How would Benjamin Harrison handle the Panic of 1893?

[delariva]

Assuming he wins the 1892 election narrowly due to a different Democratic ticket or some other circumstance, and the Congress remains the same as OTL, how do you think Benjamin Harrison would handle the Panic of 1893 compared to Grover Cleveland? I'm curious to hear what you guys think specifically on how he'd handle the Panic, but also how this affects politics and the Republicans' landslide in 1896.

 

[UCB79]

Assuming he wins the 1892 election narrowly due to a different Democratic ticket or some other circumstance, and the Congress remains the same as OTL, how do you think Benjamin Harrison would handle the Panic of 1893 compared to Grover Cleveland? I'm curious to hear what you guys think specifically on how he'd handle the Panic, but also how this affects politics and the Republicans' landslide in 1896.

Not much differently- no, I would say not @ all differently- than the way Grover Cleveland handled it
IOTL: sit back, do nothing, & just wait for things to get better(this is how, until the 1930’s, every single
POTUS confronted with hard economic times had handled the situation).

 

[TheRockofChickamauga]

I agree that the Republicans would likely take a hands-off approach as well, but one major difference is that with a Republican in office, especially a noted tariff man like Harrison, using the tariff argument that McKinley employed in his bid for the Republican nomination in 1896 would fall flat. Even if the Democrats held a majority in Congress and blocked any tariff programs, Republicans would not be eager to set forth a nominee like McKinley whose entire career centered around issues of tariffs thus far. With tariffs discredited in the eyes of the party as a winning issue, the wing of the party obsessed with maintaining Gold Standard as their central plank, led by Governor Levi P. Morton of New York, likely take center field. If that were to occur, the Republicans are even more doomed in 1896 than they would be before, as the Gold Bugs would certainly lack the flexibility McKinley displayed IOTL on their main issues, and would be unwilling to compromise. Morton and whatever poor sap is chosen as his running-mate likely go down in ignominious defeat in 1896.

The real question, then, is which wing of the Democratic Party wins the 1896 nomination: the Bourbons or the Populists. The Bourbons were certainly not lacking in qualified candidates, with David B. Hill, William F. Vilas, Robert E. Pattison, and James E. Campbell counted among their numbers. The Populists, however, would have the up and coming momentum on their side, even if they lacked a head figure to rally around. Personally, I think the Bourbons narrowly win the nomination in 1896 without the OTL recriminations thrown against them due to better organization (although they probably give a sop to the Populists with the VP pick). Said ticket (maybe William Vilas/Richard Bland) goes on to quash Morton, but fail to end the depression. Come 1900, with Bland dead and thus the Populists iced out from a sinking Democratic administration, they decide to bail and run their own ticket (maybe William Bryan/Thomas Watson), which of course hands the race to whatever Republican is lucky enough to have decided to seek the nomination in the aftermath of Morton's disaster.

 

[SlideAway]

I'm not sure how valid this is - I'd be curious to get a good critique of this from someone better versed in the period's economics - but historian Heather Cox Richardson argues that the panic was at least partly triggered by Wall St fears of a looser Democratic monetary regime, and exacerbated by the lax response by the lame-duck Harrison Admin (who reasoned it was the responsibility of the incoming Cleveland Admin to address).

... 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.

<snip>

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.”

If true, that suggests that the panic may not have occurred precisely the same, or that a reelected Harrison Admin might at least put forth a bond issuance to help arrest the panic. Probably won't change the fundamentals of the bad economy in the period, but might not get quite so bad.