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Cleveland apparently raised more money than Harrison in 1892.
With the Democrats deflecting the Populist threat in the South, the party had no hope. They captured only 8.5 percent of the national vote.
The exhibit of the world’s “childlike races” mimicked one of the most popular parts of the Paris Fair. The exhibits aspired to be ethnological, embodying social evolution and demonstrating how far the United States had progressed since Columbus discovered the New World.
Their core difference was that Buffalo Bill marked American homemaking in the West as a violent conquest, while Turner claimed it had been a largely peaceful movement.76
The railroads could not live without substantial inflows of capital. Adams did not realize how bad it was until the Baring Brothers refused him an essential loan, and he found that the bank—and with it the Union Pacific—was on the verge of collapse.
The Bank of England stepped in to rescue Baring Brothers and stem the panic in London, but no one stepped in to rescue Charles Francis Adams.
everyone knew that the nineteenth century’s great white shark of finance, Jay Gould, would strike, but no one knew where.
Gould took control of the Union Pacific.
The brief panic of 1890 was only a harbinger of things to come.
The Civil War mechanism of the national banks issuing notes after depositing federal government bonds with the comptroller of the currency had broken down. Government credit was so strong that the market value of U.S. bonds exceeded their face value, cutting the profit of using them to issue bank notes and reducing the national banknotes in circulation by 55 percent between 1882 and 1891.
The fundamental problem remained: since the money supply depended on the gold supply, the gold standard provided insufficient currency and thus contributed to deflation. American gold reserves in 1893 looked like sand draining from the top of an hourglass.
When, as in 1892, a poor cotton harvest diminished reserves, there was a danger the whole system would freeze up.
In 1892–93 the combination of Europeans liquidating investments and a poor cotton harvest caused gold reserves to fall dramatically, credit to become more expensive, and investment to decline.
Believing that the Sherman Silver Purchase Act was the source of the panic, both outgoing President Harrison and incoming President Cleveland demanded its repeal.
The first attempt at repeal in March—introduced by Republican Sen. John Sherman, the act’s original sponsor—failed.
On May 5, full-scale panic hit the New York Stock Exchange, and all over the country banks faced runs as depositors demanded cash. Starved for capital, the national banks between May and October reduced their outstanding loans by nearly 15 percent,
The special session did not restore confidence. The Erie Railroad failed, and stocks plunged again. Western and Southern banks continued to collapse. Credit dried up, and in California farmers could not borrow either to harvest or to ship their crops. Only in August did the second wave of the Panic subside.
Congress finally repealed the Sherman Silver Purchase Act at the end of October.17 Repeal was supposed to restore confidence and, with it, the economy; instead, more failures followed.
The iron industry suffered the worst year in its history; textile mills closed, and railroads steamed into the abyss, unable to meet their interest payments or repay their loans. In all, 119 railroads went into receivership in 1893, including Henry Villard’s Northern Pacific; the Atchison, Topeka and Santa Fe; and the Union Pacific.
Gold continued to drain from the country.
With little new gold flowing into the Treasury, the government tried to prevent the collapse of the gold standard by issuing bonds, which purchasers paid for in gold.
Cleveland’s monomaniacal focus on gold had made silver a potent symbolic issue.
By 1893 the company had more than fourteen thousand employees, and three out of every four miles of American railroads ran cars leased from the Pullman system,
No one had believed in the sacred republican trinity of home, citizen, and white manhood more ardently than Debs.38 Debs never abandoned his ambition, his producerism, or his republicanism, but as the country changed, his politics changed.
Bowers regarded religion as the fault line of American society; Debs increasingly thought it was class. He kept his old emphasis on workers as both citizens and producers, but he now stressed solidarity, and mutual dependence rather than independence, while denouncing attempts to turn working people against each other. He saw American rights as under attack from increasingly powerful corporations, and workers had a duty to defend those rights.
Hill refused to recognize it and fired ARU members. The union struck, with Debs telling the workers that if they acted as men, “they would not want for the support of courageous manly men.” He appealed to the citizens of towns along the Great Northern route for support against “this unholy massacre of our rights.” In a West full of antimonopoly sentiment, he got it. When attempts to get the government to intervene failed, Hill agreed to arbitrate. Debs bested him. The arbiters, led by William Pillsbury of Pillsbury Flour, gave the ARU 97 percent of its demands.
The ARU became the workers’ new hope in the nation’s largest industry. ARU organizers followed the tracks west in 1894, creating new locals as they went. The members were wildly enthusiastic, militant, but barely organized, a near-precise replica of the Knights in 1886. The ARU organizers had turned the railroad tracks into a fuse; Pullman lit it.
As orders fell, Pullman cut wages, cut hours, and cut workers. While reducing pay, he did not reduce rents or the prices he charged for gas and water. And the corporation continued to pay dividends.
The ARU’s charter was so broad that the small spur the railroads ran into Pullman allowed the organization of ARU locals in the factory. On May 11, after an initial meeting where Pullman laid off members of the ARU negotiating committee, 90 percent of the workers walked out. He laid off the remainder.
The ARU voted to back the Pullman strike by refusing to handle any Pullman cars. The powerful General Managers’ Association, which represented the twenty-four railroads centering or terminating in Chicago, countered by announcing that any worker who enforced the boycott would be fired. On June 26, the workers began detaching the cars; the railroads fired workers, and other workers walked out, demanding their reinstatement.
what had been an isolated strike became a national strike, with its primary focus west of Chicago. By June 29, 125,000 workers were on strike and twenty railroads were tied up. Two-thirds of the nation—from Ohio to California—was affected.
But the strike would not be decided on the ground; it would be decided in Washington by the Cleveland administration, particularly by Attorney General Richard Olney.
He became general counsel of the Chicago, Burlington, and Quincy, and Cleveland had made him his attorney general in 1893. Even after taking office, Olney remained on the Burlington’s payroll and seems also to have been paid by the Atchison, Topeka and Santa
Olney acted in full cooperation and consultation with the General Managers’ Association in Chicago.
Olney used an earlier legal opinion that any train of any kind carrying a mail car was a mail train; interfering with it was thus a violation of U.S. law. The decision forced often-reluctant federal marshals to act when strikers blocked any train with both a Pullman and a mail car. The railroads refused to run any mail trains without Pullmans.
The federal government used the mail to break the boycott, but the General Managers’ Association wanted the strike, which continued, crushed.
Using the Sherman Antitrust Act and the Interstate Commerce Act, measures aimed at controlling the railroads, the government got injunctions against the ARU and its leaders forbidding them from advocating the boycott. They could neither write nor talk about it.
There had been little violence before Cleveland intervened, but the president’s orders and the arrival of federal deputy marshals and troops precipitated the violence they were supposed to prevent.
The U.S. marshal in Chicago reported that police and the five thousand deputy marshals deployed in Chicago were insufficient. On July 4, federal troops arrived.
Altgeld argued that the president had no constitutional authority under Article IV of the Constitution to send troops; neither the governor nor the legislature had requested them. He denounced “military government.” Four other governors also protested.
Cleveland justified his action on the grounds of the necessity to protect federal property, to prevent obstruction of the mails, to prevent interference with interstate commerce, and to enforce the decrees of the federal courts.
By and large, neither the Pullman strikers nor railroad workers took part in the riot. When the authorities killed six members of the mob, the suddenly sanguinary Judge William Howard Taft thought it “hardly enough to make an impression.” He was wrong; the violence died out nearly as quickly as it arose, and by July 7, the army was in control of the streets.
Debs hoped for a general strike, but Gompers and the AFL declined to do more than offer sympathy. In the West, ARU strongholds in California and Montana, which operated nearly independently of Debs, fell as violence alienated the public and militia sympathetic to the strikes gave way to federal troops.
The government targeted Debs. On July 2 the federal court had issued an injunction, which enjoined Debs and other officials from compelling or persuading railroad employees to refuse or fail to perform their duties.
On July 10, a federal grand jury indicted Debs for conspiracy to obstruct the mails, and he was immediately arrested.
Debs got out on bail, but on July 17 he was accused of contempt of court and rearrested.
In the contempt trial, there was no jury. Clarence Darrow was one of the defense attorneys, and the judge admitted that the Sherman Antitrust Act under which the contempt citation was issued was “directed wholly against trusts and not at any organization of labor in any form,” but he argued it was the court’s duty to interpret the law and decide what combinations acted in restraint of trade. He sentenced Debs to six months.
The Supreme Court ruled resoundingly in the government’s favor, creating a new doctrine without the slightest legislative cover that the government had the power to halt labor disputes if they interfered with interstate commerce.
In 1898, the Illinois Supreme Court ruled the company’s charter gave it no right to own the town of Pullman and that company towns were “opposed to good public policy and incompatible with the theory and spirit of our institutions.”
Consolidation did not necessarily lead to more efficient production; nor did it occur in all industries. Mergers resulted from attempts to eliminate competition. To maintain the advantages mergers created, these firms had to create and maintain high barriers to entry for new competitors.
