Historians generally concede that Stephen Grover Cleveland's first administration was better run than his second one. That is because he was in a prosperous first term, and then had a depression in the second that he could barely handle. He did try to handle economic issues, but quite ham-handedly: look at the 1895 use of Federal troops in Chicago to put down Eugene Debs peaceful strike against George Pullman, mentioned before in the review of the episode dealing with John Peter Altgeld.
Altgeld represented the best of the future Democratic Party he helped rebuild and create. President Cleveland was more of a 19th Century leader - he was the last great 19th Century Democratic leader. He was hard working, straight talking, and honest (in a profession with a lot of liars in it). Cleveland had been elected in 1884 despite a scurrilous campaign showing he had an illegitimate son. We really don't know if this was true, for all he said was "Tell the truth!" In the end his Republican opponent, James Blaine, had told too many lies, and his supporters made too many mistakes. Cleveland won by a close election, but he won - the first Democrat to occupy the White House since the inept James Buchanan in 1861 (or, as Andy Johnson was originally a Democrat - although a Unionist in the 1864 election - since 1869).
Cleveland (Carroll O'Connor here) handled his office quietly and efficiently for four years, but one thing that he did which gained much negative attention was his habit of vetoing private pension bills. After the American Civil War, the only people in the military who got pensions were those in the Northern forces who had documentary proof of service (i.e. were on formal rolls of men who signed up for the army or navy). They also had to show their mustering out papers. But over the twenty years since the war, it was not unknown for congressmen and even Senators to present private bills from men claiming some Northern military service, even if the documentation was faulty or non-existent.
This was encouraged by organizations like the Grand Army of the Republic (GAR) as a way of keeping the old veterans happy to vote for the Republicans. After all, the Democrats were mostly the losing side of the Civil War (the solid south). They could not seek pensions, as they fought against the U.S. (on the other hand, the governments of southern states did give their soldiers from their states pensions).
This worked like a charm in the 1860s to early 1880s. But by 1885 Cleveland was noticing a change in public opinion. A whole generation had grown up since the war ended, and while enthralled by stories of heroism by their forbears in the war, they didn't like the idea of on-going demands for pensions, particularly if there were serious questions about them. It was a matter that the Republicans would ignore for another decade.
Cleveland had spent the Civil War practicing law in Buffalo. He was a heavy man (our fattest President before William Howard Taft), and he hired a substitute to fight for him (which was allowed in the Civil War draft laws). He was criticized for this, but Blaine had also been using a substitute. So it really was not a major issue in 1884.
Now that he was elected, Cleveland started financial retrenchment throughout the government. This included the vetoing of the private pension laws. The northern veterans groups were furious, claiming that Cleveland (having not fought in the war) had no right to keep doing this. Cleveland refused to stop.
In 1888, for reasons connected to Cleveland's not supporting a protective tariff, Benjamin Harrison defeated Cleveland for re-election. Harrison won in the electoral college, but truth to tell, more voters liked Cleveland. So Cleveland resumed his lucrative law practice in New York City, and looked forward to possibly returning to the White House in 1892.
Cleveland's thrift (including the vetoed pensions - about 600 were vetoed by him, which was a record) left over $100,000,000 surplus in the U.S. Treasury. That was quite an accomplishment. Harrison had plans for expanding the government. Our navy was being modernized, so new battleships (including the ill-fated U.S.S. Maine) were constructed. The White House was to be remodeled (the plans were ornate, but fortunately never followed through).
But one error Harrison and his advisers made was to appoint a leading critic of Cleveland to be head of the Pension bureau. This was Corporal James Tanner, a veteran of the war who lost both legs. He had worked as an attorney helping present the petitions for pensions that Cleveland had vetoed. He also worked on Harrison's election campaign.
Tanner believed in giving money to any old comrade who needed it. He began to give pensions right and left, and the records were not well kept. There may have been corruption by some of his assistants. Harrison and the Secretary of the Interior tried to rein in Tanner. Tanner, rather imperiously, told them to mind their own business. Harrison (a Civil War general and veteran, by the way) fired him. While the budget of the "Billion Dollar Congress" was really out of bounds, the pension fiasco did not help the economic mess.
In 1892 Cleveland was able to beat Harrison for re-election. Unfortunately the loss of the surplus was worsened by the coming of a crash on Wall Street - leading to the depression of 1893. Cleveland was stuck with this, and never really got out from underneath it.
In 1897 McKinley and the Republicans came back. However, they had reevaluated the value of the Pensions. They did not like the arrogance of the Tanners, and realized that thirty years after the war the remaining vets were not the only voters to placate. So Cleveland's vetoing of the private Pensions finally became acceptable to both major parties.
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