Another important event was the action of the government as regards the question of arbitration between Great Britain and Venezuela (q.v.), in which Richard Olney, the secretary of state, played a somewhat aggressive part. On the 17th of December 1895 President Cleveland sent to Congress a special message calling attention to Great Britain's action in regard to the disputed boundary line between British Guiana and Venezuela, and declaring the necessity of action by the United States to prevent an infringement of the Monroe Doctrine. Congress at once appropriated funds for an American commission to investigate the matter. The diplomatic situation became for the moment very acute, but after a short period of bellicose talk the common-sense of both countries prevailed. Negotiations with Great Britain ensued, and before the American special commission finished its work, Great Britain had agreed, November 1896, to arbitrate on terms which safeguarded the national dignity on both sides.
Cleveland's independence was nowhere more strikingly shown during his second term than in his action in regard to the tariff legislation of his party in Congress. A tariff bill introduced in the House by William Lyne Wilson (1843-1900), of West Virginia, chairman of the Committee of Ways and Means, was so amended in the Senate, through the instrumentality of Senator Arthur Pue Gorman and a coterie of anti-administration democratic senators, that when the bill eventually came before him, although unwilling to veto it, the president signified his dissatisfaction with its too high rates by allowing it to become a law without his signature. Cleveland's second administration began by vigorous action in regard to Hawaii; he at once withdrew from the Senate the annexation treaty which President Harrison had negotiated.
During his second term Cleveland added 44,004 places in the civil service to the classified list, bringing them within the rules of the merit system. This was a greater number than all that had been placed in the list before, and brought the whole number up to 86,932. Toward the end of his second term the president became very much out of accord with his party on the free-silver question, in consequence of which the endorsement of the administration was withheld by the Democratic national convention at Chicago in 1896. In the ensuing campaign the president and his cabinet, with the exception of Hoke Smith (b. 1855), secretary of the interior, who resigned, gave their support to Palmer and Buckner, the National, or "Sound Money" Democratic nominees.