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Cleveland lost the [[United States presidential election, 1888|1888 Presidential Election]] to Republican [[Benjamin Harrison|Benjamin Harrison]]. Apart from endless discussions of the tariff, there were no major issues, as both parties rallied their armies of voters and the GOP did a slightly better job.  Cleveland had chilly relations with intensely partisan Governor [[David B. Hill]], leader of the Democratic Party in New York, and he narrowly lost the state and the election as Harrison won the Electoral College by a 204-197 margin. Cleveland nevertheless won the nationwide popular vote. Out of office, he moved to New York City, joining the prestigious Bangs, Stetson, Tracy and McVeigh law firm. Cleveland enjoyed a busy, lucrative practice, chiefly as a referee appointed by the courts.  

Cleveland lost the [[United States presidential election, 1888|1888 Presidential Election]] to Republican [[Benjamin Harrison|Benjamin Harrison]]. Apart from endless discussions of the tariff, there were no major issues, as both parties rallied their armies of voters and the GOP did a slightly better job.  Cleveland had chilly relations with intensely partisan Governor [[David B. Hill]], leader of the Democratic Party in New York, and he narrowly lost the state and the election as Harrison won the Electoral College by a 204-197 margin. Cleveland nevertheless won the nationwide popular vote. Out of office, he moved to New York City, joining the prestigious Bangs, Stetson, Tracy and McVeigh law firm. Cleveland enjoyed a busy, lucrative practice, chiefly as a referee appointed by the courts.  

==1892 campaign==

===1892 campaign===

The Democrats won a landslide in the Congressional elections of 1890, attacking the McKinley Tariff, and the efforts of the GOP in Wisconsin and Illinois to shut down many religious schools.  Cleveland easily defeated Harrison in 1892, and the Democrats took control of both houses of Congress.  

The Democrats won a landslide in the Congressional elections of 1890, attacking the McKinley Tariff, and the efforts of the GOP in Wisconsin and Illinois to shut down many religious schools.  Cleveland easily defeated Harrison in 1892, and the Democrats took control of both houses of Congress.  

===Second term ===

==Second term, 1893-97 ==

Cleveland's most important appointees were [[John Carlisle]] as Secretary of the Treasury, and [[Richard Olney]] as Attorney General. Carlisle, of Kentucky, had been Speaker of the House, and was a tariff expert. Olney was a leading railroad lawyer in Boston; in 1895 the aggressive, undiplomatic Olney became Secretary of State.

Cleveland's most important appointees were [[John Carlisle]] as Secretary of the Treasury, and [[Richard Olney]] as Attorney General. Carlisle, of Kentucky, had been Speaker of the House, and was a tariff expert. Olney was a leading railroad lawyer in Boston; in 1895 the aggressive, undiplomatic Olney became Secretary of State.

====Silver and gold====

====Silver and gold====

The Sherman Silver Purchase Act of 1890 required the government to buy 4,500,000 ounces of silver each month, and to pay for it with the issue of new paper money. Conservatives denounced this as a wasteful subsidy to the silver miners and mine owners, and that it endangered the gold standard because there was not gold in the treasury to redeem all of the new government notes.  Using all his powers of persuasion and patronage, Cleveland forced the repeal of the law in October, 1893.   

The Sherman Silver Purchase Act of 1890 required the government to buy 4,500,000 ounces of silver each month, and to pay for it with the issue of new paper money. Conservatives denounced this as a wasteful subsidy to the silver miners and mine owners, and that it endangered the gold standard because there was not gold in the treasury to redeem all of the new government notes.  Using all his powers of persuasion and patronage, Cleveland called a special session of Congress and forced the repeal of the law in October, 1893.<ref> In the middle of the crisis he had secret emergency surgery to remove a cancerous growth in his mouth.</ref> Nevertheless the treasury continued to lose gold.

The depression continued to worsened, reaching a nadir in mid-1894. Prices, trade and profits continued to fall, and unemployment reached 20%. Some 156 railroads with 30,000 miles of track went bankrupt along with 800 banks and many small businesses.<ref>  Samuel Rezneck, "Unemployment, Unrest and Relief in the United States during the Depression of 1893-1897," ''Journal of Political Economy'' 61 (1953): 324-45 [http://www.jstor.org/stable/1826883  in JSTOR]; Charles Hoffmann, "The Depression of the Nineties," ''Journal of Economic History'' 16 (1956): 137-64 [http://www.jstor.org/stable/2114113  in JSTOR]</ref>  

The depression continued to worsened, reaching a nadir in mid-1894. Prices, trade and profits continued to fall, and unemployment reached 20%. Some 156 railroads with 30,000 miles of track went bankrupt along with 800 banks and many small businesses.<ref>  Samuel Rezneck, "Unemployment, Unrest and Relief in the United States during the Depression of 1893-1897," ''Journal of Political Economy'' 61 (1953): 324-45 [http://www.jstor.org/stable/1826883  in JSTOR]; Charles Hoffmann, "The Depression of the Nineties," ''Journal of Economic History'' 16 (1956): 137-64 [http://www.jstor.org/stable/2114113  in JSTOR]</ref>  

In 1895 the treasury was empty and Cleveland had to borrow gold from [[J. P. Morgan]] and the New York banks, a policy that embarrasses his administration and strengthened the silverites.<ref> Ron Chernow, ''The House of Morgan: An American Banking Dynasty and the Rise of Modern Finance'' (2001)  [http://books.google.com/books?id=N6rbt4X-VlEC&pg=PA73&lpg=PA73&dq=cleveland+morgan+gold&source=web&ots=xdNS7L16bs&sig=jzVfIcyuJZqFqrQDEp3peg2nDhk&hl=en&sa=X&oi=book_result&resnum=7&ct=result online p. 73-74]</ref>

In 1895 the treasury's gold dupply had almost run out and Cleveland had to borrow gold from [[J. P. Morgan]] and the New York banks, an emergency move that embarrassed his administration and strengthened the silverites.<ref> Ron Chernow, ''The House of Morgan: An American Banking Dynasty and the Rise of Modern Finance'' (2001)  [http://books.google.com/books?id=N6rbt4X-VlEC&pg=PA73&lpg=PA73&dq=cleveland+morgan+gold&source=web&ots=xdNS7L16bs&sig=jzVfIcyuJZqFqrQDEp3peg2nDhk&hl=en&sa=X&oi=book_result&resnum=7&ct=result online p. 73-74]</ref>

====Wilson Gorman tariff====

====Wilson Gorman tariff====

Cleveland tried to lower the tariff in 1893-94 and result was a fiasco. The House did vote much lower rates, but protectionist Democrats in the Senate, led by Senator Arthur Pue Gorman, Democrat of Maryland, raised them again, and added an income tax, leaving Cleveland's main campaign issue in shambles. He allowed the "Wilson-Gorman Tariff Act", including the income tax, to become law without his signature in 1894.</ref>  The Supreme Court in 1895 declared the income tax of 1894 unconstitutional. The income tax was legalized by the [[Sixteenth Amendment]] in 1913.</ref>

Cleveland tried to lower the tariff in 1893-94 and result was a fiasco. The House did vote much lower rates, but protectionist Democrats in the Senate, led by Senator Arthur Pue Gorman, Democrat of Maryland, raised them again, and added an income tax of 2% on incomes over $4000, leaving Cleveland's main campaign promises of tariff reform in shambles. He allowed the "Wilson-Gorman Tariff Act", including the income tax, to become law without his signature in 1894.</ref>  The Supreme Court in 1895 declared the income tax of 1894 unconstitutional. The income tax was legalized by the [[Sixteenth Amendment]] in 1913.</ref>

====Pullman Strike====

===Pullman Strike: 1894===

Deep in the depression, in summer 1894 the Pullman strike, based in Chicago, was an attempt by workers tried to stop all trains, including those carrying the U.S. mail.  Noting that the mail is a constitutional duty of the federal government, Cleveland rejected the demands by Illinois Governor [[John Peter Altgeld]], a fellow Democrat, to stay out. Altgeld, with ties to the labor unions, was a leader of the radical left wing of the party, and was using states rights arguments favored by southerners who wanted  no federal protection of the voting rights of blacks. "If it takes the entire army and navy of the United States to deliver a postcard in Chicago that card will be delivered," he roared.

Deep in the depression, in summer 1894 the Pullman strike, based in Chicago, was an attempt by workers tried to stop all trains, including those carrying the U.S. mail.  Noting that the mail is a constitutional duty of the federal government, Cleveland rejected the demands by Illinois Governor [[John Peter Altgeld]], a fellow Democrat, to stay out. Altgeld, with ties to the labor unions, was a leader of the radical left wing of the party, and was using states rights arguments favored by southerners who wanted  no federal protection of the voting rights of blacks. "If it takes the the entire army and navy . . . to deliver a postal card in Chicago, that card will be delivered." he promised. Cleveland ignored Altgeld and the states rights argument and sent in the army to take control of the rail yards in Chicago and dozens of other major cities. Cleveland had the strike leaders arrested as strikers attacked the army in numerous cities . The army reopened the rail system.   

Cleveland ignored Altgeld and the states rights argument and sent in the army to take control of the rail yards in Chicago and dozens of other major cities. Cleveland had the strike leaders arrested as strikers attacked the army in numerous cities . The army reopened the rail system.   

 

====Hawaii====

===Hawaii===

In 1893 Hawaiian businessmen overthrew the local queen, without bloodshed; they proclaimed an independent republic in 1894. They sought annexation to the U.S., which long had dominated the Hawaiian economy. Cleveland withdrew the treaty of annexation and sent his own agent [[James Henderson Blount]] to investigate.  The Blount report said that support for the revolution by the American consul tainted its legitimacy.  Cleveland was on the verge of sending the navy to conquer Hawaii and return it to the queen when she promised to behead all the revolutionaries.  The notion that America would invade a peaceful republic and install a bloodthirsty absolute monarch so violated the principles of the American Revolution (when France aided the American rebels) that Cleveland sat silent.  In 1898 Hawaii voluntarily joined the U.S.

In 1893 Hawaiian businessmen overthrew the local queen, without bloodshed; they proclaimed an independent republic in 1894. They sought annexation to the U.S., which long had dominated the Hawaiian economy. Cleveland withdrew the treaty of annexation and sent his own agent [[James Henderson Blount]] to investigate.  The Blount report said that support for the revolution by the American consul tainted its legitimacy.  Cleveland was on the verge of sending the navy to conquer Hawaii and return it to the queen when she promised to behead all the revolutionaries.  The notion that America would invade a peaceful republic and install a bloodthirsty absolute monarch so violated the principles of the American Revolution (when France aided the American rebels) that Cleveland sat silent.  In 1898 Hawaii voluntarily joined the U.S.

==Latin America==

===Latin America===

Cleveland wanted to enforce strict neutrality in the Cuban rebellion between 1895 and 1897, but American public opinion strongly supported the rebels. In 1898, under McKinley, the U.S. went to war to stop Spain’s harsh suppression of the rebellion.  

Cleveland wanted to enforce strict neutrality in the Cuban rebellion between 1895 and 1897, but American public opinion strongly supported the rebels. In 1898, under McKinley, the U.S. went to war to stop Spain’s harsh suppression of the rebellion.  

Cleveland took a bellicose stand against Britain in  the Venezuela crisis of 1895, claiming the  [[Monroe Doctrine]] gave him the right to intervene in a boundary dispute between independent Venezuela and British Guiana, a neighboring British colony. He stood behind Secretary of State Richard Olney's claim that the United States was "practically sovereign on this continent" and that its "fiat" was law.  Britain ignored the hint of war and tried to maintain friendly relations with the U.S.; Britain and Venezuela resolved the issue through arbitration.

Cleveland took a bellicose stand against Britain in  the Venezuela crisis of 1895, claiming the  [[Monroe Doctrine]] gave him the right to intervene in a boundary dispute between independent Venezuela and British Guiana, a neighboring British colony. He stood behind Secretary of State Richard Olney's claim that the United States was "practically sovereign on this continent" and that its "fiat" was law.  Britain ignored the hint of war and tried to maintain friendly relations with the U.S.; Britain and Venezuela resolved the issue through arbitration.

====1896====

===1896===

Radical agrarians rejected Cleveland and the [[Gold Democrats]], taking over the Democratic party in 1896 and nominating firebrand [[William Jennings Bryan]] of Nebraska. Bryan vehemently denounced industrialists and bankers in his famous “Cross of Gold Speech.”  Bryan called for inflation by putting more money in circulation; his plan was to legislate cheap silver into legal currency at the ratio of 16 oz of silver to one oz of gold, hence the silverite slogan “16 to 1.” . Many of Cleveland's closest associates bolted the Democratic party and formed the "Gold Democrats"; many Cleveland supporters voted for republican candidate [[William McKinley]]. Cleveland himself remained silent.  

Radical agrarians rejected Cleveland and the [[Gold Democrats]], taking over the Democratic party in 1896 and nominating firebrand [[William Jennings Bryan]] of Nebraska. Bryan vehemently denounced industrialists and bankers in his famous “Cross of Gold Speech.”  Bryan called for inflation by putting more money in circulation; his plan was to legislate cheap silver into legal currency at the ratio of 16 oz of silver to one oz of gold, hence the silverite slogan “16 to 1.” . Many of Cleveland's closest associates bolted the Democratic party and formed the "Gold Democrats"; many Cleveland supporters voted for republican candidate [[William McKinley]]. Cleveland himself remained silent.