Chapter 23
Political Paralysis in the
Gilded Age
1869-1896
Grant Elected President
• 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.
Era of Good Stealings
• Jim Fisk and Jay Gould
devised a plot to drastically
raise the price of the gold
market in 1869.
– "Black Friday," September 24,
1869, the two bought a large
amount of gold to sell for a
profit. In order to lower the
high price of gold, the
Treasury was forced to sell
gold from its reserves. Fisk
and Gould did not make a
huge profit, but the
government lost money.
Boss Tweed
• "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.
Credit Mobilier
• 1872 - Union Pacific
Railroad insiders formed the
Credit Mobilier construction
company and then hired
themselves at high prices to
build the railroad line,
embezzling a lot of money
– When it was found out that
government officials were
paid to stay quiet about the
illicit business, some officials
were censured.
Liberal Republicans
• 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 civilservice reform to the Grant administration.
Panic of 1873
• Over-speculating was the primary cause; too much expansion had taken
place.
– Too many people had taken out loans of which they were unable to pay
• Mistrust of the government and inflation soon depreciated the value of
the greenback.
– 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.
• 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.
• Treasury began to accumulate gold stocks to prepare for 1879 (trade
paper money for gold)
– This policy, along with the reduction of greenbacks, was known as
"contraction."
• Redemption Day (1879) few holders of greenbacks redeemed them for
gold
– Greenback's value had 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.
The Gilded Age
• 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.
Republicans
• Stressed strict codes of
personal morality
• 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
• Immigrants
• Lutherans and Roman
Catholics who believed in
toleration of differences in
an imperfect world.
– Opposed the government
imposing a single moral
standard on the entire
society.
– Democrats were found in the
South and in the northern
industrial cities.
Stalwarts
• 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.
Hayes-Tilden Standoff
• 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 3rd 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 Ends
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.
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 14th
Amendment only prohibited government
violations of civil rights, not the denial of civil
rights by individuals.
Birth of Jim Crow
• 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, voterregistration laws, and poll taxes to ensure the denial of voting
for the South's black population.
Plessy v. Ferguson
• 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.
Problems of the Gilded Age
• 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 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.
Election of Cleveland
• 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.
• 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.
Tariff Battle
• 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 Billion-Dollar 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.
Rise of the Populist Party
• 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 oneterm 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.
– 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.
Election of Cleveland (Again)
• 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.
• Panic of 1893 - worst economic downturn for the US during the 19th Century.
– Caused by overbuilding and over-speculation, labor disorders, and the ongoing
agricultural depression.
• Treasury was required to issue legal tender notes for the silver bullion that it
had purchased that owners of paper currency would trade 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.
• Sherman Silver Purchase Act of 1890 was created by the administration of
Benjamin Harrison to increase the amount of silver in circulation.
– 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. (Good business sense – bad for public opinion because
people thought Cleveland sold the government to Morgan)
End of the Forgettable Presidents
• 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.“
• All except for Cleveland were Republicans