American President Grover Cleveland (1837 – 1908) is rather neglected in the sequence of US leaders. For schoolchildren, he appears as the man who was both the 22nd and the 24th president – he lost his reelection bid the first time to Benjamin Harrison but then defeated Harrison in his reelection bid four years later. Cleveland deserves to be remembered for much more than his dramatic return to office. His real legacy was a semi-bipartisan approach that enshrined limited government, balanced federal spending, and all forms of economic liberty, including absolute free-trade.
When Cleveland took office for his first term (1885 – 1889), the United States was in the middle of a recession which stemmed from gross mishandling of the nation’s finances and social policies following the end of the Civil War in 1865, although the official beginning of the recession occurred in the early 1880s. It is only a slight exaggeration to say that every industry and every product in the country at the time was federally subsidized.
Cotton farming in the South collapsed – this tends to happen when a region was ravaged by war – which caused the textile industry in the North, which had been fighting a losing battle against British competition since before the War, to wither away into near oblivion. As much of the US economy pre-War was related to textiles, the loss of these two symbiotic industries represented a seismic change for society. In the aftermath of the War and during the period of Reconstruction (1865 – 1877), the US government granted subsidies to almost all agricultural products, in the name of providing livelihoods to Southern farmers. In keeping with other historical examples, this centralized attempt failed miserably: Southern farmers remained poor, while those in the North and ranchers in the Midwest reaped the benefits of free federal money. In addition, there were high tariffs, some of which predated Reconstruction, but all of which were focused on protecting American industry from foreign (particularly British) competition. In modern equivalence, the US was mercantilist China to Britain’s laissez-faire capitalist approach.
There was even a parallel to the modern welfare state in the form of war pensions. Veterans pensions became enshrined in the American ethos from the very beginning, with Washington’s Continental Army being the first to receive them. Pensions for Civil War soldiers were controversial, though, because of concerns over whether the victorious side would honor the commitments of the losing side and a general sense that the War was shameful blot on the nation’s history. In 1865, however, both sides found themselves, post-peace, with large swathes of people without savings, without marketable skills, and often disabled as a result of combat injuries. As part of a national reconciliation effort, the reunified federal government promised to honor all pensions for both sides.
With very vague definitions and inadequate verification procedures, this particular iteration of the veterans’ pension system quickly corrupted and became a domain for frauds. As early 20th century historian Donald L. McMurry explained in a 1922 article on the “Pensions Question”, in 1890, the year after Cleveland left office, there were 427,981 pensions claimed by members of an organization for veterans, the Grand army, alone; but only one-third of those claims came from genuine Civil War veterans. While the numbers are an estimate due to poor record keeping from that era, it is unlikely there were more than 1.5 million Civil War veterans eligible for pensions when Cleveland first took office. In other words, a single organization, out of many in the nation, filed for claims that would have amounted to almost a third of the veteran population. The numbers for pensions claimed against extant, verified veterans had not balanced since the 1880s.
When he entered office in 1885, Cleveland had four defined goals: 1) remove all tariffs, 2) end federal subsidies, 3) abolish the seminal welfare state through pension reform, and 4) prevent inflation through monetary policy reform. Recognizing the numbers problem with pensions, Cleveland responded to the wide-scale fraud by trying to throttle the system. Although his efforts were ultimately unsuccessful, given that the number of fraudulent claims had increased from the time he took office to when he left, they were an important statement in terms of recognizing the vulnerability centralized systems have to being exploited and abused. Unfortunately, his opponents successfully recast his move toward pension reform into a narrative of “war on veterans,” and this formed a major part of his loss of a consecutive second term.
In his tumultuous first term, Cleveland didn’t succeed in removing all subsidies, though he did prevent an expansion of subsidy packages. It was in the context of an 1887 debate on appropriating money and sending it to farmers in a specific region of Texas that was suffering from drought that Cleveland made his famous statement (Veto of the Texas Seed Bill):
I can find no warrant for such an appropriation in the Constitution; and I do not believe that the power and duty of the General Government ought to be extended to the relief of individual suffering which is in no manner properly related to the public service or benefit. A prevalent tendency to disregard the limited mission of this power and duty should, I think, be steadfastly resisted, to the end that the lesson should be constantly enforced that, though the people support the Government, the Government should not support the people. The friendliness and charity of our countrymen can always be relied upon to relieve their fellow-citizens in misfortune. This has been repeatedly and quite lately demonstrated. Federal aid in such cases encourages the expectation of paternal care on the part of the government and weakens the sturdiness of our national character, while it prevents the indulgence among our people of that kindly sentiment and conduct which strengthens the bonds of a common brotherhood.
Most of the time, this quote is used to show what an awful, inhuman monster Cleveland was. What his detractors in the 19th, 20th, and 21st centuries didn’t, and won’t, reveal is that he was proven right: private charity drives raised more than enough to rescue the farmers involved. The optics, though, remained a problem, and in the 1888 election Cleveland’s veto became another sign of his indifference toward the common American people.
What is remarkable about Cleveland was his integrity. Even in the face of rising unpopularity and misunderstanding of his purpose, he never swerved from the path of bettering the nation. He understood the good the country to be a return to a literal interpretation of the American Constitution, and he was willing to sacrifice poll numbers and reelection in pursuit of this goal. He also differentiated between the fundamental and the popular will of the people since the former, a desire to return to the Constitution, was often at odds with the latter.