Period of

transition.

CHAPTER XXVI

THE CURRENCY AND THE TARIFF, 1880 TO 1900

THE period of the eighties and nineties was in many respects one of transition. The war issues had for the most part been solved, but the memory of them continued to be an important factor in politics. Certain results of the war, such as the permanence of the Union and the increased exercise of national functions, were well established. This very fact broadened the scope of national politics, for the currency problem which for twenty-five years before the war had been a state affair now became exclusively national. The war legislation, moreover, still gave shape to discussion of the tariff, which took the form of defense of the policy then adopted or attack upon it. In the meantime new conditions were evolving, and new issues forcing themselves upon public attention. In general these issues were of two kinds. On the one side government action was demanded upon many subjects; on the other there was an attempt to improve the machinery of the government. This period of transition differed from that between 1815 and 1828 in being marked, not by the disorganization of parties, but by their stability and effectiveness of organization. Party allegiance passed from father to son, and independent voting was generally a negligible factor except in the trans-Mississippi district, where the currency moved the farmer, and the Chinese question the Californian, to desert his party standard. The usual tendency of national parties to compromise by adopting a policy of inaction, left the initiative on many subjects to the states. The legislative history of most movements begins with the states, then becomes national, and then goes

back to those states which were slow in acting. Another noticeable feature of the period from 1875 to 1898 is that only twice, 1889 to 1891 and 1893 to 1895, did a political party control both houses of Congress and the presidency. National legislation was, therefore, largely of a non-partisan character. In this chapter, the course of national party politics will be followed with such notice of changing conditions as seems necessary to explain them. Later, the general unfolding of new factors in the national development will be traced.

With the resumption of specie payments in 1879 ended Free coinage all important discussion of fiat money, but not the agitation of silver. for other kinds of cheap circulating mediums. This now took the form of a demand for the free and unrestricted coinage of silver. In 1873 the coinage of silver dollars had ceased. In 1878 the Greenback element forced a compromise measure, known as the Bland act, through Congress, by which silver was again made legal tender, and the treasury department was instructed to purchase and coin not less than $2,000,000 and not more than $4,000,000 worth of silver bullion per month. In twelve years nearly 370,000,000 silver dollars were coined, which the government credit kept in circulation at a rate considerably in excess of the commercial value of the silver they contained. This, however, was far from answering the demand, and endeavor was persistent to secure the unlimited coinage of all silver offered the government.

This demand was urged by a strong minority in both Silver in parties, which the party managers generally endeavored to politics. quiet by making some compromise. The Democrats in 1868 nominated a strong money candidate and adopted a soft money platform. The Republicans in 1884 declared in favor of bimetallism by international agreement. When such an arrangement was not forthcoming, the advocates of free silver were able to form an independent party of no

The granger movement.

inconsiderable proportions. In 1880 they cast over three hundred thousand votes for a Greenback candidate; in 1892, over one million for the same candidate, James B. Weaver, running on the Populist ticket.

While the expansion of the currency was the chief political object of this element, other issues tended to increase its solidarity. The problem of transportation had, in the earlier period, been one of creating the means of intercourse; with the phenomenal strides in railroad construction during the fifties and sixties, attention came to be centered upon the question of rates. American foodstuffs in the European market came increasingly into competition with those from all parts of the world, and transportation rates became of vital importance. In 1865 it was calculated that the 1,062,611 bushels of wheat raised in Dane county, Wisconsin, were worth $1,188,163 at home, the railroad charge to the lake shore would bring the value to $2,125,222, and the water carriage to New York, to $2,444,005. The farmers' complaints at what they considered exorbitant charges were made effective by the rise of rural organizations. In 1867 the Patrons of Husbandry were organized. The society was secret, admitting both men and women. Its object was the general improvement of farming conditions, and its granges or local branches combined social entertainment with education and coöperative buying. Quickly attaining a large membership, the granges soon began to influence politics. In the early seventies the organized farmer became a factor to reckon with in Illinois, Minnesota, Iowa, Kansas, and Wisconsin. In Wisconsin the Grangers secured control in 1874 and passed laws fixing maximum railroad rates. This legislation was repealed subsequently, but is important because it came before the courts for review. Chief Justice Ryan of the Supreme Court of Wisconsin found it constitutional in a very able decision, and this position was confirmed by the Supreme Court of the United States in the Granger Cases

in 1877. In these decisions there was set forth for the first time clearly the legal doctrine that companies running railroads and performing certain other similar functions were public service corporations, and as such, were under the control of the state in which they operated.

rates.

The experience of the later seventies and eighties in- Railroad creased the feeling that railroads should be regulated, but it came to be realized that not rates alone were in question. The management of many railroads was both inefficient and corrupt. Fortunes were made rather by contracts for the construction of the roads and their supply than by running them. Their profits were drawn away by extravagant payments to terminal companies formed by the railroad officials. The roads were "watered" by issuing stock far in excess of the cost. It was the attempt to pay dividends on issues thus foolishly and corruptly spent or not spent at all which in many instances caused the companies to desire high rates. The rates were on a financial rather than an economic basis, and in many instances they were not charged equally to all the customers of the road. Roads by discriminating in their rates could and frequently did ruin individuals and even towns. Where two or more roads served the same territory, rates were determined not by competition but by pools or joint agreements. Roads or steamship companies refusing to agree were bought up or forced into submission by cutting off their through traffic. The question was one National of great complexity, and it was one which was national regulation in character and required national legislation. In 1866 tation. and again in 1868 committee reports were submitted to Congress which asserted the authority of that body to legislate on the subject. In 1874 a report was made to the House of Representatives: "Upon the theory that, by reason of stock inflation, extravagance, and dishonesty in construction and management, and combinations among existing companies, the present railroad service of the coun

of transpor

Concentration of population and the labor movement.

Labor unions.

try imposes unnecessary burdens upon its commerce." This report advised the building of one or more roads by the government to regulate the situation by competition. Economic causes produced a rapid lowering of rates, but a report of 1886 asserted that this "recognized benefit has been obtained at the cost of the most unwarranted discriminations," and demand arose for regulations of increasing scope.

Almost at the same time that the farming interests were becoming organized, labor was making its first important efforts in the same direction. By the close of the Hayes administration, manufacturing had recovered from the crisis of 1873, and began a new era of marvelous expansion. Steam was rapidly displacing water power, bringing with it concentration at points to which coal could easily be brought, as on the seacoast and at railroad centers. Particularly in New England the village factories failed to recover from the shock of 1873, and the population of many towns sank far below what it had been a hundred years before, while cities grew like magic. The conditions of employment changed. The old individual relation, where employer and employee were united by a lifetime of associations, was superseded by one more purely economic, particularly as the native Americans tended to leave the factories to French Canadian, Irish, and other immigrants. Corporations, often controlling many factories, began generally to take the place of individual owners. Laborers changed easily from one factory to another, and from place to place, while manufacturers settled disputes by dismissing their workmen and hiring others, sometimes even importing them from foreign countries. Both capital and labor felt the necessity of organization. Labor unions had been formed in the flush times before 1837, they had been formed again and more extensively during the war, when by strikes and other methods they had forced up wages into some relation with the increased prices. In 1869 the Noble Order of Knights of