AP US HISTORY
“SETTLING THE WEST AND
BECOMING AN INDUSTRIAL
SOCIETY”
Unit 6
FOCUS ON WHILE READING:
 Role
of the State and Federal Government
in promoting Big Business
 The Rise of the Corporation
 Support and Opposition to Laissez-Faire
Economics
 Rise of Labor Unions
 Supreme Court Cases that affected Labor
Unions and the Growth of Big Business.
INTRODUCTION TO INDUSTRIALIZATION
In 1877, most of the nation’s population was still
living in agricultural areas, with few major urban
exceptions.
 By 1900 the urban population of the United
States had grown by three times that of just
thirty years earlier.
 By 1920 more Americans lived in the cities than
on farms representing a major cultural shift in
national social norms.
 A first time visitor to New York City may find
himself in awe of the new marvels of city life, but
would also soon become acquainted with the
“dark side” of urbanization.

UNIT 6.1: THE RISE OF
INDUSTRIALIZATION IN AMERICA
What signs pointed to the growth of the
United States as an industrial powerhouse?
 How did American industrialization branch
out from New England and impact every
region of the United States?
 What role did the Government play in the
industrialization of the United States?
 Who were the “Captains of American
Industry” that spawned the rise of the
Corporation in the United States?

UNIT 6.1: THE RISE OF
INDUSTRIALIZATION IN AMERICA

What signs pointed to the growth of the
United States as an industrial powerhouse?







Gross National Product increased by 56%
between 1869 and 1913.
Due to new technological developments
production of wheat and corn had grown by
200% between 1860 and 1900.
Coal production increased by 2000%
Petroleum production was up 9000%
Steel production up 10,000%
Over 150,000 miles of new railroad track was
laid between 1865 and 1895
By 1910 the United States accounted for 1/3 of
the world’s manufacturing capacity.
UNIT 6.1: THE RISE OF
INDUSTRIALIZATION IN AMERICA

How did American industrialization branch
out from New England and impact every
region of the United States?
Steel and Lumber production made
Birmingham, Alabama and Memphis, Tennessee
the jewels of the “New South”.
 Availability of cheap labor, resistance to labor
organizations, acceptance of capitalism, and
well-developed transportation and
communication systems helped industrialize
the South.
 Cattle Ranching, Mining, the growth of the
Transcontinental Railroad allowed the west to
industrialize during this period.

UNIT 6.1: THE RISE OF
INDUSTRIALIZATION IN AMERICA

What role did the Government play in the industrialization
of the United States?







Very important was the protective tariff imposed by the Federal
Government (The Morrill Tariff)
The Federal and State governments initiated a boom in Railroad
construction through land grants and loans. (The Pacific Railroad
Act)
By encouraging the settling of the west the Federal Government
created a national market for Eastern manufactured goods. (The
Homestead Act of 1862).
The Federal Government’s loose immigration policies created a
large pool of unskilled workers, but by consequence drove down
wages and inspired intense nativism.
The Federal Government left large-scale business virtually untaxed
to encourage investment and development.
State and Federal Court systems were used to prevent regulation of
Big Business. (“The Supreme Court became the handmaiden of
private enterprise”)
Trade Unions were suppressed.


The Supreme Court fortified protection of private enterprise under the
“due process” shield of the 5th Amendment
The Police, National Guard, and U.S. Military was also used to suppress
Union activities.
UNIT 6.1: THE RISE OF
INDUSTRIALIZATION IN AMERICA

Who were the “Captains of American Industry” that
spawned the rise of the Corporation in the United States?
A poor, Scottish immigrant, Andrew Carnegie soon came to
dominate the Steel Industry.
 Carnegie built his monopoly through “vertical integration”
buying up all of the components necessary for the production
and distribution of steel.
 After selling his company to J.P. Morgan he retired and became
a philanthropist (he was the poster-child for a Captain of
Industry)
 John D. Rockefeller’s Standard Oil Company controlled 90% of
America’s oil industry.
 Rockefeller became the face of the “Robber Barons” (ruthless
businessmen that crushed their competitors and abused the
worker and consumer).
 He used numerous “extralegal” methods to build his monopoly.
 Like his father, Cornelius, William Vanderbilt dominated the
Railroad industry.
 An investment banker, J.P. Morgan orchestrated the consolidation
of the Railroad industry and bought Carnegies Steel interest to
form U.S. Steel (the nation’s first Billion-dollar company).
 J.P. Morgan cancelled his reservation on the maiden voyage of
the Titanic.

UNIT 6.2: RISE OF MONOPOLY
CAPITALISM
How are monopolies built?
 What methods do the Monopolies use to
maximize profit?
 How can Industrialists minimize organized
labor unions that form in resistance of their
business practices?

UNIT 6.2: RISE OF MONOPOLY
CAPITALISM

How are monopolies built?

The Capitalist Class has to be in a position to
dominate the free market system.
Regulate production
 Create stable markets
 Set prices and wages


Wealth then needs to be consolidated into the
hands of just a few influential people.
Use of new technologies like the steam engine,
conveyer belt, and use of better construction
materials.
 Utilize a huge labor force of men, women, and
children
 Construct large-scale factories and production
centers
 Accumulate an enormous amount of capital

UNIT 6.2: RISE OF MONOPOLY
CAPITALISM

What methods do the Monopolies use to
maximize profit?






The wealthy capitalist must then eliminate
competition.
Use pools, Gentlemen’s Agreements, Mergers,
Holding Companies, and Conglomerates.
Cut prices to drive competitors with less
capital out of business
Introduce new labor-saving technology when it
is profitable to do so
Research innovations in industrial and
managerial techniques
Industrial spying
UNIT 6.2: RISE OF MONOPOLY
CAPITALISM

How can Industrialists minimize organized
labor unions that form in resistance of their
business practices?





Give the workers a choice of whether or not to
join a union (run an “open shop”) and give
incentives for not joining unions.
Use “Scabs” if your workers do go on strike
Utilize government connections to suppress
Union activities (court injunctions)
Blacklist Union organizers
Divide the working class through differentiated
wages (usually based on race or gender).
UNIT 6.2: RISE OF MONOPOLY
CAPITALISM

How are monopolies built?

Once these are accomplished different types of monopolies can be
formed.
 Vertical Merger: Vertical Mergers occur when an industrialist
acquires each of the components necessary for the entire
production and distribution process of his product.


Horizontal Merger: Horizontal Mergers occur when an
industrialist forces his competitors out of business and is able to
dominate a particular phase of the production of a commodity.




For example Carnegie bought up land rich in iron-ore, Refineries
to employ the Bessemer Process, Railroad and Shipping
Companies, etc.
For example Rockefeller knew that refining oil was much more
profitable than drilling for it, so he drove price down and put his
competitors out business.
Trust: Method of running several companies as if they are one
entity, typically would allow the Trust to fix prices in an
industry. (typically synonymous with monopolies)
Holding Company: A Company that owns other companies, it
may not produce any goods or services itself. Gives the owner
the ability to own or have influence over many companies.
Conglomerate: A combination of two or more companies that
engage in different types of economic activity. (often a feature of
Horizontal mergers).
UNIT 6.3: THE ERA OF RAPID CAPITAL
ACCUMULATION
What was life in the Big Cities like for the
urban worker in this new industrial age?
 How did the Economists justify laissez-faire
economics during this period?
 In what ways did authors, ministers, and
even industrialists themselves justify
laissez-faire economics during this period?
 Is anybody sounding an alarm about the
abuses of unregulated capitalism?

UNIT 6.3: THE ERA OF RAPID CAPITAL
ACCUMULATION

What was life in the Big Cities like for the
urban worker in this new industrial age?
By the late 1800s many Americans were living
in squalor and despair in the urban centers of
the United States.
 Wage earners lived in overcrowded cities,
constantly exposed to disease, crime, fire, and
poor sanitation. Life was to say the least
severe.
 Big Business, to keep its own subsidies flowing,
urged the government to suppress social
spending to deal with poverty issues.
 Although there was a few private organizations
forming to provide aid, the urban poor were
(for the most part) left to their own devices.

UNIT 6.3: THE ERA OF RAPID CAPITAL
ACCUMULATION
 How did the Economists justify laissez-faire
economics during this period?




In 1776 Adam Smith published The Wealth of
Nations, the Bible for Laissez-Faire Economists.
Smith argued that prices and wages and supply
and demand were already regulated by the
“invisible hand” (a self-seeking equilibrium) of
the marketplace.
Smith assumes that the industrialist would never
sell a commodity to the consumer at a price they
could not afford, nor would he offer wages that
are unattractive to the worker.
The industrialist will naturally seek a balance
between cost and profit. This will bring a natural
balance to supply and demand free of
Government’s artificial influence.
UNIT 6.3: THE ERA OF RAPID CAPITAL
ACCUMULATION

In what ways did authors, ministers, and even industrialists
themselves justify laissez-faire economics during this period?

Herbert Spencer




Horatio Alger



He wrote “rags-to-riches” stories that popularized the notion that through selfsacrifice, determination, and hard work one could overcome poverty.
His works became the inspiration of those seeking the “American Dream”
Russell Cornwell



Spencer, a British Social Philosopher, developed the theory of Social Darwinism,
which was popularized in the U.S. by Yale Professor William Graham Sumner.
Government should not provide assistance to those who could not make it on
their own, but rather protect the wealthy for it was through them that the
species would be further developed.
This became the rallying cry of the Robber Barons as they developed Monopoly
Capitalism.
A Baptist Minister, his “Acres of Diamonds” sermon asserted that it is your duty
to get rich and that it is wrong to be poor. Now, not only were the poor destitute,
but they were morally offensive as well.
Shakespeare once wrote that “The fault…is not in our stars, but in ourselves,
that we are underlings”
Andrew Carnegie


Wealthy industrialist, he wrote “The Gospel of Wealth” explaining why he
became a philanthropist in his retirement.
It is the duty of the wealthy, not the government, to be society’s benefactor.
UNIT 6.3: THE ERA OF RAPID CAPITAL
ACCUMULATION

Is anybody sounding an alarm about the abuses of
unregulated capitalism?

Journalists:



Small Producers:


Consumers began demanding investigations of how Corporations
were using their influence to charge exorbitant prices.
Social Reformers:



Farmers and small businessmen warned of inflated shipping rates
and unfair business practices that would soon destroy the economy.
Consumers:


Edward Bellamy, Henry George, and Henry Lloyd all wrote articles
calling for government regulation that would maintain the
competitive nature of capitalism.
Bellamy’s Looking Backward envisioned a future world where
socialist principles were applied in a “blended” economy.
The Social Gospel, founded by Baptist Minister Walter
Rauschenbusch, began sounding alarms about the condition of the
Urban Poor.
Jane Addams and other intellectuals began the Settlement House
Movement to provide assistance to the poor.
Radicals and Revolutionaries:

Anarchists, Marxists, and Socialists (led by Eugene V. Debs)
maintained that capitalism was by nature exploitive and must be
replaced by a more humane economic system.
UNIT 6.4: THE RISE OF THE LABOR
UNIONS
What conditions prompted the rise of Labor
Unions?
 What were some of the early labor unions to
form and on what were they focused?
 How was the strike used to combat the
abuses of the Robber Barons and how did
the Robber Barons respond?
 What event turned the American public
against Labor Unions and radicalized the
attempt to protect workers?

UNIT 6.4: THE RISE OF THE LABOR
UNIONS

What conditions prompted the rise of Labor Unions?

Low wages



Harsh Working Conditions


No safety standards, no emissions standards, no workman’s
compensation, few pension plans, etc.
Long Hours


Many worked at subsistence wages, by this meaning just enough
to survive in squalor.
African Americans, Women, and Children were paid much less.
Workers typically worked 6-7 days per week on 12-14 hour
shifts.
Existence of Child Labor

Children working in factories were not in school, not to mention
damage to health and development.
Wages differentiated by race and gender
 All the while they were suffering, the Industrialists
were raking in enormous profits.

UNIT 6.4: THE RISE OF THE LABOR
UNIONS

What were some of the early labor unions to form and
on what were they focused?

The National Labor Union (NLU)




The Knights of Labor



Led by Terrence Powderly, who preferred third party arbitration
over strikes. (their methods were much less radical than their
aims).
A rising star in the labor movement, they faded in the aftermath of
the Haymarket Square Riot.
The American Federation of Labor (AFL)



Organized workers regardless of race or gender, skilled or
unskilled, agrarian or industrial.
Won an eight-hour workday for federal employees.
Goals included higher wages, gender and racial equality, and the
eight-hour workday.
Led by Samuel Gompers, this union was open exclusively to skilled
workers.
The most successful union of this period, they would become even
more powerful in the twentieth century.
The Industrial Workers of the World (IWW)


The “Wobblies” led by William “Big Bill” Heywood believed that the
workers’ ownership of the means of production was the only
solutions to the exploitation of monopoly capitalism.
This Union was extremely radical and prone to violence.
UNIT 6.4: THE RISE OF THE LABOR
UNIONS

How was the strike used to combat the abuses of the Robber
Barons and how did the Robber Barons respond?

Railroad Strike of 1877




The Homestead Strike of 1892





First major post-Civil War strike
Employees of the Baltimore and Ohio Railroad Company went on strike when
the company lowered their wages.
The Strike turned violent and President Rutherford B. Hayes called in the
U.S. Army to suppress the strike.
Despite high profits, Carnegie’s Steel Corporation cut wages.
Carnegie hired a private security firm, The Pinkerton Detective Agency, to
engage the strikers.
When the strikers opened fire on the Pinkertons, killing several, the
Pennsylvania State Militia was called in.
Out of funds, the Union itself called off the strike.
The Pullman Strike of 1894





During the Depression of 1893 the Pullman Company cut wages to workers to
keep stockholders dividends up.
The American Railway Union, led by Eugene V. Debs, organized a boycott of
the Railroad.
A Federal Court cited the Sherman Anti-Trust Act and ordered an injunction
to end the strike.
Striking workers continued their interference in defiance of the injunction.
President Cleveland was forced to send in the U.S. Military to protect “the
delivery of the U.S. Mail”.
UNIT 6.4: THE RISE OF THE LABOR
UNIONS

What event turned the American public against
Labor Unions and radicalized the attempt to protect
workers?





The Haymarket Square Riot at the McCormick Reaper
Works Factory in Chicago would be devastating blow to
the Labor Movement in the United States.
The protest organized at Haymarket Square was not
only to protest treatment of workers, but to also protest
the police department’s handling of protests.
Chaos erupted as an unknown assailant threw a bomb
that killed a number of police officers who were there
on orders to break up the demonstration.
Although there was no proof of their involvement, eight
anarchists (four of whom were eventually executed)
were arrested and charged in the case.
The American public blamed the Knights of Labor, and
trade unions in general, charging that they had become
radicalized (later associated with communism and
anarchy).
UNIT 6.5: THE SUPREME COURT, CONGRESS,
AND STATE LEGISLATURES ENTER THE FRAY
How did reform-minded state governments
use the 14th Amendment to protect their
people from the abuses of monopoly
capitalism?
 How were these efforts undermined by a
Pro-Business Congress and Supreme Court?

UNIT 6.5: THE SUPREME COURT, CONGRESS,
AND STATE LEGISLATURES ENTER THE FRAY

How did reform-minded state governments use
the 14th Amendment to protect their people
from the abuses of monopoly capitalism?
Some State Governments believed that the 14th
Amendment gave them commission to protect the
life, liberty, and property of their citizens.
 These government passed:








Housing Laws
Safety and Health regulations in the workplace
Regulation of Corporations whose behavior exploited
the consumer and capitalist system.
Sanitation Laws
Minimum Wage Laws
Maximum Work Hour Laws
Child Labor Laws
UNIT 6.5: THE SUPREME COURT, CONGRESS,
AND STATE LEGISLATURES ENTER THE FRAY

How were these efforts undermined by a Pro-Business
Congress and Supreme Court?

The Sherman Anti-Trust Act





Most historians believe this law was passed in the interest of
protecting the worker from abuse by the Corporations.
It was based on the premise that monopolies existed in obstruction
of the free market system.
However, the law’s key phrase “any combination or condition which
is in restraint of trade is illegal” would be used to attack Labor
Unions and break strikes.
The law would eventually be used by Progressives like Theodore
Roosevelt and William Howard Taft to break up Monopolies in the
early 1900s.
The United States v. E.C. Knight Company



The E.C. Knight Company owned 98% of the Sugar industry in the
United States.
In this case, despite the fact that this is a national corporation, the
Supreme Court ruled that since its individual factories refined sugar
in a particular state that they did not engage in interstate
commerce.
This meant the Federal Government had no jurisdiction with which
to attempt to regulate the company or break up its monopoly
through the Sherman Anti-Trust Act.
PRACTICE QUESTION #1
1.
Andrew Carnegie’s use of vertical integration
was significant in that it:
A.
B.
C.
D.
E.
Synthesized the various immigrant labor groups
into on cohesive productive force
Led to substantial cooperation between industry
and banking
Stimulated competition in the steel industry
Allowed a capitalist to control all aspects of the
production process
Ultimately led to the construction of massive steel
factories in Pittsburgh
PRACTICE QUESTION #2
2.
Which of the following statements accurately
reflects the impact that industrialization had on
the American worker?
A.
B.
C.
D.
E.
The standard of living for most workers had
declined by the late nineteenth century
The standard of living for most workers improved
by the late nineteenth century, but workers had
become mere mechanisms in the production process.
Many wage laborers ultimately saved enough of
their salaries to start their own businesses
Most workers came to develop a lasting economic
and social bond with their employers
Most workers experienced even higher wages and
even greater control over what they produced
PRACTICE QUESTION #3
3.
In the “Gospel of Wealth” Andrew Carnegie
articulated the view that:
A.
B.
C.
D.
E.
The wealthy are entitled to their riches and had no
responsibility to share it with others.
Only those born into wealth were the real economic
leaders of the nation
Religious leaders had a responsibility to convince
their parishioners that success was attainable to
those who worked hard
Capitalism and Christianity were intimately related
in the progress of individuals and nations
The wealthy were morally obligated to use some of
their wealth for the improvement of society
PRACTICE QUESTION #4
4.
By the late nineteenth century:
A.
B.
C.
D.
E.
The U.S. economy ranked fourth in the
industrialized world
The U.S. had surpassed France and Germany in
industrial output, but still lagged behind Great
Britain.
The U.S. economy had fallen to fourth in industrial
output behind Britain, France, and Germany
The U.S. economy was producing as much as
Britain, France, and Germany combined in many
sectors
The U.S. economy had not grown significantly since
the 1860s
PRACTICE QUESTION #5
5.
The Industrial Workers of the World differed
from the other major trade unions in that:
A.
B.
C.
D.
E.
It sought to negotiate and mediate its differences
with management
Unlike the other unions, it disdained using boycotts
and strikes against capital
Its objective was to eliminate the private ownership
of the means of production
It was recognized by capitalists as the legitimate
bargaining agent of its members
It was outlawed by the U.S. Government
PRACTICE QUESTION #6
6.
Which of the following would not be used by a
supporter of the capitalist system as it existed
in the Gilded Age?
Reform Darwinism
B. Social Darwinism
C. Russell Cornwell’s “Acres of Diamonds” sermon
D. The novels of Horatio Alger
E. Adam Smith’s “invisible hand”
A.
PRACTICE QUESTION #7
7.
In order to promote the interests of labor, trade
unions would support:
A.
B.
C.
D.
E.
The Open Shop
Corporate tax breaks
Subsistence Wages
Yellow-Dog Contracts
The Closed Shop
PRACTICE QUESTION #8
8.
The Railroad Strike of 1877:
A.
B.
C.
D.
E.
Was the first time a President ordered U.S. troops
to stop a strike
Led to significant wage increases for railroad
workers
Was the first time that management recognized the
legitimacy of a trade union
Was the only time in the nineteenth century that
government sided with the strikers
Led to significant improvements in worker safety
laws but not wage increases
PRACTICE QUESTION #9
9.
This capitalist created U.S. Steel, the nation’s
first “Billion Dollar Corporation”.
A.
B.
C.
D.
E.
Andrew Carnegie
J.P. Morgan
“Big Bill” Haywood
Cornelius Vanderbilt
John D. Rockefeller
PRACTICE QUESTION #10
10.
In United States v. E.C. Knight Company, the
Supreme Court ruled that:
A.
B.
C.
D.
E.
Trade unions that were on strike were in restraint
of trade
Monopolies such as the E.C. Knight Company were
illegal combinations
Since the company was involved in production and
not commerce, it fell under state jurisdiction
Monopolies were in restraint of trade
Vertical integration was not in restraint of trade
ANSWER KEY
1.
2.
3.
4.
5.
6.
7.
8.
9.
10.
D
B
E
D
C
A
E
A
B
C
FOCUS ON WHILE READING:
Presidential support for Big Business
 The efforts of the Grange, Farmers’ Alliances,
and Populists opposing Big Business’s control of
the marketplace.
 The Populist Agenda
 What brought the Populist and Democratic
Parties together in the late 1800s?

INTRODUCTION TO SETTLING THE WEST
AND POPULISM




The Republican Administrations of the late 1800s (a
neo-Federalist Party) did much to push the agenda of
Big Business and push the nation toward greater
industrialization.
By 1914 the United States (even though we did not
even know it) was the most powerful industrial nation
in the world.
In the process of industrialization the plight of the
farmer was neglected and forced many into
foreclosure, prompting a political movement to protect
farming interests and limit the influence of monopoly.
The Populists, though somewhat successful
regionally, were more important for their ideas than
for their successful legislation.
UNIT 6.6: POLITICS OF THE GILDED AGE




How did the Republican Presidents of the
Industrial Age contribute to the problems of
Patronage and “Do-Nothingism” following the
corrupt administration of Ulysses S. Grant?
In what ways did the Political Machines of this
period destroy American Democracy and
trample the urban working class in the process?
Was there anything positive that came from
these Political Machines?
What other groups or individuals were working
to help the urban poor and fight the corruption
of the Political Machines?
UNIT 6.6: POLITICS OF THE GILDED AGE

How did the Republican Presidents of the Industrial
Age contribute to the problems of Patronage and
“Do-Nothingism” following the corrupt
administration of Ulysses S. Grant?
Rutherford B. Hayes tried to restore honesty to the
Presidency. He was a supporter of the Temperance
Movement (abolish alcohol), but was also a supporter of
restricting Chinese immigration.
 James Garfield (although he only served 4 months)
demonstrated the division within the Republican
Party: The Conservative Stalwarts, the Reform-minded
Half-breeds, and the anti-Patronage (Spoils System)
Mugwumps.
 Chester A. Arthur (originally supported by the
Stalwarts) pushed the Pendleton Civil Service Act
through Congress creating the Civil Service System
and ending Patronage (The Spoils System) and
nepotism in government hiring.
 Benjamin Harrison was a supporter of high protective
tariffs and generally deferred to Congress during his
weak Presidency.

UNIT 6.6: POLITICS OF THE GILDED AGE

In what ways did the Political Machines of this
period destroy American Democracy and trample
the urban working class in the process?





The most influential of the “political machines” of this
period was Tammany Hall, led by the infamous Boss
Tweed.
The Tweed Ring controlled the politics of New York
City and was responsible for rampant voter fraud,
bribes of city officials, and illegal contracts to various
businessmen in the city.
It is estimated that the Tweed Ring bilked New York
City of at least $200 Million during the reign over the
city.
Because Tweed was in control of who ran for what
office and how they were elected, he essentially ruled
New York City like a King, even though he himself was
never elected by the people.
All municipal revenue flowed through his fingers and
very little of this money went to helping the poor, what
little that did was primarily for the purpose of
perpetrating voter fraud.
UNIT 6.6: POLITICS OF THE GILDED AGE

Was there anything positive that came from
these Political Machines?
The only “silver lining” that existed around this
dark cloud of “Gilded Age” politics was that the
Political Machines did at least provide some
assistance to the poor at a time when State and
Federal Agencies were embracing Social
Darwinism and providing no aid at all.
 The shelter, employment, living assistance
provided by Tammany Hall and others came
with a price tag.
 Taking their assistance obligated you to
participate with voter fraud and other illegal
tactics to assist in getting their candidates
elected to office.

UNIT 6.6: POLITICS OF THE GILDED AGE

What other groups or individuals were working to help
the urban poor and fight the corruption of the Political
Machines?

The Social Gospel



The Settlement House Movement




Akin to the Second Great Awakening, this movement urged
congregations to get involved with social reform.
Walter Rauschenbusch maintained that the path to heaven was
through active faith, put your belief into action.
One of the most important manifestations of the Social Gospel was
the Settlement House Movement.
Intellectuals would purchase homes in rundown neighborhoods and
go live their operating community centers that provided educational
opportunities, shelter, food, etc. to the urban poor living in the area.
One of the most famous Settlement Houses was Hull House in
Chicago, operated by Jane Addams.
Thomas Nast




Thomas Nast was a political cartoonist.
He launched a campaign to bring down Tammany Hall.
He portrayed the Tweed Ring as a viscous Tammany Tiger bent on
destroying liberty, justice, and democracy.
His work ultimately resulted in the arrest of Boss Tweed and the
dissolving of Tammany Hall.
UNIT 6.7: THE TARIFF, THE GOLD
STANDARD, AND THE “BILLION DOLLAR”
CONGRESS
In what ways did the Protective Tariff
raised during the Civil War revive the twoparty system in American politics?
 What was the “Billion Dollar” Congress and
why was it called that?
 What elements supported an expanded
money supply, how did they propose to
expand the money supply, and what did
they stand to gain?
 What elements supported a limited money
supply, how did they stop monetary
expansion, and what did they believe was to
gain from this?

UNIT 6.7: THE TARIFF, THE GOLD
STANDARD, AND THE “BILLION DOLLAR”
CONGRESS

In what ways did the Protective Tariff raised
during the Civil War revive the two-party
system in American politics?





The Tariff issue of the late 1800s pitted Western
Farmers against Eastern Industrialists.
After the Civil War Southern Democrats aligned
with Northern Democrats to push for a lowered or
eliminated Tariff.
They argued that the Tariff caused higher consumer
prices and retaliatory tariffs abroad.
In 1888 the Tariff created a true division in
American politics.
The Republicans won the election convincing the
American Public that a lower tariff would cause an
economic catastrophe and mass unemployment.
UNIT 6.7: THE TARIFF, THE GOLD
STANDARD, AND THE “BILLION DOLLAR”
CONGRESS

What was the “Billion Dollar” Congress and
why was it called that?
After a brief stint with a Democrat President
(Grover Cleveland) the Republican Benjamin
Harrison was returned to the White House, where he
promptly safeguarded the Tariff.
 Republicans also won majorities in the House and
Senate, which they used to launch massive spending
projects.








The McKinley Tariff of 1890
The Sherman Silver Purchase Act of 1890
The Sherman Anti-Trust Act of 1890
A Negro Voting Rights Bill (defeated in Congress)
The Wilson-Gorman Tariff, further increasing the tariff
Increased monthly pensions to Civil War veterans and
their families.
Grover Cleveland was reelected in 1892, becoming
the only American President to serve two nonconsecutive terms in office.
UNIT 6.7: THE TARIFF, THE GOLD
STANDARD, AND THE “BILLION DOLLAR”
CONGRESS

What elements supported an expanded money
supply, how did they propose to expand the
money supply, and what did they stand to gain?
An expanded money supply would devalue the
money supply and create inflation that would drive
prices for goods and services up.
 Supporters included: Expectant Capitalists, Debtors,
and Farmers.




They would be able to borrow money at lower interest
rates.
They could pay off loans faster with inflated dollars.
They would increase profit from increased prices for the
commodities they produced.
They argued that the Depression of 1873 was caused
by the insistence on backing the United States’
money supply with Gold (The Gold Standard).
 They believed that answer to the nation’s economic
woes was soft currency (greenbacks) and the
unlimited coining of silver.

UNIT 6.7: THE TARIFF, THE GOLD
STANDARD, AND THE “BILLION DOLLAR”
CONGRESS

What elements supported a limited money supply, how
did they stop monetary expansion, and what did they
believe was to gain from this?
Restricting the money supply creates a more valuable, stable
dollar. Increased value of money keeps prices for goods and
services low and allows the dollar to hold its value more
consistently over time.
 Supporters of this policy included Bankers, Entrenched
Capitalists, Creditors, and Investors.




They favored a “hard” currency backed by gold stored in U.S.
Government vaults (Fort Knox).
Gold-backed money is less susceptible to inflationary instabilities.
Their belief was that as the population expanded, which meant more
people and less gold, the value of gold would increase dramatically.
The Specie Resumption Act of 1875 removed all remaining
greenbacks from circulation leaving only “hard” currency that
was backed by the gold standard.
 Eventually the “Gold Bugs” would win this argument but the
United States is off the Gold Standard today, which is partly
responsible for issues related to inflation.

UNIT 6.8: THE FARMERS UNITE
What factors led to the boom in production
in the Agrarian Sector of the economy?
 Why was that increased productivity did
not result in increased profitability?
 What role did the Grange Movement play in
combating Railroad and Grain Elevator
Operator abuses? How did the Supreme
Court factor into this equation?
 What were the key components of the
Omaha Platform in 1892?
 What role did the election of 1896 play in
settling the debate between the Gold
Standard and Free Silver?

UNIT 6.8: THE FARMERS UNITE

What factors led to the boom in production
in the Agrarian Sector of the economy?






Improvements in the Cotton Gin
The introduction of Harvesters, Combines, and
Reapers that sped up the process of plowing,
planting and harvesting produce.
The Steel Plow first introduced by John Deere.
Specialization in agricultural production:
Cotton in the South, Wheat in the West, etc.
The time it took to grow and harvest crops was
cut in half during this period.
Beware that greater productivity does not
automatically equal greater profits.
UNIT 6.8: THE FARMERS UNITE

Why was it that increased productivity did not result in
increased profitability?






Grain Elevator Operators stored grain when it was not in
transit and charged excessively high rates for their services.
Even though Farmers found themselves with increasingly
less disposable income, manufacturers were charging higher
and higher prices for the commodities they produced.
Farmers are particularly dependent on credit to do business.
Banks during this period began raising interest rates on
loans and created a level of debt that was near impossible to
pay off.
New Harvesters and Combines became necessities, prices
went up dramatically.
The Railroads charged increasingly high shipping rates,
often changed rates without warning, and used numerous
extralegal means to maximize profits. (consequently the
Railroads became the focal point of farmer discontent
during this period).
In many cases the Railroads, Banks, and Manufacturers
were immune from government regulation and had free
hand to milk the Midwest Farmer for everything he had.
UNIT 6.8: THE FARMERS UNITE

What role did the Grange Movement play in combating
Railroad and Grain Elevator Operator abuses? How did the
Supreme Court factor into this equation?

By the mid-1890s prices for cotton, wheat, and corn were quickly
diminishing.


The Answer as stated by Mary Lease was to “raise less corn and more
hell!!!”
Many factors were causing the rising debt of the Nation’s farmers.




New technology that increased production drove prices down and drove
the farmer deeper into debt.
Land was less available, much had been given to the railroads or sold to
land speculators.
With tax breaks given to the Railroads, Grain Elevator Companies, and
Big Business that left more of the tax burden for everybody else
(especially farmers).
The cost of storing and shipping produce was extremely high.
Farmers’ Alliances quickly merged into what became known as the
National Grange of the Patrons of Husbandry (The Grange) and
became politically active.
 The Grange was particularly influential in the West and South and
passed numerous “Granger Laws” that attempted to regulate the
Railroads and Grain Elevator Operators.

UNIT 6.8: THE FARMERS UNITE

What role did the Grange Movement play in
combating Railroad and Grain Elevator Operator
abuses? How did the Supreme Court factor into this
equation?

Pelk v. The Chicago and Northwestern Railway (1876)



Munn v. Illinois (1877)





If Federal Law is not present, then States can establish their
own interstate trade regulations.
Victory for the Granger Laws
As long as property was “devoted to public use” the states could
place regulations on the railroads for the good of the public.
Sort of a Victory for the Granger Laws
The Court did rule that the States could not regulate “longhauls”, on which many farmers depended, so the Railroads
jacked up their prices on these runs.
Both the Pelk and Munn cases were based on using the 14th
Amendment to authorize the States to create jurisdiction of
matters related to Interstate Commerce.
Illinois v. Wabash (1886)


The Court reversed its ruling in Pelk, stating that the Federal
Government has jurisdiction over all interstate commerce.
Major defeat for the Granger Laws.
UNIT 6.8: THE FARMERS UNITE

What role did the Grange Movement play in
combating Railroad and Grain Elevator
Operator abuses? How did the Supreme
Court factor into this equation?
After the Courts ruling in the Wabash Case, the
Federal Government got involved.
 Congress passed the Interstate Commerce Act
creating the Interstate Commerce Commission.
 Under the ICC, certain rules had to be abided
by:

Reasonable Shipping Rates
 Advance warnings on any changes to rate schedules
 The ICC was able to use the courts to force the
Railroads into compliance.

UNIT 6.8: THE FARMERS UNITE

What were the key components of the Omaha Platform
in 1892?
By 1890 the various Farmers’ Alliances merged into what
became known as the National Farmers’ Alliance and
Industrial Union.
 This group would form a set of proposals that would later be
adopted by the Populist Party as the Omaha Platform in the
election of 1892.











Nationalization of the Railroads and other industries
Free and unlimited coining of silver
Graduated Federal Income Tax
Any excess lands that had been granted to the Railroads should be
reclaimed by the Federal Government.
Labor Unions should be granted the 8-hour Workday and have the
right to collective bargaining guaranteed
Federal storage facilities would allow farmers to sell their product
when value was high and store it when value was low.
Immigration should be restricted in order to limit the work force
Groups like the Pinkertons are banned from breaking up strikes
Increased democratization: Direct election of Senators, Secret
Ballot, One Term Presidencies, increased use of the
initiative/recall/referendum.
Although the various “Farmers’ groups” had moderate success
at the State and Congressional levels, they fell short of
electing a President.
UNIT 6.8: THE FARMERS UNITE

What role did the election of 1896 play in settling the debate
between the Gold Standard and Free Silver?
The Populist Movement (as this Farmers’ Crusade became known)
was revolutionary in its attacks on Monopoly Capitalism and
Laissez-Faire economics.
 The Populists also challenged the status quo by trying to forge a
political alliance between poor whites and African Americans.
 Many, like Coxey’s Army, were simply fed up with the hardships
they faced at the hands of monopoly capitalism.




Led by Jacob Coxey, these Populists marched to Washington D.C. to
demand work-relief for the unemployed suffering from the depression of
1893.
Several of Coxey’s followers were arrested, not for rioting but for walking
on the grass. The rest were dispersed by police.
The Populist Party was the definition of a “Coalition”









Grangers
Farmers’ Alliances
The Greenback Party
Knights of Labor
Socialists
Free Silver Party
Prohibitionists
Women’s Rights Activists
Anarchists
UNIT 6.8: THE FARMERS UNITE

What role did the election of 1896 play in
settling the debate between the Gold Standard
and Free Silver?
In essence the Populist Party was a diverse group of
deeply passionate people opposed to the evil of
Monopoly Capitalism.
 In 1892 the Populist Candidate, James Weaver, won
1 million votes and even won electoral college votes,
extremely rare for a third-party candidate. Other
results were much better:





1500 Populists were elected to State Legislatures
3 Populist Governors were elected
5 Populists were elected to the US Senate
10 Populists were elected to the US House of
Representatives
Not surprisingly, the Populist Party faired poorly in
the South (their courting of African Americans
soured many Southern Democrats).
 Very surprisingly, they also faired poorly in the
Northeast among hot Labor Union Activism.

UNIT 6.8: THE FARMERS UNITE

What role did the election of 1896 play in settling the debate
between the Gold Standard and Free Silver?




In 1896 the Democrat Party nominated William Jennings Bryan
(only 36 at the time) as their Presidential Candidate after he
delivered the impassioned “Cross of Gold” Speech at the
nominating convention.
In a bold move, not unanimous within the party, the Populists also
nominated Bryan as their candidate.
Under the leadership of Marc Hanna, the Republican campaign
successfully blamed the Democrats for the Depression of 1893.
Other factors contributed to Republican victory in 1896:






The defection of the Gold Bugs from the Democrat Party
Temporary increases in Grain prices
Fear mongering by Republicans that a lower tariff would result in
massive unemployment.
In the end, the power of the Monopolies and their own inability to
“leap the hurdle of racism” despite common interests caused the
Populist Party to fade as a national influence.
The silver lining is that elements of the Omaha Platform would
reemerge later in the platforms of both the Republican and
Democrat Parties during the Progressive movement.
The most important contribution of the Populist Party is that
government is not a force to be overthrown, but to be redefined
and used to bring about opportunities for all citizens.
PRACTICE QUESTION #11
11.
All of the following were political objectives of
the Populists except which one?
A.
B.
C.
D.
E.
Government ownership of major industries such as
the railroads and telegraphs
Replacing the fixed income tax with a graduated
income tax
The free and unlimited coinage of silver
Direct election of U.S. Senators
Creating a national system of unemployment
insurance
PRACTICE QUESTION #12
12.
William Jennings Bryan became the
presidential candidate of both the Democrat and
Populist Parties in 1896 because of his support
for:
A.
B.
C.
D.
E.
High protective tariffs to protect domestic
industries
Unlimited and free coinage of silver
Nationalizing the railroad industry
Policies that would unite poor black and white
farmers
A single six-year term for Presidents
PRACTICE QUESTION #13
13.
A major reason why McKinley was able to
defeat Bryan in 1896 was:
A.
B.
C.
D.
E.
The Populists ultimately withdrew their support for
Bryan
The Republicans were split between gold and silver
advocates
American farmers experienced an increase in farm
prices during the campaign
Bryan’s repudiation of the silver cause during his
campaign
Most Democrats favored Cleveland over Bryan
PRACTICE QUESTION #14
14.
Coxey’s Army:
A.
B.
C.
D.
E.
Reflected discontent with the government’s
response to the Depression of 1893
Was the military wing of the Populist Party
Was the name given to supporters of Jacob Coxey’s
candidacy for President in 1896
Were strong advocates of the gold standard
Were Democrats who switched their political
allegiance to the Republicans in the 1896 election
PRACTICE QUESTION #15
15.
Which of the following did the nation’s farmers
advocate in the late nineteenth century?
A.
B.
C.
D.
E.
Government should reduce farmers’ costs by
providing farmers with seed and farm implements
The government should privatize the railroads
A sub-Treasury system should be established that
would allow farmers to sell their crops on the
market when prices rose
The use of federal troops to ensure farmers’ safety
against private security agents hired by the
railroads
A high protective tariff
PRACTICE QUESTION #16
16.
Which of the following did not lead to greater
productivity by farmers in the late nineteenth
century?
Iron and steel plows
B. The use of new farm machinery, such as harvesters
C. Improved cotton gins
D. Greater specialization of agricultural production
E. The rates charged by Grain Elevator Operators
A.
PRACTICE QUESTION #17
17.
In which Supreme Court case did the Court rule
that as long as property was “devoted to public
use”, states could place regulations on the
railroad for the good of the public?
A.
B.
C.
D.
E.
Pelk v. Chicago and Northern Railway
Munn v. Illinois
Illinois v. Wabash
Pollock v. Farmers Loan and Trust
Dred Scott v. Sanford
PRACTICE QUESTION #18
18.
Which industry, more than any other, became
the symbol and source of agrarian discontent in
the post-Civil War period?
The insurance industry
B. Companies that developed harvesters and combines
C. Railway Companies
D. Telephone and telegraph companies
E. Banks
A.
PRACTICE QUESTION #19
19.
Which of the following groups was not identified
with the Populist Party?
A.
B.
C.
D.
E.
Supporters of the Gold Standard
Anarchists
Knights of Labor
Grangers
Greenback Party
PRACTICE QUESTION #20
20.
The Specie Resumption Act of 1875:
A.
B.
C.
D.
E.
Led to a dramatic increase in the amount of silver
in the economy
Was a compromise bill that allowed for an equal
amount of gold and silver to be introduced into the
economy each month
Established the ratio of gold to greenbacks at 16:1
Removed all of the greenbacks from circulation
Dramatically inflated currency, which led to a
depression
ANSWER KEY
1.
2.
3.
4.
5.
6.
7.
8.
9.
10.
E
B
C
A
C
E
B
C
A
D