The confusion many people have about today's two extremist parties leads to the mistaken impression that if you don't favor either party you are in between. The crank TV newscaster Bill O'Reilly makes a similar claim. He is moderate because he splits the opinions of the two big parties.
The two parties are close, and they are both extreme in their support for big government. By historical standards, today's America occupies the extreme Whig end of the spectrum, and that's true of both parties. Only an extremist can call two parties that both advocated lending as much as $29 trillion to Wall Street to be moderate. Today's America is an extremist, authoritarian state. There is no Aristotelian mean here.
A classic in the study of the Gilded Age is Edward Wiebe, The Search for Order http://www.amazon.com/Search-Order-1877-1920-Robert-Wiebe/dp/0809001047/ref=sr_1_1?ie=UTF8&qid=1427393497&sr=8-1&keywords=wiebe .
The first book I read on the Mugwumps was Nancy Cohen’s Reconstruction of American Liberalism 1865-1914, which is an intellectual history that gives a good overview. You can piece together a libertarian perspective from it. See http://www.amazon.com/Reconstruction-American-Liberalism-1865-1914/dp/0807853542/ref=sr_1_1?ie=UTF8&qid=1427393591&sr=8-1&keywords=nancy+cohen+progressivism .
The third book I recommend is a little different. It is Burton Bledstein’s Culture of Professionalism: The Middle Class and the Development of Higher Education in America. http://www.amazon.com/culture-professionalism-development-education-America/dp/0393055744/ref=sr_1_3?ie=UTF8&qid=1427393672&sr=8-3&keywords=bledstein . It traces the creation of professionalism in a host of fields. Professionalism was intimately connected to the Mugwumps’ interest in civil service reform. The impetus for rationalization led directly to Progressivism. Once the commitment to organized professions took hold, it was a small step to building legal standards and regulations for the professions. That, in turn, was linked to the development of universities. Hence, big government, the organized professions, and universities have always been linked.
The institution of the modern university in 1876 via the founding of Johns Hopkins came near the heart of the Mugwump era, which was in 1884, during the election of Grover Cleveland. I don’t think historians have a clear understanding of why the Mugwumps opposed James Blaine and turned against their own Republican Party to support Cleveland. [My colleague] may be right that there was a laissez faire impetus, but showing that would require a new, or at least clearer, historical treatment of it. Among the interesting Mugwump figures (see Cohen) were EL Godkin, David Ames Wells, and William Graham Sumner.
I also don’t believe that historians have a clear understanding of the role of the greenbacks in stimulating the expansion of industry in the Civil War era and what the economic effects were on bondholders, so the post-1873 gold deflation, which harmed other asset holders (likely Western and Southern farmers as well as stockholders) and generated Populism and Bryan (and which Friedman calls “the crime of 1873” in an article that was published in the Journal of Economic History), may have been a reaction to the post-Civil War inflation. Godkin writes about his anger at the effects of inflation on redistributing wealth to Jay Gould and others.
One question that no one has asked is whether there was a relationship between Wall Street and Bryan or the Populists. Mark Hanna, a high school friend of John D. Rockefeller, was, of course, McKinley’s close adviser. On the other hand, it may be that the election of McKinley (as propped by Wall Street) was not really opposition to silver, but rather it may have been preemptive and done in the hope for the central bank that was recommended fourteen years later, in 1910, by the same Rockefeller (with Morgan and Kuhn Loeb) interests. It is unlikely that there is much public information on something like this.
In any case the 1896 election had an opposite dynamic from what today’s pro-inflation banking community offers, and I suspect that something is not being said about who the Populists were and, more importantly, who their opponents were. Was a central bank being quietly considered by ‘96?
The same is true of the conflict within the Democratic Party between Bryan and the Bourbon Democrats,* of whom Cleveland was the chief representative. Wilson had been a Bourbon Democrat, and I think that he voted for a third party, the Gold Democrats, in 1896. His connection to Morgan is mentioned in my paper on colleges, and I suspect that his signing of the Federal Reserve Act came from his relationship with Morgan. An interesting point in the biography of Frank Vanderlip is that Wilson dropped him as a friend, and Wilson would have nothing to do with Vanderlip once Wilson was elected. Wilson did not want to seem to be linked to bankers. I wonder who thought up that plan of action. Wilson went from voting for gold in 1896 to refusing to have to do with bankers so he could propose the Federal Reserve Bank. As a result of secrecy, it may be hard to get data. But was the opposition of the banking community to silver a strategic one?
*Wikipedia: Bourbon Democrat was a term used in the United States from 1876 to 1904 to refer to a conservative or classical liberal member of the Democratic Party, especially one who supported Charles O'Conor in 1872, Samuel J. Tilden in 1876, President Grover Cleveland in 1884–1888/1892–1896 and Alton B. Parker in 1904. After 1904, the Bourbons faded away. Woodrow Wilson, who had been a Bourbon, made a deal in 1912 with the leading opponent of the Bourbons, William Jennings Bryan; Bryan endorsed Wilson for the Democratic nomination, and Wilson named Bryan Secretary of State. The term "Bourbon" was mostly used disparagingly, by critics complaining of old-fashioned viewpoints.