Grover Cleveland's second tenure as the president of the United States began on March 4, 1893, when he was inaugurated as the nation's 24th president, and ended on March 4, 1897. Cleveland, a Democrat from New York, who previously served as 22nd president from 1885 to 1889 and lost re-election to Benjamin Harrison, a Republican from Indiana, in the 1888 presidential election, took office following his victory over incumbent President Harrison in the 1892 presidential election. Cleveland was the first former U.S. president to return to office. He was succeeded by Republican William McKinley.
As his second term began, disaster hit the nation when the Panic of 1893 produced a severe national economic depression. Cleveland presided over the repeal of the Sherman Silver Purchase Act, striking a blow against the Free Silver (silverite) movement, and also lowered tariff rates by allowing the Wilson–Gorman Tariff Act to become law. He also ordered federal soldiers to crush the Pullman Strike. In foreign policy, Cleveland resisted the annexation of Hawaii and an American intervention in Cuba. He also sought to uphold the Monroe Doctrine and forced Great Britain to agree to arbitrate a border dispute with Venezuela. In the midterm elections of 1894, Cleveland's Democratic Party suffered a massive defeat that opened the way for the agrarian and silverite seizure of the Democratic Party.
Cleveland was not a candidate for re-nomination at the 1896 Democratic National Convention, which nominated silverite William Jennings Bryan, who was defeated by Republican William McKinley in the subsequent election. Cleveland left office extremely unpopular, but his reputation was eventually rehabilitated in the 1930s by scholars led by Allan Nevins. More recent historians and biographers have taken a more ambivalent view of Cleveland, but many note Cleveland's role in re-asserting the power of the presidency. In rankings of American presidents by historians and political scientists, Cleveland is generally ranked as an average or above-average president.
Election of 1892
After his loss in the 1888 election, Cleveland returned to New York, where he resumed his legal career.Graff, 98-99 Cleveland established himself as a contender for the 1892 nomination with his February 1891 "Silver Letter," in which he deplored the rising strength of the Free silver movement in the Democratic Party.Welch, 102–103 Cleveland's chief opponent for the nomination was David B. Hill, now a Senator for New York.Nevins, 470–473 Hill united the anti-Cleveland elements of the Democratic party—silverites, protectionists, and Tammany Hall—but was unable to create a coalition large enough to deny Cleveland the nomination, and Cleveland was nominated on the first ballot of the convention.Tugwell, 182 For vice president, the Democrats chose to balance the ticket with Adlai Stevenson I of Illinois, a silverite.Graff, 105; Nevins, 492–493 Although the Cleveland forces preferred Isaac P. Gray of Indiana for vice president, they accepted the convention favorite.William DeGregorio, The Complete Book of U.S. Presidents, Gramercy 1997 As a supporter of greenbacks and Free Silver to inflate the currency and alleviate economic distress in the rural districts, Stevenson balanced the otherwise hard-money, gold-standard ticket headed by Cleveland. The Republicans re-nominated President Harrison, making the 1892 election a rematch of the one four years earlier.
The issue of the tariff worked to the Republicans' advantage in 1888, but the legislative revisions of the past four years had made imported goods so expensive that many voters favored tariff reform and were skeptical of big business.Nevins, 499 Many Westerners, traditionally Republican voters, defected to James Weaver, the candidate of the new Populist Party. Weaver promised Free Silver, generous veterans' pensions, and an eight-hour work day.Graff, 106–107; Nevins, 505–506 At the campaign's end, many Populists and labor supporters endorsed Cleveland after an attempt by the Carnegie Corporation to break the union during the Homestead Strike in Pittsburgh and after a similar conflict between big business and labor at the Tennessee Coal and Iron Co.Tugwell, 184–185 The Tammany Hall Democrats, meanwhile, adhered to the national ticket, allowing a united Democratic Party to carry New York.Graff, 108
Cleveland won 46% of the popular vote and 62.4% of the electoral vote, becoming the first former president to win another term. Harrison won 43% of the popular vote and 32.7% of the electoral vote, while Weaver won 8.5% of the popular vote and the votes of several presidential electors from Western states., Cleveland swept the Solid South, won the swing states of New York, New Jersey, Indiana, and Connecticut, and surprised many observers by also taking Illinois, Wisconsin, and Indiana.Welch, 110–111 In the concurrent congressional elections, Democrats retained control of the House and won control of the Senate, giving the party unified control of Congress and the presidency for the first time since the Civil War.Graff, 109-110 Cleveland's victory made him the second individual to win the popular vote in three presidential elections, alongside Andrew Jackson.Welch, 111
Administration
Cleveland was sworn into office as the 24th president of the United States on March 4, 1893. That same day, Stevenson was sworn in as vice president.
Cabinet Appointments
In assembling his second cabinet, Cleveland avoided re-appointing the cabinet members of his first term. Two long-time Cleveland loyalists, Daniel S. Lamont and Wilson S. Bissell, joined the cabinet as Secretary of War and Postmaster General, respectively. Walter Q. Gresham, a former Republican who had served in President Arthur's cabinet, became Secretary of State. Richard Olney of Massachusetts was appointed as Attorney General, and he succeeded Gresham as Secretary of State after the latter's death. Former Speaker of the House John G. Carlisle of Kentucky became the Secretary of the Treasury.Graff, 113-114
Cancer In 1893, Cleveland underwent oral surgery to remove a tumor. Cleveland decided to have surgery secretly, to avoid further panic that might worsen the financial depression.Nevins, 528–529; Graff, 115–116 The surgery occurred on July 1, to give Cleveland time to make a full recovery in time for the upcoming Congressional session.Nevins, 531–533 The surgeons operated aboard the Oneida, a yacht owned by Cleveland's friend E. C. Benedict, as it sailed off Long Island.Nevins, 529 The surgery was conducted through the president's mouth, to avoid any scars or other signs of surgery.Nevins, 530–531 The size of the tumor and the extent of the operation left Cleveland's mouth disfigured.Nevins, 532–533 During another surgery, Cleveland was fitted with a hard rubber dental prosthesis that corrected his speech and restored his appearance. A cover story about the removal of two bad teeth kept the suspicious press placated.Nevins, 533; Graff, 116 Cleveland's operation would not be revealed to the public until 1917.Welch, 121
Economic panic and the silver issue
Shortly after Cleveland's second term began, the Panic of 1893 struck the stock market, and the Cleveland administration faced an acute economic depression.Graff, 114 The panic was sparked by the collapse of the overleveraged Philadelphia and Reading Railroad, but several underlying issues contributed to the start of a severe economic crisis. European credit played a major role in the U.S. economy during the Gilded Age, and European investors often infused cash into the economy. However, international investor confidence had been damaged by a financial crisis in Argentina, which had nearly caused the collapse of the London-based Barings Bank. Combined with poor economic conditions in Europe, the Argentinian financial crisis led many European investors to liquidate their American investments. Further exacerbating the economy was the poor cotton crop in the U.S. in 1892, as the export of cotton often infused the U.S. economy with European cash and credit. These factors combined to leave the U.S. financial system with insufficient financial resources, and, as the U.S. lacked a central banking system, the federal government had little control over the money supply.
One of the first clear signs of financial crisis came on February 20, 1893, twelve days prior to Cleveland's inauguration, when receivers were appointed for the Philadelphia and Reading Railroad, which had greatly overextended itself.James L. Holton, The Reading Railroad: History of a Coal Age Empire, Vol. I: The Nineteenth Century, pp. 323–325, citing Vincent Corasso, The Morgans. President Harrison and United States Secretary of the Treasury Charles Foster ignored the urging of individuals such as J.P. Morgan to take steps to reassure investors. Instead, Harrison reassured Congress that there was no cause for concern. Thus the crisis was laid at Cleveland's feet. Republicans would ultimately go on to subsequently blame Cleveland for causing the economic downturn that he had, in actuality, inherited from the Republican Harrison.
As panic spread following the collapse of the Philadelphia and Reading Railroad, a May 1893 bank run throughout the nation left the financial system with even less resources.White, pp. 766–772 Cleveland believed that bimetallism encouraged the hoarding of gold and discouraged investment from European financiers.White, p. 771 He argued that adopting the gold standard would alleviate the economic crisis by providing a hard currency. Seeking to repeal the Sherman Silver Purchase Act and end the coinage of silver-based currency, Cleveland called a special session of Congress, to begin in August 1893. The silverites rallied their following at a convention in Chicago, and the House of Representatives debated for fifteen weeks before passing the repeal by a considerable margin.Nevins, 524–528, 537–540. The vote was 239 to 108. In the Senate, the repeal of silver coinage was equally contentious. Cleveland, forced against his better judgment to lobby the Congress for repeal, cajoled several Senate Democrats to support repeal.Tugwell, 192–195 Many Senate Democrats favored a middle course between the silverites and Cleveland, but Cleveland squashed their attempts to produce a compromise bill.Welch, 117–119 A combination of Democrats and eastern Republicans ultimately supported the repeal of the Sherman Silver Purchase Act, and the repeal bill passed the Senate by a 48–37 majority. Depletion of the Treasury's gold reserves continued, at a lesser rate, but subsequent bond issues replenished supplies of gold.Welch, 126–127 At the time the repeal seemed a minor setback to silverites, but it marked the beginning of the end of silver as a basis for American currency.
Contrary to the administration's claims during the debate over the repeal bill, the repeal failed to restore investor confidence.Welch, 124 Hundreds of banks and other businesses failed, and 25 percent of the nation's railroads were in receivership by 1895.White, pp. 772–773 Unemployment rates rose above 20 percent in much of the country, while those who were able to remain employed experienced significant wage cuts.White, pp. 802–803 The economic panic also caused a drastic reduction in government revenue. In 1894, with the government in danger of being unable to meet its expenditures, Cleveland convinced a group led by financier J. P. Morgan to purchase sixty million dollars in U.S. bonds. The deal resulted in an infusion of gold into the economy, allowing for the continuation of the gold standard, but Cleveland was widely criticized for relying on Wall Street bankers to keep the government running.Graff, 114-115 Poor economic conditions persisted throughout Cleveland's second term, and unemployment levels rose in late 1895 and 1896.
Labor unrest Coxey's Army