Gov't & Politics in the Gilded Age 6.12-6.13

gov’t was in tune with two popular ideas of the time:

• Laissez-faire economics

  • Lack of business regulation by gov’t

  • Opposition to taxes

  • opposed gov’t trying to counter serious economic downturns

• Social Darwinism

  • Wealthy should run the nation

    • Helping poor ppl would weaken the species, going against nature’s “survival of the fittest”

  • Philanthropy

  • Private charity

federal land grants

• granted SO MANY railroad subsidies

• gov’t expected:

  • railroad co. would sell land to new settlers to finance construction

  • completed railroad might both inc value of gov’t lands and provide prefered rates for carrying mail & transporting troops

• hwvr → corruption due to land grants & cash loans

  • insiders used construction companies to bribe gov’t officials and pocket huge profits (e.g. credit moblier)

  • protests against land grants occurred when citizens discovered railroads controlled sm land

Wabash v. Illinois 1886

• state laws passed earlier to regulate railroad rates ran into numerous legal probs

• thus, Supreme Court ruled in this case that states could not regulate interstate trade

• in effect, Court nullified many state regulation achieved by Grangers

• cong responded to outcry of farmers & shippers by passing first fed effort to regulate railroads (Interstate Commerce Act)

Interstate Commerce Act 1887

• cong responded to outcry of farmers & shippers (result of Wabash v. Illinois 1886) by passing first fed effort to regulate railroads

• railroad rates required to be “reasonable and just”

• also set up Interstate Commerce Commission

  • Investigate business practices

  • Helped railroad companies

    • lost most of its cases

    • stabilized rates & curtailing destructive comp, providing little help to farmers & other shippers

Which groups were against trusts (supported antitrust movement)?

• middle class

• old wealthy

old wealthy vs new wealthy

• Old wealthy helped shape country; believed should use wealth for building libraries, museums, etc.

• Old wealthy side w/ middle class (trusts are bad)

• New wealthy → conspicuous consumptions (hey look how rich I am!)

  • Used money to throw huge parties, buy expensive pieces, etc

Sherman Antitrust Act 1890

• intended to prohibit trusts/monopolies

• Vaguely worded

• Hard to reinforce

United States v. E.C. Knight Co. 1895

• Sherman Act could apply only to commerce, not manufacturing

• Resulted in few convictions (ineffective)

Why was the assassination of Pres Garfield significant?

• caused by disgruntled office seeker

• public outrage pushed Cong to remove certain gov’t jobs from control of party patronage

• encouraged civil service reform

Pendleton Act of 1881

• set up Civil Service Commission

• Competitive examinations for gov’t positions so it would be based on WHAT you knew, not WHO you knew (patronage/”spoils system”) to get gov’t position

• Civil servants could not make political contributions contributions

• applied to 10% of fed employees at start, but grew

• Unintended effect: civil service ppl couldn’t donate to help fund campaigns

  • Candidates began to depend on the wealthy

    • The politicians are obligated to follow will of wealthy who fund them (e.g. oil person funds them, so there better be no law restricting oil business)

debtor’s (and farmer’s) POV on money question

• Wanted $ with less value 

• Wanted “soft” currency

• would allow them to:

  • borrow $ at lower interest rates

  • Pay off loans/debts more easily with inflated currency

• after Panic of 1873 → many blamed gold standard for restricting $ supply & causing depression

• advocated for paper money and silver coins

creditor’s (wealthy/elite) POV on money question

• Wanted “hard” currency

  • Gold coins

• Gold would hold value

• value doesn’t fluctuate; if anything, money would gain in value

• Increased 300% between 1865-1895

Why was the Greenback Party formed?

• Paper money not backed by specie (gold/silver) was issued during the Civil War

  • Benefitted Northern farmers

• 1875 Specie Resumption Act

  • Took paper money out of circulation

  • Exchange dollars for gold

• Greenback Party

What did the Greenback party achieve?

• formed to support paper money

  • Made up from farmers & small business owners at the start

  • Received 1 million votes in 1878 Congressional elections

  • 14 members elected to Congress

  • Died out as economy improved

• Goal of increasing money supply remained (inc amt of $$ in circulation bc gives more ppl access to money)

“Crime of 1873”

• in addition to removing greenbacks, Cong also stopped coining silver

• critics called this “crime”

Bland Allison Act 1878

• silver discoveries in Nevada revived demands for use of silver to expand money supply

• this compromise law was passed

• allowed only limited coinage of btwn $2-4 mill in silver each month at standard silver-to-gold ratio of 16-1

• not satisfied → farmers, debtors, & western miners cont to press for unlimited coinage of silver

• tbh neither side was happy by this

tariff issue

• Civil War → Repub Cong raised tariffs to protect US industry & fund Union gov’t

• after war → Dems objected high tariffs bc raised price of consumer goods

• protective tariffs also caused other nations to retaliate by placing taxes on their own US farm products

• Hurt farmers → lost overseas sales

  • Surpluses of their goods

  • had to lower crop prices & therefore also the profits

• farmer’s POV → industry growing at expense of agriculture

• Both parties ignored complaints

• Depression of 1893 & Populists would eventually invoke actual change

factors that accounted for complacency (both parties ignoring issues) and conservatism of the era:

1. the way parties conducted campaigns

2. importance of party patronage

3. beliefs abt political strat

4. mainly to appeal to as wide of a segment of the electorate as possible 

how were politics made appealing to the public?

• both parties had strong platforms

  • dems in cities

  • repubs on state level

• entertaining rallies

• resulted in high voter turnout

why did party patronage become popularized?

• neither party had active legislative agenda → politics were chiefly game of:

  • winning elections

  • holding office

  • providing gov’t jobs to party faithful

• who got patronage jobs within party = more important issue than any policy

mugwumps

• ppl used this name to criticize reform-minded politicians who didn’t play patronage game

demographic & beliefs of repubs

• often waved bloody shirt

  • reminded millions of veterans of Union army & wounds caused by (southern) Dems

• b/c of party’s antislavery past, repubs kept vote of reformers & Afr Amers

• core of repub strength:

  • men in business & from middle class

  • Anglo-Saxon Protestants

    • many of whom supported temperance/prohibition

• followed Hamiltonian tradition/Whig pst

  • pro-business economic program

  • high protective tariffs

demographic & beliefs of dems

• in north, dem strength came from:

  • big-city political machines

  • immigrant voters

• dems often Catholics, Lutherans, Jews who objected temperance & prohibition mvmt by Protestants (largely repub)

• followed Jeffersonian tradition

  • states’ rights

  • limited fed pwr

election of 1884

• Republicans- James G. Blaine

• Democrats- Grover Cleveland

• Issues

  • Money supply, tariffs

  • Corruption, Civil War pensions

• Known as a “Dirty” Campaign

  • Cleveland had an illegitimate child

  • Blaine had been tied to corruption

  • “Rum, Romanism and Rebellion”

  • Mugwumps switched parties

• Cleveland narrowly won NY

election of 1888

• Republicans- Benjamin Harrison

• Democrats- Grover Cleveland

• Issues

  • Tariff and pensions

  • Trusts and labor issues

• Cleveland won the popular vote

• Harrison won the electoral vote

  • Republicans controlled Congress

  • First Billion Dollar Budget

  • McKinley Tariff

• Farmers and workers were still unhappy

Omaha Platform

• Majority of party is made up of farmers

• foundation for Populist party

• delegates from diff states met in Omaha, Nebraska in 1892 to draft political platform & nominate candidates for prez & VP for new party

Omaha Platform’s proposed political reforms

• Direct election of Senators

  • instead of indirect election by state legislatures

• Secret Ballot

  • allowing ppl to vote for who they actually want, even if political machines trying to bribe you, they won’t know if you really voted for them or not

• Initiatives (petitioning laws) and referendums (asking ppl if gov’t should conduct certain projects on ballot itself)

Omaha Platform’s proposed economic reforms

• Unlimited coinage of silver to inc money supply

• Graduated income tax

  • the greater a person’s income, the higher % of tax on their income

• gov’t ownership of railroads, telegraph, & telephone

• Loans and federal warehouses for framers to enable them to stabilize crop prices

• 8-hour workday for industrial workers

which political party tried to unite poor blacks & whites?

populist

election of 1892

• Republicans- Benjamin Harrison

• Democrats- Grover Cleveland

• Populists- James Weaver

  • Got over 1 million votes

  • Populists gained more seats in Congress

• Issues

  • Crop prices, labor strife

  • Money supply

• Cleveland won the electoral and popular vote

• populists failed to attract:

  • urban workers in North

  • Southerners

    • fear of populists uniting all poor ppl drove conservative Dems to use every technique to disfranchise Afr Amers

panic of 1893

• stock market crashed bc of overspeculation

• railroads went into bankruptcy bc of overbuilding

• Agricultural depression

• Unemployment = 20% of workforce

• Sherman Silver Purchase Act of 1890

Sherman Silver Purchase Act of 1890

• required the gov’t to purchase 4.5 million ounces of silver every month to mint coins and to back paper currency

• decline in silver prices encouraged investors to trade their silver dollars for gold dollars

• result → gold reserve fell to dangerously low level, so Cleveland decided to repeal this act

• hwvr, repeal failed to stop gold drain

• prez turned to JP Morgan to borrow $65 mill in gold to support dollar & gold standard

• this deal convinced many Amers that fed gov’t was only tool of rich eastern bankers

• workers became further upset w/ Cleveland when he used court injunctions & fed troops to crush Pullman Strike

Wilson-Gorman Tariff 1894

• enacted by Dems

• called for:

  • Moderate reduction in tariff rates

  • 2% income tax on wealthy

• hwvr, conservative Supreme Court declared tax unconstitutional → only moderate reduction left; helps no one

Coin’s Financial School

• Book 

• argued that economic struggles were caused by rich bankers

• Unlimited silver would solve all

Coxey’s Army (1894)

• Strikes spread across the nation

• Jacob Coxey led the unemployed to Washington DC

  • Demanded $500 million for public works jobs (so unemployed will go back to work)

  • Coxey and other leaders were arrested

• gov’t and Cleveland were seen as uncaring

• Set the tone for later protests

why did dems split?

• Conservative “Gold Bugs” were loyal to Cleveland

• “Silverites” looked for a new leader

• William Jennings Bryan

  • From Nebraska

  • “Cross of Gold” Speech → became Democratic nominee

  • “Fused” campaign with populists

    • Unlimited coinage of silver above market value (traditional but inflationary ratio)

how did “gold bugs'“ react to Bryan?

• unhappy

• they either:

  • formed separate National Dem Party

  • voted Repub

election of 1896

• Democrats- William Jennings Bryan

• Republicans- William McKinley

• Issues

  • Money supply

  • Depression

• McKinley won

McKinley campaign of 1896 election

• Promised strong & prosperous industrial nation after depression

• proposed high tariff to protect industry & upheld gold standard against unlimited coinage of silver

• financed by big business (Mark Hanna)

  • sold McKinley thru mass media

how was McKinley’s presidency successful?

• Gold was discovered in Alaska

  • inc $ supply under gold standard = inflation

  • Helped people pay debts

• Farm prices rose

• Factory production increased 

• Stock market rebounded

• Dingley Tariff inc more than 46%

• Made gold the standard of currency

• McKinley was reelected

significance of election of 1896

• This year/election marks end of Gilded Age

• Demise of the Populist Party

• Beginning of modern politics / End of stalemate in government

  • Republican dominance

  • Hanna created good model for organizing & financing successful campaigns

  • campaigns now focused on winning favorable publicity in most dominant media → print newspapers

• Urban Dominance

  • election was clear victory for big business, urban centers, conservative economics, & moderate middle-class values

  • Modern industry over rural ideals

• Presidents were active leaders again