Some interesting data about the events leading up to the election of 1896. The parallels are obvious to today. The worst economic depression the nation had seen to date  had just taken place resulting in the massive failure of many companies most notably some of the railroads who had overextended themselves and were carrying huge debt loads. In conjunction with this domestic situation were external pressures from abroad most notably the Spanish in Cuba.

The following information taken from the Museum of Financial History.  www.financialhistory.org

1896 – America on the verge of war with Spain in Cuba. Economic depression.

In 1879, Treasury Secretary John Sherman had managed, with the assistance of August Belmont and the Rothschilds, to acquire sufficient gold to put the U.S. on a gold standard. But, the supporters of silver, through the efforts of Representative Richard Parks Bland of Missouri and Senator William Boyd Allison of Iowa, had been able to successfully pass the Bland-Allison Act the prior year. The Act provided artificial government support for the price of silver through the coinage of a minimum of $2 million per month. In effect, this created a bimetallic standard, but the Act did not halt the free fall in silver prices. From 1872 to 1889, silver production in the U.S. rose 130 percent, whereas the market price of silver during the same time frame dropped 30%.

A "sound" U.S. dollar backed by gold was very much in the interests of the eastern industrialists, but world gold production was not keeping pace in a rapidly growing industrial age. In the western prairies, the deflationary effect of a strong dollar, combined with overproduction and a resulting declining price of wheat, had resulted in near impoverishment of much of the agrarian community. For very separate reasons, the silver mining interests and western farmers were linked in demanding the free and unlimited coinage of silver at its statutory price of $1.29 per ounce, a 16:1 ratio of the price of gold to silver.

Railroad expansion in the United States had been reckless during the decade, with 93,000 miles of track laid at the outset and 167,000 miles by 1890, twice the amount per capita of Europe. The investment banks in New York, Boston and London had been busy underwriting new debt, which had doubled during the decade. Railroad directors, on the other hand, were not very concerned about earnings, as savvy railroad men, such as Jay Gould, Russell Sage and many others were making fortunes from stock market manipulation, takeovers, threats of parallel lines and other techniques. The overbuilding also contributed to severe rate wars between the major railroads, which they could ill afford.

In their efforts to reach the Pacific coast, the transcontinentals found enormous barriers, but cost seemed to be no object. The Northern Pacific under Henry Villard vastly overspent in its efforts to connect the Great Lakes with Tacoma and Portland, the financial condition worsening further as a result of an improvident acquisition of the Wisconsin Central Railroad. The Union Pacific was weakened as a result of Jay Gould's tactic of acquiring money losing railroads (for personal gain) combined with the highly costly efforts in later years of railroad President Charles Francis Adams to acquire the Oregon Railway and its route to Portland. The Atchison, Topeka &Santa Fe literally battled its way through the Royal Gorge in Colorado to serve the Leadville silver mines, had to "occupy" its Raton Pass route to New Mexico, and fought off Collis Huntington's Southern Pacific in order to reach San Diego and Los Angeles. William Barstow Strong, the President of the Santa Fe, made his philosophy clear when he stated, "In the US...the power of a railroad to protect and increase its business depends upon its length, and the extent of the territory it can touch." By 1888, the debt of the Santa Fe had tripled within four years, the railroad lost $3 million, the dividend was curtailed and the stock price plummeted!

In conjunction with the opening of the 51st Congress in December 1889, Treasury Secretary Windom attempted to tackle the silver question head on by putting together a comprehensive proposal which, among other items, included an extraordinary recommendation that the United States buy silver from all the world's sellers at the market price and that there would be no fixed ratio between the price of gold and silver. Satisfying neither the "silverites" nor the "goldbugs" in Congress, his attempt's at leadership to provide a resolution to this highly volatile issue was soundly rejected.

As a result, legislation on silver became intertwined with pending legislation on the tariff, led by the Chairman of the House Ways and Means Committee, William McKinley, with the "Silver Senators" from the west essentially holding up their support of the McKinley Tariff for compromise on silver. Further tumultuous lobbying finally produced the "Sherman Silver Purchase Act" in July 1890, requiring the Treasury to purchase 4.5 million ounces of silver per month at the market price. But instead of coining the silver, the Treasury issued Treasury Notes, which at the discretion of the Secretary could be redeemed in silver or gold. The New York World coolly commented that, "Obviously foreign finance ministers owe a debt of gratitude to the present Congress for letting them shift their losses to our shoulders."

Almost immediately, John Sherman's carefully built-up gold reserve, which at the time stood at $190 million, began to be raided by the central banks of France, Austria-Hungary and Germany. They precipitously dropped $40 million in the following three months. With the passage of the McKinley Tariff, which decreased revenue, combined with large appropriations for pensions, infrastructure and the cost of buying silver, the US financial surplus began to rapidly head toward a deficit.

After the passage of the Sherman Act, a silver pool temporarily moved the market price of silver up to $1.20, but the intended purpose of the Act, to artificially support the market price of silver, simply did not work. At the year's end, the price of silver had dropped to $.98 per ounce, but the most devastating news in December 1890 came from London. The "Sixth Great Power," the Baring Brothers had collapsed. Edward "Ned" Baring, the 1st Baron Revelstoke had overextended the bank in Argentina, and though Barings was eventually resuscitated by the Bank of England, the Rothschilds and the Bank of France, there was massive selling on the New York Stock Exchange. Most importantly, Barings, along with their US Agent, Kidder Peabody, were the major underwriters for the Atchison, Topeka &Santa Fe, and in the post-Barings collapse period, the extremely important London market for the underwriting of US securities nosedived.

The United States entered 1891 in a precarious financial position but was "rescued" by an immense crop failure in the Volga region of Russia, the world's second largest wheat producer after the US. This, combined with a bumper harvest in the United States, resulted in massive US exports and return of some of the gold for the US Treasury and banks. However, it was at great social cost as the Russian peasantry suffered severe famine for over a year resulting in the loss of 400,000 lives. After this temporary fillip the US economy began to falter once again so that by early 1893 the Treasury was in deficit, gold was rapidly leaving the country and the silver price still declining. The statutory limit for the gold reserve was $100 million at which point the Treasury was not obligated to redeem the US currency in gold. In February the chronically mismanaged Philadelphia and Reading Railroad failed causing some but not undue nervousness on the stock exchange. The following month Grover Cleveland took office, and he and his Treasury Secretary, John Carlisle, were instantly confronted by a gold reserve that was precariously nearing the $100 million mark.

Not only was gold continually being exported, but the Sherman Act Treasury Notes were constantly being redeemed for gold, reissued and redeemed once again. The drain was severe, the anxiety high with Americans and foreign investors alike. On April 21, the statutory limit was breached. The money markets went into turmoil, and the first casualty was the failure that same day of Pennsylvania Steel. On the stock market, Missouri Pacific, Manhattan Elevated and Western Union all suffered heavy losses, and a sense of danger permeated Wall Street. Ten days later, the American public's attention was drawn to the opening of the Chicago World's Fair, and an uneasy calm came over the markets-but not for long.

The 1880s had witnessed the strong growth of industrial securities on the New York Stock Exchange, and the darling of the industrials was National Cordage , the most actively traded and widely held industrial security on the exchange. National Cordage was a combination of companies manufacturing rope and cordage principally for agricultural equipment and was headed by Pelham, New York socialite, James M. Waterbury, who had the reputation of "turning binding twine into gold with a whisk of his pen.", but also watering his stock. On May 4 National Cordage collapsed, its share price having dropped from $140 to $20 and a receiver was appointed. In the Cordage Trust circle "hats were being smashed, coats torn, cravats ruined.". The Panic was on! Banks began to fail nationwide, 128 in June alone. On June 26 a startling announcement came from Simla in British India that Lord Landsdowne, the Viceroy of India, had closed the mints in India to the free coinage of silver. Being the world's second largest consumer of silver, the silver market reacted immediately and acutely. The price of silver dropped to $.64 per ounce resulting in the US silver dollar being worth $.50. America's great silver mining industry collapsed within a day with mines closing from Aspen, Colorado to Butte, Montana to Park City, Utah.

At the end of July, the Erie Railroad went into receivership precipitating yet another steep decline in the stock market, which had lost 35 percent of its value since early in the year. In August the Northern Pacific Railroad collapsed and filed for receivership as did the Union Pacific in October. Over intense opposition Grover Cleveland managed to have the Sherman Silver Purchase Act repealed, but gold was still flowing out of the Treasury. Christmas provided no respite as on December 23 the Atchison, Topeka &Santa Fe failed and receivers took over this once proud but bankrupt railroad.

During 1893, nearly 15,000 companies failed, 500 banks went into receivership, and nearly 30 percent of the country's rail system was financially insolvent. For the next three years, the United States went into deep depression. Strikes intensified throughout the country and personal suffering increased. Even Civil Service Commissioner Theodore Roosevelt was close to insolvency and had to resort to selling four acres at Sagamore Hill to keep himself and his family afloat. Numerous attempts were made to bolster the reserve through the sale of bond issues, but each time the gold was replenished it would only be depleted once again.

Pierpont Morgan and August Belmont, Jr. arranged a foreign syndicate in February 1895 to try again to augment once again the Treasury's gold, but while the issue was successful bringing reserves temporarily to over $100 million, gold withdrawals recommenced six months later bringing the reserve down to $61 million. It was not until Treasury Secretary John Carlisle arranged a domestic issue in 1896 that a sustained gold reserve in excess of $100 million was accomplished, and this, combined with general economic improvement and increased gold production from Cripple Creek, Colorado began to slowly pull the United States out of its worst ever depression.

It was as though all the excesses and avarice of the Gilded Age had been ignited and catapulted the country into a financial inferno. The Panic of 1893 and its aftermath shifted the psyche of the American public toward a broader acceptance of reform and regulation, deftly discredited the business doctrine of "survival of the fittest," and brought in the earnestness of the Progressive Era. The cost was high, however, in financial and human terms, but the Panic, for better or for worse, ultimately strengthened the backbone of the United States and positioned it to take on a new role of world economic and financial leadership.

McKinley moves Congress to enact the highest tariff in history. Under his administration America annexes Philippines, Guam and Puerto Pico. Charges of American Imperialism abound during the campaign of 1896.