The Populist movement arose primarily in response to the 1890 McKinley Tariff, a very high tariff that particularly hurt western and southern farmers who sold their harvests on unprotected markets but were forced to buy expensive manufactured goods. To protest the tariff, these farmers helped vote Republicans out of the House of Representatives in the 1890 congressional elections.
By the time the elections of 1892 rolled around, the Farmers’ Alliance—a quasi-political party that formed in the late 1880s—merged with other liberal Democrats to form the Populist Party. Populists nominated former Greenback Party member James B. Weaver for president and campaigned on a platform of unlimited, cheap silver money pegged at a rate of sixteen ounces of silver to one ounce of gold. Populists also campaigned for government ownership of all railroad and telephone companies, a graduated income tax, direct election of U.S. senators, one-term limits for presidents, immigration restrictions, shorter workdays, and a referendum.
For the presidential election of 1892, the Republican and Democratic parties renominated candidates Benjamin Harrison and Grover Cleveland, respectively. In addition to the Populist candidate James Weaver, the fledgling Prohibition Party nominated John Bidwell. The Populists did surprisingly well, managing to receive over a million popular votes and twenty-two electoral votes. The unpopular McKinley Tariff ruined Harrison’s chance for reelection, so Cleveland was reelected, improbably becoming the first and only president to serve two inconsecutive terms.
Cleveland’s second term was much more dynamic than his relatively uneventful first term, as the Depression of 1893 hit just months after he took the oath of office. This depression, the worst the country had seen since the Depression of 1873, could not have come at a more desperate time for the federal government. On top of the fact that the U.S. Treasury was already nearly empty, wily investors traded silver for gold in a convoluted scheme that sent the gold reserve sinking below the $100 million mark. Had this trend continued, there would not have been enough gold to back the paper currency in circulation. The United States would have then had to go off the gold standard, which would have crashed the economy completely and ruined the country’s financial credibility abroad.
To prevent any more gold from being used up, Cleveland repealed the 1890 Sherman Silver Purchase Act, much to the chagrin of Populist-leaning Democrats. But the act’s repeal had little positive effect, and by the following year there was only $41 million left in the Treasury. The federal government thus was forced to look elsewhere for help. In a transaction that perhaps perfectly encapsulates the great power and wealth of big business in the Gilded Age, President Cleveland borrowed more than $60 million from Wall Street financier J. P. Morgan to put the U.S. economy back on solid ground.
The Depression of 1893 and Cleveland’s repeal of the Sherman Silver Purchase Act empowered the Populist movement, as disillusioned Democrats flocked to the Populist Party in the hopes of winning free silver and more power for the people. The depressed economic conditions also encouraged the creation of reform movements. In 1894, wealthy Ohio businessman Jacob S. Coxey set out with 500 men for Washington, D.C., to petition the federal government for cheap money and debt-relief programs. When “Coxey’s Army” reached the Capitol building, however, the men were arrested for trespassing on the lawn.
By 1896, Cleveland had virtually no chance of being elected for a third term. His presidency had been marred by a multitude of crises: he had failed to squelch the Depression of 1893, barely managed to keep the U.S. Treasury at a stable level, angered middle-class constituents by ending the Pullman Strike with federal forces, and not kept his promise to reduce the tariff significantly. As a result, Democrats instead nominated William Jennings Bryan, who at the nominating convention delivered his now-famous “Cross of Gold” speech in condemnation of the gold standard. In the speech, Bryan passionately proclaimed, “We will answer [the Republicans’] demands for a gold standard by saying to them: ‘You shall not press down upon the brow of labor this crown of thorns; you shall not crucify mankind upon a cross of gold!’” Because the Democrats ran on a Populist-inspired platform, campaigning for free silver, the two parties joined in supporting Bryan.
The Republican Party nominated Senator William McKinley of Ohio, sponsor of the controversial McKinley Tariff, on a pro-business platform. Wealthy Ohio businessman Mark Hanna financed most of the campaign and convinced his colleagues in the East to support McKinley. Hanna’s expert politicking won McKinley the presidency despite Bryan’s whirlwind speaking tour through the South and Midwest.
Ironically, Bryan’s “Cross of Gold” speech, though seen as one of the finest rally cries in U.S. history, ended up creating many opponents of the free silver cause. Conservatives, fearing cheap money and inflation, flocked to the McKinley camp. The election of 1896 thus became less a race between Bryan and McKinley than a contest between those for Bryan and those against him. Wealthy businessmen in the East invested about $15 million into McKinley’s campaign, making it the largest campaign fund for a presidential candidate in history. Some Democrats quite reasonably claimed that McKinley had “bought” the White House.
McKinley ultimately killed the Populists’ dream of free silver in 1900 when he signed the Gold Standard Act, stabilizing the value of the dollar to one ounce of gold. In 1897, McKinley also signed the Dingley Tariff to set overall tariff rates at approximately 45 percent.
In retrospect, historians believe that the election of 1896 was one of the most important elections of the nineteenth century and certainly the most significant election since the Civil War. McKinley’s win represented a victory for urban middle-class Americans over agrarian interests in the West and South. Populism never really spread into the cities, and Bryan’s appeal for free silver and inflation alienated even the poorest Americans in the cities, who depended on a stable dollar to survive.
The Bryan campaign of 1896 essentially marked the end of the Populist movement, for the Populist Party effectively became a part of the Democratic Party by throwing its support behind Bryan. In addition, in light of Bryan’s defeat, the election of 1896 marked the last time in which a major candidate tried to win by appealing to agricultural interests. McKinley’s victory ushered in a new age in American politics in which conservatives dominated: Republicans would control the White House for the majority of the next thirty-six years.