6.13 Gilded Age Politics and the Rise of Populism Notes

National Politics in the Gilded Age

• Politics on the national level during the Gilded Age was characterized by three primary factors: the identities of the major political parties, constant legislative stalemate, and pervasive corruption.

• The two major political parties were the Democrats and the Republicans, whose platforms and memberships were deeply rooted in the lingering divisions of the Civil War.

• The Democratic Party was primarily composed of Southerners, though not exclusively. Their platform focused on:

  • Championing states' rights.
  • Supporting racial segregation.
  • Relying on the votes of big-city political machines.
  • Gaining support from the growing population of immigrants.

• The Republican Party was the party of the North and more industrial interests. Their voter base included:

  • Black people.
  • The middle class.
  • Businessmen.
  • Projectants.

• Constant stalemate was a defining feature of national politics in the closing decades of the $19^{th}$ century. The federal government achieved very little because:

  • The House of Representatives and the Senate were frequently controlled by opposing parties.
  • The majorities held by each party in their respective houses were extremely thin.
  • Voter turnout was exceptionally high, leading to fierce competition for politicians to remain in office and a reluctance to take risks.

Government Corruption and Corporate Influence

• Reformers of the era argued that corruption had permeated every level of government, leading politicians to represent their own economic self-interest and greed rather than the needs of the people.

• The lack of legal restrictions prevented politicians from receiving payments from large corporations, making it common for elected officials to use their positions to accumulate personal wealth.

• Examples of corporate influence include:

  • Jay Gould, the railroad tycoon, publicly boasted that he had elected the entire New York state legislature with his own money.
  • Owners of massive corporations in the oil, steel, and railroad industries paid congressional politicians to vote for policies favorable to their businesses.

• The $1890$ Congress became known as the "Billion-Dollar Congress." Important details include:

  • They passed the highest tariff bill in U.S. history.
  • These tariffs allowed large corporations to dominate the domestic market by keeping prices lower than imported competitors.
  • Members of Congress utilized the excess federal funds generated by these tariffs for "pet projects" to enrich themselves and their specific districts.

• The Crédit Mobilier scandal serves as the primary example of Gilded Age corruption:

  • The Union Pacific Railroad Company established a front organization called Crédit Mobilier to build a portion of the transcontinental railroad.
  • They inflated construction costs to charge far more than the actual cost, pocketing millions in profit.
  • To prevent government interference, they bribed members of Congress with shares in the company in exchange for their discretion.

The Patronage System and Civil Service Reform

• One of the major points of contention in the federal government was the patronage system, also known as the "Spoils System."

• The patronage system functioned as the method by which a President filled federal jobs after an election. Winners would spend months hearing from thousands of supporters who lined up at their door seeking federally appointed positions as rewards for their support.

• This system was popularized by Andrew Jackson, who famously argued, "To the victor go the spoils."

• Serious efforts to reform the system were hindered by congressional stalemate until the assassination of President James Garfield:

  • Garfield was overwhelmed by job seekers after his election.
  • He passed over a specific applicant who, in a fit of rage, assassinated Garfield at a train station a few months into his term.

• In response to the assassination, Congress passed the Pendleton Act of $1881$:

  • It replaced the patronage system with a merit-based competitive examination.
  • Applicants for federal jobs had to compete for the highest scores on these exams to be hired.
  • Over time, the effectiveness of this reform was diluted because political parties shifted from relying on the "party faithful" seeking jobs to receiving funding from a small group of wealthy individuals.

National Debates: Currency and Tariffs

• Currency Reform and the Gold Standard:

  • The United States Treasury operated on the Gold Standard, meaning paper money was backed by a corresponding amount of gold in a vault.
  • Because gold is a limited resource, the money supply remained restricted, which benefited the wealthy who already held significant capital.
  • Westerners and indebted farmers pushed for the expanded coinage of silver to increase the money supply.
  • Introducing silver would lead to inflation ($\text{rising prices}$), allowing farmers to pay off their debts more easily with inflated currency.

• Tariffs:

  • Politicians debated whether it was appropriate to use high protective tariffs to favor American industries.
  • High tariffs were essentially policies that benefited domestic industrial owners at the expense of others by increasing the cost of foreign goods.

Local Politics and Political Machines

• Most political power was actually wielded at the local city and town level rather than the federal level. In urban areas, power was often concentrated in organizations called political machines.

• Characteristics of Political Machines:

  • Run by a "Boss" who was usually an elected official.
  • Primary goal was to keep the boss and his loyalists in power.
  • Target demographic: Immigrants and the working poor in industrial cities.

• The Exchange of Services for Votes:

  • Political machines provided public welfare services such as food, coal for the winter, and jobs on public works projects for the impoverished.
  • These services were provided explicitly in exchange for votes.
  • This was easily enforced because voting at the time was public, not private.

• Corruption and Illegal Profits:

  • Bosses enriched themselves by taking cuts of profits from illegal activities they protected, such as gambling and prostitution.
  • They engaged in "honest graft," a term used by some bosses to describe getting things done through underhanded but locally beneficial means.

• Boss Tweed and Tammany Hall:

  • William M. "Boss" Tweed led the political machine at Tammany Hall in New York City.
  • Tweed used his position overseeing the construction of a Manhattan courthouse to steal taxpayer money.
  • The original budget was approximately $\$250,000$, but Tweed drove the cost up to nearly $\$13,000,000$, pocketing the majority of the difference.
  • Tweed was eventually convicted and jailed for the theft of these enormous sums.

The Rise of the Populist Party

• The Populist Party (or the People's Party) emerged in the late $19^{th}$ century due to government corruption and economic distress.

• The Panic of $1893$ was a major catalyst:

  • A severe economic depression caused by the bankruptcy of a large railroad company and subsequent bank failures.
  • This coincided with a debt crisis for Western farmers.

• Agricultural Challenges:

  • Technologies like the combine harvester increased productivity.
  • Increased production flooded the market, driving crop prices down.
  • Farmers could not pay back loans with these low prices.

• The National Farmers Alliance organized the People's Party in $1892$. Its membership included farmers, labor unions, middle-class reformers, and Black Americans.

• The Omaha Platform ($1892$) formalized their principles. Major goals included:

  • Political Reforms: Direct election of U.S. Senators (previously chosen by state legislatures) and the use of the referendum to allow voters to steer policy.
  • Economic Reforms: Expanded coinage of silver to address debt, and a graduated income tax where the wealthy pay a higher percentage of taxes ($\text{wealth redistribution}$).
  • Labor/Infrastructure Reforms: Government ownership of railroads, federal loans for farmers, and a mandated $8$-hour workday for industrial workers.

The Election of 1896 and the End of Populism

• In the presidential election of $1896$, the Populists nominated William Jennings Bryan.

• William Jennings Bryan:

  • A powerful orator and advocate for the coinage of silver.
  • Famous for his "Cross of Gold" speech, where he stated: "You shall not crucify mankind upon a cross of gold."

• Outcome and Decline:

  • Republican William McKinley won the election of $1896$.
  • The Populist Party collapsed shortly after due to internal divisions and the end of the economic depression that had fueled their movement.
  • Many Populist ideas were later adopted and achieved during the Progressive Movement in the following era.