Political Paralysis of theGilded Age

AP Chapter 23

What were the patterns of party strength?

• Elections were close

• Voter participation very high – 80 to 95%

• Family tradition, ethnic ties, religious affiliation often determined how one voted

Differences Between the Two PartiesDemocrats• Immigrant Lutherans &

Roman Catholics• Southerners• Northern Industrial Cities• Big “political machine”

politics• More indulgent to moral

weakness; smaller role for government in moral issues

Republicans• Puritan heritage• Midwestern• Rural & small towns of the

northeast• Freedmen• Union Army veterans• Favored a strong gov’t role

to enforce strict codes of personal morality AND economics

What were the issues?

• Tariff

• Nature of the nation’s money supply

• Pensions awarded to Civil War veterans

• “waving the bloody shirt”

• Lackluster presidents

Money Supply and the EconomyInflation: rising prices that

result from demand exceeding supply

Causes:

• Increased need or desire for specific products or services (ex: oil, health care)

• Increasing money supply. More currency available means that more money will be chasing those goods/services available.

Deflation: dropping prices that result from supply exceeding demand

Causes:

• Decreased need or desire for specific products or services (ex. building materials)

• Limited money supply. Less currency available chasing goods/services mean there are fewer people able to buy.

• People are holding their money because they’re scared to spend.

Money Supply and the EconomyInflation

Winners

• People who owe money

• Commodity producers: sellers of raw materials and agricultural products (esp. farmers)

• People whose incomes can hopefully continue to rise

• Silver (?) and paper money not backed by precious metal

Losers

• Savings

• ? Industrial workers? (Always a struggle to get business owners to increase wages, esp. at times of uncertainty with increasing inflationary costs.)

DeflationWinners

• People lending money; People who have large amounts of currency (bankers especially)

• Already established businesses

• Savings

• People living on a fixed amount of money

• Gold (And perhaps silver?)

• ? Industrial workers? (Since business owners would possibly be less likely to cut wages.)

Losers

• Assets (land, machinery); raw materials

Greenbacks and Silver• U.S. needed a money

supply adequate for a growing and diverse economy

• Gold and silver – trustworthy

• Bankers and creditors wanted gold

• Farmers and debtors wanted an expanded money supply backed by silver & even greenbacks along with gold

Depression of 1873• Biggest up to that point in time – some call it

the first major economic depression in U.S. history

• Result of rapid economic expansion after the Civil War

• Boom – bust• Overextended economy + risky loans• The Crime of ’73 – de-monitized silver • Millions out of work

Resumption Act of 1875

• Debtors and farmers sought the reissue of greenbacks

• “soft money” vs. “hard money”• “hard money” won – redemption of all paper

money in gold beginning 1879• Contraction – decrease in nation’s money

supply – stabilized greenbacks• “soft money” began demanding free coinage of

silver

Bland – Allison Act - 1878

• The U.S. Treasury purchase between $2 and $4 million in silver each month from the western mines

• The silver was to be purchased at market rates, not at a pre-determined ratio of 16 to 1

• The metal was to be minted into silver dollars as legal tender

• Government purchased a minimal amt. of silver – little effect

Sherman Silver Purchase Act of 1890

• Gov’t required to 4.5 million ounces of silver each month

• Issue (a.k.a. paper money) was redeemable in gold and silver

• Surplus of silver – drove down value

• People preferred to redeem issue for gold and not silver drain on gold reserves

• Panic of 1893

Election of 1868

• Republican• “Bloody Shirt”

campaign• Inexperienced in

politics• Inept in choosing

assistants• Deferred to Congress

Era of Good Stealings

• Corruption – Railroads, Stock-market, judges and legislators for hire

• Political machines and bosses – Tweed Ring of NYC cheated the city of $200 million

• Scandals in the presidency

The Spoils System• Since the Jacksonian era• A system of rewarding contributors & political

supporters with government jobs.• Government jobs were used to support politicians &

the political parties to maintain party loyalty• Unqualified and incompetent often received jobs• Office holders had to contribute to future

campaigns• Battle for reform in the GOP – Stalwarts vs. Half-

breeds

Grant Scandals• Whiskey Ring – Grant’s private

secretary took bribes not to collect taxes from distillers

• Credit Mobilier - VP received stock not to investigate fraud by a RR construction company

• Sec. of War accepted bribes from agents on Indian reservations

The Fisk – Gould Scheme• Jim Fisk and Jay Gould – wealthy businessmen• Attempted to corner the gold market• Bribed government officials to stop selling gold

in order to drive up the price• Sept. 24, 1869 – began to bid up the price of

gold• When Grant suspected a scam, he ordered the

treasury to release more gold • Gold prices crashed

The Election of 1876 – The End of Reconstruction

• Rutherford B. Hayes vs. Samuel Tilden

• Tilden (D) won 184 votes out of the needed 185 to win the Electoral College

• Votes in Louisiana, South Carolina, and Florida in dispute ( 2 sets of results)

• Commission of 15 (8 republicans and 7 democrats) counted the disputed votes

Compromise of 1877

• Hayes (R) would get the votes and become president

• Federal troop withdrawn from Louisiana and S. Carolina – ending Reconstruction

• Bill to subsidize the Texas Pacific Rail - line

The Great RR Strike of 1877

• Wild-cat strike – 1st national strike

• Baltimore and Ohio RR

• 10% wage cut

• Double headers

• Spread from the East to Mid-west

• 2/3 RR idle – property burned

• Hayes called in federal troops – 100 dead

Tweed Ring - NYC

• Tammany Hall – NYC democratic headquarters

• Political machine politics

• Graft, bribery, fraudulent elections

• Bilked the city of almost $200 million

• Brought down by Thomas Nast

Election of 1872

• Liberal Republicans – fed up with corruption and graft – nominated Horace Greeley

• Democrats – nominated Greeley

• Republicans – Grant

• Mud-spattered campaign

Who voted Republican during the Gilded Age?

• Region?

• Religion?

• Blue laws?

• Tariffs?

• Money issues?

• Union pensions?

Who voted Democratic during the Gilded Age?

• Region?

• Religion?

• Blue laws?

• Tariffs?

• Money issues?

• Union pensions?

The Election of 1880 and the Patronage Issue

• Republican convention split between Half-Breeds and Stalwarts

• James A. Garfield – Half-Breed nominated for president

• Chester Arthur – Stalwart – VP nominee• Garfield beat Winfield Hancock by 40,000 out

of 9.2 million votes• 1881 Garfield assassinated by Charles Guiteau

– a stalwart• Arthur became president

Pendleton Act• Created an independent civil service staff that is

outside of party politics. Government jobs based on ability and qualifications.

• Civil Service Commission to classify government jobs and administer an examination – established standards of merit

• Gov’t employees could not be forced to contribute to political campaigns and could not be fired for political reasons

• Difficult to fire or demote government employees without a lot of proof and a long procedure.

Consequences of the Pendleton Act?

• Stopped the most blatant abuses

• Politicians forced to look elsewhere for money

• Turned to businesses and lobbyists

Election of 1884

• Republican candidate – James G. Blaine of Maine – not know for his honesty

• Mugwumps – Republicans who refused to support Blaine

• Democrats – Grover Cleveland – had a reputation for integrity

• Mud – slinging again – Democrats labeled the party of “Rum, Romanism, and Rebellion”

Grover Cleveland

• 1st democratic president since Civil War

• “public office is a public trust”

President Cleveland

• Laissez – faire business happy• Expanded the merit system – but also

appointed many democrats to positions• Surplus - $145 million/year• Issue military pensions – vetoed special

pension bills for Civil War vets• Fought for lower tariffs• Compelled return of 80 million acres of public

land held illegally by lumber and railroad companies

Election of 1888

• Democrats Cleveland

• Republicans Benjamin Harrison

• Harrison supported high tariffs and so the industrialists supported him

• Cleveland won popular vote – Harrison won the electoral vote

The First Billion Dollar Congress

• Harrison did not assert presidential authority – deferred to party leaders

• Congress –– Raised tariffs and reduced imports, thus

reducing federal revenues (McKinley Tariff)– Voted “pork barrel” public expenditures– Authorized generous pensions previously

vetoed by Cleveland– Wiped out surplus

There’s Trouble Down on the Farm!

• Harsh conditions – drought and harsh winters – 1886-87

• Railroad abuses• Falling agriculture prices• Tight money• McKinley Tariff• Voted for Democrats in 1890• Formed Farmers’ Alliances and the Grange

1892 – A year of discontent

• Homestead Strike– Strike against A. Carnegie’s Homestead steel

plant– 300 armed Pinkerton’s called in– Ten people killed– Federal troops called in to break strike

• Strike at Coeur d’Alene silver mine broken by state and federal troops

Populist (Omaha) Platform• Inflation – free coinage of silver• Graduated income tax• Government ownership of the railroads,

telegraph, and telephone• Direct election of U.S. senators• One-term limit on the presidency• Initiative and referendum• 8 hour day• Immigration restriction

Election of 1892

• Populists nominated General James B. Weaver – 22 electoral votes– Cut into republican strength in

Midwest

• Republicans – Harrison• Democrats – Cleveland (winner)

Panic of 1893

• Economic collapse of the railroads– Overbuilding and over-speculation

• Depletion of gold reserves

• Government debt – veterans benefits and high tariff

• Stock prices dropped

Depression 1893-1897

• 200 railroads failed• 20-25 percent unemployment• Recent immigrants faced disaster• Harsh winters 1893-4• Farm prices down 20% • More people joined the Populist Movement• Jacob Coxey went to see the President

What about the gold standard?

• Defended by Cleveland

• Gold reserve fell below $100 million

• Repeal of Sherman Silver Purchase Act

• Gold reserve sank to $40 million

• Floated 2 Treasury bond issues of over $100 million

• Turned to J.P. Morgan for help

What did Morgan do?

• Banker and head of a Wall Street syndicate

• Agreed to lend gov’t $65 million in gold

• Charged $7 million fee• Saved the gold standard and restore

confidence in nation’s finances

Backlash?

• People resented cooperation with Morgan• Resented preservation of gold standard• Wilson – Gorman Tariff passed

– Lower but not enough– Income tax – but declared unconstitutional

• Coxey’s Army ignored• Used troops and an injunction against the

Pullman Strike

Congressional Election of 1894

• Democrats suffered heavy losses

• Republicans gained control of the House of Representatives

• Populists increased their base