The Greenback Interlude
Whatever may have been the causes of the collapse of the Granger
movement in 1875 and 1876, returning prosperity for the Western farmer
was certainly not one of them, for the general agricultural depression
showed no signs of lifting until nearly the end of the decade. During
the Granger period the farmer attempted to increase his narrow margin of
profit or to turn a deficit into a profit by decreasing the cost of
transportation and eliminating the middleman. Failing in this attempt,
he decided that the remedy for the situation was to be found in
increasing the prices for his products and checking the appreciation of
his debts by increasing the amount of money in circulation.
This demand for currency inflation was by no means new when it was taken
up by the Western farmers. It had played a prominent part in American
history from colonial days, especially in periods of depression and in
the less prosperous sections of the ever advancing frontier. During
the Civil War, inflation was actually accomplished through the issue of
over $400,000,000 in legal-tender notes known as "greenbacks." No
definite time for the redemption of these notes was specified, and they
quickly declined in value as compared with gold. At the close of the war
a paper dollar was worth only about half its face value in gold. An
attempt was made to raise the relative value of the greenbacks and to
prepare for the resumption of specie payments by retiring the paper
money from circulation as rapidly as possible. This policy meant, of
course, a contraction of the volume of currency and consequently met
with immediate opposition. In February, 1868, Congress prohibited the
further retirement of greenbacks and left to the discretion of the
Secretary of the Treasury the reissue of the $44,000,000 which had been
retired. Only small amounts were reissued, however, until after the
panic of 1873; and when Congress attempted, in April, 1874, to force a
permanent increase of the currency to $400,000,000, President Grant
vetoed the bill.
Closely related to the currency problem was that of the medium to be
used in the payment of the principal of bonds issued during the Civil
War. When the bonds were sold, it was generally understood that they
would be redeemed in gold or its equivalent. Some of the issues,
however, were covered by no specific declaration to that effect, and a
considerable sentiment arose in favor of redeeming them with currency,
or lawful money, as it was called.
These questions were not party issues at first, and there was no
clear-cut division upon them between the two old parties throughout the
period. The alinement was by class and section rather than by party; and
inflationists and advocates of the redemption of the bonds in currency
were to be found not only among the rank and file but also among the
leaders of both parties. The failure of either the Democrats or the
Republicans to take a decided stand on these questions resulted, as so
often before, in the development of third parties which made them the
main planks in the new platform.
The first attempts at organized political activity in behalf of
greenbackism came not from the farmers of the West but from the laboring
men of the East, whose growing class consciousness resulted in the
organization of the National Labor Union in 1868. Accompanying, if not
resulting from the Government's policy of contraction, came a fall of
prices and widespread unemployment. It is not strange, therefore, that
this body at once declared itself in favor of inflation. The plan
proposed was what was known as the "American System of Finance": money
was to be issued only by the Government and in the form of legal-tender
paper redeemable only with bonds bearing a low rate of interest, these
bonds in turn to be convertible into greenbacks at the option of the
holder. The National Labor Union recommended the nomination of
workingmen's candidates for offices and made arrangements for the
organization of a National Labor party. This convened in Columbus in
February, 1872, adopted a Greenback platform, and nominated David Davis
of Illinois as its candidate for the presidency. After the nomination of
Horace Greeley by the Liberal Republicans, Davis declined this
nomination, and the executive committee of his party then decided that
it was too late to name another candidate.
This early period of inflation propaganda has been described as "the
social reform period, or the wage-earners' period of greenbackism, as
distinguished from the inflationist, or farmers' period that followed."
The primary objects of the labor reformers were, it appears, to lower
the rate of interest on money and to reduce taxation by the
transformation of the war debt into interconvertible bonds. The farmers,
on the other hand, were interested primarily in the expansion of the
currency in the hope that this would result in higher prices for their
products. It was not until the panic of 1873 had intensified the
agricultural depression and the Granger movement had failed to relieve
the situation that the farmers of the West took hold of greenbackism and
made it a major political issue.
The independent parties of the Granger period, as a rule, were not in
favor of inflation. Their platforms in some cases demanded a speedy
return to specie payment. In 1873 Ignatius Donnelly, in a pamphlet
entitled Facts for the Granges, declared: "There is too much paper
money. The currency is diluted--watered--weakened.... We have no
interest in an inflated money market.... As we have to sell our wheat at
the world's price, it is our interest that everything we buy should be
at the world's price. Specie payments would practically add eighteen
cents to the price of every bushel of wheat we have to sell!" In Indiana
and Illinois, however, the independent parties were captured by the
Greenbackers, and the Indiana party issued the call for the conference
at Indianapolis in November, 1874, which led to the organization of the
National Greenback party.
This conference was attended by representatives from seven States and
included several who had been prominent in the Labor Reform movement.
"The political Moses of the 'New Party,'" according to the Chicago
Tribune, was James Buchanan of Indianapolis, a lawyer "with an ability
and shrewdness that compel respect, however much his theories may be
ridiculed and abused." He was also the editor of the Sun, a weekly paper
which supported the farmers' movement. The platform committee of the
conference reported in favor of "a new political organization of the
people, by the people, and for the people, to restrain the aggressions
of combined capital upon the rights and interests of the masses, to
reduce taxation, correct abuses, and to purify all departments of the
Government." The most important issue before the people was declared to
be "the proper solution of the money question," meaning thereby the
issue of greenbacks interconvertible with bonds. A national convention
of the party was called to meet at Cleveland on March 11, 1875.
The Cleveland convention, attended by representatives of twelve States,
completed the organization of the Independent party, as it was
officially named, and made arrangements for the nominating convention.
This was held at Indianapolis on May 17, 1876, with 240 delegates
representing eighteen States. Ignatius Donnelly, who had apparently
changed his mind on the currency question since 1873, was the temporary
president. The platform contained the usual endorsement of a circulating
medium composed of legal-tender notes interconvertible with bonds but
gave first place to a demand for "the immediate and unconditional repeal
of the specie-resumption act." This measure, passed by Congress in
January, 1875, had fixed January 1, 1879, as the date when the
Government would redeem greenbacks at their face value in coin. Although
the act made provision for the permanent retirement of only a part of
the greenbacks from circulation, the new party denounced it as a
"suicidal and destructive policy of contraction." Another plank in the
platform, and one of special interest in view of the later free silver
agitation, was a protest against the sale of bonds for the purpose of
purchasing silver to be substituted for the fractional currency of war
times. This measure, it was asserted, "although well calculated to
enrich owners of silver mines ... will still further oppress, in
taxation, an already overburdened people."
There was a strong movement in the convention for the nomination of
David Davis for the presidency, but this seems to have met with
opposition from Eastern delegates who remembered his desertion of the
National Labor Reform party in 1872. Peter Cooper of New York was
finally selected as the candidate. He was a philanthropist rather than a
politician and was now eighty-five years old. Having made a large
fortune as a pioneer in the manufacture of iron, he left his business
cares to other members of his family and devoted himself to the
education and elevation of the working classes. His principal
contribution to this cause was the endowment of the famous Cooper Union
in New York, where several thousand persons, mostly mechanics, attended
classes in a variety of technical and educational subjects and enjoyed
the privileges of a free library and reading room. When notified of his
nomination, Cooper at first expressed the hope that one or both of the
old parties might adopt such currency planks as would make the new
movement unnecessary. Later he accepted unconditionally but took no
active part in the campaign.
The Greenback movement at first made but slow progress in the various
States. In Indiana and Illinois the existing independent organizations
became component parts of the new party, although in Illinois, at least,
quite a number of the former leaders returned to the old parties. In the
other Western States, however, the third parties of the Granger period
had gone to pieces or had been absorbed by means of fusion, and new
organizations had to be created. In Indiana the Independent party
developed sufficient strength to scare the Republican leaders and to
cause one of them to write to Hayes: "A bloody-shirt campaign, with
money, and Indiana is safe; a financial campaign and no money and we are
beaten."
The Independents do not appear to have made a very vigorous campaign in
1876. The coffers of the party were as empty as the pockets of the
farmers who were soon to swell its ranks; and this made a campaign of
the usual sort impossible. One big meeting was held in Chicago in
August, with Samuel F. Cary, the nominee for Vice-President, as the
principal attraction; and this was followed by a torchlight procession.
A number of papers published by men who were active in the movement,
such as Buchanan's Indianapolis Star, Noonan's Industrial Age of
Chicago, and Donnelly's Anti-Monopolist of St. Paul, labored not without
avail to spread the gospel among their readers. The most effective means
of propaganda, however, was probably the Greenback Club. At a conference
in Detroit in August, 1875, "the organization of Greenback Clubs in
every State in the Union" was recommended, and the work was carried on
under the leadership of Marcus M. Pomeroy. "Brick" Pomeroy was a
journalist, whose sobriquet resulted from a series of Brickdust Sketches
of prominent Wisconsin men which he published in one of his papers. As
the editor of Brick Pomeroy's Democrat, a sensational paper published in
New York, he had gained considerable notoriety. In 1875, after the
failure of this enterprise he undertook to retrieve his broken fortunes
by editing a Greenback paper in Chicago and by organizing Greenback
clubs for which this paper served as an organ. Pomeroy also wrote and
circulated a series of tracts with such alluring titles as Hot Drops and
Meat for Men. Several thousand clubs were organized in the Northwest
during the next few years, principally in the rural regions, and the
secrecy of their proceedings aroused the fear that they were advocating
communism. The members of the clubs and their leaders constituted, as a
matter of fact, the more radical of the Greenbackers. They usually
opposed fusion with the Democrats and often refused to follow the
regular leaders of the party.
In the election the Greenback ticket polled only about eighty thousand
votes, or less than one per cent of the total. In spite of the activity
of former members of the Labor Reform party in the movement,
Pennsylvania was the only Eastern State in which the new party made any
considerable showing. In the West over 6000 votes were cast in each of
the five States--Indiana, Illinois, Michigan, Iowa, and Kansas. The
agrarian aspect of the movement was now uppermost, but the vote of
17,000 polled in Illinois, though the largest of the group, was less
than a quarter of the votes cast by the state Independent Reform party
in 1874 when railroad regulation had been the dominant issue. Clearly
many farmers were not yet convinced of the necessity of a Greenback
party. The only tangible achievement of the party in 1876 was the
election of a few members of the Illinois Legislature who held the
balance between the old parties and were instrumental in sending David
Davis to the United States Senate. This vote, it is interesting to note,
kept Davis from serving on the electoral commission and thus probably
prevented Tilden from becoming President.
But the Greenback movement was to find fresh impetus in 1877, a year of
exceptional unrest and discontent throughout the Union. The agricultural
depression was even greater than in preceding years, while the great
railroad strikes were evidence of the distress of the workingmen. This
situation was reflected in politics by the rapid growth of the Greenback
party and the reappearance of labor parties with Greenback planks. ¹
¹ In state elections from Massachusetts to Kansas the Greenback and
labor candidates polled from 5 to 15 per cent of the total vote, and in
most cases the Greenback vote would probably have been much greater had
not one or the other, and in some cases both, of the old parties
incorporated part of the Greenback demands in their platforms. In
Wisconsin, for example, there was little difference between Democrats
and Greenbackers on the currency question, and even the Republicans in
their platform leaned toward inflation, although the candidates declared
against it. No general elections were held in 1877 in some of the States
where the Greenback sentiment was most pronounced.
In the following year the new party had an excellent opportunity to
demonstrate its strength wherever it existed. In February, 1878, a
conference was held at Toledo for the purpose of welding the various
political organizations of workingmen and advocates of inflation into an
effective weapon as a single united party. This conference, which was
attended by several hundred delegates from twenty-eight States, adopted
"National" as the name of the party, but it was usually known from this
time on as the Greenback Labor party. The Toledo platform, as the
resolutions adopted by this conference came to be designated, first
denounced "the limiting of the legal-tender quality of greenbacks, the
changing of currency-bonds into coin-bonds, the demonetization of the
silver dollar, the excepting of bonds from taxation, the contraction of
the circulating medium, the proposed forced resumption of specie
payments, and the prodigal waste of the public lands." The resolutions
which followed demanded the suppression of bank notes and the issue of
all money by the Government, such money to be full legal-tender at its
stamped value and to be provided in sufficient quantity to insure the
full employment of labor and to establish a rate of interest which would
secure to labor its just reward. Other planks called for the coinage of
silver on the same basis as that of gold, reservation of the public
lands for actual settlers, legislative reduction of the hours of labor,
establishment of labor bureaus, abolition of the contract system of
employing prison labor, and suppression of Chinese immigration. It is
clear that in this platform the interests of labor received full
consideration. Just before the conference adjourned it adopted two
additional resolutions. One of these, adopted in response to a telegram
from General B. F. Butler, denounced the silver bill just passed by
Congress because it had been so modified as to limit the amount of
silver to be coined. The other, which was offered by "Brick" Pomeroy,
declared: "We will not affiliate in any degree with any of the old
parties, but in all cases and localities will organize anew ... and ...
vote only for men who entirely abandon old party lines and
organizations." This attempt to forestall fusion was to be of no avail,
as the sequel will show, but Pomeroy and his followers in the Greenback
clubs adhered throughout to their declaration.
In the elections of 1878, the high-water mark of the movement, about a
million votes were cast for Greenback candidates. Approximately
two-thirds of the strength of the party was in the Middle West and
one-third in the East. That the movement, even in the East, was largely
agrarian, is indicated by the famous argument of Solon Chase, chairman
of the party convention in Maine. "Inflate the currency, and you raise
the price of my steers and at the same time pay the public debt." "Them
steers" gave Chase a prominent place in politics for half a decade. The
most important achievement of the movement at this time was the election
to Congress of fifteen members who were classified as Nationals--six
from the East, six from the Middle West, and three from the South. In
most cases these men secured their election through fusion or through
the failure of one of the old parties to make nominations.
Easily first among the Greenbackers elected to Congress in 1878 was
General James B. Weaver of Iowa. When ten years of age, Weaver had been
taken by his parents to Iowa from Ohio, his native State. In 1854, he
graduated from a law school in Cincinnati, and for some years thereafter
practiced his profession and edited a paper at Bloomfield in Davis
County, Iowa. He enlisted in the army as a private in 1861, displayed
great bravery at the battles of Donelson and Shiloh, and received rapid
promotion to the rank of colonel. At the close of the war he received a
commission as brigadier general by brevet. Weaver ran his first tilt in
state politics in an unsuccessful attempt to obtain the Republican
nomination for lieutenant governor in 1865. Although an ardent advocate
of prohibition and of state regulation of railroads, Weaver remained
loyal to the Republican party during the Granger period and in 1875 was
a formidable candidate for the gubernatorial nomination. It is said that
a majority of the delegates to the convention had been instructed in his
favor, but the railroad and liquor interests succeeded in stampeding the
convention to Samuel J. Kirkwood, the popular war governor. In the
following year Weaver took part in the organization of the Independent
or Greenback party in Iowa and accepted a position on its state
committee. Though resentment at the treatment which he had received from
the Republicans may have influenced him to break the old ties, he was
doubtless sincerely convinced that the Republican party was beyond
redemption and that the only hope for reform lay in the new party
movement.
Weaver was gifted with remarkable talent as an orator. His fine face and
soldierly bearing, his rich sympathetic voice and vivid imagination,
made him a favorite speaker at soldiers' reunions and in political
campaigns. Lacking the eccentricities of so many of his third party
associates and never inclined to go to extremes in his radicalism, he
was one of the ablest and, from the standpoint of the Republicans, the
most dangerous of the Greenback leaders. In Congress Weaver won the
respect of his colleagues. Always ready to promote what he believed to
be the interests of the common people and especially of the farmers, he
espoused the cause of the Oklahoma "boomers," who were opposed by a
powerful lobby representing the interests of the "cattle barons." He
declared that, in a choice between bullocks and babies, he would stand
for babies, and he staged a successful filibuster at the close of a
session in order to force the consideration of a bill for the opening of
part of Oklahoma to settlement.
The preliminaries of the campaign of 1880 were vexed by dissension
within the ranks of the Greenbackers. In March the radical faction led
by Pomeroy held a convention in St. Louis which claimed to speak for ten
thousand Greenback clubs and two million voters. After Stephen D.
Dillaye of New York had refused the presidential nomination at the hands
of this convention, it adjourned to meet in Chicago on the 9th of
June--the place and time already selected for the regular convention of
the National party. One reason for the attitude of this faction appears
to have been the fear of fusion with the Democrats. The Chicago
convention finally succeeded in absorbing these malcontents, as well as
a group of socialist delegates and representatives of various labor
organizations who asked to be admitted. Dennis Kearney, the notorious
sand-lot agitator of California was made chief sergeant at arms, and
Susan B. Anthony was allowed to give a suffrage speech. The platform
differed from earlier Greenback documents in that it contained no
denunciation of the Resumption Act. That was now a dead issue, for on
January 1, 1879, resumption became an accomplished fact, and the paper
currency was worth its face value in gold. Apart from this the platform
was much the same as that adopted at Toledo in 1878, with the addition
of planks favoring women's suffrage, a graduated income tax, and
congressional regulation of interstate commerce. On the first ballot,
General Weaver received a majority of the votes for presidential
nominee; and B. J. Chambers of Texas was nominated for Vice-President.
General Weaver in his letter of acceptance declared it to be his
intention "to visit the various sections of the Union and talk to the
people." This he did, covering the country from Arkansas to Maine and
from Lake Michigan to the Gulf, speaking in Faneuil Hall at Boston and
in the Cooper Union at New York, but spending the greater part of his
time in the Southern States. He declared that he traveled twenty
thousand miles, made fully one hundred speeches, shook the hands of
thirty thousand people, and was heard by half a million. Weaver was the
first presidential candidate to conduct a campaign of this sort, and the
results were not commensurate with his efforts. The Greenback vote was
only 308,578, about three per cent of the total. One explanation of the
small vote would seem to be the usual disinclination of people to vote
for a man who has no chance of election, however much they may approve
of him and his principles, when they have the opportunity to make their
votes count in deciding between two other candidates. Then, too, the sun
of prosperity was beginning at last to dissipate the clouds of
depression. The crops of corn, wheat, and oats raised in 1880 were the
largest the country had ever known; and the price of corn for once
failed to decline as production rose, so that the crop was worth half as
much again as that of 1878. When the farmer had large crops to dispose
of at remunerative prices, he lost interest in the inflation of the
currency.
After 1880 the Greenback party rapidly disintegrated. There was no
longer any hope of its becoming a major party, in the near future at
least, and the more conservative leaders began to drift back into the
old parties or to make plans for fusion with one of them in coming
elections. But fusion could at best only defer the end. The
congressional election of 1882 clearly demonstrated that the party was
moribund. Ten of the Congressmen elected in 1880 had been classified as
Nationals; of these only one was reëlected in 1882, and no new names
appear in the list. It is probable, however, that a number of
Congressmen classified as Democrats owed their election in part to
fusion between the Democratic and Greenback parties.
The last appearance of the Greenbackers in national politics was in the
presidential election of 1884. In May of that year a convention of "The
Anti-Monopoly Organization of the United States," held in Chicago,
adopted a platform voicing a demand for legislative control of
corporations and monopolies in the interests of the people and nominated
General Benjamin F. Butler for President. The convention of the
Greenback or National party met in Indianapolis, and selected Butler as
its candidate also. General Weaver presided over the convention. The
platform contained the usual demands of the party with the exception of
the resolution for the "free and unlimited coinage of gold and silver,"
which was rejected by a vote of 218 to 164. It would appear that the
majority of the delegates preferred to rely upon legal-tender paper to
furnish the ample supply of money desired. General Butler was at this
time acting with the Democrats in Massachusetts, and his first response
was noncommittal. Although he subsequently accepted both nominations, he
did not make an active campaign, and his total popular vote was only
175,370. Butler's personal popularity and his labor affiliations brought
increased votes in some of the Eastern States and in Michigan, but in
those Western States where the party had been strongest in 1880 and
where it had been distinctly a farmers' movement there was a great
falling off in the Greenback vote.
Though the forces of agrarian discontent attained national political
organization for the first time in the Greenback party, its leaders were
never able to obtain the support of more than a minority of the farmers.
The habit of voting the Republican or the Democratic ticket, firmly
established by the Civil War and by Reconstruction, was too strong to be
lightly broken; and many who favored inflation could not yet bring
themselves to the point of supporting the Greenback party. On the other
hand there were undoubtedly many farmers and others who felt that the
old parties were hopelessly subservient to capitalistic interests, who
were ready to join in radical movements for reform and for the
advancement of the welfare of the industrial classes, but who were not
convinced that the structure of permanent prosperity for farmer and
workingman could be built on a foundation of fiat money. Although the
platforms of the Greenbackers contained many demands which were soundly
progressive, inflation was the paramount issue in them; and with this
issue the party was unable to obtain the support of all the forces of
discontent, radicalism, and reform which had been engendered by the
economic and political conditions of the times. The Greenback movement
was ephemeral. Failing to solve the problem of agricultural depression,
it passed away as had the Granger movement before it; but the greater
farmers' movement of which both were a part went on.