American History Lecture Seven

Lecture - Questions - Student Answers

On the SAT II, about 20% of the test concerns economic history. That's a big portion of the exam. This includes questions about unions, money standards (gold or silver or paper), inventions, trade, taxes, farming, court decisions about economic disputes, disputes over the size of pensions for Civil War veterans, government spending and anything else effecting the economy. Economic trends influence the course of human events more than students realize.

In the time period after the end of Reconstruction (1877) until the key presidential election of 1896, economic issues were particularly important. Nothing much else was going on: the presidents were unremarkable and, frankly, entirely forgettable. Social disputes like slavery were resolved. And for the longest time in American history, there were no wars. America had no wars between the end of the Civil War in 1865 and the beginning of the Spanish-American War in 1898, a period of 33 years. Ask yourself: when was the second longest time of peace in American history?

The Supreme Court ruled in 1883, in the Civil Rights Cases, that the Fourteenth Amendment was limited to prohibiting racial discrimination by government. These decisions held that the Fourteenth Amendment does not apply to racism by private groups. This ended the civil rights movement until the 1950s. So there is nothing to learn about civil rights concerning the late 1800s.

So what's left to study about 1877 to 1896? The economy. Many of the 20% of economic questions on the SAT II will come from 1877-1896 because nothing else was happening then. But if like economic issues, this is an exciting time period to study. The economy was booming. The greatest inventions in the history of mankind occurred during this period. Our prosperity today is party a result of the tremendous breakthroughs of that era.

But first, a little review.

Review

When the North won the Civil War in 1865, the Republican Party claimed victory and blamed the Democratic Party for the war itself. From then until 1912, only one Democratic candidate for president was able to win a presidential election: Grover Cleveland, who won in 1884, then lost in 1888, and then won again in 1892. And he was a conservative Democrat from the traditionally Republican northern state of New York.

Republican rule of the nation meant that free enterprise and big business were favored. There was also tremendous prosperity and the nation grew into a world power in the second half of the 1800s.

The country grew enormous in size when the Secretary of State under Presidents Lincoln and Johnson, William Seward, agreed for the United States to purchase Alaska from Russia in 1867. Critics ridiculed this purchase as "Seward's Folly," describing the land as a mere "icebox". At the time, no one knew there was oil and gold there, or that Sarah Palin would be its future governor!

Russia needed money to pay for its defensive efforts at the time, as it felt threatened by the massive and growing British Empire. The purchase price was $7,200,000, which was only about 1.9¢ per acre. The Senate approved this deal nearly unanimously, but the House of Representatives delayed and was divided in authorizing the funding for it. The property was useful in World War II in connection with Japan, and during the Cold War in dealing with the communist Soviet Union. As Governor Sarah Palin has pointed out, one can see Russia while in Alaska.

But while the Republicans controlled the presidency from 1868 to 1912 (with the exception of Grover Cleveland), the Democratic Party controlled much of local politics. "Tammany Hall" was the name of the Democratic Party organization that controlled New York City. It was a completely corrupt "machine" that elected people, gave out jobs, and even stole money from the City. Eventually, it was the New York Times and America's most famous cartoonist, Thomas Nast, who mocked its leader, "Boss" Tweed, with tremendous effectiveness. Thomas Nast's cartoons whipped the public into scorning Boss Tweed and demanding that he be brought to justice. When Boss Tweed was eventually sent to jail, Nast cheered Tweed's humiliation. This demonstrated the influence of political cartoons in changing the course of history.

The Republicans did win presidential elections easily in the late 1800s. The presidential contest of 1876 was virtually a tie, and former Ohio Governor Rutherford B. Hayes was able to win it only due to a post-election deal between the Republican and Democratic parties. The deal, as mentioned in the last lecture, was for the Republicans to end Reconstruction in the South in exchange for the Democrats agreeing to the swearing in of Hayes as President. Hayes served for only one-term. He was considered a "moderate" and the Hayes Administration was uneventful. It was free of the scandals that plagued the Grant Administration before him.

In the period just after the end of Reconstruction, many African Americans moved away from discrimination into the South towards the Midwest, especially Kansas. These migrants are known as the "Exodusters".

One more point of review that will become important later: the Women's Christian Temperance Union was founded in 1874 by women in order to combat the problems that alcohol caused in their families and society. The WCTU sought "prohibition" (of alcohol), and eventually obtained it (for a while). Even today there are some regions of the country (such as some rural counties) that are "dry" (do not allow any alcohol to be sold there).

Yankee Ingenuity

America was not the origin of major religions, or even most great ideas like free enterprise. America was not the place where most scientific breakthroughs occurred. America has not been the leader in great writers, or great statesmen. Most of the concepts that have been so successful in America, like the "separation of powers" structure in the Constitution, are based on insights that originated in Europe.

Indeed, it is not easy to name what did originate in America. Not democracy. Virtually none of the great physicists, mathematicians, composers, writers, or other great thinkers came from America. What, if anything, is so special about America in its place in the world?

In two words, "Yankee ingenuity." Virtually all great inventions since about 1776 came from America, and these creations of man have brought the world a wealth beyond all imagination. America creates, and the rest of the world copies. And neither the rest of the world or even American history books give full create to Yankee ingenuity. The Encyclopedia Britannica, which is the leading encyclopedia, listed the greatest inventions in the history of the world along with the country of the invention, and by far the highest percentage are attributed to the United States. The relatively few that are attributed to other countries are often silly, or predate 1788, when the U.S. Constitution was ratified. For example, the Encyclopedia Britannica lists 29 inventions for the United Kingdom, but that includes useless and even harmful creations like cloning, as well as other inventions that predate the United States such as carbonated soft drinks (which is also not particularly productive). The United States, meanwhile, is credited with 170 inventions, which is over 5 times as many creations than Great Britain even though most Americans were descended from the British and did not have as much wealth or advantage as the mother country for most of America's history. All other countries are even further behind America in inventions.

The American invention of the cotton gin in 1792 illustrates how inventions create wealth. Previously it required many men (often slaves) and backbreaking labor to separate cotton and cotton seeds from each other. But the U.S. Constitution has a unique clause that authorizes Congress to grant ownership of inventions to the inventors for a period of time:

To promote the progress of science and useful arts, by securing for limited times to authors and inventors the exclusive right to their respective writings and discoveries

Soon after the Constitution was ratified in 1788, the first Congress passed the first patent law in 1790 to encourage Americans to invent useful devices, and ever since Americans have been doing exactly that. The inventor makes money for himself because no one else may copy his invention for 20 years without paying him for it, and the public benefits from how the inventions save time and money in performing necessary tasks.

Within a few years of the ratification of the U.S. Constitution and enacting of the first patent law, Eli Whitney invented the cotton gin, which was a machine that replaced the hard labor of 50 men to separate cotton from cotton seeds. He received a patent (exclusive ownership) for his invention in 1794. Whitney became wealthier due to his creation as people paid him for the right to make and use his invention; southern plantations became wealthier from his invention because it reduced their costs; and the entire public became wealthier because the price of clothes containing cotton decreased due to the lower costs. This is how an invention creates wealth for the world.

Several of the most important inventions concerned communications, which created wealth by reducing the costs of exchanging information, and increasing the amount of information available. In 1831, an American scientists named Joseph Henry invented the first electric telegraph, which enabled communication across distances by using codes to represent letters. Soon thereafter, the American Samuel Morse created Morse code to standardize the codes used (1835), and then in 1843 he invented the first long distance electric telegraph line. This enabled the sending and receiving of messages almost instantaneously over long distances, without having to wait for someone to travel the distance. Obviously this greatly increased the ability of people to communicate with each other, and for businesses to communicate their needs and purchases. This was not like the internet yet, but it was a tremendous improvement over sending letters by U.S. Mail, which could take weeks if the distance was long. The Pony Express was not even available then; it was first established in 1861 to try to speed up mail delivery.

In 1866, after four attempts, the transatlantic cable established permanent communication with Europe based on laying a cable on the ocean floor. This facilitated trade between the continents, and helped families communicate with grandparents back in Europe.

Then, in 1875, perhaps the greatest invention of all for communications occurred: Alexander Graham Bell invented the telephone. His motivation was to help his deaf mother hear. He had been homeschooled by his mother in order to learn to read and write, and Alexander (called Aleck) wanted to repay the favor:

Unlike others, who spoke to Mrs. Bell through her ear tube, Aleck chose to communicate with her by speaking in low, sonorous tones very close to her forehead. Young Aleck surmised that his mother would be able to "hear" him through the vibrations his vocal intonations would make. This early insight would prove significant as Alexander Graham Bell went on to develop more elaborate theories regarding the characteristics of sound waves. It would also lend rationale to Bell's opinions as to how the deaf could be assimilated into a world of sound.

Legend says that the first sentence spoken over the telephone was by Bell to his assistant Watson: "Watson, come here; I want you."

But there was far greater inventor than even Alexander Graham Bell, and he was homeschooled virtually his entire life: Thomas Edison. At the age of 7 years, Edison was sent to the local public school. The public school teacher was irritated by Edison's curiosity and questions, and aggravated by his failure to follow directions like the rest of the class. She concluded that Edison was an idiot who was incapable of learning, and after merely three months the teacher told young Edison's mother that.

Mrs. Edison was furious at the teacher and the public school. She immediately pulled young Thomas out of school and never sent him back. She then homeschooled him by reading from the Bible, and his father encouraged young Thomas to read the classics. Young Thomas became an voracious reader and, by the age of 12, became interested in science, chemistry and the works of Isaac Newton. Young Thomas also became an entrepreneur as a teenager, first publishing a newspaper and then memorizing Morse Code so that he could get a job transmitting messages over the telegraph by age 15. He was a very hard worker who would put in 12-hour days, 6 days a week, and then invent in his spare time. His famous quotes include:

• Genius is one per cent inspiration and ninety-nine percent perspiration.
• Everything comes to him that hustles while he waits.
• I never did anything by accident, nor did any of my inventions come by accident; they came by work.
• Our greatest weakness lies in giving up. The most certain way to succeed is always to try just one more time.

This homeschooler changed the world, and is considered by many historians to have been the most influential person in the entire world over the last millennium (1000 years). Known as the "Wizard of Menlo Park," which is a town in northern New Jersey next to the town named after him (Edison), Edison did his best work in New Jersey. One historian wrote about him:

"Thomas Edison was more responsible than any one else for creating the modern world .... No one did more to shape the physical/cultural makeup of present day civilization.... Accordingly, he was the most influential figure of the millennium. ..."

Edison's inventions (from 1875 to about 1900) include a list of most modern technology:

• an automated telegraph system
• improved the telephone so that it would be practical
• an office copying machine (mimeograph)
• stock ticker for Wall Street
• a practical light bulb
• the generation of electricity as power
• the industrial research laboratory
• phonograph (record player)
• motion pictures (movies)
• fluoroscopes (used for X-rays today)

A biographer credited Edison's "highly individualistic style of acquiring knowledge that eventually led him to question scores of the prevailing theories on the workings of electricity." Edison's success was not caused by an special advantages: his family was poor and Edison himself was nearly totally deaf. Imagine that: the inventor of the record player was deaf! We should remember that the next time we resort to excuses for not accomplishing what we could have.

One of Edison's sons, Charles, became a conservative governor of New Jersey and was later a co-founder of the Conservative Party of New York, which remains active today.

There were other marvelous inventions or engineering feats in the second half of the 19th century. The Brooklyn Bridge, which still stands today on the east side of lower Manhattan (connecting it with Brooklyn), is a cable suspension bridge that was completed in 1883. It was remarkable at its time, and heralded in many new suspension bridges to span across waterways. Soon the Brooklyn Bridge enabled the transportation of 33 million persons a year, and that was before the arrival of automobiles!

Not every invention was American, but often the Americans ("Yankees") are best at making the creation practical and most productive. Henry Bessemer of England invented a means for converting molten pig iron into valuable steel, which was called the "Bessemer process." The process removes impurities from the molten iron by oxidizing it with air that is blown through it. In the 1870s Americans built steel mills, particularly in Pennsylvania, to take advantage of this process and produce large quantities of steel. Those steel mills brought wealth to Pennsylvania for a century, until cheaper labor in Asia and a lack of protective tariffs drove those mills out of business.

The Election of 1880

The marvelous inventions of the 1870s led up to a very interesting presidential election in 1880. The race of 1876 had been a virtual tie, and the general election in 1880 was nearly as close, with only 10,000 separating the winner (the Republican) from the loser (the Democrat).

But who would be the Republican Party nominee? There was an historic stalemate and deadlock during the National Convention when the delegates attempted to pick their nominee. Former President Ulysses S. Grant wanted to become president again, despite having served two terms. His main rival was the power Republican Senator from Maine, James Blaine. A third candidate, John Sherman of Ohio, also ran. None was able to obtain a majority of the delegates despite dozens of ballots (actual votes) by the delegates. James Garfield went to the convention without any desire to be considered for president, and sought to support one of the leading candidates.

The big issue in 1880 was the "spoils system," which was an important part of these political machines and the view of many politicians, from President Andrew Jackson to President Ulysses S. Grant, that the victor in the election should be able to "clean house" and install his supporters in the new Administration. In 1880, the Republican Party Senator from New York, Roscoe Conkling, supported the "spoils system" and opposed Garfield and Blaine over it. Under the "spoils system" or "patronage system, the winner of an election gets to hand out government jobs to his supporters. "To the victors go the spoils," is the famous saying. The "Stalwarts" in the Republican Party favored this system, which insured that holdovers who disagreed with the winner would be fired and everyone in the new administration would agree with the new leader. Former Radical Republicans were "Stalwarts". Against the Stalwarts were moderates like Blaine and Garfield who wanted a civil service system where a government employee would keep his job even after a new leader is elected. They sought so-called "reform" of the spoils system to stop the corruption that a spoils system might lead to.

Finally, when Blaine realized he could not win, he and Sherman withdrew their candidacies and threw there support behind a "dark horse" candidate, James Garfield. Garfield was finally elected on the 36th ballot! In other words, the delegates met for days in a hot summer convention center, without air conditioning, and debated and voted 36 times before nominating James Garfield, who was a former Union general and a current Republican congressman.

So Congressman James Garfield was nominated by the Republican Party for president in 1880. To appease the Stalwarts and try to earn their support, Garfield picked a Stalwart, Chester Arthur, as his Vice President.

But Garfield did not compromise after he was sworn into office. He appointed an anti-Stalwart and arch-rival of Senator Conkling to run the New York Customs House, which was a big position that Conkling had expected to fill based on patronage. Garfield insulted Conkling on purpose in order to establish that the president had control over these positions based on merit, rather than local senators based on patronage. Conkling contested the nomination and tried to block it in the U.S. Senate. Conkling even arranged for the Senate to confirm all of Garfield's uncontested nominations except this one; Garfield responded by withdrawing all those other nominations except the one that Conkling opposed! That forced the other senators to choose between Conkling and all the nominees, who were friends of other senators. Conkling, having been checkmated, resigned in protest in the expectation that he would be reappointed by the New York legislature to his position. Fed up, however, the New York legislature refused to reappoint him (in those days U.S. Senators were picked by the legislatures rather than elected by the people), and Conkling was gone from the Senate. The issue had thereby been resolved in Garfield's favor and against the Stalwarts.

But then tragedy struck Garfield. On July 2, 1881, in a railroad station in Washington, D.C., an embittered attorney who had unsuccessfully sought a consular post shot President Garfield. Garfield then lived for several weeks as experts from around the country examined his wound, and tried to get the bullet out. Garfield even asked Alexander Graham Bell to develop a device (an induction-balance electrical gadget) to find the bullet. Nothing worked, and all the doctors who probed Garfield's wound had the effect of infecting him. This was before doctors took better care to sterilize instruments and wash their hands to remove all germs.

Garfield was removed to the "Jersey shore" (the ocean-front property along the coast of New Jersey) to recuperate. The helped at first, but ultimately an infection in the wound killed him on September 19, 1881, when he died from an internal hemorrhage.

The assassination shocked the country and discredited the Stalwarts. Vice President Chester Arthur, who was Garfield's running mate in order to appease the Stalwarts, had never been elected to any public office before then, and was never elected to one afterward either! He had been an abolitionist and a New York attorney. Historians view him as being ineffective as a president, which is not surprising given his lack of experience for the position.

The Democratic Party won big in the congressional elections of 1882, by advocating reform of the patronage or "spoils system." President Arthur then abandoned the Stalwarts and established a civil service system whereby the victors cannot fire and replace government workers with his supporters. Specifically, President Arthur signed into law the Pendleton Act in 1883, which established an examination system for federal jobs. It also established the Civil Service Commission, which is a bipartisan committee to administer federal exams. Those who supported "reform" of the government employment system declared victory.

Debate: Do you support a "spoils system" or a "civil service system"?

The Grange Movement

Not everyone in America was happy with Republican dominance in the White House, and unregulated free enterprise in the economy. Many farmers, for example, that railroads were charging prices that were too high. From 1867 to 1874, there was a political movement for states to regulate the prices charged by railroads, which was led by "Granger" politicians. A leader in "The Grange Movement" was Oliver Kelley, a former official in the U.S. Department of Agriculture. Initially the Grange was devoted to social gatherings and educational programs for farmers, who otherwise had a somewhat isolated and tedious lifestyle.

In many ways farmers in the 1870s were like homeschoolers today: divided and lacking in political force. The Grange Movement attempted to change that. When there was a financial crisis known as the Panic of 1873, the Grange surged in popularity among farmers who had too much debt and not good rates from railroads for shipping their products. Popularity grew in the farm states of Iowa, Minnesota, Wisconsin and Illinois, and the Grangers were able to pass "Granger laws" to regulate the railroads for the benefit of farmers.

The owner of a grain elevator (which charges farmers to store their grain) fought an Illinois Granger law all the way to the U.S. Supreme Court in Munn v. Illinois, decided in 1876. That decision upheld the power of states to regulate the rates charged by grain warehouses or any other public facility made available for the general public good, such as railroads. This ruling in favor of the farmers energized the populist movement. But a later lawsuit brought by the railroads to challenge state regulations of the terms it placed in its contracts, the Wabash case (1886), invalidated the state regulation and put the farmers almost back to where they started. The Wabash case led to the federal government ultimately intervening in favor of the farmers by creating the Interstate Commerce Commission in the Interstate Commerce Act (1887). This new federal agency, known by its initials as the "ICC", regulates railroad rates and terms in its contracts with the public.

The Grange Movement reached its zenith (peak) in 1875. It then began to decline as its activists started more powerful organizations: the Greenback Party (in the 1870s), the Farmers' Alliances (in the 1880s) and the Populist Party (in the 1890s, which eventually joined with the Democratic Party).

Debate: Do you think government should be able to set the rates charged by railroads and other "public facilities"?

Big Business and Big Oil

The railroads and grain elevators were not the only types of "big business" that began to generate wealth while also aggravating ordinary Americans. The biggest and wealthiest business of all, perhaps in the entire history of mankind, was built by John D. Rockefeller to control the production and supply of oil.

Oil has been used since the Ancient Greeks, who would pour it into the sea and then set fire to it in order to defend against attacking fleets of ships. Noah may have used thick oil (called "pitch") to waterproof Noah's ark. Moses' basket may have been made waterproof using oil, just as American Indians used it to waterproof canoes.

But the first modern oil well was in Pennsylvania, when Colonel Edwin L. Drake drilled down 72 feet near Titusville (just east of Pittsburgh) and struck "Oil Creek." Oil production there started in 1859. That oil sold for $40 a barrel (note that a dollar was worth far more then), so it was even more expensive to buy than oil is today! It was used for medicine, as there were no cars then.

A devout Christian who abandoned public high school before finishing, John D. Rockefeller, had just started his first job a few years earlier. He developed a tremendous work ethic, and was immediately attracted to the discovery of oil in 1859. He quickly entered the business and hooked up with an inventor who knew how to cheaply refine the oil into something usable. By 1870 Rockefeller founded Standard Oil Company, and then began pursuing highly aggressive business tactics to drive out competitors and consolidate his control (monopolize the industry).

In 1882, Rockefeller formed a new type of business entity called the "trust", and named it the Standard Oil Trust of Ohio. But ten years later a decision by the Ohio Supreme Court decision forced him to break up his Trust into 20 smaller businesses. In 1899 he formed a holding company for all his businesses in the name of Standard Oil Company of New Jersey. By 1911 it controlled an astounding 95% of the entire oil industry, but then the U.S. Supreme Court forced Rockefeller to break up it up into smaller pieces and separately controlled companies, one of which became Exxon. Rockefeller then retired and devoted the remainder of his long life to philanthropy (giving away his money to charitable causes).

Rockefeller became perhaps the wealthiest man in the history of the world. Predictably, people became jealous and his competitors sometimes lost their businesses. Many politicians became determined to break up his huge company, and many critics accused him or his employees in engaging in illegal activities, even bribes, to build his business empire. But other industries began to follow his example, as large industrial companies began to form to control sugar, lead, beef and even whiskey.

Congress ultimately passed the Sherman Antitrust Act to prohibit monopolization and "restraint of trade," or interference with competition, in 1890, named after Senator John Sherman of Ohio (a candidate for the Republican presidential nomination in 1880 and the brother of General William Sherman). The Sherman Antitrust Act was not what broke up Rockefeller's oil empire, because in 1895 the Supreme Court weakened the law by upholding a powerful Sugar Trust, in U.S. v. Knight Co. The Sugar Trust controlled 98% of the sugar market, and the Supreme Court allowed it to continue. Despite being weakened, the Sherman Antitrust Act remains a very important law that is used every day now.

The issue of Rockefeller and monopolies divides free enterprise thinkers. Some advocate that the free market will deal with monopolies adequately. Others say that monopolies are an opponent to free market competition and should be broken up.

Debate: Should government break up monopolies?

Good or bad, Rockefeller was part of a huge economic boom that began before the end of Reconstruction in 1877 and continued through 1900. There was an increase in America's "gross domestic product," which is the total output (in dollars) of all the good and services produced by labor and property located our country. It is basically how much our entire country is producing, valued in dollars. When we are prosperous it increases, and when we are in a depression it goes down or does not increase as much.

By the late 1800s the wealthiest city in the United States was Williamsport, Pennsylvania, which was the center of the profitable lumber industry. Now it is best known for hosting the Little League World Series!

Economics

This was the “Gilded Age,” a term coined by the extremely successful writer from Missouri, Mark Twain (his real name was Samuel Clemens).

The era was “gilded” because it appeared golden, but beneath the shiny surface was greed and corruption according to Mark Twain, who wrote a novel by that name in which Washington, D.C. was run by greedy businessmen and corrupt government officials. (Mark Twain wrote several other influential novels, including “The Adventures of Huckleberry Finn” (a journey on a raft on the Mississippi and in life based on experiences)). The Gilded Age featured “robber barons,” who were people who became extremely wealthy through ruthless business practices. The worst “robber baron” was Jay Gould, a financier on Wall Street who committed rampant fraud by printing false stock certificates and even tried to corner the gold market in 1869. That led to a financial panic known as Black Friday, after Gould drove up the price of gold by hoarding it, President Grant learned of the scheme and started selling the government gold reserves on the market to cause the price to fall. The price of gold then fell sharply, and many lost everything they had. Gould, however, had sold out at the highest price!

In fact, this was the golden era of capitalism, when American business was phenomenally successful, huge fortunes were made, and government did not interfere. Businessmen like Andrew Carnegie, who immigrated from Scotland without any money and ended up with massive wealth from founding the Carnegie Steel Co. (later became U.S. Steel Co.), amassing a fortune that he then donated to build structures like Carnegie Hall, Carnegie-Mellon University, and the enormous New York Public Library (plus 2800 other public libraries). He wrote the “Gospel of Wealth” in 1900 to describe his vision of capitalism.

The Gilded Age was the golden era of the inventions, when freedom, capitalism and almost no government regulations unleashed fantastic inventions in a short period of time. In about ten years the United States produced these inventions: the telephone (1876), the record player (1877), the light bulb (1879), the electric power station (1882), and the motion picture camera (1889).

Most of these inventions were by the “Wizard of Menlo Park” Thomas Edison, who was by the far the greatest inventor in the history of mankind and ranked as the number one most influential person of the past 1000 years by Life magazine. He was homechooled, having flunked out of regular school. He was a failure as an employee of companies. He was mostly deaf. Out of money and lacking any other options, he eventually went into business for himself in New Jersey.

Self-employed, he then created one marvelous invention after another, acquiring more than 1300 U.S. and foreign patents throughout his life. He invented the record player (phonograph), the light bulb, the electric power station, the mimeograph machine (copier), a telephone transmitter device for the mouthpiece (Alexander Graham Bell invented the telephone itself), electric power generator, and many other remarkable items. The wealth generated by Edison’s work (and capitalism) is astronomical.

From about 1878 to the end of the century there was strong pressure to return the nation’s economic standard to bimetallism by including silver along with gold. Two forces drove this pro-silver or “free silver” movement: Westerners had discovered silver mines so they wanted the silver to become more valuable, and farmers wanted more money in currency to cause inflation. Westerns and Southerners arranged for passage of the Bland-Allison Act in 1878, which required the government to purchase $2-4 million worth of silver each month. Also, a bill passed over President Hayes’ veto which allowed for the free and unlimited coinage by the government of silver, such as silver dollars, at a ratio of 16 to 1 relative to gold. The government began minting silver dollars that are collectors’ items today (and worth much more than one dollar now). But the price of silver fell as more was mined, and so the monthly government purchases declined also. Deflation continued for the next ten years. A $100 cost in 1878 was equivalent to only $84.43 in 1890.

The Westerners wanted more silver purchased, and the debtors and farmers wanted more inflation. They forced passage of the Sherman Silver Purchase Act in 1890, which required even greater purchases by the government of silver. The Silver Purchase Act required the government to issue notes (like large-denomination dollar bills) to purchase 4.4 million ounces of silver each month, regardless of its value in dollars. The bill passed in a compromise with the Northerners, who obtained the high tariff in the McKinley Tariff Bill.

But the notes used to buy the silver each month were redeemable in gold, which was more valuable than the increasingly plentiful silver. So pretty soon the public was demanding gold from the government in return for these new notes. This created a “run” on the gold reserves of our Nation, with its total supply falling below $100 million and headed quickly towards zero.

The Panic of 1893 hit just after Democrat Grover Cleveland became president for his second term. He persuaded Congress to repeal the Silver Purchase Act in order to stop the run on gold. A big Wall St. banker, J.P. Morgan, arranged for more gold to be imported from Europe to protect the government reserves. The “run” on our valuable gold reserves stopped.

There was a huge bestselling pamphlet called “Coin’s Financial School” which was published just after the economic depression of 1893. In this fictional work, professor Coin lectures gold-standard advocates on the benefits of monetizing silver at a 16:1 ratio. The pamphlet swept the country, much as Thomas Paine’s “Common Sense” did, and laid the foundation for William Jennings Bryan’s “Free Silver” presidential campaign in 1896 against pro-gold Republican William McKinley. Ultimately Bryan rocked the country with the most famous political speech in American history, his “Cross of Gold” speech to the Democratic nominating convention in 1896:

“There are two ideas of government. There are those who believe that if you just legislate to make the well-to-do prosperous, that their prosperity will leak through on those below. The Democratic idea has been that if you legislate to make the masses prosperous their prosperity will find its way up and through every class that rests upon it. …

If they dare to come out in the open field and defend the gold standard as a good thing, we shall fight them to the uttermost, having behind us the producing masses of the nation and the world. Having behind us the commercial interests and the laboring interests and all the toiling masses, we shall answer their demands for a gold standard by saying to them, you shall not press down upon the brow of labor this crown of thorns. You shall not crucify mankind upon a cross of gold.”

Bland-Allison Act "1878: feds to buy $2M-$4M of silver/mth, to increase inflation & silver prices"

Unions and Immigrant Workers

As the American economy grew, and businesses became more profitable, workers began to band together and "unionize" (create "unions"). A union is a group of workers at a factory or business who join together in order to negotiate better wages and working conditions. They acquire power in joining together, and they threaten to strike if the owner does not give in to their demands. In the early 1800s there were no unions and no strikes, but by the late 1800s workers began to see that they could increase their wages and improve their conditions by forming unions and threatening to strike. Today, Wal-Mart does everything it can to keep its workers from unionizing, and union organizations despise it for that reason.

Factory owners began hiring Chinese workers at lower wages, and unions objected to that. Factory owners would also import Chinese workers to "break a strike," and keep the factory operating despite the refusal of the regular employees to work. So quickly the unions became opposed to immigration from China.

From 1877 to 1880, the Workingmen's Party existed with support by ordinary workers. It was socialistic and opposed to immigration from China. Its leader was Dennis Kearney, who was actually imprisoned for provocative speeches. (Today the broad interpretation of the First Amendment prohibit such imprisonments.)

In 1882, the Chinese Exclusion Act was enacted as a culmination of growing opposition to Chinese immigrants, who were thought to lower wages for workers. This Act banned the Chinese from immigrating to the United States, and was not repealed until 1943 when America needed the Chinese in the war against Japan.

Some cities passed laws to frustrate efforts by Chinese to operate businesses in competition with Americans. San Francisco, for example, passed a law requiring laundries to be only in stone or brick buildings, which made it more difficult for the Chinese to open laundry businesses. But the Chinese challenged that law and took it to the U.S. Supreme Court, which invalidated the law and gave the victory to the Chinese in Yick Wo v. Hopkins 1886).

In 1886, Samuel Gompers formed the American Federation of Labor (AFL) in order to demand limiting the workday to 8 hours and stop employers who required longer hours per day. Initially this was a non-political organization, not aligned with either political party. By 1901 it had 1 million members. The Knights of Labor, another labor group in the 1880s, had 700,000 members at that time. So these labor groups were quite large.

In 1886, workers at the McCormick Harvesting Machine Co. in Chicago began a strike in the hopes of shortening the workday to 8 hours. The company tried to break the strike by using new workers, and police were called in to protect the new workers. A fight broke out and one person was killed.

Anarchists were extremists who sided with the unions, and the anarchists planned a large rally the next day to protest the alleged police brutality. They expected 20,000 to show up at Haymarket Square in Chicago, but actually on 1500 to 2000 were there, with the police there also. At one point a protester through a pipe bomb at the policemen, and its explosion killed seven policement and injured more than 60 others. The police then fired into the crowd, and killed four.

Eight anarchists were tried for conspiracy to commit murder; seven were convicted, and four were hanged in November 1887. This was a huge embarrassment for the union movement, which did include many socialists and anarchists. It caused a delay in acceptance of the eight hour workday, and the movement of workers from the Knights of Labor to the more moderate American Federation of Labor.

Despite the fact that the radicals killed the policemen in the Haymarket Square riots, radicals in 1969 (including Barack Obama's friend Bill Ayers) detonated a bomb to destroy a statute honoring the fallen policemen. The mayor of Chicago correctly criticized it as an attack on law and order.

Another violent conflict involving striking workers occurred near Pittsburgh in 1892. Called the Homestead Strike, guards hired by wealthy businessman Andrew Carnegie suppressed a strike by workers and ten were killed in the conflict.

The biggest leader of the labor movement was Eugene V. Debs, who headed the American Railway Union (railroad workers). Debs was jailed for leading strike against Pullman railroad cars in 1894 over wages. In 1895, in a case entitled "In re Debs," the U.S. Supreme Court upheld judicial power to prohibit strikes against railroads, and upheld the power of courts to jail those who disobey court orders and engage in strikes anyway (like Debs).

Indians and the Frontier

Conflicts with the Indians started to subside after "Custer's Last Stand." There were bloody battles in 1877 between the U.S. Army and the Nez Perce, an Indian tribe led by Chief Joseph in Oregon and Idaho. This tribe did better against the U.S. Army than other tribes had, but ultimately this tribe was relocated to Oklahoma just as many others had been. Oklahoma has by far the largest Indian population (by percentage) of any state.

Today there are 38 national historic sites in the northwest (Oregon, Washington, Montana and Idaho) in honor of the Nez Perce, which are frequently visited by tourists.

In 1881, a book was published that attempted to do for the Native Americans what "Uncle Tom's Cabin" did for African Americans. called "A Century of Dishonor"", it complained about and exposed unjust treatment of Indians by the United States. Its author was Helen Hunt Jackson.

In 1887, partly in reaction to this book, Congress enacted the Dawes Act to help Indians. This law granted landholdings (allotments, usually 160 acres or 65 hectares) to individual Native Americans, which replaced communal tribal holdings. In other words, this law attempted to convert the tribal structure of Indian life into the individualized private property system used by Europeans and most Americans. It sought to absorb tribe members into the general public.

This law was a complete failure. Within decades most of the tribal land had been transferred into ownership by non-Indians, and the Indians were worse off than they were before. This was an example of government trying to make something better, but actually making it worse.

In 1890, the U.S. Census Bureau declared that the frontier is settled and officially closed. The era of frontier America, which first began with the settlement at Jamestown, Virginia, and then spread westward for nearly 300 years, was over. Frederick Jackson Turner wrote in 1893 that frontier experience had promoted individualism and democracy.

Tariffs and an Income Tax

Recall that the tariffs were a cause of the Civil War: the North wanted higher protective tariffs, while the South opposed them. The Civil War resolved the dispute over slavery, but it did not resolve the dispute over tariffs. After the War, the North still supported higher tariffs and the South still opposed them. The West, particularly farmers, also opposed higher tariffs.

In 1890, the McKinley Tariff established the highest tariffs ever, but in a compromise it did make sugar "duty free" (no tariff on sugar). Other than sugar, prices increased on goods and products due to the higher tariffs. These higher tariffs reflected the continued dominance by the Republican Party, which controlled the White House in 1890 (Benjamin Harrison, the grandson of William Henry Harrison, was president). Partly due to public outrage over the higher tariffs, the Democratic Party won many seats in Congress in the 1890 elections after the McKinley Tariff was enacted.

In 1894, the Wilson-Gorman Tariff and Income Tax Act passed, which added an income tax to even more tariffs. In the case of Pollack v. Farmers Loan and Trust Company, the Supreme Court declared the Income Tax Act unconstitutional because it did not apportion the tax by population as required by the Constitution. Wealthier folks paid more, as in today's income tax, but the Supreme Court decision required a constitutional amendment (the 16th Amendment) to be passed before allowing taxation based on wealth rather than population.

The Conservative Democrat

After Chester Arthur served out the presidential term for the late James Garfield, Republicans were so unhappy with Arthur that they did not renominate him. Meanwhile, the Democratic Party -- which had not won a presidential election in nearly 30 years, turned to a conservative candidate from the Republican state of New York: Grover Cleveland. The Democrats hoped that by nominating Grover Cleveland they could pick up some Republican support and finally win a presidential election.

His opponent was the Republican Senator James Blaine from Maine, who was a moderate. Blaine is best known today for his opposition to the funding of Catholic schools, and he pushed through many state amendments (and nearly succeeded with a constitutional amendment) to prohibit the use of any taxpayer money towards religious schools.

Some key eastern Republicans opposed James Blaine due to scandals, and supported Grover Cleveland for president instead. These Republicans were known as the "Mugwumps"; they felt Blaine could not be trusted, and they were probably right! The defection by the Mugwumps to support Cleveland enabled him to win his key home state of New York, despite its Republican tradition at the time. (Today New York is very Democratic.)

The strategy of the Democrats, aided by division within the Republican Party, worked. Cleveland was elected president in 1884 for his integrity, his support of gold standard, his opposition to unions, his opposition to government spending, and his support of free enterprise. He was the most conservative president since James Monroe, even though Cleveland was a Democrat.

Cleveland then did as he said he would. He vetoed a record number of bills passed by Congress, mostly concerning pensions for Civil War veterans. Cleveland was frugal like most conservatives, and did not want more government spending.

In 1888, Cleveland faced a new Republican candidate, Benjamin Harrison. Cleveland won more votes, but Harrison won more electoral college votes and thus won this close election. Harrison, who was from Indiana and enjoyed the popularity of his grandfather president, favored protective tariffs and increasing veterans pay.

Cleveland came back for a rematch in the presidential election of 1892, and beat Harrison that time. But then he was faced with the financial Panic of 1893, during which hundreds of banks and businesses failed, President Cleveland was criticized for doing nothing, but refusing to bail out the banks is a conservative solution. In fall 2008, President Bush and Congress did bail out the banks, in contrast to Cleveland's conservative approach.

The Panic of 1893 caused a wealthy Ohio populist who had been hurt by it to lead a march on Washington, D.C., setting a precedent for "marching on Washington." Jacob Coxey promised to gather 10,000, but by the time he arrived in D.C. "Coxey's Army" consisted of only 500 people, which is still enough to cause a problem. But the conservative Cleveland held his ground:

Upon arriving in Washington, Coxey and his supporters demanded that the federal government immediately assist workers by hiring them to work on public projects such as roads and government buildings. The United States Congress and President Grover Cleveland refused. Law enforcement officials arrested Coxey for trespassing on public property. Coxey's Army quickly dispersed upon its leader's arrest.

Historians cite this march on Washington as an example of how Americans increasingly looked to the national government to solve their problems.

Cleveland also held his ground against problems instigated by unions. He put down the (railroad) Pullman Strike in Chicago in 1894.

Preparing for the "Turn of the Century"

Social movements in the late 1800s also occurred, preparing the nation for the turn of the century:

• Elizabeth Cady Stanton, who opposed abortion, founded National Woman Suffrage Association in 1869 and, before that, led the Seneca Falls Convention in 1848. This would foreshadow the women's suffrage movement in teh early 20th century.

Chataugua Movement 1874: knowledge revolution founded in NY; promoted adult education and combined it with entertainment

Booker T. Washington "self-taught former slave; urged self-help, accommodation with others; founded Tuskegee Institute for research"

Alfred Thayer Mahan 1890: wrote books on sea power and urged strong navy and imperialism by United States

Queen Liliuokalani "Hawaii leader recognized only natives, opposed joining U.S.; Americans on island then dethroned her (1893)"

National Municipal League "1894: leaders form group to make city gov't more honest, efficient, effective. Now the National Civic League"

Atlanta Exposition/Compromise "1895: Booker T. Washington addresses racially diverse audience to urge cooperation, accommodation"

Jane Addams/Hull House argued for reform of city government by involvement of women

Debate Topics

Debate: it wasn’t the “Gilded Age”, it was the “Golden Age”. Debate: caveat emptor, or government regulation of monopolies and robber barons? Debate: spoils system.