President Cleveland had scarcely begun his second term in 1893 when the country plunged into the worst depression it had yet seen. In the face of economic disaster, Cleveland clung to the economic orthodoxy of the gold standard. In the winter of 1894–95, the president walked the floor of the White House, sleepless over the prospect that the United States might go bankrupt. Individuals and investors, rushing to trade in their banknotes for gold, strained the country’s monetary system. The Treasury’s gold reserves dipped so low that unless they could be buttressed, the unthinkable might happen: The U.S. Treasury might not be able to meet its obligations.

At this juncture, J. P. Morgan stepped in. A group of bankers pledged to purchase millions in U.S. government bonds, paying in gold. Cleveland knew that such a scheme would unleash a thunder of protest, yet to save the gold standard, the president had no choice. But if President Cleveland’s action managed to salvage the gold standard, it did not save the country from hardship. In the winter of 1894–95, people faced unemployment, cold, and hunger. Cleveland, a firm believer in limited government, insisted that nothing could be done to help: “I do not believe that the power and duty of the General Government ought to be extended to the relief of individual suffering which is in no manner properly related to the public service or benefit.” Nor did it occur to Cleveland that his great faith in the gold standard prolonged the depression, favored creditors over debtors, and caused immense hardship for millions of Americans.