The Gilded Age & Corruption
Essential Question: How did economic growth impact NC and the US
during the Gilded Age?
First some background/review to US Politics and Business:
The “Politics of Equilibrium”
1.
2.
3.
US Politics dominated by a Two-Party system: Democrats & Republicans
Intense voter loyalty to each of these parties
Well-Defined Voting Blocs
A.
B.
4.
Democratic Bloc: White southerners (preservation of white supremacy), Catholics, Recent immigrants (esp. Jews),
Urban working poor (pro-labor), Most farmers
Republican Bloc: Northern whites (pro-business), African Americans, Northern Protestants, Old WASPs (support
for anti-immigrant laws), Most of the middle class
Laissez Faire Federal Govt: From 1870-1900 Govt. did very little domestically
A. Main duties of the federal govt.:
A.
B.
C.
D.
Deliver the mail,
Maintain a national military,
Collect taxes & tariffs,
Conduct a foreign policy
5. The Presidency a Symbolic Office: Party Bosses Ruled, Presidents should avoid offending any groups in their party, and
President gave out Federal Jobs (think Jackson and Spoils System)
3 Main Factors of Corruption
1. Federal: think of the President
2. Local: think of cities and what were
called Political Machines
3. Corporate: think of the Robber Barons –
Rockefeller, Carnegie, J.P. Morgan, and
Biltmore
Federal Government & The Presidency
Credit Mobilier & Federal government: paying more for something than what it really costs
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Union Pacific employee Thomas Durant get into railroad building business
gains government contract to build transcontinental railroad giving an inflated estimate
his is only bid because of unscrupulous actions
Pays construction company lot less and profits the rest
1872 - President Grant's VicePresident and several Congressmen
received bribes from Credit Mobilier,
the construction company building the
Union Pacific Railroad, to
fraudulently bill the government.
Federal Government & The Presidency
The Presidency & Patronage (Spoils System):
• Patronage: give government jobs to people that helped you get elected
• People usually not qualified to do the work 7 these individuals used jobs for personal gain
• Pendleton Civil Service Reform Act changed this by making people pass a Civil Service Exam
Local-City Corruption – Political Machines
• Organized group that controlled activities of a political party in a city by taking advantage of the
needs of the immigrants and urban poor.
• Ensured voter loyalty by providing jobs and social services to immigrants’ most pressing problems
• Jobs, housing, healthcare, licenses
• Structure of Political Machines:
• City Boss: typically but not always, a mayor
• Controlled jobs, business licenses, and influenced the court systems
• Ward Boss and then Precinct Captains: 1st or 2nd generation immigrants, helped new immigrants with
jobs, housing, and naturalization in exchange for votes
Political Machine Corruption – Graft & Scandal
• Voter Fraud: use of fake names, multiple votes, using pets’ names to ensure a political victory at
the ballot
• Graft: (Bribes & Kick Backs) the illegal use of political influence for personal gain
• Bribe: official takes money from a citizen and then ensures citizen will get what they want
• Kick Back: typical example is in construction
• Elected official guarantees company gets the job at an inflated price, the difference goes
into official’s pocket
Political Machine Example
Boss Tweed – William M. Tweed: head of famous
Tammany Hall, New York City’s powerful Democratic
political machine
• He was a bookkeeper & volunteer firemen
• Worked his way up in political machine
• Plundered over $30 million 19 century money from
NYC
Corporate Corruption – Robber Barons
Companies develop from small businesses into corporations and then into Trusts
Trusts: a group of independent organizations formed to limit competition by controlling the production and
distribution of a product or service.
Also: Corporate Trust acts as a financial manger for the task of handling the corporation’s financial assets.
• Robber Baron practice: build up multiple companies doing same thing, move all money into one of the
companies and then file bankruptcy in the others