Chapter 23
Political Paralysis in the Gilded Age
1869-1896
The "Bloody Shirt" Elects Grant
The Republicans nominated General Grant for the presidency in 1868. The Republican
Party supported the continuation of the Reconstruction of the South, while Grant stood on
the platform of "just having peace."
The Democrats nominated Horatio Seymour.
Grant won the election of 1868.
The Era of Good Stealings
Jim Fisk and Jay Gould devised a plot to drastically raise the price of the gold market in
1869. On "Black Friday," September 24, 1869, the two bought a large amount of gold,
planning to sell it for a profit. In order to lower the high price of gold, the Treasury was
forced to sell gold from its reserves.
"Boss" Tweed employed bribery, graft, and fraudulent elections to milk New York of as
much as $200 million. (Tweed Ring) Tweed was eventually put into prison.
A Carnival of Corruption
In addition to members of the general public being corrupt, members of the federal
government also participated in unethical actions.
The Credit Mobilier scandal erupted in 1872 when Union Pacific Railroad insiders formed
the Credit Mobilier construction company and then hired themselves at inflated prices to
build the railroad line, earning high dividends. When it was found out that government
officials were paid to stay quiet about the illicit business, some officials were censured.
The Liberal Republican Revolt of 1872
In response to disgust of the political corruption in Washington and of military
Reconstruction, the Liberal Republican Party was formed in 1872.
The Liberal Republican Party met in Cincinnati and chose Horace Greeley as their
presidential candidate for the election of 1872. The Democratic Party also chose Greeley as
their candidate. The Republican Party continued to put its support behind President Grant.
Grant won the election of 1872.
The Liberal Republicans caused the Republican Congress to pass a general amnesty act in
1872; removing political disabilities from most of the former Confederate leaders. Congress
also reduced high Civil War tariffs and gave mild civil-service reform to the Grant
administration.
Depression, Deflation, and Inflation
Over-speculating was the primary cause to the panic of 1873; too much expansion had taken
place. Too many people had taken out loans of which they were unable to pay back due to
lack of profit from where they had invested their money.
Due to popular mistrust of illegitimate dealings in the government, inflation soon
depreciated the value of the greenback. Supported by advocates of hard money (coin
money), the Resumption Act of 1875 required the government to continue to withdraw
greenbacks from circulation and to redeem all paper currency in gold at face value beginning
in 1879.
The coinage of silver dollars was stopped by Congress in 1873 when silver miners began to
stop selling their silver to the federal mints - miners could receive more money for the silver
elsewhere.
The Treasury began to accumulate gold stocks against the appointed day for the continuation
of metallic money payments. This policy, along with the reduction of greenbacks, was
known as "contraction."
When the Redemption Day came in 1879 for holders of greenbacks to redeem the
greenbacks for gold, few did; the greenback's value had actually increased due to its
reduction in circulation.
The Republican hard-money policy had a political backlash and helped to elect a Democratic
House of Representatives in 1874.
Pallid Politics in the Gilded Age
Throughout most of the Gilded Age (a name given to the 30 years after the Civil War era by
Mark Twain) the political parties in government had balanced out.
Few significant economic issues separated the Democrats and the Republicans.
Republican voters tended to stress strict codes of personal morality and believed that the
government should play a role in regulating the economic and the moral affairs of society.
They were found in the Midwest and Northeast. Many Republican votes came from the
Grand Army of the Republic, a politically active fraternal organization of many Union
veterans of the Civil War.
Democrats were immigrant Lutherans and Roman Catholics who believed in toleration of
differences in an imperfect world. They also opposed the government imposing a single
moral standard on the entire society. Democrats were found in the South and in the northern
industrial cities.
A "Stalwart" faction led by Roscoe Conkling supported the system of swapping civilservant jobs for votes. (Giving someone a job if they vote for a specific party/cause. "Spoils
system") Opposed to the Stalwarts were the Half-Breeds, led by James G. Blaine. The main
disagreement between the two groups was over who would give the jobs to the people who
voted in their favor.
The Hayes-Tilden Standoff, 1876
Congress passed a resolution that reminded the country, and Grant, of the two-term tradition
for presidency after Grant was speculating about running for a 3 rd term.
The Republicans chose Rutherford B. Hayes as their presidential candidate for the election
of 1876. The Democrats chose Samuel J. Tilden.
In the election, Tilden won the popular vote, but was 1 vote shy from winning in the
Electoral College. The determining electoral votes would come from three states, Louisiana,
South Carolina, and Florida who had each sent two sets of ballots to Congress, one with the
Democrats victorious and the other with the Republicans victorious; there was no winner in
these states.
It was necessary to find the true political party winner of the states, although it was unknown
who would judge the winner of the states because the president of the Senate was a
Republican and the Speaker of the House was a Democrat.
The Compromise of 1877 and the End of Reconstruction
The Electoral Count Act (Compromise of 1877), passed by Congress in 1877, set up an
electoral commission consisting of 15 men selected from the Senate, the House of
Representatives, and the Supreme Court. It was made to determine which party would win
the election. The committee finally determined, without opening the ballots from the 3
disputed states, that the Republicans had been victorious in the disputed ballots from the
three states, giving the Republicans the presidency.
The Democrats were outraged at the outcome, but agreed that Republican Hayes could take
office if he withdrew the federal troops from Louisiana and South Carolina.
With the Hayes-Tilden deal, the Republican Party abandoned its commitment to racial
equality.
The Civil Rights Act of 1875 supposedly guaranteed equal accommodations in public places
and prohibited racial discrimination in jury selection. The Supreme Court ended up ruling
most of the Act unconstitutional, declaring that the 14 th Amendment only prohibited
government violations of civil rights, not the denial of civil rights by individuals.
The Birth of Jim Crow in the Post-Reconstruction South
As Reconstruction had ended in the South, white Democrats resumed their political power in
the South and began to exercise their discrimination upon blacks.
Blacks were forced into sharecropping and tenant farming. Through the "crop-lien" system,
small farmers who rented out land from the plantation owners were kept in perpetual debt
and forced to continue to work for the owners.
Eventually, state-level legal codes of segregation known as Jim Crow laws were enacted.
The Southern states also enacted literacy requirements, voter-registration laws, and poll taxes
to ensure the denial of voting for the South's black population.
The Supreme Court ruled in favor of the South's segregation in the case of Plessy vs.
Ferguson (1896), declaring that separate but equal facilities for blacks were legal under the
14th Amendment.
Class Conflicts and Ethnic Clashes
Following the panic of 1873 and the resulting depression, railroad workers went on strike
after their wages were cut by President Hayes. The strike failed, exposing the weakness of
the labor movement.
Masses of immigrants came to United States in hopes of finding riches, but many were
dismayed when they found none. They either returned home or remained in America and
faced extraordinary hardships.
People of the West Coast attributed declining wages and economic troubles to the hated
Chinese workers. To appease them, Congress passed the Chinese Exclusion Act in 1882,
halting Chinese immigration into America.
Garfield and Arthur
Because President Hayes was despised by his own Republican Party, James A. Garfield was
chosen as the presidential candidate for the election of 1880. His vice-president was Chester
A. Arthur, a former Stalwart. The Democrats chose Civil War hero, Winfield Scott.
Garfield won the election of 1880, but was assassinated by Charles J. Guiteau at a
Washington railroad station. Guiteau, claiming to be a Stalwart, shot the president claiming
that the Conklingites would now get all the good jobs now that Chester Arthur was
President.
The death of Garfield shocked politicians into reforming the spoils system. The reform was
supported by President Arthur, shocking his critics. The Pendleton Act of 1883 made
campaign contributions from federal employees illegal, and it established the Civil Service
Commission to make appointments to federal jobs on the basis of competitive examination.
It was basically made to stop political corruption. The civil-service reform forced politicians
to gain support and funds from big-business leaders.
The Blaine-Cleveland Mudslingers of 1884
The Republicans chose James G. Blaine as their presidential candidate for the election of
1884. The Democrats chose Grover Cleveland. Grover Cleveland was a very honest and
admirable man. Cleveland won the election of 1884.
"Old Grover" Takes Over
Questions were raised about whether Cleveland and the Democratic Party, "the party of
disunion," could be trusted to govern the Union.
Cleveland replaced thousands of federal employees with Democrats.
Cleveland summed up his political philosophy when he vetoed a bill in 1887 to provide
seeds for drought-ravaged Texas farmers, stating that the government should not support the
people.
The Grand Army of the Republic lobbied hundreds of unreasonable military pension bills
through Congress, but Cleveland vetoed many of the bills.
Cleveland Battles for a Lower Tariff
The growing surplus of money in the Treasury coming from the high tariff, which was made
to raise revenues for the military during the Civil War, caused President Cleveland to
propose lowering of the tariff in order to bring lower prices to consumers. The lower tariff,
introduced to Congress in 1887 and supported by Cleveland, tremendously hurt the nation's
factories and the overall economy. Cleveland lost support because of the tariff.
The Republicans chose Benjamin Harrison as their presidential candidate for the 1888
election. During the election, the first major issue between the two parties had arisen:
tariffs. Cleveland won the popular vote, but Harrison still won the election.
The Billion-Dollar Congress
When the Democrats were prepared to stop all House business, the Speaker of the House,
Thomas B. Reed, took control and intimidated the House to his imperious will. The BillionDollar Congress, named for its lavish spendings, gave pensions to Civil War veterans,
increased government purchases on silver, and passed the McKinley Tariff Act of 1890.
The McKinley Tariff Act raised tariffs yet again and brought more troubles to farmers.
Farmers were forced to buy expensive products from American manufacturers while selling
their own products into the highly competitive world markets.
The Tariff Act caused the Republican Party to lose public support and become discredited.
In the congressional elections of 1890, the Republicans lost their majority in Congress.
The Drumbeat of Discontent
The People's Party, or "Populists," formed from frustrated farmers in the agricultural belts
of the West and South. The Populists demanded inflation through free and unlimited
coinage of silver. They also called for a 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; a shorter workday; and immigration restriction.
The Populists nominated General James B. Weaver for the presidential election of 1892.
In 1892, a series of violent worker strikes swept through the nation.
The Populist Party fell far short of winning the election. One of the main reasons was that
the party supported and reached out to the black community. Its leaders, such as Thomas
Edward Watson, felt that a black man had every right to vote. The Populist Party counted on
many blacks votes from the South. Unfortunately, many Southern blacks were denied the
right to vote due to literacy tests. The Southern whites voted against the party due the party's
equal rights views toward blacks.
Cleveland and Depression
Grover Cleveland again ran for the presidency in the election of 1892 and won, beating out
the divided Populist Party and the discredited Republican Party.
The panic of 1893 was the worst economic downturn for the United States during the 19 th
Century. It was caused by overbuilding and over-speculation, labor disorders, and the
ongoing agricultural depression.
The Treasury was required to issue legal tender notes for the silver bullion that it had
purchased. Owners of the paper currency would then present it for gold, and by law the
notes had to be reissued. This process depleted the gold reserve in the Treasury to less than
$100 million.
The Sherman Silver Purchase Act of 1890 was created by the administration of Benjamin
Harrison in order to increase the amount of silver in circulation. The drastic rise in silver
caused the American people to believe that the less expensive silver was going to replace
gold as the main form of currency. The American people therefore began to withdraw their
assets in gold, depleting the Treasury's gold supply. Cleveland was forced to repeal the
Sherman Silver Act Purchase in 1893.
Cleveland turned to J.P. Morgan to lend $65 million in gold in order to increase the
Treasury's reserve.
Cleveland Breeds a Backlash
The Wilson-Gorman Tariff of 1894 lowered tariffs and contained a 2% tax on incomes
over $4,000. The Supreme Court ruled income taxes unconstitutional in 1895.
The Wilson-Gorman Tariff caused the Democrats to lose positions in Congress, giving the
Republicans an advantage.
Grant, Hayes, Garfield, Arthur, Harrison, and Cleveland were known as the "forgettable
presidents."