2022 is looking like a bad election year for Democrats, quite contrary to 100 years ago, when in the 1922 elections they had a significant bounce back from the disastrous 1920 election. However, this wasn’t their worst, and this year I’m sure, for all the liabilities the Democrats have, will not exceed the very worst for them since the development of the modern two-party system. That year was 1894, and it changed the Democratic Party as we know it.
A Crisis Strikes the Presidency
Although the 1892 election sustains the Democratic majority in Congress (214 Democrats vs. 123 Republicans) and Grover Cleveland triumphantly returns as the only president elected to two non-consecutive terms, after only two months in office he is faced with a major crisis. The economy is not doing so well at the start of Cleveland’s presidency and while there were some international factors, there were two proximate causes. The first was the bankruptcy of Philadelphia & Reading Railroad on February 20, 1893 due to being financially overextended and losing the financial support of J.P. Morgan (Fulfer). The railroad had for some time been in decline, and this failure spreads doubt among investors about the viability of other railroads. The second was on May 4, 1893, when the straw breaks the camel’s back as the National Cordage Company, a near-monopoly conglomerate of rope manufacturers, declares bankruptcy (Reed). The following day, the stock market crashes with investors proceeding to sell off numerous stocks, particularly railroads. The National Cordage Company’s stock, which had before the bankruptcy announcement been a highly thought of stock, selling at $70 a share, was now selling for $12 a share (Reed). This had an enormous impact on the market, particularly on unemployment. Numerous runs on the banks occurred and unemployment at most increased nationwide from an estimated 3% in 1892 to 11.7% in 1893 and 18.4% in 1894 (Saylor, 1). This crisis is a tremendous test on the Cleveland presidency, and he responds with the Sherman Silver Purchase Act repeal, which ends the policy requiring the United States government to purchase silver. Cleveland largely blames the Sherman Silver Purchase Act for the economic depression. Indeed, banks responded to the increasingly low supplies of gold in the Treasury as well as their own as a result of the act by reducing the supply of credit (Reed). This proposal wins the votes of conservatives of both parties, including Senator Sherman himself. This law, however, didn’t stop the draining of gold, so he managed to get Wall Street bankers, led by J.P. Morgan, to buy discounted gold bonds in exchange for their help in stopping the withdrawal of gold. By the end of the downturn, 156 railroads are bankrupted. Several disturbances occur as well, including the march on Washington by Coxey’s Army, a group of unemployed laborers who call for public works projects for the purpose of increasing employment, and the Pullman Strike of July 1894. In the latter case, much of the nation’s transportation is shut down and Cleveland intervenes on the side of the railroad with troops to end the strike, citing the transport of U.S. mail as a justification (Saylor, 2). The strike, along with opposition to how it was ended, further taxes the approval of Cleveland’s presidency.
Despite some blame falling on Republicans for the Panic of 1893 given the Sherman Silver Purchase Act signed by President Harrison and possibly the McKinley Tariff as well, Cleveland and the Democrats get the political fallout. Western and Southern Democrats saw Cleveland as being essentially a Democrat-in-Name Only for his support for gold and his making a deal with J.P. Morgan. Republicans saw Cleveland and Democrats as to blame, and the 1894 election resulted in Republicans having a majority of 240 with Democrats down to 104 by the start of the next Congress. This constituted a horrific loss of 110 seats. There were also a whopping 32 election challenges brought before the House. After election challenges were resolved, the Democrats lost 10 more and Republicans gained 12 more seats. By contrast, the Tea Party midterms of 2010, considered a “shellacking” by President Obama, lost the Democrats 63 seats in the House. Future Speaker of the House Champ Clark (D-Mo.), who himself lost reelection that year, lamented on the results, “It was the greatest slaughter of innocents since the days of Herod” (U.S. House). Some other people who were major names in the Democratic Party or would become big names lost reelection. Among them were William S. Holman of Indiana and Richard “Silver Dick” Bland of Missouri. The Senate was far from as dramatic given that only a third of senators are up for reelection in any given election year and that state legislatures at the time voted for senators. There a small Democratic majority became a small Republican majority.
Dramatic Implications for Politics
This loss ended the hyper-competitive and relatively politically even period of 1875 to 1895. The Democratic Party essentially disowned Grover Cleveland by the end of his term and embraced as their 1896 nominee William Jennings Bryan, a man who supported unions, opposed gold, opposed big business interests, and supported a consistent greater role of government in the welfare of the people. The Democratic Party had moved to the left, and Republicans would control the House until 1911 and the Senate until 1913.
As I wrote before, I doubt the election will reach 1894 proportions as Republicans are not free of highly publicized political liabilities and are having a more challenging slate of candidates than they’d hoped for the Senate. The picture for the House looks really good for them as of writing, especially given the recent win of Republican Mayra Flores in a strongly Latino district in Texas. If the numbers shift in ways that Republicans hope they will for Latinos and certain other ethnic groups this year, it may even herald a new age in ethnic group voting in America.
Fulfer, J. (2020, August 12). The Reading Railroad and the Panic of 1893. The Economic Historian.
Graff, H.F. Grover Cleveland: Domestic Affairs. Miller Center.
Macri, B. (2000). The ‘Morgan Bonds’. Vassar.
Panic of 1893. Saylor.
Reed, L.W. (1978, June 1). The Silver Panic. Foundation for Economic Education.
The Historic 54th Congress. United States House of Representatives.
The Panic of 1893. The Life and Times of Florence Kelley.