After losing the 1880 Republican presidential bid, and after having his term expire as Treasury Secretary in 1881, John Sherman was elected once again to the United States Senate where he served from 1881-1897. During this period, Sherman would bid unsuccessfully twice more for the Republican presidential nomination in 1884 and 1888.
In 1890 the Bland-Allison Act, which required the Treasury to purchase silver at a high price, was replaced by the Sherman Silver Purchase Act, named after Senator Sherman. Responding to demands of miners and farmers, the Sherman Silver Purchase Act was enacted to boost the economy and to encourage inflation which would allow farmers to pay their debts with cheaper dollars. Under the Act, the U.S. government was required to purchase 4.5 million ounces of silver bullion every month – twice the amount mandated by the Bland-Allison Act.
Simultaneously, the McKinley Tariff was proposed, raising the average duty on imports almost fifty percent to protect domestic industries from foreign competition. This tactic of protectionism, supported by the Republicans and opposed by the Democrats, was not popular with the American public who suffered a steep increase in the cost of products after the tariff was enacted.
The problems imposed by the Sherman Silver Purchase Act and the McKinley Tariff were compounded by the Panic of 1893 which saw the collapse of the railroad industry and agricultural prices—which in turn started a run on the banks. President Cleveland oversaw the repeal of the Sherman Silver Purchase Act in 1893 and the crisis was eventually resolved when J.P. Morgan formed a banking syndicate that saved the United States from bankruptcy with a massive gold loan. However, the Panic of 1893 led the United States into its worst economic depression (1893-97) it had experienced until that point with unemployment reaching a peak of 19%. Democrats blamed the Sherman Silver Purchase and McKinley Tariff Acts for causing the economic depression, while Republicans held responsible the Democrats and President Cleveland who were in power.
Senator Sherman’s legislative reign was not over. The legislation which still bears his name is the Sherman Anti-trust Act of 1890. Signed into law by President Benjamin Harrison on July 2, 1890, the Sherman Anti-trust Act sought to eliminate monopolies and “to protect the consumers by preventing arrangements designed, or which tend, to advance the cost of the consumer.” American courts continue to use this legislation in deciding cases in which monopolies or cartels are being challenged.
Sherman’s last public office would be Secretary of State. In 1897, President William McKinley nominated Sherman as Secretary of State. Although the Senate confirmed his appointment, Sherman proved inept at foreign affairs, having been largely appointed because of his favorable standing in the Republican party. After slightly more than a year, on April 27, 1898, Sherman resigned and was replaced by Assistant Secretary of State William R. Day.
Sherman retired to private life. He died in Washington at the age of 77 on October 22, 1900.