Political Paralysis in the Gilded Age 6.1 1965-1900

The “Gilded Age” (1877-1900) Termed first used by the author Mark Twain Describes the era in American History of big business and political corruption following the Civil War and Reconstruction.

General Grant becomes President 1868 The Republicans nominated General Grant for the presidency in 1868. The Republican Party supported the continuation of the military reconstruction of the South. Grant’s popularity had soared after the end of the Civil War, and he was elected very easily.

The Era of Good Stealings Grants presidency was rife with scandals, though he was never directly involved in any of them. Gould and Fisk Scandal The “Whiskey Ring” The Credit Mobilier Scandal

Black Friday Jay Gould and James Fisk Devised a plan to corner the gold market by buying a large amount of gold over a long time, and holding it until the price rose to the highest level in U.S. History (up until that point) Once the price got to an extremely high level, they sold off the large quantity of gold that they had been hoarding, causing the gold price to crash back down. The day the gold market crashed is referred to as “Black Friday” The Federal government was forced to release $4 million in gold to stabilize the gold market.

Federal Government Corruption Union Pacific Railroad Company was contracted by the U.S. Government to plan and complete a transcontinental railroad. The Union Pacific railroad was buying the supplies to build the railroad, from a company called the Credit Mobilier, a subsidiary that was owned by the Union Pacific Railroad Company.

Credit Mobilier Scandal Credit Mobilier Construction Company issued company stock to U.S. congressmen at extremely discounted rates with the hopes that the congressmen would approve additional government spending for the railroad to be completed. The company double charged the government (tax-payer money) for everything needed to build the railroad. The extra spending was approved by Congress.

The excess government spending = more profits for the Credit Mobilier Company = higher stock price. In essence, the congressmen that had been bribed with company stock, had approved a ridiculous amount of spending with taxpayer money, knowing that they would profit from the increase in company stock value.

Political Corruption Tammany Hall (New York) A political machine Run by “Boss” Tweed Used bribery and manipulation to fraudulently change the out come of elections in New York Tweed stole more than $200 million from the city of New York “Boss” Tweed and his cronies were brought to justice in part because of the political cartoons of Thomas Nast.

Liberal Republican Revolt The Amnesty Act of 1872 Removed the voting and office holding restrictions from most former Confederates.

The Hayes-Tilden Standoff Election of 1876 Democrats run Samuel Tilden Republicans run Rutherford B. Hayes Tilden clearly won the popular vote and had 184 electoral votes to Hayes’ 165 but 20 electoral votes from four states were still disputed.

The Compromise of 1877 and the End of Reconstruction To solve the electoral controversy in the four disputed states, a compromise is struck. The Compromise of 1877 The Republicans get to claim all 20 disputed electoral votes and Hayes get the presidency (185-184) In return, the Republicans promise the Democrats that Southern Reconstruction will be ended.

Blacks in the South At the end of Reconstruction, white Democrats resumed their political power in the South Racism in the South was at an all-time high Blacks were forced into sharecropping and tenant farming AKA the "crop-lien" system small farmers would rent out land from a plantation owner and were only allowed to keep a small portion of the profits

Jim Crow Laws in the South state-level legal codes of segregation The Southern states enacted: literacy tests voter-registration laws poll taxes All designed to ensure the denial of voting for the South's black population.

Plessy V. Ferguson (1896) The Supreme Court ruled in favor of the South's segregation in the case of Plessy vs. Ferguson (1896) declared that separate but equal facilities for blacks were legal under the 14th Amendment. This case legally segregated blacks and whites in the south

Class Conflict and Ethnic Clashes The Chinese Exclusion Act (1882) Passed to keep Chinese immigrants from coming to the U.S. because they drove wage labor down. This was the first limitation on immigration in American history.

Garfield’s Assassination 1881 President James A. Garfield became the 2nd U.S. president to be assassinated. The assassin was Charles Guiteau An aspiring politician who was upset that he was not awarded a position in the government (the spoils system) by President Garfield.

The Pendleton Civil Service Act Passed in response to Garfield’s assassination Stated that government jobs had to be award based on merit (not the spoils system) Government employees would have to take an aptitude test to prove they were fit for whatever job they were appointed to. Government employees could not be fired or demoted for political reasons. Federal employees cannot contribute money to political campaigns.

Depression, Deflation, and Inflation The Panic of 1873 An economic depression caused by the over-speculation of land. Jay Cook, owned the biggest banking house on Wall Street and had lent hundreds of millions of dollars to people that were buying land. When it was realized that the land was overvalued, land prices crashed, and the money that had been lent by Jay Cook’s bank, was lost. Cook & Company was forced to go bankrupt, which caused a panic on Wall Street (The Panic of 1873)

Early Farmers’ Alliances The Greenback Labor Party Founded and supported by western and southern farmers Supported soft money economic policies in an attempt to help farmers pay off their large amounts of debt. The Grange

Hard Money vs. Soft Money Hard money – money system backed by gold Soft money – money system backed by gold and silver With the crashing land values, many debt-ridden farmers supported soft money policies If silver were accepted as a currency, the paper money could be inflated, therefore allowing them to pay their existing debt easier. When they pay their debts, the money they pay back is worth less than the money they borrowed. Bankers favored a hard money policy Gold cannot be inflated, and the price is pretty stable, therefore the amount paid back was generally worth the same as the amount borrowed

The People’s Party The Populist Party (aka the People’s Party) Drew most of its support from farmers in the south and west, and factory workers from the Northeast Had its roots in the old Greenback Labor Party They supported: Graduated income tax (the more money you make, the higher % of taxes you pay) Election reform (direct election of Senators and term limits) Government control of the railroads and telegraphs The unlimited coinage of silver.