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Wednesday, October 12, 2011

Gold and US Political Parties

The Transformation of the American Party System



This article is excerpted from A History of Money and Banking in the United States, part 1, "The History of Money and Banking Before the 20th Century" (2002).

Orthodox economic historians attribute the triumph of William Jennings Bryan in the Democratic convention of 1896, and his later renominations for president, to a righteous rising up of the "people" demanding inflation over the "interests" holding out for gold. Friedman and Schwartz attribute the rise of Bryanism to the price contraction of the last three decades of the 19th century, and the triumph of gold and disappearance of the "money" issue to the price rise after 1896.

This conventional analysis overlooks several problems. First, if Bryan represented the "people" versus the "interests," why did Bryan lose and lose soundly, not once but three times? Why did gold triumph long before any price inflation became obvious, in fact at the depths of price contraction in 1896?


But the main neglect of the conventional analysis is the disregard of the highly illuminating insights provided in the past 15 years by the "new political history" of 19th-century American politics and its political culture. The new political history began by going beyond national political issues (largely economic) and investigating state and local political contests. It also dug into the actual voting records of individual parishes, wards, and counties, and discovered how people voted and why they voted the way they did. The work of the new political history is truly interdisciplinary, for its methods range from sophisticated techniques for voting analysis to illuminating insights into American ethnic religious history.


In the following pages, we shall present a summary of the findings of the new political history on the American party structure of the late 19th century and after, and on the transformation of 1896 in particular.

First, the history of American political parties is one of successive "party systems." Each party system lasts several decades, with each particular party having a certain central character; in many cases, the name of the party can remain the same but its essential character can drastically change – in the so-called "critical elections." In the 19th century the nation's second party system (Whigs v. Democrats), lasting from about 1832 to 1854, was succeeded by the third system (Republicans v. Democrats), lasting from 1854 to 1896.

Characteristic of both party systems was that each party was committed to a distinctive ideology clashing with the other, and these conflicting worldviews made for fierce and close contests. Elections were particularly hard fought. Interest was high since the parties offered a "choice, not an echo," and so the turnout rate was remarkably high, often reaching 80 to 90 percent of eligible voters. More remarkably, candidates did not, as we are used to in the 20th century, fuzz their ideology during campaigns in order to appeal to a floating, ideologically indifferent, "independent voter."

There were very few independent voters. The way to win elections, therefore, was to bring out your vote, and the way to do that was to intensify and strengthen your ideology during campaigns. Any fuzzing over would lead the Republican or Democratic constituents to stay home in disgust, and the election would be lost. 

Very rarely would there be a crossover to the other, hated party.

One problem that strikes anyone interested in 19th-century political history is, How come the average person exhibited such great and intense interest in such arcane economic topics as banking, gold and silver, and tariffs? Thousands of half-literate people wrote embattled tracts on these topics, and voters were intensely interested. Attributing the answer to inflation or depression – to seemingly economic interests, as do Marxists and other economic determinists – simply won't do. The far-greater depressions and inflations of the 20th century have not educed nearly as much mass interest in economics as did the milder economic crises of the past century.


Only the findings of the new political historians have cleared up this puzzle. It turns out that the mass of the public was not necessarily interested in what the elites, or national politicians, were talking about. The most intense and direct interest of the voters was applied to local and state issues, and on these local levels the two parties waged an intense and furious political struggle that lasted from the 1830s to the 1890s.

The beginning of the century-long struggle began with the profound transformation of American Protestantism in the 1830s. This transformation swept like wildfire across the Northern states, particularly Yankee territory, during the 1830s, leaving the South virtually untouched. The transformation found particular root among Yankee culture, with its aggressive and domineering spirit.

This new Protestantism – called "pietism" – was born in the fires of Charles Finney and the great revival movement of the 1830s. Its credo was roughly as follows: Each individual is responsible for his own salvation, and it must come in an emotional moment of being "born again." Each person can achieve salvation; each person must do his best to save everyone else. This compulsion to save others was more than simple missionary work; it meant that one would go to hell unless he did his best to save others. But since each person is alone and facing the temptation to sin, this role can only be done by the use of the State. The role of the State was to stamp out sin and create a new Jerusalem on Earth.

The pietists defined sin very broadly. In particular, the most important politically was "demon rum," which clouded men's minds and therefore robbed them of their theological free will. In the 1830s, the evangelical pietists launched a determined and indefatigable prohibitionist crusade on the state and local level that lasted a century. Second was any activity on Sunday except going to church, which led to a drive for sabbatarian blue laws. Drinking on Sunday was of course a double sin, and hence was particularly heinous.


Another vital thrust of the new Yankee pietism was to try to extirpate Roman Catholicism, which robs communicants of their theological free will by subjecting them to the dictates of priests who are agents of the Vatican. If Roman Catholics could not be prohibited per se, their immigration could be slowed down or stopped. And since their adults were irrevocably steeped in sin, it became vital for crusading pietists to try to establish public schools as compulsory forces for Protestantizing society or, as the pietists liked to put it, to "Christianize the Catholics." If the adults are hopeless, the children must be saved by the public school and compulsory-attendance laws.

Such was the political program of Yankee pietism. Not all immigrants were scorned. British, Norwegian, or other immigrants who belonged to pietist churches (whether nominally Calvinist or Lutheran or not) were welcomed as "true Americans." The Northern pietists found their home, almost to a man, first in the Whig Party, and then in the Republican Party. And they did so, too, among the Greenback and Populist parties, as we shall see further below.

There came to this country during the century an increasing number of Catholic and Lutheran immigrants, especially from Ireland and Germany. The Catholics and High Lutherans, who have been called "ritualists" or "liturgicals," had a very different kind of religious culture. Each person is not responsible for his own salvation directly; if he is to be saved, he joins the church and obeys its liturgy and sacraments. In a profound sense, then, the church is responsible for one's salvation, and there was no need for the State to stamp out temptation. These churches, then, especially the Lutheran, had a laissez-faire attitude toward the State and morality. Furthermore, their definitions of "sin" were not nearly as broad as the pietists'. Liquor is fine in moderation; and drinking beer with the family in beer parlors on Sunday after church was a cherished German (Catholic and Lutheran) tradition; and parochial schools were vital in transmitting religious values to their children in a country where they were in a minority... continued