Economic panic and the silver issue Shortly after Cleveland's second term began, the
Panic of 1893 struck the stock market, leaving Cleveland and the nation to face an
economic depression. The panic was worsened by the acute shortage of gold that resulted from the increased coinage of silver, and Cleveland called Congress into special session to deal with the problem. The debate over the coinage was as heated as ever, and the effects of the panic had driven more moderates to support repealing the coinage provisions of the
Sherman Silver Purchase Act. In the Senate, the repeal of silver coinage was equally contentious. Cleveland, forced against his better judgment to lobby the Congress for repeal, convinced enough Democrats—and along with eastern Republicans, they formed a 48–37 majority for repeal. Depletion of the Treasury's gold reserves continued, at a lesser rate, and subsequent bond issues replenished supplies of gold. At the time the repeal seemed a minor setback to silverites, but it marked the beginning of the end of silver as a basis for American currency.
Tariff reform and the sugar trust Having succeeded in reversing the Harrison administration's silver policy, Cleveland sought next to reverse the effects of the
McKinley Tariff. The
Wilson–Gorman Tariff Act was introduced by West Virginian Representative
William L. Wilson in December 1893. After lengthy debate, the bill passed the House by a considerable margin. The bill proposed moderate downward revisions in the tariff, especially on raw materials. The shortfall in revenue was to be made up by an
income tax of two percent on income above $4,000 (). The bill passed the Senate with more than 600 amendments attached that nullified most of the reforms. The
Sugar Trust in particular lobbied for changes that favored it at the expense of the consumer. Cleveland was outraged with the final bill, and denounced it as a disgraceful product of the control of the Senate by trusts and business interests. Even so, he believed it was an improvement over the McKinley tariff and allowed it to become law without his signature.
Voting rights In 1892, Cleveland had campaigned against the
Lodge Bill, which would have strengthened
voting rights protections through the appointing of federal supervisors of congressional elections upon a petition from the citizens of any district. The
Enforcement Act of 1871 had provided for a detailed federal overseeing of the electoral process, from registration to the certification of returns. Cleveland succeeded in ushering in the 1894 repeal of this law (ch. 25, 28 Stat. 36).
Labor unrest , Senator from
Alabama, opposed Cleveland on free silver, the tariff, and the Hawaii treaty, saying of Cleveland that "I hate the ground that man walks on." The Panic of 1893 had damaged labor conditions across the United States, and the victory of anti-silver legislation worsened the mood of western laborers. A group of workingmen led by
Jacob S. Coxey began to march east toward Washington, D.C., to protest Cleveland's policies.
Pullman Strike The Pullman Strike had a significantly greater impact than Coxey's Army. A strike began against the
Pullman Company over low wages and twelve-hour workdays, and sympathy strikes, led by
American Railway Union leader
Eugene V. Debs, soon followed. By June 1894, 125,000 railroad workers were on strike, paralyzing the nation's commerce. Because the railroads carried the
mail, and because several of the affected lines were in
federal receivership, Cleveland believed a federal solution was appropriate. Cleveland obtained an injunction in federal court, and when the strikers refused to obey it, he sent federal troops into Chicago and 20 other rail centers. "If it takes the entire army and navy of the United States to deliver a postcard in Chicago", he proclaimed, "that card will be delivered." Most governors supported Cleveland except Democrat
John P. Altgeld of Illinois, who became his bitter foe in 1896. Leading newspapers of both parties applauded Cleveland's actions, but the use of troops hardened the attitude of organized labor toward his administration. Just before the 1894 election, Cleveland was warned by Francis Lynde Stetson, an advisor: "We are on the eve of [a] very dark night, unless a return of commercial prosperity relieves popular discontent with what they believe [is] Democratic incompetence to make laws, and consequently [discontent] with Democratic Administrations anywhere and everywhere." The warning was appropriate, for in the Congressional elections, Republicans won their biggest landslide in decades, taking full control of the House, while the Populists lost most of their support. Cleveland's factional enemies gained control of the Democratic Party in state after state, including full control in Illinois and Michigan, and made major gains in Ohio, Indiana, Iowa and other states. Wisconsin and Massachusetts were two of the few states that remained under the control of Cleveland's allies. The Democratic opposition were close to controlling two-thirds of the vote at the 1896 national convention, which they needed to nominate their own candidate. They failed for lack of unity and a national leader, as Illinois governor John Peter Altgeld had been born in Germany and was ineligible to be nominated for president.
Foreign policy, 1893–1897 '', 1894 When Cleveland took office, he faced the question of Hawaiian annexation. In his first term, he had supported free trade with the
Hawaiian Kingdom and accepted an amendment that gave the United States a coaling and naval station in
Pearl Harbor. The Harrison administration had quickly agreed with representatives of the new government on a treaty of annexation and submitted it to the Senate for approval. Five days after taking office on March 9, 1893, Cleveland withdrew the treaty from the Senate and sent former Congressman
James Henderson Blount to Hawai'i to investigate the situation. Cleveland agreed with
Blount's report, which found the
native Hawaiians to be opposed to annexation; A firm
anti-imperialist, By December 1893, the matter was still unresolved, and Cleveland referred the issue to Congress. He expressed himself in forceful terms, saying the presence of U.S. forces near the Hawaiian
government building and
royal palace during the coup was a "substantial wrong" and an "act of war," and lambasted the actions of minister
Stevens. Senator
John Tyler Morgan of Alabama, chairman of the
U.S. Senate Committee on Foreign Relations, oversaw the report. It declared that the "action of the Queen in an effort to overturn the constitution of 1887...amounted to an act of abdication on her part." The "constitution of 1887" mentioned in the report was the so-called
Bayonet Constitution, which King
Kalakaua had signed under pressure that year. The Morgan Report said that the troops landed on Oahu from the USS
Boston gave "no demonstration of actual hostilities," and described their conduct as "quiet" and "respectful." Cleveland dropped his push to restore the queen, and went on to recognize and maintain diplomatic relations with the new
Republic of Hawaii under President Dole, who took office in July 1894. Closer to home, Cleveland adopted a broad interpretation of the
Monroe Doctrine that not only prohibited new European colonies, but also declared an American national interest in any matter of substance within the hemisphere. When Britain and
Venezuela disagreed over the boundary between Venezuela and the colony of
British Guiana, Cleveland and Secretary of State
Richard Olney protested. British Prime Minister
Robert Cecil and the British ambassador to Washington,
Julian Pauncefote, misjudged how important the dispute was to Washington, and to the anti-British Irish Catholic element in Cleveland's Democratic Party. They prolonged the crisis before accepting the American demand for arbitration. An international tribunal in 1899 awarded the bulk of the disputed territory to British Guiana. But by standing with a Latin American nation against the encroachment of a colonial power, Cleveland improved relations with Latin America. The cordial manner in which the arbitration was conducted also strengthened relations with Britain and encouraged the major powers to consider
arbitration as a way to settle their disputes.
Military policy, 1893–1897 The second Cleveland administration was as committed to military modernization as the first, and ordered the first ships of a navy capable of offensive action. Construction continued on the Endicott program of
coastal fortifications begun under Cleveland's first administration. In 1895–1896 Secretary of the Navy
Hilary A. Herbert, having recently adopted the aggressive naval strategy advocated by Captain
Alfred Thayer Mahan, successfully proposed ordering five
battleships (the and es) and sixteen
torpedo boats. Completion of these ships nearly doubled the Navy's battleships and created a new torpedo boat force, which previously had only two boats. The battleships and seven of the torpedo boats were not completed until 1899–1901, after the Spanish–American War.
Cancer , In the midst of the fight for repeal of free-silver coinage in 1893, Cleveland sought the advice of the White House doctor, Robert O'Reilly, about soreness on the roof of his mouth and a crater-like edge ulcer with a granulated surface on the left side of Cleveland's
hard palate. Clinical samples were sent anonymously to the
Army Medical Museum. The diagnosis was an
epithelioma, rather than a
malignant cancer. Cleveland decided to have surgery secretly, to avoid further panic that might worsen the financial depression. The surgery occurred on July 1, to give Cleveland time to make a full recovery in time for the upcoming Congressional session. Under the guise of a vacation cruise, Cleveland and his surgeon,
Joseph D. Bryant, left for New York. The surgeons operated aboard the
Oneida, a yacht owned by Cleveland's friend
Elias Cornelius Benedict, as it sailed off
Long Island. The surgery was conducted through the President's mouth, to avoid any scars or other signs of surgery. The team, sedating Cleveland with
nitrous oxide and
ether, successfully removed parts of his
upper left jaw and hard palate. During another surgery, Cleveland was fitted with a hard rubber dental prosthesis that corrected his speech and restored his appearance. Even when a newspaper story appeared giving details of the actual operation, the participating surgeons discounted the severity of what transpired during Cleveland's vacation. Other suggestions included
ameloblastoma or a benign salivary mixed tumor (also known as a
pleomorphic adenoma). In the 1980s, analysis of the specimen finally confirmed the tumor to be
verrucous carcinoma, a low-grade epithelial cancer with a low potential for
metastasis. Hornblower, the head of a New York City law firm, was thought to be a qualified appointee, but his campaign against a New York machine politician had made Senator David B. Hill his enemy. Hill used all of his influence to block Peckham's confirmation, and on February 16, 1894, the Senate rejected the nomination by a vote of 32 to 41. Instead, Cleveland nominated
Rufus Wheeler Peckham, the brother of Wheeler Hazard Peckham, and the Senate confirmed the second Peckham easily. During Cleveland's second term, the
53rd United States Congress passed an Enabling Act that permitted
Utah to apply for statehood. Cleveland signed it on July 16, 1894. Utah joined the Union as the 45th state on January 4, 1896. ==Election of 1896 and retirement (1897–1908)==