Grover Cleveland.
From a photograph by Alexander Black.
At the opening of the Special Session, in August, 1893, the President demanded the repeal of that clause in the Sherman law of 1890 requiring the Government to make heavy monthly purchases of silver. The suspension in India of the free coinage of silver the preceding June had precipitated a disastrous monetary panic in the United States. Gold was hoarded and exported, vast sums being drained from the Treasury. Credits were refused, values shrivelled, business was palsied, labor idle. It was this situation which led the President to convoke Congress in special session.
Though achieving the repeal on November 1st, after Congressional wrangles especially long and bitter in the Senate, President Cleveland, pursuing the policy of paying gold for all greenbacks presented at the Treasury, was unable, even by the sale of $50,000,000 in bonds, to keep the Treasury gold reserve up to the $100,000,000 figure. Both old greenbacks and Sherman law greenbacks, being redeemed in gold, reissued and again redeemed, were used by exchangers like an endless chain pump to pump the Treasury dry. In February, 1895, the reserve stood at the low figure of $41,340,181. None knew when the country might be forced to a silver basis. In consequence, business revived but slightly, if at all, after the repeal.
In its first regular session the same Congress enacted the Wilson Tariff. As it passed the House the bill provided for free sugar, wool, coal, lumber, and iron ore, besides reducing duties on many other articles. It also taxed incomes exceeding $4,000 per annum. The Senate, except in the case of wool and lumber, abandoned the proposal of free raw materials, stiffened the rates named by the House, and preferred specific to ad valorem duties. Many believed, without proof, that improper influences had helped the Senate to shape its sugar schedule favorably to the great refiners. The President pronounced sugar a legitimate subject for taxation in spite of the “fear, quite likely exaggerated,” that carrying out this principle might “indirectly and inordinately encourage a combination of sugar refining interests.” In a letter read in the House, however, he upbraided as guilty of “party perfidy and dishonor” Democratic Senators who would abandon the principle of free raw materials. But nothing shook the senatorial will. What was in substance the Senate bill passed Congress, and the President permitted it to become a law without his signature.
William L. Wilson.
The Wilson law pleased no one. It violated the Democrats’ plighted word apparently at the dictation of parties selfishly interested. The Supreme Court declared its income tax unconstitutional. The revenue from it was inadequate, and had to be eked out with new bond issues. These were alleged to be necessary to meet the greenback debt, but this need not have embarrassed the Government had it followed the French policy of occasionally paying in silver a small percentage of the demand notes presented. Borrowing gold abroad, moreover, tended to inflate prices here, stimulating imports, discouraging exports, increasing the exportation of gold to settle the unfavorable balance of trade, and so on in ceaseless round.
The Democratic management of foreign affairs was severely criticised. Our extradition treaty with Russia, a country supposed to pay little or no regard to personal rights, and our delay in demanding reparation from Spain for firing upon the Allianca, a United States passenger steamer, were quite generally condemned. There were those who thought that Cuban insurgents against the sovereignty of Spain might have received some manifestation of sympathy from our Government, and that we should not have permitted Great Britain to endanger the Monroe Doctrine by occupying Corinto in Nicaragua to enforce the payment of an indemnity.
The President offended many in dealing as he did with the Hawaiian Islands’ problem. Most did not consider it the duty of this country to champion the cause of the native dynasty there, a course likely to subserve no enlightened interest. Whites, chiefly Americans, had come to own most of the land in the islands, while imported Asiatics and Portuguese competed sharply with the natives as laborers. Political power, even, was largely exercised by the whites, through whose influence the monarchy had been reduced to a constitutional form.
