[65][66] Harrison centered his campaign on economic policy and favored deflating the national currency. He was defeated in a plurality by James D. Williams, losing by 5,084 votes out 434,457 cast,[67] but Harrison built on his new prominence in state politics. When the Great Railroad Strike of 1877 reached Indianapolis, he gathered a citizen militia to make a show of support for owners and management,[24][68] and helped to mediate an agreement between the workers and management and to prevent the strike from widening.[69]
When United States Senator Morton died in 1877, the Republicans nominated Harrison to run for the seat, but the party failed to gain a majority in the state legislature, which at that time elected senators; the Democratic majority elected Daniel W. Voorhees instead.[70][c] In 1879, President Rutherford B. Hayes appointed Harrison to the Mississippi River Commission, which worked to develop internal improvements on the river.[71] As a delegate to the 1880 Republican National Convention the following year,[72] he was instrumental in breaking a deadlock on candidates, and James A. Garfield won the nomination.

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