66. The New American System
66. The New American System
“President McGovern knew he had a limited amount of political capital with which to implement his agenda. His party held just 181 seats in congress and relied on the Populists’ 27 to form a narrow majority. While the Populists generally aligned with McGovern and the solidarist Whigs on issues such as bank reform and antimonopoly legislation, but the Whigs were opposed to Populist ideas such as loosening the national reliance on the gold standard, and the proposal of a federal income tax threatened to divide the Whig caucus. The Populists also held a lingering distrust of the Whigs’ solidarist turn, which kept the two parties from a closer cooperation. Charles Stone of Champoeg, the leader of the Populist caucus in the House, called the Whigs “allies of convenience” and reasoned that “once we secure our agenda, we will supplant them.” He, and many of his partymen, believed that their coalition partners were, despite the election of Robert Kerr as Speaker of the House, “in the thrall of the east-coast conservatives.” The fact that Thomas Cabot, the staunchly conservative Senator from Massachusetts, was Vice President was just one example for Stone that the Whigs had never truly shed their conservative, pro-business policies. They also opposed levying a direct income tax, as McGovern’s experience as Governor of Iowa had left him convinced that an income tax would be too controversial for his first term.
The Whigs also faced their own internal divisions. Kerr had been elected as Speaker only with Populist support, while the Whig caucus was led by the moderate-conservative Francis Kemp of Michigan, who had succeeded the conservative David Henderson in 1905. The Majority Whip was Cecil Harding, a solidarist, who had won his post by just seven votes. The division within Whig leadership required careful compromise and delicate navigation of the various factions in order to pass legislation: McGovern could only afford to lose 12 votes in the House. And while the solidarists held a slight edge in the House, conservative Whigs formed the majority of the Senate caucus. There, the Whigs held 41 seats, with the support of all six Populists. There, McGovern could only afford to lose 5 votes [1]. Fortunately, Vice President Cabot agreed to lobby his old Senate friends in support of the administration, despite his personal conservativism. Matthew Quay also proved amenable to certain measures in exchange for patronage powers, which McGovern reluctantly agreed to. However, a number of New English Senators proved to be headaches, especially William Sprague V of Rhode Island. They were flexible on antimonopoly laws and labor reform, but resolutely against the income tax or bank reform. Passing solidarist legislation would require a precarious tightrope walk.
Though many Populists demanded that McGovern start with bank reform, he and the solidarists opted to proceed with two more broadly popular bills passed by a special session of Congress: The Commerce Oversight Act, which regulated businesses and created the Commerce Oversight Bureau to enforce said regulations, and the National Development Act, which included funds for a host of infrastructure projects, mostly railroads in the west and turnpikes in the east and Midwest. The COA established types of business practices that were monopolistic or unfair, such as price discrimination that lessens competition, exclusivity contracts that prevented customers from dealing with a seller’s competitors and empowered the COB to cancel mergers and acquisitions that decreased competition [2]. The COA was supported by almost all Whigs and every Populist, and its provisions had broad appeal to the general public. The NDA, meanwhile, was not only a way to make good on McGovern’s promises to the Populists during the contingent election, but bribe other lawmakers with public works projects in their home states and districts. Both bills were passed easily by the House and narrowly by the Senate, the former earning 3 Whig defections and the latter 1 Whig defection, but support from 3 Democrats. These two pieces of legislation were signed by President McGovern on March 13th and 16th, respectively. With the political capital secured by these two bills, he hoped to forge ahead with the rest of his agenda in the regular session of Congress.
McGovern and Speaker Kerr planned to begin with a comprehensive labor regulation law establishing a Conciliation Board [3] to settle labor disputes in a legally-binding manner, banning employers from conditioning employment on abstention from union activities, and prohibiting child labor. The Labor Reform Act was generally popular with solidarists and the Populists, but the initial effort to pass the LRA was defeated in committee by Populist defectors. Stone and the Populists demanded that McGovern push for bank reform first, threatening to block the rest of the President’s agenda in retaliation. McGovern agreed, and began the process of assembling a reform bill radical enough to appease the Populists, but moderate enough to ensure enough conservative buy-in. The first draft of the Bank Reform Act was introduced by Charles Stone on March 13th, 1906. This bill removed the requirement that the National Bank had to settle accounts in specie and loosened the limits on paper money printed by the branch banks, effectively removing the US economy from the international gold standard. It also expanded the autonomy of the Branch Banks. This was strenuously opposed by conservative Whigs, with even Speaker Kerr informing Stone that he couldn’t support the bill as it was. With Majority Leader Kemp actively lobbying against it and Sprague and his allies in the Senate vowing to block it, the Stone Bill died in committee and the Whigs and Populists went back to negotiating.
A group of moderate Whigs led by Kemp proposed their own version, which had the support of both solidarists like Harding and conservatives like Sprague. The Kemp Bill kept the Washington, D.C. branch as the central authority of the bank and kept the specie requirements in place. In order to expand rural investment opportunities, specially-designated rural banks, both branches of the National Bank and private banks, would be able to tap into a special government account and loan out money to farmers, up to 30% of their land’s value. This proved more popular among the Whigs and Populists, but the final Kemp-Stone bill, though it made it to a floor vote, was narrowly defeated in the House, 200-191. Along with the predictable conservative defectors, 6 Populists also voted against it, because they opposed the inclusion of private institutions in the farm loan program. It was back to the drawing board, as May gave way to June, with the 30th the end of the legislative session. McGovern pushed heavily for Cecil Harding’s compromise, which established 10 branch banks, with the Washington D.C. branch the first among equals, rather than 10 equal branches as the Populists had first proposed. The conservatives refused to remove private banks from the rural lending program, so McGovern was able to secure Populist support for allowing private banks to participate, but with extremely strict regulations that removed all but a few private banks from consideration. This proposal, negotiated between Whigs Francis Kemp and Cecil Harding and Populist Stewart Roth of Nebraska, created the Kemp-Roth Bank Reform Act. It passed the House by a vote of 204-187 on June 13th, sending it to be considered by the Senate.
Here, there was more of a challenge. While most conservatives and moderates, including McGovern’s convention opponent William McKinley, supported Kemp-Roth, William Sprague V, Frederick Swayne III, and three other conservative Whigs continued to oppose any form of bank reform. This had been foreseen, and McGovern relied on Cabot to persuade Swayne, his close friend, while the Whigs lobbied Democratic Senators Tom Daley of Washita and Nathan Ives of Arkansas, whose states would benefit greatly from Kemp-Roth. McGovern promised to guarantee that Washita and other rural southern states would get “ample access” to the farm loan program. Cabot was also able to secure Swayne’s support in exchange for appointing his brother Josiah to the Appeals Court. This gave the Whigs 44 votes in the Senate, just enough to send the Kemp-Roth Act to President McGovern’s desk on June 21st. He signed it the next day. The Kemp-Roth Bank Reform Act was the largest change to the American finance system since 1841 and overhauled the bank’s charter. It was in some ways the crowning achievement of the progressive era, and cemented William McGovern as one of the most impactful Presidents in American history. Following in Clay’s footsteps, he had left his own imprint on the United States…”
-From PARADIGM SHIFT: THE AMERICAN PROGRESSIVE ERA by Olivia DiMarco, published 2015
“As the Liberal-Democratic joint convention struggles to select a nominee, one contender has earned the opposition of the most illogically conservative of the lot. Charlie Breathitt, the former President of the National Bank, has been gaining support over the last eight ballots as a compromise candidate between Alabama Senator Howell Yarborough and Shasta Governor Patricia Linz. The two candidates had deadlocked, the hardline conservative Yarborough and the moderate, technocratic Linz each short of a majority. The paternalist [4] candidate, former New York Governor Robert Sullivan, has refused to endorse either candidate, declaring that Yarborough represents “a dangerous trend within our party: a trend of reaction and exclusion,” and Linz represents “what the voters detest about some strains of our party: elitism and supporting profit and economic growth over all other considerations.” After twelve inconclusive ballots, Sullivan withdrew and endorsed Charlie Breathitt, the former President of the Bank of the United States, in his stead.
Breathitt has proven popular with both the moderate, liberal [5] faction and the socially-conservative paternalists, but the most conservative delegates have remained steadfastly opposed. Senator Yarborough denounced him in a speech as “the man in the Ivory Tower, the epitome of privilege and power.” Others in the hard-right of the party have gone even further. Enter Congressman Lyle Carter of rural southern Virginia, who former President Claire Huntington famously referred to as “Congress’s resident nutjob,” spoke last night, and it was a hell of a speech. Carter began by tearing into Governor Linz, before turning to the surging Breathitt. He claimed that Breathitt is a Freemason (which is false – Breathitt was extended an invitation to initiate, but he declined), saying “and now let’s discuss the Mason, the former head of the National Bank. The former head of the Bank that has been a rotten institution, rife with corruption and fond of shady practices since the time of Clay.”
Amid loud boos from the delegates, Carter charged ahead undaunted. “Why should we nominate as our standard-bearer a man who headed this corrupt institution, so shrouded in secrecy? Did you know that Congress has never held an audit of the Bank of the United States? This is an organization with no accountability. Zero. We need, we deserve, a President who is familiar with accountability to Congress and to the American people. This is the party of Jackson, not the party of corrupt financiers and out-of-touch elitist billionaires.” This conveniently ignores that the Liberal Party enjoys the support of many wealthy Americans, routinely winning a majority of the top earners and upper-middle-class voters. House Speaker Alex Sessions spoke after Carter, joking at the start of his speech that “I won’t do any of that conspiracy junk.”
After the rambling, confused speech, the convention seemed to move on without a pause, as TV commentators on both sides of the aisle gleefully mocked Carter’s conspiratorial remarks. This morning, the convention resumed balloting, and Charlie Breathitt secured the nomination on the 22nd ballot, at 11:17am, after Governor Linz withdrew. The Vice-Presidential nomination will likely go to Texas Congressman Henry Ulrich, a key surrogate for the Yarborough campaign.
Breathitt will go on to face incumbent President Neil Ahrendt, a Whig, in November.”
-From CARTER SPEECH IS BIZARRE CLOSER FOR TUMULTUOUS DNC by John Pembroke, published in The National Report, July 21st, 2016
[1] TTL, the filibuster doesn’t develop – a key event that led to its development occurred in 1841 when Clay failed to end debate on his bank bill. TTL, Clay is president and has the full support of the Whigs, so the effort to prolong Senate debate fails.
[2] Essentially a mashup of the OTL Clayton Anti-Trust and FTC Act.
[3] This was a major accomplishment during Woodrow Wilson’s presidency OTL.
[4] Like Red Tories or Disraeli’s conservatism.
[5] Liberal in the classical sense, that is.
“President McGovern knew he had a limited amount of political capital with which to implement his agenda. His party held just 181 seats in congress and relied on the Populists’ 27 to form a narrow majority. While the Populists generally aligned with McGovern and the solidarist Whigs on issues such as bank reform and antimonopoly legislation, but the Whigs were opposed to Populist ideas such as loosening the national reliance on the gold standard, and the proposal of a federal income tax threatened to divide the Whig caucus. The Populists also held a lingering distrust of the Whigs’ solidarist turn, which kept the two parties from a closer cooperation. Charles Stone of Champoeg, the leader of the Populist caucus in the House, called the Whigs “allies of convenience” and reasoned that “once we secure our agenda, we will supplant them.” He, and many of his partymen, believed that their coalition partners were, despite the election of Robert Kerr as Speaker of the House, “in the thrall of the east-coast conservatives.” The fact that Thomas Cabot, the staunchly conservative Senator from Massachusetts, was Vice President was just one example for Stone that the Whigs had never truly shed their conservative, pro-business policies. They also opposed levying a direct income tax, as McGovern’s experience as Governor of Iowa had left him convinced that an income tax would be too controversial for his first term.
The Whigs also faced their own internal divisions. Kerr had been elected as Speaker only with Populist support, while the Whig caucus was led by the moderate-conservative Francis Kemp of Michigan, who had succeeded the conservative David Henderson in 1905. The Majority Whip was Cecil Harding, a solidarist, who had won his post by just seven votes. The division within Whig leadership required careful compromise and delicate navigation of the various factions in order to pass legislation: McGovern could only afford to lose 12 votes in the House. And while the solidarists held a slight edge in the House, conservative Whigs formed the majority of the Senate caucus. There, the Whigs held 41 seats, with the support of all six Populists. There, McGovern could only afford to lose 5 votes [1]. Fortunately, Vice President Cabot agreed to lobby his old Senate friends in support of the administration, despite his personal conservativism. Matthew Quay also proved amenable to certain measures in exchange for patronage powers, which McGovern reluctantly agreed to. However, a number of New English Senators proved to be headaches, especially William Sprague V of Rhode Island. They were flexible on antimonopoly laws and labor reform, but resolutely against the income tax or bank reform. Passing solidarist legislation would require a precarious tightrope walk.
Though many Populists demanded that McGovern start with bank reform, he and the solidarists opted to proceed with two more broadly popular bills passed by a special session of Congress: The Commerce Oversight Act, which regulated businesses and created the Commerce Oversight Bureau to enforce said regulations, and the National Development Act, which included funds for a host of infrastructure projects, mostly railroads in the west and turnpikes in the east and Midwest. The COA established types of business practices that were monopolistic or unfair, such as price discrimination that lessens competition, exclusivity contracts that prevented customers from dealing with a seller’s competitors and empowered the COB to cancel mergers and acquisitions that decreased competition [2]. The COA was supported by almost all Whigs and every Populist, and its provisions had broad appeal to the general public. The NDA, meanwhile, was not only a way to make good on McGovern’s promises to the Populists during the contingent election, but bribe other lawmakers with public works projects in their home states and districts. Both bills were passed easily by the House and narrowly by the Senate, the former earning 3 Whig defections and the latter 1 Whig defection, but support from 3 Democrats. These two pieces of legislation were signed by President McGovern on March 13th and 16th, respectively. With the political capital secured by these two bills, he hoped to forge ahead with the rest of his agenda in the regular session of Congress.
McGovern and Speaker Kerr planned to begin with a comprehensive labor regulation law establishing a Conciliation Board [3] to settle labor disputes in a legally-binding manner, banning employers from conditioning employment on abstention from union activities, and prohibiting child labor. The Labor Reform Act was generally popular with solidarists and the Populists, but the initial effort to pass the LRA was defeated in committee by Populist defectors. Stone and the Populists demanded that McGovern push for bank reform first, threatening to block the rest of the President’s agenda in retaliation. McGovern agreed, and began the process of assembling a reform bill radical enough to appease the Populists, but moderate enough to ensure enough conservative buy-in. The first draft of the Bank Reform Act was introduced by Charles Stone on March 13th, 1906. This bill removed the requirement that the National Bank had to settle accounts in specie and loosened the limits on paper money printed by the branch banks, effectively removing the US economy from the international gold standard. It also expanded the autonomy of the Branch Banks. This was strenuously opposed by conservative Whigs, with even Speaker Kerr informing Stone that he couldn’t support the bill as it was. With Majority Leader Kemp actively lobbying against it and Sprague and his allies in the Senate vowing to block it, the Stone Bill died in committee and the Whigs and Populists went back to negotiating.
A group of moderate Whigs led by Kemp proposed their own version, which had the support of both solidarists like Harding and conservatives like Sprague. The Kemp Bill kept the Washington, D.C. branch as the central authority of the bank and kept the specie requirements in place. In order to expand rural investment opportunities, specially-designated rural banks, both branches of the National Bank and private banks, would be able to tap into a special government account and loan out money to farmers, up to 30% of their land’s value. This proved more popular among the Whigs and Populists, but the final Kemp-Stone bill, though it made it to a floor vote, was narrowly defeated in the House, 200-191. Along with the predictable conservative defectors, 6 Populists also voted against it, because they opposed the inclusion of private institutions in the farm loan program. It was back to the drawing board, as May gave way to June, with the 30th the end of the legislative session. McGovern pushed heavily for Cecil Harding’s compromise, which established 10 branch banks, with the Washington D.C. branch the first among equals, rather than 10 equal branches as the Populists had first proposed. The conservatives refused to remove private banks from the rural lending program, so McGovern was able to secure Populist support for allowing private banks to participate, but with extremely strict regulations that removed all but a few private banks from consideration. This proposal, negotiated between Whigs Francis Kemp and Cecil Harding and Populist Stewart Roth of Nebraska, created the Kemp-Roth Bank Reform Act. It passed the House by a vote of 204-187 on June 13th, sending it to be considered by the Senate.
Here, there was more of a challenge. While most conservatives and moderates, including McGovern’s convention opponent William McKinley, supported Kemp-Roth, William Sprague V, Frederick Swayne III, and three other conservative Whigs continued to oppose any form of bank reform. This had been foreseen, and McGovern relied on Cabot to persuade Swayne, his close friend, while the Whigs lobbied Democratic Senators Tom Daley of Washita and Nathan Ives of Arkansas, whose states would benefit greatly from Kemp-Roth. McGovern promised to guarantee that Washita and other rural southern states would get “ample access” to the farm loan program. Cabot was also able to secure Swayne’s support in exchange for appointing his brother Josiah to the Appeals Court. This gave the Whigs 44 votes in the Senate, just enough to send the Kemp-Roth Act to President McGovern’s desk on June 21st. He signed it the next day. The Kemp-Roth Bank Reform Act was the largest change to the American finance system since 1841 and overhauled the bank’s charter. It was in some ways the crowning achievement of the progressive era, and cemented William McGovern as one of the most impactful Presidents in American history. Following in Clay’s footsteps, he had left his own imprint on the United States…”
-From PARADIGM SHIFT: THE AMERICAN PROGRESSIVE ERA by Olivia DiMarco, published 2015
“As the Liberal-Democratic joint convention struggles to select a nominee, one contender has earned the opposition of the most illogically conservative of the lot. Charlie Breathitt, the former President of the National Bank, has been gaining support over the last eight ballots as a compromise candidate between Alabama Senator Howell Yarborough and Shasta Governor Patricia Linz. The two candidates had deadlocked, the hardline conservative Yarborough and the moderate, technocratic Linz each short of a majority. The paternalist [4] candidate, former New York Governor Robert Sullivan, has refused to endorse either candidate, declaring that Yarborough represents “a dangerous trend within our party: a trend of reaction and exclusion,” and Linz represents “what the voters detest about some strains of our party: elitism and supporting profit and economic growth over all other considerations.” After twelve inconclusive ballots, Sullivan withdrew and endorsed Charlie Breathitt, the former President of the Bank of the United States, in his stead.
Breathitt has proven popular with both the moderate, liberal [5] faction and the socially-conservative paternalists, but the most conservative delegates have remained steadfastly opposed. Senator Yarborough denounced him in a speech as “the man in the Ivory Tower, the epitome of privilege and power.” Others in the hard-right of the party have gone even further. Enter Congressman Lyle Carter of rural southern Virginia, who former President Claire Huntington famously referred to as “Congress’s resident nutjob,” spoke last night, and it was a hell of a speech. Carter began by tearing into Governor Linz, before turning to the surging Breathitt. He claimed that Breathitt is a Freemason (which is false – Breathitt was extended an invitation to initiate, but he declined), saying “and now let’s discuss the Mason, the former head of the National Bank. The former head of the Bank that has been a rotten institution, rife with corruption and fond of shady practices since the time of Clay.”
Amid loud boos from the delegates, Carter charged ahead undaunted. “Why should we nominate as our standard-bearer a man who headed this corrupt institution, so shrouded in secrecy? Did you know that Congress has never held an audit of the Bank of the United States? This is an organization with no accountability. Zero. We need, we deserve, a President who is familiar with accountability to Congress and to the American people. This is the party of Jackson, not the party of corrupt financiers and out-of-touch elitist billionaires.” This conveniently ignores that the Liberal Party enjoys the support of many wealthy Americans, routinely winning a majority of the top earners and upper-middle-class voters. House Speaker Alex Sessions spoke after Carter, joking at the start of his speech that “I won’t do any of that conspiracy junk.”
After the rambling, confused speech, the convention seemed to move on without a pause, as TV commentators on both sides of the aisle gleefully mocked Carter’s conspiratorial remarks. This morning, the convention resumed balloting, and Charlie Breathitt secured the nomination on the 22nd ballot, at 11:17am, after Governor Linz withdrew. The Vice-Presidential nomination will likely go to Texas Congressman Henry Ulrich, a key surrogate for the Yarborough campaign.
Breathitt will go on to face incumbent President Neil Ahrendt, a Whig, in November.”
-From CARTER SPEECH IS BIZARRE CLOSER FOR TUMULTUOUS DNC by John Pembroke, published in The National Report, July 21st, 2016
[1] TTL, the filibuster doesn’t develop – a key event that led to its development occurred in 1841 when Clay failed to end debate on his bank bill. TTL, Clay is president and has the full support of the Whigs, so the effort to prolong Senate debate fails.
[2] Essentially a mashup of the OTL Clayton Anti-Trust and FTC Act.
[3] This was a major accomplishment during Woodrow Wilson’s presidency OTL.
[4] Like Red Tories or Disraeli’s conservatism.
[5] Liberal in the classical sense, that is.
Last edited: