Reconstruction and the Gilded Age 185To stanch the hemorrhage of gold, Cleveland called Congress into
special session and asked for the repeal of the Sherman Silver Purchase
Act. Congress agreed and acted quickly. But the hemorrhaging contin-
ued and the depression got worse. An “army” of unemployed workers,
led by Jacob S. Coxey of Ohio, a Populist, marched on Washington
and demanded jobs and an increase in the money supply. Coxey and
several other leaders were arrested and Coxey’s army was forced to dis-
band.
The Democrats in the House succeeded in reducing the tariff, but
the Senate added 634 amendments which jacked rates back up. This
Wilson-Gorman Tariff passed on August 27 , 1894 , but Cleveland re-
fused to sign it. One important feature of the act was a two percent fl at
rate on personal and corporate income over $ 4 , 000. But the Supreme
Court, in the case of Pollock v. Farmers Loan and Trust Company, de-
clared this provision unconstitutional because it was a direct tax, and
direct taxes can be apportioned only according to the population of
each state.
To resolve the problem of the continued depletion of the gold re-
serve, the administration worked out a $ 62 million loan from a bank-
ing group headed by J. Pierpont Morgan and August Belmont whereby
3. 5 million ounces of gold would be purchased with government bonds,
half the gold to come from abroad. For their assistance, the bankers
raked in a profit of $ 1. 5 million.
Maintaining the gold standard became an important issue in the
presidential election of 1896 , although the depression and the fact that
it persisted throughout the Cleveland administration did not bode well
for the Democrats. Under the dexterous management by Marcus A.
Hanna, a Cleveland mining and shipping magnate, the Republican
Party nominated William McKinley for President at its convention in
St. Louis in mid-June and Garret A. Hobart of New Jersey for Vice
President on a platform that advocated the single gold standard, a high
protective tariff, and an aggressive foreign policy.
At their convention in Chicago on July 8 , the Democrats adopted a
platform that demanded the free and unlimited coinage of silver at the
ratio of sixteen to one, and an end to high protective tariffs and the use
of injunctions against labor. William Jennings Bryan gave an electrify-
ing speech at the convention, in which he answered the Republican call