Ch. 23: Political Paralysis in the Gilded Age

Political Paralysis in the Gilded Age

***Gilded means plated in Gold

The Gilded Age was a term coined by Mark Twain to describe the three decade post-civil war era which consisted of economic expansion along with corruption and materialism; urbanization and industrialization

Aesthetic beauty in closer examination

• Problems during the era:
  • business and political corruption and to enhance all of that give an example
  • wealth: carnegies, rockefellers
  • Corruption: Whiskey Ring, Credit Mobilier

Election of 1868: Grant vs. Seymour

• First major political happening after the civil war; Reconstruction
• Andrew Johnson was the president after Lincoln
• Republicans nominate Grant; most people know him because he was responsible for the Union victory (He’s on the $50 bill)
• Supported military reconstruction- federal troops in southern states
• Fear of second rebellion, civil unrest because of new social attitudes, protect the rights of the freed slaves
• Grant offers branch to the south- important phrase: “let us have peace”; telling the southern states that he wants them back into the union with peace; wave the bloody shirt- reviving gory memories of the Civil War- vote how you fought; Americans were blaming the democrats for the civil war

- Democratic Candidate: Horatio Seymour

Issues: Democrats denounce military reconstruction; southerners not happy w/troops:

• Introduced the Ohio Idea- redeeming civil war bonds with greenbacks (paper money); radical idea because previously civil war bonds were redeemed with gold and it’s going to cause inflation and put more money into circulation- soft money policy
• Inflation: too many dollars chasing too few goods; value of the dollar drops- goods’ prices increases; it makes it easier to pay off your debt (wages also go up)
• A bond is a loan- gov. Needs money to finance money; return money and give interest
• Appealing to in debt farmers and in debt workers to get them to vote for him; doesn’t work
• Grant wins electoral college and wins popular vote by 300,000; Seymour won the majority of the white vote
• 500,000 former slaves voted for Grant helping him win the electoral college; political alignment ; African Americans- became loyal to the republican party and stay loyal to the party until FDR
• Grant’s Administration was marred by corruption; Grant was never directly involved in any scandal during his presidency

Government Corruption

• NYC Tammany Hall- Boss Tweed and the Tweed Ring; democratic political machine and they stole 200 million dollars out of NYC; awarding government contracts
• Thomas Nast started drawing political cartoons to expose the corruption
• Political cartoons were more effective because there were literacy issues
• Credit Mobilier
  • Involved the Union Pacific Railroad contracted to build the railroad; west to east
  • Gov. loaned them money
  • People on railroad make money
  • Start another company “Credit Mobilier”
  • Charge 3 times the money; declare themselves bankrupt and they won’t have to repay the loan (Fraud); congress oversees this and congressmen were bribed
  • Credit Mobilier was eventually revealed to the public; people were mad at Grant for his inexperience
• Whiskey Ring
  • Collection of Whiskey taxes in Southern taxes
  • Personal Secretary- chief of staff- was part of it
  • Grant wrote letter of leniency for his personal secretary

Revolt of 1872: Greeley vs. Grant

• Liberal Republicans form their own party; they left republicans because they wanted to leave Grantism (leave scandals associated with Grant administration)
• Opposed military reconstruction
• Liberal Republicans nominated Horace Greeley
• Democrats nominate Grant; Democrats also nominated Greeley
• Republican party is split
• Greeley should win, but Grant wins
• Freedmen voted for him and the economy was going

Panic of 1873: Economic Panic

• Panic of 1873: Caused by over speculation and then economic depression
• Overspeculation- Wall Street; people invest money in stocks that they think will go up, but then they lose value
• Real Estate and Railroads- thinks it goes up in value, but then they lose money
• Economic Depression- business productivity declines, more bankruptcies and foreclosures, more unemployment
• One of the worst in American History and lasts for several years
• They believed that there’s a business cycle- times of decline and prosperity; didn’t think they could do anything about it and couldn’t hold people accountable
• Social attitudes were starting to change especially among the debtors, the working class debtors, the farmers wanted their government to do something
• In 1873: President Grant- Republican Party; believe in hard money policies so they working-class debtors they believed there should be more money in the circulation; inflation
• People pay off debts and go to buy goods and services; no major differences
• Bill passed by Congress but Grant vetoed it because he didn’t believe in because believed businessmen needed to change the system- Multiple backlashes
• So many people are unhappy with Grant, Democrats win the congressional midterms; Democrats in power
• Solutions:
  • Resumption Act: Withdraw greenbacks from circulation (submit paper currency to bank or representative of treasury, they’ll give you $50 worth of gold), redeem paper currency in gold at face value----people didn’t want it
  • Bland Allison Act: Authorized the treasury to buy and coin between 2 and 4 million dollars of silver each month
  • Nothing changes with Democratic party
  • Last political backlash: People are so upset with the two major parties, they assume the formation of the Greenback Labor Party becomes somewhat influential in American political history

Politics of the Era

• 3 key Issues dominated the Gilded Issues (more but these are key)
• Tariffs: Tax on imported goods
• Currency: Hard vs soft money
  • Gold: hard money
  • Hard money policies: government recognizes currency which is based on an actual, fixed item which is considered valuable
  • soft money: currency (greenbacks and silver, because silver was less valuable than gold)
• Civil Service Reform: Federal government jobs- part of the spoils system
• Need money to win elections
  • The Spoils system Catered to wealthy donors and they expect something in return and maybe they want a government job
• Voter Participation: 80%; 1 of the highest eras of voter participation in American History
• People were loyal to their party
• The parties did a very good job of producing voter turnout; making sure you went out and voted
• Identity politics (racially)- political allyship to a specific party
• Republican religious views: rooted in the ideas of Puritanism with strict codes of morality
• Democrats have strong support from Immigrant Lutherans and Roman Catholics; they professed tolerance of differences
• Role of Government: Republicans believe government should have a role in regulating both the moral and economic fairs of the community
• Democrats opposed any moral regulation by the government; didn’t think it was the government’s place
• Support Base:
  • Democrats: South and Northern Industrial Cities
  • Republicans: Midwest and Rural/Small-town Northeast, Freedmen in the South, and members of the army

Election of 1876: Hayes vs. Tilden

• Grant wanted to run the third term, but higher-ups didn’t want him
• Republicans nominated: Ohio Rutherford B. Hayes
• Democrats nominated: Prosecuted Boss Tweed; Samuel Tilden
• The outcome of election: Tilden wins the popular vote but he does not become president because he lost the electoral college; 4 states had disputed votes and those 20 electoral votes determine who wins electoral college; a constitutional crisis
• 7 democrats, 7 republicans, 1 independent---independent starts to go republican
• Democrats go crazy; “Tilden or blood” concerns about wars
• Channel Henry Clay: Compromise of 1877 and under the terms: Hayes becomes president, Democrats get an end of military reconstruction (troops were withdrawn),
• Never implemented: Democrats were supposed to get a seat in Hayes’ cabinet and promised to bring a transcontinental railroad in the South (would have been an economic boom, but it never happened)
• Disastrous for Freedmen: Meant that Republican party had abandoned their commitment to protecting the civil rights of the freed slaves in the south; results in legalized segregation and African Americans became second class citizens in the united states

Pendleton Act

• People were beginning to look to the government to help alleviate the struggles of the depression and the masses (workers and farmers in debt) believed they had a simple response
• Print more money and more into circulation: inflation (pay off debt and catalyst for economic growth because people will buy goods and services which is good for businesses, increase in profit meant an increase in wages)
• Grant Hard money policy advocate vetoes the bill to print more currency

Midterm elections: 1874

• Generally a referendum on the party in the White House (in this case itś the Republicans) and their policies
• History shows that traditionally party in power loses seats in Midterm Elections
• More seats than the Republicans would lose; Democrats would win the Midterm and win the house of representatives (people were unhappy with the Republicans)
• Resumption Act: take greenbacks out of circulation; gold at face value; which was also a hard money policy

Election of 1876:

• Tilden wins popular vote
• Democrats had one last chance; both parties in Congress understand the public mood, so they offer something to the public (which is sort of Hamiltonian)
• Authorize treasury to buy 2-4 million dollars worth of silver
• Only coin 2 million; exemplifies that powers believed that people didn’t know what was good for them and their best interest
• People took this as people were not protecting them; Create a new party: The Greenback Labor Party: Offer what the masses seem to want, more money in circulation; third parties don’t usually succeed (minor successes and influential because it influences the populist movement, and populist movement has moderate success and also influences the progressive era which has monumental success at the national level), which traces back to the 1874 Midterm elections
• Influences FDR and his New Deal policies shapes democratic and republican policies
• Grassroots movement: Begun by the everyday people, which is how most change happens

Civil Rights:

Republican party abandons commitment to Reconstruction movement

• Not everyone goes along with the 14th and 15th amendments
• 13th amendment: never again institutionalized slavery
• Southerners pass laws that ignore the 14th amendment (guarantees equal protection under the law); waiting for an institutional body to weigh in (waiting for supreme court)
• Civil Rights Cases
• In 1883: The Supreme Court made a ruling
• 14th amendment prohibited only government violation of civil rights not the denial of civil rights by individuals; government can’t deprive freed slaves but private businesses and individuals CAN; it’s not the court’s intent to control the social institutions
• After that ruling: legalized segregation and disenfranchisement; Democrats don’t want POC voting for Republicans (disenfranchise)
• Private businesses and individuals don’t have to follow 14th amendment so they can segregate; disenfranchisement: state controls voting, so if the state doesn’t let POC vote, isn’t that a violation of the 14th amendment? So they came up with some workarounds: we’re not gonna prohibit them from voting, we’re going to put in requirements like Poll Tax (make you pay to vote), literacy tests (pass literacy test in order to vote); poor whites who can’t pass literacy test or pay poll tax; Made a requirement so your grandpa had to vote in the election: Grandfather clause; (IF a Family member can vote in 1860 then they are automatically qualified to vote); doesn’t violate 14th amendment- no race discrimination

Jim Crow Laws

• Passed in Southern States
• Legalized Segregation And Disenfranchisement ( no equal economic or education)
• POC community pushes for test which support from White americans; how can we challenge these laws?
• 1896: Plessy vs. Ferguson
• One of the worst decisions in Supreme Court history: SEPARATE BUT EQUAL; Justice Harland came from slave owning family and predicted that the outcome would be disastrous and he was right; stayed until Brown vs. Board of Education in 1954 (unanimously overturned)---there were still resistance in Southern States to ending segregation
• Worst decision in Supreme Court: Dred Scott decision (they’re not considered humans)
• Segregation was acceptable and African Americans were deprived of American society

1882: Chinese Exclusion Act

• Congress passed a law prohibiting the immigration of Chinese laborers; not all chinese were excluded (gov. Officials, religious ministers, people who had family, and students)
• The Irish pushed for the exclusion act
• Chinese and Irish were low on socioeconomic ladder
• Immigrants working in industries
• Irish were upset because of stereotype Chinese labor, so they refceived lower wages;
• Chinese were more productive group
• The Irish were stereotypically whiskey drunks
• Chinese drank tea; tea and was healthier, water not purified

Institutional Racism in US

1880 Election: Garfield vs. Hancock

• Rutherford B. Hayes (no reelection)
• James Garfield: Republican: protective tariff and somewhat supported civil service reform
• Winfield S. Hancock- former Civil War hero general; for a revenue tariff and civil service reform
• No difference between the two sides
• Garfield was assassinated by Charles J. Guiteau; (Curse of Tecumseh for the mistreatment of native Americans meant the death of president)
• stalwart- spoils system proponent ; half breeds (in favor of merit system/favor of political machines) (Both were part of republican party)
• Charles guiteau thought he was entitled to have an office position and he campaigned for garfield, but garfield didn't even know who he was
• after garfield’s assassination- pendleton act
  • PENDLETON ACT signed by Chester Arthur;
  • Republicans were not happy because senators got their jobs because of spoils system
  • Beginning of end Ends Political Patronage; merit system for civil service jobs
  • Parties still need money
  • They turn to Big Businesses; alliance still holds true today

1884 Election: James G. Blaine vs. Grover Cleveland

• James G. Blaine: Republican Candidate for Presidency; Maine---Bates and Boden (colleges- alumni network); position: For high-protective tariff and he wanted civil service reform
• Wanted to repeal Pendleton Act
• Democrats: Grover Cleveland- NJ: Low protective tariff; Supported the gold standard
• Gold Standard: THe amount of gold we have in the US treasury is the amount of money we could have in circulation; conservative---odd coming from Democrats (most supporters support inflation)
• Mudslinging: Both Candidates/Multiple candidates are attacking each other to get votes; Candidates tried staying above but the Democrats attacked Character/integrity of James Blaine (allegedly involved with Railroad scandals); concerned about Blaine’s business dealings
• Republicans Grover Cloveland’s morality (allegedly fathered an illegitimate child; child out of wedlock);
• Grover Cleveland wins!
• Fall of 1884: Pastor in NYC delivered a sermon in which he labelled the Democratic Party of Rum, Romanism (Catholicism), and Rebellion (Trying to remind voters that the Democrats were responsible for the Civil War---took it as Democrats were fighters)
• Drunk, Catholic, Fighters: Irish think they were targeted in the speech (and so did the Catholics); so they voted Democrat (especially in NY), helps Cleveland win NY
• Deplorable: uneducated & ungrateful
• Mulligan
• Letters James Blaine sent to a business associate; contents of letters become controversial; signed the letter “burn this letter”; content reveals that Blaine was trying to get involved in questionable business dealings
• Mugwumps: Republicans who voted for Cleveland because of the disdain they had for Blaine’s character

Grover Cleveland

• Philosophy: believed in limited government; government shouldn’t support people, people should support government
• Accomplishments:
• Implement new civil service system
• Cleaned up abuses of the military pension system (served in Civil War, entitled to pension, money for serving, however there were people who were claiming to injured to get more money)
• Signed into law the interstate commerce act:
  • This was the first attempt of American Federal Government to regulate big business; moving away from Laissez Faire
  • The Government would be more involved in economy; now imposing regulations
  • tariffs protected American businesses from Foreign competition (Government intervention)
• He signed the Dawes Act into law: Assimilate native Americans into society, which was a disaster;
• our treatment of Native Americans was overwhelmingly disastrous and culturally insensitive
• Surplus Problem
• Surplus: Use less money than you were given: excess money; The US government spent less money than it took in in revenue; normally have deficit and build up debt; Cleveland had an opportunity to lower tariff (revenue for US treasury) people complained
• Eisenhower and Bill Clinton had surpluses

1888 election: Cleveland vs. Harrison

• Cleveland runs again (Wants lower tariff)
• CLEAR divide on one of the issues: tariff
• Republican Candidate: Benjamin Harrison (Wants high protective tariff)
• Surface level economic prosperity (Gilded Age)
• Grover Cleveland won the popular vote, but didn’t win the electoral college
• Benjamin Harrison is in
• The Republicans won the House of Representatives and senate
  • Form 1888-1890, the Republicans control Congress and WHite House

1892 Election: Cleveland vs. Harrison

• Cleveland: wins 1892 election
• Reelected because of tariff; non consecutive term
• Billion Dollar Congress (1888): First congress to have a billion dollar budget
• Republican Campaigns: increase tariff
• McKinley Tariff: signed into law; raised the average tariff rate to 48%;
• Sherman AntiTrust Act of 1890: It forbade any combinations that restrained trade; monopolies and trusts became illegal; slowly moving away from Laissez Faire
• LATE 1800s: ***Historical critics say it was for the people’s reassurance but it didn’t use it to break up trusts, but for labor unions instead (just to convince people they were doing something): president theodore roosevelt

1890 midterms

• Agrarian discontent; Farmers not happy with Republicans in post-civil war era; state/federal government ignored farmers’ problems
• Tariff was unpopular; Republicans were guilty of overreach; started to legislate morality
• Prohibition laws (state levels, not federal): Alcohol prohibition, Sunday Closing laws (all businesses closed)- wanted you at Church
• Farmers unhappy with policies (tariff morality laws);
• Democrats take back control of Congress

Rise of the Populists

Grange-Greenback Labor-Farmers Alliance

• Grange (How it started): SOCIAL AND EDUCATIONAL organization for farmers
• Farming is difficult and challenging/lonely type of work and lifestyle; facing drought, severe weather, insect plagues that damage crops; People realize that they have shared grievances; Farmers build the railroads and the banks and middleme and court and state government and federal government; farmers were guilty of overproduction
• ONe of the ways they can get the politicians to see their needs: BOOC; people with shared interests voting together to form candidates
• Leads to Greenback Labor party; Political party as a result of the Grange
• Minimal successes; more greenbacks into circulation
• Give way to Farmers Alliance (which has more success than Greenback Labor Party)
• Able to elect senators and members of the HOR, governors in several states; had majority in four state legislatures in the west--Agrarian movement was more popular in west than established Northeast
• FarmersAlliance provide the foundation for a new political party that emerges in the 1890s;  Gives rise to the Populists
• Populist party meets in Omaha, Nebraska in 1892: introduce political platform (What the party stands for) and nominate candidate for president
• Omaha Platform: Considered radical in its day
• Called for political and economic reforms in the US (Why it’s so radical)
• Politically:
  • Demanded the restoration of the government to the people; government’s supposed to work for the people; they were working for big business
  • Direct Election of US senators (17th amendment during Progressive Era); state legislatures were appointing; You give candidates money for the campaign and they win; and you want to be named a position--; Senators have no idea what happens in everyday life
  • Wanted democracy to become more democratic
• At state level, they wanted initiatives and referendums
  • Initiatives: allow the public to introduce a bill to be considered for law
  • Referendums: allows public to vote on proposed bill before it becomes law
• Economic:
  • Wanted to do something about the concentration of economic power at the hands of trust in bankers
  • Unlimited coinage of silver: inflate the economy
  • Graduated income tax: the more you earn, the more you would pay in taxes
  • Public ownership of the railroads: Farmers think it ends monopolistic competition
  • Telegraph and Telephone: owned and operated by the government
  • Federal Farm loan program: farmers thought the private banks were charging them too much interest (though government would give them decreased interest)
  • 8 hour work day (For labor votes)
  • Revolutionary for two reasons:
  • Attack on Laissez-Faire capitalism
  • Attempted to form political alliance between poor POC and poor whites

Election of 1892: Cleveland vs. Harrison

• Rematch of 1888
• Democrats: Grover Cleveland
• Republican: Incumbent running for Benjamin Harrison
• Incumbent: holder of an office or post; office-holder- person who holds office
• Third Party: James B. Weaver nominated by Populists
• Populists candidate received: 1,000,000 popular vote and 22 electoral votes; the most successful candidates; few times third party won electoral votes; western part of the country- agrarian based; thought they would do well in the South but they did not because their alliance was poor blacks and poor whites and southern whites didn’t like that
• Divided, voter participation, People were unhappy with the direction of the country and the two major political parties
• 1892: Grover Cleveland won reelection with popular and electoral vote
• Irony: political storm that Cleveland started- much lower tariff and US had economic prosperity and when the tariff was lowered, which destroyed prosperity
• why he lost- northeast voted against Cleveland and the tariff helped to defeat in 1888, but then Congress used McKinley Tariff (Raised tariffs by 48%) (unpopular with American tariff); McKinley loses seat in Congress; helped Cleveland get reelected
• Only president w/two non-consecutive terms: 1884 and 1892
• Cleveland was for lower tariff in 1888; helped him get reelected in 1892; tariff hurts normal people

Depression Politics

• Cleveland gets inaugurated in spring of 1892; back in March (doesn´t change to January till FDR)
• Panic of 1893
• Over speculation in stock market causes depression again; wall street crash in spring of 1893
• One of worst depressions; nearly four years long; overtaken by Great Depression
• Dozens of railroads went bankrupt because of over building
• Farm foreclosures were at an all time high up to that point in history
• Farm Foreclosure: Can’t pay for mortgage for farm, so farm goes to the bank- eviction (lost value); property unpaid for by occupant
• Unemployment reaches 20%; companies close down; people don’t have jobs--Banks close, less money in circulation, less loans for businesses, less spending, other businesses collapse as well- no revenue
• Social attitudes changing: People not accepting laissez faire
• Cleveland’s Response
  • Championed gold standard in face of economic crises; was a conservative Democrat; masses want inflation; free unlimited coinage of silver
  • Laissez faire attitude: Economy will recover; businesses will figure it out

Gold Reserve and Tariff

• Silver starts to lose value; investors started to sell it and buy something instead- gold maintains its value; started to purchase gold; gold reserve fell to a dangerously low level; US treasury had very little gold
• Cleveland’s Actions:
  • Repeals Sherman Silver Purchase Act: hard money policy; goes to the richest person in the country to loan the country gold during crisis: JP Morgan-diversify into other businesses (buys Andrew Carnegie’s steel company)
  • Morgan loans the US $65 million worth of gold; magnanimous effort by JP Morgan--LOAN the country gold; he wants it back and also wants millions of dollars of interest; the public finds out and it’s proof that the gov. Is tool for Rich eastern bankers- not working for everyday people

Pullman Strike

• 1894: Strike with Pullman Company- made luxury train cars
• Built a factory and then they built a factory town and they built shops and housing; workers live in housing---rent will go back to the company; People who work for them-close knit community; depression hit the Pullman company hardly and losing significant value
• Losing money, two choices: lay off workers or pay cut; they vote to accept the pay cut- understand hard times and loyal to the company; company turns around and raises rent by 20%
• Workers went on Strike: Eugene V. Debs: Leads the Pullman strike
• Grover Cleveland gets injunction (Court order): Send in federal troops for strike; allowed troops to go in because they said the strikes was preventing the government from delivering the mail- court agreed
• Troops go in and put down the strike; strike´s over and Debs is put into jail
• Cleveland stuck up for the government; he gets involved because it got violent;
• Eugene V. Debs did reading: Communist Manifesto and Marxist-Socialist
• Eugene V Debs: runs for presidency 5 times as socialist
• In 1920 election he arrested; war effort during WWI; ran for presidency in jail; democrats retook control of congress and passed a measure that was initially popular with public in 1894: Wilson-Gorman tariff act
• Wilson - Gorman Tariff: Tariffs went down on goods nobody cared about; tariff went up on goods they needed to consume; raised the tariff rates on key goods
• Measure attached to it: Very popular measure: Included 2% income tax on incomes of more than $3000 dollars (Taxes THE RICH); avg. american earns under $1000/year
• Only lasted briefly because supreme court declared it unconstitutional; government works to protect the rich- eventually get federal income tax with 16th amendment--woodrow wilson’s presidency
• People not happy with government;

Signs of Discontent

• Coxey’s army
  • Jacob Coxey plans a march on DC demanding gov. To do something to help people during this depression; Coxey isn’t just a protestor; constructive plan that he thinks will help get the americans out of depression
  • Coxey wants federal government to give $500 million dollars on federal works program (Gov. people to pay people to work on useful projects; people make wages, people spend, companies increase wages/increase employments and putting it into the government)/Federal government doesn’t go through with it
• Massive Federal Government Program- employed: Herbert Hoover and Cornerstone of FDR’s new deal during the Great Depression
  • Coxey got arrested during his protest; for trespassing; on federal grass
  • Jacob Coxey and his march to DC during this time became inspiration for the Wizard of Oz (Dorothy’s slippers were silver; silver standard vs. gold)
• Gold vs. silver; marching to get what you need
• Coin’s Financial School
  • Books release with cartoons w/high level content
  • Book said there was a conspiracy of eastern bankers who are trying to hoard the wealth; the only way for prosperity to return was through the unlimited coinage of silver- monetary policy
• Gold is more valuable than silver because it’s more rare; both gold and silver back money- put more money into the economy- inflate money because of amount of gold and silver funding the treasury
• Monetary policy: value of our money?? Gold or silver?
• Today: We’re backed by Faith and Trust; Nixon gets rid of gold standard
• People were illiterate; and they wanted to get this out of the masses; major issue coming up for next presidential campaign: Silver vs. gold

Stalwarts and Half-breeds were Republicans and were pushing for civil service reform (not really):

• They don’t really want to change patronage, but they just want to control the system themselves
• Political backlash of republican hard money policies after the panic of 1873 was due to:
  • Democrats won the congressional midterm and Resumption Act
  • Also 1874 Midterm elections and formation of Greenback Labor Party