No praise for Grover Cleveland on President’s Day |

No praise for Grover Cleveland on President’s Day

Courtesy Library of CongressPresident Grover Cleveland arguing for repeal of the Sherman Act: "... present evils may be mitigated and dangers threatening the future may be averted."

Aspen celebrated favored presidents by naming schools after them: Washington, Lincoln and Garfield. Washington was the universally favored founding father. While Lincoln was beloved by half of Aspen, he was reviled by the many confederate veterans. Although President Garfield held office for only 199 days, that service occurred when his eponymous school was built. Had there been President’s Day in 1893, Aspenites may have praised past favorites while venting venom towards Grover Cleveland, the occupant of the White House at the time.

After the passage of the Sherman Act in 1890, the price of silver stood at $1.20 per ounce. Prices plummeted to $.65 when the British government closed silver mints in India and returned to the gold standard. Aspen’s mines laid off workers as prices plummeted. The “Panic” that began in 1892 was a national depression; unemployment approached 20 percent; banks, including Aspen’s Wheeler Bank, were failing; agricultural prices declined, and several large railroad companies declared bankruptcy. Cleveland, who inherited the recession from his predecessor, Benjamin Harrison, believed that the recession was no more than a customary business cycle adjustment.

In addition to stalled lending, there was a drain on the nation’s gold reserves. The Republican Congress during Harrison’s term had gone on a spending spree. Some foreign countries shunned silver for specie payments. Cleveland’s banking advisers convinced him that unless the Sherman Silver Purchase Act was repealed, the gold drain would escalate. Under the Sherman Act, the government was committed to buying 4.5 million ounces of silver each month and producers could demand payment in gold at a set ratio of 16:1. As the market price of silver declined, both producers and speculators demanded gold.

Since the Act required the treasury to purchase a minimum amount of silver, the Colorado mining industry decided to shut down production, stalling so the terms of the Act could not be met. Smelters closed and Aspen’s mines stopped shipping ore.

Cleveland called a special session of Congress to repeal the Act, intending to make short order of that so he could get on with tariff reform. A bitter six-week debate ensued. The eastern states and the banks clamored for repeal and for going on a gold standard. The western mining states and southern agricultural states begged for bimetallism and an expanded money supply. The Act was repealed on Nov. 4. With no government market, silver dropped to $.59 per ounce. J.P. Morgan arranged an enormous loan of gold to the federal government. Aspen’s mines reopened, but with about half the previous workforce.

Aspen’s citizens felt betrayed by Cleveland because, while he had demanded repeal of the gold payment provision of the Sherman Act, he had led many to believe that he still favored bimetallism. Both the Democratic and Republican parties split, and bimetal proponents formed the Populist Party.

Present-day recession punditry mirrors the debate of the “Panic of ’93.” An editorial comment from the Aspen Daily Chronicle provides one example: “What this country needs is an honest, patriotic administration that will not mistake the howl of Wall Street for the voice of the people.” That same paper reported that Judge Morse attributed the recession’s cause to “the greed of Wall Street speculators and Eastern bankers”.

Senator William Stewart of Nevada said, “It is the duty of every patriot and lover of his country to rouse himself to action and resist the cruel aggressions and warfare which capital is now making against labor and the producers of wealth.”

Countering Republican newspapers in agreement with Democrat Cleveland’s silver/gold policy, Aspen’s Chronicle editor wrote, “They are all in the same boat financially and the captain and crew, from stoker to first mate, are from Wall Street.” The Chronicle complained, “old Cleveland would like to see (Aspen) wiped off the map because she refused to give him a vote.”

The Aspen Weekly Times called it a “dastardly deed” and summed up Aspen’s vitriolic view of Cleveland this way: “It is said that President Cleveland has scarcely a friend in the United States. He should not have. He dashed his party to ruin in order that the banker, bondholder and aristocracy might prosper, sacrificing every interest of the people. He is president of the wrong country.”

The nature of America’s money may change from metal to paper to electrons, but the nature of politics stays the same. You can bet a silver dollar on that.

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