Why didn't Republicans become the progressive/ liberal party?

[Statilius the Epicurean]

It's important to identify what the Republican Party of the era was. It was a nationalist developmentalist coalition with an aim to unify, industrialise and purify the American nation. Its planks were patriotism, Protestant moralism and the protective tariff. One could in a way compare the 19th century GOP to the interwar KMT in China: both had progressive elements, both set themselves against pre-industrial landlordism, but the parties were not "left" as a whole.

The Democratic Party represented everyone who felt threatened and left out of this drive for national modernisation: urban ethnics, labour unions, southern sectionalists, poor farmers and so on. They saw the Republican vision for America as exclusivist and hierarchical: a corrupt nexus of big business and federal government steamrolling the common man under the presumption that everyone should be a good, obedient, industrious Yankee. In this context it's easy to understand why the Democratic Party absorbed the new left and the Republican Party did not.