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HIST 021 BOOK NOTES: CHAPTER 16
Give Me Liberty: An American History by: Eric Foner
CHAPTER 16: AMERICA’S GUILDED AGE 1870-1890
- October 28, 1886: dedication of Liberty Enlightening the World
o Edovard de Laboulgy: French educator
o Symbol of American freedom post Civil War
The Second Industrial Revolution
- From Civil War to early 1900’s: huge economic revolutions; causes:
o Abundant natural resources
o Growing supply of labor
o Expanding market for manufactured goods
o Availability of capital investment
o Government promoted industrial and agricultural development
 enacted high tariffs, granted land to railroads, removed Indians with army force for farming and mining
- The Industrial Economy
o Increase in factory production (mining, railroads) signaled transition for Lincoln’s American to an industrial society
o “One can hardly believe there has been a revolution in history so rapid, so extensive, so complete.” John Dewey
o By 1880- Census Bureau found a majority of the workforce engaged in non-farming jobs
o By 1890- 2/3 of American’s worked for wages rather than owning farm/business
o By 1913- US produced 1/3 of the world’s industrial output
o 1870-1920: 11 million American’s moved from farm to city and 25 million immigrated from other countries
o New York- major industrial city, symbolized urban growth
o Heartland of revolution was around Great Lakes (cities and factories producing iron and steel, machinery,
chemicals and packaged foods)
- Railroads and the National Market
o Railroads fueled second industrial revolution: fueled by private investment, massive grants of land and government
support.
o Increased national market for manufactured goods
o Standard National Gauge- trains from different companies to share one track (5 transcontinental lines by 1890s)
o Increased population meant increased mass production, mass distribution and mass marketing of goods
o Railroads spread of national chains and brand names
- The Spirit of Innovation
o 1866: Atlantic Cable- made electronic telegraph between US and Europe possible.
o 1870-1880: telephone, typewriter and handheld camera
o Thomas A. Edison- born in 1847 in Ohio; era’s greatest inventor
 Established new industries, public entertainment
 Economic activity: phonograph, light bulb, motion picture, a system for generating and distributing electrical
power.
 Opened first electrical generating station in Manhattan 1882 to benefit streetcars, factories and private
homes; General Electric
- Competition and Consolidation
o Market flooded with goods and federal monetary policies led to fall in prices.
o 1873-1897: The Great Depression
 railroads and other companies tried various means of bringing order to marketplace
 formed “pools” that divided up the markets between competing firms and fixed prices
 established “trusts”- legal devices where by the affairs of several rival companies were managed
by a single director.
 To avoid competition, many companies tried to control entire industries, but most companies were
overtaken
 1897-1904: 4000 companies vanished into larger ones
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U.S. Steel (created by J.P. Morgan by combining 8 large steel companies), Standard Oil and
International Harvester dominated major parts of the economy.
The Rise of Andrew Carnegie
o Business leaders accumulated huge economic power because of lack of personal or corporate income tax.
o Pennsylvania Railroad (under Thomas A. Scott) was nations largest corporation
o Andrew Carnegie- emigrated with his family from Scotland, worked in textile factory at 13
 Scott hired Carnegie as a private telegraph operator and by Civil War had promoted him to one of the PA
Railroads major management positions.
 During Depression, Carnegie tried to establish a “vertically integrated” steel company (one that controlled
every phase of the business from raw materials to transportation, manufacturing and distribution).
 By 1890s he dominated the steel industry (hundreds of millions of dollars).
 Complex of steel factories were most technology advanced in the world.
 Denounced the worship of money
 Distributed wealth to philanthropies especially public libraries
 Still ran company with dictatorial hand
 Ran factories non stop, 2- 12 hour shifts everyday (except July 4th)
Triumph of John D. Rockefeller
o Began his working career as a clerk in Cleveland, rose to dominate oil industry
o “Horizontal” expansion- buy out competing oil refineries, but soon established a “vertical integrated” monopoly
 Controlled drilling, refining, storage and distribution
o By 1880’s Standard Oil Company controlled 90% of the industry
o Rockefeller gave much of fortune away
 Establish foundations to promote education and medical research
o Found employees efforts to organize unions
o 2 views existed of industrial leaders:
 “Captains of industry”
 “Robber barons”
o Wealth Against Commonwealth by Henry Demarest Lloyd 1894
 Exposé of how Rockefeller’s Standard Oil Company made a mockery of the economic company and
political democracy by manipulating market and bribing legislators.
 “Liberty and monopoly cannot live together”
Workers Freedom in an Industrial Age
o Workers economic independence rested on technological skill
o “Miner’s freedom”- elaborate work rules that left skilled underground workers free from managerial supervision of
the job.
o Through union, iron and steel workers fixed output quotas and controlled training apprentices
 Workers often knew more than employers
o “Freedom” only applied to small portion of industry
o During the Depression, millions of workers lost jobs and reductions in pay (economic instability)
o “Tramp”- thousands of men searching for work
o Many workers had 60 hour work weeks, no pension, no compensation for injury and no protection against
unemployment.
o 1880-1890 an average of 35,000 workers per year died
o Strikes failed because employers called on unemployed and brought in police to regulate
o Nell Cusack published “City Slave Girls” in 1888: exposed conditions of women working in city homes, factories and
sweatshops.
Sunshine and Shadow: Increasing Wealth and Poverty
o On the other hand, wealth grew and divisions between classes became more noticeable.
o Urban and suburban middle class residence grew
o By 1890, the richest 1% earned same income as the entire bottom half
o Wealthy Americans pursued aristocratic lifestyle: palatial homes, exclusive social clubs, schools and colleges, fancy
balls and marrying within each other.
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o The Theory of Leisure Class by Thornstein Veblen: critique of upper-middle class focusing on “conspicuous
consumption”- spending money that is not needed or even desired to display possession of wealth.
o Sunshine and Shadow in New York by Matthew Smith: compared home of department store manager Alexander T.
Stewart’s $2 mil mansion with city slums.
o How the Other Half Lives by Jacob Rii: discussed shocking living conditions of urban poor with photographs.
The Transformation of the West
- 1893 Frederick Jackson Turner gave speech “The Significance of the Frontier in American History”
o Argued west had individual freedom, political democracy and economic mobility.
o The west was desired among many Americans: economic opportunity
- A Diverse Reign
o Federal government had to aid in acquiring land from the Indians by:
 War and treaty
 Administered land sales
 Regulated territorial politics
 Distributed land and money to farmers, railroads and mining companies
o Construction of irrigation systems and dams would open up large areas to commercial farming.
o West became known as a place of rugged individualism and sturdy independence.
- Farming on the Middle Border
o Promotional literature for west flooded eastern cities
o Hundreds of thousands of families acquired farms under the Homestead Act
o Middle border (Minnesota, the Dakotas, Nebraska and Kansas) population rose from 300,000 to 5 million between
1860-1900.
o New agricultural national market for wheat and corn arose.
o Farming in west as not as easy as expected by settlers
 Poisonous rattlesnakes, blizzards and droughts.
 Men spent money on farming machinery and women were stuck caring for animals, growing crops for food,
cooking and cleaning.
- Bonanza Farms
o John Wesley Powell (explorer and geologist): surveyed Middle Border in 1870s and warned that because of the
region’s arid land and limited rainfall, development there required large-scale irrigation projects.
 Homestead Act of 1862 could not apply: no single family could do all the work required on irrigation farms
(only cooperative, communal farming could succeed)
o Bonanza farms- thousands of acres that employed large numbers of agricultural wage workers
 But family farms still dominated the west
o Farmers began specializing in production of a single crop for sale in faraway places.
o Small farmers around the world suffered severe difficulties in the last ¼ of the 19 th century because of economic
depressions and drop in prices of farm products.
- Large-Scale Agriculture in California
o Western farming relied on irrigation, chemicals and machinery (investments beyond means of family farmers).
o Land was not worked by laborers who could expect to acquire land, but by Chinese, Philippine, Japanese and
Mexican tramps.
o Henry George (young journalist) urged government to take action against “land monopoly” and to “give all men an
equal change” to acquire economic independence.
- The Cowboy and the Corporate West
o White, Mexican and black men conducted early cattle drives (symbols of freedom).
o Texas Cowboys Strike 1883- strike for higher wages
o Barbed wire fences and terrible winters put an end to cattle grazing
o San Francisco was a major manufacturing and trading center
o Southern California began growth with tourism, then with the discovery of oil in LA in 1892.
o Many corporate businesses appeared in the west: lumber industry and mining
o Gold and silver rushes in Dakotas, Idaho and Alaska.
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o New Mexico (known for sheep farming): by 1880, ¾ of the sheep belonged to 20 families.
 Unable to continue as sheep farmers, Hispanics went to work for new mines and railroads.
The Subjugation of the Plains Indians
o Indians already went through changes: 18th century they started hunting on buffalo, not foot.
o Newcomer Indian tribes came to plains to take advantage of horses, but started warfare with established tribes
o Migrants on trail BEFORE civil war hardly ever encountered problems with Indians, often trading with them
o During the Civil War, Sioux killed hundreds of white farmers (army came in to subdue them and sentenced over 300
Indians to death)
 Remains largest official execution in American history
o After 1865 most tribes were forced to cede their land to government and give some to their former slaves
o Union army forced 8,000 people (Navajo) to move off land into reservations by destroying their orchards and sheep
 The Navajo’s Long Walk
o 1869 President Grant announced “peace policy” but warfare returned.
 Civil War generals like Philip H. Sheridan destroyed foundations of Indian economy: villages, horses and
especially buffalo (becoming extinct)
“Let me be a Free Man”
o 1877 O.O. Howard commanded troops to chase away the Nez Perce tribe.
 They tried to flee to Canada, but after 4 months, Howard forced the Indians to surrender and they were
moved to Oklahoma
o 2 years later, Chief Joseph of Nez Perce addressed audience on equality: “treat all men equal”
 Government eventually transported remaining Nez Perce to reservation in Washington.
 Until he died, Joseph petitioned all presidents to let tribe return to homeland in Oregon.
o The Battle of Little Bighorn
 Most successful Indian victory
 General George A. Custer and 250 troops perished by Sioux and Cheyenne’s led by Sitting Bull and Crazy
Horse
 Fighting over land that was promised to them “for as long as the grass shall grow”
o Cochise and Geronimo and other leaders continually tried to fight army until mid 1880’s
 Only temporarily delayed white soldiers invading and settlers moving in
o Between Civil War and 1890 8 new states entered Union: Nebraska, Colorado, North and South Dakota, Montana,
Washington, Idaho and Wyoming.
o Railroads moved throughout west, farmers and cattlemen exploited land and Plains tribes were on reservations.
o Sitting Bull escaped to Canada after army defeated the Sioux (returned and was imprisoned)
o Buffalo Bill’s Wild West Show: traveling entertainment that mocked Indian attacks.
Remaking Indian Life
o Wanted to preserve culture, have political autonomy and remain on ancestral lands conflicted with white American
plans.
o 1871 Congress eliminated previous treaties with Indians
o The Bureau of Indian Affairs established boarding schools where Indian children were removed from “negative”
influence and given non-Indian clothes, new names and educated according to white America.
The Dawes Act
o Named for Senator Henry L. Dawes of Mass. (chair of Senate’s Indian Affairs Committee)
o The act broke up land of nearly all tribes into small parcels to be distributed to Indian families, with remainder
auctioned off to white purchasers
 Indians who accepted would be American citizens
o After act, Indians lost 86 million acres of their 136 million
Indian Citizenship
o Laws and treaties offered citizenship to Indians who assimilate
o Elk vs. Wilkins- questioned weather any Indian was a citizen
 Rights guaranteed under 14th and 15th amendments didn’t apply to them
o By 1924 Congress made all Indians American citizens
The Ghost Dance and Wounded Knee
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o Ghost Dance- religious revitalization campaign reminiscent of the pan-American movements led by earlier prophets
like Neolin and Tenskwatawa.
 Foretold disappearance of white men, return of the buffalo, return on ancestral customs.
 Government sent troops Dec 1890- soldiers opened fire near Wounded Knee Creek killing 150-200 Indians
o Wounded Knee Massacre
 Ended armed conflict
 Lowest Indian population in American history (250,000)
Politics in the Gilded Age
- “Gilded”: implies glittering surface covering real value, therefore, deceptive (Twain and Warner)
o Referring to expanding economy and corruption
- Slogan of the era: “get rich, dishonestly if we can, honestly if we must”
- The Corruption of Politics
o Reform Act of 1884: until this, most of working class could not vote
o House of Lords- unelected body of hereditary aristocrats could veto any legislation passed by House of Commons
o Railroads and corporations had as much influence as elected chambers; lawmakers held stock in companies that
got public aid
o NY Tweed Ring: W.M. Tweed’s organization forged close ties with labor unions; won support of urban poor by
making private welfare; considered him an “urban Robin Hood”
o Credit Mobilier (Grant’s Presidency)- corporation formed by an inner ring of Union Pacific Railroad Stockholders to
oversee the line’s government assisted construction
 Enabled participants to sign contracts with themselves, at huge profit, to build a new line
 Protected by distribution of stock to influence politicians (like Speaker of the House S. Colfax who later
became VP)
o Whisky Ring- another scheme between Republican officials, tax collectors and whiskey manufacturers that
defrauded federal government of millions of tax dollars.
- The Politics of Dead Center
o Many Republican presidential candidates had fought in Union Army: had support of North, Midwest, agrarian West,
churches, protestant immigrants and blacks.
o 40% of federal budget went to pension for solders and widows
o Democrats had support from South, Catholic voters and Irish-Americans
o Rarely ever one party in White House and both houses of Congress
o Era of massive party rallies and “spellbinding” political oratory
- Government and the Economy
o Federal government was ill equipped to handle rapidly growing economy.
 Educations, medical care, business regulation, civil and criminal prosecutions and others were almost
entirely under control of state and local governments and private institutions.
o Republicans supported high tariff to protect American industry, paying off debt and withdrawing greenbacks (paper
money used during Civil War)
 Reduced competition from foreign manufactured goods and leave banks in control of issuing money.
(Favorable to eastern industrialists and bankers)
o Democrats opposed high tariff, resisted demands from debt-ridden agricultural areas for an increase in the money
supply.
o 1879- first time since war, US returned to gold standard (paper currency exchangeable for gold at a fixed rate)
- Reform Legislation
o Civil Service Act of 18830 created a merit system for federal employees, with appointment via competitive
examinations rather than political influence.
o Interstate Commerce Commission (ICC)- ensure that the rates railroads charged farmers and merchants to
transport their goods were “reasonable” and did not offer more favorable treatment to some shippers than others.
 First federal agency intended to regulate economic activity
o Sherman Antitrust Act- banned combinations and practices that restrained free trade
 Impossible to enforce
- Political Conflict in the States
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o The Greenback-Labor Party: proposed fed government stop taking greenback money out of circulation, arguing it
would make more funds available for investment and put control of money supply in gov’t.
 Condemned militia and private police use against strikers
o Farmers and local merchants complained of excessively high freight rates, discrimination in favor of large producers
and shippers and high fees.
o Patrons of Husbandry or Grange: moved to establish cooperatives for storing and marketing farm output in the hope
of forcing the carriers to “take our produce at a fair price”
 Members called on state governments to establish fair freight rates and warehouse charges
o Labor movement: demanded laws establishing 8 hour work days
Freedom in the Gilded Age
- The Social Problem
o The relationship between employers and employees
 Employees couldn’t trust tyrannical employers, complained of being overworked and lived in poor housing.
 Manufacturers complained there employees were “scum of the English and Irish”
- Freedom, Inequality, and Democracy
o Division of society into classes- given the expansion of production capacity, many viewed the concentration of
wealth as inevitable, natural and justified by progress.
o Liberal reformers: broke with the Republican Party in 1872 and helped to bring about a change in northern opinion
regarding Reconstruction.
 Feared that with lower-class groups seeking to use government to advance their own interests, democracy
was becoming a threat to individual liberty and the rights of property.
- Social Darwinism in America
o On the Origin of Species by Charles Darwin expounded the theory of evolution whereby plant and animal species
best suited to their environment took the place of those less able to adopt.
 “Natural selection,” “the struggle for existence,” “the survival of the fittest”
o Social Darwinism- evolution was as natural a process in human society as in nature and government must not
interfere (to restrict operations of industry would reduce society to a more primitive level).
 The lower classes failure to advance in society was fault of their own: lack of character, absence of selfreliance and determination.
 Families should practice personal income, keep out of debt and educate their children on the principles of
the marketplace, not look to the government for aid.
o William Graham Sumner
 Believed “the security given to each man that he can acquire, enjoy and dispose of property exclusively as
he chooses without interference from other persons or from government.
 What Social Classes Owe to Each Other: “in a free state no on was entitled to claim help from and cannot
be charged to offer help to another”
- Liberty of Contract
o Labor contracts reconciled freedom and authority in the workplace.
 As long as labor relations were governed by contracts freely at by independent individuals, neither
government or unions had a right to interfere with working conditions
- The Courts and Freedom
o 14th Amendment gives government the right to overturn state laws violating citizens rights
o State and federal courts struck down state laws regulating economic enterprise as an interference of employer to
choose his employment and working conditions.
o Courts viewed state regulations of business an insult to free labor
o Munn v. Illinois- it upheld the constitutionality of an Illinois law that established a state bored empowered to
eliminate railroad rate discrimination and set maximum charges.
o Wabash v. Illinois- 9 years later reversed decision: only federal government can regulate railroads
o Interstate Commerce Act of 1887
o Women still didn’t have right to vote, but still were considered to have same economic “liberties”
o Government continued to side with business over state laws
Labor and The Republic
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“The Overwhelming Labor Question”
o The Great Railroad Strike- pay cut lead to workers paralyzing rail traffic
 Militia tried to force back to work, troops fired on strikers in Pitt and killed 20
 Workers burnt down railroad yards
 President B. Hayes- ordered troops to put workers “down by force”
- The Knights of Labor and the “Conditions Essential to Liberty”
o Knights of Labor- first group to try to organize unskilled workers as well as skilled (women and men, blacks and
whites); supported 8 hour work day, public employment in hard times, currency reform, socialism, anarchism,
“cooperative commonwealth”
 Terence V. Powderly- head of Knights
o Could meaningful freedom exist in a situation of extreme economic inequality?
Middle-Class Reformers
- fear of class warfare, concentrated capital power
- Caesar’s Column- by Ignatius Donnelly- ended with civilized society destroyed in a savage civil war between labor and
capital
Progress and Poverty (By Henry George)
- George’s solution was a single tax (real estate); made land “common property”; saw government as “repressive power”
- The Cooperative Commonwealth by Laurence Gronland
o Socialism- the believ that private control of economic enterprises should be replaced by government ownership in
order to ensure a fairer distrubtion of the benefits of the wealth produced.
o However, in American, access to private property was considered essential to individual freedom
Bellamy’s Utopia
- Looking Backward (Edward Bellamy): socialist ideas but using the term nationalism (freedom is a social condition based on
interdependence, not autonomy)
- Bellamy’s utopia: citizens obligated to labor for years in an Industrial Army controlled by a single Great Trust
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A Social Gospel
- most Protestant preachers focused on individual sins like drinking and Sabbath-breaking
- Social Gospel (by Walter Rauschenbusch): insisted that freedom and spiritual self-development required an equalization of
wealth and power and that unbridled competition mocked the Christian ideal of brotherhood.
The Haymarket Affair
- Railroad union strike took place against powerful financier Jay Gould (workers flooded Knights of Labor)
- MayDay (May 1, 1886) showed a demonstration for an 8 hour work day
- Iron molders union organized a strike against wage reduction; the company brought in strikebreakers and private police
(settled with the union).
- Next strike, government sided with the company—4 strikers were killed
- The next day in Haymarket square there was a rally for the killings, someone threw a bomb into the crowd and police
opened fire, killing strikers and police officers.
- 8 people charged and sentenced to death (they were innocent)
Labor and Politics
- In Kansas City black and Irish elected Tom Manna as mayor (sided with unions rather than employers)
- Henry George was candidate for mayor (came in close 2nd) behind Abram Hewitt
- Knights of Labor declined- employer hostility, poorly organized structure that could not assimilate new members
CLOSING PARAGRAPH: America’s Gilded Age witnessed deep and sometimes violent divisions over the definition of freedom in a
rapidly industrializing society. The battle between upholders of Social Darwinism and laissez-faire, who saw freedom as the right of
individuals to pursue their economic interests without outside restraint, and those who believed in collective efforts to create
“industrial freedom” for ordinary Americans, would continue for many decades.