American History - Part 135 - Cleveland - Great Depression of 1893 - Setting the Gold Standard
Channel: ListenAndReadAlong
Date: 10/07/2013

Welcome to the MAKING OF A NATION -- American history in VOA Special English.
Grover Cleveland did not want to be president again. But he was worried about the future of the United States. He did not think President Harrison could solve the serious economic problems the country faced.
President Harrison had approved very high taxes on imports. He also had approved an increase in the supply of silver money. Grover Cleveland said both actions had hurt the economy. He also feared that Harrison was not strong enough to oppose the demands of special interest groups in the Republican Party.
Cleveland believed he was the only Democrat who could defeat Harrison. He won his party's nomination. And he was easily elected to a 2nd presidency.
Grover Cleveland immediately turned to the nation's economic problems. The country seemed headed for a serious depression.

Only a few days before Cleveland's second inauguration in 1893, a major railroad failed. Then another big company declared failure. This set off a selling panic on the stock market.
In the next few months, almost 8000 businesses failed in the United States. 400 banks closed. 1000000 workers lost their jobs. The prices of farm products fell lower than ever before. And thousands of farmers -- unable to pay their debts -- had to give up their farms.
In 1871, Germany declared that it would no longer support its paper money with silver. Instead, it would use only gold. Other European countries quickly did the same thing.

President Cleveland supported the gold standard. He opposed any use of silver for money. He said the United States should use only gold, as other nations did.
President Cleveland was sure the silver purchase law of 1890 had caused the economic depression. He explained the situation in this way:
The law had caused businessmen and investors to lose faith in the government's money policy. They were afraid their money would drop in value, as more silver money was put into use.
Investors began to withdraw their money from businesses. Banks began demanding early payment of loans. Everyone wanted gold. They took their paper money and their silver to the government and exchanged them for gold.
In 1890, when the Silver Purchase Act was passed, the government held almost 290000000 dollars in gold. After two years, withdrawals had cut that amount to 100000000 dollars.
President Cleveland and other administration officials began to worry. It was possible that gold holdings might fall so low the government could not support the dollar.
Cleveland decided the only answer was to get Congress to kill the silver purchase law. Then the government could stop buying silver. It could return to the gold standard.
The Congress was not in session, however. It would not meet again for several months. President Cleveland did not want to wait. He believed the problem was too serious. So, he called a special session of Congress.
The President did not expect an easy time with the Congress. Many congressmen supported silver money -- especially those congressmen from silver-producing states in the west.
President Cleveland believed he could get Congress to kill the silver purchase law. But if he showed any weakness, the fight would be lost. Then, just before the congressional debate, he learned he would need an operation.
He felt a rough spot in the top of his mouth. It got bigger and more painful. Doctors examined the spot. It was a cancer. President Cleveland asked how long he could wait to have the cancer removed. "If it were in my mouth," one of the doctors said, "I would have it removed immediately."
Cleveland agreed. But he said the operation would have to be kept secret. News from the White House often affected short-term activity on the stock market. News that the President's life was in danger could cause the nation's economic crisis to become worse.
Cleveland decided to have the operation on a friend's boat in New York Harbor. Newsmen were told he was going sailing with his friend.
Doctors made final preparations. They were not afraid of the operation. But they were afraid of what would happen if news of the operation were leaked to the press.
One of them spoke with the boat's captain. "If you hit an underwater rock," he said, "hit it good and hard, so we will all go to the bottom."
As the boat moved slowly up the East River in New York, the doctors put President Cleveland to sleep with an anesthetic drug. Then they began the operation. That will be our story in the next program of THE MAKING OF A NATION.