The Gilded Age: Scandal and Corruption (1870 - 1896)

Mark Twain: The Gilded Age

  • Twain co-authored the book
  • "gilded" implies shoddiness; fakeness; cheap commercialism
  • the novel was about a social climber, with a "get-rich-quick" scheme
  • there's show, but no substance, like a gold-painted trinket
  • also denotes a fascination with gold - wealth and power
  • social challenges
    • battle between the haves and the have-nots
    • gold standard v. greenbacks
    • powerful v. wanting-power
  • the nation grows in wealth, but corruption appears everywhere

Immigrants

  • despite the 600,000+ losses of the Civil War, the Census of 1870 was 25% higher than the previous decade
  • the US is now the third most populous nation in the world (behind Russia and France)
  • farmers struggle, but businesses and industry boom
  • American seemed to be a dreamland of opportunity for immigrants
  • provides industry with an unmatched labour force
  • immigrants with skill could become entrepreneurs and earn good money
  • those with relatives already in the US adapted better
  • starting brand new didn't work as well; didn't have a strong support base
  • often, ethnic groups gathered in enclaves within cities
    • these were neighbourhoods of Germans, Poles, etc.
    • would last for a long time, but not as common any more
  • cities become filled with tens of thousands of people
    • workers had to live close to their workplace, as they didn't have transportation
    • huge labour-intensive factories were ringed by multi-story tenement buildings
    • lodging offered shelter, and nothing else
    • buildings were jammed - often have night/day shifts for home as well as work

Politics

  • government at all levels say itself as the provider of essential services - roads, justice, etc.
    • not responsible for individual welfare
    • to them, citizens were responsible for their own fates
  • neighbourhood associations grew to bridge the gap between government and what people needed
    • help new arrivals with jobs, support for small businesses, legal assistance, etc.
    • did ask a price - set up a system to pay them back (for example, with votes), and they gained power
    • leaders began to be known as "bosses", ran for office and got elected
      • loyalty was to their associations - gave them success and votes
      • loyalty was not to the elected position - often corrupt
    • these associations became the city government in some places
    • government was influence by "machine politicians" - bosses who controlled votes via their associations
    • politicians are beholden to the bosses

Tammany Hall, New York City (1860s-1870s)

  • the headquarters of the Democratic Party in New York
    • headed by William Marcy "Boss" Tweed
    • graft, bribery, rigged elections
    • took $200 million from the city
    • some of the money was used to create jobs, public buildings, etc. - some was used to make Tweed's life comfortable
    • helped the local economy and the local people
    • building prices were inflated with kickbacks
    • some of the money was truly helpful - widows, orphans, poor, sick, unemployed
    • those who objected to the system could "disappear"
  • Thomas Nast, political cartoonist
    • worked for Harper's Weekly
    • in 1871, he began to bring to light the corruption of Tweed
    • his cartoons were so damaging, they would lead to the downfall of Tweed
    • Tammany Hall offered Nast $100,000 to stop, but he refused
    • he became a celebrity
    • in 1873, a successful campaign against Tweed caused him to flee to Spain; he was recognised there by the Nast cartoons and sent back to the US
    • Nast is also famous for the Republican elephant, Democratic donkey, Santa Claus
  • Samuel Tilden
    • responsible for prosecuting Tweed, who was convicted, jailed, and died in jail
    • because of this, he got the 1876 Democratic nomination for President; lost to Hayes by 1 electoral vote

Reformers

  • against the machines
  • began to lobby for more government in social services
  • wanted openness and public scrutiny
  • city, state, national governments began to consider the welfare of society in their planning and budgeting
  • the political machine will not totally go away, though

Corruption in Business and Government

  • from the end of the Civil War to the 20th century, new methods of industrialisation, transportation, etc. lead into the "Second Industrial Revolution"
  • business grows rapidly, but the government is na├»ve about business
    • doesn't know how businesses make money - both legally and illegally
    • didn't have the quality leadership to deal with cutthroat businessmen - the best men arein business
    • so, the government did nothing: "hands-off", "laissez-faire", "leave-to-do" policy
    • also, business is growing - so let them keep going, it's good for the nation
    • even when it became clear that control would be necessary, the government didn't know where to start
    • America didn't like corruption, but didn't want to force government involvement that might slow growth
  • government made growth easier through incorporation
    • early in the century, business through corporations became legal
    • by creating a corporation, individual stockholders are only at risk for the amount of their original investment
    • also, it's easy to raise capital by selling more stock
    • allows businesses to grow and develop
  • holding companies
    • one company buys the assets of another
    • thus, corporations can gain control over many other businesses
  • interlocking directorate
    • people on the board of directors of various corporations are also on the boards of competing corporations
    • allowed by the government's "hands-off" policy
  • leads to many scandals
    • to some, the lack of regulation was necessary for growth, but it brings with it scandal
    • Union Pacific railroad; Credit Mobilier; etc.
    • the worker was abused and taken advantage of
    • deregulation allowed the US to become a world leader in business

Spoils System

  • the spoils system expands during the Gilded Age
    • politicians give jobs to their family, supporters, etc.
    • often, these people weren't qualified
  • Hamilton Fish - Grant's Secretary of State
    • re-organised the Department of State
    • attempt to adhere to a merit system, where applicants had to pass a competency exam
    • considered a visionary
    • this idea of merit is more talked about than it is utilised elsewhere
  • battle over reform leads to split in Republican Party
    • Liberal Republican Party nominated Horace Greeley (editor of the New York Tribune) for President against Grant
    • two factions arise: Stalwarts and Halfbreeds
    • the Stalwarts were in favour of the patronage and spoils system
    • the Half-Breeds were reformers, in favour of merit-based appointments
  • no major reform would be undertaken until the 1881 assassination of James A. Garfield
    • 6 months into his term, he was assassinated by Guiteau, who was angry because he had been denied a patronage job
    • Arthur, Garfield's replacement, had been a Stalwart, put on the ticket to pacify that faction
    • not a big reformer, but that changes because of public outcry over Garfield's assassination
    • created the Civil Service Commission, which impacted 10% of jobs
  • Pendleton Civil Service Reform Act
    • said that each new President has the ability enlarge the percentage of civil servants (merit-based jobs)
    • this would not need a Congressional vote
    • everyone would get equal treatment when applying for jobs [except veterans, widows of veterans, and disable veterans]

Industrial Expansion

  • America becomes an industrial and agricultural giant
  • by 1894, was the world's greatest manufacturing power
  • abundant natural resources
  • created new industries and new opportunities faster than any other nation
  • a rush of new immigrants provided labour
  • industry and agriculture grow rapidly - railroads, canals, new markets
  • expand internationally
  • farmers begin to focus on single crops, producing for the nation and for the world
  • organise factories that specialise in a few products
  • railroads help bind the nation together
    • connect raw material with factories
    • become a huge market for steel, coal, etc.
    • become so huge, that 4 time zones are created to manage schedules
    • commuter trains move workforce
  • technological innovation
    • in the 1790s, the patent office issued 200 patents
    • from 1860-1890, there were 400,000 patents issued
    • much technological innovation and applied science
    • possibly the most significant was the 1876 telephone
    • in 1885 American Telephone and Telegraph was founded
    • Thomas Edison is credited with many inventions, among them the phonograph and light bulb (1879)
    • with the backing of JP Morgan, Edison Electric provided current to 85 customers in New York City

Captains of Industry

  • many individuals stand out for their contributions
  • called "robber barons" or "captains of industry"
  • Andrew Carnegie
    • from Scotland, came to Pennsylvania
    • in 1872, he met Bessemer, who had a new, inexpensive and easy, process for changing iron into steel
    • Carnegie then focussed his business on steel, founding the J. Edgar Thomson Steelworks in 1875
    • he utilised vertical integration, owning every phase of steel production - steamships, mines, factories, etc.
    • he was able to increase efficiency and quality while decreasing cost by controlling all the variables
    • in times of recession, he bought out competitors
    • by 1900, produced 25% of the nation's steel
    • he sold his steel holdings to investment banker JP Morgan for $500 million; Morgan will turn the US Steel Corporation into the world's first $1 billion corporation
    • richest man in America at the time
    • he spent the rest of his life in philanthropy, giving about $350 million to public libraries, parks, universities, etc.
  • John D. Rockefeller
    • Standard Oil Company
    • ruthless businessman, perfected the trust (a method of acquiring stock to create a monopoly)
    • when he felt the market had too much oil, his profits were reduced, so he forced competitors to close
    • by 1877, he controlled 95% of the US oil refineries and had a virtual monopoly on the entire world petroleum market
    • justified his wealth by saying God had given it to him
    • donated some $500 million to philanthropy
  • Vanderbilt - merged 13 railroad to create the New York Central Railroad
  • Swift and Armour monopolised meat packing
  • Sears Roebuck started mail-order catalogues
  • the government's laissez-faire attitude allows these monopolies to develop
  • competition between old business and new, rapidly changing and "new rich" companies
  • new battle of have/have-not and old/new
  • wealthy businessmen use Darwin's Origin of the Species to justify their success
  • Sumner, Spencer, and others created Social Darwinism
    • millionaires are the product of natural selection
    • the biggest, brightest succeed, the others fail - "survival of the fittest" was coined by Spencer
  • Spencer promoted free-market capitalism, feeling that Social Darwinism was the logical explanation for crowding out small businesses; to him, fostering the "good-for-nothings" at the expense of the "good" was a cruelty
  • Carnegie's "Gospel of Wealth"
    • felt that the wealthy had to prove that they were morally responsible
    • concentration of wealth was necessary for society to progress
    • the contract between the labourer and the millionaire was a sign of the progress of society
    • in the long run, disparity of wealth is good for the race
    • the rich are responsible for giving back and creating opportunities in education, etc.
    • give others the power to become rich

Attempts at Reform

  • begins at the state level
  • attempt to regulate the railroads
  • the government begins to take a stronger role in the economy
  • 1887 - Interstate Commerce Act
    • passed in response to farmers who were being discriminated against by the railroads
    • required that all railroads charge "reasonable" rates and publish those rates; different rates could not be charged unless they were published
    • created the Interstate Commerce Commission to supervise the railroad and investigate complaints
    • it had quasi-legislative and quasi-judicial abilities
      • created by Congress
      • could create laws to accomplish its goal
      • if the law wasn't followed, it could find the railroad to be guilty
    • however, all decisions were subject to the interpretation of the (pro-business) actual court system
    • initially, it wasn't very successful; but it was the beginning of the government's interference in the economy
  • Sherman Anti-Trust Act (1890)
    • signed by Benjamin Harrison
    • any combination (trust, etc.) in restraint of commerce is illegal
    • designed to placate the masses - it wasn't enforcable
    • ironically, the first time it was used was to break up labour unions

Changing Workforce

  • machines became more common; demand for unskilled workers increased
  • many immigrants, women, and children are a part of the workforce
  • the concept of wage slaves arises - not paid much; replaceable if ill, etc.
  • company towns
    • not much transportation is available, so companies build towns near to the factories for their workers
    • owners of the business control the town - rent, prices, etc.
    • part of wages goes into paying for housing
    • many people live in one house - can't afford individual homes
  • workers had at least a 10-hour day
  • no health or safety considerations
  • social transformations affects every aspect of life in America
    • delayed marriage - women work alongside men
    • dirty tenements
    • high rate of disease

Union Organisations

  • Commonwealth v Hunt/ (1842) - Massachusetts Supreme Court ruled that strikes were not illegal, but the decision wasn't necessarily accepted by businesses
  • National Labour Union (1866)
    • first national labour organisation
    • supported workers' rights - 8-hour workday, arbitration, paper money
    • ended by the death of their leader
  • Knights of Labour (1869 - 1893)
    • Uriah Stephens initially formed a secretive group; Powderly ended the rituals and membership increased
    • they staged a successful riot over reduced wages for workers on the Wabash railroad
    • one of the anarchists involved in the Haymarket Square riot had a membership card, causing them to become associated with anarchy; membership drastically decreased
  • American Federation of Labour (1886)
    • unified various local union
    • advocated 8-hour day, safety laws, etc.
    • favoured closed shops, where only union workers could be hired
    • only allowed skilled workers to join
    • highly successful
  • Major Strikes
    • "Molly Maguires"
      • coal miners in Pennsylvania resorted to violence to express their frustration
      • Pinkerton detectives arrested 20 leaders and some were hung
    • Great Railroad Strike (1877)
      • first nation-wide strike
      • railroad workers walked off the job and blockaded trains following pay cut
      • Rutherford B. Hayes ended the strike with federal troops
    • Homestead Strike
      • steel workers in Carnegie's plant were locked out
      • the union was broken, and Homestead remained deunionised until 1937
    • Pullman Strike (1894)
      • railroad workers went on strike, stopping almost all train service in the midwest
      • Cleveland sent federal troops in on the premise that the strike hindered the delivery of the US mail (Constitutional grounds)

Chinese Immigrants

  • beginning in 1848, large numbers of Chinese came to America
  • discovery of California gold prompted people from all over the world to seek their fortunes there
  • this coincided with political and economic hardship in China
  • most settled the Western coast and worked in gold mines
  • Burlingame Treaty (1868)
    • most favoured nation status granted to China
    • opens door to immigration without restrictions
    • by 1880, Chinese form about 9% of the population of the state
  • most were single males ("coolies") - wanted to become rich and return home to China
  • they also played a large role in building the railroad
  • failed to assimilate
    • didn't care about American culture
    • didn't feel a need to join, as they planned on leaving
  • when the railroad is complete and the mines are empty, about 1/2 went back to China
  • the rest didn't have an easy life
  • many worked as domestic servants, learning new skills that weren't required in China (cooking, cleaning, etc.)
  • started Chinatown enclaves
  • some white workers began to attack the Chinese, as cheap Chinese labour was taking their jobs
  • Dennis Kearney
    • naturalised Irish immigrant
    • formed the Workingmen's Party
    • one goal is to remove Chinese workers, so they terrorise them
    • attempted to rewrite constitution to deny the Chinese votes and jobs
    • his movement would go national
  • Chinese Exclusion Act (1882)
    • banned all Chinese immigration for next 10 years; then it could be renewed
    • in 1902, it is made indefinite
    • immigration not reopened until 1943

New Immigration (1880s)

  • Immigrants Prior to 1880
    • from the British Isles and Western Europe
    • literate, relatively well-off
    • from countries with democratic governments
    • Protestant (except the Irish)
    • similar customs to America
    • easily assimilated
  • Immigrants After 1880
    • shift to Southern and Eastern Europe - Italians, Slavs, Czechs, Russians, etc.
    • sharply contrasted to "old" immigrants
    • illiterate, poor, no democratic experience, Jewish, Orthodox, Catholic
    • settled in New York, Chicago and created enclaves
    • these immigrants came to outnumber "natives" in many cities
    • bring different customs, clothes, etc.
    • because of large numbers and enclaves, didn't assimilate well
    • tried to maintain old lifestyle - published their own newspapers, ran their own schools (rise of parochial schools), teach their own religion and language
    • sometimes didn't teach English at all
    • poor education, economy, persecution in Europe sent them to America
    • Contract Labour Law (1864)
      • federal government encouraged immigration
      • businesses or the federal government can pay for immigrants to come to US, then takes their wages in repayment
    • the development of the steamship meant that the passage to American was safe and comfortable; competition in the industry meant that prices were low
    • most entered through New York
      • some entered through Boston, New Orleans, and other places
      • at first, went through the state-run Castle Garden
      • Castle Garden was closed after a Congressional investigation that revealed the lack of record-keeping, the filth, and the corruption
      • Congress funded Ellis Island (1892)
      • passing the Statue of Liberty was a symbol of hope for immigrants
      • Emma Lazarus' poem is on the base: "give me your tired, your poor…"
      • many (exaggerated) stories were spread about the opportunities of America
  • Reaction
    • political corruption - political machines were made to deal with the terrible conditions
    • one person would become the leader
    • the machines provide work, help, etc.
    • Nativism, anti-foreignism
      • not new - in the 1840/50s it was anti-Irish
      • anti-immigration occurs as an issue periodically, especially when the economy is not doing well (right now)
    • these new groups were a bigger problem, as they didn't adapt as well
    • ethnic enclaves avoided American culture
    • many immigrants ("birds of passage") planned to make a fortune and then return home; they had no intention of assimilating
    • the new immigrants were seen as a threat to traditional American culture - culturally and religiously exotic
    • American Protective Association
      • formed in 1887
      • grew slowly at first, but more rapidly during 1893 economic depression
      • primary goal was to resist "Catholic conspiracies"
      • organised and voted against Catholic candidates
      • promoted immigration restrictions and stringent naturalisation requirements
    • push for legislation to limit immigrants
      • for example, a literacy test to enter the country
      • a literacy bill was vetoed by Cleveland in 1887
      • 1913, 1915, 1917 - illiteracy bills were vetoed
      • argued that immigrants were being penalised for not having had the opportunity to become educated - and America was supposed to be that opportunity
      • Immigration Act of 1917 - Congress overrode Wilson's veto, and illiterates were banned
      • Natural Origins Act of 1924 was even more restrictive

Reform Movements

  • Agrarian Revolt
    • mid-1800s, farmers have a bright future - cotton, wheat prices are high
    • 1890s - problems arise quickly
    • technological advances led to overproduction, which as their main problem
    • competition
      • globalism meant that US farmers were competing with Canada, Russia, Australia
      • American crops begin to spiral down as the price plummets drastically
    • railroads play with pricing to the disadvantage of the farmer
    • banks weren't flexible, and charged enormous interest rates
    • often, farmers had to mortgage their homes and hope for a good crop
    • despite their independent nature, American farmers are pushed into groups
    • Oliver H. Kelly - the Grange
      • a farmer's group, similar to a union
      • offered education and social activities for farmers
      • by 1875, there were 800,000 members
      • "Grangers" established co-ops, which were cooperatively owned warehouses, etc.; they were run by the farmers so that there were no employment costs
      • politics - he lobbies for farmers, and will later run for office
      • as they fade, they create Farmers Alliances
    • Farmers Alliances
      • similar to the Grange, but more political
      • there were three main Alliances: North, South, and Coloured
      • well over 1 million members
      • push for political gains, but act independently - don't coordinate efforts
      • eventually, they'll reach an accord to gain power
    • People's Party (Populist Party)
      • disgruntled former members of Farmers Alliances
      • want to nationalise the railroads, telephones, telegraphs
      • gradual income tax
      • want subtreasuries
        • federal government builds large warehouses to store farmers' possessions
        • create loans secured by those possessions
        • hold items until market improved
    • the South and the West push for an expanded money supply
      • call for use of silver coinage
      • during this period, there is a major debate between "Goldbugs" and "Silverites"

Election of 1892

  • involved the Grange, Farmers Alliances, greenbacks, Populists
  • elected several Populist Representatives
  • 4 July 1892 - gathered in Omaha, Nebraska
    • established the Populist "Omaha platform"
    • want to end injustice, oppression, and poverty caused by old political parties
    • formally put in writing all of their desires
    • also want a secret ballot and direct primaries
  • the Republicans run Benjamin Harrison for President (incumbent); gets 43% of the vote, mostly the North
  • the Democrats run Grover Cleveland; gets 46%, mostly the South; wins to become the only President with two non-consecutive terms
  • the Populists run James Weaver; gets 8.5% of the vote (about 1 million votes) and wins 4 Western states
  • the third-party effect sends a message
  • the Populists could have done better, but lost Southern votes for accepting blacks
  • Cleveland had carried the popular vote in three straight elections

Cleveland's Second Term

  • Panic of 1893
    • started as he walked into office; he gets blamed
    • poor market, plight of farmers, railroad expansion, unsatisfied labour, limited credit, poor banks all add up
    • banks close, businesses go bankrupt, 20% unemployment
    • at this point in time, the government isn't set up for and doesn't feel that they have a role in the trouble
    • believe workers need to work harder, without government help
  • Coxey's Army (1894)
    • Coxey organised a march on Washington
    • wants to persuade the government to help provide jobs
    • proposes that the government use money to create public works jobs to improve the nation's infrastructure
    • in theory, more jobs would increase spending, which would help end the recession
    • this is the seed of the idea of government involvement
    • Coxey was arrested for walking on the grass; his movement ended
  • Cleveland didn't believe government should help people, or support the less fortunate

Election of 1896

  • depression, and Cleveland's not helping meant that the Republicans and Populists gained power in Congress
    • the off-year elections had sent a signal to the Democratic Party that there's a problem
  • as political leaders create party platforms, currency becomes the key issue
    • the Republicans calls for the gold standard to gain industrialist votes
    • the Populists called for unlimited silver coinage - want inflation and more money
  • William Jennings Bryan - "Cross of Gold" speech
    • arose in Democratic convention in Chicago
    • he was a Congressman from Nebraska who was a great orator
    • captures attention while speaking in favour of silver
    • wants to repeal the Sherman Silver Purchase Act, which required the Treasury to purchase 4.5 million ounces of silver per month
    • uses his speaking skills to call for silver coinage and the end of the big business gold standard
    • speaks of a "crown of thorns" on the "brow of labour" and "crucifixion" on a "cross of gold"
    • birth of a new Democratic spokesperson
    • the Populist Party also nominates him - their loss of independence spells their doom
    • split in Democratic party - John Palmer, Illinois, also runs
  • William McKinley is nominated by the Republicans, calling for high tariffs to gain industrial votes
    • he runs a front porch campaign, where he gives occasional speeches but otherwise stays at home
    • this election sees the rise of the campaign manager, as Marcus Hanna plans his election
    • raises $3 million and has brochures, newspapers, multilingual campaign literature
    • 1500 speakers sent out nationwide
    • railroads give discounts to travel to see McKinley
  • Bryan
    • it was thought to be improper to blatantly pursue the Presidency, but he travelled around the country and spoke
    • took advantage of his tremendous speaking skills
    • these campaigns create a dramatic shift for the future
  • Results
    • because of the poor economy, the voters change parties
    • McKinley gets most of the North, California, and Oregon (industrial areas): 51%
    • Bryan gets the agrarian South and West
    • silver/gold has little impact
  • as McKinley enters office, new gold discoveries expand money supply, and economy picks up - McKinley gets the credit
  • the Republicans became the party of prosperity - in power for 16 consecutive years
  • because the economy is going well, the Democrats are left only with sectional followers and poor Southern farmers
  • the Populist Party fades away - Bryan had lost, so they lost their gamble
    • as the economy improved, their ideas were less important
  • "Realignment" - shift in party support during the election
    • the Republicans became the party of the prosperous - white-collar, industrialists, capitalists
    • following the Civil War, they had been the party of the newly enfranchised blacks
    • blacks and poor voters go the Democrats (1932 - now)
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