The Republican Party nominated war hero Benjamin Harrison, who they knew would appeal to Civil War veterans and the industrial north. At the time, Harrison's home state, Indiana, was a swing state, and the party believed his nomination would help win the state. It also may have helped that Harrison was the grandson of former President William Henry Harrison, who died after just thirty-two days in office. The Republican Party chose Allen G. Thurman to run alongside Harrison as vice presidential candidate.
The election of 1888 occurred during a period of relatively good conditions, with a strong and stable economy. There were no major issues aside from that of protective tariffs. Cleveland brought this issue into the spotlight, claiming that the tariffs were too high, instead favoring a free trade model, in which trade had little government regulation. Cleveland's policies worked against industrial workers and Civil War veterans, which lost him support from these large demographics in the North.
The election was marred by a scandal known as "Blocks of Five," in which the Republican Party paid electors in Indiana to cast votes for their candidate. Though the scandal was widely publicized before the electors were ever cast, some fraudulent votes were still cast, though they probably did not have any effect on the outcome of the election.
The 1888 election was one of only four in U.S. History in which the winning candidate did not receive a plurality of the popular votes, winning only by the electoral vote count. It was a tight race, but Cleveland lost by 1 percent in his home state, New York, and ultimately lost the election. Benjamin Harrison won the seat and became the twenty-third President of the United States.