section by utterances which might be offensive to that part of the country. The first Republican state convention during 1896 was that in Ohio. Its financial plank was awaited with interest, because of the early date of the meeting and because its proceedings were in the hands of friends of the most prominent candidate for the Republican presidential nomination. The convention dodged the issue by demanding that all our currency be "sound as the Government and as untarnished as its honor," and that both metals be used as currency and kept at parity by legislative restrictions. The New York _Tribune_ thought that this could mean nothing but a gold standard; the _Times_ was fearful that it would lead to silver; the _Springfield Republican_ condemned it as "chock full of double-dealing." Its ambiguity, however, was in line with the purposes and ambitions of two men who were actively preparing for the campaign of 1896--Marcus A. Hanna and Major William McKinley.

Marcus A. Hanna, or "Mark" Hanna as he was universally known, was an Ohioan, born in 1837.[5] As a young man he entered upon a business career in Cleveland, first in a wholesale grocery company, later in a coal and iron firm and finally in a variety of industrial and commercial enterprises which his energy and ability opened to him. The expansion of industrial America after the Civil War was coincident with the greater part of Hanna's career and he was a typical product of that period in his political, economic and social philosophy. After he had attained a degree of business success he became actively interested in politics and took a prominent part in placing Joseph B. Foraker in the governor's chair in Ohio in 1885. Strained relations between the two turned Hanna's attention to the fortunes of John Sherman. When it became apparent in 1888 that the presidential campaign would turn upon President Cleveland's tariff principles, Hanna, who looked upon the protective tariff as synonymous with industrial expansion and even of industrial safety, threw his weight upon the side of Sherman, who was again seeking the Republican nomination. The failure of Sherman was a blow to Hanna, but it called to his attention the pleasing personality of a more prominent protectionist, William McKinley. He was an important agent in McKinley's successful campaign for the governorship of Ohio in 1891. Two years later the Governor met serious financial reverses, and again Hanna proved to be a firm friend. Aided by other men of means he rescued McKinley from bankruptcy. Between the two there sprang up a mutual admiration of unusual strength, and finally, in 1894-1895, Hanna withdrew from his business enterprises in order to devote his entire time to the political fortunes of his friend.

Mark Hanna had extraordinary capacity for leadership. Sociable, open-handed, full of energy, direct, aggressive, shrewd, daring, a hard fighter, a loyal friend, an organizer and a man of his word, he was essentially a man of action. In politics he was practical and straight-forward. He wanted results, not reforms, and results meant accepting the prevailing methods and using them. When he wished a street-railway franchise in Cleveland, he bought enough influence with the city government to get what he wanted, as others of his day did. He was a strict party man; good government and safety to industry, he believed, were dependent upon Republican control. Patriotism therefore demanded his utmost energy in getting Republicans elected. In political campaigns his counsel, his energy and his money were always available.

A protective customs tariff, a "sound" currency system and a free hand in the conduct of business were the things which he most desired from the government.

William McKinley would have been a formidable compet.i.tor for the presidential nomination in 1896 even without the a.s.sistance of his rugged friend. His personality was attractive, in a pleasing, soothing, tactful, ingratiating way. His military career had been honorable even if not famous. For most of the time from 1877 to 1891 he had been a member of the House of Representatives, becoming identified particularly with the high protective tariff and acting as sponsor for the McKinley act of 1890. After being defeated for re-election, just subsequent to the pa.s.sage of the tariff law, he had become Governor of Ohio for two terms. The panic of 1893 and the ill-fated Wilson-Gorman tariff act during the time when he was Governor caused the tide of popular favor to swing away from the Democrats; McKinley, as the apostle of protection, appeared in a more favorable light; and his partisans began to press him forward as the logical nominee for 1896 and as "the advance agent of Prosperity." The fact that his home was in a populous state in the Middle West was also in his favor, because the Republicans had frequently chosen their candidate from this debatable ground rather than from the Northeast, where success was to be had without a struggle.

Hanna's first care upon determining to devote himself to the interests of McKinley was to keep the candidate before the people as the one man who could rescue the nation from industrial depression. To that end he widely circulated the Cleveland _Leader_, a strong McKinley organ, for eighteen months at his own expense; he rented a house in Georgia, entertained Governor McKinley there and brought numbers of southern politicians to meet the candidate; and experienced political workers were sent all over the country and especially to the South to prepare the way for the election of delegates to the nominating convention.

Hanna himself went to the East to discover on what terms the support of some of the states in that section could be obtained. On his return he reported that aid would be a.s.sured by a guarantee that the patronage of the administration would go to certain powerful politicians; Hanna thought the bargain a desirable one, but the candidate objected and Hanna acquiesced. The campaign of publicity and of personal canva.s.s for delegates and influence continued. First and last, it is estimated, Hanna contributed over $100,000 for this purpose, urging his a.s.sistants always to use funds only for legitimate ends, although promising McKinley partisans who aided in the work that they would be "consulted"

in the disposition of patronage.

Two difficulties stood in the way of completely ensuring the choice of McKinley as the candidate by the convention. Several states had "favorite sons" whom they would be sure to present, and if so many of these should appear as to prevent McKinley's nomination on the first ballot or at least on an early one, there might be a stampede to an unknown man--a "dark horse"--and then Hanna's ambitions would be frustrated. Thomas B. Reed of Maine was an especial source of anxiety as he possessed considerable strength throughout New England. To guard against such a danger, Hanna sedulously cultivated the popular demand for Governor McKinley and also fought in the state conventions for delegates even against favorite sons. A crucial state was Illinois, where Senator Cullom was powerful. The Senator says that a representative of McKinley offered him "all sorts of inducements" to withdraw, but McKinley's biographer mentions no such attempt at a bargain. Eventually Cullom made the fight and was defeated, and from then on, the nomination of McKinley seemed sure unless he should be tripped by the currency issue.

The silver question was the second obstacle in the way of success. Not only was the party divided, but McKinley's record on the subject was far from consistent. He had voted for the Bland free-silver bill in 1877, for the Bland-Allison act in 1878 and for the pa.s.sage of that act over President Hayes's veto. In 1890 he had urged the pa.s.sage of the Sherman silver purchase law, intimating that he would support a free coinage measure if it were possible to pa.s.s it. Hardly more than a year later he was campaigning for the governorship of Ohio, and there he denounced the free coinage of silver and advocated international bimetallism. In 1896 McKinley feared that a definite public utterance on the one side or the other of the question would widen the division in the party, prevent his nomination and lose the election. Hence the ambiguous currency plank in the Ohio state convention and hence, also, the refusal of the candidate to commit himself openly. Nevertheless he commissioned a friend to go to the East and explain his att.i.tude privately to certain leaders and prominent business men, urging them not to force a declaration for gold before the convention met. In this way, he thought, the currency issue might be subordinated, the tariff emphasized and the party held together. In this state of uncertainty the currency situation was allowed to rest until the convention met at St. Louis on June 16.

The platform adopted was, for the most part, of the usual sort. It urged popular attention to the matchless achievements of thirty years of Republican rule and contrasted that period of "unequalled success and prosperity" with the "unparalleled incapacity, dishonor, and disaster" of Democratic government; it promised the "most ample protection" to the products of mine, field and factory; generous pensions, American control of Hawaii, a Nicaragua ca.n.a.l, the Monroe doctrine, restricted immigration and the arbitration of labor disputes affecting interstate commerce received the support of the party.

It was the currency plank, however, that differentiated the platform of 1896 from that of other campaigns. Many Republican leaders and business men, particularly in the East, were disposed to call for a definite party statement in favor of a gold standard and had reached the point where they could not be put off by the usual meaningless straddle.

Thomas C. Platt, Henry Cabot Lodge, Joseph B. Foraker, Charles W.

Fairbanks and other party chiefs were among them. Hanna was ready to declare for gold after he had been a.s.sured of the nomination of his candidate. McKinley was willing to stand for gold, although he preferred not to mention that word in the plank and hoped to make the contest on the tariff. Moreover so many silver delegates had already been elected to the Democratic convention, which was soon to be held, that a definite utterance from that party seemed a certainty. The Prohibitionists had already divided into halves over the dominant issue. It was almost imperative, therefore, for the Republican convention to be more explicit than it had hitherto ventured to be. As leader after leader arrived who was insistent upon a gold standard, it became increasingly evident to Hanna that he must proceed with caution.

If McKinley committed himself to gold, the silver advocates would balk at his candidacy, and perhaps unite on somebody else; if he committed himself to silver, he would lose the eastern leaders. The astute Hanna therefore allowed sentiment in favor of the gold plank to gather force, although holding the discussion as far as possible under cover, and kept McKinley from making a definite statement. Then at the last minute, when the McKinley delegates were numerous enough to ensure the nomination of the Major and when it was too late for the silver forces to agree upon an opposition candidate, Hanna gave way to the pressure for gold and agreed to the plank which he had always favored.[6]

Despite the canny management of Hanna a defection took place over the decision on the currency issue. As soon as the platform was read, Senator Henry M. Teller, of Colorado, moved to replace the gold plank by one advocating the free coinage of silver. The earnestness with which Teller urged the adoption of the subst.i.tute was an indication of the sincerity of the western wing of the party. He had been a strict Republican since the formation of the party in the mid-fifties, yet he now found himself forced to accept a policy which he believed to be pernicious or break the political bonds which had held him for forty years. The majority of the convention, however, was determined to adopt the gold plank and overwhelmingly defeated the Teller amendment, whereupon the Senator and thirty-three other silver supporters solemnly withdrew from the hall.

The way was now clear for the nomination of a candidate. Thomas B.

Reed, Senator Quay and other favorite sons received but scant support, and McKinley was nominated by an overwhelming majority on the first ballot. Garrett A. Hobart, a lawyer and business man whose reputation was confined to New Jersey, his home state, was nominated for the vice-presidency. The platform and the candidate were generally hailed with favor in the East. To be sure, critical newspapers were inclined to look askance upon McKinley's past. The New York _Evening Post_, for example, favored a gold standard but decried the candidate's "absence of settled convictions about leading questions of the day, and his want of clear knowledge on any subject." Yet on the whole, the platform and the candidate were popular, and, in view of the serious factional disputes among the Democrats, the Republicans seemed likely to make good their boast that victory would be so easy that they could nominate and elect a "rag baby" if they chose. The redoubtable Hanna was appointed chairman of the National Republican Committee, from which office he was to direct the campaign. McKinley still believed that the contest would be of the old-fashioned sort and that it would turn on the tariff, despite the platform utterance of the party. And so it might have proved had it not been for an important change of purpose and leadership in the opposition.

The friends of free silver coinage went to the Democratic convention at Chicago on July 7 with the same determination to get a definite statement on the currency question that had characterized the eastern leaders at the Republican convention. Without the loss of a moment they wrested the control of the organization from the former leaders by defeating Senator Hill of New York, a gold Democrat, for the temporary chairmanship and electing Senator Daniel of Virginia, a recognized proponent of free silver. Hill's support came mainly from the Northeast; Daniel's, from the West and South. Senator White of California, a representative of the silver wing, was then chosen permanent chairman and the convention was ready for the contest over the platform. While it awaited that doc.u.ment, however, it listened to several favorite leaders, of whom Senator Tillman and Governor Altgeld of Illinois were the best known. From the sentiments expressed by these men it was clear that the radical Democrats believed that they were speaking for the ma.s.ses of the people and that they were bent upon making far-reaching changes both in the organization and the creed of the party.

A disquieting feature was a degree of turbulence beyond that which usually characterizes our nominating conventions. The official proceedings record the following, for example, while Senator Tillman was addressing the delegates:

I hope that when this vast a.s.sembly shall have dispersed to its home the many thousands of my fellow-citizens who are here will carry hence a different opinion of the pitchfork man from South Carolina to that which they now hold. I come to you from the South--from the home of secession--from that State where the leaders of--(the balance of the sentence of the speaker was drowned by hisses). Mr.

Tillman (resuming): There are only three things in the world that can hiss--a goose, a serpent, and a man....

In the last three or four or five years the Western people have come to realize that the condition of the South and the condition of the West are identical. Hence we find to-day that the Democratic party of the West is here almost in solid phalanx appealing to the South, and the South has responded--to come to their help.... Some of my friends from the South and elsewhere have said that this is not a sectional issue. I say it is a sectional issue. (Long prolonged hissing.)

At length, the platform was presented. It was a summary of the complaints against the East which had been forming in the West and South ever since the days of the Greenbackers and the "Ohio idea." It recognized first that the money question was paramount to all others; laid hard times at the door of the gold standard, which it denounced as a British policy; and demanded the free coinage of both metals at the existing legal ratio, under which sixteen parts of silver by weight were declared equivalent to one part of gold in minting coins. Nor would the party wait for the consent of any other nation. It opposed the issuance of interest-bearing bonds in time of peace, condemned the bond transactions of the Cleveland administration and denounced the national bank-note system. The McKinley tariff was declared a prolific breeder of trusts which enriched the few at the expense of the many.

The plank concerning the income tax, which had so recently been declared unconst.i.tutional by the Supreme Court, excited much condemnation among Republicans and conservative Democrats, who denounced it as an attack on the Court. It noted that the Court had uniformly sustained income taxes for nearly a hundred years and declared it to be the duty of Congress

to use all the const.i.tutional power which remains after that decision, or which may come from its reversal by the court as it may hereafter be const.i.tuted, so that the burdens of taxation may be equally and impartially laid, to the end that wealth may bear its due proportion of the expenses of the government.

The reaction of the party on the labor disputes of recent years and especially the Pullman strike was clearly in evidence. Arbitration of such controversies was called for; "interference" by federal authorities in local affairs was condemned; government by injunction was objected to; and the pa.s.sage of such laws was demanded as would protect all the interests of the laboring cla.s.ses.

A minority of the platform committee now presented the opposing point of view. It objected to many of the planks; complained that some were ill-considered, others revolutionary; and offered two amendments, one advocating the gold standard, the other expressing commendation of Cleveland's administration. The contest was then on. Tillman excoriated Cleveland and declared that the East held the West and South in economic bondage; Hill denounced the currency, income tax and Supreme Court planks as furiously as any Republican could have wished.

The currency plank, he thought, was unwise, that on the income tax unnecessary, that on the Court a.s.sailed the supreme tribunal, and the entire program was "revolutionary."

As yet, n.o.body had quite expressed the feelings of the convention.

Tillman was too crude; Hill had no remedy for long-standing ills. At this juncture William J. Bryan stepped upon the platform. He was a young man--only thirty-six years of age--and known but slightly as a representative from Nebraska who possessed many of the arts and abilities of an orator. Bryan began with a modest and tactful declaration that his opposition to the gold wing of the party was based solely on principles and not at all on personalities. The convention had met, he insisted, not to debate but to register a judgment already rendered by the people. Old leaders had been cast aside because they had refused to express the desires of those whom they aspired to lead. Briefly he outlined the reply of the radicals to the objections made by Hill and the gold wing to the proposed platform. The conservatives, Bryan declared, had complained that free silver coinage would disturb business:

We say to you that you have made the definition of a business man too limited in its application. The man who is employed for wages is as much a business man as his employer; the attorney in a country town is as much a business man as the corporation counsel in a great metropolis; the merchant at the cross-roads store is as much a business man as the merchant of New York; the farmer who goes forth in the morning and toils all day--who begins in the spring and toils all summer--and who by the application of brain and muscle to the natural resources of the country creates wealth, is as much a business man as the man who goes upon the board of trade and bets upon the price of grain; the miners who go down a thousand feet into the earth, or climb two thousand feet upon the cliffs, and bring forth from their hiding places the precious metals to be poured into the channels of trade are as much business men as the few financial magnates who, in a back room, corner the money of the world. We come to speak for this broader cla.s.s of business men.

The time was at hand, Bryan insisted, when the currency issue must be squarely met:

We have pet.i.tioned, and our pet.i.tions have been scorned; we have entreated, and our entreaties have been disregarded; we have begged, and they have mocked when our calamity came. We beg no longer; we entreat no more; we pet.i.tion no more. We defy them.