1896 gubernatorial candidacy
In order to dislodge the Democratic Party politicians which had controlled state affairs since the end of Reconstruction, the Republicans and Populists cooperated with one another during the 1894 state legislative elections in a process Democrats derided as "Fusion". The Fusionist coalition of Republicans and Populist won a majority in the North Carolina General Assembly and used their power to liberalize election laws, thus expanding suffrage in the state.[4]
Despite their joint support of certain reforms, the Republican and Populist coalition was strained by differences between the two parties which became more acute in anticipation of the 1896 United States presidential election.[4] In April 1896, state leaders of both parties met to discuss possible Fusion for that year's state elections but deadlocked over several key issues, including the fact that both parties wanted to reserve the right to chose their own candidate for the office of governor of North Carolina. At their contentious state convention the following month, the Republicans nominated a pro-Fusion slate of candidates for state offices, with Daniel L. Russell as their choice for governor. The ticket was left incomplete to allow for the Populists to chose some of the candidates at their convention. Some dissident black Republicans held their own convention in early July and nominated Guthrie as their gubernatorial candidate.
The Populists held their state convention in August and, largely ignoring overt discussion of the Fusion issue, nominated a full slate of state candidates. Largely at the initiative of U.S. Senator Marion Butler, Guthrie was given the gubernatorial nomination with the hope that he could attract the votes of free silver Democrats. In September, the party's leaders formulated a Fusion agreement with the Republicans to defeat the Democrats. The agreement did not involve withdrawing Guthrie's candidacy, and rumors proliferated that Russell would withdraw from the race and thus allow the Guthrie to become the single Fusion candidate for governor. Guthrie, distrustful of the Republicans, was opposed to Fusion and doubted that Russell would ever withdraw, which Russell eventually confirmed to him in a private meeting.
Reassured by the national Democratic Party's embrace of free silver, Butler pushed for North Carolina Populists to repudiate their earlier agreement with Republicans and work with Democrats. State Democratic leaders offered to support Guthrie as a candidate for lieutenant governor or U.S. Senator but would not back a Populist for governor. Largely on this basis, the Populist leaders rejected cooperation with the Democrats, to Guthrie's dismay. With Russell and Guthrie remaining in the contest, the gubernatorial election evolved into a three-way race between the two of them and Democratic nominee Cyrus B. Watson. Watson and Guthrie largely ran similar campaigns, with both focusing on their support for presidential candidate William Jennings Bryan (who had been nominated by both the national Democratic and Populist parties), free silver, and largely ignoring state concerns. Many North Carolinian Populists were disturbed by Guthrie's strategy.
Though his nomination had not been formally impacted by the Fusion agreement between the Republicans and Populists, Guthrie felt he had been rejected by his own party. Seeking to avoid the election of a Republican, on October 27 he endorsed Watson and urged Populists to pursue Fusion with Democrats. Many Populists following him eventually divided their vote between Russell and Watson. Russell won the November election with 153,787 votes. Watson placed second with 145,266 votes, and Guthrie placed last with 31,143 votes, having earned a majority in only one county and underperforming the Populists' 1892 gubernatorial candidate. His break with his own party deeply embarrassed the Populists.