The Gilded Age: Politics, Industry, and Corruption (1865–1899)

Forging an Industrial Society (1865–1899)

The Great Transformation: Between the 1860s and 1898, the United States transformed from a nation of farmers into a massive industrial power. * Economic and technological change occurred so rapidly that it appeared a new civilization had emerged. * Scale of Industry: * Transcontinental railroads connected the country sea to sea. * New industries like oil and steel reached "staggering size." * Key figures: Oilman John D. Rockefeller and steel maker Andrew Carnegie became "megamillionaires." * Urbanization Trends: * In $1860$ , only about $20\%$ of the population lived in cities. * By $1900$ , this proportion doubled as rural Americans and European immigrants moved to mills and metropolises. * Challenges to Individualism: * The rise of powerful monopolies challenged the government's traditional "hands-off" (laissez-faire) policy. * The western frontier, historically a place of "rugged loners," saw increased government intervention via the U.S. Army to subdue Plains Indians and federal regulation of natural resources. * Growing cities required massive budgets for transport, schools, sanitation, and protection. * Regional Differences: * The West: Conflict between railroads/expansion and Plains Indians ended with the destruction of buffalo herds and the placement of Indians on reservations by the $1890\text{s}$ . * The South: Remained largely untouched by the Industrial Revolution, maintaining its rural way of life and "peculiar system of race relations." * Imperialism: In $1898$ , after a brief war with Spain, the U.S. seized control of the Philippines, becoming an imperial power and sparking national debate over the roles of a modern industrial state.

Political Paralysis in the Gilded Age (1869–1896)

The State of the Republic (1870): * Population: Over $39\text{ million}$ people, a gain of $26.6\%$ over the previous decade. * Rank: The United States was the third largest nation in the Western world, behind Russia and France. * Civic Health: The post-war era was characterized by waste, extravagance, speculation, and graft. Idealism regarding the Union and emancipation was replaced by political stalemate.
The Election of 1868: * Candidates: The Republicans nominated General Ulysses S. Grant. The Democrats nominated former New York governor Horatio Seymour. * Grant’s Platform: Enthusiastically called for continued Reconstruction of the South under federal military presence. His campaign slogan was "Let us have peace." * The "Ohio Idea": Poorer midwestern Democrats advocated for redeeming federal war bonds in greenbacks (paper money) to keep more money in circulation and interest rates lower. Seymour scuttled the party's hope by repudiating this idea. * The "Bloody Shirt": Republicans won by "waving the bloody shirt"—reviving gory memories of the Civil War to gain votes. Slogan: "Vote as You Shot." * Results: Grant won with $214$ electoral votes to $80$ . Popular vote: $3,013,421$ to $2,706,829$ . Approximately $500,000$ former slaves provided Grant’s margin of victory.

The Era of "Good Stealings": Financial and Political Corruption

General Atmosphere: Corruption flourished from town halls to Congress. Unscrupulous stock speculators and railroad promoters (who sold bonds for "two streaks of rust and a right of way") were common.
Jim Fisk and Jay Gould (1869): The pair plotted to corner the gold market. * They bid the price of gold skyward on "Black Friday" (September 24, 1869). * The plot failed when the federal Treasury was compelled to release gold, contrary to assurances the pair thought they had from President Grant.
The Tweed Ring: "Boss" Tweed in New York City used bribery and fraudulent elections to steal as much as $200\text{ million}$ from the city. * The New York Times published evidence of his crimes in $1871$ . * Thomas Nast, a cartoonist, pilloried Tweed (noting that Tweed's illiterate followers could still see "them damn pictures"). * Prosecutor Samuel J. Tilden led the case; Tweed died in jail.
Federal Scandals (Grant Administration): * Crédit Mobilier (1872): Union Pacific Railroad insiders formed the Crédit Mobilier construction company and hired themselves at inflated prices (dividends reached $348\%$ ). They distributed stock to key congressmen to prevent an investigation. The Vice President was revealed to have accepted payments. * Whiskey Ring (1874–1875): Robbed the Treasury of millions in excise-tax revenues. Grant's own private secretary was involved. * Belknap Scandal (1876): Secretary of War William Belknap resigned after pocketing bribes from Indian reservation suppliers.
The Liberal Republican Revolt of 1872: * Reformers formed the Liberal Republican party with the slogan "Turn the Rascals Out." * They nominated Horace Greeley, editor of the New York Tribune. * The Democrats also endorsed Greeley, despite his previous attacks on them. * Grant won the election $286$ to $66$ in the electoral college and $3,596,745$ to $2,843,446$ in the popular vote. * Legacy: Agitation forced regular Republicans to pass a general amnesty act ( $1872$ ), reducing high Civil War tariffs and attempting mild civil-service reform.

Economic Panic, Monetary Policy, and the Gilded Age

The Panic of 1873: Caused by overreaching promoters (too many railroads, mines, and factories) and imprudent loans. Over $15,000$ businesses went bankrupt. * Impact on Black Americans: The Freedman’s Savings and Trust Company failed after making unsecured loans; black depositors lost over $7\text{ million}$ .
The Greenback Issue: * "Cheap-money" supporters (debtors/farmers) wanted more greenbacks to cause inflation, making debts easier to pay. * "Hard-money" supporters (creditors) wanted deflation. * Resumption Act of 1875: Pledged the government to withdraw more greenbacks and redeem all paper currency in gold at face value by $1879$ .
The Silver Conflict: Debtors demanded the coinage of silver (the "Dollar of Our Daddies"). * Crime of ’73: Congress had dropped the coinage of silver dollars in $1873$ because the Treasury price was lower than market prices. When silver prices later dropped, silver-mining states and debtors cried for a return to silver inflation. * Contraction: The Treasury accumulated gold and reduced greenbacks. This policy increased the government's credit but worsened the depression. Per capita money in circulation decreased from $\$19.42$ to $\$19.37$ between $1870$ and $1880$ .
Gilded Age Politics: A term coined by Mark Twain ( $1873$ ). * Equilibrium: Presidential elections were very close. The majority in the House switched six times between $1869$ and $1891$ . * Voter Turnout: Reached nearly $80\%$ of eligible voters. * Party Differences: * Republicans: Traced lineage to Puritanism, stressed strict personal morality, believed government should regulate economic and moral affairs. Strength in Midwest and rural Northeast; base included the Grand Army of the Republic (GAR). * Democrats: Included immigrant Lutherans and Catholics; favored toleration and opposed government-imposed moral standards. Strength in the South and northern industrial cities. * Patronage: The "lifeblood" of both parties. * Stalwarts: Led by Roscoe Conkling; supported the spoils system. * Half-Breeds: Led by James G. Blaine; flirted with civil-service reform but really fought over who dished out the spoils.

The End of Reconstruction (1876–1877)

Election of 1876: Rutherford B. Hayes (Republican) vs. Samuel J. Tilden (Democrat). * Tilden had $184$ electoral votes (needed $185$ ). $20$ votes from four states (LA, SC, FL, and one from OR) were disputed.
Compromise of 1877: * Electoral Count Act (1877): Set up a commission of $15$ men (from Senate, House, and Supreme Court). * The commission voted $8$ to $7$ on partisan lines to take the Republican returns. * The Democrats agreed to let Hayes take office if he withdrew federal troops from Louisiana and South Carolina and supported a southern transcontinental railroad (Texas and Pacific Railroad).
The Legacy of the Compromise: Racial equality was sacrificed for political peace. The Republican party abandoned its commitment to black freedmen. * Civil Rights Act of 1875: Supposedly guaranteed equal accommodations but was declared unconstitutional in the Civil Rights Cases ( $1883$ ).

The Birth of Jim Crow in the Post-Reconstruction South

Economic Subjugation: Blacks and poor whites were forced into sharecropping and tenant farming. The "crop-lien" system kept farmers in perpetual debt to merchants.
Legal Segregation: What began as informal separation became formal "Jim Crow" laws by the $1890\text{s}$ . * Disfranchisement: Southern states enacted literacy requirements, voter-registration laws, and poll taxes. * Plessy v. Ferguson (1896): The Supreme Court ruled that "separate but equal" facilities were constitutional under the Fourteenth Amendment.
Violence: A record number of lynchings occurred in the $1890\text{s}$ .

Data Table: Persons in United States Lynched (by race), 1882–1970

Year	Whites	Blacks	Total
1882	$64$	$49$	$113$
1890	$11$	$85$	$96$
1892 (Worst Year)	$69$	$161$	$230$
1900	$9$	$106$	$115$
1920	$8$	$53$	$61$
1950	$1$	$1$	$2$

Class Conflicts and Ethnic Clashes

Great Railroad Strike (1877): Railroad presidents cut wages by $10\%$ . Workers struck, and President Hayes sent federal troops. Over $100$ people died; the strike's failure exposed labor movement weakness.
Chinese Immigration: Many came for the gold fields or to build transcontinental railroads. * Demographics: Mostly poor, uneducated, single males from the Taishan district of Guangdong province. By $1880$ , they made up $9\%$ of California's population. * Anti-Chinese Sentiment: Irish-born Denis Kearney incited followers to attack Chinese migrants ("Kearneyites"). They resented competition for "cheap labor." * Chinese Exclusion Act (1882): Prohibited all further immigration from China until $1943$ . * U.S. v. Wong Kim Ark (1898): The Supreme Court ruled that the Fourteenth Amendment guaranteed citizenship to all persons born in the U.S. (jus soli or "right of the soil").

Garfield, Arthur, and Civil Service Reform

Election of 1880: James A. Garfield (Republican) defeated Winfield Scott Hancock. Margin: $39,213$ popular votes.
Assassination: Charles J. Guiteau, a disappointed office seeker and self-proclaimed "Stalwart," shot Garfield in a Washington railroad station. Garfield died September 19, 1881.
Chester A. Arthur: Initially seen as a foppish dandy, he surprised critics by reforming the spoils system.
Pendleton Act of 1883: * Made compulsory campaign contributions from federal employees illegal. * Established the Civil Service Commission for appointments based on competitive exams. * Initially covered $10\%$ of federal jobs. * Unintended Consequence: Politicians, unable to use patronage for money, turned to big corporations for funding.

Chart Capital: Growth of Classified Civil Service (Competitive Requirements)

$1884$ : $13,780$ offices ( $10\%$ )
$1901$ : $106,205$ offices ( $41\%$ )
$1920$ : $497,603$ offices ( $71\%$ )
$1952$ : $2,278,446$ offices ( $87\%$ )
$2000$ : $1,351,072$ offices ( $49\%$ \text{—note: Postal Reorganization Act of 1971 changed service categories})

The Blaine-Cleveland Campaign (1884)

James G. Blaine (Republican): Reputed for the "Mulligan letters" linking him to corrupt railroad deals.
Grover Cleveland (Democrat): A reformer known as "Grover the Good." * Scandal: News broke of an illegitimate son. Cleveland's response: "Tell the truth."
The Campaign: Sank to a low level with chants like "Ma, ma, where’s my pa?"/"Gone to the White House, ha, ha, ha!"
The Turning Point: A Republican clergyman labeled Democrats the party of "Rum, Romanism, and Rebellion" (RRR), insulting Irish-American voters. Blaine failed to repudiate it immediately.
Result: Cleveland won the presidency, the first Democrat since Buchanan in 1856 $.</li></ul><h3 id="d576a028-9f6c-448d-83b7-2c8e2ec9ac5c" data-toc-id="d576a028-9f6c-448d-83b7-2c8e2ec9ac5c" collapsed="false" seolevelmigrated="true">Cleveland’s First Term and the Tariff</h3><ul><li>Political Philosophy: Followed laissez-faire. Vetoed a bill to provide seeds for drought-ravaged Texas farmers ($ 1887 $), stating: "the government should not support the people."</li><li>The Surplus and Tariff: By$ 1881 $, the Treasury had an annual surplus of$ \$145\text{ million} $from high tariffs. Cleveland appealed for lower tariffs in late$ 1887 $to help consumers and end monopolies.</li><li>Election of 1888: Benjamin Harrison (Republican) defeated Cleveland. Republicans raised a$ \$3\text{ million} $war chest from industrialists. Harrison won the electoral college$ 233 $to$ 168 $, though Cleveland won the popular vote.</li></ul><h3 id="78a87239-8758-45f7-90a7-42049c3b10bb" data-toc-id="78a87239-8758-45f7-90a7-42049c3b10bb" collapsed="false" seolevelmigrated="true">The Billion-Dollar Congress and Populist Protest</h3><ul><li>Speaker Thomas B. "Czar" Reed: Dominated the House; counted Democrats present even if they didn't answer roll call.</li><li>McKinley Tariff Act (1890): Boosted rates to their highest peacetime level (average$ 48.4\%).
The People’s Party (Populists): * Formed in 1892 by the Farmers' Alliance. * Omaha Platform: Demanded free and unlimited coinage of silver (16\text{ to } 1 ratio); graduated income tax; government ownership of railroads/telegraph/phone; direct election of U.S. senators; one-term presidency; shorter workdays; immigration restriction. * Labor Unrest (1892): * Homestead Strike: Steelworkers at Carnegie's plant battled Pinkerton detectives; 10 dead. * Coeur d’Alene Strike: Federal troops crushed silver miners in Idaho.
Election of 1892: General James B. Weaver (Populist) won over 1\text{ million} $popular votes and$ 22 $electoral votes. Cleveland won the presidency back from Harrison.</li></ul><h3 id="3a97eec3-467c-4504-b537-2d7c57204711" data-toc-id="3a97eec3-467c-4504-b537-2d7c57204711" collapsed="false" seolevelmigrated="true">Cleveland’s Second Term and the Depression of 1893</h3><ul><li>Depression of 1893: Most punishing economic downturn of the$ 19\text{th} $century. Causes: overbuilding, speculation, labor disorders, agricultural distress.</li><li>Gold Drain: The Treasury's gold reserve dropped below$ \$100\text{ million} $due to the "endless-chain" operation where people traded silver-backed notes for gold.</li><li>Repeal of Sherman Silver Purchase Act (1893): Cleveland engineered the repeal to stop the gold drain, alienating "silver-tongued" William Jennings Bryan and other silverite Democrats.</li><li>J.P. Morgan Loan (1895): With reserves at$ \$41\text{ million} $, Cleveland turned to Morgan’s Wall Street syndicate for a$ \$65\text{ million} $gold loan. Public condemned it as a "sellout."</li><li>Wilson-Gorman Tariff (1894): Loaded with special-interest protection. The Supreme Court struck down its$ 2\% $income-tax provision in$ 1895.

Questions & Discussion: George Washington Plunkitt on "Honest Graft"

Dialogue/Interview (1905): George Washington Plunkitt of Tammany Hall distinguished between "honest" and "dishonest" graft. * Plunkitt's Argument: "There’s an honest graft, and I’m an example of how it works. I might sum up the whole thing by sayin’: ‘I seen my opportunities and I took ’em.’" * Example Provided: If the party in power plans a new park, Plunkitt would be "tipped off," buy up the land in the neighborhood, and sell it at a profit once the plan becomes public. He argued: "Ain’t it perfectly honest to charge a good price and make a profit on my investment and foresight?"

Chronology of Key Events

1868: Grant defeats Seymour for presidency.
1869: Fisk and Gould corner gold market.
1872: Crédit Mobilier scandal exposed.
1873: Panic of 1873 begins.
1877: Compromise of 1877 ends Reconstruction; Railroad strikes.
1881: Garfield assassinated; Arthur takes presidency.
1882: Chinese Exclusion Act.
1883: Pendleton Act.
1884: Cleveland defeats Blaine.
1890: McKinley Tariff Act.
1892: Homestead Strike.
1893: Depression of 1893 begins.
1895: J.P. Morgan loans \$65\text{ million}$$ to government.
1896: Plessy v. Ferguson (Separate but Equal).