CHAPTER XXXIII. A QUARTER CENTURY OF STRUGGLE OVER INDUSTRIAL QUESTIONS, 1872 TO 1897
Three plans were suggested for disposing of the surplus. Some thought it should be distributed among the states as in 1837. Some were for buying government bonds and so reducing the national debt. Others urged a reduction of the annual revenue by cutting down the tariff rates. The President in his message in 1887 asked for such a reduction, and in 1888 the House passed a new tariff bill which the Senate rejected.
THE CAMPAIGN OF 1888. - In the campaign of 1888, therefore, the tariff issue came to the front. The Democrats renominated Grover Cleveland for President, and called for a tariff for revenue only, and for no more revenue than was needed to pay the cost of economical government. The Republicans nominated Benjamin Harrison  on a platform favoring a protective tariff, and elected him.
NEW STATES. - Both the great parties had called for the admission of new states. Just before the end of Cleveland's term, therefore, an enabling act was passed for North and South Dakota, Washington, and Montana, which were accordingly admitted to the Union a few months later (1889). Idaho and Wyoming were admitted the following year (1890), and Utah in 1896.
NEW LAWS OF 1890. - The administration of affairs having again passed to the Republican party, it enacted the McKinley Tariff Law, which slightly raised the average rate of duties; the Sherman Anti-Trust Act, forbidding combinations to restrain trade; and a new financial measure which also bore the name of Senator Sherman. The law (p. 409) requiring the purchase and coinage of at least $2,000,000 worth of silver bullion each month did not satisfy the silver men. They wanted a free-coinage law, giving any man the privilege of having his silver coined into dollars (p. 224). As they had a majority of the Senate, they passed a free-coinage bill, but the House rejected it. A conference followed, and the so-called Sherman Act was passed, increasing the amount of silver to be bought each month by the government. 
THE CONGRESSIONAL ELECTION OF 1890. - The effect of the increased tariff rates, the Sherman Act, and large expenditures by Congress was at once apparent, and in the congressional election of 1890 the Republicans were beaten. The Democratic minority in the House of Representatives was turned into a great majority, and in both House and Senate appeared members of a new party called the Farmers' Alliance. 
PRESIDENTIAL CAMPAIGN OF 1892. - The success of the Alliance men in the election of 1890, and the conviction that neither the Democrats nor the Republicans would further all their demands, led to a meeting of Alliance and Labor leaders in May, 1891, and the formation of "the People's Party of the United States of America." In 1892 this People's Party, or the Populists, as they were called, nominated James B. Weaver for President, cast a million votes, and secured the election of four senators and eleven representatives in Congress. The Republicans renominated Harrison for President. But the Democrats secured majorities in the House and the Senate, and elected Cleveland. 
THE PANIC OF 1893. - When Cleveland's second inauguration took place, March 4, 1893, our country had already entered a period of panic and business depression. Trade had fallen off. Money was hard to borrow. Foreigners who held our stocks and bonds sought to sell them, and a great amount of gold was drawn to Europe. So bad did business conditions become that the President called Congress to meet in special session in August to remedy matters.
The silver dollars coined by the government were issued and accepted by the government at their face value, and circulated on a par with gold, although the price of silver bullion had fallen so low that the metal in a silver dollar was worth less than seventy cents. Many people believed the business panic was due to fears that the government could not much longer keep the increasing volume of silver currency at par with gold. Therefore Congress repealed part of the Sherman Act of 1890, so as to stop the purchase of more silver.
THE WILSON TARIFF. - The business revival which the majority of Congress now expected, did not come. Failures continued; mills remained closed, gold continued to leave the country, and government receipts were $34,000,000 less than expenditures when the year ended. By the close of the autumn of 1893, hundreds of thousands of people were out of employment and many in want. In this condition of affairs Congress met in regular session (December, 1893). The Democrats were in control of both branches, and were pledged to revise the tariff. A bill was therefore passed, cutting down some of the tariff rates (the Wilson Act). 
Nobody expected that the revised tariff would yield enough money to meet the expenses of the government. One section of the law therefore provided that all yearly incomes above $4000 should be taxed two per cent. Though Congress had levied an income tax thirty years before, its right to do so was now denied by many, and the Supreme Court decided (1895) that the income tax was unconstitutional. 
AUSTRALIAN BALLOT. - One great reform which must not go unnoticed was the introduction of the Australian or secret ballot. The purpose of this system of voting, first used in Australia, is to enable the voter to prepare his ballot in a booth by himself and deposit it without any one knowing for whom he votes. The system was first used in our country in Massachusetts and in Louisville, Kentucky, in 1888. So successful was it that ten states adopted it the next year, and by 1894 it was in use in all but seven of the forty-four states.