1869 - 1896

• Sarcastic name given to the three-decadelong-post- Civil War era by Mark Twain
• Age of Economic Growth
– U.S. begins its transition from a nation of farmers to a nation of industrialists

President
Ulysses S. Grant
Rutherford B. Hayes
James A. Garfield
Chester A. Arthur
Grover Cleveland
Benjamin Harrison
Grover Cleveland
Party
Republican
Republican
Republican
Republican
Democrat
Republican
Democrat
Years
1869-1877
1877-1881
1881-1881
1881-1885
1885-1889
1889-1893
1893-1897

Question
By looking at the previous table, what can you conclude about the time period post-
Reconstruction and 1900?

• “A few skunks can pollute a large area.”
– postwar atmosphere stunk of corruption
• Cynics defined an honest politician as one who, when bought, would stay bought

• Father of the American political cartoon
– Attacked social and political issues of the post-Civil
War period
• His focus was on imagery
• “L et’s stop them damn pictures. I don’t care so much what the papers write about
—my constituents can’t read—but damn it, they can see pictures.”

• Plagued by a cabinet full of shady individuals
– Credit Mobilier Scandal
– Whiskey Ring
• Plagued by economic Panic of 1873
– Exhausted markets
– Bankers made imprudent loans
– Worldwide economic collapse

Too much expansion of rails, mines, factories, and grainfields
Bankers made too many poor loans
Profits failed
Loans went unpaid

Question
CCOT
Relate the Panic of 1873 to a previous event
(something you learned in US I)
Can you relate it to a future event?

• Hayes-Tilden Standoff of 1876
• Compromise of 1877
– Democrats accepted Hayes in return for removing federal troops in the south

Question
Why Did Reconstruction End?

• Political Scandals
• Unstable Economy
• Need for national reform over region problems
• Passing of white reformers, forged by abolitionist fervor
– example: Charles Sumner

Question
What impact did the end to
Reconstruction have?
Abandonment of racial equality
End of Regional Warfare
Increase in class and ethnic conflict

• White southerners were back in the political saddle.
– Blacks faced unemployment, eviction, and physical harm
• Jim Crow
– segregation of public schools, public places and public transportation, and the segregation of restrooms, restaurants and drinking fountains for whites and blacks.
• Backed by Plessy v. Ferguson (1896)
– Separate but equal

• Presidents of nation’s four largest railroads collectively decided in 1877 to cut employees’ wages by 10%
– Working class struck back
• Govt sided with the railroads
– Fed Courts, US Army, state militias, local police all sided with big business

• Chinese Exclusion Act of 1882
– Stopped further immigration from China
• U.S. v. Wong Kim Ark (1898)
– 14 th Amendment
• Birthright citizenship

Question
What does it take for there to be Civil Service reform?
What problems did Civil Service reform create?

• Garfield is assassinated shortly after he is elected
– One positive outcome:
• It shocked politicians into reforming the spoils system
– Chester A. Arthur’s duty
• Pendleton Act of 1883
– Made compulsory campaign contributions from federal employees illegal
– Established the Civil Service
Commission

• Theodore Roosevelt (1858–1919), an ardent civil-service reformer, condemned the patronage system as
• “tending to degrade American politics…. The men who are in office only for what they can make out of it are thoroughly unwholesome citizens, and their activity in politics is simply noxious…. Decent private citizens must inevitably be driven out of politics if it is suffered to become a mere selfish scramble for plunder, where victory rests with the most greedy, the most cunning, the most brazen. The whole patronage system is inimical to American institutions; it forms one of the gravest problems with which democratic and republican government has to grapple.”

• James Blaine vs. Glover Cleveland
– Cleveland won
• First Democrat to take oath since Buchanan
• Party of disunion now controlled the Union
• Neither candidate served in Civil War
• Treasury Surplus
– Wanted to lower the tariff
• Lower prices for consumers
• Less protection for monopolies

• Presided over the “Billion Dollar” Congress
– Used money to pay pensions of Civil War vets.
– Passed McKinley Tariff Act of 1890
• Meant to protect Republican industry from foreign competition

• Coalition of disgruntled farmers and workers
– Led a slew of strikes throughout the nation
• Ex. Andrew Carnegie’s steel plant near Pittsburgh
– Homestead
• Homestead Strike
– Steelworkers were angry over pay cuts

Question

• Elected James Weaver
– 5% of electoral vote in 1892
• Mainly from midwest and western states
• Party Platform:
– Demanded inflation through free and unlimited coinage of silver at the rate of sixteen ounces of silver to one ounce of gold
– Graduated income tax
– Government ownership of the railroads, telegraph, and telephone
– The direct election of U.S. senators
– A one-term limit on the presidency
– The adoption of the initiative and referendum to allow citizens to shape legislation more directly
– Shorter workday
– Immigration restriction

Industrial millionaires were condemned in the
Populist platform of 1892:
“The fruits of the toil of millions are boldly stolen to build up colossal fortunes for a few
… and the possessors of these, in turn despise the Republic and endanger liberty.
From the same prolific womb of governmental injustice we breed the two great classes — tramps and millionaires.”

• First and only president to ever be reelected after defeat.
• President of a surplus and then a deficit
– Depression of 1893
• Laissez-Faire approach
– As depression got worse,
Cleveland turned to J.P. Morgan for a loan to restore confidence

• Back and forth issues over the following:
– Tariffs
– Money Question
• Silver/Gold Standard
– Rights of Labor
– Civil Service and Spoils System
• Clearly, the best men were not in politics?
– But Why?

• In a famous series of newspaper interviews in 1905, George Washington Plunkitt (1842–1924), a political “boss” in the same Tammany Hall Democratic political “machine” that had spawned
William Marcy (“Boss”) Tweed, candidly described his ethical and political principles:
• “Everybody is talkin’ these days about Tammany men growin’ rich on graft, but nobody thinks of drawin’ the distinction between honest graft and dishonest graft. There's all the difference in the world between the two. Yes, many of our men have grown rich in politics. I have myself.
I've made a big fortune out of the game, and I'm gettin’ richer every day, but I've not gone in for dishonest graft—blackmailin’ gamblers, saloonkeepers, disorderly people, etc.—and neither has any of the men who have made big fortunes in politics.
• “There's an honest graft, and I'm an example of how it works. I might sum up the whole thing by sayin': ‘I seen my opportunities and I took ‘em.’
• “Just let me explain by examples. My party's in power in the city, and it's goin’ to undertake a lot of public improvements. Well, I'm tipped off, say, that they're going to lay out a new park at a certain place.
• “I see my opportunity and I take it. I go to that place and I buy up all the land I can in the neighborhood. Then the board of this or that makes its plan public, and there is a rush to get my land, which nobody cared particular for before.
• “Ain't it perfectly honest to charge a good price and make a profit on my investment and foresight? Of course, it is. Well, that's honest graft.”

1865 - 1900

Question
Why weren’t the best men in politics?

• Industrial rather than agricultural
• More exports than imports
• More railroads
• Foreign investment, labor, trade, and technology combined to make all thing possibilllllllllllllllllllllle!

Question
How did the railroads benefit the government?
How did the railroads benefit those who owned them?
How was it that the railroad companies were
“shadier” than trees?

• long term preferential rates for postal service and military traffic
• Did none of the work
• Loans to railroad companies were repaid
• Good for America
– States were bound together
– National unity
– Economic value
– Settlement Value

• Pacific Railway Act of 1862
– Received $16,000-48,000 per mile of track
– Received 20 sections (each being a square mile) of land for every mile of track laid
– Could sell that land at a profit
– Could use tracks as collateral for loans

• Frontier Villages became cities overnight
– Those that were passed became ghost towns
• Communities fought one another for the privilege to play host
• Central Pacific- not shady
• Union Pacific- bribed Congressmen

Question
Why is the transcontinental railway line such a big deal?

• Emerged as the nation’s biggest business
– Helped the West immensely
• Opened up the west and all its resources
• Stimulated mining and agriculture
• Brought immigrants to the farms
• Allowed people to be less self-sufficient

• Stockwatering , abuse, bribes, freebies, cooperation, and pools were associated with the railroad industry
• Up until now, government didn’t interfere with business.
– This was about to change

• Wabash, St. Louis & Pacific RR Co. v. Illinois
– Individual states had no power to regulate interstate commerce
• Job only for Federal govt
• Interstate Commerce Act of 1887
– Prohibited rebates and pools
– Required railroads to publish their rates openly
– Forbade unfair discrimination against shippers
• Set up the Interstate Commerce Commission (ICC) to administer and enforce the new legislation
– First large scale attempt to legislate business in the interest of society at large

1. Factories
2. Transportation
• Railroads
3. Natural Resources
• Coal
• Lumber
• Oil
• Iron
4. Liquid Capital

• American market became huge
– Need for mass production methods
– Cheap transportation
– Unskilled Labor: immigrants
• There was a large population ready to consume
• Goal: create quality products at a good price in large quantities, and market it

• Most versatile inventor of his time
– Turned night into day
How do you think the light bulb revolutionized industry and society as a whole?

Business Tycoons during the
Gilded Age and Industrial Age
Andrew Carnegie
John D. Rockefeller
J.P. Morgan

Robber Barons
• Big businesses that bought up or squeezed out the competition
• Swindled the poor
Captains of Industry
• Helped create jobs
• Helped America industrialize and grow
• Gave Back
– universities, museums, libraries

• Government for the most part took a laissez faire approach to dealing with business
• Plutocracy
– Government by the wealthy

Business leader
John D. Rockefeller
Andrew Carnegie
Cornelius Vanderbilt
Industry
Oil
Steel
Railroads

• Vertical Integration
– Used by Carnegie
• Horizontal Integration
– Used by Rockefeller
• Interlocking Directorates
– Used by J.P. Morgan

Clark, Payne &
Co, OH
Hanna, Baslington
& Co, OH
Atlantic Refining
Co, OH
Charles Pratt &
Co, NY
Imperial Refining
Co, PA
Chess, Carley &
Co, KY
Standard Oil
Company

• Brought steel to America
– Operated out of Pittsburgh (steel city)
– Used the Bessemer process to make cheap steel
• Sold his company to J.P. Morgan ($400 million)
Andrew Carnegie (1835 –1919) wrote in 1889,
“The man who dies leaving behind him millions of available wealth, which was his to administer during life, will pass away
‘unwept, unhonored, and unsung,’ no matter to what uses he leaves the dross which he cannot take with him. Of such as these the public verdict will then be: ‘The man who dies thus rich dies disgraced.'”

• Pays Andrew Carnegie $400 million for his company
– Joined the steel industry into U.S. Steel
• Interlocking Directorates
– Members of a corporate board of directors serving on boards of multiple corporations
He did not believe that “money power” was dangerous, except when in dangerous hands —and he did not regard his own hands as dangerous.

• John D. Rockefeller
– Joined the oil industry into Standard Oil
• Kerosene oil replaced whale oil
• Electric replaced kerosene oil
– The invention of the automobile saved the oil industry

1. George Washington
2. Thomas Jefferson
3. Lewis and Clark
4. Abraham Lincoln
5. Sitting Bull
6. Alexander G. Bell
7. Thomas Edison
8. Henry Ford
9. Wright Brothers
10. Margaret Sanger
11. Albert Einstein
12. FDR
13. Louis Armstrong
14. James Watson
15. MLK Jr.
16. Muhammad Ali
17. Andrew Carnegie
18. Bill Gates
19. John D. Rockefeller
20. Steve Jobs

PUBLIC SHAREHOLDERS
Give money to a company in exchange for share ownership
BOARD OF DIRECTORS
Elected by shareholders to set business direction and protect company
MANAGERS
Hired by the board of directors. Run the company and hire workers
EMPOLOYEES
Carry out the company’s jobs

• Protective Tariffs
– Taxes that make imported goods cost more than those made locally
• Laissez-Faire
– Businesses operate under minimal government regulation
• “Hands off”
• Trust
– group of separate companies that are placed under the control of a single managing board in order to form a monopoly
• Monopoly
– Only supplier of a commodity and controls entire industry
• No competition

Capitalism Socialism
• Private control of property and income
• Public control of property and income
• Free enterprise
– You control your destiny
• Wealth distributed equally

• Individuals won their stations in life by competing on the basis of their natural talents
– Wealthy demonstrated greater ability than poor
• Capitalism and Social Darwinism
– Wealth = Most Fit
• Government disrupted natural selection by giving aide
• Nation grows stronger when its best people rise to the top

• Sherman Anti-Trust Act
– Outlawed trusts that operated “in restraint of trade or commerce among the several states”
• Bigness, not badness, was the sin
• Act was ineffective
– Its paper jaws got some teeth in 1914
• At least corporations were on notice

• Northern capitalists brought the “mills to the cotton”
– Cheap labor
• Paid half the rate of a northern worker
– Often paid in credit at a company store
» Similar to sharecropping system
Henry W. Grady (1851 –1889), editor of the Atlanta Constitution , urged the new South to industrialize. In a Boston speech in 1889, he described the burial in Georgia of a Confederate veteran:
“The South didn't furnish a thing on earth for that funeral but the corpse and the hole in the ground…. They buried him in a New York coat and a Boston pair of shoes and a pair of breeches from Chicago and a shirt from Cincinnati, leaving him nothing to carry into the next world with him to remind him of the country in which he lived, and for which he fought for four years, but the chill of blood in his veins and the marrow in his bones.”

Question

• New social and economic opportunities thanks to the growth in technology
– Gibson Girl
• Women’s growing independence
– Career opportunities
» Typewriters
» Telephone Switchboard
» Stenographers

• 1860- half of all workers were self employed
• 1900- 2/3 of people depended on wages
• With wages came vulnerability:
– Swings of the economy
– Whims of the employer
• Job and wage security was needed

• Use railroad network to bring unemployed workers
• Pool vast wealth to wait out strikes
• Buy up the local press
• Put pressure on politicians
• Import strike breakers (scabs)
• Employ thugs to beat up labor organizers
• Call upon the federal courts
• Lock their doors against rebellious workers
• Make them sign oaths not to join a union
– Yellow Dog Contracts
• Create a “black list”

“I can hire one-half of the working class to kill the other half.”

• National Labor Union (1866)
– Unified workers across locales and trades
• Skilled, unskilled, and farmers
– Excluded Chinese, women, and blacks
» Panic of 1873 ended it
• Knights of Labor
– Carried the torch of the National Labor Union
• Included all workers in “one big union”
– Skilled, unskilled, women, blacks, some Irish, no Chinese

• Haymarket Square (1886)
– Fighting between workers and Carnegie Steel
• Dynamite bomb killed several dozen people, including police
– Brought the end to the Knights of Labor
» Seen as anarchists
• Flawed
– Included both skilled and unskilled
• Unskilled could be replaced
• Skilled could not (better bargaining position)
– Skilled split from the unskilled

• American Federation of Labor
– Union of skilled workers
• Led by Samuel Gompers
– No problem with capitalism
• Just wanted “more”
» Better wages, hours, working conditions
• Weapons
– Boycotts, walkouts, pooling funds, vote in “friends”

• Embraced only a small minority of all working people
– 3% in 1900
• Interesting Fact:
– As a sign of the time, Labor Day was made a legal holiday by act of Congress in 1894

Benefits Problems