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Political Paralysis of the Gilded Age AP Chapter 23.

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1 Political Paralysis of the Gilded 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 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.) 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

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 – 1 st 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 1 st 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

51 Congressional Election of 1894 Democrats suffered heavy losses Republicans gained control of the House of Representatives Populists increased their base

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