US History 2/03

Economic Context and the Great Panic

  • Freedman's Savings Bank and the Panic

    • The Freedman's Savings Bank was among many banks that failed during the panic.

    • Priorities of the Republican party during this crisis indicated a tendency to overlook financial tragedies.

    • The panic initiated a protracted economic downturn known as the Long Depression, pervading the economy and resulting in severe unemployment.

  • Impact on Employment

    • In New York City, the unemployment rate peaked at 25%.

    • The panic especially impacted railroads, which saw reduced rail traffic and subsequent financial losses leading to:

      • Layoffs of workers.

      • Reduction of wages for remaining employees, making cuts of up to 50% in some cases.

The Great Railroad Strikes of 1877

  • Overview of the Strikes

    • Marked as the largest uprising of American workers up to that point.

    • Originated in Martinsburg, West Virginia, where railroad workers struck due to wage cuts imposed by railroads amid a depressed economy.

    • Ultimately involved approximately 100,000 workers in a widespread series of railroad strikes across major cities, lasting about six weeks.

  • Sequence of Events

    • Initial strike in Martinsburg led to disconnecting locomotives and halting rail traffic.

    • Local police were called to arrest leaders but were sympathetic to strikers and hesitant to enforce the mayor's request.

    • The governor eventually called for the state National Guard, which also displayed sympathy towards the strikers.

    • Federal troops were dispatched to enforce order and successfully suppressed the strike by forcibly arresting the strikers.

  • Expansion to Other Cities

    • The strike rapidly spread nationwide.

    • In Chicago, tens of thousands of workers joined, leading the Illinois governor to request federal troop intervention.

    • Federal troops, fresh from fighting in the Dakotas during the Civil War, arrived with firearms, resulting in violence against the protesting crowd.

  • The Pittsburgh Incident

    • The strike escalated dramatically in Pittsburgh, where the Pennsylvania Railroad held a monopoly on rail traffic.

    • Workers from all sectors united, expressing discontent towards the Railroad's disregard for their welfare and high freight rates.

    • Fights broke out between strikers and National Guard, resulting in multiple fatalities (estimates of 20,000 injured).

    • The strikers retaliated with violence, seizing weapons from armories, burning down facilities including the Union Depot, and causing massive destruction.

    • This series of strikes served as a harbinger of labor tensions in the coming decade.

Political Corruption in the 1870s

  • Characteristics of Political Corruption

    • The 1870s were marked by extensive political corruption, affecting both the Republican and Democratic parties.

    • Political machines operated similarly; a party boss, not elected, would wield extensive control over job appointments and candidates for elections.

    • Kickbacks from appointed officials to party bosses were a common aspect of this corruptive relationship.

    • Such machines served to provide necessary community services absent from the government, thus consolidating their power.

  • Spoils System

    • The spoils system dictated that all government jobs would go to those affiliated with the victorious political party, as opposed to being meritocratic.

    • This dynamic empowered parties and enabled rampant corruption, including voter fraud, where individuals would vote multiple times under different disguises.

Republican vs. Democratic Practices

  • Republican Posture

    • Continued to exploit their position in the federal government for financial gain, allowing access to governmental funds and railroad riches.

    • Scandals flourished in the Union Pacific Railroad, characterized by setting up false companies to siphon funds from government projects by overcharging.

  • Democratic Influence

    • Democrats, lacking substantial federal control, wielded power primarily within city governments, leading to significant political machines dominating urban conditions.

    • The role of immigrants was notable; they were often used to bolster the party’s base through expedited citizenship processes.

    • Illustrating the control exercised, instances of jury tampering by party bosses were common when members faced legal scrutiny.

The Compromise of 1877 and Its Fallout

  • Compromise Overview

    • The compromise followed the contentious election that had led to a divided nation, marked by instability after the Civil War.

    • Resulted in a deal where Republicans, under Rutherford Hayes, obtained the presidency in exchange for pulling back federal troops from the South and ending civil rights enforcement.

  • Implications

    • The Republicans effectively abandoned their commitment to enforce civil rights, allowing Democratic control and the rise of white supremacist groups.

Organizing Workers and Farmers

  • Emergence of Organized Movements

    • Post-Long Depression led workers and farmers to organize collectively for improved conditions.

    • Workers aimed to establish unions while farmers sought cooperatives to gain a fair stake in profits.

    • Farmers recognized the need for political influence as a means of expressing their grievances against shipping rates and predatory loans.

  • Monopolization Critique

    • Farmers highlighted that they produced food essential for others but were suffering due to monopolies in railroads and agriculture.

    • They advocated for a system where they could control their means of production and fair pricing, eventually leading to the establishment of organizations and ideologies that demanded greater equity.

The Gold Standard Debate

  • Return to the Gold Standard

    • The federal government suspended the gold standard during the Civil War, resulting in a reliance on paper money.

    • The push to return to a gold standard aimed to stabilize the money supply and inflation but also depressed economic growth due to limited money circulation.

    • Farmers were particularly concerned with a deflationary environment, fearing increasing debts if crop prices fell.

  • Bimetallism Proposal

    • Advocacy for a bimetallic standard (gold and silver) aimed to broaden the money supply and combat shrinking prices, enabling farmers to pay debts more easily while addressing their financial strains.

Labor Organizations and Movements

  • The Knights of Labor

    • At its peak, the Knights of Labor represented around 20% of American workers and aimed to unite both skilled and unskilled laborers in common interests.

    • Following the uprisings, the Knights sought to establish a national organization for consistent representation in labor issues.

    • Their principles included fighting for better wages and working hours while avoiding violent confrontations.

Agricultural Developments and Challenges

  • Rise of Agricultural Productivity

    • Accelerated farming activities were attributed to the Homestead Act and advances in agricultural technology, increasing both supply and competition rates.

    • This resulted in escalating debt levels among farmers due to increased input costs without corresponding rises in commodity prices, producing a cyclical financial plight.

    • Farmers collectively acknowledged their need for political representation as a means of overcoming their economic struggles against monopolistic practices and price manipulation.

Conclusion

  • Emergence of Populist Philosophy

    • The convergence of worker and farmer organization efforts would lead to the birth of the Populist movement, which sought political recognition and economic justice in a monopolized economy.