Norman B. Ream by Ryscavage Paul;

Author:Ryscavage, Paul;
Language: eng
Format: epub
Tags: undefined
Publisher: Fairleigh Dickinson University Press
Published: 2012-08-15T00:00:00+00:00

The Urge to Merge

The economy by 1896 was only slowly pulling its way out of the deep economic slump that had started in 1893. It would be a significant period—because up until then the nation’s economy had been growing rapidly as its economic base continued to shift from agriculture to industry. Many thought the railroad boom would continue on into the decade, despite the industry’s overbuilding and overborrowing. Indeed, many goods-producing companies that had sprung into existence in the second half of the century now began struggling because they too had grown rapidly and overborrowed. When the economic contraction began in 1893, the entrepreneurs of these enterprises could think of only one thing: survival! And the one way to do this, they believed, was by engaging in savage price wars with their competitors, thereby shrinking profit margins to cost-of-production levels. It was a classic, and severe, economic recession.

The nation’s political leadership had shifted in 1888 from the Democrats to the Republicans and President Benjamin Harrison, and then back to the Democrats and President Grover Cleveland in 1892. It would be Cleveland’s second term, 1892 to 1896, and he would be governing a weakened economy for four years.

The central and decisive issue that the polity wrestled with in these years was, of course, the gold standard versus bimetalism (using both gold and silver as the basis of the medium of exchange).[22] The Republicans were all for the gold standard while the Democrats launched a populist campaign with bimetalism at its core—and, sectionally, it was the North and East versus the South and West. Allowing the nation’s currency to be linked to both gold and silver, as mentioned earlier, was something the South and West wanted because the money supply would be increased, inflating the currency, which would make paying off the debts the South and West had incurred that much easier (the former from the Civil War and the latter from economic expansion); on the other hand, the North and East were all for sticking to the gold standard, which would preserve the value of the currency and, most importantly, their assets.

During these early years of the 1890s, the populist movement, especially in the South and West, had gained strength. Resentment toward wealthy bankers and commercial interests in urban areas, especially in the East, had heightened as a result of the economic downturn. In 1896, the Democrats nominated William Jennings Bryan to run for president. He was very effective in riding the wave of populism and arguing that his was the party of the little guy and not the privileged few. And, of course, he spearheaded the fight against the gold standard at the Chicago nominating convention with his famous “Cross of Gold” speech. William McKinley, the Republican nominee for president, on the other hand, was backed by the economically established and moneyed interests in the country. Indeed, Standard Oil and the House of Morgan contributed handsomely to his campaign.[23] Fortunately, in the summer of 1896, the nation’s economy showed it

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