A History of Money and Banking in the United States: The Colonial Era to World War II (25 page)

The victory of the free-silver Bryanite forces at the 1896 Democratic convention caused further problems for gold, but the victory of the pro-gold Republicans put an end to the problem of domestic and foreign confidence in the gold standard.

1896: THE TRANSFORMATION

OF THE AMERICAN PARTY SYSTEM

Orthodox economic historians attribute the triumph of William Jennings Bryan in the Democratic Convention of 1896, and his later renominations for president, to a righteous rising up of the “people” demanding inflation over the “interests” holding out for gold. Friedman and Schwartz attribute the rise of Bryanism to the price contraction of the last three decades of the nineteenth century, and the triumph of gold and disappearance of the “money” issue to the price rise after 1896.155

154On silver agitation, the gold reserves, and the panic of 1893, see Friedman and Schwartz,
Monetary History
, pp. 104–33, 705.

155Ibid.,
Monetary History,
pp. 113–19.

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This conventional analysis overlooks several problems. First, if Bryan represented the “people” versus the “interests,” why did Bryan lose and lose soundly, not once but three times? Why did gold triumph long before any price inflation became obvious, in fact at the depths of price contraction in 1896?

But the main neglect of the conventional analysis is the dis-regard of the highly illuminating insights provided in the past fifteen years by the “new political history” of nineteenth-century American politics and its political culture. The new political history began by going beyond national political issues (largely economic) and investigating state and local political contests.156 It also dug into the actual voting records of individual parishes, wards, and counties, and discovered how people voted and why they voted the way they did. The work of the new political history is truly interdisciplinary, for its methods range from sophisticated techniques for voting analysis to illuminating insights into American ethnic religious history.

In the following pages, we shall present a summary of the findings of the new political history on the American party structure of the late nineteenth century and after, and on the transformation of 1896 in particular.

First, the history of American political parties is one of successive “party systems.” Each party system lasts several 156The locus classicus of the new political history in late nineteenth-century politics is Paul Kleppner,
The Cross of Culture: A Social Analysis of
Midwestern Politics, 1859–1900
(New York: Free Press, 1970). See also other writings of the prolific Kleppner, especially his magnum opus,
The
Third Electoral System, 1853–1892: Parties, Voters, and Political Cultures
(Chapel Hill: University of North Carolina Press, 1979). On the late nineteenth century, see also Richard J. Jensen,
The Winning of the Midwest:
Social and Political Conflict, 1888–1896
(Chicago: University of Chicago Press, 1971). On the Civil War period and earlier, see the works of Ronald Formisano, Joel Sibley, and William Shade. For Eastern confirmation on the Kleppner and Jensen findings on the Middle West, see Samuel T.

McSeveney,
The Politics of Depression: Political Behavior in the Northeast,
1893–1896
(Oxford: Oxford University Press, 1972).

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decades, with each particular party having a certain central character; in many cases, the name of the party can remain the same but its essential character can drastically change—in the so-called “critical elections.” In the nineteenth century the nation’s second party system (Whigs v. Democrats), lasting from about 1832 to 1854, was succeeded by the third system (Republicans v. Democrats), lasting from 1854 to 1896.

Characteristic of both party systems was that each party was committed to a distinctive ideology clashing with the other, and these conflicting worldviews made for fierce and close contests. Elections were particularly hard fought. Interest was high since the parties offered a “choice, not an echo,” and so the turnout rate was remarkably high, often reaching 80 to 90 percent of eligible voters. More remarkably, candidates did not, as we are used to in the twentieth century, fuzz their ideology during campaigns in order to appeal to a floating, ideologically indifferent, “independent voter.” There were very few independent voters. The way to win elections, therefore, was to bring out your vote, and the way to do that was to intensify and strengthen your ideology during campaigns.

Any fuzzing over would lead the Republican or Democratic constituents to stay home in disgust, and the election would be lost. Very rarely would there be a crossover to the other, hated party.

One problem that strikes anyone interested in nineteenth-century political history is: How come the average person exhibited such great and intense interest in such arcane economic topics as banking, gold and silver, and tariffs? Thousands of half-literate people wrote embattled tracts on these topics, and voters were intensely interested. Attributing the answer to inflation or depression, to seemingly economic interests, as do Marxists and other economic determinists, simply won’t do. The far greater depressions and inflations of the twentieth century have not educed nearly as much mass interest in economics as did the milder economic crises of the past century.

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Only the findings of the new political historians have cleared up this puzzle. It turns out that the mass of the public was not necessarily interested in what the elites, or national politicians, were talking about. The most intense and direct interest of the voters was applied to local and state issues, and on these local levels the two parties waged an intense and furious political struggle that lasted from the 1830s to the 1890s.

The beginning of the century-long struggle began with the profound transformation of American Protestantism in the 1830s. This transformation swept like wildfire across the Northern states, particularly Yankee territory, during the 1830s, leaving the South virtually untouched. The transformation found particular root among Yankee culture, with its aggressive and domineering spirit.157

This new Protestantism—called “pietism”—was born in the fires of Charles Finney and the great revival movement of the 1830s. Its credo was roughly as follows: Each individual is responsible for his own salvation, and it must come in an emo-tional moment of being “born again.” Each person can achieve salvation; each person must do his best to save everyone else.

This compulsion to save others was more than simple mission-ary work; it meant that one would go to hell unless he did his best to save others. But since each person is alone and facing the temptation to sin, this role can only be done by the use of the State. The role of the State was to stamp out sin and create a new Jerusalem on Earth.158, 159

157”Yankees” originated in rural New England and then emigrated westward in the early nineteenth century, settling in upstate (particularly western) New York, northern Ohio, northern Indiana, and northern Illinois.

158These pietists have been called “evangelical pietists” to contrast them with the new Southern pietists, called “salvational pietists,” who did not include the compulsion to save everyone else in their doctrine.

159These pietists are distinguished from contemporary “fundamentalists” because the former were “postmillennialists” who believe that the
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The pietists defined sin very broadly. In particular, the most important politically was “demon rum,” which clouded men’s minds and therefore robbed them of their theological free will.

In the 1830s, the evangelical pietists launched a determined and indefatigable prohibitionist crusade on the state and local level that lasted a century. Second was any activity on Sunday except going to church, which led to a drive for Sabbatarian blue laws. Drinking on Sunday was of course a double sin, and hence was particularly heinous. Another vital thrust of the new Yankee pietism was to try to extirpate Roman Catholicism, which robs communicants of their theological free will by subjecting them to the dictates of priests who are agents of the Vat-ican. If Roman Catholics could not be prohibited per se, their immigration could be slowed down or stopped. And since their adults were irrevocably steeped in sin, it became vital for crusading pietists to try to establish public schools as compulsory forces for Protestantizing society or, as the pietists liked to put it, to “Christianize the Catholics.” If the adults are hopeless, the children must be saved by the public school and compulsory attendance laws.

Such was the political program of Yankee pietism. Not all immigrants were scorned. British, Norwegian, or other immigrants who belonged to pietist churches (whether nominally Calvinist or Lutheran or not) were welcomed as “true Americans.” The Northern pietists found their home, almost to a man, first in the Whig Party, and then in the Republican Party. And they did so, too, among the Greenback and Populist parties, as we shall see further below.

world must be shaped up and Christianized for a millennium before Jesus will return. In contrast, contemporary fundamentalists are “pre-millennials” who believe that the Second Coming of Jesus will usher in the millennium. Obviously, if everyone must be shaped up before Jesus can return, there is a much greater incentive to wield State power to stamp out sin.

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There came to this country during the century an increasing number of Catholic and Lutheran immigrants, especially from Ireland and Germany. The Catholics and High Lutherans, who have been called “ritualists” or “liturgicals,” had a very different kind of religious culture. Each person is not responsible for his own salvation directly; if he is to be saved, he joins the church and obeys its liturgy and sacraments. In a profound sense, then, the church is responsible for one’s salvation, and there was no need for the State to stamp out temptation. These churches, then, especially the Lutheran, had a laissez-faire attitude toward the State and morality. Furthermore, their defini-tions of “sin” were not nearly as broad as the pietists’. Liquor is fine in moderation; and drinking beer with the family in beer parlors on Sunday after church was a cherished German (Catholic and Lutheran) tradition; and parochial schools were vital in transmitting religious values to their children in a country where they were in a minority.

Virtually to a man, Catholics and High Lutherans160 found their home during the nineteenth century in the Democratic Party. It is no wonder that the Republicans gloried in calling themselves throughout this period “the party of great moral ideas,” while the Democrats declared themselves to be “the party of personal liberty.” For nearly a century, the bemused liturgical Democrats fought a defensive struggle against people whom they considered “pietist-fanatics” constantly swooping down trying to outlaw their liquor, their Sunday beer parlors, and their parochial schools.

How did all this relate to the economic issues of the day?

Simply that the leaders of each party went to their voting constituents and “raised their consciousness” to get them vitally 160Lutherans, then as now, were split into many different synods, some highly liturgical, others highly pietist, and still others in between.

Paul Kleppner has shown a 1-to-1 correlation between the degree of liturgicalness and the percentage of Democratic Party votes among the different synods.

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interested in national economic questions. Thus, the Republican leaders would go to their rank and file and say: “Just as we need Big Paternalistic Government on the local and state level to stamp out sin and compel morality, so we need Big Government on the national level to increase everyone’s purchasing power through inflation, keeping out cheap foreign goods (tariffs), or keeping out cheap foreign labor (immigration restrictions).”

And for their part, the Democratic leaders would go to their constituents and say: “Just as the Republican fanatics are trying to take away your liquor, your beer parlors, and your parochial schools, so the same people are trying to keep out cheap foreign goods (tariffs), and trying to destroy the value of your savings through inflation. Paternalistic government on the federal level is just as evil as it is at home.”

So statism and libertarianism were expanded to other issues and other levels. Each side infused its economic issues with a moral fervor and passion stemming from deeply held religious values. The mystery of the passionate interest of Americans in economic issues in the epoch is solved.

Both in the second and third party systems, however, the Whigs and then the Republicans had a grave problem. Partly because of demographics—greater immigration and higher birth rates—the Democratic-liturgicals were slowly but surely becoming the majority party in the country. The Democrats were split asunder by the slavery question in the 1840s and ‘50s.

But now, by 1890, the Republicans saw the handwriting on the wall. The Democratic victory in the congressional races in 1890, followed by the unprecedented landslide victory of Grover Cleveland carrying
both
houses of Congress in 1892, indicated to the Republicans that they were becoming doomed to be a permanent minority.

To remedy the problem, the Republicans, in the early 1890s, led by Ohio Republicans William McKinley and Mark Hanna, launched a shrewd campaign of reconstruction. In particular, in state after state, they ditched the prohibitionists, who were
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