History

The Gilded Age in America (1870s–1900): Wealth, Corruption, and Social Change

I. Introduction: What Was the Gilded Age?

• The term “Gilded Age” was coined by Mark Twain in his 1873 novel The Gilded Age: A Tale of Today.

• It refers to the late 19th century, a time of rapid industrialization, economic growth, and immense wealth—often covering up deep social inequalities.

• While America saw unprecedented technological progress, it also experienced widespread political corruption, labor exploitation, and struggles for social justice.

II. Economic and Industrial Expansion

The Rise of Big Business and Monopolies

• The U.S. economy grew dramatically due to industrialization.

• Key industrial leaders (often called “Robber Barons” or “Captains of Industry”):

  • John D. Rockefeller – Standard Oil Company, controlled 90% of U.S. oil.

Horizontal integration is a business strategy where a company acquires, merges with, or takes over competing companies within the same industry to increase market share, reduce competition, and achieve economies of scale. The main purpose of horizontal integration is to dominate the market by reducing competition and increasing a company’s control over pricing, production, and distribution.

• Andrew Carnegie – Carnegie Steel Company, later sold to J.P. Morgan to form U.S. Steel.

Vertical Integration is a business strategy in which a company expands its control over multiple stages of production and distribution within the same industry. This means that instead of relying on outside suppliers, distributors, or retailers, the company owns and controls all aspects of its 

• The Bessemer process revolutionized steel production, allowing for the expansion of railroads and skyscrapers.

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  • Cornelius Vanderbilt – Railroads and shipping empire.

  • J.P. Morgan – Banking and finance, consolidated industries.

• Trusts and monopolies formed, limiting competition and consolidating power in a few hands.

Technological and Industrial Innovations

• The rise of the assembly line and factory production.

• Key inventions:

  • Thomas Edison – Light bulb and electrical power stations.

  • Alexander Graham Bell – Telephone, revolutionizing communication.

  • Typewriters, cash registers, and refrigeration further modernized industries.

The Expansion of Railroads

• The expansion of railroads in the United States was one of the most transformative developments in the country's history, shaping its economy, society, and geography. This expansion occurred in several key phases throughout the 19th and early 20th centuries.

• Early Development (1820s–1850s)

• The first railroads in the U.S. were small, localized projects meant to complement existing transportation methods like canals and turnpikes. The Baltimore and Ohio Railroad (B&O), chartered in 1827, was the first major railroad, intended to connect Baltimore with western markets. Early railroads primarily served the industrializing Northeast and were built with short lines that connected major cities, ports, and rivers.

• Expansion and the Rise of a National Network (1850s–1860s)

• During this period, the federal government played a crucial role in promoting railroad expansion, particularly in the Midwest and West. The 1850s saw the rise of land grant railroads, where the government provided land to railroad companies to incentivize construction. The Illinois Central Railroad, for example, benefited from these grants, which helped develop the interior of the country.

• The onset of the Civil War (1861–1865) underscored the importance of railroads for military logistics. The Union’s superior rail infrastructure played a significant role in its victory. After the war, railroad construction accelerated, particularly toward the western frontier.

• The Transcontinental Railroad and Westward Expansion (1860s–1890s)

• Perhaps the most iconic moment in railroad expansion was the completion of the First Transcontinental Railroad in 1869. The project, authorized by the Pacific Railway Acts (1862 & 1864), connected the Central Pacific Railroad from California with the Union Pacific Railroad from the Midwest at Promontory Summit, Utah. This drastically reduced travel time across the country and encouraged migration, settlement, and economic growth in the West.

• Following the first transcontinental route, several other transcontinental railroads were completed, including the Northern Pacific (1883), Southern Pacific (1883), and Great Northern (1893). These lines facilitated trade, the movement of goods, and the expansion of industries such as mining, ranching, and agriculture.

• The Gilded Age Boom and Regulation (1870s–1910s)

• By the late 19th century, railroad companies became some of the most powerful businesses in the country, leading to both economic booms and controversies over monopolistic practices. Tycoons like Cornelius Vanderbilt, Jay Gould, and James J. Hill amassed great wealth by controlling vast networks of rail lines. However, corruption, rate discrimination, and exploitative practices led to calls for government regulation.

• In response, the federal government passed laws such as the Interstate Commerce Act of 1887, which created the Interstate Commerce Commission (ICC) to regulate railroads and prevent unfair pricing practices. This marked one of the first major instances of government regulation of private industry.

III. Urbanization and Immigration

• Industrialization led to rapid urban growth—major cities like New York, Chicago, and Pittsburgh expanded dramatically.

• Over 12 million immigrants arrived in the U.S. between 1870 and 1900, mostly from Southern and Eastern Europe.

• Immigration processing centers:

  • Ellis Island (New York) – European immigrants.

  • Angel Island (San Francisco) – Asian immigrants.

• Immigrants often lived in tenement housing, facing overcrowding, poor sanitation, and unsafe conditions.

• Nativism grew, leading to anti-immigrant policies like the Chinese Exclusion Act (1882). No Nothing Party (AmericanParty)

IV. Political Corruption and the Call for Reform

Political Machines and Corruption

• City politics were dominated by political machines—organizations that controlled elections through bribery and patronage.

• Example: Tammany Hall in New York, led by Boss Tweed, controlled contracts and votes through fraud.

• Corruption at the national level:

  • Weak presidencies (Grant, Hayes, Garfield, Arthur) allowed for corporate influence over government.

  • The Credit Mobilier Scandal  (The Crédit Mobilier scandal was a political and economic corruption scheme that involved the Union Pacific Railroad and a construction company, Crédit Mobilier.)  and the Whiskey Ring (The Whiskey Ring was a political scandal that took place from 1871 to 1876 in the United States. It involved a conspiracy between government officials, politicians, and whiskey distributors to steal tax revenue. The scandal occurred during the presidency of Ulysses S. Grant. exposed government corruption.)

Reform Efforts

• The Pendleton Civil Service Act (1883): Required government jobs to be awarded based on merit rather than political connections.

• Muckrakers (investigative journalists) exposed corruption—

• e.g., Ida B. Wells on lynching 

• Upton Sinclair: A novelist and social crusader who exposed the unsanitary conditions in the meat-packing industry in his novel The Jungle

• Jacob Riis: A newspaper reporter, social reformer, and photographer who wrote How the Other Half Lives

• Samuel Hopkins Adams: An American writer and muckraker  Adams was widely known for his writings on public health and patent medicines; he is often given much of the credit for the passage of the 1906 Pure Food and ...

• Ida Tarbell:  The History of the Standard Oil Company, published in McClure's Magazine from 1902–1904. 

• Lincoln Steffens:  The Shame of the Cities (1904) and The Struggle for Self-Government (1906). 

• Ray Stannard Baker:  Following the Color Line: An Account of Negro Citizenship in the American Democracy, becoming the first prominent journalist to examine America's racial divider

V. Labor Struggles and Class Conflict

Social Darwinism is a sociopolitical theory that applies Charles Darwin’s concepts of natural selection and survival of the fittest to human societies, economics, and politics. It emerged in the late 19th century and was often used to justify inequality, imperialism, racism, and laissez-faire capitalism.

Origins and Key Ideas

While Charles Darwin himself did not coin or promote Social Darwinism, the theory was largely developed by thinkers like Herbert Spencer and William Graham Sumner, who applied Darwinian principles to human competition. Some key ideas include:

1. Survival of the Fittest – The belief that individuals, businesses, or even nations that are strongest will naturally succeed, while weaker ones will fail.

2. Laissez-Faire Capitalism – Social Darwinists opposed government intervention in the economy, arguing that the market should determine success and failure without regulations or welfare.

3. Justification for Social Inequality – Many Social Darwinists believed that poverty, class divisions, and racial superiority were natural outcomes of human evolution.

4. Imperialism and Colonialism – The idea was used to justify European and American expansion, claiming that superior civilizations had the right to dominate weaker ones.

5. Eugenics Movement – Some took Social Darwinism further by advocating for selective breeding to "improve" the human race, leading to harmful policies in the early 20th century.  

Eugenics in Indiana:  By late 1800s, Indiana authorities believed criminality, mental problems, and pauperism were hereditary. Various laws were enacted based on this belief. In 1907, Governor J. Frank Hanly approved first state eugenics law making sterilization mandatory for certain individuals in state custody. Sterilizations halted 1909 by Governor Thomas R. Marshall. Indiana Supreme Court ruled 1907 law unconstitutional 1921, citing denial of due process under Fourteenth Amendment. 1927 law reinstated sterilization, adding court appeals. Approximately 2,500 total in state custody were sterilized. Governor Otis R. Bowen approved repeal of all sterilization laws 1974; by 1977, related restrictive marriage laws repealed.

Impact and Criticism

Social Darwinism played a role in shaping policies during the Gilded Age (1870s–1900s) and was used to resist labor rights, social welfare programs, and civil rights. However, by the mid-20th century, the theory fell out of favor, especially after its association with racist ideologies and the horrors of Nazi eugenics policies.

Modern scholars widely discredit Social Darwinism as a misinterpretation of biological evolution, emphasizing that human societies are shaped by culture, ethics, and cooperation rather than purely competitive survival.

The Harsh Realities of Industrial Labor

• Factory workers faced long hours (10–16 per day), low wages, and dangerous conditions.

• Child labor was rampant, with children as young as five working in mines and factories.

Major Labor Strikes and Conflicts

• The Great Railroad Strike of 1877 – First major national strike, led to violent clashes with federal troops.

Causes

Wage cuts: The Baltimore and Ohio Railroad cut wages three times in 1877, including a 10% cut in July. 

Poor working conditions: Railroads were also criticized for their safety records and monopolistic practices. 

Economic depression: The country was still suffering from the Financial Panic of 1873. 

Timeline

July 14, 1877: The strike began in Martinsburg, West Virginia.

July 19, 1877: The strike turned violent in Maryland, where protestors threw stones at militia troops who responded by firing into the crowd. 

August 1877: The strike collapsed due to military responses. 

Aftermath

The strike helped set the stage for later labor violence in the 1880s and 1890s. 

The strike demonstrated the power of railroad workers and the role they played in the United States. 

• The Haymarket Affair (1886) – A bomb exploded during a labor rally in Chicago, leading to anti-union sentiment.

What happened?

On May 3, 1886, police attacked and killed workers picketing at the McCormick Reaper Works factory. 

A public rally was held in Haymarket Square on May 4 to protest the deaths of the workers. 

Police arrived to break up the rally, and a bomb was thrown into their ranks. 

The identity of the person who threw the bomb is unknown. 

What was the significance? 

The Haymarket Affair became a symbol of the international struggle for workers' rights.

The Second International designated May 1 as International Workers' Day in 1889, associating it with the Haymarket Affair.

• The Homestead Strike (1892) – Carnegie Steel workers protested wage cuts; private security forces killed several strikers.

What happened?

• Strike begins
  On July 1, 1892, the Carnegie Steel Company fired workers from the Amalgamated Association of Iron and Steel Workers (AAISW) 

• Private security guards arrive
  On July 6, 1892, private security guards hired by the company arrived and exchanged gunfire with the workers 

• Battle
  At least three guards and seven workers were killed in the battle 

• Violence
  The workers and their supporters beat the surrendering Pinkerton guards with sticks, stones, and dirt 

• Strike ends
  The AAISW voted to end restrictions on working at the Carnegie Steel Company, leaving the union weakened 

What was the cause?

The company wanted to lower production costs by breaking the union 

The company's CEO, Henry Frick, offered the AAISW a new contract with pay reductions over time 

What was the impact?

The strike highlighted how difficult it was for unions to challenge the power of corporations and the government 

The strike inspired workers and contributed to the modern labor movement 

• The Pullman Strike (1894) – Railroad workers protested wage cuts; President Cleveland sent federal troops, resulting in violent clashes.

Causes

The Pullman Company cut wages and laid off workers to increase profits during the economic depression 

Workers formed a grievance committee to negotiate with the company but were unsuccessful 

Participants

Pullman Palace Car Company workers: The original strikers at the Pullman Palace Car Company in Chicago 

American Railway Union (ARU): Led by Eugene V. Debs, the ARU called for a boycott of Pullman cars 

Federal government: President Grover Cleveland intervened to help end the strike 

Events 

The ARU called for a boycott of Pullman cars

The boycott crippled rail traffic nationwide

The federal government issued an injunction to stop the boycott

Federal troops were sent to Chicago and other cities

The strike and the union were broken by mid-July

Legacy 

Eugene V. Debs went on to become a leader in the socialist movement in the United States

The Rise of Labor Unions

• Knights of Labor –The Knights of Labor was a progressive union that fought for the eight-hour work day, an end to child labor, and the right of workers to own the industries they worked in, but declined after the Haymarket Affair.
  

• American Federation of Labor (AFL) – Led by Samuel Gompers, focused on skilled workers and better wages/conditions.
  

The Importance of Henry George

Henry George (1839–1897) was an influential American economist, journalist, and social reformer best known for his book Progress and Poverty (1879). He argued that economic inequality stemmed from land monopolization and proposed a "single tax" on land to address wealth disparities and promote social justice. His ideas had a lasting impact on economic thought, labor movements, and tax policy.

Key Contributions and Ideas

1. Progress and Poverty (1879)

• George’s book was one of the best-selling economic texts of the 19th century, addressing the paradox of increasing wealth alongside deepening poverty during industrialization.

• He argued that land monopolization allowed a few to accumulate massive wealth while workers and small businesses struggled.

• Proposed a single tax on land value as the solution, replacing all other taxes and redistributing wealth more fairly.

2. The Single Tax Movement

• George believed that land is a common resource and that landowners unfairly profit from rising land values without contributing to society.

• His single tax proposal aimed to:

  • Discourage land speculation.

  • Reduce inequality by taxing unearned land wealth.

  • Encourage productive use of land, benefiting workers and businesses.

3. Influence on Economic and Social Thought

• Inspired progressive tax policies and discussions on wealth redistribution.

• Influenced economists like John Maynard Keynes and Joseph Stiglitz in debates about land and wealth inequality.

• His ideas contributed to later Georgist movements, advocating for land value taxation.

4. Political and Social Reform

• Ran for Mayor of New York City in 1886 as a labor-friendly candidate, nearly defeating Theodore Roosevelt.

• Supported labor rights, free trade, and public control of natural resources.

5. Lasting Legacy

• Many cities today use variations of land value taxation, particularly in Pennsylvania.

• His ideas influenced the Progressive Era reforms and New Deal economic policies.

• Advocated for economic justice without resorting to socialism or excessive government control.

Why Henry George Matters Today

• His concerns about wealth inequality, land speculation, and economic justice remain relevant in debates on housing affordability, urban development, and tax policy.

• Calls for land value taxation continue among urban planners and economists as a way to address modern wealth disparities.
  

Economic Issues and Party Realignment During the Gilded Age (1870s–1900)

The Gilded Age was a period of rapid industrialization, economic transformation, and deep social inequality in the United States. Economic issues played a crucial role in shaping political alignments and realignments, influencing party loyalties and voter coalitions. The era saw intense debates over tariffs, currency policy, labor rights, and corporate regulation, which led to shifts in political power between the Republican and Democratic parties, as well as the rise of third-party movements.

Key Economic Issues Driving Party Realignment

1. Tariff Policy: Protectionism vs. Free Trade

• The Republican Party supported high protective tariffs, arguing that they helped American industries grow by shielding them from foreign competition. Business leaders, industrialists, and manufacturers, particularly in the Northeast and Midwest, strongly backed this policy.

• The Democratic Party, particularly in the South and among agrarian interests, opposed high tariffs, favoring free trade to lower costs for farmers who needed to buy manufactured goods.

• Impact on Realignment: The tariff debate solidified the Republican Party as the party of business and industry, while the Democratic Party increasingly became the party of rural interests and the South.

2. Monetary Policy: The Gold Standard vs. Free Silver

• The late 19th century saw fierce debates over currency policy, particularly between supporters of the Gold Standard and Free Silver (bimetallism).

• Gold Standard: Favored by Republicans, Wall Street financiers, and big businesses. They argued it ensured economic stability and protected investments.

• Free Silver Movement: Supported by Democrats, farmers, and working-class voters in the South and West. Advocates, including William Jennings Bryan, believed expanding the money supply with silver would ease debt burdens and help struggling farmers.

• Impact on Realignment: The monetary debate created deep divisions within both parties, but particularly among Democrats, leading to a shift in their platform toward populist economic policies by the 1896 election.

3. Industrialization and Labor Unrest

• The rise of large corporations, monopolies, and trusts led to widespread labor strikes and conflicts between capital and labor.

• Republicans generally sided with business interests, opposing labor unions and favoring policies that promoted industrial expansion.

• Democrats had a more mixed stance; they gained some working-class support but were not fully aligned with labor movements.

• The Populist Party (People’s Party) emerged in the 1890s as a response to these economic struggles, advocating for worker protections, an 8-hour workday, and an end to corporate monopolies.

• Impact on Realignment: Economic hardships and labor unrest pushed some working-class voters toward third-party movements like the Populists, which later influenced the Democratic Party’s progressive shift.

4. The Panic of 1893 and the Election of 1896

• The Panic of 1893 was a severe economic depression that led to massive unemployment, wage cuts, and bankruptcies.

• The crisis intensified debates over monetary policy, with Democrats and Populists blaming the Gold Standard for deflation and economic hardship.

• The Election of 1896 was a defining moment of party realignment:

  • Republicans (led by William McKinley) ran on a platform of gold standard, high tariffs, and pro-business policies.

  • Democrats (led by William Jennings Bryan) absorbed many Populist Party ideas, advocating for Free Silver and economic policies favoring farmers and workers.

  • Outcome: McKinley’s victory marked a realignment, solidifying Republicans as the dominant pro-business, industrialist party and the Democrats as the party of agrarian and working-class interests.

Long-Term Effects on Party Realignment

1. Republicans Dominated National Politics (1896–1932) – The election of 1896 solidified the GOP as the pro-business party, securing support from Northern industrialists and urban centers.

2. Democrats Shifted Toward Populism and Progressivism – The influence of agrarian and labor movements pushed Democrats toward more progressive economic policies.

3. The Decline of the Populist Party – Many Populist ideas were absorbed into the Democratic platform, leading to the decline of third-party influence.

4. Rise of Progressive Reforms (1900s–1910s) – Economic inequalities and corporate abuses led to reforms like antitrust laws, labor protections, and banking regulation, many of which were later championed by Theodore Roosevelt and Woodrow Wilson.

Economic issues during the Gilded Age—particularly tariffs, monetary policy, labor struggles, and financial crises—played a major role in party realignment. By the end of the 19th century, Republicans had become firmly established as the party of industrial capitalism, while Democrats, influenced by Populist and agrarian interests, began their shift toward advocating for economic reform and working-class concerns. These divisions would continue shaping American politics well into the 20th century.

VI. Racial and Gender Struggles

African American Life in the Gilded Age

• The end of Reconstruction led to severe racial discrimination.

• Jim Crow laws (legalized segregation) spread across the South.

• Plessy v. Ferguson (1896) – Supreme Court ruled “separate but equal” facilities were constitutional.

• Lynching and racial violence targeted Black communities.

• Booker T. Washington advocated for economic progress and vocational education, while W.E.B. Du Bois pushed for immediate civil rights.

Native American Displacement

• The Dawes Act (1887) aimed to assimilate Native Americans by dividing tribal land.

• Native resistance led to events like the Battle of Wounded Knee (1890), marking the last major Native American conflict.

Women’s Rights and Early Feminism

• Women’s roles were largely domestic, but many joined the workforce in textile mills and clerical jobs.

• Women’s suffrage movement gained momentum, led by figures like Susan B. Anthony and Elizabeth Cady Stanton.

• The Temperance Movement sought to limit alcohol consumption.

VII. Conclusion: Legacy of the Gilded Age

• The Gilded Age set the stage for the Progressive Era (1900–1920), where reformers sought to fix economic, social, and political problems.

• While it was a time of great economic expansion and innovation, it also revealed deep inequalities that led to labor, racial, and gender struggles.

• Discussion question: Was the Gilded Age more about progress or exploitation?

The Gilded Age in America (1870s–1900) was characterized by rapid industrialization, economic growth, and significant wealth, often masking deep social inequalities. Major industrial figures like John D. Rockefeller (Standard Oil), Andrew Carnegie (Carnegie Steel), and Cornelius Vanderbilt (railroads) dominated the economy through monopolistic practices. Innovations such as the assembly line, the Bessemer process, and key inventions from Thomas Edison and Alexander Graham Bell transformed industries and society.

Urbanization surged with over 12 million immigrants arriving, facing overcrowding and poor living conditions. Political corruption thrived, exemplified by the Tammany Hall machine and scandals like Credit Mobilier, prompting calls for reform and the establishment of merit-based government jobs through the Pendleton Act.

Labor struggles were prevalent with significant events like the Great Railroad Strike (1877) and the Homestead Strike (1892), highlighting poor working conditions and the rise of labor unions. Economic issues such as tariffs and monetary policy were pivotal in party realignment, leading to the Republican Party's dominance and a shift towards progressive reforms.

Racial and gender struggles emerged, with African Americans facing Jim Crow laws and violence while women sought rights and improved working conditions. The Gilded Age ultimately set the stage for the Progressive Era, revealing vast inequalities alongside significant economic advancements.