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History of the United States by Charles A. Beard and Mary R. Beard

«·The Sound Money Battle of 1896 · CHAPTER XIX·»

Republican Measures and Results

The Gold Standard and the Tariff.—Yet strange as it may seem, the Republicans did not at once enact legislation making the gold dollar the standard for the national currency. Not until 1900 did they take that positive step. In his first inaugural President McKinley, as if still uncertain in his own mind or fearing a revival of the contest just closed, placed the tariff, not the money question, in the forefront. “The people have decided,” he said, “that such legislation should be had as will give ample protection and encouragement to the industries and development of our country.” Protection for American industries, therefore, he urged, is the task before Congress. “With adequate revenue secured, but not until then, we can enter upon changes in our fiscal laws.” As the Republicans had only forty-six of the ninety Senators, and at least four of them were known advocates of free silver, the discretion exercised by the President in selecting the tariff for congressional debate was the better part of valor.

Congress gave heed to the warning. Under the direction of Nelson P. Dingley, whose name was given to the bill, a tariff measure levying the highest rates yet laid in the history of American imposts was prepared and driven through the House of Representatives. The opposition encountered in the Senate, especially from the West, was overcome by concessions in favor of that section; but the duties on sugar, tin, steel, lumber, hemp, and in fact all of the essential commodities handled by combinations and trusts, were materially raised.

Copyright by Underwood and Underwood, N.Y.
President McKinley and His Cabinet

Growth of Combinations.—The years that followed the enactment of the Dingley law were, whatever the cause, the most prosperous the country had witnessed for many a decade. Industries of every kind were soon running full blast; labor was employed; commerce spread more swiftly than ever to the markets of the world. Coincident with this progress was the organization of the greatest combinations and trusts the world had yet seen. In 1899 the smelters formed a trust with a capital of $65,000,000; in the same year the Standard Oil Company with a capital of over one hundred millions took the place of the old trust; and the Copper Trust was incorporated under the laws of New Jersey, its par value capital being fixed shortly afterward at $175,000,000. A year later the National Sugar Refining Company, of New Jersey, started with a capital of $90,000,000, adopting the policy of issuing to the stockholders no public statement of its earnings or financial condition. Before another twelvemonth had elapsed all previous corporate financing was reduced to small proportions by the flotation of the United States Steel Corporation with a capital of more than a billion dollars, an enterprise set in motion by the famous Morgan banking house of New York.

In nearly all these gigantic undertakings, the same great leaders in finance were more or less intimately associated. To use the language of an eminent authority: “They are all allied and intertwined by their various mutual interests. For instance, the Pennsylvania Railroad interests are on the one hand allied with the Vanderbilts and on the other with the Rockefellers. The Vanderbilts are closely allied with the Morgan group.... Viewed as a whole we find the dominating influences in the trusts to be made up of a network of large and small capitalists, many allied to one another by ties of more or less importance, but all being appendages to or parts of the greater groups which are themselves dependent on and allied with the two mammoth or Rockefeller and Morgan groups. These two mammoth groups jointly … constitute the heart of the business and commercial life of the nation.” Such was the picture of triumphant business enterprise drawn by a financier within a few years after the memorable campaign of 1896.

America had become one of the first workshops of the world. It was, by virtue of the closely knit organization of its business and finance, one of the most powerful and energetic leaders in the struggle of the giants for the business of the earth. The capital of the Steel Corporation alone was more than ten times the total national debt which the apostles of calamity in the days of Washington and Hamilton declared the nation could never pay. American industry, filling domestic markets to overflowing, was ready for new worlds to conquer.


F.W. Taussig, Tariff History of the United States.

J.L. Laughlin, Bimetallism in the United States.

A.B. Hepburn, History of Coinage and Currency in the United States.

E.R.A. Seligman, The Income Tax.

S.J. Buck, The Granger Movement (Harvard Studies).

F.H. Dixon, State Railroad Control.

H.R. Meyer, Government Regulation of Railway Rates.

W.Z. Ripley (editor), Trusts, Pools, and Corporations.

R.T. Ely, Monopolies and Trusts.

J.B. Clark, The Control of Trusts.


1. What proof have we that the political parties were not clearly divided over issues between 1865 and 1896?

2. Why is a fall in prices a loss to farmers and a gain to holders of fixed investments?

3. Explain the theory that the quantity of money determines the prices of commodities.

4. Why was it difficult, if not impossible, to keep gold and silver at a parity?

5. What special conditions favored a fall in silver between 1870 and 1896?

6. Describe some of the measures taken to raise the value of silver.

7. Explain the relation between the tariff and the income tax in 1894.

8. How did it happen that the farmers led in regulating railway rates?

9. Give the terms of the Sherman Anti-Trust Act. What was its immediate effect?

10. Name some of the minor parties. Enumerate the reforms they advocated.

11. Describe briefly the experiments of the farmers in politics.

12. How did industrial conditions increase unrest?

13. Why were conservative men disturbed in the early nineties?

14. Explain the Republican position in 1896.

15. Give Mr. Bryan’s doctrines in 1896. Enumerate the chief features of the Democratic platform.

16. What were the leading measures adopted by the Republicans after their victory in 1896?

Research Topics

Greenbacks and Resumption.—Dewey, Financial History of the United States (6th ed.), Sections 122-125, 154, and 378; MacDonald, Documentary Source Book of American History, pp. 446, 566; Hart, American History Told by Contemporaries, Vol. IV, pp. 531-533; Rhodes, History of the United States, Vol. VIII, pp. 97-101.

Demonetization and Coinage of Silver.—Dewey, Financial History, Sections 170-173, 186, 189, 194; MacDonald, Documentary Source Book, pp. 174, 573, 593, 595; Hart, Contemporaries, Vol. IV, pp. 529-531; Rhodes, History, Vol. VIII, pp. 93-97.

Free Silver and the Campaign of 1896.—Dewey, National Problems (American Nation Series), pp. 220-237, 314-328; Hart, Contemporaries, Vol. IV, pp. 533-538.

Tariff Revision.—Dewey, Financial History, Sections 167, 180, 181, 187, 192, 196; Hart, Contemporaries, Vol. IV, pp. 518-525; Rhodes, History, Vol. VIII, pp. 168-179, 346-351, 418-422.

Federal Regulation of Railways.—Dewey, National Problems, pp. 91-111; MacDonald, Documentary Source Book, pp. 581-590; Hart, Contemporaries, Vol. IV, pp. 521-523; Rhodes, History, Vol. VIII, pp. 288-292.

The Rise and Regulation of Trusts.—Dewey, National Problems, pp. 188-202; MacDonald, Documentary Source Book, pp. 591-593.

The Grangers and Populism.—Paxson, The New Nation (Riverside Series), pp. 20-37, 177-191, 208-223.

General Analysis of Domestic Problems.Syllabus in History (New York State, 1920), pp. 137-142.

«·The Sound Money Battle of 1896 · CHAPTER XIX·»