Gold Democrats and the Decline of Classical Liberalism, 1896-1900.

• Author: BEITO, DAVID T.

In 1896 a new political party was born, the National Democratic Party (NDP). The founders of the NDP included some of the leading exponents of classical liberalism during the late nineteenth century. Few of those men, however, foresaw the ultimate fate of their new party and of the philosophy of limited government that it championed. By examining the NDP, we can gain insights into a broader ideological transformation that was under way at the turn of the century. More specifically, we can better understand the decline of classical liberalism and the subsequent rise of modern liberalism.

The choice of the new party's name was carefully considered. The NDP (more widely known as the Gold Democrats) had been founded by disenchanted Democrats as a means of preserving the ideals of Thomas Jefferson and Grover Cleveland. In its first official statement, the executive committee of the NDP accused the Democratic Party of forsaking that tradition by nominating William Jennings Bryan for president. For more than a century, it declared, the Democrats had believed "in the ability of every individual, unassisted, if unfettered by law, to achieve his own happiness" and had upheld his "right and opportunity peaceably to pursue whatever course of conduct he would, provided such conduct deprived no other individual of the equal enjoyment of the same right and opportunity." They had stood for "freedom of speech, freedom of conscience, freedom of trade, and freedom of contract, all of which are implied by the century-old battle-cry of the Democratic Party, 'Individual Liberty'" (National Democratic Party 1896, 1).

A who's who of classical liberals gave the NDP their support. Among them were President Cleveland (Welch 1988, 211), E. L. Godkin, the editor and publisher of the Nation (Beisner 1968, 59), Edward Atkinson, a Boston fire insurance executive, textile manufacturer, and publicist for free-market causes (Williamson 1934, 211), Horace White, the editor of the Chicago Tribune and later the New York Evening Post (Logsdon 1971, 346), and Charles Francis Adams, Jr., a leading political reformer and the grandson of President John Quincy Adams (Blodgett 1966, 229).

Two other supporters of the NDP became better known in the decades after 1896: Moorfield Storey, the first president of the National Association for the Advancement of Colored People, and the journalist Oswald Garrison Villard (Hixson 1972, 27-28), an anti-imperialist and civil libertarian. But the two NDP backers who enjoyed the greatest fame in subsequent years were those bulwarks of progressivism Louis Brandeis and Woodrow Wilson (Blodgett 1966, 225-26; Bragdon 1967, 52).

The origins of the NDP can be traced to broader shifts in political alignments during the last three decades of the nineteenth century. Between 1876 and 1896, the national Republican and Democratic Parties vied in almost complete equilibrium. Electoral margins were thin, turnout was often 80 percent of the eligible voters, and ticket-splitting was rare. Victory usually depended on getting the party faithful to the polls on election day (Wiebe 1995, 134; Jensen 1971, 2, 9-10; Kleppner 1979, 21-25, 44). The two most contentious national issues were the tariff and the gold standard. Especially after the rise of Cleveland in the 1880s, the Democrats supported free trade and hard money (Jensen 1971, 19-24). At the local and state levels, they generally fought liquor prohibition and Sunday blue laws. By contrast, the Republicans often espoused a more interventionist agenda of protective tariffs, legislation to regulate morals, and, to a lesser degree, monetary inflation (Jensen 1971, 133; Jones 1964, 93-95; Kleppner 1979, 195-96, 355).

During the first weeks of Cleveland's second administration (1893-97), the country started to slip into a major economic depression. Cleveland blamed the crisis on the mildly inflationist Sherman Silver Purchase Act of 1890. Enacted under the previous (Republican) administration, this law required the Department of the Treasury to purchase 4.5 million ounces of silver per month. Fearing abandonment of the gold standard, foreigners (and Americans) scrambled to exchange dollars for gold. Cleveland fought to restore financial confidence by pressing for repeal of the Silver Purchase Act. His campaign, though ultimately successful, was painfully slow and did not immediately reverse the drain (Ritter 1997, 37-40; Higgs 1987, 87-88; Timberlake [1978] 1993, 167-79).

Now tarred as members of the party of depression, the Democrats lost their congressional majority in the 1894 elections. But Cleveland did not give up easily in his quest to save the gold standard. In January and November of 1894 he had authorized the Secretary of the Treasury to float bonds to replenish the government's gold holdings, and he did so again in February 1895. The measures reversed the gold drain but did great damage to Cleveland's popularity. Critics charged that he had sold out to the Morgan banking syndicate that had arranged the ultimately successful 1895 bond sale (Ritter 1997, 4546).

By the end of 1895, Democratic critics of Cleveland in the agricultural West and South, such as William Jennings Bryan of Nebraska and Benjamin ("Pitchfork") Tillman of South Carolina, had launched a party insurgency (Jones 1964, 54-60, 71-73). Seeking to raise commodity prices for hard-pressed farmers, the silverite insurgents demanded that the federal government implement an inflationary monetary policy of "free silver." Under that policy, the dollar value of sixteen ounces of silver would have been pegged by the Treasury as equivalent to the dollar value of one ounce of gold (Ritter 1997, 183). Because the free-market ratio between silver and gold was thirty-two to one, the result would have been a pell-mell rush of silver holders to exchange their metal for dollars, and hence rapid dollar inflation and a corresponding depreciation of the currency. By the early months of 1896, the silverites had captured control of most Democratic state organizations (Jones 1964, 192-94).

Meanwhile, at their June presidential convention the Republicans embraced the gold standard and nominated William McKinley. The GOP had not always supported sound money so staunchly. Earlier, McKinley, like many Republicans, had taken an evasive straddle on the financial issue (Jones 1964, 93-95, 159-61). The GOP also reaffirmed its longtime commitment to a high protective tariff. One month after McKinley's nomination, the silverites took control of the Democratic convention in Chicago. The platform repudiated the gold standard in favor of the sixteen-to-one plan and called for the prohibition of private bank notes. After delivering his rousing "Cross of Gold" speech, the youthful Bryan captured the nomination. The People's (or Populist) Party, which endorsed Bryan less than two weeks later, had more radical demands, such as a graduated income tax and the nationalization of railroads and telegraphs (Jones 1964, 212-63; Johnson [1956] 1978, 97-98, 105).

The pro-gold Democrats reacted to these events with a mixture of anger, desperation, and confusion. Although they looked upon Bryan as the exemplar of an illegitimate "Popocratic" party, they recoiled from the protectionist McKinley. A growing chorus urged a "bolt" and the formation of a third party (Barnes 1930, 435-37). In response, a hastily arranged assembly on July 24 organized the National Democratic Party (New York Times, July 25, 1896). A follow-up meeting in August scheduled a nominating convention for September in Indianapolis and issued an appeal to fellow Democrats. In this document, the NDP portrayed itself as the legitimate heir to Jefferson, Jackson, and Cleveland. Vowing to protect "the liberty of the individual, the security of private right.,; and property, and the supremacy of the law," it denied that the Chicago convention had the "right or power to surrender those principles" (Dunnell 1896, 441).

In the months before the September convention, the NDP scrambled to establish a nationwide presence. William B. Haldeman of the Louisville Courier-Journal labored to recruit delegates and national committee members. After a Herculean effort, he looked forward to a "great convention of first class men, the delegates representing every State and Territory in the American Union, excepting possibly three of the rotten boroughs of the West." The strongest local organizations were in the relatively pro-gold Midwest and Northeast (Barnes 1931, 468-69).

Mugwumps and Regulars

Some of the most prestigious supporters of the NDP were among those widely known as the Mugwumps. The term first appeared in the 1880s and was derived from an Algonquian word for "great leader" or "chief." It was used to refer to a group of self-described "independent voters" who had reputations for upholding principle over party (Tucker 1998, 73). Most of the Mugwumps lived in Northeastern states such as Massachusetts and New York. They were often college-educated and of distinguished Yankee ancestry, and many worked in professions such as journalism, law, and academe (McFarland 1975, 1).

Participation in the movement against slavery had been a defining life experience for the older Mugwumps. Atkinson and White, for example, had raised funds to help equip John Brown's insurgent army in Kansas (Williamson 1934, 4; Logsdon 28-31). During the Civil War, the Mugwumps had identified themselves with Lincoln and embraced the Union cause. The younger Mugwumps often had family or personal ties to the antislavery movement. Thomas Mort Osborne, a member of the executive committee of New York's ND P, was a grandnephew of Lucretia Mott, the abolitionist organizer of the first national women's rights conference in 1848 (Chamberlain [1935] 1970, 33). Villard was a grandson of William Lloyd Garrison (Villard 1939, 4-5), and Moorfield Storey had been personal secretary to Senator Charles Sumner of Massachusetts, a leading...