1. Chapter 17: Gilded Age Political and Economic Challenges

2. Section 1: American Politics in the late 19th century
Balance of Power Creates stalemate
Party loyalty was divided
No majority gained by either party in Congress.
Neither party held power for more than two years.
Made it tough for Congress to pass laws
Corruption was widespread
Many high level officials accepted bribes 2 2 2 2

3. Presidents of this era, were very weak when compared to Lincoln.
Rutherford B Hayes won by a majority vote from Congress
Benjamin Harrison lost popular vote, but won electoral vote.
Chester A. Arthur became president after James Garfield was assassinated then failed to win his party's nomination in a re-election campaign.
Only President to display presidential power was Grover Cleveland
Served from and then 3 3 3 3

4. The Spoils System Dominates the Government
Spoils System– Awarded government jobs to people who were loyal to the political party that was elected.
a. jobs awarded at local, state and federal levels
b. allowed for many unqualified people to be given very important jobs
Phrase that sums up spoils system was: “It’s not what you know, it’s who you know” 4 4 4 4

5. Civil Service Reform
Civil Service System – System that includes state and federal jobs aimed at hiring the most qualified people for government jobs.
Focused on what you knew, rather than who you knew.
Many Presidents wanted reform to the spoils system, but couldn't gain any support
Parties fought any attempts to get rid of the spoils system
often backed candidates based on their ability to be controlled ex: Chester A. Arthur after death of James Garfield
Arthur ultimately signed law that reformed spoils system in huge way 5 5 5 5

6. Pendleton Civil Service Act – (1883) Established a Civil Service Commission which created a civil service exam.
Anyone who wanted govt. job now had to take exam and have their scores compared to others interested in the job.
-one's political connections alone could no longer earn him/her a high level job 6 6 6 6

7. Section II: Economic Issues
America debated over two main issues involving the economy in the late 1800s
Tariffs– taxes on imported goods
High protective tariff-large tax on goods intended to help American businesses that sell goods abroad
Gold Standard – The government uses gold as the basis of the nation's currency 7 7 7 7

8. Americans Debate the Tariff Issue
New tariffs served two main purposes:
-Income for govt. & protection of U.S. industries.
In the Gilded Age, each party viewed tariffs differently
a. Republicans- high tariffs would allow industries to grow and create new factory jobs.
b. Democrats – higher tariffs raise the cost of consumer goods and make it more difficult to sell goods overseas. 8 8 8 8

9. Conflicts over Monetary Policy
-During the Civil War, there was inflation
-prices were high, supply was high, demand was low
-paper money that was not in high circulation were called greenbacks
-value of greenbacks was low
Coin Act-(1873) Allowed the U.S. government to make both gold and silver coins.
Known as bimetallism
-Farmers were in favor of bimetallism, businesses favored a Gold Standard 9 9 9 9

10. Conflicts over Monetary Policy Contd.
-bimetallism would increase farmers’ income but decrease the debt they owed
-Businesses feared that inflation would reduce their profits because they relied on a high value of the dollar to sell goods overseas
-Most Republicans favored the Gold Standard, and most Democrats favored bimetallism 10 10 10 10

11. Lesson review question
What were the views of Republicans and Democrats regarding a high protective tariff? 11 11 11 11

12. Ch. 17 Section 3: Farmers and Populism12 12

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14. Economic problems during the Gilded Age
high protective tariffs led to rising prices and high debts for farmers
their goods sold for small profits
gold coinage v. silver coinage
gold was less available for farmers than silver
two factions that represented each side of monetary policy debate emerged in election
Silverites v. Gold Bugs in 1896 Election
Gold Bugs=pro Gold Standard
Silverites=bimetallism /free silver 14 14

15. Birth of Populism
Populism was born out of the nightmare that was once the “American Dream” for America's Farmers.
In the late 1800s, farmers faced high debts, low prices for goods, and high costs
Populism became known as the People’s Party
A third political party to represent farmers 15 15

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17. Falling Prices and Rising Debt
: prices for goods plummeted due to high tariffs and the Gold Standard
-By late 1890s it cost farmers more to grow their crops than they earned by selling them.
-Cost of production continued to climb due to new machinery, cost of seed & livestock
-Many farmers went into debt and couldn't pay it back.
-Most lost their farms and became tenant farmers. 17 17

18. Big Business Hurts Farmers
-Farmers blamed banks for foreclosures, and railroads for unfair prices.
-felt that entire nation had turned back on them
-Govt. cared more about farmers before Second Industrial Revolution.
-More focus on industry than concerns of farmers in early 20th century 18 18

19. Farmers Organize and Seek Change
Grange– Organization of farmers that sought to:
1. educate farmers on new technology
2. call for new legislation that protected farmers from unfair business practices.
Several states passed laws in 1870’s restricting maximum charge for railroad fees and grain storage. These became known as “Grange Laws”
The Grange pressured the federal govt. to create Interstate Commerce Commission (ICC). 19 19

20. Answer these questions in your notebooks.
Review questions
Answer these questions in your notebooks.
1. How did big business contribute to the issues faced by farmers?
2. What were the nicknames of the two sides in gold v. silver monetary debate?
3. Who did a high protective tariff favor and who did it hurt and why?
4. Why did many farmers lose their property? 20

21. Farmers’ Alliance Lead the Protest
As the Grange faded after the creation of the ICC, other farmer's rights groups emerged.
formed cooperatives to sell their products in larger quantities
created “postal banks” to provide low interest loans to farmers
boycotted companies who cheated farmers 21 21

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23. The Populist Party Demands Reform
Populist Party –A non-major party who focused on specific interests
Focused on the issues of farmers
Mostly in the MW, NW, and SE U.S.
Created to elect politicians that held the same concerns as farmers. 23 23

24. Populists' Goals Called for the coinage of silver to combat low prices
To combat high costs, they wanted government ownership of railroads.
Elect a Populist Party member as President of the U.S. and nominate candidates
Convince urban workers that they were fighting the same people and should work together.
Populists’ successes included:
Populist Presidential candidate, James Weaver, got 1 million votes in 1892.
3 Governors, 5 Senators, & 10 Congressmen were elected in 1894. 24 24

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26. Economic Crisis and Populism’s Decline
The Panic of 1893 occurred after the Northern Pacific and Union Pacific Railroads failed
stock prices dropped very low
3 million unemployed at the time
Populists chose to support Democratic candidate William Jennings Bryan in 1896
Bryan adopted campaign of free-silver 26 26

27. “Cross of Gold” Speech
William Jennings Bryan made speech during the 1896 Democratic Convention known as Cross of Gold speech
“You shall not crucify man upon a cross of gold”
a direct attack at Republican William McKinley’s position in favor of the Gold standard
speech rallied thousands behind the Populist effort 27 27

28. 1896 Election: Jennings Bryan (Democrat) v. McKinley (Republican)28

29. Bryan and the Election of 1896
Bryan held very similar beliefs as most Populists.
wanted to fight for the common man, including farmers.
He lost back to back elections v. William McKinley in 1896 and 1900
As a result, the Populist Party faded from popularity.
Silverites supported Bryan
Gold Bugs supported McKinley 29 29

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31. Populism’s Legacy Reforms that remained in place:
-progressive income tax,
railroad regulation
more flexible monetary system that included both gold and silver coinage
Non-major Party candidates now had an example of third party candidate success. 31 31