GRANT REFLECTED.—In 1872 no great importance was attached to either of these parties (the Labor and the Prohibition). The contest lay between General Grant, the Republican candidate for President, and Horace Greeley, [3] the Liberal Republican nominee (p. 390), who was supported also by most of the Democrats. Grant was elected by a large majority.
THE PANIC OF 1873.—Scarcely had Grant been reinaugurated when a serious panic swept over the country. The period since the war had been one of great prosperity, wild speculation, and extraordinary industrial development. Since 1869 some 24,000 miles of railroad had been built. But in the midst of all this prosperity, the city of Chicago was almost destroyed by fire (1871), [4] and the next year a large part of the city of Boston was burned. This led to a demand for money to rebuild them. Many speculative enterprises failed. The railroads that were being built ahead of population, in order to open up new lands, could not sell their bonds, and when a banker who was backing one of the railroads failed, the panic started. Thousands of business men failed, and the wages of workingmen were cut down.
THE SPECIE PAYMENT ACT.—The cry was then raised for more money, and (in 1874) Congress attempted to increase, or "inflate," the amount of greenbacks in circulation from $356,000,000 to $400,000,000. Grant vetoed the bill. What shall be done with the currency? then became the question of the hour. Paper money was still circulating at less than its face value as measured in coin. To make it worth face value, Congress (1875) decided to resume specie payment; that is, the fractional currency was to be called in and redeemed in 10, 25, and 50 cent silver pieces; and after January 1, 1879, all greenbacks were to be redeemed in specie.
POLITICAL PARTIES IN 1876. [5]—This policy of resumption of specie payment did not please everybody. A Greenback party was formed, which called for the repeal of the Specie Payment Act and for the issue of more greenbacks. That the presidential election would be close was certain, and this certainty did much to lead the Democratic and Republican parties to take up some of the demands of the Prohibition, Liberal Republican, and Labor parties. Thus both the Democratic and Republican parties called for no more land grants to corporations, and for the exclusion of the Chinese.
[Illustration: MEMORIAL HALL, PHILADELPHIA.]
THE ELECTION OF 1876.—The Republican candidate for President was Rutherford B. Hayes; [6] the Democratic candidate was Samuel J. Tilden. The admission of Colorado in August, 1876, made thirty-eight states, casting 369 electoral votes. A candidate to be elected therefore needed at least 185 electoral votes. So close was the contest that the election of Hayes was claimed by exactly 185 votes. This number included the votes of South Carolina, Florida, Louisiana, and Oregon, in each of which a dispute was raging as to whether Republican or Democratic electors were chosen. Both sets claimed to have been elected, and both met and voted.
ELECTORAL COMMISSION.—The electoral votes of the states are counted in the presence of the House and Senate. The question then became, Which of these duplicate sets shall Congress count? To determine the question an electoral commission of fifteen members was created. [7] It decided that the votes of the Republican electors In the four states should be counted, and Hayes was therefore declared elected. [8]
END OF CARPETBAG GOVERNMENTS.—The inauguration of Hayes was followed by the recall of United States troops from the South, and the downfall of carpetbag governments in South Carolina and Louisiana. During the first half of Hayes's term the. Democrats had control of the House of Representatives, and during the second half, of the Senate as well. As a result, proposed partisan measures either failed to pass Congress, or were vetoed by the President.
THE YEAR 1877 was one of great business depression. A strike on the Baltimore and Ohio Railroad in the summer of 1877 spread to other railroads and became almost an industrial insurrection. Traffic was stopped, millions of dollars' worth of freight cars, machine shops, and other property was destroyed, and in the battles fought around Pittsburg many lives were lost. [9] Failures were numerous; in 1878 more business men failed than in the panic year 1873.
SILVER COINAGE.—For much of this business depression the financial policy of the government was blamed, and when Congress assembled in 1877, this policy was at once attacked. An attempt to repeal the act for resuming specie payment (p. 408) was made, but failed. [10] Another measure, however, concerning silver coinage, was more successful.