4. Greenback-Labor’s Struggle for a Just Monetary System
Labor, in the decade of the 1870s, pursued independent political action in a loose alliance with monetary reformers known as Greenbackers. The basis for the electoral coalition was a shared criticism of the existing system of banking and finance which seemed to be designed to concentrate wealth in the hands of the business class and maximize the exploitation of workers and farmers. The Greenback philosophy offered the worker an explanation for the obvious problem of the growing concentration of wealth, on one hand, and the growing impoverishment of the worker, on the other. In the process of challenging the political and economic elite of the day, labor confronted the fundamental impediments to genuine democracy in the U.S. First was the process of candidate selection, as the Labor Reform Party sought a candidate with a national reputation, someone capable of winning a majority of the vote.
Second was the rigid two-party system, which was structured to deflect and divert the nation’s attention from important issues rather than to resolve them. Political opportunism on the part of the Democratic Party leaders, designed to absorb grassroots challenges, was crucial in blocking labor’s efforts at independent political action. Class conflict during the long depression of 1873-1879, nonetheless, was politically expressed by the election of numerous Greenback-Labor Party candidates to office in 1878.
To some economic historians, the Civil War was the Second American Revolution. The defeat of the slave-owning planter class in the South left corporate interests virtually unchallenged in what evolved into an era of predatory capitalism. Republican Party politicians, the “servile instruments” of eastern business, according to this interpretation of history, openly subordinated public interests to private profits. Their pro-big business legislative program included protective tariffs, various government subsidies, and “sound money” – all of which testified to the capture of the national government by business interests (Unger: 4).
While the details of the so-called “money question,” in retrospect, may seem overly complicated and therefore obscure and foreign to industrial workers, the political and social implications were not. In the words of one historian, “How money was created, and on what basis it circulated, defined in critical ways the relationship of farmers, urban workers, and commercial participants in the emerging industrial state.” The financial structures were crucial in determining “how many Americans obtained that minimum of income necessary to ensure … lives of some dignity” (Goodwyn: 9). Fundamental questions addressed by Greenbackers and Labor, then, were such non-esoteric topics as price and income levels, interest rates, the relationship between debtors and creditors, and the definition of money.
The immense cost of the Civil War (some $3 billion, of which only $200 million was paid for by increased taxes) influenced the Northern Congress to abandon the gold standard. To pay for the war, the government contracted with commercial banks for loans in the form of tax free government bonds, which increased both the amount of currency in circulation and the pressure on gold reserves. Had the gold standard remained in force, the nation’s gold reserves would have quickly been exhausted. Congress, therefore, authorized the issuance of legal treasury notes known as Greenbacks. At the end of the war, some $450 million worth were in circulation. Their contribution to the wartime economy has been summarized as “inflation,” “commercial liquidity,” and “prosperity.”
The political-financial controversy following the Civil War centered on the attempts by banking and business interests to return to the gold standard. Wind fall profits would have been made by redeeming government bonds in gold valued at the pre-war level. In essence, that would have meant that “though the Civil War had been fought with 50 cent dollars, the cost would be paid in 100 cent dollars” (Goodwyn: 11). Workers and farmers, through their taxes, would pay the difference to the banking and investing community. Two methods of returning to the gold standard, both of which were viewed as cruel and exploitative to workers and farmers, were proposed. The first approach would raise taxes immediately to retire Greenbacks from circulation. As a result, the currency would have been abruptly contracted, prices driven down, business activity depressed and unemployment dramatically increased. The second approach would have frozen the money supply at existing levels, while the population and the economy grew. The resultant deflationary spiral would have been a blessing to the banker-creditors, while it would have meant a low and declining standard of living for workers (Goodwyn: 11, 12).
Money questions were political issues because of the sense that bankers and investors were exploiting their influence over government to enrich themselves from the recent war. Commercial bankers not only purchased the government bonds at special rates; they also received an exceptional rate of interest. In addition, the interest was payable in gold, which in itself would yield a large profit for the investor. Banks and bankers came to be perceived as a privileged institution and a favored class (Rochester: 26). Tax exempt bonds bearing exorbitant rates of interest were increasingly criticized as a violation of “all just principles of revenue laws” (Nash: 150). The fundamental political controversy behind the so-called money question, then, could be summarized as: Who was to carry the burden of the war debt? Who was ultimately to meet the costs of the war (Rochester: 23, 24)?
The terms used for the debate were “hard money” versus “fiat money.” Bankers defined gold and silver money, not as simply a medium of exchange, but as a commodity of intrinsic value. Money was said to be “only as good as the gold which is in it.” Money not backed by hard metal was said to be “fiat money.” It was money only because legislators, by arbitrary fiat, defined it as such (Goodwyn: 10). Greenbackers, for their part, thought of currency as solely a creature of law and saw a “harmony of interests” between labor and other productive classes united against a common foe, the finance capitalist” (Goodwyn: 14). Monetary reform, to them, meant increasing the money in circulation and keeping prices steady by balancing the total supply of money with the volume of goods in circulation (Rochester: 27). The much noted demand to monetize silver was seen by Greenbackers as a diversion. Silver, like gold, was a hard currency. In the long run, silver would contribute to an overly rigid money supply that would foster high interest rates and benefit only the money lenders (Goodwyn: 17).
The sense of frustration felt by the worker following the Civil War helps explain the extent of labor’s participation in the post war financial controversy. The American worker confronted a society which promised more than it fulfilled. Job insecurity, the uncertainties of an unregulated market economy, the hazards of injury and illness, all contributed to a growing sense of anxiousness. Workers possessed political rights but were denied the promised economic benefits of a wealthy, growing country (Unger: 23).
Like their agrarian Greenbacker allies, Labor-Greenbackers detested the bankers, above all. Yet they were not simply working class imitators of the entrepreneur capitalist. In the words of labor editor A.C. Cameron, “The great object and aim of the whole labor reform movement is not to make the working man a capitalist …. but to secure him in his present condition those rights which are essential to his well being, and to which he is entitled as a human being” (Unger: 106). The National Labor Union was known as a consistent critic of high interest rates, the national banking system, bank notes, and tax-exempt government bonds (Karson: 11).
William Sylvis spoke for organized labor when he argued that the rate of interest, which determined the real value of money, was the key to the impoverishment of labor. While labor was paid for ten hours a day six days a week, money “sat idle” and received interest twenty-four hours a day, seven days a week. Sylvis observed that since interest increased six per cent or more a year, while labor could only produce enough to increase the national wealth by three of four per cent, money made up the difference by “pre-empting” the present and future products of labor. Sylvis illustrated the absurdity of the prevailing financial structure with what he conceded to be a gross over-simplification. “If interest were eight per cent and the national wealth increased at four per cent, one-eighth of the population owning one-quarter of the national wealth in 1790, would seventy years later own three times the value of the property of the nation” (Grossman: 247, 248).
To increasing numbers of labor’s thinkers, the concept that high interest meant low wages came as a “revelation – a liberating insight” (Unger: 106). Labor leaders concluded that interest, because of its tendency to concentrate national wealth in the hands of the money lenders, was the key to the “great labor puzzle” (Unger: 116). An editorial writer for the National Labor Tribune defined interest as a “cancer” which “drives millions into starvation.” Interest was named as the force that “holds the struggling worker in dependence to those who have a little money.” The usurious nature of the existing banking system was denounced for making “children pale and haggard,” “men sunken eyed and dejected,” and “mothers sad.” High interest was further condemned for driving “men from their homes” and “sending them down to Rum” (Unger: 107). Sylvis warned labor audiences that “their dearest rights were being stolen “by the power of gold” and further that “bonds and banks were the Alpha and Omega of the devil’s alphabet” (Unger: 108). Labor Greenbackers hurled the traditional agrarian epithets at the banking system: “money power … monster of the age … aristocracy of untaxed wealth” (Unger: 109).
Even more convincing to the working class, the periodic economic depressions, or panics as they were called in the nineteenth century, were attributed to high interest rates. Because labor could not create wealth fast enough to satisfy the “insatiable appetite” of money at “compound interest,” about once every ten years interest went unpaid. The result was a money “panic,” the widespread repudiation of debts, and an economic depression in which all of society suffered. Panics invariably hurt the worker more than the banker. Sylvis explained that money had a “lien” on society and gathered whatever was left into its “greedy maw,” while labor began a slow struggle upward from nothing. Money resumed its practice of “appropriating” the product of the workers. The productive farmers and workers thus were chained to the money cycle, as a “money monarchy” doomed them to suffer from the periodic depressions. Sylvis protested that “the very heart’s blood of the workingman … was mortgaged from the cradle to the grave” (Grossman: 248).
Bankers and bondholders, in a similar vein, were subject to labor-based criticism for receiving special favors. During the war, Congress authorized the sale of bonds for Greenbacks, the interest on which would be paid in gold. The legislation did not specify how the principal was to be paid. After the war, when the principal was also paid in gold, the net interest transferred from the Treasury Department to the bondholder constituted what was considered to be the “princely” rate of 10 per cent (Grossman: 250).
Sylvis’s sense of outrage over the injustice of the bondholders’ war time “profiteering” was apparent when addressing audiences consisting of war veterans. The labor orator often began by asking, “What do you say, you man out there in the crowd, with one leg, and a prop under your arm, did you get your wages in gold?” To the families of those killed in the war, Sylvis lamented, “[T]here is no gold for the widow and the orphan. Their tears and sorrows have been made into gold bearing bonds” (Grossman: 251). For labor the unjust nature of the financial structure was painfully obvious. As Sylvis articulated the concept, “[W]hy should the money kings who skinned the government in its hour of danger be the preferred of the preferred, the elect of the elect?” The solution was clear: simple justice demanded that the bondholder be paid “in the same currency with which he bought the bonds” (Grossman: 251).
An additional basis for labor’s criticism of the system of banknotes was the fact that they placed the control of the national currency in private hands. Sylvis estimated profit of banks on the $300,000,000 in bank notes to be $100,000,000 – all of which was squeezed from productive labor. National banks, Sylvis charged, were a “national swindle” – worse, a “licensed swindle” (Grossman: 252).
Still gold was identified as the root of the nation’s financial difficulties. The irrationality of a gold-based currency was illustrated by the observation that the intrinsic value of gold was subject to fluctuation. Because gold was not a constant measure of value and it was scarce and concentrated in a few private hands, labor charged that the fluctuations in value were manipulated to benefit the private interests of the possessors of the gold rather than the larger interests of the public. Sylvis mused that while no “sane” person would agree to a fluctuating yardstick or a fluctuating pound weight, the financial “hocus-pocus” of the money powers so mystified the public, that they were allowed to use such a measure for the value of money. Labor’s solution was a “people’s” government to end the worship of gold (Grossman: 249).
Paper money, Sylvis concluded, was democratic money. This cheap, safe, convenient, abundant currency was the answer to many of labor’s objections to a gold-backed currency. By reducing the rate of interest below the increase in national wealth, the products of labor could be prevented from accumulating in the hands of the “money barons” and would give to the nation’s producers the “fruits of their toil” (Grossman: 25). To this end, Sylvis endorsed the “Ohio” idea, which proposed that bondholders be paid in Greenbacks, the “currency for the government and the people, the laborer and the office holder, the pensioner and the soldier.” For the benefit of his critics in the banking and investing community, Sylvis sarcastically noted that Greenbacks could be used to buy everything – “even Congressmen” (Grossman: 251).
Labor-Greenbackers could be distinguished from Democratic Party fiat money advocates by labor’s support for what was known as the “interconvertible bond.” Some Democrats also expressed antipathy toward banks and bondholders. Like Labor-Greenbackers, they would tax bonds, abolish national banks, and substitute Greenbacks for bank notes. Labor, on the other hand, opposed the Democrats’ protectionist trade policies and favored the interconvertible bond proposal as the solution to the financial question (Unger: 112, 113). This proposal envisioned the government loaning money directly to citizens, secured by property, and at a low rate of interest, about one percent (which was thought to be the actual cost of banking). No longer intimidated by high interest rates, people would borrow freely what they could use. Overexpansion would be avoided, because when the citizen no longer needed the loan, he could simply return it to the government in exchange for a government bond, which in turn, could be reconverted, at his option, when he again had need of money. The interconvertible bond would create an elastic currency which could expand and contract in accordance with the needs of the economy (Grossman: 249, 250).
William Sylvis understood the money question in class terms. The money plank of the National Labor Union asserted, “Money has ruled us long enough; let us see if we cannot rule money for a time.” The goal for labor was stated clearly. “Let our cry be REFORM – down with the monied aristocracy and up with the people” (Grossman: 253, 254). Sylvis argued that the pre-Civil War “Slave Power” had been shifted from the South to Wall Street and only a new monetary system could challenge its tyrannical hold on American society.
The proposed solution inexorably led labor to embrace political action. In Sylvis’s words, “The evil is legislative, and the remedy must be legislative.” Despite all of the talk of intrinsic and fiat money, money was a creature of law. Government created paper money, and by legislative action government could get the interest rate out of the hands of the “bankers, brokers and other gamblers” and place it where it belonged, in the hands of the people’s representatives (Grossman: 249). Monetary reform, therefore, seemed to be the crucial post war issue confronting the nation. Labor and other reform groups clearly articulated the need to reorganize the country’s exploitative banking system in order to bring a modicum of economic fairness to the “plain people,” white and Black alike. The political parties of the time, however, proved to be “impervious to new concepts,” no matter how worthy (Goodwyn: 3).
The Civil War had fundamentally altered the way people thought about politics. In effect, the war, rather than political ideas, dominated the American two-party system. Coalitions based on sectional, religious, and racial loyalties and prejudices controlled both political parties and managed to ignore the economic interests of millions. The nation’s three economic divisions – farmers, workers, and business interests – formed six separate political constituencies, the three in the North along with their counterparts in the South. Together with the Southern Freedmen and Northern Free Blacks, these eight broad classifications, for the most part, “vot[ed] as they shot” during the Civil War (Goodwyn: 4). The exception to the rule was the urban working class of the North. Sectional loyalty was less significant to this largely immigrant and overwhelmingly Catholic population than religious and racial loyalties. Catholic urban workers “adrift in sea of Yankee Protestant Republicanism were noted for voting for the Democrats” (Goodwyn: 4).
Blacks faced a political dilemma. In part because they were defined less by class than by caste, African-Americans, North and South, conceived of the Republican Party as the party of emancipation and consistently voted for Republican candidates. The irony was that, as a group, Black people remained the most exploited of all in this especially brutal phase of capitalism. Yet they were the single most consistent supporters of the party personifying the “triumphant spirit of business enterprise” (Goodwyn: 4-6).
For their part, the white farmers of the North, veterans of the “Grand Army of the Republic,” found a home in the “Grand Old Party” (GOP) after the war. Sectional loyalty was solidified by the Republican campaign tactic of “waving the bloody shirt,” which consisted of reminding Union Army veterans that each comrade killed or wounded in the “War of the Rebellion” was shot by a Democrat (Goodwyn: 5, 6). The Democratic Party, too, relied on an emotional tribute to the “fallen and gallant of the Lost Cause” in order to win the support of Southern farmers who had fought in the Confederate Army. This was despite the fact that the Southern Democratic Party, like the Republican Party in the North, was a pro-business party which responded to the needs of the “New South” entrepreneurs, rather than the needs of farmers or workers (Goodwyn: 7).
The rigidity and unresponsiveness of both the Democrats and Republicans convinced delegates to the National Labor Union conventions to endorse the principle of a Labor Party, first in 1866, and again in 1867, and in 1868. Though Sylvis’s untimely death in 1869 temporarily set back the movement for independent political action by labor, by 1870, in Massachusetts, where the well known abolitionist Wendell Phillips ran for Governor on the Labor Reform Party ticket, Labor-Greenback politics advanced beyond the talking state (Unger: 181). Phillips’s vote totals were impressive. He received 21,946 votes, the Republican candidate 79,514, and the Democrat 49,536. Equally significant, in 1869 the Massachusetts Labor Party had elected 21 members out of 80 candidates to the lower house of the state assembly (Karson: 12).
In 1870, at the NLU Convention, the first serious steps were taken to form a national Labor Party. Sylvis’s long time allies in the labor movement, A.C. Cameron and Richard Trevillick, among others, were active in the movement. In addition, a number of younger trade-unionists were in substantial agreement with the veteran labor activists on the necessity of establishing a Labor Party (Unger: 181, 182). The 200 delegates from 17 of the 38 states at the inaugural Labor Reform Party convention issued a clear, succinct statement on the perceived significance of the monetary reform to the labor movement. The Labor Party declared it to be “the duty of the federal government to establish a just standard of distribution of capital and labor by providing for a currency based on the faith and resources of the nation issued directly to the people without the intervention of banking corporations ….” (Nash: 149, 150).
The candidate selection in 1872, however, caused the downfall of both the National Labor Reform Party and the National Labor Union. The Labor Party’s presidential nominee, David Davis, who had a national reputation as a respected Supreme Court Justice and an outspoken critic of Republican Party corruption, was a political opportunist with little interest in either the Labor or the Greenback movements. He was ambitious for a political career and hoped the Labor Party nomination would “snowball” into series of reform minded nominations, which would sweep him into office as the anti-incumbent fusion candidate (Unger: 187; Nash: 152).
For labor, the selection of Davis as their first presidential candidate was a “tragi-comedy.” Because he feared being labeled as a “financial crank,” Davis was reluctant to formally accept the Labor-Greenback nomination. He sought to distance himself from the movement for financial reform by the most “shameless duplicity.” Davis first announced that “The Chief Magistracy of the Republic should neither be sought nor declined” (Unger: 188). Davis’s “handlers” disingenuously assured labor that Davis no doubt agreed to some planks in the labor platform but that he would be unwise to endorse those positions. “It would ‘raise up and provoke’ premature opposition” (Unger: 189).
Davis’s 1872 presidential hopes were dashed when the “`bewildered” Democrats endorsed the quixotic Liberal-Republican, Horace Greeley, for the presidency. Cameron noted that Davis was still officially in the race and proposed that the Labor Party go it alone. Not until both Davis and his Vice Presidential candidate withdrew from the contest did labor abandon the campaign (Unger: 193). The election debacle led to the collapse of the National Labor Union.
The Industrial Congress, the NLU’s successor, would emphasize pure and simple trade unionism rather than an electoral strategy. The Davis debacle led a thoroughly chastened A.C. Cameron in 1873 to apologize formally to the Labor Movement “for riding his hobby horse so hard.” At the behest of Cameron and Trevillick, the Industrial Congress did endorse paper money, but the Greenback plank was the last of twelve and the only one not unanimously adopted (Unger: 227). Of the new generation of labor leaders, only German-born Robert Schilling had absorbed Labor-Greenbackism. Fortunately for the cause, he was the president of the new labor federation and an “important agent” for perpetuating the Greenback concept during the remainder of the 1870s (Unger: 227).
Farmers would join with labor in the 1876 attempt at independent political action. This constituted an important change as not until 1873 did substantial numbers of farmers support paper money. Discontent among farmers was on the rise in the 1870s. Farmers deplored the steady exodus of talented young men and women from rural areas. The farmer was distressed by the growing gap between country and city. He was increasingly aware of the power of the railroads to control the productive farmers’ economic fate. Conventions of farmers began to demand both Greenbacks and the interconvertible bond. Some of them concluded that labor’s demand for a “just monetary system” was the solution to the growing railroad monopoly problem (Unger: 210-205).
With the decline in the effectiveness of pure and simple trade unionism, political reform once against attracted the interest of labor leaders. Robert Schilling’s proposal to redouble efforts on the money question in 1874 at the second meeting of the National Industrial Congress received enthusiastic support (Unger: 228). Labor and farm leaders were united at the 1875 founding of the National Independent Party, commonly known as the Greenback Party. Labor leaders Schilling, Cameron, and Trevillick were appointed to the new party’s National Executive Committee (Rochester: 29, 30). Farmer-oriented Greenback Clubs, pledged to support the new party, were organized throughout the West. Labor support for the Independents was expressed by a close paraphrase of the Greenback Party’s platform in the Knights of Labor National Labor Convention’s declaration of Principles (Unger: 301, 302). Of course, the 1876 Convention of the National Independent (Greenback) Party was not primarily a labor gathering. Greenback enthusiasts had converged on the movement from many directions. In addition to labor activists, businessmen, lawyers, and farm leaders were prominent at the convention. Still the formulas of recent farmer-labor conventions were repeated word-for-word by the Independent Party platform (Unger: 306).
Candidate selection, as in 1872, was poorly handled by the Greenbackers and their labor supporters. Peter Cooper, an elderly New York philanthropist, was a foolish choice. One of the few men of wealth prior to the Civil War to befriend labor, Cooper in 1869 had been commended by the National Labor Union for his financial views. Nominated despite his advanced age of 85, Cooper clearly lent the Greenbackers respectability, but in the end, it was his wealth that influenced the poverty-stricken Independents to nominate him for president (Unger: 307, 308). Money, nonetheless, remained scarce as Cooper proved to be less generous than expected and poverty hindered the Independent campaign (Unger: 312).
Even worse, hard luck and ineptitude marked the 1876 Greenback electoral effort. Former Democrat Brick Pomerory financed a weekly pro-Greenback paper, the Great Campaign. Despite the expenditure of funds, Brick hurt the Greenbackers by his use of extreme language and extravagant attacks. Republicans, to Pomeroy, were “political harlots.” The Democratic presidential candidate, New York Governor Samuel Tilden, was subjected to crude anti-Semitic attack as the “paid tool of the Jews who control the gold market” (Unger: 313).
Despite all of their flaws, the Independents’ campaign seemed to get off to a “fast start.” Farmers and labor apparently responded positively to Cooper’s candidacy. In Chicago, Greenback supporters organized Cook County ward by ward, in a effort to “woo” wage earners and the unemployed. Reformers and veteran trade-unionists in Pennsylvania joined with Knights of Labor members to campaign for Cooper (Unger: 313, 314).
By the end of the campaign season, however, the Greenback Party campaign had collapsed. Numerous factors undermined the effort at independent political action. Cooper’s advanced age and the lack of funds were obvious weaknesses. Traditional party loyalties also demonstrated remarkable resiliency. The Democrats kept their partisans loyal by copying much of the Independent Party’s program. Greenbackers responded that the Democrats, despite their reformist posturing, were “betrayers” of the people. Still, by election day, the Independent-Greenback Party campaign fell apart (Unger: 317, 318).
The official vote credited to Cooper’s candidacy was a rather pitiful 82,000 votes – less than one percent of the total (Nash: 158-160). This total did not accurately reflect the extent of support for the Independent Party in the electorate. Democratic and Republican election officials often simply refused to report an accurate count of votes for the opposition candidates. Yet even if voter fraud is factored out, assuming that the vote total for Cooper was double that reported, the Independent showing was decidedly unimpressive (Unger: 318, 319).
On a positive note, however, an analysis of the Greenback vote does indicate that Cooper’s votes came predominantly from workers and farmers. The bulk of the vote for Cooper was cast in following regions: coal mining and iron manufacturing centers in Pennsylvania; Ohio’s industrial centers; rural, isolated single-crop farming regions in Iowa, Kansas, and Illinois; and depressed farming regions and areas marked by urban unemployment in Indiana. While the class-nature of the Greenback Party vote was obvious, the overwhemingly majority of farmers and workers retained their traditional party loyalties (Unger: 319).
Yet only two years later, labor support for Greenbackism would crest at a remarkably high level in the 1878 election. The “Panic of 1873,” a six-year depression, the longest on record, refocused the nation’s attention on the need for economic reform. Organized labor was in a severely weakened position when the depression hit. The National Labor Union had been destroyed by the 1872 political fiasco. The Industrial Congress, NLU’s successor, was barely two months old when the panic struck and had little strength to withstand the hard times. Organized labor virtually disappeared during the long depression. The 30 to 40 national trade unions of 1873 were reduced to 9 by 1877. Economic hard times reinvigorated the veteran Greenbackers. A.C. Cameron considered the national calamity to be a vindication of his money views and took “new heart” (Unger 220, 226, 227).
Among those sympathetic to the labor movement, the only sour note came from the socialists of a sectarian nature. These ideologues denounced Greenbackism as a mere “social palliative,” a middle-class movement. The ultra-left socialists would support no electoral campaign unless it was explicitly socialist in orientation. Speaking only to themselves, the sectarian-left averred, “The disease from which we suffer is not the want of currency, but a planless system of production” (Unger: 315).
Thousands of miners, mill hands, and laborers, for their part, rushed to vote for the 1878 candidates of the United Greenback-Labor Party. This new level of working class support was sparked by the labor uprising of 1877 against the railroad companies, which had sought to offset declining revenues during hard times by cutting wages. Desperate engineers, firemen, and brakemen tried to prevent wage cuts by blocking the movement of the trains. They were met by armed soldiers and indiscriminate gunfire. Beginning in Martinsburg, West Virginia, the four years of working class misery were protested by arson, riots and looting. In Baltimore, Pittsburgh, Buffalo, Chicago, and St. Louis, strikers, the unemployed, and their supporters were shot down. In a single incident, troops at Pittsburgh killed 26. Workers responded by derailing trains, and “gutting” train stations and roundhouses, with the total damage to railroad property estimated at more than $5,000,000 (Unger: 347; Karson: 12). In a bloody aftermath, federal troops brutally crushed the uprising. The unrestrained violence against the working class “stiffened” the class feelings of the workers and aroused sympathy for the working class among social reformers (Rochester: 8).
Greenbackers urged embittered laborers to turn to independent political action as the practical method to escape their “bondage” to all powerful capital (Unger: 349). Greenback-Labor groups “sprung to life,” literally from Maine to California. Working class based political action alarmed the opportunist Democrats, who counter-attacked with positively “Machiavellian” tactics. Where labor normally voted for the Democratic Party, Democrats “shouted louder” for Greenbacks than did the Greenbackers. In normally Republican areas, the Democrats tried to split the labor vote by secretly subsidizing independent candidates (Unger: 348).
The total national Greenback-Labor Party vote was impressive. More than a million voters, or one in nine, rejected the traditional parties for Greenback-Labor candidates. As a result, between 21 and 26 Greenbackers were sent to Congress. The exact numbers are somewhat nebulous because of the tendency of the Democratic Party leaders to coopt the Greenback movement by proposing a fusion of Democrat/Greenback-Labor candidates, as was the case for one of Iowa’s Greenback Congressmen, James B. Weaver. Nonetheless, the gains in the 1878 Greenback vote totals over those of 1876 were undeniable. Greenback-Labor vote totals in individual states were substantial: Ohio recorded 30,000 votes; Iowa 33,000; Wisconsin 26,000; Pennsylvania topped the 50,000 mark (Unger: 349; Fine: 66). Everywhere across the nation, the Greenback vote more than doubled that of 1876.
Though candidates identified with the Greenback-Labor movement continued to challenge Democrats and Republicans through 1888, support for Greenbackism declined rapidly. Veteran labor activist Richard Trevillick chaired the 1880 Greenback Party convention. James B. Weaver, the fusionist who had won nation-wide respect as the leader of the Greenback faction in Congress, was nominated for president. Weaver boldly took his campaign into the old Confederacy, which provided the Democratic Party’s base of support. Democrats fought back by circulating a forged letter designed to prove that Weaver was paid by Republicans to split the Southern vote (Fine: 70, 71). Prosperity returned in 1879, unemployment declined, farmers received higher prices for their produce, the trade union movement revived through Knights of Labor Assemblies, and farmers had high hopes for their newly established economic organization – the Farmers’ Alliances (Unger: 409). As a result, the 1880 Greenback Party vote declined to only 300,000 votes, less than one-third of the 1878 total.
The “death knell” for the national Greenback movement, however, came in the 1884 presidential election, which was reminiscent of the 1872 fiasco. Benjamin F. Butler, with a long political history, first as a Democrat then as a Republican, in 1882 was elected governor of Massachusetts. Described as “able but unscrupulous,” Butler always believed himself to be the “friend of the workingman.” More than a “mere demagogue,” he went to the 1884 Democratic Party convention with aspirations to be president. When party leaders ran “roughshod” over him, Butler accepted the Greenbackers’ nomination (Rochester: 38, 39). His candidacy was not endorsed by labor and the Greenback vote sunk to 134,000 votes, only slightly more than one per cent of the total.
By the 1880s, however, the Greenback Party’s vote totals were largely anti-climactic. On January 2, 1879, the United States went back on the gold standard. Bankers and investors had won and the Greenbackers had lost the fight over the nation’s monetary system. The amount of currency in circulation was held stable through the decade of the 1870s, as the growth in population and production reduced price levels and spread economic hardship among the majority of the population consisting of workers and farmers. The resultant economic depression was severe and protracted, but by the end of the decade, the finance capitalists had achieved their goal of reestablishing a gold- based monetary system (Goodwyn: 15).
The failure of the Labor-Greenback political challenge can be largely attributed to sectionalism. Against the politics of the “Bloody Shirt” and the “Lost Cause,” monetary reform was able to evoke only a relatively muted response. In large part, this was due to a party system geared to “non-economic memories” (Goodwyn: 15). The nearly universal hostility of the nation’s opinion makers further complicated the Greenbackers’ task. With few exceptions, the press, the universities, and pulpits were rigidly orthodox on the money question. Fiat money advocates had to deny some of the era’s basic cultural assumptions. The accepted wisdom of the time held that bankers should be deferred to on the question of currency, not rebellious workers or farmers. Greenbackers’ arguments, as a result, did not have to be answered. They were subjected instead to ridicule and scorn by respectable society. Luhman Weller, one of Iowa’s Greenback Congressmen, was disparagingly nicknamed “Calamity” Weller. Similarly, Texas’s George Washington Jones was referred to as old “Wash” Jones (Goodwyn: 17, 18).
The political failure of Greenbackism was especially frustrating to labor and other advocates of reform. To them, the money question remained central to the problem of economic injustice and continuing corporate concentration in the United States. Disappointed reformers tended to blame the “apathy” and near-sightedness” of the people for their defeat. In reality the basic problem may have been one of simple organization. The Greenback movement lacked a stable and effective instrument of grass roots recruitment to their cause (Goodwyn: 19).
The labor movement was young and relatively unstable in the post-Civil War era. The National Labor Union collapsed in 1872; the Industrial Congress did not survive the Panic of 1873. The Noble Order of the Knights of Labor emerged in the 1880s as the nation’s premier labor body. As a candidate of the Greenback-Labor Party, the Knights chief official, Terence Powderly, had been elected mayor of Scranton, Pennsylvania, in 1878 and re-elected in 1880. Still, the Knights of Labor did not in principle endorse political action or advocate a Labor Party (Karson: 14). The most promising vehicle for independent political action, in the era, evolved from discontented farmers. The Farmers’ Alliances in the West and South would, in the 1890s, mount a serious challenge to the continued domination of the business parties.
Fine, Natan. Labor and Farmer Parties in the United States, 1828-1928. New York: Russel & Russel, 1961.
Goodwyn, Richard. The Populist Moment: A Short History of the Agrarian Revolt in America. New York: Oxford University Press, 1978.
Grossman, John Philip. William Sylvis: Pioneer of American Labor. New York: Octagon Books, a division of Farrar, Straus and Giroux, 1973.
Karson, Marc. American Labor Unions and Politics, 1900-1918. Boston: Beacon Press 1958.
Nash, Howard P. Third Parties in American Politics. Washington, D.C.” Public Affairs Press, 1959.
Rochester, Anna. The Populist Movement in the United States. New York: International Publishers, 1943.
Unger, Irwin. The Greenback Era: A Social and Political History of American Finance, 1865-1879. Princeton, NJ: Princeton University Press, 1964.