The Crises of the 1890s

1. From Stalemate to Crisis The Crises of the 1890s

2. The Panic of 1893 • The Panic of 1893 led to a severe depression • caused by bankruptcy of few corporations • led to bank failure • led to credit contraction. • Also caused by depressed farm prices of late 1880s • European depression • Railroad expansion beyond market demand- showed how dependent economy was on powerful railroads • Businesses, banks, and railroads failed. • Unemployment soared, led to social unrest • In 1894, Populist Jacob Coxey called for • massive public works program for unemployed • currency inflation • Coxey led protests in Washington, D.C. with followers know as “Coxey’s Army”

3. The Silver Question • The financial panic weakened the monetary system • President Cleveland believed currency instability cause of depression • Many people believed specie (precious metal) must back money to give it value • “Bimetal” standard discontinued in 1873 by Congress • By the late 1870s, silver became less valuable • People were unable to convert silver because of the “Crime of ‘73” • Opposition by silver-miners and farmers who wanted greater money circulation (inflation) to ease debts • At the same time, decreasing government gold reserves led President Cleveland in 1893 to seek a repeal of the Sherman Silver Purchase Act of 1890 • The presidential election of 1896 was incredibly fierce because • supporters of gold standard (Goldbugs) saw it as essential to national stability • supporters of “free silver” (Silverites) saw the gold standard as tyrannous and advantageous to wealthy, silver would decrease debt

4. The Cross of Gold • Republicans in the election of 1896 were confident of victory because of Cleveland’s and the Democrats’ failure to deal with the depression • Republicans nominated William McKinley with a platform opposed to free coinage of silver • Democrats in the West sought to weaken the People’s Party by adopting Populist demands • debated platform of free silver, tariff reduction, income tax, railroad and trust regulation • opposed by eastern Democrats • William Jennings Bryan delivered “Cross of Gold” speech opposed to gold standard at convention. The next day he was voted to be the Democratic nominee • Populists split as to whether or not to fuse with the Democratic Party • Populists felt that some of their unique needs were addressed • Populists concluded that they had no other alternative but to support Bryan

5. The Conservative Party • Business and finance communities donated heavily to Republicans • Bryan’s national stump and camp-meeting style alienated Catholics and ethnic minority voters who feared he embodied Protestants who so firmly opposed them • McKinley carried election because Democratic platform had proved to be too narrow (sectional) to win nationally. • Because of the fusion gamble with Democrats the People’s Party began to dissolve in the wake of defeat

6. McKinley and Recovery • The McKinley administration saw a return to calm • labor unrest and agrarian protest had subsided by 1897 • economic crisis gradually easing • McKinley focused on implementing a high tariff rate • Republicans passed Currency (Gold Standard) Act of 1900 that confirmed nation’s gold standard • Foreign crop failures resulted in economic growth • nation entered period of expansion once again • clear trend between prosperity and gold standard support • Free-silver movement failed • During the late 19th century the money supply expanded much more slowly than increases in production and population • By the late 1890s an increase in gold supply inflated money, satisfied free-silver supporters