What’s the worst that can happen during a transition between two American presidents taking place at a time of deep partisan division and nationwide unrest? You can find one historical answer by looking at the transition between James Buchanan and Abraham Lincoln after the election of 1860: secession, soon to be followed by civil war. Another answer, historian Heather Cox Richardson argued when I reached her recently with this question, comes from the transition between Benjamin Harrison and Grover Cleveland after the election of 1892: economic disaster, egged on by a vengeful lame-duck administration willing to leave things a mess for its successor.
Richardson is the author of six books about 19th- and 20th-century American history—most recently, How The South Won The Civil War, and, perhaps most relevantly to this conversation, To Make Men Free: A History of the Republican Party. Her daily Substack newsletter, Letters From an American, has become essential for readers trying to keep track of the news, in this year of too much of it.
Our conversation was condensed and edited for clarity.
Rebecca Onion: What were the Republicans standing for, when Harrison was elected? I think of the middle of the 19th century as being a time when Republicans were “the Party of Lincoln”—the party of the abolitionists. And Harrison was a Union officer.
Heather Cox Richardson: James Garfield [elected, and assassinated, in 1881] was really the last Lincoln Republican. By the time you get to even 1884, let alone 1892, the Republican Party had really wedded itself to big business. What became the symbol of the difference between the two parties, in the 1880s and 1890s, was the tariff. The argument was that the tariff protected corporations from foreign competition—that enabled them to collude to raise prices.
Really, all the late-19th-century political battles were fought over the issue of the tariff, kind of like taxes nowadays. The issue hit on something that was way bigger than the actual tariff. Where you stood on the issue of the tariff became symbolic of being either pro-business or pro–ordinary Americans.
What happened in the election of 1892 to set up this bad transitional period and the panic that followed?
The election was between Benjamin Harrison and Grover Cleveland, and most people go to sleep when they hear those two names, but that’s in part because of the people who wrote about them later. There was a very distinct narrative that came out afterward that made you think that was not an important time. But it’s actually crucially important.
In 1884, Cleveland was elected president, the first Democrat to take the White House since the Civil War. The Republicans went bonkers because they believed that what he was going to do was what he ran on: lower the tariff. Republicans said, He’s going to get rid of this tariff and the economy is going to hell in a handbasket; the entire country is going to be destroyed.
But they didn’t have to worry too much in his first term because they still held the Senate, so Cleveland couldn’t actually get tariff reform through Congress. He tried. It didn’t work.
So then, in the next presidential election in 1888, the Republicans just pulled out all the stops. Some Republican employers told their workers that if Cleveland was reelected, they’d be fired. They papered the country with literature about how tariffs are the answer to the economy, how Democrats don’t understand money—all the things you can imagine. They suppressed votes.
Yet in 1888, Cleveland won again, by 100,000 votes—at least, he won the popular vote. But when it goes to the Electoral College, there’s a funny little shift in the college that year that gave the election to Benjamin Harrison, the Republican candidate.
Harrison was a devoutly religious man. He said to his political manager, Mark Hanna, “Providence has given us this victory.” And Hanna grumbles later, to somebody else: “Providence hadn’t a damn thing to do with it. A number of men were compelled to approach the penitentiary to make him president.”
Once Harrison was in office, he didn’t act moderately. He thought that God gave him this victory, so he needed to be an extremist. So he populated the government with pro-business people, forced a whole bunch of pro-business legislation. A bunch of his supporters bought one of the major media outlets in the country, Frank Leslie’s Illustrated Newspaper, and they turned it over to his son to edit. … They used these levers to try to push through all the big-business stuff they possibly can.
As soon as he took office in 1889, Harrison’s administrators insisted that the only way to guarantee that Republicans never again lose control of America was to add six new states to the Union. So that’s how we got North Dakota, South Dakota, Montana, and Washington in 1889. Then the following year, we got Idaho and Wyoming. They were in such a hurry, they weren’t going through normal channels—for one of those states, they had volunteers write a constitution.
So they really think they have it packed. I’m not making this up. They say in Frank Leslie, The Senate’s never going to go Democratic again, because we’ve got all these new states, and we’re just packed the House with the Electoral College, which is never going to change.
But the economy was in real trouble in the middle ’80s, especially in the American West, where the farmers were very poor, and the Republicans kept insisting the only reason it was so bad was that the tariff wasn’t high enough. So they passed the McKinley Tariff in October 1890, raised tariff rates. Then in the midterms of 1890, they were completely blindsided. The Democrats, helped by the Populists and the West, took the House of Representatives by a margin of 2 to 1.
The Republicans pulled out all the stops again for Harrison in 1892, but this time it didn’t work because everyone hated Harrison, thought he’d gone too far, and was packing the mechanics of the system to stay in power. So there was a huge backlash and in 1892, Cleveland was elected—winning the popular vote and the Electoral College. And the Democrats won the presidency, House, and Senate for the first time since the Civil War.
Of course, at the time we had a longer interregnum between election and inauguration—from November to March—and during that time, the Harrison administration deliberately ran the country into the ground. They deliberately did it! It’s in the newspapers. They say to readers, OK, you elected a Democrat. They don’t know how to run the country. They don’t know anything about money; all the money is going to drain out of this country. There’s not going to be anything left. Take your money out of the stock market; we’re headed for a terrible crash. They basically created this crash.
Foreign capital was going home at the same time as Republicans had really deliberately spent a ton of money on things like statues and courthouses and veterans benefits, because they’d been trying to get rid of what was at the time a surplus coming into the treasury, trying to prove that they needed a tariff to bring in more money. They’d been running a surplus for years, and the Democrats kept going, We don’t need all this money! Lower the damn tariffs!
So during the interregnum, as the panic developed, the financiers rushed to Washington and said, DO something! And the secretary of the treasury, Charles Foster, and Harrison said, No, we’re good. Foster actually said publicly that, as he saw it, the administration was only responsible for the economy up until March 4, the day Cleveland took office. He didn’t even manage it—the economy actually collapsed 10 days before Harrison left office.
But if you Google anything, it’s going to say to you, It happened on Cleveland’s watch. But no! It happened on Harrison’s watch! But again—the Republicans wrote the history books.
OK, so in this between time, what things did the Republicans do to enable or facilitate this crash?
There’s so much in newspapers that [Republicans] run that enables the panic. The Chicago Tribune is a great example. They tell readers that the easy money Democrats promised would destroy industry and throw people out of work—but, they say, that’s fine. I’ll read you a passage: “The working classes of the country need a lesson. … It remains for the wise man to endeavor so to arrange his personal affairs that he will suffer least from the threatened affliction.” So basically, the Republicans will be passive spectators; it won’t be their funeral. It goes on and on like this.
So the minute Cleveland is elected, the gold started flowing out of the country to Europe. And the outgoing Harrison administration refused to reassure investors. By February 1893, the stock market was paralyzed and Eastern bankers begged for an issue of bonds to replenish the Treasury, but the administration announced there was no financial problem. J.P. Morgan went to Washington to urge Harrison to do something, but the administration wasn’t moved. That’s when the secretary of the treasury made that comment about Republicans only being responsible for the economy until March 4.
On Feb. 17, the market collapsed. Panicked observers begged Harrison to relieve the crisis, but with only eight days left in his term, they maintained nothing was happening. The secretary of the treasury spent his last few days in office sitting for his portrait.
Wall Street watched the outgoing administration in disgust. … I’ll read you a quote from the New York Times: “If the national Treasury Department had been retained especially to manufacture apprehension and create disturbance, it could not have done more effective work.” Before handing the department over to his successor, Foster told the newspapers that “the treasury was down to bedrock.”
They crashed the economy! Then, for the midterms in 1894, they went and told people, We told you the Democrats would crash the economy; reelect the Republicans and we’ll be fine. So the Republicans won, in what was the biggest landslide midterm election in American history, and they said, Everything’s going to be fine now.
Was there anyone inside the Harrison administration who might have been a countervoice to that, who might have said, People are going to suffer if this happens? Anyone with a sense of social responsibility?
You really don’t get that sense in reading the Harrison papers. You really don’t see people saying that. Where you got some sense of social responsibility, it was from people in the Army, stationed out in the Plains, who knew just how bad things were. The Harrison administration, when [Harrison] was in office, was always saying, There really isn’t a problem in the country. Farmers were caught in these terrible conditions on the Plains in those years, but the Republican line was, Farmers are spending too much money on fancy food and putting carpets in their homes, really, there’s no problem. And you’ve got Army officers looking around out there, saying, You know, actually, people are dying.
Harrison, who really was kind of a dull tool in some ways, really believed the party line. When his party got shellacked in 1890—and they got shellacked—he wandered around the garden, being like, “What happened?” There’s a letter from somebody who goes to visit him, and the letter reports him just wandering around, saying, I have no idea what happened, I just know it wasn’t my fault. Ha!
During the transition period, he wasn’t going to be the one to say, No, we can’t just tank this on purpose. For one thing, he was very religious. He believed Providence had a hand in so much. … Let’s say, he was always handled. He wasn’t a handler.
Who did the public blame, in this case?
If the 1894 midterms are anything to go by, the blame was not properly assigned. One thing I always say is, until the Great Depression, it’s easier to be sympathetic to people who don’t understand how economic depressions happen because they didn’t understand Keynesian economics. In the 19th century, they don’t understand how a national economy works.
So how do people take the Panic of 1893? All they see is, the first man down is one of the railroad corporations [Reading Railroad Company]. So they blame the railroads. But there’s no sense yet that it’s possible to create a panic psychologically, which, it’s pretty clear that’s what was happening.
If you actually look at the literature on the Panic of 1893, the economic historians who look at it—and there are not a lot of them—don’t really have an explanation for why it happened. If you look at 1873 or 1929, you can say, “It’s clear, we’ve got an overcapitalization over here, an issue over there”—but the numbers in ’93 were not bad. I mean, they weren’t great, but there was no reason for there to be a panic. So I argue it really was a psychological panic. And at the time the public certainly wasn’t prepared to understand why that was happening.
I think the people who did understand it were on Wall Street. They understood exactly what was happening, and they were furious about it, because even though they might have really liked Harrison, what they didn’t like was watching their investments evaporate into smoke.
What were the other lasting effects of this transition? What did anyone learn?
Interestingly enough, when the Great Depression came in ’29, Andrew Mellon advocated to Herbert Hoover simply letting it run its course. The example he used was the Panic of ’93. He said, Look, the Panic of ’93 was a good thing because it sort of knocked the wind out of the poor people, and they all went home to their parents’ farms and got their act together and voted for Republicans in the midterms. And to Hoover’s credit, he said, No, the world has changed, people can’t go home to their farms. I’ve just fed Belgium during World War I. I’m not going to let Americans starve.
Really, [the Panic of 1893] locked into the American psyche the idea that Democrats can’t handle money. You should read those newspapers from back then; they all say, We told you, as soon as Democrats got into power, they would destroy the economy.
Of course, we’re living with this now. And you tell me that that’s not going to happen, the minute that Biden, if he gets elected, gets in there. The same way people blame Obama for the crash of 2008. I mean, if Biden is selected, in January, when he takes over, the economy is going to be in the toilet. We have debts like nobody’s business, and they’re going to insist that there’s no money to do anything. It could be just horrible, and that’s exactly what happened after Cleveland was elected in 1892.