Grover Cleveland’s reforms, both real and abortive, during his first term (1885 – 1889) cost him his mandate in the 1889 election. Despite the efficacy with which he shrank the federal government, his resolute disregard toward special interests, and his focus on constitutional limits and fiscal responsibility, he became very unpopular with the majority of the electorate. Unsurprisingly, angry special interest groups rallied behind Cleveland’s opponent, but the loss can also be attributed to a popular perception that the president was attacking various American sacred cows, such as veterans and farmers (Cleveland refused to fund agricultural subsidies and he raised awareness of veterans’ pension fraud.).
The 23rd President, Benjamin Harrison (1833 – 1901), was the grandson of William Henry Harrison, the 9th President, and bested his grandfather by surviving to the end of his single term. During his four years, he managed to wreak such havoc that in 1893, Cleveland triumphantly returned to office as the 24th President. Harrison’s tenure was a chaotic mixture of executive overreach, legislative overreach, expansion of the administrative state, and economic and foreign policy mishaps and blunderings that rendered the US paralyzed domestically and discredited internationally.
Two of Harrison’s misbegotten ideas contributed in particular to Cleveland’s return: the Tariff Act of 1890 (dubbed the McKinley tariff after the its congressional sponsor who eventually became President William McKinley) and the Sherman Silver Purchase Act, also of 1890. Cleveland refused to institute tariffs throughout his first presidency, explaining in his State of the Union address (titled “A Condition, not a Theory”) in 1887,
Our scheme of taxation, by means of which this needless surplus is taken from the people and put into the public treasury, consists of a tariff or duty levied upon importations from abroad, and internal revenue taxes levied upon the consumption of tobacco and spirituous and malt liquors. It must be conceded that none of the things subjected to internal revenue taxation are, strictly speaking, necessaries. There appears to be no just complaint of this taxation by the consumers of these articles, and there seems to be nothing so well able to bear the burden without hardship to any portion of the people.
But our present tariff laws; the vicious, inequitable, and illogical source of unnecessary taxation, ought to be at once revised and amended. These laws, as their primary and plain effect, raise the price to consumers of all articles imported and subject to duty by precisely the sum paid for such duties. Thus the amount of the duty measures the tax paid by those who purchase for use these imported articles. Many of these things, however, are raised or manufactured in our own country, and the duties now levied upon foreign goods and products are called protection to these home manufactures, because they render it possible for those of our people who are manufacturers to make these taxed articles and sell them for a price equal to that demanded for the imported goods that have paid customs duty. So it happens that while comparatively a few use the imported articles, millions of our people, who never use and never saw any of the foreign products, purchase and use things of the same kind made in this country, and pay therefor nearly or quite the same enhanced price which the duty adds to the imported articles. Those who buy imports pay the duty charged thereon into the public treasury, but the great majority of our citizens, who buy domestic articles of the same class, pay a sum at least approximately equal to this duty to the home manufacturer. This reference to the operation of our tariff laws is not made by way of instruction, but in order that we may be constantly reminded of the manner in which they impose a burden upon those who consume domestic products as well as those who consume imported articles, and thus create a tax upon all our people.
Despite Cleveland’s articulate justification for his refusal to countenance tariffs, popular opinion favored tariffs. With Harrison’s McKinley tariff act, popular will was victorious but was immediately succeeded with popular regret, one could say buyer’s remorse.
Like the modern set of American tariffs, Harrison-McKinley protections were geared almost exclusively for manufacturers, and the first victims were the farmers and agricultural industries. In what legislators thought was a concession, American sugar production was both exempt from tariffs and received additional subsidies. Instead, this move boomeranged as the only region hospitable for sugar cultivation in the US is a narrow region in the South, which meant that the sugar concession was insufficiently large to placate the agricultural community – a group that stretched from the icy wilds of New England to the orange groves of California – and suggested the presence of special interests. Additionally, the cost of farming machinery rose, which led to unrest in the Midwest – the US’ primary source of wheat and dairy and a region that was just becoming settled – as operations became prohibitively expensive and farmers and ranchers faced having to abandon the acres that they could not afford to work. The McKinley tariff effectively turned American farmers against the Harrison administration and caused them to lament Grover Cleveland. Although the farmers had detested Cleveland during his first presidency for closing down agricultural subsidies, by 1890, they swung to his side and played an instrumental role in returning him to office. Additionally, the Harrison-McKinley tariffs sparked a trade war with Europe, in particular the British Empire, which saw the cost of consumer goods for ordinary Americans shoot up astronomically.
An offshoot of the McKinley tariff was the Sherman Silver Purchasing Act. Since the end of the Civil War and the discovery of rich veins of silver in the western regions, silver miners and their associated special interests lobbied for silver to become an official part of the US monetary system, which was legally only pegged to gold. As president, Cleveland had vetoed all attempts to incorporate silver, recognizing that doing so would trigger inflation. Harrison had no such qualms and also believed that inflation would address the economic problems linked to the tariffs, so he signed the Silver Purchasing Act requiring the US Treasury to purchase monthly, at market rate, 130,000 kilos of silver. The expected inflation occurred, and Harrison lost the support of the middle-classes, along with the very manufacturers to whom he had pandered. The American people suddenly remembered that none of these problems existed when Cleveland was president and they wanted him back.
On 4 March 1893, Grover Cleveland returned to the White House as the 24th president, the only US president to win reelection while not the incumbent. In his inauguration speech, which every American child ought to learn in school (but sadly does not), Cleveland clearly indicated that the mission of his second term was to clean up the disaster left behind by his predecessor:
I am confident that such an approach to the subject will result in prudent and effective remedial legislation. In the meantime, so far as the executive branch of the Government can intervene, none of the powers with which it is invested will be withheld when their exercise is deemed necessary to maintain our national credit or avert financial disaster.
Closely related to the exaggerated confidence in our country's greatness which tends to a disregard of the rules of national safety, another danger confronts us not less serious. I refer to the prevalence of a popular disposition to expect from the operation of the Government especial and direct individual advantages.
The verdict of our voters which condemned the injustice of maintaining protection for protection's sake enjoins upon the people's servants the duty of exposing and destroying the brood of kindred evils which are the unwholesome progeny of paternalism. This is the bane of republican institutions and the constant peril of our government by the people. It degrades to the purposes of wily craft the plan of rule our fathers established and bequeathed to us as an object of our love and veneration. It perverts the patriotic sentiments of our countrymen and tempts them to pitiful calculation of the sordid gain to be derived from their Government's maintenance. It undermines the self-reliance of our people and substitutes in its place dependence upon governmental favoritism. It stifles the spirit of true Americanism and stupefies every ennobling trait of American citizenship.
The lessons of paternalism ought to be unlearned and the better lesson taught that while the people should patriotically and cheerfully support their Government its functions do not include the support of the people.
The acceptance of this principle leads to a refusal of bounties and subsidies, which burden the labor and thrift of a portion of our citizens to aid ill-advised or languishing enterprises in which they have no concern. It leads also to a challenge of wild and reckless pension expenditure, which overleaps the bounds of grateful recognition of patriotic service and prostitutes to vicious uses the people's prompt and generous impulse to aid those disabled in their country's defense.
Every thoughtful American must realize the importance of checking at its beginning any tendency in public or private station to regard frugality and economy as virtues which we may safely outgrow. The toleration of this idea results in the waste of the people's money by their chosen servants and encourages prodigality and extravagance in the home life of our countrymen.
Under our scheme of government the waste of public money is a crime against the citizen, and the contempt of our people for economy and frugality in their personal affairs deplorably saps the strength and sturdiness of our national character.
It is a plain dictate of honesty and good government that public expenditures should be limited by public necessity, and that this should be measured by the rules of strict economy; and it is equally clear that frugality among the people is the best guaranty of a contented and strong support of free institutions.
Although Cleveland applied himself with the same integrity and policies as he had in his first term, his second was less successful. Through no fault of his own, he did not accomplish his goal of completely reversing the economic decline triggered by the tariffs and inflationary monetary policy. Despite the repeal of the Sherman Silver Purchase Act, the damage was done and it would take decades for a coherent monetary policy to appear.
His other main goal, repeal of the McKinley tariff never occurred, largely because of opposition from Cleveland’s own party, the Democratic Party, which sided with special interest groups against the president (the Republican Party, to which McKinley belonged, was completely entrenched and invested in the tariffs.). Sadly, Cleveland only obtained a diluted version of the McKinley tariff, the Wilson-Gorman Tariff Act of 1894, which only slightly reduced all tariffs and increased income taxes. Cleveland was outraged, but without any support in Congress, he had to sign it into law. The debacle of the Wilson-Gorman Act summarized Cleveland’s second term, and in 1896, the American people, still dissatisfied, voted in William McKinley of the original McKinley tariff.
The decidedly anticlimactic ending that was Cleveland’s second term is an example of the difference between populist and popular. In his first term, Cleveland was one of the most detested presidents in US history, but he started his second with a decisive majority in the popular vote. However, his electoral vindication did not mean he was particularly popular as he repeatedly opposed populist policy proposals. He was not deterred, though, and his dedication to remaining true to the nation’s founding mission through acting as an impediment to the growth of big government is the reason that he should be admired alongside the Founding Fathers.