Industrialization and Corporate Consolidation - PDF by jnn17557


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Lecture Notes

1865-1900 – 35 years after the Civil War – Time of Industrialization
                    ->Rise of big business
                              Rise will
                              o Help the slow recovering economy take off
                              o Led to free enterprise and individual initiative
                                            Led to monopolistic practices
                                            Led to abuse by industries
                                            Led to the start of labor unions
Why did Industrialization happen??
         1. Expansion of the National Market
         2. Abundant Resources
         3. Adequate Labor Supply
         4. Expansion of Transportation
         5. Technical Improvements, inventions and innovations
         6. Developments in Communication
         7. Corporate System of Organization
         8. Territorial Extension of U.S. Manufacturing

    1.   Expansion of the National Market
             a. Opening of the west – an entire territory west of the Mississippi becomes a domestic market
             b. Innovations in Transportation – Transcontinental Railroad
                        i. Made it possible to –
                                 1. move raw materials to the industrial areas
                                          a. food – crops and livestock
                                          b. lumber – Pac. Northwest
                                          c. minerals – gold, silver and copper
                               2. move finished goods to the market – out west
             c. Govt. policy established to protect new industries – Tariff

    2.   Abundant Resources
         - discovery and utilization of the nation’s natural resources aided the growth in manufacturing
                   - mining contributed gold, silver and copper
                   -    iron ore found in Pennsylvania and the Great Lakes Region
                   -    oil discovered in Pennsylvania and the southwest
                   -    lumber from the Pacific Northwest
                   -    coal – The Newest Source Of Energy – abundant in the central Appalachian mtns.

    3.   Adequate Labor Supply
                  -   vets from the Civil War looking for jobs in the cities/factories
                  -   men, women and children looking to leave the farm
                  -   largest source of labor => Immigrants
                                           came from Europe because
                                               •     political and social unrest in Europe
                                               •     religious persecution
                                               •     belief the U.S. was a great place to live
                                               •     non-restrictive immigration policy
                  3 Waves of Immigration
                                1. 1820-1860 – 5 Million People
                                               came from Ireland, England and Germany
                                               most were Protestant
                                               most had some money
                                               most had some education – most spoke the language
                                               settled in eastern cities                 Midwest cities and states
                                                                     New York                     Chicago Cleveland
                                                                     Boston                       Cinn.            Wisconsin
                                                                     Philadelphia                 Detroit          Minnesota
                                                                     - work in                    - started farms
                                               Assimilation was fairly easy – happened for most
                                   2.   1860-1890 – 10 Million People
                                                came from Western and Northern Europe
                                                          Great Britain                    Ireland
                                                          Germany               Scandinavia
                                                Protestant and Catholic
                                                Irish and English – settled in the cities in the east
                                                Germans and Scandinavians – settled on the farms and cities in the
                                                Some had money
                                                Some had education- some with language skills
                                                Assimilation was a little more difficult

                                  3. 1890-1920 – 15 Million People
                                                 came from southern and eastern Europe
                                                           Italy                         Poland
                                                           Greece                        Russia
                                                 Catholic and Jew
                                                 Rural peasants at home with no skills, no education, no $
                                                 They came with nothing – skills, $, education
                                                 Much more different than any other group who had immigrated
                                                 Settled mainly in NYC and Chicago

                     A fight will rage between “New Immigrants” – those who came after 1880
                                                    And “Old Immigrants” – those who came before 1880
This fight will bring a rise in opposition to immigration – it had existed with the Know-Nothing Party in the pre-war time, but it will take off
          1820-1880 – assimilation was pretty easy
          1880-1920 – opposition grew – especially to southern and eastern Europeans
                                                               they were the most “different”
          Josiah Strong => Congregational minister
                                          “ Catholics and Jews posed a threat to American Life”
                                He wrote Our Country: It’s Future and Possible Crisis (1885)
          Henry Bowers – Iowa – started the
                                American Protective Association
                     -     it opposed Catholic Immigration
                     -     pushed for WASP control
                                          White                }
                                          Anglo                }         WASP
                                          Saxon                }
                     - most WASPs thought that immigrants
                                          drank too much
                                          caused too much crime
                     -     female WASPs disliked immigrant women because they accepted male domination

          Eventually the govt. will begin to restrict immigration – not too effective
                   1875 – no prostitutes or convicts allowed
                   1882 – no insane or mentally retarded
                              no people who couldn’t take care of themselves
                   1882 – Chinese Exclusion Act – Signed by Chester A Arthur
                              1880- 17% of Calif = Chinese – seen as a bad thing and we needed to stop it
                              1882- Chinese were banned for 10 years
                              1892- renewed
                              1904- made permanent
                   1894 – Immigrant Restriction League
                              Republican Senator – Henry Cabot Lodge from Mass. spoke for the group
                              Pushed Congress for more legislation
                                        - wanted to require a literacy test to get into the country
                   -     Vetoed by Grover Cleveland

          Some Basic Facts
                  -    the majority of the immigrants came with little or no skills
                  -    they worked long hours, for very little pay and no benefits
                  -    they lived in urban areas that were not suited for the massive influx of people
  4.   Transportation
                -     probably the most critical to the development of manufacturing
                -     effects all aspects of American life
                -     carried raw materials to the manufacturers
                -     carried finished goods to the buyer
                -     new innovations/inventions increased the value of the railroad as an industry
                                            air brakes
                                            signal devices
                                            refrig. Car
                                            sleeping car

  5.   Technical Improvements – Inventions and Innovations
                1. Steel and the Bessemer Process (1850s)
                           Henry Bessemer and William Kelly found a way to use oxygen with
                                     molten iron to create a better steel
                           Steel was stronger and more durable, lighted than iron and cheaper
                           1870 – 77,000 tons of steel manufactured
                           1880 – 1.39 Million tons
                           1900 – 11.4 Million tons
                           took huge supplies of iron ore and coal and we had it
                                               Lake Superior                 Ohio
                                               Wisconsin                     Alabama
                                               Mesabi Range – Minn.
                                     Manufacturers developed steel mills around the supply – more settlement

                 2. Discovery of Petroleum
                          Edwin Drake drilled the first successful well in Pennsylvania in 1859
                          1860-1865 – 2-3 million barrels a year
                          1873 – 10 mill barrels produced
                          1880’s – ave 20 million barrels a year
                          1890’s – 50 million barrels per year
                                     crude oil was refined into kerosene and eventually gasoline
                          another new source of fuel

                3. Telephone (1876)
                           Alexander Graham Bell
                                     1880 – 85 towns and cities had local phone networks
                                     1895 – 300,000 phones in the country
                                     1900 – 800,000 phones
                                              AT&T consolidated over 100 local systems into one of the biggest
                                                         companies in America
                4. Electric Light (1879)
                           Thomas Edison – incandescent light bulb
                                     1882 – opened a power station and gave light to 85 consumers
                                     1898 – 3000 power stations in country
                                              electric power began to replace steam as the main power source and as
                                              coal replaced it as a source of fuel
                5. Vulcanization of Rubber
                           Charles Goodyear
                                     made rubber stronger and more resistant to heat
                6. Continued and increased use of Eli Whitney’s idea of interchangeable parts
       ***** bottom line – more stuff made – stuff was less expensive *****

6. Developments in Communication
                -   telephone and Alexander Graham Bell
                -   transatlantic cable was laid – 1866 – Cyrus Field
                -   1865-1870 – miles of telegraph line tripled

7. Corporate System of Organization
                 -   individual proprietorships and partnerships gave way to the corporation
                 -   corporations were charted under state law
       Advantages to the Corporate System
                 -   relative permanence
                 -   limited liability
                 -   opportunity to acquire lots of land/capital in a short time
       Manufacturers throughout industrialization seeked corporate charters
                 -   from these grew elaborate structures designed to insure monopolistic control of
                            particular businesses
                  - once a corporation was set up and going – the desire to control an entire industry
                                       this led to consolidation
                                                  objective of consolidation – eliminate competition
                                                  horizontal consolidation
                                                  vertical consolidation
         Horizontal Consolidation
                  -    controlling one part of every industry
                            for example: you control the sewing machine business -> Singer
                                                  every sewing machine used – no matter what you were making –
                                                  was made by Singer

         Vertical Consolidation
                   -   controlling all aspects of a certain industry
                             for example: John Rockefeller and Oil
                                       he controlled the business “from ground to tank”

  Consumers complained and new ideas to control businesses developed

         1.   Pool
                     -    used mostly by the railroads
                     -    Pools were like an agreement among several companies
                                          - establish prices
                                          - regulate output
                                          - divide markets
                     Pools weren’t legal – they weren’t binding
                     They could be easily broken
                     Not really effective

         2.   Trust
                   -   developed by John Rockefeller and his Lawyers
                   -   Standard Oil Trust (1879)
                                       group of corporations engaged in refining and transporting oil
                  -    the group took its stock and turned it over to a Board of Trustees
                            this Board had the power to control all these companies
                  -    the original stockholders received Trust Certificates in exchange for their stock
                  -    they were paid dividends based on what the Trust made
                            1882 – 76 companies in the Standard Oil Trust
                                       76 companies = 90% of the nation’s oil refineries and pipelines
                            Trust soon developed in the
                                                 Steel -}
                                                 Sugar }              Industries
                                                 Beef -}
         3.   Holding Companies
                  -    some states began to prosecute Trusts – saying they were unlawfully restricting
                  -    industry leaders began to experiment with holding companies
                  -    Holding Company was a company that neither made anything nor provided any
                  -    Holding Companies instead purchased controlling interest in companies that did make
                            stuff or perform a service

  8. Territorial Extension of U.S. manufacturing
                    -    Northeast still the manufacturing leader but ….
                               - Chicago and Midwest – center of meatpacking and flour milling
                               - Pennsylvania-Ohio-Indiana-Illinois
                                                    center of iron and steel
                               - South – lumber, textiles and tobacco
Take the 8 factors – and realize there are 4 basic dominant features
                    1 – we have a rapid spread of technology and the factory system
                    2 – there is constant pressure on firms to compete tooth and nail
                                         cut costs
                                         cut prices
                                         eliminate competition
                                         consolidate into monopolies
                    3 – continued drop in prices
                    4 – then we have a failure of the money supply to keep up with productivity
                                         this in turn effects prices and credit
The Factors and the Features combine into some basic facts
                   -    technological changes lead to increased production
                   -    also made it possible to lower costs
                                        less skilled worker needed to work in factor
                                        could pay workers less
                   -    cost cutting leads to competition
                                        competition leads to consolidation
                                        consolidation leads to monopolies
                   -    farmers and small businessmen
                                        suffered from low costs- harder to make $
                                        benefited from lower prices on store bought goods

The Railroad System
                  -     very important to industrialization
                                        - united all sections of the country
                                        - brought raw materials and food to industrial areas
                                        - brought finished goods to domestic markets
                                        - brought finished goods to port for shipment to foreign markets
                   -    the nation believed it was a good idea to bind us together by the railroad

         Railroad – East of the Mississippi
                             - lots of construction during the 1850s
                             - construction slowed a little during the war
                             - got going again after the war
                   Basic Facts
                             1865-1873 – 30,000 miles of track laid
                             1880 – 93,000 miles of track in use
                             Railroads made changes after the war
                                        - adopted a standard gage for the track
                                        - improved their engines
                                        - introduction of air brake in 1868
                                                  - allowed brakes to be applied to all cars at the same time
                                                  - allowed for longer, heavier trains – more cars/more stuff/ more $
                                        - use of Pullman Cars
                                                  - invented by George Pullman
                                                              sleeper (1859)
                                                              dining (1868)
                                                              parlor (1875)
  1860s – while the Transcontinental Line was being constructed
                                        Railroad Lines in the East were consolidating into major railway systems
                                        - New York Central
                                                  ran from NYC to Chicago
                                                  organized by Cornelius Vanderbilt
                                        - The Erie
                                                  served the state of New York
                                                  financed by Jay Gould and James Fisk
                                                              - they will go bankrupt due to stock manipulation

                                       - The Pennsylvania
                                                Pittsburgh to        Chicago
                                                                     St. Louis
                                       - The B&O (Baltimore and Ohio)
                                                  extended to Chicago
                                       - Illinois Central
                                                  Chicago to New Orleans
                                                  run by Edward Harriman
                                                  one of the few major north-south lines

                   *** Most of the small lines were consolidating and most of the area east of the Miss.
                            Had railroad access *****
Railroad – West of the Mississippi

                   The Transcontinental Railroad
                            Union Pacific } Both Chartered
                            Central Pacific }        in 1864

                   Credit Mobilier Construction Company
                            Given the right to build the Union Pacific from Omaha, Neb. -> west
                   Crocker Corporation – Run by the “Big 4”
                                      Charles Crocker
                                      Mark Hopkins
                                      Collis Huntington
                                      Leland Stanford
                            Given the right to build the Central Pacific from Sac, CA -> east

         Both companies got help from the government – the companies got
                           1. right of way – land the track was on
                           2. free use of timber and minerals on the public land
                           3. a grant of 10 square miles of public land for every mile of track laid
                           4. Congress also agreed to “lend” each company
                                               $16,000 per mile across the plains
                                               $ 32,000 per mile across the plateaus
                                               $ 48,000 across the mountains
         Construction Methods
                  1867 – construction got going
                           most work done by immigrants
                                     Chinese on the Central Pacific
                                     Irish and Germans on the Union Pacific
                           They worked nearly 24 hours a day
                           The two railroads met at Promontory Point in Utah in May of 1869

         Other Western Railroads
                 1890- several major lines were in operation in the west
                            organized by shrewd and powerful entrepreneurs who used ethical and
                            unethical methods to secure domination

                   1.   Union Pacific
                   2.   Central Pacific
                   3.   Great Northern Railway
                                        Run by James Hill
                                        Only line built without govt. assistance
                   4.   The Northern Pacific
                                        Organized by Jay Cooke and taken over by Henry Villard
                   5.   The Southern Pacific
                                        Organized by the central pacific guys
                   6.   Atchison, Topeka and the Santa Fe
                   7.   Chicago, Milwaukee, St. Paul and Pacific

         Patterns of Financing
                   Most of the western railroads used methods developed by the Union Pacific to finance their
                                        - sale of land given to the railroad company by the state and federal govts
                                        - “loans” state and federal govts
                                        - loans/grants from county and local govts. Trying to attract the RR to go
                                                    through their area
                                        - private investment by Americans and Europeans
         Government Stimulus
                   more than 130 mill acres given by the federal government
                   more than 55 mill acres from state governments
                   for every $3 invested by private individuals the government “loaned” $2
                             late in the 1880s – govts at all levels chose to stop requiring payment
Effects of the Transcontinental Rail System
                    1. Influence on Manufacturing
                              a. Raw materials, farm commodities and manufactured goods could be moved freely
                              b. Frontier farms and western commodities could supply urban centers of the east
                              c. Manufacturers were encouraged by the expanding market and easy access to raw materials to seek higher profits
                                   with mass production at lower cost per unit
                              d. Foreign trade expanded
                    2. Influence on the Population
                              a. Due to high cost of construction the railroad sold as much land as possible – quickly which will led to more
                                   western settlement
                              b. Railroad agents actively sought immigrants as workers and purchasers of land
                    3. Influence on Politics
                              a. Territories became states
                              b. Western senators and reps would go head-to-head with eastern business interests in the 1890s
                    4. Indirect effect of the railroad on the Economy
                              a. Railroad bought $41.6 mill worth of cars and engines
                                          i. New jobs
                              b. purchases led to a need for new technical advances
                              c. caused growth in other industries – steel
          Negative Effects
                    1. Political Corruption
                              a. Railroad lobbyists gained more power in state legislatures
                              b. Pressure was exerted in various ways to get legislation favorable to railroads or to block legislation that restricted
                              c. Railroad Companies
                                          i. Gave free passes to office holders
                                         ii. Made contributions to party campaigns
                                        iii. Bribery
                    2. Financial Abuses
                              a. Fraudulent sale of securities
                                          i. Sold more stock to Europeans than was allowed by law
                                         ii. Would sell stock and pocket the $
                              b. Market Manipulation
                                          i. Manipulated the stock exchange
                                         ii. Most cared more about making $ than about running a railroad
                              c. “Stock Watering”
                                          i. selling more stock than the railroad was worth

                                                       Lecture Notes – Industrial Revolution II

The Railroad was very important, but so were

Steel and Carnegie
                     Andrew Carnegie (1835-1919)
                     Carnegie learned his business sense from Tom Scott
                               - his boss on the Pennsylvania Railroad
                     As Scott moved up so did Carnegie
                               -     he developed a cost cutting analysis and helped the railroad make lots of money
                               -     set up the first night train service
                               -     worked on scheduling and on time zones
                     Carnegie invested his money in things he knew the railroad would need
                               -     sleeping cars
                               -     bridge building companies
                     1868 – Carnegie making $50,000/yr. just from his investments
                     1875 – Carnegie got involved in steel
                               -     he was never big in creation but was fantastic in mgmt.
                     He bought up
                               -     production lines
                               -     coal and iron mines
                               -     limestone quarries
                               -     coke ovens
                               -     ships and railroads
                     He built his steel plant in Homestead, Pennsylvania
                     He used only the Bessemer Process in his plant
                   1890- he dominates the Steel industry
                               he has two choices
                               -    take over all of the steel industry
                               -    get out completely
                   1901 – He decides to get out
                               JP Morgan offered to buy Carnegie Steel
                               Morgan had already purchased
                               -    American Steel and Wire                    }
                               -    American Tin Plate                         }         He will
                               -    National Tube                              }         put it all
                               He then purchased                                         together
                               -    Carnegie Steel                             }         and create
                               -    All Andrew’s mines and transportation      }         U.S. Steel
         U.S. Steel – first Billion $ industry
                               The stock was worth $1.4 Billion
                   Carnegie stockholders made $492 Million
                   Carnegie himself made $250 Million

         Once finished with steel Carnegie turned to philanthropy
                    Between 1901 and 1919 he gave away $350-400 Million
                            -     Built Libraries and stocked them with books
                            -     Built art museums and school
                            -     Built Carnegie Hall for the education of musicians and singers etc.
                    Why ??? _ Gospel of Wealth ( we will cover that later ☺)
Oil and Rockefeller

        1870 – John Davison Rockefeller
                           founded the Standard Oil Company of Cleveland
                 Rockefeller used every technical advancement, employed every means – fair and unfair
                           to eliminate his competition
                 He would begin by trying to get a competitor to join him – but when they didn’t
                           -     he got the railroad to give him a 10% rebate and to charge his competition more
                           -     he cut local prices to force competition out
                           -     Kerosene was sold in grocery stores so Rockefeller got meat, sugar and other products – sold them to the stores
                                 which sold only his kerosene at real cheap prices- and crushed the stores who sold the competition’s products
                           -     He hired spies to track down customers of independent refineries and offered them bargains
                           -     He used bribery
        1879 – he controlled +90% of the nation’s oil refining businesses as well as the pipelines and the oil
                 3 phases of the industry developed
                           -     slaughtering and packing
                           -     storage and distribution
                           -     by products
                 Gustuvus Swift established Swift & Co.
                 1877 – with the first refrig. Car – shipped meat from Chicago to Boston

Business had been living in a society of Social Darwinism
                              -    they had been allowed to go and prosper
                              -    they had created trusts and monopolies
                              -    they had abused their workers and their customers
         Eventually – the public will begin to push for changes

Economists and authors wrote against Social Darwinism
                            -    Henry George – Progress and Poverty (1879)
                                      - discussed the unequal distribution of wealth
                                      - pushed for a single tax for land owners
                                                - this would bring money to the govt. and they could give it
                                                           to the poor

                             - Edward Bellamy – Looking Backwards (1888)
                                      - novel that urged the elimination of competition and the creation of a socialist
                                                society based on cooperation

                             - Henry Demarest Lloyd – Wealth Against Commonwealth (1894)
                                      - an attack on John Rockefeller and Standard Oil
                                      - argued that social Darwinism represented nothing more than an attempt to
                                                 legitimize the greed of industrialists
The public began to ask and then to demand some regulation on the
                              -    trusts
                              -    railroads
         In both cases – the states had to act first and then Congress will act

Anti-Trust Legislation

          By 1890 – 15 states passed laws against corporate practices that restricted trade
          Most didn’t work because the Supreme Court was willing to see corporations as “persons” and under
                   the 14th Amendment no state could deny “life, liberty or property without due process of law”
                   from any person
          1890 – Congress also acted
                             Sherman Anti-Trust Act
                             -    it made illegal “every contract, combination in the form of a trust or otherwise
                                        or conspiracy in restraint of trade or commerce among several states or with
                                        a foreign nation”
                             -    it authorized prosecutions by the federal district attorneys and suits for damages by any individual or firm injured
                                  by a company in violation of the Act’s provisions

          *** Until the 1900’s the Act did NOTHING to control the abuses by big business ***
                                                   WHY ???
                             -     loose wording of the law
                             -     attitude of the Supreme Court
                                         - U.S. v E.C. Knight & Co. (Jan 1895)
                                                   - Court ruled 8-1 that the American Sugar Refining Company’s
                                                             acquisition of the stock of it’s leading competitor was not
                                                             a violation of the act. American Sugar owned 95% of the
                                                             sugar industry
                             - the lack of desire by Harrison, Cleveland and McKinley to see the govt. go after trusts
                             - Court would begin to use the act against labor union activity when the unions went after big business

Railroad Legislation

                    Like with Anti-Trust Laws – railroad regulation began with the states

                              State Regulations
                                         - 1869 Mass. will be the first state to set up a commission with the power to
                                                    supervise the railroad
                                         - New York and New Hampshire will soon follow
                                         - The first major success in the Midwest
                                                    - Fixing Maximum Prices
                                         - The Grange in many Midwestern states were able to set up commissions that set
                                                    rate schedules
                              The Commissions and Rate Fixing were initially upheld by the Courts
                              -    1877 Munn v Illinois
                                         said Illinois’ law fixing grain storage rates didn’t deprive the warehouse owners their 14th Amendment
                                         property rights
                              -    1877 Peik v Chicago
                                         gave the states the right to deal with railroad abuses that were limited to INTRA – state commerce
                    Unfortunately - 1886
                              Wabash Rate Case
                                         Supreme Court decided that state laws set to prevent rate discrimination were
                    *** Result: most of the state passed regulations were useless
                                         Court believed it was the job of Congress to control the Railroad
                    *** A complete reversal from the previous cases
          1868 - Issue of Railroad abuses had been a topic in each election
          1872 – Labor reform demanded Congressional regulation of rates
          1876 – Prohibition Party called for govt. action
          1880 – Greenback Party called for action
          1884 – Greenback-Labor Party called for action
          1874 – Windom Commission reported the problems to the Senate
                    many pieces of legislation were proposed – but none could pass the house and the senate
          1887 – Congress will finally act
                              Interstate Commerce Act – it forbid Railroads
                              -    to form pooling agreements
                              -    to charge more for a short haul than for a long haul under the same conditions and same traffic
                              -     to grant rebates
                              It required
                              -     railroads to publish their rates
                              -     to give a 10-day public notice to rate changes
                              It set up
                              - a 5 member commission ( Interstate Commerce Commission) which would
                                          - supervise the accounting systems, rate schedules and business methods used by the RR
                                          - hear complaints of shippers
                                          - assist the Attorney General in prosecuting offenders

          Like the Sherman Act – the Interstate Commerce Act was initially ineffective
                            -     couldn’t compel witnesses to testify
                            -     railroad companies continued to win cases on appeal after the Commission had ruled
                            -     Supreme Court continued to use the law against the commission

                    *** Two pieces of legislation – both passed to prevent abuses by big business – both succeeded only in allowing more abuses to
                    happen until things change in the 1900s. *****

While the government was helping big business to grow – the also saw cities grow and the abuse of workers continue

Urbanization – The growth of cities
                   1860 - <25% of the American Population lived in cities
                   1890 – 33 % of the American Population lived in cities
                   1910 – 50 % lived in cities

                   1860 – NYC = only city with +1 million population
                            7 cities = +100,000
                   1870 – 15 cities = + 100,000
                   1920 – 68 cities = + 100,000
                            New England and the Middle Atlantic states were the most urban
                            Most major cities were on the water
Why did cities grow ???
                            -     annexation
                                       taking areas outside of a city into the city limits
                                       i.e. 1898 – NYC annexed – Brooklyn
                                  Population of NYC                     The Bronx
                                       grew 1.5 mill to 3 mill          Staten Island
                            -     migration
                                       to the west and north
                                       by blacks looking for jobs
                                       by farmers to the cities
                                       by people moving from one urban area to another
                            -     immigration
                                       30 million people in 100 years
                                       most became city dwellers
                                       1890- 4 of 5 New Yorkers = foreign born
                                                  this led to the creation of ethnic neighborhoods – ghettos
                                                             poor, inadequate housing
                                                             slums in deteriorated areas
                                                             inadequate social services
                                                             decreasing health care and sanitation
                                                  will lead to political corruption

          Technical advances assisted growth of the cities
                             -    urban mass transit
                                       1871 – Andrew S Hallidie = Cable Car
                                       1873 – San Francisco first city to put a system into operation
                                                  still in use today
                                       1880s – Stephen Dudley Field = Electric Street Car
                                                  led to elevated trains and subways
                                                  1890 – 50+ street car systems operating in major urban areas
                                                  1902 – 22,000 miles of street car track
                                       1880s – John Roebling – Suspension Bridges
                                       1870s – James Eal – cantilevered steel bridges
                                                              bridges over rivers
                             -    Paved Streets
                             -    Electric Street Lights
                                       More electric power in major most cities
                             -    Central Water and Sewer Systems
                                       Improved public health
                             -    Fire Departments
                             -    Steel Frame Construction
                             -    Electric Elevator – 1889 – Otis Elevator Company

                   Urban Problems
                            1. Housing
                                      - most immigrants could only afford to rent tenements
                                                 Tenement = 4 to 6 stories
                                                           4 apartments per floor
                                                           2-3 families per apt.
                                      - poorly lit and ventilated
                                      - dirty and dangerous
                                      - 1895 – 702 people/acre in NYC on the lower east side
                            2. Poverty

                                      -1890s – unskilled workers - $9 a week
                                      - worked 10 hrs per day – 6 days per week
                                      - in steel workers worked 6 – 12 hr days
                                      - 1870 – 11% of all workers were women
                                      - 1920 – 20% made $5-6 per week
                                                 domestic help - $2-5 per week
                                      - 1880 – 20% of the nation’s 10-14 yr olds worked – they made less than women
                            3. City Bosses
                                      - Boss = the head of an urban political machine
                                      - Political Machine would provide
                                                 legal aid
                                      - all held picnics and provided entertainment
                                      - advocated public improvements
                                      - city dwellers who benefited from this help repaid the bosses with their votes
                                      - city bosses controlled the politicians that made the major decisions
                                                 - politicians did what they were told
                                                 - bosses took bribes from construction companies to insure companies got
                                                            govt. contracts
                                                                      - electric street cars
                                                                      - water and electricity
                                                                      - public works
                                      - Most Famous Boss – William M Tweed – “Boss” Tweed
                                                 - He controlled NYC’s Democratic Political Organization
                                                            - Tammany Hall
                                                 - Lots of widespread graft and corruption
                                                            - helped immigrants who in turn supported the bosses
        Urban Social Reform
                            Key was education
                                      Public Education for adults and kids
                            McGuffey Readers used by kids
                                      taught them how to read and also taught religious and ethical values
                            Chautauqua Movement
                                      education for adults
                            1873 – first Kindergarten set up in St. Louis
                            1860-1900 – increase in teacher training
                                      1860- 10 training schools
                                      1900 – 350
Development of the Social Gospel Movement
                  Led by Washington Gladden
                  Philosophy – Problems caused by modern industrialism could be solved by applying the teachings
                                      Of Jesus
                  Walter Rauchenbusch – first major proponent of social gospel
                            “In Christianity and social crisis”
                            urged Protestants to carry Christian principles into action by supporting the causes of social reform
                  Led to the creation of Settlement Houses
                            community centers to help urban dwellers improve their education and vocational skills
                            and getting better jobs
                           They offered – child care
                                           - health care clinics
                                           - art and music education
                                           - recreation opportunities
                 1886 – first settlement house in NYC = Neighborhood Guild
                           Lillian Ward – Henry Street Settlement
                 1889 – Most Famous – Chicago – Hull House
                                      run by Jane Addams and Ellen G Starr

Management and Labor Disputes

                 Mgmt. Aims = achieve the greatest profits possible through the effective use of materials and labor
                                  1. Yellow Dog Contract
                                             a. Agreement by workers not join a union while working
                                  2. Blacklists
                                             a. Name of workers who engaged in actions contrary to the employers’ interest
                                  3. Injunction
                                             a. Court order preventing an action
                                  4. Open Shop
                                             a. Employment was not determined by union membership
                                  5. Company Police and Spies
                                  6. Strikebreakers

                 Labor Aims = 3 Principal Aims
                                   1. Higher Wages
                                   2. Shorter Hours (8 Hr. Day)
                                   3. Safe and Sanitary Working Conditions
                          Secondary Goals
                                   1. Establishment of Federal and State Labor Bureaus
                                   2. Abolition of Child Labor
                                   3. Abolition of Contract Labor
                                               - laborers imported in from a foreign nation by an employer
                                   4. Recognition of the Principles of Collective Bargaining
                                   5. Institution of Compulsory Arbitration of Mgmt. And Labor Disputes
                                   7. Laws Providing for Workers’ Compensation
                 Labor Tactics
                                   1. Strike
                                   2. Picketing
                                   3. Boycott
                                   4. Closed Shop
                                               a. Employer only hires union members in good standing

                 First Labor Unions
                           1. Craft or Horizontal Union
                                    a. Membership limited to workers in the same craft
                           2. National Industrial or Vertical Union
                                    a. Membership included workers in an entire industry no matter the occupation/craft
                           1866 – National Labor Union
                                    William H Sylvis
                                               skilled iron workers union
                                               1. elimination of monopolies
                                               2. establishment of the Dept. of Labor
                                               3. abolition of contract labor
                                               4. arbitration
                                               5. 8 hour day
                                    lasted until 1872
                           1869 – Knights of Labor
                                    first under Uriah Stephens and then Terence Powderly
                                  Knights stressed
                                               1. industrial unionism
                                               2. inclusion of all workers skilled and unskilled
                                               3. formation of local assemblies of workers – based on residence not on occupation
                                               4. highly centralized control of local assemblies by the national body
                                               1. 8 Hour Day
                                               2. equal pay men and women
                                               3. abolition of child (under 14) labor
                                               4. no foreign contract labor
                                               5. arbitration
                                               6. state and federal depts.. of labor
                                               7. safety and sanitation standards
                                               8. laws making employers pay laborers on a weekly basis
                                               9. creation of co-ops
                                               10. income tax
                                               11. govt. regulation of railroad and telegraph
                            1886 – under Powderly – 5892 local chpts. And 700,000 members
                            Knights began to decline
                                     1. unsuccessful strikes
                                     2. unions=violence in the public eye
                                     3. issue of skilled workers vs. unskilled workers
                                     4. unsuccessful co-ops = unions lose $
                                     5. conflicting leadership goals
                                               principal goals vs. idealist social reform
                                     6. local assemblies vs. national body
                                     7. increase in the # of unskilled workers
                            1886 – while the Knights were declining…
                                               the AFL – American Federation of Labor began to rise
                                               under the leadership of Samuel Gompers and Adolph Strasser
                                     AFL – League of separate and quite autonomous craft unions
                                               Strong on the local level with restrictions on control by the central body
                                     Objectives: “Bread and Butter” Issues
                                               1. Higher Wages
                                               2. Shorter Hours
                                               3. Safer and more Sanitary Conditions
                                     The Organization also
                                               1. advocated restrictions on immigration
                                               2. used strikes, boycotts and collective bargaining
                                               3. stayed away from joining one political party
                                                         a. used it’s power to achieve specific objectives – NOT major social change

                            1890 – 190,000 members        }          not a
                            1900 - 550,000 members        }         great % of the
                            1915 – 2 million              }          work force

                            AFL – did achieve
                                                1.   development of effective programs for sickness and unemployment benefits within the union
                                                2.   establishment of an 8 hour day in many trades
                                                3.   recognition of collective bargaining by many employers
                                                4.   slow but steady growth in influence on state and federal legislation

                            1905 – creation of the IWW – Industrial Workers of the World

Mgmt./Labor Conflicts
                 1880-1900 – 25,000 strikes involving 6 million workers – Most ended in Failure

                  1877 – Railroad Strikes
                                     B & O Railroad workers walked because of wage reductions
                                     Other workers from across the country also walked
                                     Riots, Bloodshed, Destruction of Property
                                     State Militias were called into action
                                     President Rutherford B Hayes eventually sent in federal troops to restore order
                  1886 – May 4 – Haymarket Square Riot
                                     A mass meeting organized by anarchists
                                     Held in Haymarket Square in Chicago to protest police tactics against strikers at the
                                                McCormick Harvester Plant
                                     Police tired to disperse the crowd – a bomb was thrown at them
                                                7 dead policemen and many injured
                                     Both sides opened fire – 2 more dead and more police and civilians injured
                                     8 anarchists were convicted of inciting a crowd to riot
                                     4 anarchists were hanged
                           *** Significant because the Labor Movement was injured throughout the nation
                                     The public believed the Knights of Labor were
                                                1. affiliated with anarchists
                                                2. condoning violence
                                                3. were responsible for the riot
                 1892 – June – The Homestead Strike
                                     Homestead, Penn – Plant of Andrew Carnegie Steel
                                     Members of the Iron, Steel and Tin Workers struck in protest of reduced wages
                                     In order to destroy the union the company hired 300 Pinkertons to protect the hired strikebreakers
                                     Strikers fired on and killed several Pinkertons
                                     Eventually the state militia was called in to restore order
                                     After 5 months – the union could no longer operate – out of spirit and out of money
                                     Strike collapsed
                 1894 – June – The Pullman Strike
                                     Pullman Car Company – Chicago – workers went on strike
                                     Company had reduced wages to keep the dividend paid high
                                     Members of the American Railway Union in Chicago tried to help the strikers
                                                Refuse to handle trains with Pullman Cars
                                     Across the country the boycott continued
                                     Attorneys for the Railroad Managers Association got a court injunction
                                                Used the Sherman Act saying that the ability to move the U.S. Mail was being restricted
                                                the strike was a “conspiracy in restricting trade”
                                     Strikers ignored the injunction and the govt. reacted
                                                1. Grover Cleveland sent troops to Chicago – He said “to assure mail delivery”
                                                           but it was more to maintain order
                                                2. Attorney General – Richard Olney
                                                           instructed govt. attorneys to press charges against the union for contempt in
                                                           President of the Union – Eugene V Debs
                                                                     Got 6 months for refusing to obey the injunction
                                                *** First time an injunction was used against a union ***
                 Effects of the Major Strikes
                           Change in public opinion
                                     - most Americans believed in “bread and butter” issues but were suspicious of unions and the
                                                violence that went with them
                           Use of Sherman Anti-Trust Act against the unions

                 Some Successes
                         1892 – 8 hr. day for federal employees
                         1882 – Chinese Exclusion Act
                         1898 – Erdman Act
                                  mediation in disputes with railroad and interstate commerce
                         1898 – Max. hours for miners
                         1907 – Hours of Service Act
                                  limited consecutive hrs. worked by railroad employees - safety
                         1908 – Max hours for women

                                                            Opening of the West

After the Civil War
                 1.  People got greedy
                 2.  tired of sacrifice
                 3.  tired of government control
                          “ let things regulate themselves”
                          “ the progress of the country is independent of legislation”
        People weren’t concerned with waste of resources or corruption in high places
        As long as no one interfered with their own personal gain – people didn’t care

Mark Twain called this the Gilded Age
                “Dazzling on the surface, basic metal below”
America displayed vigor, imagination and confidence in themselves and the future of the country while cheapness and corruption ran

Intellectuals drove the exploitations
                   Charles Darwin – The Origin of the Species (1859)
                                      Theory of Evolution      (1870)
                            Both began to influence opinion in America
                            “Nature and Natural selection brought progress”
                            “Let the buyer beware”
                   Adam Smith – Wealth of Nations (1776)
                           Echoed the same ideas in economics

*** The Stage is set for the 2nd Half of the Century ****

Opening of the West

1860 – For 250 years the Indians had been pushed west and they still inhabited ½ of the US
1862 – Homestead Act – led to more settlement

Contributing Factors to the move West
                 1. Courage and Perseverance of Pioneers
                 2. Lots of Capital and Supply of Labor for Business to expand
                 3. Govt. policies and support for settlement
                 4. Building of the Railroad

Settlement signaled a change for the Indians
        1860 – most Indians lived in
                  1. Great Plains
                  2. Great Basin
                  3. Rocky Mountains
        They were faced with
                  1. introduction of disease
                  2. killing of buffalo/bison
                  3. forced movement to reservations

        1865 – most Indians very angry – 225,000 – because of the Chivington Massacre
                Colorado Militia led by Colonel JM Chivington came upon a community of Cheyene Indians at
                         Sand Creek Colo.
                The militia killed 450 men, women and children
                         “The Indians were scalped, their brains knocked out, the men used their knives, ripped open
                                    the women, clubbed the little children. Knocked them in the head, beat their brains out
                                    mutilated their bodies in every sense of the word.”
                         “It is the foulest and most unjustifiable crime in the annuals of America.”
        The Indians were ready to retaliate
                Some friendly tribes                            Some not so friendly
                         Crow                                            Southern Arapaho
                         Northern Arapaho                                Sioux
1865-1875 – 30,000 military men moved into the area to take care of the problem

1867 – US Govt. thought it had a solution – they had gotten most of the chiefs to agree to move to 2 reservations
                 1. Black Hills of the Dakota Territory
                 2. Oklahoma
        This will work until gold is found in the Black Hills and the US wants the land back
                 1. many Indians refused to follow their chiefs
                 2. people in charge of Indians were some of the most corrupt govt. officials around
        1874 – Gold found in the Black Hills
                 Northern Pacific Railroad was being built
                          - both of these sent the Sioux into action
                          - Sioux were
                                     i. Large tribe
                                    ii. Well armed
                                   iii. Well led
                                             1. Sitting Bull
        1876 – Sioux will be able to defeat Custer at Little Big Horn
                          - won the battle
                          - not the war
        1890 – Final Battle took place at Wounded Knee
1877 – the US government had gotten the upper hand
                        - they had pretty much succeeded in extermination of the Buffalo
                        - 1860- 13 – 15 million
                        - 1887 – almost extinct
                Buffalo were killed to
                        1) feed railroad workers
                        2) trophies to hang on the wall
                        - buffalo hunting had become a sport
                        - ride the railroad through the Plains and kill them
                                   i. “Buffalo Bill” Cody – legend has it he killed 4300 in 2 years
                        3) commercial uses increased in the 1880’s and the killings increased

        The last two tribes to keep up the fight
                          1) Nez Perce – under Chief Joseph
                          2) Apaches under Geronimo

        With the reduction of fight came a shift in the policy
                 Old Policy – run by the Dept. of War
                          Goal: extermination
                 New Policy – govt. set up the Bureau of Indian Affairs – part of the Dept. of the Interior
                          Goal: assimilate Indians into the agrarian economy

As the fighting came to a close – Indians were put on reservations
                           - by 1885 – 171 reservations
                  Indians were dependent on the tax payers to pay their way
                  Govt. $ was never enough
                  System was very corrupt
                           1) govt. agents were making a ton of $
                           2) sold Indians shoddy goods
                           3) sold them prohibited liquor
                           4) cheated them on real estate deals
                                    a. miners, ranchers, cattlemen and farmers pushed the government to let them use the Indian
                  On the other hand there were those who participated in Humanitarian Efforts on behalf of the Indians
                           - pushed for change

                 Helen Hunt Jackson – A Century of Dishonor (1881)
                          1) talked about government practices
                          2) degradation of the reservation Indians
                          3) poor treatment the Indians had dealt with from the start
                 Book led to a division between reformers
                          1) we should push for assimilation of Indians into American society
                          2) let them continue with their tribal customs
                 Government went with assimilation
                          1) outlawed the Sun Dance and Ghost Dance (1884)
                                   a. there goes the culture
                          2) Passed the Dawes Severalty Act (1887) AKA Dawes Act
                                   a. Tribal lands were split into individual allotments – 160 acres
                                   b. Allotments couldn’t be sold for 25 years
                                   c. $ was to be provided for the education and training of the Indians
                                   d. those who accepted the allotments had to
                                             i. take up residence and separate form the tribe
                                            ii. adopt the habits of civilized life
                                   then they could be US citizens
                 Motivation behind the act
                          1) encourage Indians to become assimilated
                          2) get some of the reservation land back so the whites could settle on it
                 Result of the Act – whites benefited and blacks didn’t

        1906 – Government tried again – Burke Act
                       1) provided for new incentives for Indians to assimilate
                                 a. move from tribal membership to individual citizens
                                   b. anyone who proved they could manage the land became citizens right away
        1924 – all Indians were given their citizenship
        1934 – government restored tribal ownership of land

Once the Indians were gone – the white people moved in
                 1) miners
                 2) cattlemen
                 3) farmers

        1st major group to move west – Miners
                 1850-1875 – a majority of the minerals out west had been discovered and was being mined
                          1848 – Gold in Calif
                          1858 – Gold in the Pike’s Peak area – Colo
                          1859 – Comstock Lode discovered in Virginia City, Nev
                          1874 – Gold in the Black Hills
                          1881 – Copper in Montana
                                  Silver in Idaho
                 Where miners were found, towns sprung up – Boomtowns
                          Most contained
                                    1) saloon
                                    2) hotel
                                    3) general store
                                    4) dance hall
                                    5) gambling hall
                                    6) brothel
                          ***Virginia City had 25 saloons before it had 4000 people
                          Most had no law and order
                          Many used any means to get rich
                                    1) shop keepers charged outrageous prices
                                    2) claim holders “salted” their worthless claims to sell them
                 Biggest Injustice of it All
                          - in the end it wasn’t the rugged individual who made big $ off the Comstock Lode or Black Hills Gold
                          - it was the giant corporations
                                     i. they bought up the claims and made big $
                                    ii. in the end the guys who got rich never got their hands dirty
                          - it took money to get rich – you needed
                                     i. capital investment     ] things only the
                                    ii. heavy machinery        ]       corporations
                                   iii. access to the railroad ]                 could get together
                                   iv. lots of labor           ]

        Impact of mining on the Frontier
                1) gold itself – government got $
                          i. paid for the debt caused by the war
                          ii. paid for economic expansion
                2) gold and silver created interest in the west
                          a. permanent settlers moved into the area
                          b. many believed the way to make $ was to serve the miners – not to be one
                          c. these people set up stores and saloon, schools and churches
                3) these permanent settlers allowed many territories to become states
                          - 1864 – Nevada
                          - 1876 – Montana
                          - 1889 – Idaho
                          - 1890 – Wyoming
                4) west provided opportunity for investment and speculation
                5) opportunity for investment led to a new type of investment
                          a. development of the corporation
                6) gave more people a chance to get involved in government
                          a. new states with new Senators and members of the House
                          b. new state governments
                          c. women begin to get the right to vote – Wyoming
                7) push for improved transportation
                a. railroad
                b. stage coach

2nd Group to move west – Cattlemen
                - treeless grasslands great for cattle
                - cattle would start in Texas
                - be “driven” to
                           i. Kansas
                          ii. Missouri
                         iii. Wyoming
                - then go by railroad to Chicago for packing or off to NYC by ship
                - Cowboys gained fame during this time
                           i. Protect cattle
                          ii. Work the ranch and then work the round up
                         iii. Work the long drives
                                  1. move hundreds and thousands of cattle hundreds of miles to “cow towns”
                - 4 main trails used to get the cattle to the “cow towns”
                           i. Goodnight-Loving
                                  1. Texas to Wyoming
                          ii. Western
                                  1. Texas to Dodge City, Kansas
                         iii. Chisholm
                                  1. Texas to Kansas
                         iv. Sedalia
                                  1. Texas to Missouri

        1875-1885 – the long drive was a major happening
                - in the first 10 years profits rose 40%
        Late 1880s – a major decline took place
                                           1) the advance of the farmers
                                                      i. thanks to barbed wire – they could fence off the grazing land
                                           2) legislation that increased inspections and made it more difficult to take
                                                cattle across state lines
                                           3) competition from livestock/cattle raisers in the Midwest
                                           4) the ability of buyers in cow towns to determine prices and railroad owners
                                                to set freight rates
                                           5) over expansion and over speculation

        Next came the farmers
                3 major factors that allowed farmers to move west
                         1) govt. benefits – new land policies
                                  a. Homestead Acts
                         2) new inventions
                                  a. steel plow
                                  b. barbed wire
                                  c. mowers
                         3) rail facilities
                                  a. Transcontinental Railroad
                New Land Policies – the “giving” of the public land to the private citizen
                         1) Homestead Act – 1862
                                  a. Any head of a family – citizen or wanna be – could get 160 acres of surveyed land
                                  b. Pay a small fee – paperwork $- commit to stay on the land for 5 year
                                  c. Improve the land
                                  d. It becomes yours
                - 20 million acres became occupied between 1862 – 1880
                          i. act worked well in forested humid areas – not so great on the semi-arid Great Plains

                         2) Timber Culture Act – 1873
                                a. Additional land to persons who would use part of the original land to plant trees
                         3) Desert Land Act – 1877
                                a. Additional land in semi-arid area sold at $1.25 an acre if you agreed to irrigate it
                          -   neither of the acts all that successful at getting people on the Plains – but…
                                                       1) states that had gotten land with the Morrill Land Grant Act in 1862 sold
                                                            some of it to settlers
                                                       2) the Railroad sold some of their land grant land to the settlers
                          -   total settlement came with lots of stuff
                                    i. New Tools and Methods
                                            1. barbed wire – 1874 – helped to close the cattle country
                                            2. plows and mowers suitable for the Plains were developed
                                            3. irrigation systems were developed
                                   ii. the fight between the cattle men and the farmers was won by the farmers
                                  iii. new immigration – foreign and domestic
                                            1. people living in the east who wanted to move to the Mississippi Valley and Great
                                            2. they were attracted by
                                                       1) availability of cheap land
                                                       2) improved transportation
                                                       3) availability of machinery necessary to make a profit
                                            3. foreign immigrants
                                                       1) German and Scandinavian moved into
                                                                a. Wisconsin
                                                                b. Iowa
                                                                c. Nebraska
                                                                d. Kansas
                                                                e. Dakotas
Closing of the Frontier
                  1870-1880 – most of the farmland had been claimed
                           - an area = the size of Great Britain came under cultivation
                  1890 – U.S. Bureau of the Census
                           - announced the end of the frontier
                           - Frontier is defined as a large inhabitable area with fewer than 2 people per square mile
                  Frederick Jackson Turner – Frontier Thesis
                           - a historian
                           - wrote a paper – The Significance of the Frontier
                           - he called the frontier “ the greatest force in the shaping of American democracy”
                           - he argued that the existence of free, open territory with abundant natural resources was perhaps the
                               most important factor in forming tendencies to individualism, inventiveness and expansion
                           - with the closing of the Frontier – America’s character would change

        Post- Reconstruction South
                Reconstruction govts. Had been under attack for corruption, incompetence and extravagance
                           - public debt rose dramatically
                                       i. SC – from $7 mill in 1865 to $29 mill in 1873
                                      ii. Ark. From $3.5 mill to $17.7 mill
                                     iii. Louisiana from $11 mill to $50 mill
                           - taxes rose
                           - property values decreased
                it is true that lots of money was needed to get the south going
                           - social services for ex-slaves
                           - new hospitals and asylums
                           - new schools
                Black American and the Collapse of Reconstruction
                           - movement to the west
                           - loss of civil rights
                                       i. violence
                                      ii. subtle economic pressure
                                     iii. legislation
                           - supreme court action
                                       i. Plessy v Ferguson
                                      ii. Said separate but equal facilities were OK
                           Black Spokesmen
                           - Booker T Washington
                                       i. Educator – founder of the Tuskegee Normal and Industrial Institute
                                     ii. 1895 – Atlanta Compromise
                                             1. laid out a policy for Negro advancement
                                                       1) Blacks couldn’t agitate for practical and social equality until acquiring
                                                           sufficient skills through vocational training
                                                                 i. Which would provide economic security
                                                       2) “better your position not by fighting segregation, but by learning useful
                                                           skills and demonstrating your ability
                          -    his theories are known as “accomidationism or gradualism”
                          -    William Edward Burghart Du Bois – WEB Du Bois
                                      i. Massachusetts born
                                     ii. Harvard Phd.
                                    iii. Professor at Atlanta University
                                    iv. He agreed that blacks needed an education
                                     v. He opposed Washington’s attitude of submission to the notion of Black inferiority
                                    vi. His view – Confrontationalism or Interracialism
                                             1. 1903 – wrote In Souls of Black Folks
                                                       1) he argued that Negroes must constantly insist on voting rights as necessary
                                                       2) point out when they are confronted by it
                                                       3) discrimination was barbarism

                                            Agrarian Revolt and the Rise of the Populists

Post Civil War Agricultural Changes
                  1) favorable prices led to a concentration in a single cash crop
                  2) purchase of more manufactured goods led to the use of more profits
                           a. “in town”
                           b. mail order catalogs
                                      i. Sears
                                     ii. Montgomery Wards
                  3) new inventions and innovations led to bigger and better equipment
                           a. made it easier to plant
                           b. made it quicker to harvest
                  4) farming was becoming a business and most farmers had no business experiences and no business skills
         Farmers saw
                  1) government go from favoring them to favoring the industrial class
                  2) saw large corporations
                           a. form
                           b. eliminate competition
                           c. charge monopolistic prices
                  3) felt the railroad discriminated against the small farmers
                  4) national banking system favor big business and industrialists
         Farmers believed
                  1) they weren’t getting their fair share of the national income considering how important they were to the nation
                  2) they didn’t have the same advantages and conveniences their counterparts in the city had
         Specific Problems
                  1) rely on mother nature
                           a. unreliable irrigation
                           b. bug infestations
                           c. drought and flood
                           d. erosion
                  2) lack of currency in circulation
                           a. rise in big business in the northeast created a shortage in currency
                           b. leads to high interest rates – up to 40%
                  3) high taxes
                           a. can’t hide land and property the way you can hide stocks and bonds
                           b. property taxes were high
                  4) Tariff
                           a. Set up to protect our American industries but not to protect farmers
                  5) Single Cash Crop
                           a. Great when prices are high
                           b. Disaster when prices are low
                                      i. Can lead to bankruptcy
         6) storage and shipping fees
                   a. farmers had to store crops prior to shipping
                   b. railroads owned the grain elevators
                   c. they charged very high prices
                   d. in some cases it will cost more to store and ship the grain then the crop is worth
                              i. some farmers would burn their crop as fuel due to the high cost
unlike the workers in the east – there were no “unions” to look after the interest of the farmers – so they got together
                                       and decided to make one
1867- Oliver Kelley started the first National Grange of the Patrons of Husbandry AKA the Grange
                   - it began as a non-political group whose goals were to stimulate farm families
                              i. social
                             ii. educational
                            iii. fraternal
1870 – 700,000 members – mainly in the Midwest
1871 – introduced in South Carolina
         it will spread through the South
1874 – 858,000 members total
         it will reach 1.5 million at its peak

Organization of Cooperatives
                 1) decrease cost of things they needed to purchase
                 2) increase the cost of their crops
                 1) operate plow and harvester factories
                 2) purchase and maintain grain silos
                 3) set up loan companies and retail stores
                 4) obtain rural delivery and parcel post service
        While they were great goals…
                 1) mismanagement
                 2) dissent in the ranks
                 3) lack of permanent solutions
                 led to a decline in the 1880s
        Some Success
                 1) did see some political victories in upper Mississippi Valley states
                 2) Dept. of Agriculture set up
                 3) Some laws passed – Grange Laws
                           a. Most will be overturned by the Supreme Court

Farmers and the Greenback Movement
        Farmers wanted inflation
                  - inflation = general or gradual increase in prices
                  - an increase in prices is good for
                             i. farmers
                            ii. anyone in a debtor class
        In order to get inflation the government needs to increase the amount of $ in circulation
                  - either paper $ (not backed by gold)
                  - silver coins
        Greenbacks were first issued during the Civil War – more than $400 million still in circulation

         After the war
                  - creditor class/ eastern business class
                  - want the govt. to create a “sound” base for our $
                  - want “sound $” money backed by gold
                  - want greenbacks taken out of circulation
         Two sides – Farmers want more greenbacks
                  - business wants less
                  - Congress goes with business
         Jan. 1875 – Resumption Act
                  - $130 million in greenbacks taken out of circulation immediately
                  - in Jan 1879 the rest would be turned in for gold
                  - congress set aside $100 million in gold to take care of it
                          -  Effect: Deflation
                                   i. Leads to the creation of the Greenback Party
                                           1. led by Peter Cooper
                1878 – Greenback Party merged with the National Labor Reform Party
                        - Greenback-Labor Party
                        - Goals:
                                   i. More greenbacks in circulation
                                  ii. Free coinage of silver
                                 iii. Less working hrs.
                                 iv. Restrictions on Chinese immigration
                1878 – 14 members from the Greenback-Labor party elected to Congress
                1880 – began to advocate
                        - women’s suffrage
                        - graduated income tax
                        - federal regulation of interstate commerce
Silver Movement – Movement to solve the inflation situation by free and unlimited coinage of silver at a ratio of
                        16 silver coins to 1 gold coin
                        - free and unlimited coinage of silver received more support than the greenback movement did
                        - in both parties the issue caused a split
                                   i. western farmers and miners in favor
                                  ii. easterners and business opposed
        1873 – Congress passed the Coinage Act
                        - ended the coinage of Silver
                        - brought an end to bi-metalism
                        - Act caused deflation
                        - Called the “Crime of ‘73”
        1878 – Congress will bend under the pressure and pass the Bland-Allison Act
                        - ordered the purchase of $2-4 million worth of silver a month
                        - supported by Western Republicans and Southern Democrats
                        - Rutherford B Hayes will veto the bill
                        - Congress will override
                        But the act had little effect
                        - the money supply didn’t change that much
                        - very little relief for the debtors and the miners
        Farmers and miners wanted more
                1890 – Sherman Silver Purchase Act
                        - required the government purchase 4.5 million ounces of silver each month
                        - the silver would be purchased at market value
                        - the silver would be used for payment of silver certificates
                Cleveland objected
                        - said that the government was replacing gold with silver
                        - will blame the Panic of 1893 on the silver situation
                        - the act will be repealed
                        again no significant change
                        the solution – the greenback people and the silver people need to work together
                        thus a new party is formed – The Populists

        As the silver movement hits its snag, the greenback party is going no where, the grange is in its decline – alliances begin to
                 1877 – Knights of Reliance – cotton states
                 1890 – various alliances – 1 million members
                          stressed: co-ops to buy fertilizer and stuff
                 They all believed that
                          - prices were low
                          - costs were too high
                          - American had problems with its financial system
                 3 Major Alliances will develop
                          1) Northern Alliance – National Farmers’ Alliance
                                   a. Voted Republican
                                   b. Favored the tariff
                                   c. Focused on railroad regulation and federal land policies
                          2) Southern Alliance – National Farmers’ Alliance and Industrial Union
                                    a. Voted Democratic
                                    b. Opposed the tariff
                                    c. Focused on financial reforms
                          3) Colored Farmers’ Alliance
                                    a. Had their own organization because they weren’t allowed in the Southern Alliance
                                    b. Northern Alliance would have let them in – but they didn’t agree with the north
                 1890 – Unity begins
                          Leaders – Ignatius Donnelly – Minn
                          - Mary Elizabeth Lease – “raise less corn and more hell”
                          - Tom Watson – Georgia
                          - Jerry Simpson – Kansas
                          Labor + Greenbacks + Grangers = People’s Party – met St. Louis 1889
                          Southern Alliance + Farmers’ Mutual Benefit Assoc. + Colored Farmers’ Alliance – met in Florida
1892 – All got together = Populist Party
       Economic Platform
                 1) free and unlimited coinage of silver
                          a. 16 to 1 16 ounces of silver coins for every one ounce of gold cions
                 2) increase in the $ in circulation
                          a. from $20 per person to $50 per person
                 3) govt gets excess land held by corporations
                 4) graduated income tax
                 5) tax reduction
                 6) govt. ownership of Telegraph, telephone and railroad
                 7) prohibit alien landownership
                 8) rural postal system
                 9) use of govt. funds to
                          a. assist farm marketing
                          b. extend short-term loans to rural farmers
          to draw in eastern factory workers
                 10) reduction of immigration
                 11) 8 hr. work day
                 12) abolition of Pinkertons
          Political Planks
                 13) single term for Pres and VP
                 14) direct election of Senators
                 15) use of initiative, referendum on the state level
       1892 – Populist nominate their first presidential candidate for President
                          - James Weaver
                          - Running mate – James Field
                          - Got 1.04 million votes
                          - Carried 4 states
                          - Got electoral votes from 2 other states
                          - Total of 22 electoral votes
       1896 – Populists and Labor got together as the election neared
                 Democrats – at their convention
                          - Cleveland had made the South and the West mad
                          - William Jennings Bryan gave a great speech
                                     i. “Cross of Gold Speech”
                                       “you shall not press down upon the brow of labor this crown of thorns.
                                              You shall not crucify mankind upon your cross of gold.”
                          - Bryan won over the democrats and got the nomination
                 Pushed for
                          - free coinage of silver
                          - criticism of the Supreme Court on tax policies
                                     i. Pollock v Farmers’ Loan and Trust Co.
                                    ii. Ruled income tax unconstitutional
                          - denunciation of govt. use of injunctions in mgmt-labor disputes
                          - enlargement of Interstate Commerce Commission powers to control the railroad
                 Bryan and the Democrats chose – Arthur Sewall
                           - William McKinley for Pres.
                                    i. Former member of the house
                                   ii. Gov. of Ohio
                           - VP – Garret Hobart
                  Pushed for
                           - maintaining the gold standard
                           - a protective tariff
                           - pensions for civil war vets
                           - federal arbitration of mgmt-labor disputes
                           - Also chose William Jennings Bryan
                           - But wanted to choose a different VP – Tom Watson
                           - They wanted to stay true to themselves – so didn’t go with same VP as the democrats
                           - Businesses vs Agriculture and Labor
                           - Creditors vs debtors
                           - West + south vs east
                           - Silver vs gold
                  On some ballots you could vote for Bryan + Watson or Bryan + Sewall

                  Candidate                  Popular                    Electoral
                  McKinley                   7.1 mill                   271
                  Bryan                      6.5 mill                   176

After 1896 – Populist dissolved as a 3rd Party –
                           - the Democrats adopted most of their issues
                           - 1897-1900 – farm economy improved
Did see some success in the next 20 years
                           - initiative, referendum adopted by most states
                           - direct election of senators – 17th amendment
                           - secret ballot is adopted
                           - graduated income tax – 16th amendment
                           - 8 hr. work day

                                            Popular Culture and Politics in the Gilded Age

Late 19th Century
         a unique middle class, with its own culture began to influence American life
         its growth and increasing prosperity resulted from the rise of American industry
         the middle class constituted the primary market for consumer goods

Mass Consumption
       the new consumer market resulted in the development of affordable products and new merchandising techniques
       the ready-made garment industry expanded to clothe almost all Americans
       1900 – Americans learned to buy and prepare food differently because canned foods and refrigeration were
       chain stores such as the A&P and F.W. Woolworth made their debut
       the growth of mail-order business also began with Montgomery Ward and Sears-Roebuck catalogs

Improved Quality of Life
       because of increased purchasing power and better diet, middle class America began to enjoy a higher quality
       of life
       their general health improved, and they had long life expectancies
       leisure time increased, particularly for members of the urban professional and middle classes
       new forms of recreation and entertainment became available
                 there was an interest in sports, and organized spectator sports became popular
                 by early 1900s baseball had become a business and America’s national pastime
                 other sports also became popular – golf, tennis, boxing, biking, football and basketball
       Popular Culture
                 aside from sports, other types of entertainment arose to satisfy American tastes
                  musical comedy, vaudeville, circuses, wild west shows and most important – movies
                  motion pictures attracted audiences in all areas of the country
                  reading will also become a popular pastime – we have a better educated middle class and more time
                           “dime novels” were popular – they were about adventure and romance
                           newspaper circulation increased 9 times between 1870-1900
                           newspaper chains and the national press services emerged which standardized the presentation
                           of the news across the country
                           “yellow journalism” was introduced by two publishers – William Randolph Hearst and Joseph
                           these newspapers reported sensationalized stories, emphasized scandal, did exposes, talked about
                           sports, fashion and entertainment – all with one goal in mind – SELL PAPERS – make $
popular magazines also began to appear – McClure’s Magazine, Ladies Home Journal and Harper’s Weekly – were inexpensive and
geared to the mass audience
         Art and Literature
                  Realism and Naturalism were the major influences on American writers
                           Realists                             Naturalists                       Local/Regional
                           Hamlin Garland                       Stephen Crane                     Mark Twain
                           Frank Norris                         Theodore Dreiser           Edward Eggleston
                           Willa Cather

                          Non – Fiction writers included Edward Bellamy and Oliver Wendel Holmes
                          Also had those writers who transcended the labels – like Emily Dickinson, Henry James and
                          Edith Wharton
                  Writers were influenced by the growth of industry and the rise of the city – wrote about industrial society

         most major cities had art museums
         galleries contained both European and American art
         a number of truly American artists emerged
                   Mary Cassatt and James McNeil Whistler both studied in Europe
                   Whistler painted about American life
                   Winslow Homer painted the New England Maritime life
                   John Singer Sargent and Thomas Eakins were realists. Sargent also did portraits
                   The Ashcan school developed – paintings depicting the urban industrial society – social realities
                   of the time
                   John Sloan painted American slums and Edward Hopper focused on other aspects of the modern city
                   Sculptors of the period included Frederic Remington and Daniel Chester

          the theory of evolution had a profound intellectual impact
          the theory was widely accepted by most urban professionals and the educated class
          it won acceptance in most colleges and schools
          strong opposition still existed among rural America where a majority of the people were wedded to
          fundamentalist religious beliefs and older values
          Darwin’s ideas created a split between the cosmopolitan culture of the city and the provincial culture of rural
          this philosophical movement accepted the idea of organic revolution, but asserted that modern society should
          be guided by scientific inquiry, not by inherited ideas and moral principles
          in other words, an idea or institution is valid if it can be demonstrated to work
          exponents of pragmatism were William James, Charles Pierce and John Dewey
          Dewey for instance advocated an education in which students would acquire knowledge that would help
          them deal with life
Scientific Inquiry
          the spirit permeated intellectual thought
          economists such as Richard Ely argued for more pragmatic use of the discipline
          sociologists – Edward Ross and Lester Ward – advocated the use of scientific method in tackling social and
          political problems
          progressive historian – Charles Beard – asserted that economic factors had been influential in historic
          development. Beard wrote Economic Interpretation of the Constitution where he stated that the
          economic standing of the founding fathers caused them to create a document which would serve
          people like them
        urban-industrial society emphasized specialized skills and scientific knowledge to prepare American workers
        the education system responded
        free public education spread; by 1900 – 31 states had compulsory attendance laws
        Morrill Land Grant Act of 1862 enabled 69 Land Grant institutions of higher learning to be established
        in addition to the federal government’s efforts, business titans endowed private colleges and universities
        following Harvard’s lead, other colleges and universities adopted the elective system of course selection and
        began to offer modern language, fine arts and physical and social science courses
        improved technical training became available in law, medicine, architecture, engineering, journalism, business
        and education
        graduate education grew and educational opportunities for women expanded as well with the growing number
        of women’s colleges
                                                      Politics of the Gilded Age

 Election of 1880
                    -   Hayes refused to seek re-election, giving the Stalwarts (regular and conservative branch of the
                           Republican party – led by Roscoe Conkling) a chance to push Grant for another term

Democrats: Nominated Winfield Hancock of Penn. – a former Civil War general

Republicans: the convention was locked with Stalwarts going for Grant and Half-Breeds (the liberal branch of
        the Republican party) going with James Blaine
        On the 36th ballot the Half-Breeds led a group of delegates in support of a compromise candidate – James
        Garfield of Ohio
        Garfield was a Half-Breed and he chose as his running mate the #2 Stalwart – behind Conkling – Chester
The Campaign
        Grant and Conkling got behind Garfield and projected a united front to the Republicans
        both candidates stayed away from the prominent economic and social issues of the day
        for the most part both candidates were the same and partisanship and personal rivalries were the issue of
        the election
        Garfield will get only 9000 more popular votes than Hancock – but will win the electoral 369-155
The Assassination
        right after the election Garfield indicated that James Blaine would be appointed Sec. of State and would
        have a great say in his administration
        this caused a lot of tension between Garfield and Conkling – and the factions got more intense
        lots of people went to Washington looking for a job – one who didn’t get one was Charles J Guiteau –
        Guiteau caught up with Garfield at the DC train station and shot him – “I am a Stalwart and Arthur will
        be President”
        Garfield didn’t die immediately; he suffered for 80 days with a 44-caliber bullet in his back
        he will die Sept 19, 1881
        Guiteau will be tried, convicted and then executed on June 30, 1882
The Arthur Administration
        from the start Conkling believed that Arthur would appoint a lot of his guys to govt. positions
        but Arthur refused to use his presidency to reward loyal Conkling followers “Conkling made me vice-
        president, but God made me President”
        he did try to reduce and relieve the party factional strife – though he did everything he could to insure
        that Blaine and his followers didn’t have the most influence
        Surplus Funds
                  due to various tariffs and taxes a surplus in govt. money had developed
                  members of Congress took this opportunity to support one another’s pet projects
                  known as Pork-Barrel Appropriations or Pork Barrel Legislation – members of Congress
                  propose to spend money on pet projects in their home states and areas to look good with the folks back home. These
                  include public works projects like roads, bridges, deepening of rivers or harbors and establishing military
                  instillations most of these projects should not be created at the expense of the federal government and are more for
                  political patronage than for needed improvements
                  Arthur criticized what he considered to be wasteful spending of govt. money
                  when a bill authorizing the use of $18 million for river and harbor improvements was sent to
        Arthur – he vetoed it – the veto was overridden, but Arthur gained a lot of respect
Reform of the Civil Service System
         Public reaction to Garfield’s assassination – caused by party strife over appointments - and Democratic victories in the 1882
         elections forced the Republicans to look at the civil service system and work for some reform
         After the Civil War the idea of using a merit system for appointing and promoting civil service employees got going
                   1865 – Republican Rep. From RI – Thomas Jenckes – introduced a bill to set up competitive exams for specific
                             federal jobs
                   1871 – Grant appointed a commission to look at the exam idea
                   1878 – Hayes issued an executive order forbidding the extraction of political contributions from federal office
                   Hayes also gave Sec. of the Interior – Carl Schurz – a free hand to institute the merit system in his dept.
                   Hayes also appointed pro-merit system guys and got rid of people who were breaking the rules
                   1881 – the national civil service league – founded by Harper’s Weekly editor – George William Curtis – united
                             those in favor of the merit system –
                   In his first message to Congress – Arthur indicated his willingness to work with the legislation
                             to develop a merit system and end appointments for political rewards
 The result was the Pendleton Act – named after it’s sponsor – George Pendleton of Ohio – a democratic senator
         1883 – in Jan. the act was passed by the Republican Congress – they had hoped it would prevent
         Republicans from loosing jobs if Arthur lost in 1884
         The act provided for the president to appoint a 3 member bipartisan commission to draft and
         administer examinations to determine the qualifications of office holders
         The act also prohibited the collection of election funds from any federal office holder
         A list of federal positions obtainable through the merit system was established
         It started at about 10% - but could be expanded by the president when he saw fit
         This is the basis of the civil service system we have today
Other actions under Arthur
                   - corrupt Republicans were prosecuted
                   - pork barrel legislation was vetoed
                   - Sec. Of the Navy Whitney built a steel navy
                   - Commodore Stephen Bleecker opened the US Naval War College in 1884 in Newport RI to provide naval
                        officers with postgraduate training in advanced naval science and warfare, international law and history
                   - Chinese Exclusion Act 1882
                   - Bureau of Labor was created as part of the Dept. of the Interior in 1884
                   - Tariff Legislation
The Republicans wanted to see them increased – they advocated a higher “protective” tariff – to assist domestic manufacturers when
competing on the foreign market
The Democrats supported a revenue tariff – a tariff that provided an income for the federal govt.
         Tinkering with the Rates
                   1870, 1872, 1875 – saw changes in rates due to protests from the non-industrial west and south
                   1883 – Congress looked at the need to revise the rates to meet the needs of new industries
                   Experts suggested the best thing would be significant reductions in the tariff
                   Congress ignored the experts and instituted a 2% reduction

Election of 1884
         The democrats will win for the first time in 28 years
                 Since the scandals of the Grant administration, republicans had been on the defensive
                 They could win the election only if they carried the independent voters
                 But due to their own in fighting the Republicans will lose
         The Democrats
                 Presidential nominee – gov. of New York – Stephen Grover Cleveland
                 He was a bachelor and very reform minded
                 He was seen as a competent and courageous administrator
                 He chose Thomas Hendricks – Tilden’s running mate in 1876 – as his running mate
         The Republicans
                 Convention refused to give the nomination to Arthur – who wanted and deserved it
                 The nomination will go to James Blaine
                 The issue of civil service reform split the party
                          Stalwarts supported the party
                          Half-Breeds, led by Blaine, supported civil service reform, but went with the party
                          Mugwumps (Algonquin for “big chief”) led by George William Curtis and Sen. Carl Schurz
                          bolted the party and as liberal republicans, agreed to support the Democrat
         The Campaign
                One of the dirtiest in the history of politics
                Blaine was linked to the Credit Mobilier
                Cleveland was linked to an illegitimate son in Buffalo
                Lots of mud slinging

         The Election
                 Cleveland got 60,000 more votes than Blaine – why did he win
                         1. Support of the mugwumps
                         2. Stalwarts had campaigned unenthusiastically for Blaine
                         3. It was believed the Blaine had used his political position to further himself economically
                         4. Resentment of Catholic voters – especially in NY – over a statement made by Republicans
                         that the Democrats were the party of “Rum, Romans and Rebellion”
                                   Cleveland will win by 1149 votes in NY
                 Cleveland will win 219-182 and only receive 60,000 more popular votes

The Cleveland Administration
                 Cleveland thought that public office was given through the public trust and should be treated as such-
                 but most believed he wasn’t serious
                 He is considered by historians as the best to hold the office since Lincoln
                 He was honest, efficient, had common sense and couldn’t be controlled by others
                 Cleveland set up a cabinet with guys with ability and didn’t care how much experience they did or didn’t
        The Cleveland Actions
                 Most of Cleveland’s recommendations to Congress were ignored or blocked by Republican leaders
                 because Cleveland wouldn’t play political games
                 He did extend the Civil Service List – added 12000 positions to the list of jobs obtained through the
                 merit system
                 The Tenure of Office Act was repealed in 1887
                 The Pension Controversy
                          with lots of excess money in the govt.’s bank account – Congress became very generous when
                          granting pensions to the Union vets of the Civil War
                          1879 – Congress granted back payments to disabled vets
                          soon pension agents – who would get a cut – started to search for vets to file claims
                          if the pensions bureau didn’t approve – the agents would go to Congress to ask for a private
                                    pension bill
                          many of these bills were frauds and Cleveland worked to research them all – he vetoed over
                                    200 of them
                          1887 – Congress passed a bill that would give any vet who served 3 months and now couldn’t
                                    make a living a pension
                          Cleveland vetoed that one too
Govt. Reorganization and Reform
                          The Presidential Succession Act
                                    1885 – Nov. – Thomas Hendricks became the 5th VP to die in office
                                    1886 – Congress passed the Presidential Succession Act which made it official that in the
                                              case of removal, death, resignation or inability to serve of the President and VP –
                                              members of the cabinet, in order of creation of their office, should succeed to
                                              the duties of the President
                          The Electoral Count Act
                                    set up to prevent 1876 from happening again, Congress passed the act in 1887
                                    the act authorized each state
                                              to decide contests over appointment of its electors
                                              to report election returns
                                    if opposing sets of returns were submitted the Senate and House – voting separately –
                                              would decide which to approve
                                    if Congress doesn’t agree – the returns certified by the state’s gov. would be accepted
                          Dept. of Agriculture set up in 1889
                 The Tariff and the Fiscal Policy
                          Surplus of Funds
                                    1880- the surplus of funds was approximately $100 million a year
                                    This had the effect of
                                             - being embarrassing to govt. because it showed tax payers, they were paying too
- reduced the amount of money in circulation and thus available for business
                           - encouraged Congress to make pork-barrel appropriations
         Cleveland’s Tariff Message
                 Cleveland opposed the using of surplus funds for large govt. expenditures
                 He wanted to lower taxes to reduce the surplus
                 1887 – State of the Union Address – Cleveland
                           - denounced the existing tariff duties as “vicious, inequitable and illogical
                                    source of unnecessary taxation”
                           - spoke positively about the need for protection of the nation’s growing
                 He wanted Congress to lower the tariff rates – but they couldn’t get it done

The Republican Revival
       Election of 1888
                both parties started out trying to gain the vote of the discontented farmer and laborer
                the Republicans were more successful at convincing the nation that their party was the protector
                equally of all three elements of our economic society
                                   factory workers
       They went with Cleveland despite the fact the he had angered many groups
                - Texas farmers when he vetoed a bill to provide seed for drought stricken areas
                - Cattle ranchers by nullifying their illegal leases of Indian grasslands
                - He resented the press when they got into his personal life
                - He tried to stop the free coinage of silver under the Bland Allison Act
                - He had angered vets when he closely looked at the pension situation
                - He had appointed 2 former confederates to his cabinet

Cleveland picked Allen G Thurmond as his running mate
                 They went with Benjamin Harrison – grandson of William Henry Harrison – his running mate was
        Levi P Morton

                The major issue was the tariff
                        Democrats wanted to lower and republicans wanted to maintain
                        Cleveland was accused of removing trade restrictions benefiting the British manufacturers
                        over Americans
                        The Republicans also appealed to the Union vets
                        Neither Cleveland nor Harrison addressed the issues of the farmers or laborers
                        Harrison came out on top 233-168

The Harrison Administration
        No longer a deadlock in Congress – Republicans in both the House and the Senate – and the Presidency
        McKinley Tariff
                 1890- tariff levels raised to a new high on the theory that prosperity flowed directly from protection
                 The ave. tariff rate was 50%
                 Among protected projects
                          Woolen and cotton goods
                          Steel products
                          Wheat, potatoes, butter and eggs
                 Sugar was out on the free list, but American producers got a 2 cent tax on a pound of sugar
                 Other products placed on the free list included molasses, coffee, tea and hides
                 This act produced a decrease in revenue and in the federal surplus
                 The act also included reciprocity provisions giving the president the right to place a tax on items on the
                          Free list if any country tried to place high tariffs on us
        “Billion Dollar” Congress
                 Despite Harrison’s desire to see the surplus reduced with tax cuts – it was reduced with major spending
                          Extensive river and harbor improvements
                          Construction of steel ships for the navy
                          Implementation of the Dependent Pension Act – a bill similar to the one vetoed by Cleveland
                 The 51st Congress spent $1 Billion – more than ever during a peace time

A Democratic Reappearance
      Election of 1892
               First election to see the Populists as a strong minor party of protest
                         Cleveland got the support of a group of Eastern businessmen and won the nomination
                         He picked Adlai E Stevenson of Illinois as VP
                         Blaine was back in the race, but Harrison got the nomination
                         He picked Whitelaw Reid as his running mate
                         Party was made up of western and southern farmers + eastern laborers
                         It nominated an agrarian oriented politician – James B Weaver of Iowa
                         He chose James G Field of Virginia as VP – both were agrarian reformers
                         Their platform advocated reforms to help farmers and laborers
               The Campaign
                         The two major parties still differed on the tariff issue
                                   Democrats – advocated a general lowering of rates
                                   Republicans – supported the continuance of high protective duties
                         For the most part the parties were similar in the other major areas
               Harrison will lose – Cleveland will win – WHY ?
               - the hostility of reformers to Harrison’s neglect of the merit system
               - resentment over higher prices brought on by the McKinley tariff
               - anger in the south over the republican attempt to force federal control of elections on southern states
               - disgust with republican controlled congress for having used up the federal surplus at a time when it looked like
                    a depression was coming

Cleveland’s 2nd Administration
                 The first – and only – time a president served two nonconsecutive terms
        The Panic of 1893
                 Not long after the inauguration the country went into a panic and then a depression
                 The depression lasted 4 years and had showed signs of coming
                 - the enormous increase in govt. expenditures while income remained stationary – the surplus became a deficit
                 - the hoarding of gold as investors in Europe began to sell their American stocks and bonds to get gold
                 - the uneasiness of the business community when the US gold reserves fell below $100 million

Business Failures
          Business began to fail in May of 1893
                            By Nov. 1000s of businesses failed, hundreds of banks closed and some railroads went bankrupt
                            By the spring of 1894, 20% of the work force was unemployed
                  Coxey’s Army
                            Bands of jobless men – “armies” – roamed the country looking for relief
                            One army led by Jacob S Coxey marched to DC in April 1894 to petition for inflation of the
                            currency and a program of federal public works
                            Coxey and 2 aides were arrested for walking on the capital lawn and their followers quickly
                  Tariff legislation
                            Wilson-Gorman Tariff
                                     Early 1894 – the House passed the Wilson bill which provided for
                  - the inclusion of raw materials such as coal, iron ore, lumber and wool on the free list
                  - reduction of the rates on iron and steel wares, cotton and woolen goods and silk and linen articles
                  - repeal of the bounty granted under the McKinley Tariff to domestic producers of unprocessed sugar
                  - a tax of 2% on incomes of $4000 and over in order to make up for lost revenue
the senate added 634 amendments and the finished products looked a lot like the McKinley Tariff
it passed without Cleveland’s signature

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