Capital v. Labor Complete the Industrialist Poster

Laissez Faire Economics “ Leave it alone ” Gov ’ t should stay out of business Businesses benefit = society benefits

Social Darwinism (Herbert Spencer) Charles Darwin ’ s theory of evolution applied to humans/society “ Only the strong survive ”

Andrew Carnegie Steel “ Gospel of wealth ” – use wealth to help society "Millionaires are the bees that make the most honey and contribute most to the hive even after they have gorged themselves full.” --Andrew Carnegie *Entrepreneur A person who starts a business

Vertical Consolidation = gain control of all phases of product development Andrew Carnegie (cont ’ d)

John D. Rockefeller Standard Oil Co. Horizontal Consolidation = creation of 1 giant business from buying many smaller ones

Monopolies, Cartels, and Trusts Monopoly = the sole supplier of a product with no substitute Cartel = secret associations of businesses making the same product Trust = several businesses run by a board of trustees

Captains of Industry or Robber Barons? Captain of Industry Positive view Made U.S. great! Improvements helped us all Philanthropist = charitable person Robber Baron Negative view Wealth ONLY concern Unfairly used power to cut our competition

Socialism a theory or system of social organization that advocates the vesting of the ownership and control of the means of production and distribution, of capital, land, etc., in the community as a whole. -Webster ’ s dictionary Founded by Karl Marx and German Philosopher Why would people be interested in socialism, during this time?

Early Labor Unions Initially - to help members in bad times Soon -means to gain better working conditions Collective bargaining – union negotiates with employers Yellow dog contracts - signed by employees, promise to never join a union

Knights of Labor 1869 Goal to organize ALL workers into 1 union Recruited women and Afr. Am.s Concerns: Equal pay for equal work 8 hour day End child labor

The American Federation of Labor (AFL) 1886 – Samuel Gompers Goal - organize ONLY skilled workers In practice opposed women and Afr. Ams. Advocated “ closed shop ” Concerns Wages/Hours Working conditions

Anarchy a theory that regards the absence of all direct or coercive government as a political ideal and that proposes the cooperative and voluntary association of individuals and groups as the principal mode of organized society. - Webster ’ s Dictionary Why would people be in favor of anarchy, during this time?

Two Different Worlds 1 extravagant lifestyles  The wealthy lived extravagant lifestyles and considered themselves elitists. caste system  The common people resented their snobbish attitudes and wealth. There was a caste system in the U.S.  millionaires ,800  1900, 90% of wealth, controlled by 10% of population.

Political Machine Organized group that controls a city’s political party Give services to voters, businesses for political, financial support After Civil War, machines gain control of major cities Machine organization: precinct captains, ward bosses, city boss The Emergence of Political Machines

The Role of the Political Boss May serve as mayor he: controls city jobs, business licenses influences courts, municipal agencies arranges building projects, community services Bosses paid by businesses, get voters’ loyalty, extend influence Immigrants and the Machine Many captains, bosses 1 st or 2 nd generation Americans Machines help immigrants with naturalization, jobs, housing Election Fraud and Graft Machines use electoral fraud to win elections GraftGraft—illegal use of political influence for personal gain Machines take kickbacks, bribes to allow legal, illegal activities

Corrupt political leader put New York City in debt Political boss Political boss 1851 elected to city council 1852 served in Congress Kept Democratic Party in power in NYC called Tammany Hall Formed the Tweed Ring Bought votes, encouraged corruption, controlled NYC politics

kickbacks  Received large fees for interests (*kickbacks) from the Erie Railroad  Tweed Ring milked the city with false leases, padded bills, false vouchers, unnecessary repairs and over-priced goods *Return of a portion of the money received in a sale or contract often illegal and corrupt in return for special favors.

 Exposed for his corruption by cartoonist and editor, Thomas Nast  Tweed Ring fell and 1873 Tweed convicted of embezzlement  Later Tweed was arrested on a civil charge and jailed in NYC, later died there

Credit Mobilier Phony construction company owned by stockholders of Union Pacific Railroad. Hired Credit Mobilier to build the transcontinental railroad Charged the U.S. government nearly twice the actual cost of the project. Bribed Congress to stop the investigation. Largest scandal in U.S. history, and led to greater public awareness of government corruption.

Whiskey Ring A group of President Grant’s officials imported whiskey Used their offices to avoid paying taxes Cheated US treasury of millions. Salary Grab Congress gave itself a raise, $5,000 to $7,500 annually. Congressmen received a retroactive check for $5,000, plus their raise…… Became a political issue….Later repealed.

Assassinated by an upset Spoilsman. Led to VP Chester Arthur becoming president Supported a change to the corrupt spoils system. Pendleton Actthe Civil Service ActSigned into the law the Pendleton Act also called the Civil Service Act. Required candidates applying for government positions to a test to determine their qualifications.

1880 Presidential Election: Democrats

patronage  Under the Spoils System (patronage), candidates for political office would offer potential jobs in exchange for votes. –gave supporters access to money and political favors.  During the Gilded Age, the Republicans and Democrats had roughly the same number of supporters. –To keep party members loyal, candidates rewarded supporters and tried to avoid controversial issues. The Republicans  appealed to the industrialists, bankers, and eastern farmers. sound money  They favored the gold standard (sound money) and high tariffs  Blue laws, regulations that prohibited certain activities people considered immoral. The Democrats  attracted the less privileged groups.  such as northern urban immigrants, laborers, southern planters, and western farmers.  Supported soft money and silver coinage.

Gilded Age Presidents Rutherfraud (R) Garfield (R) (Assassinated by Charles Guiteau) Arthur Cleveland (D) Harrison (R) Cleveland (D)

1881: Garfield Assassinated! Charles Guiteau: I Am a Stalwart, and Arthur is President now!

Pendleton Act (1883)  Civil Service Act.  The “Magna Carta” of civil service reform.  1883  14,000 out of 117,000 federal govt. jobs became civil service exam positions.  1900  100,000 out of 200,000 civil service federal govt. jobs.

Arthur Reforms the Civil Service After the assassination, President Arthur was able to get congressional support for the Pendleton Civil Service Act. which created a commission of classified government jobs