Gilded Age Politics & Populism

The Gilded Age suggests that there was a glittering layer of prosperity that covered the poverty and corruption that existed in much of society. This term was coined by Mark Twain. In the late 1800’s businesses operated without much government regulation. This is known as laissez-faire economics. Laissez-faire means “allow to be” in French. Although people accepted laissez-faire economics in theory, they supported government involvement when it benefited them. For example, American businesses accepted land grants and subsidies. A subsidy is a payment made by the government to encourage the development of certain key industries, such as railroads. The Business of Politics Chapter 15, Section 1

The Spoils System Under the Spoils System, candidates for political office would offer potential jobs in exchange for votes. The spoils system also 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. They favored the gold standard, high tariffs, and the enforcement of blue laws, regulations that prohibited certain activities people considered immoral. The Democratic party attracted the less privileged groups such as northern urban immigrants, laborers, southern planters, and western farmers. Chapter 15, Section 1

Rutherford B. Hayes Elected in 1877 Hayes began to reform the civil service, the government’s nonelected workers, by appointing qualified political independents instead of giving positions to supporters. He did not have the support of Congress or his own Republican party. Hayes did not seek a second term

Reforming the Spoils System President James A. Garfield Before the 1880 presidential election the Republican party was split into three factions. The Stalwarts defended the spoils President Rutherford B. Hayes system. The Half-Breeds hoped to reform the system. The Independents opposed the spoils system. Garfield wanted to reform the system. His running-mate was Chester Arthur, a Stalwart. On July 2, 1881 Garfield was assassinated by a Stalwart who wanted Arthur as president. Chapter 15, Section 1

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

Regulating Railroads By 1880, about 14 states had railroad commissions that looked into complaints about railroad practices. One practice that caused problems was railroads offering rebates, partial refunds, to favored customers. Chapter 15, Section 1

In 1877, the Supreme Court, in Munn v. Illinois allowed states to regulate certain businesses within their borders, including railroads. But since railroads cross state borders, it was argued that only the federal government could regulate them. In 1887, Congress passed the Interstate Commerce Act and set up the nation’s first federal regulatory board, the Interstate Commerce Commission (ICC). However, the ICC did not have the power to set railroad rates and was often overruled in the Supreme Court.

Source/Date: Los Angeles Times, February 9, 1906

Rise of the Populists

The Farmers’ Complaint Tariffs helped farmers by protecting them against competition from farm imports. But, they also hurt farmers because they raised the prices of manufactured goods, such as farm machinery, and kept foreigners from earning U.S. money with which to buy American crops. Farmers and Tariffs Farmers wanted an increase in the money supply, the amount of money in the national economy. As a result, the value of every dollar drops, leading to a widespread rise in prices, or inflation. This trend would benefit people who borrow money (farmers), but it would not be good for money lenders (banks). A decrease in the money supply would cause deflation. Monetary policy, the federal government’s plan for the makeup and quantity of the nation’s money supply, thus emerged as a major political issue. The Money Issue Before 1873 U.S. currency was on a bimetallic standard, consisting of gold and silver. Then Congress put the currency on a gold standard which decreased the money supply. “Gold bugs” (big lenders) were pleased. – Increases the cost of money Gold Bugs Chapter 14, Section 4

Silverites The Bland-Allison Act of 1878 The move to a gold standard enraged the “silverites,” mostly silver-mining interest and western farmers. Silverites called for free silver, the unlimited coining of silver dollars to increase the money supply. Required the federal government to purchase and coin more silver, thereby increasing the money supply and causing inflation Vetoed by President Hayes because he opposed the inflation that it would cause Congress overrode the veto. The Treasury Department refused to buy more than the minimum amount of silver required by the act. The act had limited effect. Chapter 14, Section 4

Grover Cleveland

Sherman Silver Purchase Act of 1890 Increased the amount of silver that the government was required to purchase every month The law required the Treasury to buy the silver with notes that could be redeemed for either silver or gold. Many people turned in their silver Treasury notes for gold dollars, thus depleting the gold reserves. In 1893, President Cleveland repealed the Silver Purchase Act.

Organizing Farmer Protests Organized in 1867 in response to farmers’ isolation, it helped farmers form cooperatives which bought goods in large quantities at lower prices. The Grange also pressured government to regulate businesses on which farmers depended. The Grange Another powerful political group, the Farmers’ Alliance called actions that many farmers could support. The alliances won support for women’s rights. The African Americans worked through a separate but parallel “Colored Farmers’ Alliance.” Farmers’ Alliance Government Response In 1887 President Cleveland signed the Interstate Commerce Act. It regulated prices that railroads charged to move freight between states. It also set up the Interstate Commerce Commission to enforce laws. Chapter 14, Section 4

The Populists The Farmers’ Alliances formed a new political party, The People’s Party or the Populists. Their platform called for 1. An increased circulation of money 2. Unlimited minting of silver 3. A progressive income tax which would put a greater financial burden on the wealthy industrialists and a lesser one on farmers. 4. Government-owned communications and transportation systems 5. An eight-hour work day Chapter 14, Section 4

Bryan’s “Cross of Gold” Populist presidential candidate William Jennings Bryan, a former silverite Congressman, faced off against moderate Republican William McKinley. During the 1896 Democratic Convention in Chicago, Bryan closed the debate over party platform with his Cross of Gold speech. Using images from the Bible, he stood with his head bowed and arms outstretched and cried out: “You shall not press down upon the brow of labor this crown of thorns. You shall not crucify mankind upon a cross of gold!” So impressive was his speech that both Democrats and Populists nominated him for President. Chapter 14, Section 4

The Populists sought to unite African American and white farmers. The Populist candidate for President, William Jennings Bryan, won most of the western and southern states but lost the election. However, populist ideas lived on. In the decades ahead, reformers known as Progressives applied populist ideas to urban and industrial problems.