as a community had approached
the point at which its economic surplus would be exhausted and an
enforced liquidation would be due. As banks curtailed in 1893 to save
themselves, stringency became general, and depression turned to panic.
In April the gold reserve in the Treasury, on which the whole volume of
silver and paper depended, passed below $100,000,000, which business had
come to regard as the limit of safety. In the summer Great Britain
closed her Indian mints to silver and that bullion dropped farther in
value. Before July there was panic and failure everywhere in the United
States.

Panic had been imminent before Harrison left office and remained for
Cleveland to confront. Already Cleveland had taken a solid stand against
free silver and the silver basis. He saw in the Sherman Silver Purchase
Act the most striking cause of danger, and summoned Congress to meet in
August, 1893, to repeal it, while he maintained the gold reserve for the
next two years by borrowing on bonds. For the first time since the Civil
War his party controlled every branch of the Government, yet it now met
an issue on which it had not been elected and over which it broke to
pieces.

An angry minority opposed the Message in which Cleveland described the
financial dangers and demanded the repeal of the Sherman Law. It was a
sectional minority that included Western Representatives from both
parties and many Democrats from the South. Men who had fought the
Populists since 1890 now fraternized with them and raised their strength
beyond their hopes. The President refused compromise, even to save his
party from destruction, and found a majority for repeal among Easterners
of both parties. The Sherman Law was repealed in November, and the
liquidation following the crisis was effected during the next three
years.

It was a bad beginning for tariff revision, to split the party at its
first session and to drive into opposition those Democrats who were most
genuinely interested in tariff reform. Cleveland had lost his influence
with Western Democrats before the repeal of the McKinley Act was
undertaken, and they, like the Populists, had decided that he was the
tool of the corporations and the "gold-bugs" of the East. The
anti-corporation feelings of the West were increased by the accident
which threw the corporations and the farmers into different sides upon
the silver question.

A tariff for revenue had been the winning issue in 1890 and 1892,