Politics and Government during the Gilded Age
Gilded Age – Introduction (Short Notes)
Gilded Age (1870–1900): Period marked by extreme wealth inequality, monopolies, speculation, and government corruption.
Term coined by Mark Twain and Charles Dudley Warner.
From their 1873 novel The Gilded Age: A Tale of Today.
“Gilded” means gold on the surface, but problems underneath.
The era looked prosperous, but hid poverty, corruption, and social inequality.
The novel criticizes government corruption, reckless speculation, and the shallowness of the newly wealthy.
Who Benefited and Who Did Not After the Civil War
Gilded Age – Short Notes
Benefited: A small group of business owners and industrialists became extremely wealthy.
Did NOT benefit:
Speculators who lost money
Business owners ruined during the Panic of 1873
Rapid industrialization and railroad expansion boosted the economy.
New jobs were created, but wealth inequality increased.
Top 10% gained more wealth; the bottom 90% lost share of national wealth.
Manufacturers: Mostly in the East/Northeast (high population density).
Farmers: Mostly in the West and South (low population density).
These regional differences shaped political strategies and voting appeals.
The Economy During the Gilded Age (Short Notes)
The graph compares the U.S. economy in 1869, 1879, 1889, and 1900.
Most sectors (transportation, mining, construction) stayed fairly consistent as a share of total wealth.
Big changes occurred in agriculture and manufacturing.
Agriculture’s share decreased over time.
Manufacturing’s share increased sharply.
Agriculture and manufacturing switched places in their importance to the economy.
Farmers produced more by 1900, but industrial production grew much faster.
This shift reflects rapid industrialization during the Gilded Age.
Notes: The Nation’s Wealth Grew (Gilded Age)
Explosive Growth in National Wealth
The period 1870–1900 saw massive economic expansion.
National wealth more than doubled:
1869: $6.3 billion
1900: $14.6 billion
Growth came from multiple sectors:
Agriculture
Manufacturing
Mining
Transportation
New industrial technologies (steel, railroads, oil)
John Sherman’s Prediction Fulfilled
Sherman said business leaders would think in terms of “millions instead of thousands.”
This proved true:
Larger factories
National-scale corporations
Expanding transportation networks
The country shifted from small-scale production to industrial capitalism.
Huge Corporations Developed
Rise of Monopolies
Some corporations grew so large they dominated entire industries.
They eliminated competitors by:
Buying them out
Undercutting prices until rivals failed
Forming trusts or agreements
These corporations are called monopolies.
With no real competition, monopolies could:
Set prices freely
Control supply
Influence politics and laws
Railroads as a Monopoly Example
Railroads were the most powerful monopoly example of the era.
They controlled:
Routes
Pricing
Freight schedules
Access to markets
Farmers, small businesses, and towns depended on them, creating resentment and regulatory demands.
Distribution of Wealth (Inequality)
Graph interpretation:
Shows the share of national wealth owned by the top 10% vs bottom 90%.
1810
Top 10%: 58%
Bottom 90%: 42%
1870
Top 10%: 71%
Bottom 90%: 29%
1910
Top 10%: 81%
Bottom 90%: 19%
Trend
Clear increase in wealth inequality throughout the 19th century.
By 1910, the richest 10% owned 4 out of every 5 dollars.
This concentration of wealth contributed to:
Social tension
Labor strikes
Populist and Progressive reform movements
Notes: The Growth of Railroads (1860–1900)
Railroad Expansion
1860: 30,626 miles of track in the U.S.
1900: Nearly 200,000 miles — massive increase.
Tracks were standardized to the same gauge, meaning:
Trains from different companies could use each other’s tracks.
Transportation became faster, safer, and more unified.
Why Railroads Were Key to Industrialization
Railroads acted like the nation’s circulatory system:
1. Transport of Raw Materials
Carried:
Coal
Timber
Iron and steel
Agricultural goods
Enabled factories to receive resources cheaply and quickly.
2. Distribution of Manufactured Goods
Trains connected:
Factories to cities
Cities to ports
Ports to international markets
Allowed mass production to reach mass consumers.
3. Economic Multiplier Effect
Railroads boosted industries like:
Steel (for tracks and trains)
Coal (for fuel)
Iron machinery
Banking and finance (investment)
Created national markets instead of isolated regional economies.
Railroad Monopolies
Massive Wealth & Power
Railroad magnates (Gould, Vanderbilt, Stanford, etc.) accumulated unprecedented wealth.
Jay Gould at one point controlled enough financial power that he owned most of the gold in the U.S. Treasury.
These monopolists could:
Set high rates
Block competition
Manipulate markets
Bribe public officials
Political Influence
Owners pressured Congress:
To pass favorable laws
To ignore unfair pricing practices
To maintain tariffs and subsidies that helped them
They shaped national policy to reinforce their control.
Panic of 1873 (Railroad-Triggered Depression)
Cause
Failure of the Northern Pacific Railroad, heavily funded by Jay Gould.
Gould sold over $1 billion in bonds to speculators.
Promised high profits but couldn’t raise enough capital to finish construction.
Investors panicked when his plan collapsed.
Effects
Wall Street Panic
Confidence evaporated.
Stock prices fell rapidly.
Bank Failures
Banks across the U.S. collapsed.
Businesses and farmers couldn’t get loans.
Business Failures
Thousands of businesses closed.
Railroad companies were hit hardest.
Railroad Bankruptcy
Within 3 years, nearly 50% of American railroad companies went bankrupt.
Long-Term Consequences
Showed how dependent the U.S. economy was on railroads.
Led to calls for:
Federal regulation
Oversight of monopolies
Anti-trust legislation (later in the 1890s)
Key APUSH Takeaways
Railroads = backbone of industrialization.
Created national markets and boosted heavy industry.
Monopolies used wealth + political influence to manipulate government.
The Panic of 1873 proved that unregulated private railroads could destabilize the entire economy.
Set the stage for the Interstate Commerce Act (1887) and later Sherman Antitrust Act (1890).
Agrarian Protest (1870–1900) — Study Notes
1. Farmers’ Economic Problems
In 1870, 75% of Americans lived in rural areas.
Farm goods were vital to the national economy and a major export.
Between 1870–1900, farm prices fell, and farmers’ incomes declined.
Farmers struggled to make a profit because:
Railroads charged high rates to ship goods.
Panic of 1873 reduced access to credit.
Farmers had to sell crops in the fall when prices were lowest due to oversupply.
Many farmers fell deeply into debt.
Reformers pushed for state and federal government intervention.
2. The Grange (Patrons of Husbandry)
Founded in 1867 to teach farmers modern agricultural techniques.
By the mid-1870s, had 800,000 members across nearly all states.
Main purpose: education and cooperation among farmers.
Economic Cooperation in the Grange
Farmers couldn’t set their own prices; others controlled prices for their goods.
Granges created cooperatives to:
Buy goods in bulk at lower prices.
Reduce dependence on expensive merchants.
Loan money to members when needed.
Provide cheaper equipment through group purchasing.
Cooperatives helped farmers obtain fairer prices and reduce costs.
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3. The Grange and Railroads
Grangers accused railroads of monopolistic behavior:
High shipping rates.
Middlemen/agents made large profits by:
Paying farmers low prices.
Getting special reduced freight rates from railroads.
Farmers resented that agents grew wealthy while they struggled.
Some Grangers wanted the federal government to own railroads.
Grangers believed the government favored manufacturing over agriculture and thus doubted support.
4. The Farmers’ Alliance
Largest organized protest movement of the 19th century.
Originated in Texas around 1875.
By 1890: 1.2 million members in 43 states.
Split into:
Northern Farmers’ Alliance
Southern Farmers’ Alliance
Southern branch excluded Black farmers.
Goals of Farmers’ Alliances
Continued cooperative buying like the Grange.
More politically active:
Wanted a government-owned railroad charging fair rates.
Asked for government grain warehouses (storage at fair prices).
Proposed low-interest government loans for farmers.
5. Political Power of Farmers
Traditionally conservative and Republican.
As the movement grew, it could influence local, state, and national elections.
Was seen as a powerful potential voting bloc.
6. The Colored Farmers’ National Alliance and Cooperative Union (CFNA)
After the Civil War, most freedpeople worked in agriculture due to racial discrimination.
Few Black farmers became landowners; most were:
Sharecroppers
Tenant farmers
Hired laborers
In 1900, only 15% of U.S. farm owners were Black.
Founding and Growth of the CFNA
Formed in Texas in 1886.
By the early 1890s:
Active in 12 Southern states
Over 1 million members
CFNA Goals and Struggles
Emphasized self-help and cooperation.
Provided:
Cooperatives for cheaper goods.
Fair-priced loans for mortgages.
Collective bargaining for better prices.
However, Black farmers lacked political power because:
The Ku Klux Klan violently suppressed Black voting.
Violence and intimidation kept Black farmers from organizing politically.
7. The 1891 Cotton-Pickers’ Strike
A CFNA branch demanded higher wages for cotton pickers.
White planters responded with violence.
A posse hunted down and killed sixteen CFNA members.
Result:
Many Black farmers abandoned the organization out of fear.
CFNA activity declined sharply.
Farmers and the Supreme Court — Study Notes
Background
By the 1870s, seven states passed laws allowing themselves to regulate prices that merchants and railroads charged farmers.
Businessmen opposed these state regulations and took cases to the Supreme Court.
Two major cases shaped farmers’ rights and the government’s power to regulate business:
Munn v. Illinois (1877)
Wabash v. Illinois (1886)
Munn v. Illinois (1877)
What happened
In 1871, the Illinois Grange pushed the state legislature to regulate the prices warehouse owners could charge farmers for crop storage.
Warehouse company Munn & Scott violated the new law.
Illinois state courts ruled the law was legal.
Munn & Scott appealed to the U.S. Supreme Court.
Arguments
Munn & Scott claimed:
States did not have the right to regulate private businesses.
Supreme Court Ruling
The Supreme Court upheld the state law.
It ruled:
Grain storage facilities served a public interest.
Because they affected the public, the state had the power to regulate pricing to protect farmers.
This decision supported the Grange and farmers’ rights.
Wabash v. Illinois (1886)
What happened
In 1885, Illinois created a commission to regulate railroad shipping prices.
The Wabash, St. Louis, and Pacific Railway Company sued Illinois.
They argued that allowing each state to regulate railroad rates would create inconsistent rules that were impossible to follow.
Supreme Court Ruling
The Court agreed with Wabash.
It declared:
Railroad transportation is national, not local.
Therefore, only Congress can regulate railroad rates.
This ruling overturned Munn v. Illinois.
Impact
Munn v. Illinois (1877): States can regulate businesses that serve a public interest.
Wabash v. Illinois (1886): States cannot regulate interstate railroads; only Congress can.
Interstate Commerce Commission (ICC) — Study Notes
Why the ICC Was Created
The Wabash v. Illinois (1886) decision said:
Only Congress could regulate interstate railroads.
States could not do it.
This ruling opened the door for federal regulation instead of state regulation.
Formation of the ICC (1887)
In 1887, Congress created the Interstate Commerce Commission (ICC).
Purpose:
To regulate railroads that crossed state lines.
Significance:
First time the federal government regulated a national service.
Marked the beginning of federal intervention to protect the public from monopolies.
Showed the federal government taking responsibility instead of leaving it to states.
Limitations of the ICC in the 1890s
In its early years, the ICC had:
No enforcement power.
Could not punish railroads that broke rules.
Could only:
Collect data
Investigate railroad practices
Set transportation rates (but not enforce them)
What the ICC Achieved Despite Weak Powers
Created a bureaucracy to monitor railroad companies.
Gathered information that showed unfair railroad practices.
Publicized abuses to increase pressure on the railroads.
Strengthening the ICC (1906)
Congress passed a new law in 1906.
This law gave the ICC:
Power to enforce the rates it set.
Power to punish railroads that violated regulations.
This made the ICC an effective regulatory agency.
Early Reforms in Government — Study Notes
1. Government Corruption in the Gilded Age
High levels of corruption at local and federal levels.
In cities, networks of politicians controlled:
Jobs
Building contracts
Access to favors and assistance
Politicians exchanged favors for votes, creating political machines.
2. Federal Corruption: The Spoils System
Before 1883, federal jobs were filled through the spoils system:
Politicians appointed supporters as rewards for political or financial favors.
Jobs included:
Ambassadors
Postal Service workers
Patent Office staff
Customs House employees
Government Printing Office workers
3. Lack of Government Aid
In the 1800s, the federal government did not help people during job loss, illness, or disasters.
President Grover Cleveland said federal aid would weaken the “sturdiness” of American character.
People relied on local politicians, not government programs.
4. Political Machines
A political machine = a network of local politicians who controlled neighborhoods.
Local politicians:
Helped families in need
Provided jobs and assistance
Expected votes in return
Their money came from corruption:
Padding contracts (inflating bills)
Pocketing taxpayer money
Political machines robbed taxpayers by claiming projects cost more than they did.
5. Example: William “Boss” Tweed and Tammany Hall
Leader of New York City’s political machine during 1860s–1870s.
Controlled:
NYC treasury
Thousands of local politicians known as the Tweed Ring
The Tweed Ring stole ~$200 million from NYC taxpayers.
Example:
A courthouse budgeted at $250,000 cost the city over $3 million due to padded bills.
Tweed’s attitude: “What are you going to do about it?”
6. Thomas Nast’s Campaign Against Tweed
Nast published political cartoons exposing Tweed’s corruption.
Cartoons were powerful because:
They used strong imagery
They were easy for the public to understand (even for people who couldn’t read)
Nast + New York Times investigation led to Tweed’s arrest (1873).
Tweed escaped to Spain but was recognized because officials had seen Nast’s cartoons.
He died in prison in 1878.
7. Political Machines Continued
After Tweed’s downfall, another political boss replaced him.
Political machines remained strong; corruption persisted.
8. Chicago’s Political Machine: Johnny Powers
Controlled Chicago’s Nineteenth Ward from late 1880s–early 1900s.
Power came from:
Taking bribes
Running illegal gambling saloons
Helped people get jobs but ignored issues like:
Clean streets
Sufficient schools
Sanitation in poor neighborhoods
9. Jane Addams vs. Johnny Powers
Jane Addams tried to defeat Powers in elections.
Recruited reform candidates to run against him.
Powers won each time because:
Voters cared more about favors and jobs he provided
Reform issues seemed less important to struggling workers
Shows reformers struggled to defeat corruption during the Gilded Age.
Summary Themes
Political machines provided services, but were rooted in corruption.
The spoils system fueled national-level corruption.
Reformers like Thomas Nast and Jane Addams made efforts but had limited success.
Corruption remained widespread due to voters’ dependence on political favors.
Early Reforms in Government — The Federal Government (Study Notes)
1. Growth of Federal Civil Service
By the 1880s, the federal government had over 14,000 civil service positions.
These jobs included:
Postal workers
Patent Office clerks
Customs House employees
Many other federal workers
2. Spoils System
The president depended on members of Congress to recommend people for federal jobs.
Job seekers expected Senators to choose them in exchange for:
political support
financial support (donations)
This practice was called the spoils system.
Jobs were given as rewards for loyalty, not based on merit or qualifications.
3. Why the Spoils System Was Corrupt
Senators and Representatives were influenced by people who supported their campaigns.
Elected officials were not independent when making policies.
Instead of voting for the public interest, they had to vote to satisfy supporters who helped them gain office.
People seeking jobs gained political influence over how members of Congress voted.
4. Effects of the Spoils System
Many unqualified people got federal jobs.
These workers often:
Lacked necessary skills
Performed poorly
Slowed down government efficiency
The system promoted corruption in the federal government.
5. Visual Representation
The drawing of the Patent Office shows:
Only one employee working properly
Others loitering or being unproductive
Represents how unqualified spoils-system appointees often wasted time and resources.
The Pendleton Act & Civil Service Reform — Study Notes
1. Growth of the Federal Civil Service
After the Civil War, the number of federal jobs expanded rapidly.
By the 1880s, there were over 14,000 civil service positions.
The postal service especially grew in size.
Jobs were filled through the spoils system:
Jobs given as political rewards.
People appointed due to connections, not qualifications.
2. Reform Efforts Begin (1865–1883)
After the Civil War, reformers wanted:
A civil service system independent of the president.
Hiring based on competence, not political favor.
Reformers pushed for federal oversight of hiring.
3. The Pendleton Act (1883)
Passed by Congress in 1883.
Created the Civil Service Commission:
President appoints commission members.
Oversees hiring of federal workers.
Required applicants to pass an exam to show competence.
Ended hiring based purely on political favors.
Initially covered only 15% of civil service jobs.
BUT the law allowed presidents to expand the number of protected jobs.
4. Why the Pendleton Act Was Important
Marked a shift toward a more interventionist federal government.
Reduced corruption in hiring.
Improved professionalism within the federal workforce.
5. Struggles Around Civil Service Reform
Gilded Age presidents faced pressure from Congress for and against reform.
Members of Congress wanted to keep power under the spoils system.
Presidents needed Congress’s support to enact reform—difficult to achieve.
6. Presidents and Civil Service Reform
Ulysses S. Grant (1869–1877)
Supported civil service reform.
Asked Congress for funding to create a reform commission.
Congress gave limited support; commission achieved little.
Rutherford B. Hayes (1877–1881)
Strongly favored civil service reform.
Lacked allies in Congress.
Congress refused to fund the commission, so it collapsed.
James Garfield (1881)
Supported civil service reform and made it a major goal.
Assassinated after 4 months by Charles Guiteau:
Guiteau believed Garfield owed him a government job.
Assassination shocked the nation and increased public demand for reform.
Led to creation of the National Civil Service Reform League.
Chester A. Arthur (1881–1885)
Became president after Garfield’s assassination.
Weak support in Congress, even in his own party.
Delayed reform for over a year.
Public pressure forced Congress to pass the Pendleton Act in 1883.
Initially applied to only 10% of civil service jobs.
Grover Cleveland (1885–1889; 1893–1897)
First Democratic president since the Civil War.
Doubled the number of positions covered under the Pendleton Act.
Faced criticism from Republican Congress members.
Accused of favoritism even when reappointing qualified workers.
Reform still controversial and politically risky.
Benjamin Harrison (1889–1893)
Promised to expand civil service protections.
Backed down due to pressure from Republicans in Congress.
Public support for reform was weak during his presidency.
Later admitted he lacked the majority needed to push reforms through.
Summary of Key Themes
Spoils system = corruption and unqualified workers.
Pendleton Act = first major step toward professional federal employment.
Gilded Age presidents struggled because:
Congress wanted to keep patronage power.
Public opinion shifted frequently.
Garfield’s assassination was a major turning point in reform.
Cleveland expanded reform the most.
Harrison retreated from reform under political pressure.
**Sound Money or Cross of Gold?
Debate Over US Currency (Study Notes)**
1. Background: Gold vs. Silver in the Gilded Age
People understood dollars in terms of the metal stored in the US Treasury.
During the Civil War:
The government used silver to back some currency.
After 1879:
The US was mostly on the gold standard.
Gold = main basis for US currency; small amount of silver also used.
Gold was scarce, limiting the amount of money in circulation.
2. Effects of the Gold Standard
Limited money supply → lower prices (deflation).
People didn’t have enough money to pay higher prices.
Farmers suffered because:
Crop prices dropped.
Loans were hard to get.
Income lagged behind factory workers.
3. Bimetallism
Bimetallism = using both gold and silver to back US currency.
Supporters believed:
Using silver would increase money supply.
More money would make loans easier to get.
Farmers could charge higher prices for goods.
Agrarian groups (especially Farmers’ Alliances) strongly supported it.
4. Why Farmers Supported Bimetallism
They blamed their economic hardships on:
Low money supply.
Difficulty getting credit.
Believed adding silver would:
Raise crop prices.
Reduce debt burdens.
Stimulate economic growth in rural areas.
5. 1896 Election: Gold vs. Free Silver
The debate over gold vs. silver became the central issue of the 1896 election.
People argued about it everywhere: homes, newspapers, streets, meetings.
The issue divided:
Families
Friendships
Political parties
Seen as a broader question of:
Government helping the poor majority (workers & farmers)
Or benefiting the wealthy minority (industrialists & bankers)
6. Republicans and “Sound Money” (Gold Standard)
Gold vs. silver was a major political issue from 1882 to 1900.
Republicans supported the gold standard because:
They said it made the economy stable.
It helped the US become a stronger global trading nation.
Bankers and industrialists supported gold:
Gold = reliable and stable
Adding silver = risky and unstable
Wealthy Americans opposed bimetallism because:
Increasing the money supply would decrease the value of their money.
Republicans portrayed silver supporters as:
Uneducated
Ignorant
Economically naive
7. Populist Party and Free Silver
Formed in 1882 by agrarian protest movements.
Supported free silver:
Government uses silver at 16:1 ratio with gold.
Support grew in the late 1880s and early 1890s.
Populists gained strength after the severe economic depression of 1893.
They argued:
Gold standard was worsening the crisis.
Adding silver would ease hardship for farmers and workers.
8. Democrats Move Toward Silver (1896)
Democrats were divided but leaned toward bimetallism as the election approached.
Supporting silver appealed to:
Workers
Farmers
Lower-income voters
Strategically, Democrats wanted to attract Populist voters.
By late 1880s:
Populists had 1.5 million voters
Enough to influence a national election
NOTES – Panic of 1893, Coxey’s Army, Election of 1896, and Party Shifts
1. The Panic of 1893
What it was:
A major economic depression beginning in 1893.
Second major depression of the Gilded Age (after 1873).
Causes:
Sudden collapse in stock market prices.
Overextension and failures of major industries (especially railroads).
Bank failures that led to a credit crisis.
Effects:
Lasted four years (1893–1897).
Railroads, banks, steel mills, and manufacturers went bankrupt.
Unemployment tripled from 1890 levels.
Many Americans lost homes and farms.
Farmers blamed federal monetary policy.
Boosted support for the Populist Party, which favored bimetallism and more government intervention.
2. Coxey’s Army (1894)
Who:
Jacob Coxey — Ohio businessman and Populist.
What he proposed:
“Good Roads Bill”:
$500 million federal program
Government creates jobs by hiring unemployed workers to build roads.
The march:
Coxey mobilized unemployed people and farmers from around the nation.
Journalists publicized it widely.
Coxey predicted 12,000 marchers; only around 500 reached Washington.
The marchers were dispersed by soldiers when they reached the Capitol.
Significance:
First major protest march on Washington.
Introduced the idea that the federal government should create jobs in an economic crisis.
This idea later influenced the New Deal in the 1930s (public works programs like the CCC and WPA).
3. The Republican Campaign of 1896
Candidate: William McKinley
Support base: industrialists, business owners, bankers.
Main message:
Staying on the gold standard = economic stability.
Bimetallism = dangerous inflation and instability.
Media portrayal:
McKinley shown as a wise, experienced leader.
Some compared him to Napoleon (hand-in-coat imagery).
His message reassured industrial workers that the economy would stabilize.
Contrast with Bryan:
William Jennings Bryan portrayed as:
Young
Radical
Overly dramatic
Obsessive about speeches
Cartoon shows him cranking out “weak speeches” supporting free silver, indirectly helping McKinley.
4. The Election Cartoon Analysis (1896)
Imagery:
McKinley and Bryan on a balancing scale.
Bryan spews “Bad speeches” like a broken machine.
His speeches land on McKinley’s side, weighing it down — meaning Bryan helps McKinley win.
McKinley holds a paper labeled “Gold Standard.”
Message:
Bryan’s advocacy of free silver is making McKinley look stronger and more credible.
Republican press trying to show Bryan as unintentionally helping the opposition.
5. Results of the 1896 Election
Winner: William McKinley
Reason for victory:
Industrial states (Northeast and Midwest) supported him.
Workers in factories did not trust Bryan’s bimetallism to protect their jobs.
They believed McKinley’s experience would stabilize the economy.
Bryan’s mistake:
Thought “free silver” would attract workers.
Failed to realize most industrial workers feared inflation and job losses.
Voting pattern:
Bryan strongest in the South and West.
McKinley dominated the Northeast and industrial Midwest.
6. Why the Election of 1896 Matters
This election marked a major political realignment:
A. Populist Party Impact
First time farmers’ issues (railroad rates, monetary policy, debt relief) influenced national politics.
Populists lose political independence after 1896 but their ideas enter the Democratic platform.
B. Democratic Party Transformation
Began to identify itself as:
The party of workers
Farmers
Rural America
Embraced bimetallism and reform rhetoric.
C. Republican Party Transformation
Became the party of:
Big business
Industrial growth
National and international trade expansion
Supported policies that encouraged manufacturing and exports.
D. Long-term consequences:
Republicans dominate national politics for decades after 1896.
Gold standard maintained until early 20th century.
Shows tensions between industrial America and agricultural America.