Political Paralysis of the Gilded Age

1. Political Paralysis of theGilded Age AP Chapter 23

2. 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

3. Differences Between the Two Parties Democrats • 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

4. What were the issues? • Tariff • Nature of the nation’s money supply • Pensions awarded to Civil War veterans • “waving the bloody shirt” • Lackluster presidents

5. Money Supply and the Economy Inflation: 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.

6. Money Supply and the Economy Inflation Deflation Winners 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 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.)

7. 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

8. 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

9. 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

10. 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

11. 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

12. Election of 1868 • Republican • “Bloody Shirt” campaign • Inexperienced in politics • Inept in choosing assistants • Deferred to Congress

13. 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

14. 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

15. 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

16. 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

17. 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

18. 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

19. 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

23. 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

26. Election of 1872 • Liberal Republicans – fed up with corruption and graft – nominated Horace Greeley • Democrats – nominated Greeley • Republicans – Grant • Mud-spattered campaign

27. Who voted Republican during the Gilded Age? • Region? • Religion? • Blue laws? • Tariffs? • Money issues? • Union pensions?

28. Who voted Democratic during the Gilded Age? • Region? • Religion? • Blue laws? • Tariffs? • Money issues? • Union pensions?

29. 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

31. 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.

32. Consequences of the Pendleton Act? • Stopped the most blatant abuses • Politicians forced to look elsewhere for money • Turned to businesses and lobbyists

33. 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”

34. Grover Cleveland • 1st democratic president since Civil War • “public office is a public trust”

35. 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

36. 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

37. 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

38. 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

41. 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

42. 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

43. Election of 1892 • Populists nominated General James B. Weaver • 22 electoral votes • Cut into republican strength in Midwest • Republicans – Harrison • Democrats – Cleveland (winner)

46. 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

47. 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

48. 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

49. 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

50. 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