MR. FAEH
A.P. UNITED STATES HISTORY
UNIT VII: GILDED AGE
Themes of the Gilded Age:
Politics: hard vs. soft money ('70s & '90s); tariff ('80s); corruption due to greed, patronage &
trusts (throughout late 19th c.)
Industrialism: U.S. became the world’s most powerful economy by 1890s: railroads, steel, oil,
electricity, banking
America was transformed from an agrarian nation to an urban nation between 1865 and 1920.
Urbanization: millions of "New Immigrants" came from Southern and Eastern Europe, mostly
to work in factories.
Unions and Reform movements sought to curb the injustices of industrialism.
Farmers increasingly lost ground in the new industrial economy and eventually organized
(Populism)
The "Last West": farming, mining, & cattle raising
By 1900 society had become more stratified into classes than any time before or since.
I. ULYSSES S. GRANT AS PRESIDENT
A. Most popular figure to emerge from Civil War
1. People eager for a change from poltics-as usual; Grant appeared to be non-politial
2. Grant received and accepted many gifts such as houses and large sums of
money as if the country owed him for winning the war.
B. Presidential election of 1868
1. Grant the Republican nominee
a. Platform of continued military Reconstruction
b. Grant supporters during campaign began "waving the bloody shirt" -- reviving gory
memories of the Civil War
2. Democrats nominated Horatio Seymore on plank denouncing military Reconstruction.
a. Wealthy easterners demanded federal bonds issued during war be redeemed
in gold despite being purchased with badly depreciated paper greenbacks.
b. "Ohio Idea" --Poorer mid-western delegates called for "repudiation" plank by
demanding redemption of bonds in greenbacks to maximum extent possible
-- Hoped to keep more $ in circulation making loans less costly & easier to find
c. Seymore refused to support "Ohio Idea" hurting Democrats chances.
d. Significance: Money issue dominates politics in 1870s (and 1890s)
3. Grant d. Seymore 214 to 80 but only by 300,000 in poplar vote
-- Freedmen gave Grant 500,000 votes and his margin for victory.
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C. Grant presided over an era of unprecedented growth and corruption
1. Grant considered one of worst presidents in U.S. history with much corruption in
his administration and his reluctance to try to end graft in other areas.
2. "Jubilee Jim" Fiske and Jay Gould attempted to corner gold market in 1869
a. Persuaded Grant to make the federal Treasury refrain from selling gold.
b. Fiske and Gould then bid price of gold upward.
c. Treasury finally released gold and the bubble burst ("Panic of 1869")
-- Like the Crash of 1929 with overspeclulation and inflated stock values.
d. Congressional probe found Grant did nothing illegal but acted recklessly.
3. Tweed Ring in NYC (William Marcy Tweed -- 1823-1878)
a. Boss Tweed used bribery, graft, and fraudulent elections to gain perhaps $200
at the expense of NYC – headed notorious Tammany Hall political machine.
b. NY Times exposed him in 1871
i. Cartoonist Thomas Nast offered $100K bribe to "study art in Paris" so
not to portray Tweed badly; Nast refused despite even higher $ offers.
ii. Samuel Tilden prosecuted Tweed & he was sent to jail where he died
-- Paved way for Tilden’s presidential nomination in 1876
4. Credit Mobilier scandal
a. Railroad construction company formed by insiders of Union Pacific Railway
b. Hired themselves to build the railroad and paid themselves huge fees.
i. Paid dividends of 348% in one year
ii. Distributed shares of stock to congressmen to avoid interference.
c. NY newspaper exposed scandal in 1872 and charges confirmed by
subsequent Congressional investigation that censured 2 members & v.p.
-- Grant’s reputation tarnished although most corruption before his presidency.
5. Whiskey Ring
a. 1875, public discovered Whisky Ring had robbed millions in excise-tax revenues.
-- Grant: "Let no man escape"
b. Yet, one of Grant’s own cabinet members part of the scam.
c. Grant persuaded the jury not to convict.
6. Secretary of War Belknap pocketed $24,000 for selling the privilege of disbursing
supplies to Indians; supplies often worthless.
a. House voted to impeach him and he resigned the same day.
b. Grant accepted resignation "with great regret."
D. Secretary of State Hamilton Fish (one of few bright spots in Grant’s cabinet)
1. Reorganized State Department and adhered to the merit system in civil service.
2. Treaty of Washington (1871): Britain agreed to pay U.S. $15.5 million for
Alabama claims during Civil War.
3. Averted war with Spain by persuading Grant to remain neutral in Cuba’s
struggle for independence.
E. 15th Amendment only major significant accomplishment of Grant administration
-- Grant much more sympathetic to Radical Republicans than Johnson and the Democrats.
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F. Election of 1872 (Liberal Republican revolt)
1. Liberal Republican party formed in response to Grant’s corrupt presidency.
a. Slogan: "Turn the rascals out"
b. Horace Greeley nominated for president. (1811-1872)
c. Supported by Carl Schurz, a German immigrant in the 40s who was
an abolitionist and in favor of honesty in gov’t.
2. Democratic party endorsed Greeley who had earlier bashed them as he seemed
to be the strongest candidate available; no Democrats willing to run against Grant
3. Grant d. Greeley 286-66 and by almost 800,000 popular votes.
4. Liberal Republican influence forced the Republican party to reform itself.
a. All but 500 ex-Confederates pardoned in 1872 by a general amnesty act.
b. Reduced high Civil War tariffs.
II. PANIC of 1873 and the subsequent depression (1873-1879)
A. Causes
1. Overproduction of railroads, mines, factories and farm products.
2. Bankers made too many risky loans to finance growth.
a. Many loans went unpaid and the banking system collapsed (e.g. Jay Cooke)
b. 15,000 businesses went bankrupt.
3. Depreciation of Greenbacks resulted in hard-money advocates seeking to
increase dollar’s value.
a. Treasury withdrew $100 million decreasing money available to $350 million
b. Hard-money advocates pleased; soft-money advocates dismayed.
B. Greenback Issue
1. Contraction
a. 1874, to stimulate economic growth Congressional Democrats sought inflation
by printing more Greenbacks into circulation.
b. Grant persuaded by hard money folks to veto bill to print more paper $.
-- Conservatives feared uncontrolled growth of money supply and inflation.
c. Specie Resumption Act of 1875: Further withdrawal of Greenbacks
and redemption of all paper currency in gold (not silver) at face value in 1879.
d. Deflation resulted due to less money in circulation.
i. Worsened impact of depression
ii. Yet, boosted nation’s credit rating; brought Greenbacks up to full face value.
C. Debtors push for silver
1.Debtors sought to cause inflation which would increase money supply, making it
easier to pay debts.
2. Treasury in early 1870s claimed silver was only 1/16 value of gold although silver
although prices were higher in the market.
3. Silver producers stopped offering silver for sale to federal mints and Congress stopped
coinage of silver dollars in 1873 – U.S. now off bimetal standard.
4. Silver values hurt further by new mines in West that drove downward silver prices.
5. Westerners cried that the downward trend in silver prices was the "crime of 1873"
a. Silver mining states demanded return to earlier silver prices in order to boost inflation.
b. Republicans refused and Grant maintained hard-money policy.
6. Bland-Allison Act of 1878
a. Compromise where gov’t would buy and coin between $2-4 million per month.
b. Yet, gov’t stuck to legal minimum and inflation did not occur.
-- Although economy grew, currency in circulation didn't keep pace
resulting in lower prices.
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D. 1878, Greenback Labor Party formed (seeking soft-money) and elected 14 members to
Congress while polling over a million votes.
-- After depression ended in 1879, the currency issue did not come back to center stage until
1890s.
III. POLITICS OF THE GILDED AGE
-- Term coined sarcastically by Mark Twain & Charles Dudley Warner in
The Gilded Age (1873)
A. Era of the "forgettable presidents": Hayes, Garfield, Arthur, and Harrison;
Cleveland the only exception – did little of enduring value to the nation
B. Era was most highly competitive politically in U.S. history
1. All presidential elections close and House of Reps switched 6 times between
1869 and 1891.
-- Voter turnout reached highest levels in U.S. history before and after.
2. Politicians extremely cautious not to tip balance to other party.
3. Yet, few significant economic issues separated the major parties (only money & tariff)
-- Republicans differed only in that they were more successful.
C. Social issues more pronounced in party differences
1. Republicans traced their lineage to Puritanism and stressed strict codes
of personal morality and govt’s involvement in regulating both economic
and moral affairs of the community as a whole—middle class WASP values.
a. Heavy support from businessmen
b. Support from the Midwest and small and rural towns in NE
c. Heavy support from African Americans
d. Emphasized identify-of-interest argument: people should accept their place in society
because the wealthy know what’s best for the country
e. GAR (Grand Army of the Republic), a politically potent fraternal
organization of several hundred thousand Union vets in the Civil War.
2. Democrats consisted of many immigrant Lutherans and Catholics (esp. Irish)
a. Religions stressed less stern views of human weaknesses
b. Views opposed gov’t efforts to impose single moral standard on whole society.
c. Support came from the Solid South and large industrial cities where
immigrants factored in significantly under political machines.
d. Emphasized economic equity
3. Prohibition and education became intense issues at the local level.
D. Patronage and bribery dominated politics
1. Def: Giving away many gov’t offices for votes, kickbacks, and party service.
2. Gov’t employment expanded significantly (e.g. postal service)
3. Reformers targeted the spoils system as being inefficient and a breeding corruption.
-- Civil service reform largely anti-Irish in politics.
E. Republican factions
1. "Stalwarts" headed by Roscoe Conkling, U.S. Senator who favored spoils system
2. "Half-Breeds" led by James G. Blaine, Congressman who favored civil service reform
3. "Mugwumps" -- represented in thought by Thomas Nast
a. Composed of young liberal reformers
b. Favored Reconstruction policies to help African Americans
c. Anti-corruption (continued Liberal Republican ideas)
4. Infighting 1870s and 80s resulted in a dead-locking of the party.
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UNIT VII: GILDED AGE
IV. ELECTION of 1876
A. Supporters urged Grant to run for a third term in 1876; Grant was willing
-- House passed a resolution (233-18) to remind the country of two-term tradition.
B. Republicans nominated Rutherford B. Hayes as a compromise candidate
C. Democrats nominated Samuel Tilden (of Boss Tweed fame)
D. Election results
1. Tilden one of only two candidates to win majority of popular votes but lose election.
2. Election fraud in SC, FL, and LA resulted in commission created to determine election.
E. Compromise of 1877
1. Hayes would become president in return for withdrawing remaining federal troops
from last two states, LA and SC.
2. Republicans assured Democrats of presidential patronage and support for a bill
subsidizing a southern transcontinental railroad route.
3. Officially ended Reconstruction and blacks sacrificed in the South.
V. ELECTION of 1880, Garfield and Arthur
A. Republican James Garfield d. Democrat Winfield Hancock (both were Civil War officers)
B. Garfield second president to be assassinated (June, 1881) by a office seeker Charles J.
Guiteau; "I am a Stalwart. Arthur is now president of the U.S."
C. Because vice president Arthur was a Stalwart, it seemed as if Stalwarts (Conklingites) would
get all the good civil service jobs.
D. Garfield seen as a martyr in a corrupt civil service system—spurred public demand for reform
E. Pendleton Act of 1883
1. Provisions
a. Prohibited hiring office holders based on wealth.
b. Merit system for making appointments
c. Set up Civil Service Commission charged with administering open
competitive examinations to applicants for posts in classified office.
-- Offices not "classified" by the president open to spoils.
d. By 1884, nearly 10% of federal offices "classified"
e. By 1980’s, about 90% were classified.
2. Problem: Federal patronage from powerful office-seekers was significantly reduced
thus forcing politicians to look increasingly to corporations for campaign financing.
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VI. ELECTION of 1884
A. James G. Blaine became the Republican nominee
1. Many Republicans believed Blaine was corrupt
2. Some Republicans left for the Democratic party and dubbed Mugwumps
B. Democrats nominated Grover Cleveland, ex-mayor of buffalo & ex-governor of NY
1. Seen by many as a reformer who stood firm against the railroads in NY.
2. Platform included more honesty and efficiency in government.
C. Campaign
1. Republicans publicized Cleveland’s claimed of having an illegitimate child 8-years prior
2. In NY, a Republican clergyman damned the Democrats as the party of "Rum,
Romanism, and Rebellion" -- thus insulting NY’s Irish community
i. Blaine failed to repudiate the statement
ii. Shortened phrase "RRR" stuck and ultimately cost Blaine crucial NY
D. Election results
1. Cleveland won 219-182 and by about 40,000 popular votes.
2. The desertion of Mugwumps and the NY incident sealed Cleveland’s victory.
3. Cleveland also won the Solid South
4. First Democratic president since Buchanan 28-years earlier
VII. CLEVELAND’S PRESIDENCY
A. Staunch believer in laissesz faire: gov’t should leave the free market alone.
B. Initially favored cause of Mugwump reformers but eventually caved in to the
Democratic political machine mindset and fired about 2/3 of federal
C. Military pensions
1. By 1880, military pensions for Civil War veterans were being abused through
loopholes that allowed able-bodied veterans to file fraudulent claims.
2. The GAR was a powerful lobby organization that influenced elections.
3. Cleveland courageously veoted several hundred thousand new pensioners.
D. Tariffs became the major issue separating the two parties in the 1880s.
1. Republicans favored a high tariff; Democrats hated it.
-- Republicans (esp. William McKinley) argued that it stimulated American industry and
enriched all Americans (like "trickle down"); labor supported this somewhat.
2. High tariffs since the Civil War created a treasury surplus annually by
1881 amounting to $145 million.
3. Tariffs stifled American foreign trade, 75 to 80% of which was agricultural
a. Pushed costs for farm production higher
b. As producers and consumers, farmers were double victims.
c. Workers’ wages did not increase nearly at the rate tariffs increased prices.
4. Cleveland sought lower tariffs
a. Believed lower tariffs = lower prices for consumers & less protection for monopolies.
b. Would also end embarrassing treasury surplus.
c. In 1887 annual address to Congress, Cleveland spent entire speech appealing
for lower tariffs.
d. The tariff determined the election of 1888.
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E. Landmarks during Cleveland’s term (though not necessarily supported by Cleveland)
1. Dawes Act -- designed to control Indians (see "Great West Chapter")
2. Interstate Commerce Act -- designed to curb railroads (see next chapter)
3. Retrieved 81 million acres of public domain in the West -- land that had
been improperly acquired by "cattle barons" or the railroads. (See "Progressivism")
VIII. ELECTION of 1888 – tariff primary issue
A. Democrats grudgingly renominated Cleveland.
B. Republicans nominated Benjamin Harrison (grand-son of William H. Harrison)
C. Harrison d. Cleveland 233-168 (although Cleveland had more popular votes)
1. Only 2nd time in U.S. history person with most popular votes lost election.
2. Cleveland the first sitting president to be voted out since Van Buren in 1840.
3. Republicans interpreted victories in House (1st time in over a decade) and the Senate as
a mandate for the tariff. Tariffs subsequently increased.
IX. BENJAMIN HARRISON’S PRESIDENCY
A. Thomas B. Reed, Republican Speaker of the House; "Czar Reed"
1. Perhaps most powerful Speaker in history of Congress
-- Manipulated House rules to prevent Democrats from blocking legislation.
2. Presided over the "Billion Dollar" Congress that created expensive legislation
-- Republicans eager to spend money to offset the surplus created by high tariffs.
B. Sherman Anti-Trust Act passed in 1890
C. Sherman Silver Purchase Act of 1890 (system of bimetallism)
1. Treasury would approximately double minimum amount of silver purchased under the
Bland-Allison Act.
2. Western pro-silver advocates agreed to support a protective tariff in return
for eastern protectionist support for a silver bill.
a. Silverites detested limited silver purchasing under Bland-Allison Act.
b. Easterners saw potential profits from a boost in tariffs
-- Still, hated the thought of inflated currency
c. Result: Did not significantly inflate currency
D. McKinley Tariff Bill (1890)
1. Republicans’ reward for supporting Sherman Silver Purchase Act.
2. Raised tariffs to highest peacetime level: 48% on dutiable goods.
3. Disposed of surplus by giving a 2 cent subsidy to American sugar producers.
-- Also increased pensions to GAR and lowered internal taxes on tobacco.
4. Raised tariffs on agricultural products.
a. Seen by farmers as a hollow gesture as Europeans could not compete
with American farmers anyway.
b. Some eastern manufacturers raised their prices before the law went into effect.
c. Democratic party helped foster anti-Republican sentiment
5. McKinley and 77 other Republican congressmen lost their seats in the 1890
mid-term elections.
a. New Congress included 9 members of the Farmers’ Alliances
b. Tariff faded as main issue replaced by silver issue.
E. Harrison’s Sec. of Treasury permanently reduced gov’t surplus by increasing GAR pensions.
1. Helped save the protective tariff and reduce the gov’t surplus
2. GAR continued vigorous support of the Republican GOP (Grand Old Party)
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X. FARMERS RISE POLITICALLY
A. National Grange of the Patrons of Husbandry (The Grange) organized in 1867
1. Led by Oliver H. Kelley
2. Primary objective was to stimulate minds of farmers by social, educational, and
fraternal activities such as picnics, music, and lectures.
-- By 1775, movement claimed 800,000, mostly in Midwest & South
3. Eventually, established cooperatives for both consumers and producers.
a. Grain elevators, dairies to store & process products, cooperative stores to
purchase supplies.
b. Demanded end to railroad monopoly practices
c. Attempt to manufacture harvesting machinery ended in financial disaster.
4. Grangers went into politics with success in IL, WI, IO, and MN.
a. Strove to regulate railroad rates and storage fees charged by railroads
and by the operators of warehouses and grain elevators.
b. Granger Laws created to apply principle of public control over private
business for the general welfare.
c. Munn vs. Illinois (1877): Supreme Court ruled that private property
becomes subject to regulation by gov’t through its "police powers" when
the property is devoted to the public interest.
d. Many Granger Laws written badly and overturned by higher courts who
were persuaded by high-priced lawyers of wealthy interests.
-- Wabash case (1886): Individual states don’t have right to regulate
interstate commerce (effectively overturned Munn decision)
e. Due to Supreme Court reverses, esp. Wabash case, Grangers faded rapidly in influence.
B. Greenback Labor Party
1. Combined inflationary appeal of the earlier Greenbackers with a program for
improving conditions for laborers.
2. Election of 1878, Greenback-Laborites polled over a million votes and elected
14 members to Congress.
3. Election of 1880, Greenback Party ran General James B. Weaver, an old Granger
and Civil War veteran.
-- Polled only 3% of total popular vote.
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C. Populism -- Rise of Populist Party
1. Farmers’ Alliances in the South (formed in 1877) and Midwest (formed in 1880)
increasingly voicing discontent (Colored Alliance formed in 1889)
a. Like Grangers, sponsored social events, active politically, organized cooperatives,
sought heavy regulation of railroads and manufacturers.
b. 3 Alliances met in 1889 and boasted over 3 million members
-- Demanded free siliver and subtreasury plan.
c. Many supported or joined Knights of Labor; saw similar goals.
d. Major demand of Southern Alliance in 1880s: subtreasury plan
i. Called for est. of fed. subtreasury offices alongside warehouses or elevators.
ii. Farmers could store nonperishables and subtreasury would loan them up to 80% of
value of crop at modest interest and fees.
iii. Reason: farmers had poor cash flow during much of the year but large harvests drove
prices down.
e. Defeat of the Subtreasury scheme in Congress in 1890 led to Alliances taking
political matters into their own hands and forming a third party.
-- Since Civil War, Greenbackers, Workingmen’s and Knights of Labor parties, and
Farmers’ Alliances saw national banks as monopolistic culprits who kept the
"producing classes" poor.—the "Eastern Establishment"
2. The People’s Party (Populist Party) emerged in early 1890s as the culmination of the
Farmer’s Alliances (started in Topeka, Kansas)
a. Attracted recruits from Farmer’s Alliances & disenfranchised southern whites.
b. Ignatius Donnelly, elected 3X to Congress, a major figure.
-- Formerly known as utopian author (like George & Bellamy)
c. Mary E. Lease -- Made about 160 speeches in 1890 denouncing the
moneyed aristocracy in Wall Street
-- Kansas should raise "less corn & more hell."
d. "Sockless" Jerry Simpson, along with Lease, traveled to the South to rouse
up Southern Alliance support for Populist unity.
e. Tom Watson: elected to Congress in 1890, fought for subtreasury plan, and fought for
Populist unity in 1892; became VP runningmate of Bryan in 1896.
D. Disenfranchisement and anti-black violence
1. "Pitchfork" Ben Tillman and the beginning of disenfranchisement of blacks
a. Tillman, a Democrat, used his Southern Alliance influence to win the governorship of
South Carolina and dominate the democratic party there.
b. Succeeded in disenfranchising blacks in the state constitution.
c. Widespread southern fears of African-Americans in Farmers’ Alliances led to major
push for disenfranchisement in the 1890s & Jim Crow.
-- Following South Carolina’s lead, southern states made black voting limited in their
state constitutions.
d. Suffrage restriction essentially a ruling-class campaign against lower-class voters in
general, not just blacks.
i. Deliberate attempt by New South’s political and economic elite, threatened by the
Populists, to destroy party opposition and widespread political participation.
ii. Disenfranchised whites from the South also sought reforms despite their
race-supremacy ideas since they saw themselves as secondary victims.
iii. For 200 years the South had been racially divided but in 1890s white hatred toward
blacks became almost genocidal; huge increase in number of lynchings.
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XI. ELECTION of 1892
A. Democrats nominated Grover Cleveland (had been president four years earlier)
-- Now more conservative: his law practice in NYC represented wealthy businessmen.
B. Republicans renominated President Harrison who championed protective tariff.
C. People’s party (Populists) nominated General James B. Weaver
1. Delegates from Alliances, Knights of Labor, Nationalists (Bellamy Clubs) and Land and
Labor parties met in Omaha, Nebraska
2. Omaha Platform (written by Ignatius Donnelly
a. Free and unlimited coinage of silver at ratio of 16 to 1 (flexible currency)
b. A graduated income-tax (redistribute wealth)
c. Gov’t ownership of the telephone and telegraph, and railroads.
d. initiative & referendum
e. postal savings banks (safe repository run by gov’t)
f. limiting gov’t land grants to settlers rather than to railroads (a la Henry George)
g. direct election of senators
h. 8-hour work day
i. (subtreasury plan not included because it had been defeated and was a Southern
idea—many southerns didn’t support Populists due to racial reasons)
3. Weaver: former abolitionist and general in Union Army; Greenback-Labor Party
presidential nominee in 1880.
D. Campaign centered on the tariff
1. Epidemic of strikes damaging to Harrison’s cause as workers refuted Harrison’s claim that
higher tariffs meant higher wages.
2. Homestead Strike led to loss of thousands of Republican votes.
E. Result: Cleveland d. Harrison 277-145; 5,557,000 to 5,176,000
1. Populists won over 1 million votes and 22 electoral votes for Weaver.
a. One of few 3rd parties in U.S. history to win electoral votes.
b. Support came predominantly from KA, CO, ID, and NV
c. 3 governors; 5 U.S. Senators & 10 representatives; 1,500 candidates overall won office
2. Indebted white farmers of the "Solid South" refused to desert Democratic party
for fear of losing political power to blacks who claimed more than a million members in
a segregated Colored Farmers’ Alliance.
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XII. CLEVELAND’S SECOND TERM IN OFFICE (1893-1897)
A. Panic of 1893 (depression lasted until 1897)
1. Worst depression of the century
a. 1st large-scale depression in the new urban and industrial age.
-- 20% unemployed in winter of 1893-94 (rivaled Great Depression)
b. Brought hardship to masses living in cities.
c. 8,000 business collapsed in 6 mos. (including dozens of railroads.)
2. Causes
a. Immediate cause: collapse of the stock market.
b. Long-term causes:
i. Overbuilding of railroads, heavy loans to farmers, overspeculating.
ii. Reduced money supply from gradual withdrawal of European capital from U.S.
-- Free-silver agitation damaged American credit abroad and European bankers
called in their loans
iii. Labor disorders
iv. Existing agricultural depression.
3. Deficit resulted
a. Gold reserves dwindled to below $100 million (regarded as safe minimum
to support about $350 million in outstanding paper money)
-- Reason: gov’t paid out more for silver purchases than it received
for gold with legal tender notes – "endless chain" activities
b. Cleveland saw no alternative but to repeal Sherman Silver Purchase Act.
i. William Jennings Bryan argued against repeal
ii. Cleveland alienated Democratic silverites and disrupted the party.
B. Morgan bond transaction
1. By Feb. 1894, gold reserve sank to $41 million
a. U.S. in danger of going off the gold standard
b. Money would be volatile and unreliable and int’l trade would be crippled
2. Cleveland opted to sell gov’t bonds for gold and deposit proceeds in the Treasury but
scheme failed as "endless-chain" operations continued nevertheless.
3. Early 1895, Cleveland persuaded J.P. Morgan and other bankers to lend the gov’t $65
million in gold @ commission of $7 million.
-- Bankers made a concession to obtain one-half of the gold abroad and send it
to the Treasury.
4. Confidence in the nation’s finances restored for the short-term.
C. Coxey’s Army (1894) – "Commonweal of Christ"
1. Led most famous of the "industrial armies" of the unemployed on Washington, D.C.-gained national attention.
2. Coxey was a wealthy businessman who curiously was a currency reformer.
-- Had left Democratic pasrty for Greenback-Labor party and later People’s Party.
3. Coxey’s platform included a demand for gov’t to relieve unemployment by
an inflationary public works program + increase money supply by $500 million
4. Coxey and his 500 followers arrested in Washington, DC for walking on the grass of the
nation’s capital.
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D. Pullman Strike, 1894 (see Industrialism chapter)
1. Eugene V. Debs helped to organize the American Railway Union of about 150K
2. Attorney General Richard Olney sent federal troops stating strikers interfering with
transit of U.S. mail.
3. First time gov’t used an injunction to break a strike
4. Increased worker disenchantment with government.
E. Wilson Gorman Bill, 1894
1. McKinley tariff of 1890 had resulted in deficit of $61 million
-- Democrats sought to reduce high tariff of 48.4%
2. Wilson-Gorman Bill passed the Senate after significant revision by 634 amendments
driving tariffs upwards.
a. 2% income tax on incomes over $4,000 put in to please populists.
-- Wealthy lawyer Joseph H. Choate: "Communistic, socialistic"
b. Bill fell short of establishing a low tariff; 41.3% instead of 48.4%
c. Cleveland allowed the bill to pass despite being outraged with its high tariff.
3. Income tax shot down a year later in the Supreme Court (5-4) as it violated the "direct
tax" clause – Pollock v. Farmers’ Loan and Trust Co. (1895)
a. Thus, only popular feature of the tariff law was axed.
b. Populists further incensed by alliance of business and courts.
4. Republicans benefited from ill-fated Democrat sponsored bill; won Congress in 1894
F. William Hope Harvey: Coin’s Financial School (1894) – best seller
1. "Coin" Harvey a fictional character parading as fact
-- "Little professor" overwhelmed bankers and professors of economics with
brilliant arguments in favor of free silver as cure-all for economy & debtor woes.
2. Fed public feelings of a nat’l & int’l conspiracy to elevate gold above silver esp. the "crime
of 1873."
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XIII. ELECTION of 1896
A. William McKinley, ex-Congressman fro Ohio, Republican nominee for President.
1. The creation of Marcus Hanna, an iron tycoon, who had bailed McKinley
out of a $100,000 obligation
a. Hanna believed function of gov’t was to aid business.
i. Became symbol of big industry in politics.
ii. Believed that prosperity "trickled down" to the laborer.
iii. Critics lambasted Hanna for this idea.
b. Hanna raised a huge war chest of $3.5 million compared to only $300k for Democrats.
2. Republican platform supported the gold standard but advocated bimetallism (world wide
gold-silver standard)
a. Really a sham as all other leading nations would have to agree; they wouldn’t
b. Platform also praised protective tariff.
B. William Jennings Bryan, Democratic nominee; Tom Watson, v.p. nominee from GA
1. Democrats refused to endorse Cleveland for his silver-purchase repeal, Pullman strike,
and Morgan bond deal; move suicidal to the party’s hopes in 96’
-- Cleveland left office an extremely unpopular man.
2. Bryan a 36-yr-old from NB. who was the premier orator of his day
a. More heart and passion than brains and intellect.
b. First politician of his generation to lead a major party as a champion of the poor
3. Cross of Gold speech given at Democratic convention in Chicago
"You come to us and tell us that the great cities are in favor of the gold standard. We reply that
the great cities rest upon our broad and fertile prairies. Burn down your cities and leave our
farms, and your cities will spring up again as if by magic. But destroy our farms, and the
grass will grow in the streets of every city in the country... Having behind us the producing masses of
the nation … we will answer their demands for a gold standard by saying to them: ‘You shall not
press down upon the brow of labor this crown of thorns, you shall not crucify mankind upon a cross
of gold."
4. Democratic platform: unlimited coinage of sliver at ration of 16 to 1 (16 oz of silver
to 1 oz of gold); silver in a dollar would be worth about 50 cents
5. Bryan also nominated by People’s party but Bryan did not acknowledge the Populist
nomination early enough and the campaign began with uncertainty
a. Populists frozen out as Democratic party absorbed their 16 to 1 platform.
b. Endorsed Bryan rather than submit to hard-money McKinley.
6. Cleveland and other conservative Democrats: futile attempt to form their own ticket.
C. Campaign
1. Bryan forced silver issue to the forefront despite Hanna wanting to focus on tariff.
2. Hanna waged high pressure campaign against silver.
3. McKinley remained at his Ohio home waging his "front-porch" campaign.
-- United middle-class voters by characterizing Bryan as threat to their way of life.
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MR. FAEH
A.P. UNITED STATES HISTORY
UNIT VII: GILDED AGE
D. McKinley d. Bryan 271-176 in Electoral Col. ; 7,102,246 to 6,492,559 in popular votes
1. McKinley won in Northeast and North; Bryan in South and West (except CA & OR)
2. Most significant election since Lincoln’s victories.
a. Last serious effort by to win White House with agrarian votes.
-- Not enough farmers to constitute a majority; even with a personality
as compelling as Bryan.
b. Republicans remained White House for 16 consecutive years (28 of next 36 yrs)
c. Diminished voter participation as Republican party seen as party of the rich.
d. Beginning of the "4th party system" -- large population centers determined elections;
farmers discouraged and less politically active subsequently.
e. African Americans rights abandoned by Republicans since African American
vote in the South not important in 1896 election
E. 1896 election and the Wizard of Oz (L. Frank Baum)
1. Dorothy – represents everyman of the west; seen as pure and likeable
2. Yellow Brick Road = Gold standard
3. Dorothy’s silver slippers = Soft Money (but no one knows how to use their power)
4. Scarecrow = Midwestern farmers (who are seen as stupid but actually have wisdom)
5. Tin Man = Eastern Labor victimized by Wicked Witch of the East
6. Wizard and city of OZ = Eastern Establishment
7. Cowardly Lion with Big Roar and no bite = William Jennings Bryan
8. Wicked Witch of the East = Corporations of Eastern Finance
9. OZ = An ounce of gold or silver
10.The Wizard of Oz = McKinley (or any other president during Gilded Age)
11. Flying monkeys = plains Indians who were once free but now subdued by witch.
12. Wicked Witch of the West = Forbidding frontier environment (drought, tornados, etc.)
13. water = boon that will thwart drought (Wicked Witch of the West)
F. Legacy of Populism
1. Populism fails as a 3rd Party cause but has a political influence for 25 years after its failure
in the 1896 elections.
2. Ideas that carry forward during the Progressive Era (1900-1920):
a. railroad legislation
b. income tax
c. expanded currency and credit structure
d. direct election of Senators
e. initiative and referendum
f. postal savings banks
3. Populist ideas are geared to rural life. Many of its ideas will appeal to the urban
progressives.
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MR. FAEH
A.P. UNITED STATES HISTORY
UNIT VII: GILDED AGE
XIV. MCKINLEY’S PRESIDENCY: Domestic matters
A. Dingley Tariff Bill (1897)
1. Sought to recover lost revenues as Wilson-Gorman not raising enough.
2. Tariff rate raised to 46.5% up from 41.3%
B. Gold Standard Act of 1900
1. Republicans could not pass it until 1900 when silverites had left Congress.
2. Paper money was to be redeemed freely in gold.
-- Inflationists dealt one last mortal blow as they faded into the past.
C. Moderate and necessary inflation from rapidly expanding economy finally occurred
1. In 1880s & 1890s, prices remained depressed, money was tight, and volume of currency
in circulation lagged far behind increasing volume of business.
-- Silver too radical a solution:
i. Discredited cause for expanded currency
ii. Set back movement for agrarian reform
2. New gold discoveries in Canada, Alaska, South Africa, and Australia.
3. New cyanide process for extracting gold from low-grade ore.
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MR. FAEH
A.P. UNITED STATES HISTORY
UNIT VII: GILDED AGE
Bibliography:
Bailey, Thomas A., Kennedy, David M.: The American Pageant, 14th edition, Boston: Wadsworth, 2010
Brinkley, Alan: American History: A Survey, 11th edition, New York, New York: McGraw-Hill, 2003
College Board, Advanced Placement Course Description: History -- United States, European History, College
Entrance Examination Board, 2006
Newman, John, Schmalbach, John: United States History: Preparing for the Advanced Placement
Examination, Revised Edition, New York: Amsco Publications, 2004
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