Second Presidential Administration
As strong in his convictions as he was during his first term in office, Cleveland began by forcing the withdrawal of a treaty that would have annexed Hawaii in 1893. He was by nature an anti-imperialist and believed that America was wrong in helping with the overthrow of Queen Liliuokalani. The queen had attempted to create a new Constitution for the island that would have restored power to the monarchy. This power had been previously removed when the former king had agreed to a reduction in authority. Cleveland learned that most Hawaiians did not support her ousting or annexation and believed that American troops should not have been involved.
Panic of 1893
In 1893, America experienced an economic depression resulting in the collapse of thousands of businesses and leaving millions of Americans out of work. During this depression, called the Panic of 1893, riots broke out and many asked the government for help. Cleveland, however, along with many others in the government, saw the business cycle with its highs and lows as a natural state of affairs and did not believe that the government had a place in helping people who were harmed by its extreme lows. It was not until much later that the government would take an active role in helping flatten the business cycle through overt actions.
IN THEIR OWN WORDS…
Cleveland on the Hawaii issue: “It has been the boast of our government that it seeks to do justice in all things. … I mistake the American people if they favor the odious doctrine that there is no such thing as international morality, that there is one law for a strong nation and another for a weak one, and that even by indirection a strong power may with impunity despoil a weak one of its territory.”
Silver Purchase Act
Another major issue that had been debated since the end of the Civil War — and would continue to be part of the public discussion until Franklin Roosevelt's time — was how to back the U.S. currency. Cleveland was a strong believer in the gold standard, while others felt that currency should be backed by silver. Gold was more rare, but was also a more stable way to back currency. Silver was much more readily available, and so people were less inclined to hoard currency and it became more available to the public.
During Benjamin Harrison's term as president, the Sherman Silver Purchase Act had passed, requiring the federal government to purchase silver in exchange for silver certificates. These could then be turned back in for silver or gold. By the time Cleveland was president, he felt that the gold reserves had dangerously dwindled as people were turning their certificates in for gold, which was rarer and ultimately worth more. To combat this, he called Congress into session to repeal the Sherman Silver Purchase Act, although many in his own party did not agree with his assessment. In the end, the act was repealed.
Cleveland had campaigned to lower the protective tariff created with the McKinley Tariff and he helped push forward the Wilson-Gorman Act in 1894. It had started as a serious reduction in the tariff but ended up only moving the 48 percent tax to 41 percent. To help make up for lost revenue, it imposed a 2 percent income tax. Cleveland was angered by this bill because, after going through the Senate, new items to be taxed were actually added to the bill even though its original purpose had been to lower tariffs. The bill became a law without his signature. In 1895, the Supreme Court ruled that the income tax imposed by the bill was unconstitutional.
The end of the nineteenth century saw an increase in laborers fighting for better working conditions. The Pullman Palace Car Company had reduced wages and on May 11, 1894, the workers in Illinois walked out under the leadership of Eugene V. Debs. The Pullman Strike resulted in violence in Chicago. Cleveland ordered federal troops in and arrested Debs and other leaders, ending the strike.
Cleveland was able to send in federal troops and U.S. marshals to break up the Pullman strike on the basis that it was impeding the delivery of U.S. mail. In fact, the strike's main leader, Eugene V. Debs, was sent to jail for six months for interfering with the delivery of the mail.
The strike itself was important as it brought many issues before the national audience, including whether a strike should be legal and what the government's response should be.