National Politics in the Gilded Age



Politics in the Gilded Age 1877-1900

Part I

This dreadful office seeking hangs over me and surrounds me and makes me feel like resigning.

-Grover Cleveland

Greed and Corruption: The Troubled Grant Administration

Throughout Grant’s first term many Republicans expressed their concerns that some men were in office to make money and sell their influence and were beginning to dominate the Republican Party. These critics broke away and created the Liberal Republican Party and nominated Horace Greeley as their presidential nominee (1872).

Although Grant easily won the re-election, a series of scandals damaged his reputation.

In 1869, for example, two Wall Street financiers, Jay Gould and James Fisk, obtained the help of President Grant’s brother-in-law in a scheme to corner the gold market (TD broke scheme though Gould made a fortune).

In the Credit Mobilier affair, insiders gave stock to influential members of Congress to avoid investigation of the profits they were making- as high as 348 %- from government subsidies (money that comes from the government) for building the transcontinental railroad.

In one scandal Grant’s secretary of state William Belknap was found to have accepted bribes from merchants operating an army post in the West (resigned before found guilty). Then in 1875, the Whiskey Ring scandal broke when a group of government officials and distillers in St Louis cheated the government out of millions of dollars by filing false tax reports (one of Grant’s private secretary was reported to be involved).

Panic of 1873

Grant’s second term began with an economic disaster that rendered thousands of northern laborers both jobless and homeless. In 1873 over speculation by financiers and overbuilding by industry and railroads led to widespread business failures and depression. Debtors on the farms and in the cities sought an inflationary, easy-money solution by demanding Greenback paper money that wasn’t supported by gold. In 1874, Grant finally decided to side with the hard-money bankers and creditors who wanted a stable money supply backed by gold and vetoed a bill calling for the release of additional Greenbacks.

The expression Gilded Age, first used by Mark Twain in 1873 as the title of a book, referred to the superficial glitter of the new wealth so prominently displayed in the last years of the 19th century. As individuals rose to the top of their industries, they amassed personal fortunes that led to extravagant living. Industry giants bought multiple homes, fitted with the latest technologies. The “Gilded Age” symbolized the wealth among the Americans elite society which seemed like a cheep picture frame-golden on the outside, but rotting on the inside. The politics of the era is often criticized as mostly show with little substance. It was the era of “forgettable” presidents, none of whom served two consecutive terms, and politicians who largely ignored problems arising from the growth of industry and cities. The two major parties in these years avoided taking a stand on any controversial issues.

Causes of Stalemate (going now where) in Washington:

Factors accounting for the complacency (staying the same even though its bad) and conservatism of the era included:

1) the prevailing political ideology of the time-The idea of “do little” government was in tune with two other popular ideas of the time: laissez-faire economics and social Darwinism. Furthermore, federal courts rarely interpreted the government’s powers to regulate business, and this limited the impact of the few regulatory laws that Congress did pass.

2) campaign tactics of the two parties

3) party patronage or spoils system. Since neither party had an active legislative agenda, politics in this era was chiefly a game of gaining office, holding office, and providing government jobs to the party faithful.

Presidential Politics

The administration of presidents Hayes, Garfield, and Arthur reflected the political stalemate and patronage problems of the Gilded Age.

Rutherford B Hayes

After being declared the winner of the disputed election of 1876, Hayes most significant act was to end Reconstruction by withdrawing the last federal troops from the South. Hayes also attempted to reestablish honest government after the corrupt Grant administration. When Rutherford B Hayes entered the White House in 1877, he attacked the practice of party patronage by appointing well-known reformers to his cabinet and replacing officials who owed their jobs to party bosses. As temperance (stop drinking alcohol) reformers, Hayes and his wife cut off the flow of liquor in the White House and vetoed efforts to restrict Chinese immigration. Hayes also had hoped to revive the Republican party in the South by persuading business oriented ex-Whigs to join a national party that was committed to a sound currency backed by gold rather than silver. He tried to veto a bill that called for partial coinage of silver, but Congress overrode his veto by passing the Bland-Allison Silver Purchase Act, which allowed only a limited coinage between $2 million and $4 million in silver each month. Not satisfied, farmers, debtors, and western miners continued to press for the unlimited coinage of silver.

James Garfield

Republican politicians, more interested in spoils and patronage than reform, were happy to honor Presidents Hayes’ pledge in 1877 to serve only one term. A Union hero, he took office energetically determined to:

1)unite the Republican party (spilt because of tariffs and South)

2)lower tariffs to cut taxes

3) and assert interest in Latin America

In his first weeks in office, Garfield was besieged in the White House by hordes of Republicans seeking some 100,000 federal jobs. Each one wanted a government job, and each one thought nothing of cornering the president on every occasion. The problem provoked a bitter fight with a powerful senator from NY, Roscoe Conkling. While the president was preparing to board a train for a summer vacation to New England in 1881, was shot in the back by the deranged lawyer and office seeker, Charles J Guiteau. After an 11-week struggle, the gunshot wound proved fatal. Chester A. Arthur then became president.

Chester A. Arthur and The Pendleton Civil Service Act

Although President Arthur was an ally of Conkling, he proved a much better president than people expected. He distanced himself from Conkling, supported a bill reforming the civil service, and approved the development of modern American navy (reversed Garfield’s foreign policy in Lat Am). He worked to lower tariffs, and in 1883, passed The Pendleton Civil Service Act which established the bipartisan Civil Service Commission to administer competitive examinations to those people seeking government jobs. At first, the law applied to only 10% of federal employees, but in later decades, the system was expanded until most federal jobs were classified . It was an important step towards reform because it was established as a law the idea that federal jobs below the policymaking level should be filled based on merit. Initially, the act affected only about 14,000 of some 100,000 government offices, but laid the foundation for later expansion of the civil service.

The Election of 1884

In 1884 the Republicans nominated James G. Blaine for president, but suspicious about Blaine’s honesty were enough for the reform minded Republican to switch allegiance and campaign for the Democratic nominee, Grover Cleveland.

Unlike most Gilded Age politicians, Cleveland was honest, frugal, conscientious, and uncompromising. He had been an honest mayor of Buffalo and incorruptible governor of NY state. Republicans raised questions about the honest NY’s private life, since Cleveland had fathered an illegitimate child. In one of the dirtiest election campaigns in history, the Democrats were labeled the party of “Rum, Romanism, and Rebellion.” Catholic voters were offended by the phrase, and their votes in key states like New York may have been enough to ensure Cleveland’s victory as the first Democrat to be elected president since Buchanan in 1856.

Cleveland’s First Term

The Democratic president believed in frugal and limited government in the tradition of Jefferson. He implemented the new civil service system and vetoed hundreds of private pension bills for those falsely claiming to have served or been injured in the Civil War.

He signed into law both

1) Interstate Commerce Commission (ICC) 1887, the federal government’s first effort to investigate and oversee railroad activities, by outlawing rebates and pooling agreements. (regulates many parts of the economy today), and

2) the Dawes Act, which reformers hoped would benefit Native Americans (160 acres of land 25 year citizenship).

3) Cleveland’s administration also retrieved some 81 million acres of government land from cattle ranchers and the railroads for the Native Americans.

He brought a new respectability to a Democrat party still linked with secession. He brought veteran pensions, continued civil service appointments, pushed the naval construction program, and forces railroad, lumber and other fraudulent companies to surrender millions of acres of land from public domain. The Republicans accused him of undermining American industries and nominated Benjamin Harrison in 1888.

Billion-Dollar Congress

As if a dam had burst, law after law poured out of the Republican Congress from 1888 to 1890. For the next two years, Republicans controlled the presidency (Harrison’s victory in 1888) and both houses of Congress-unusual for this era of a close billion-dollar budget, in which they passed:

• The McKinley Tariff of 1890, which raised the tax on foreign products to a peacetime high of over 48% (4% higher than ever before).

• The Sherman Antitrust Act, the first federal attempt to deal with the problem of trust and industrial growth. It declared illegal, “every contract, combinations in the form of trust of otherwise, or conspiracy in restraint of trade or commerce” (trying to abolish monopolies and trust).

• The Sherman Silver Purchase Act of 1890, which increased the coinage of silver, but in amounts too small to satisfy farmers and miners.

• A bill to protect the voting rights of African Americans, passed by the House but defeated in the Senate.

Tariff Issue and the Money Question

An important economic issue concerned tariffs. Western farmers and eastern capitalists also disagreed on the question of whether tariff rates on foreign imports should be high or low. During the Civil War, the Republican Congress had enacted to protect US industry and also fund the Union government. After the war, southern Democrats as well as some northern Democrats objected to high tariffs because these raised the prices of consumer goods. Another result of the protective tariff was that other nations retaliated by placing taxes of their own on US farm products. American farmers lost a share of the overseas market, creating surpluses of corn and wheat and resulting in lower farm prices and profits. From a farmer’s point of view, industry seemed to be growing rich at the expense of rural America.

One of the most hotly debated issues of the era was whether or not to expand the money supply. The money question reflected the growing tension during the industrial age between the “haves” and the “have nots”.

Debtors, farmers, and start-up businesses wanted more money in circulation, since this would enable them to:

(1) borrow money at lower interest rates and

(2) pay off their loans more easily with inflated dollars.

After the Panic of 1873, many Americans blamed the gold standard for restricting the money supply causing the depression. To expand the supply of US currency, easy or “soft” money advocates campaigned first for more paper money (greenbacks) and then for the unlimited minting of silver coins. On the opposite side of the question, bankers, creditors, investors, and established businesses stood firm for sound, hard money-meaning currency backed by gold stored in government vaults. The big holders of money understood that dollars backed by gold would hold their value against inflation and as the US economy and population grew, a limited number of gold backed dollars would gain in value.

The Growth of Discontent, 1888-1896

The politics of stalemate and complacency would begin to lose their hold on the voters by the late 1880’s. Discontent over government corruption, the money issue, tariffs, railroads, and trusts was growing. In response, politicians began to make small steps to respond to public concerns, but it would take a third party, the Populist Party and a major Depression in 1893 to shake the Democrats and the Republicans from their lethargy.

Return of the Democrats

In the congressional elections of 1890, the voters especially in the Midwest replaced many Republicans with Democrats (lost 78 seats in the House). They were reacting in part to unpopular measures passed by Republican state legislatures, and tired of spending the nations money on appropriations and grants. Many were angry because Republicans:

(1) Prohibition of alcohol and

(2) required businesses to close on Sunday closing laws, and

(3) mandating the use of English in the public and parochial schools.

Politics In The Gilded Age 1877 Part II

& The Progressive Era 1901-1918

Farmers Organize” The Rise of the Populists

New urban populations caused an increased demand for food and farmers responded by increasing production. As foreign competition increased, prices dropped and to compete American farmers continued to increase production. As supply increased, prices continued to drop and some were forced to give up their farms. Farmers united to form organizations like the National Grange and the National Farmers Alliance to look out for their interests.

Members of the National Farmers’ Alliances elected US senators and representatives, the governors of several states, and majorities in four state legislatures in the West.

Populism was the movement to increase farmers’ political power and to work for legislation in their interest. The economic crisis that drove farmers to embrace this movement had its origins in the years immediately following the Civil War. A major problem was that farm prices had dropped due to new technology. Farmers were producing more crops and greater supply tended to lower prices. At the same time, high tariffs increased the cost of manufactured goods farmers needed and made it harder for farmers to sell their goods overseas. Farmers also felt they were victimized by big businesses: the banks from which they obtained loans and the railroads that set their shipping rates. The world that farmers now dealt with was more and more one of big business, and they felt they were losing power and influence.

The National Farmers’ Alliance movement provided the foundation of a new political party-The People’s, or Populist, party. Delegates from different states met in Omaha, Nebraska, in 1892 to draft a political platform and nominate candidates for the new party.

Populists were determined to do something about the concentration of economic power in the hands of trusts and bankers:

Politically, it demanded the restoration of government to the people by means of :

1) direct popular election of US senators (instead of indirect election by state legislatures) which would lead to the 17th Amendment which is direct election of senators and

2) enacting of state laws by voters themselves through initiatives and referendums (all accept or reject a particular proposal) placed on the ballot.

Economically, the Populist platform was even more ambitious.

Populists advocated:

1) unlimited coinage of silver to increase the money supply. To help finance the Union war effort, the US Treasury had greatly expanded the money supply issuing millions of dollars in greenbacks- paper currency that was not backed by or could be exchange for gold or silver. This rapid increase in the money supply without an accompanying increase in goods or sale caused inflation, or a decline in the value of money. As the paper money lost its value, the prices of goods soared.

2) a graduated income tax (the greater a person’s income, the greater the tax) which would develop into the 16th Amendment.

3) public ownership of railroads by the US government

4) telegraph and telephone systems owned and operated by the government

5) loans and federal warehouses for farmers to enable them to stabilize prices for their crops and

6) an 8 hour work day for industrial workers

At the time, the Populist movement seemed revolutionary not only because of its attack on laissez-faire capitalism but also because of its attempt to form a political alliance between poor whites and poor blacks.

The Grange Movement/Interstate Commerce Commission

The first major farmer’s organization the National Grange of Patrons of Husbandry, or the National Grange, was founded by Oliver Hudson Kelley were its main focus was forcing states to regulate railroad costs (eventually “Granger Laws” created state commissions to regulate those rates). Many railroad companies challenged the Granger Laws in the courts. Wabash V Illinois ruled that state governments had no power to regulate traffic that moved across state boundaries. Only the federal government could do that. This decision led to Congress passing the Interstate Commerce Act (1887) which stopped railroads from giving secret rebates to large shippers and in turn the Interstate Commerce Commission was created to regulate traffic that moved across state boundaries.

Exodus to Kansas and Forming a Separate Alliance

In 1879, 70 year old Benjamin “Pap” Singleton, himself formerly enslaved, took action to escape the conditions of the rural South. He organized a mass migration of thousands of African Americans from the rural South to Kansas. The newspapers called it an “Exodus”, like the Hebrews escape from Egyptian bondage. While some African Americans fled the South, others joined with poor white farmers who had created the Farmers’ Alliance. Alliance leaders urged African Americans to for a similar organization. In 1886, African American farmers gathered in Texas at the home of a white minister name RM Humphrey (cotton strike) and formed the Colored Farmers’ National Alliance (faded 1890s) which helped its members economically by setting up cooperatives (pooled farmers’ crops and held them off the market in order to force up prices which could negotiate better shipping rates with the railroads). Many African Americans joined the Populist Party after its formation in 1891, hoping that it would unite poor blacks and white to challenge the Democratic Party’s power in the South.

The Election of 1892

In 1892, James Weaver of Iowa, the Populist candidate for president, won more than 1 million votes and was also one of the few third-party candidates in US history to win 22 electoral votes.

Nevertheless, the Populist ticket lost badly in the South and failed to attract urban workers in the North. The fear of Populist uniting poor blacks and white drove conservative southern Democrats to use every technique to disfranchise African Americans.

In terms of the major parties, the election was a rematch between President Harrison and former president Cleveland, who solidly won in part because of the unpopularity of the high-tax McKinley Tariff.

Depression Politics:

Panic of 1893

In the spring and summer of 1893, the stock market crashed as a result of overspeculation, and dozens of railroads went into bankruptcy as a result of overbuilding. The depression continued for almost four years. Farm foreclosures reached new highs, and the unemployed reached 20% of the workforce. Many people ended up relying on soup kitchens and riding the rails as hoboes. President Cleveland dealt with the crisis by championing the gold standard and otherwise adopting a hands-off policy toward the economy.

Gold Reserve and Our Dependency On The Tycoons

A decline in silver prices, encouraged investors to trade their silver dollars for gold dollars. The gold reserve (bars of gold bullion stored by the US Treasury) fell to a dangerously low level, and President Cleveland saw no alternative but to repeal the Sherman Silver Purchase Act of 1890 (Bland-Allison Act required both to buy silver each month and mint it into coins). This action however failed to stop the gold drain. The president then turned to JP Morgan to borrow $65 million in gold to support the dollar and the gold standard, which convinced Americans that the government in Washington was only a tool of rich eastern bankers.

The Turning Point in American Politics and the Demise of the Populist Party: 1896

National politics was in transition, The repeal of the Sherman Silver Purchase Act and Cleveland’s handling of the depression thoroughly discredited the conservative leadership of the Democratic party.

The Election of 1896

The election of 1896 was one of the most emotional in US history and would mark the beginning of a new era in American politics.

Bryan, Democrats, and Populists

Democrats were divided between “gold” Democrats loyal to Cleveland and pro-silver Democrats looking for a leader.

William Jennings Bryan captured the hearts of the pro-silver force at the convention in 1896 and won the nominee for president.

The Democratic platform favored:

1) unlimited coinage of silver at the traditional, but inflationary, ratio of 19 oz. of silver to 1 oz. of gold

2) The Democrats took over the leading issue of the Populist platform and they conducted a “fused” campaign for “free silver” (Silverites-Americans believed an unlimited quantities of silver would solve the nation’s economic crisis). Unhappy with the idea of Bryan and free silver, the conservative faction of “Gold Bug” ( currency should be based only on gold) Democrats, including Cleveland, broke away from the majority and put together a separate ticket.

McKinley, Hanna, and Republicans

After blaming the Democrats for the Panic of 1893, the Republicans offered the American people the promise of a strong and prosperous industrial nation. The Republican platform proposed high tariff to protect industry and upheld the gold standard against unlimited coinage of silver.

Campaign

The defection of “Gold Bug” Democrats over the silver issue gave the Republicans an early advantage. Bryan countered by turning the Democratic-Populist campaign into a nationwide crusade traveling by train rousing millions of farmers and debtors that the unlimited coinage of silver was their salvation.

Hanna did most of the working of his campaign for McKinley by raising millions of dollars for the Republican ticket from business leaders who feared that “silver lunacy” would lead to runaway inflation, and used the money to advertise him in the media.

In the last weeks of the campaign, Bryan was hurt by

1) rise in wheat prices, which made farmers less desperate.

2) Employers telling their workers that factories would shut down if Bryan was elected.

On election day, McKinley carried all of the North and Midwest in a decisive victory over Bryan in both popular and electoral vote.

Significance of the Election of 1896 and the Demise of the Populist Party

The election of 1896 had a number of both short and long-term consequences on American politics:

1) marked the end of the stalemate and stagnation that characterized the Gilded Age

2) the defeat of Bryan and the Populist free-silver movement initiated and era of Republican dominance (7 of the next 9 elections)

3) It was now a party of business, industry, and a strong national government.

McKinley was lucky to take office just as the economy began to revive. Gold discoveries in Alaska in 1897 increased the money supply under the gold standard, which resulted in the inflation that the silverites had wanted. Farm prices rose, factory production increased, and the stock market climbed. The Republicans honored their platform by enacting high tariffs and making gold the official standard of the US currency. As leader during the war with Spain in 1898, he helped to make the US a world power.

The Populist Party declines after 1896 and soon ceased to be a national party. In the South, Populist leaders gave up trying to unite poor blacks and whites, having discovered the hard lesson that racism was stronger than common economic interests. Ironically, in defeat, much of the Populist reform agenda, such as the graduated income tax and popular election of senators was adopted by both the Democrats and Republicans during the reform-minded Progressive Era (1900-1918).

The Progressive Era 1901-1918

Industrialization, immigration, and urban expansion were the major elements in the dramatic growth that the US experienced during the last quarter of the 19th century. Accompanying this growth were both old and new concerns and problems about the lives of many Americans.

By the turn of the century, a reform movement had developed that included a wide range of groups and individuals with a common desire to improve life in the industrial age. Their ideas and work became known as progressivism, because they wanted to build on the existing society, making moderate political changes and social improvements through government action. Most Progressives were not revolutionaries but shared the goals of limiting the power of big business, improving democracy for the people, and strengthening social justice.

It should be recognized that while the Progressives did not cure all of America’s problems, they improved the quality of life, provided a larger role for the people in their democracy, and established a precedent for a more active role for the federal government.

Origins of Progressivism

Although the Progressive movement had its origins in the state reforms of the early 1890’s, it acquired national momentum only with the dawn of a new century and the unexpected swearing into office of a young president, Theodore Roosevelt, in 1901. So enthusiastic did middle-class Americans become about the need to adjust to changing times that their reformist impulse gave a name to an era: The Progressive Era.

It lasted through the Republican presidential of Roosevelt (1901-1909) and William Howard Taft (1909-1913), and the first term of the Democrat, Woodrow Wilson (1913-1917). US entry into WWI in 1917 diverted public attention away from domestic issues and brought the era to an end- but not before major regulatory laws had been enacted by Congress and various state legislatures.

Attitudes and Motives

Entering a new century, most Americans were well aware of how their country was rapidly changing. A once relatively homogenous, rural society of independent farmers was becoming an industrialized nation of mixed ethnicity centered in the growing cities. For decades, middle class Americans had been alarmed by the rising power of big business, the increasing gap between rich and poor, the violent conflict between labor and capital, and the dominance of corrupt political machines in the cities. Most disturbing to minorities were the racist, Jim Crow laws in the South that relegated (demotion) African Americans to the status of second-class citizens. Crusaders for women’s suffrage added their voices to the call for political reform and greater democracy.

Who Were the Progressives?

Unlike the Populists of the 1890’s, whose strength came from rural America, citizens active in the Progressive movement were chiefly middle-class residents of the US cities. The urban middle-class had steadily grown in the final decades of the 19th century. In addition to doctors, lawyers, and ministers, and storekeepers, there were now thousands of white-collar office workers and middle manager employed in banks, manufacturing firms, and other businesses. Members of this business and professional middle class took their civic responsibilities seriously. They were disturbed about what might happen to American democracy from such conditions as unrest among poor, excesses of the rich, corruption in government, and an apparent decline in morality (innately right or wrong). A missionary spirit inspired certain aspects of middle-class progressivism. Protestant churches preached against vice (vicious) and taught a code of social responsibility, which included caring for the poor and the less fortunate and insisting on honesty in public life.

The Social Gospel popularized by Walter Rauschenbusch was an important element in Protestant Christians’ response to the problem of urban poverty.

What was the Progressives’ philosophy?

Without doubt, the Progressives- like American reformers before then- were committed to the democratic values and shared in the belief that honest government and just laws could improve human condition.

Progressive thinkers adopted a new philosophy of pragmatism (practical, approach to morals, ideals, and knowledge) because it enabled them to challenge fixed notions that stood in the way of reform. For example, they rejected laissez-faire theory as impractical. The old standard of rugged individualism no longer seemed viable in a modern society dominated by impersonal corporations.

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