Harrison's administration opened auspiciously in many ways. The appointment of Blaine as Secretary of State was a diplomatic move, for undoubtedly Blaine was far more popular with the rank and file of his party than was Harrison. The civil service reformers were placated by the appointment of Theodore Roosevelt as president of the Civil Service Commission, for he was a vigorous champion of reform, who brought the whole question forcibly before the country by his speeches and articles, although it must be said that no very startling gains were made against the spoils system under his administration of the civil service law. It required time to educate the country to the point of supporting the administrative heads in resisting the clamor of the politicians for office.
Harrison's leadership in legislation was not noteworthy. The Republicans were in power in the lower house in 1889 for the first time since 1881, but their majority was so small that it required all of the parliamentary ingenuity which Speaker Reed could command to keep the legislative machine in operation. Nevertheless, several important measures were enacted into law. The McKinley tariff act based upon the doctrine of high protection was passed in 1890. In response to the popular outcry against the trusts, the Sherman anti-trust law was enacted the same year; and the silver party was thrown a sop in the form of the Sherman silver purchase act. The veterans of the Civil War received new recognition in the law of 1890 granting pensions for all disabled soldiers whether their disabilities were incurred in service or not. Negro voters were taken into account by an attempt to get a new "force bill" through Congress, which would insure a "free ballot and a fair count everywhere."
There had been nothing decisive, however, about the Republican victory in 1888, for a few thousand votes in New York changed the day as four years before. Harrison had not proved to be a very popular candidate, and there was nothing particularly brilliant or striking about his administration to enhance his reputation. He was able to secure a renomination in 1892, largely because he controlled so many officeholding delegates to the Republican convention, and there was no other weighty candidate in the field, Blaine being unwilling to make an open fight at the primaries.
In the second contest with Cleveland, Harrison was badly worsted, receiving only 145 electoral votes against 277 cast for the Democratic candidate and 22 for the Populist, Weaver. The campaign was marked by no special incidents, for both Cleveland and Harrison had been found safe and conservative and there was no very sharp division over issues. The tariff, it is true, was vigorously discussed, but Cleveland made it clear that no general assault would be made on any protected interests. The million votes cast for the Populist candidate, however, was a solemn warning that the old game of party see-saw over personalities could not go on indefinitely. The issues springing from the great economic revolution were emerging, not clearly and sharply, but rather in a vague unrest and discontent with the old parties and their methods.
President Cleveland went into power for the second time on what appeared to be a wave of business prosperity, but those who looked beneath the surface knew that serious financial and industrial difficulties were pending. Federal revenues were declining and a deficit was staring the government in the face at a time when there was, for several reasons, a stringency in the gold market. The Treasury gold reserve was already rapidly diminishing, and Harrison was on the point of selling bonds when the inauguration of Cleveland saved the day for him. Congress was deadlocked on the money question, though called in a special session to grant relief; and Cleveland at length resorted to the sale of bonds under an act of 1875 to procure gold for the Treasury. The first sale was made in January, 1894, and the financiers, to pay for the bonds, drew nearly half of the amount of gold out of the Treasury itself.
The "endless chain" system of selling bonds to get gold for the Treasury, only to have it drawn out immediately, aroused a great hue and cry against the financial interests. In November, 1894, a second sale was made with similar results, and in February, 1895, Cleveland in sheer desperation called in Mr. J. P. Morgan and arranged for the purchase of gold at a fixed price by the issue of bonds, with an understanding that the bankers would do their best to protect the Treasury. To the silver advocates and the Populists this was the climax of "Cleveland's iniquitous career of subserviency to Wall Street," for it seemed to show that the government was powerless before the demands of the financiers. This criticism forced the administration to throw open the issue of January 6, 1896, to the public, and the result was decidedly advantageous to the government—apparently an indictment of Cleveland's policy. Congress in the meantime did nothing to relieve the administration.
While the government was wrestling with the financial problem, the country was in the midst of an industrial crisis. The number of bankruptcies rose with startling rapidity, hundreds of factories were closed, and idle men thronged the streets hunting for work. According to a high authority, Professor D. R. Dewey, "never before had the evil of unemployment been so widespread in the United States." It was so pressing that Jacob Coxey, a business man from Ohio, planned a march of idle men on Washington in 1894 to demand relief at the hands of the government. His "army," as it was called, ended in a fiasco, but it directed the attention of the country to a grave condition of affairs.
Reductions in wages produced severe strikes, one of which—the Pullman strike of Chicago—led to the paralysis of the railways entering Chicago, because the Pullman employees were supported by the American Railway Union. The disorders connected with the strike—which are now known to have been partially fomented by the companies themselves for the purpose of inducing Federal interference—led President Cleveland to dispatch troops to Chicago, against the ardent protest of Governor Altgeld, who declared that the state of Illinois was able to manage her own affairs without intermeddling from Washington. The president of the union, Mr. E. V. Debs, was thrown into prison for violating a "blanket injunction"[26] issued by the local Federal court, and thus the strike was broken, leaving behind it a legacy of bitterness which has not yet disappeared.
The most important piece of legislation during Cleveland's second administration was the Wilson tariff bill—a measure which was so objectionable to the President that he could not sign it, and it therefore became law without his approval. The only popular feature in it was the income tax provision, which was annulled the following year by the Supreme Court. Having broken with his party on the money question, and having failed to secure a revision of the tariff to suit his ideas, Cleveland retired in 1897, and one of his party members declared that he was "the most cordially hated Democrat in the country."