Essential Question: How did economic growth impact NC and the US during the Gilded Age?

First some background/review to US Politics and Business:
The “Politics of Equilibrium”
1.
US Politics dominated by a Two-Party system: Democrats & Republicans
2.
Intense voter loyalty to each of these parties
3.
Well-Defined Voting Blocs
A.
Democratic Bloc: White southerners (preservation of white supremacy), Catholics, Recent immigrants (esp. Jews),
Urban working poor (pro-labor), Most farmers
B.
Republican Bloc: Northern whites (pro-business), African Americans, Northern Protestants, Old WASPs (support for anti-immigrant laws), Most of the middle class
4.
Laissez Faire Federal Govt: From 1870-1900 Govt. did very little domestically
A. Main duties of the federal govt.:
A.
Deliver the mail,
B.
Maintain a national military,
C.
Collect taxes & tariffs,
D.
Conduct a foreign policy
5. The Presidency a Symbolic Office: Party Bosses Ruled, Presidents should avoid offending any groups in their party, and
President gave out Federal Jobs (think Jackson and Spoils System)

3 Main Factors of Corruption
1. Federal: think of the President
2. Local: think of cities and what were called Political Machines
3. Corporate: think of the Robber Barons –
Rockefeller, Carnegie, J.P. Morgan, and
Biltmore

Federal Government & The Presidency
Credit Mobilier & Federal government: paying more for something than what it really costs
• Union Pacific employee Thomas Durant get into railroad building business
• gains government contract to build transcontinental railroad giving an inflated estimate
• his is only bid because of unscrupulous actions
• Pays construction company lot less and profits the rest
1872 - President Grant's Vice-
President and several Congressmen received bribes from Credit Mobilier, the construction company building the
Union Pacific Railroad, to fraudulently bill the government.

Federal Government & The Presidency
The Presidency & Patronage (Spoils System):
• Patronage: give government jobs to people that helped you get elected
• People usually not qualified to do the work 7 these individuals used jobs for personal gain
• Pendleton Civil Service Reform Act changed this by making people pass a Civil Service Exam

Local-City Corruption – Political Machines
• Organized group that controlled activities of a political party in a city by taking advantage of the needs of the immigrants and urban poor.
• Ensured voter loyalty by providing jobs and social services to immigrants’ most pressing problems
• Jobs, housing, healthcare, licenses
• Structure of Political Machines:
• City Boss: typically but not always, a mayor
• Controlled jobs, business licenses, and influenced the court systems
• Ward Boss and then Precinct Captains: 1 st or 2 nd generation immigrants, helped new immigrants with jobs, housing, and naturalization in exchange for votes

Political Machine Corruption – Graft & Scandal
• Voter Fraud: use of fake names, multiple votes, using pets’ names to ensure a political victory at the ballot
• Graft: (Bribes & Kick Backs) the illegal use of political influence for personal gain
• Bribe: official takes money from a citizen and then ensures citizen will get what they want
• Kick Back: typical example is in construction
• Elected official guarantees company gets the job at an inflated price, the difference goes into official’s pocket

Political Machine Example
Boss Tweed – William M. Tweed: head of famous
Tammany Hall, New York City’s powerful Democratic political machine
• He was a bookkeeper & volunteer firemen
• Worked his way up in political machine
• Plundered over $30 million 19 century money from
NYC

Corporate Corruption – Robber Barons
Companies develop from small businesses into corporations and then into Trusts
Trusts: a group of independent organizations formed to limit competition by controlling the production and distribution of a product or service.
Also: Corporate Trust acts as a financial manger for the task of handling the corporation’s financial assets.
• Robber Baron practice: build up multiple companies doing same thing, move all money into one of the companies and then file bankruptcy in the others