Chapter 23 Political Paralysis in the Gilded Age 1869-1896 By Isaac Kaufman

The “Bloody Shirt” Elects Grant Republican Candidate – Civil War General Ulysses S. Grant Campaign “waving the bloody shirt” or reviving memories of the Civil War and enticing Union voters with “Vote as You Shot” Democratic Candidate – former New York Governor Horatio Seymour Refused to support Democratic “Ohio Idea’ which would bring back the “greenbacks” Grant won the 1868 election with 214 electoral votes to Seymour’s 80 and 3.13 million to 2.7 million in the popular vote

The Era of Good Stealings “Jubilee Jim” Fisk and Jay Gould bought a large sum of gold to drive the price up and planned to sell for a profit. In order to lower the price, the US Treasury had to sell from its reserves, destroying other, honest businesspeople in the process. “Boss” Tweed employed bribery, deceit and rigged elections to hold office in the city of New York and run his “Tweed Ring”, milking the taxpayers out of $200 million

A Carnival of Corruption The Credit Mobilier scandal of 1872 involved the Union Pacific Railroad and occurred when insiders formed the Credit Mobilier construction company and then hired themselves at inflated prices to build the railroad line, earning high dividends. Two Congressmen and even the Vice President received stock shares as bribes, but the Scandal was eventually uncovered and the Congressmen were censured In 1874 – 1875 the Whiskey Ring stole millions of dollars of excise tax revenue from the treasury. Grant claimed he would punish all involved, but when his private secretary was found to be involved, he helped to exonerate the thieves. Secretary of War William Belknap was forced to resign after taking bribes from suppliers to the Indian Reservations

The Liberal Republican Revolt of 1872 The Liberal Republican Party was formed in 1872 in protest of the corrupt Grant administration and military Reconstruction. Both the Liberal Republicans and the Democrats chose New York Tribune editor Horace Greeley as their candidate. The “regular” Republicans stood behind Grant and managed to pull him through in the 1872 election. The Liberal Republicans caused the Republican Congress to pass a general amnesty act in 1872; removing political disabilities from most of the former Confederate leaders. Congress also reduced high Civil War tariffs and gave mild civil-service reform to the Grant administration.

Depression, Deflation and Inflation The Panic of 1873 was mainly caused by over-speculation, or the periodic overexpansion of capitalism The Resumption Act of 1875 required the government to continue to withdraw greenbacks from circulation and to redeem all paper currency in gold at face value beginning in 1879. This was caused by the depreciation of the value of paper money due to inflation The coinage of silver dollars was stopped by Congress in 1873, as the government only valued it at a 1:16 ratio to gold, when in reality it was much higher The Treasury began to accumulate gold stocks against the appointed day for the continuation of metallic money payments.  This policy, along with the reduction of greenbacks, was known as "contraction."  When the Redemption Day came in 1879 for holders of greenbacks to redeem the greenbacks for gold, few did; the greenback's value had actually increased due to its reduction in circulation. The Republican advocacy for coin money caused a backlash causing the election of a Democratic House of Representatives

Pallid Politics in the Gilded Age Gilded Age – coined by Mark Twain in 1873 Republican voters tended to stress strict codes of personal morality and believed that the government should play a role in regulating the economic and the moral affairs of society.  They were found in the Midwest and Northeast.  Many Republican votes came from the Grand Army of the Republic, a politically active fraternal organization of many Union veterans of the Civil War. Democrats were immigrant Lutherans and Roman Catholics who believed in toleration of differences in an imperfect world.  They also opposed the government imposing a single moral standard on the entire society.  Democrats were found in the South and in the northern industrial cities. Patronage, or the Spoils System distributed jobs in exchange for votes. This led to fighting over the issue within the Republican Party by the “Stalwart” Faction (pro) and the “Half-Breeds” (con)

The Hayes-Tilden Standoff, 1876 Congress passed a resolution that reminded the countryof the two-term tradition for presidency after Grant was speculating about running for a 3rd term. The Republicans chose Rutherford B. Hayes as their presidential candidate for the election of 1876.  The Democrats chose Samuel J. Tilden. In the election, Tilden won the popular vote, but was 1 vote shy from winning in the Electoral College.   Louisiana, South Carolina, and Florida provided the deciding electoral votes, but as they returned two ballots each (one favoring Republican and one favoring Democrat), the issue lay in who should count the votes.

The Compromise of 1877 and the End of Reconstruction The Electoral Count Act (Compromise of 1877), set up an electoral commission consisting of 15 men selected from the Senate, the House of Representatives, and the Supreme Court to determine the winner of presidential elections.  The newly formed committee determined the Republicans had been victorious in the disputed ballots from the three states, giving the Republicans the presidency much to the outrage of the Democrats. The Civil Rights Act of 1875 supposedly guaranteed equal accommodations in public places and prohibited racial discrimination in jury selection. The Supreme Court ended up ruling most of the Act unconstitutional, declaring that the 14th Amendment only prohibited government violations of civil rights, not the denial of civil rights by individuals. With this came the withdrawal of Union troops and the collapse of the Republican-lead military Reconstruction.

The Birth of Jim Crow in the Post-Reconstruction South White Democrats resumed their political power in the South and continued to discriminate against blacks. Blacks were forced into sharecropping and tenant farming.  Through the "crop-lien" system, small farmers who rented out land from the plantation owners were kept in perpetual debt and forced to continue to work for the owners. Eventually, state-level legal codes of segregation known as Jim Crow laws were enacted.  The Southern states also enacted literacy requirements, voter-registration laws, and poll taxes to ensure the denial of voting for the South's black population. The Supreme Court ruled in favor of the South's segregation in the case of Plessy vs.  Ferguson (1896), declaring that separate but equal facilities for blacks were legal under the 14th Amendment.

Class Conflicts and Ethnic Clashes Following the panic of 1873 and the resulting depression, railroad workers went on strike after their wages were cut by President Hayes.  The strike failed, exposing the weakness of the labor movement. Masses of immigrants came to United States in hopes of finding riches, but many were dismayed when they found none.  They either returned home or remained in America and faced extraordinary hardships. People of the West Coast attributed declining wages and economic troubles to the hated Chinese workers. Congress passed the Chinese Exclusion Act in 1882, halting Chinese immigration into America.

Garfield and Arthur Because President Hayes was despised by his own Republican Party, James A. Garfield was chosen as the presidential candidate for the election of 1880. The Democrats chose Civil War hero, Winfield Scott. After a close race, Garfield won, but was shot within a year by a deranged office seeker. The death of Garfield stunned politicians into reforming the spoils system.  The reform was supported by President Arthur, shocking his critics.  The Pendleton Act of 1883 made campaign contributions from federal employees illegal, and it established the Civil Service Commission to make appointments to federal jobs on the basis of competitive examination. These policies were aimed at stopping political corruption.

The Blaine-Cleveland Mudslingers of 1884 The Republicans chose James G. Blaine as their presidential candidate for the election of 1884.  The Democrats chose Grover Cleveland.  The Republicans smeared Cleveland for his illegitimate affair, but Cleveland won the election of 1884 anyways.

"Old Grover" Takes Over Questions were raised about whether Cleveland and the Democratic Party, "the party of disunion," could be trusted to govern the Union. Cleveland replaced thousands of federal employees with Democrats. Cleveland summed up his political philosophy when he vetoed a bill in 1887 to provide seeds for drought-ravaged Texas farmers, stating that the government should not support the people. The Grand Army of the Republic lobbied hundreds of unreasonable military pension bills through Congress, but Cleveland vetoed many of the bills.

Cleveland Battles for a Lower Tariff The growing surplus of money in the Treasury coming from the high tariff, which was made to raise revenues for the military during the Civil War, caused President Cleveland to propose lowering of the tariff in order to bring lower prices to consumers. The lower tariff, introduced to Congress in 1887 and supported by Cleveland, tremendously hurt the nation's factories and the overall economy. As a result, Cleveland lost much of his support The Republicans chose Benjamin Harrison as their presidential candidate for the 1888 election.  During the election, the first major issue between the two parties had arisen:  tariffs.  Cleveland won the popular vote, but Harrison still won the election.

The Billion-Dollar Congress The Billion-Dollar Congress, named for its lavish spendings, gave pensions to Civil War veterans, increased government purchases on silver, and passed the McKinley Tariff Act of 1890, which raised tariffs yet again and brought more troubles to farmers.  Farmers were forced to buy expensive products from American manufacturers while selling their own products into the highly competitive world markets. The Tariff Act caused the Republican Party to lose public support and become discredited.  In the congressional elections of 1890, the Republicans lost their majority in Congress.

The Drumbeat of Discontent The People's Party, or "Populists," formed from frustrated farmers in the agricultural belts of the West and South.  The Populists demanded inflation through free and unlimited coinage of silver. In 1892, a series of violent worker strikes swept through the nation. The Populists nominated General James B. Weaver for the presidential election of 1892 but made the error of relying on black votes in the South, as many black voters were blocked from the polls by oppressive Jim Crow laws.

Cleveland and Depression Grover Cleveland again ran for the presidency in the election of 1892 and won, beating out the divided Populist Party and the discredited Republican Party. The panic of 1893 was the worst economic downturn for the United States during the 19th Century.  It was caused by overbuilding and over-speculation, labor disorders, and the ongoing agricultural depression. The Treasury was required to issue legal tender notes for the silver bullion that it had purchased.  Owners of the paper currency would then present it for gold, and by law the notes had to be reissued.  This process depleted the gold reserve in the Treasury to less than $100 million.  The Sherman Silver Purchase Act of 1890 was created by the administration of Benjamin Harrison in order to increase the amount of silver in circulation.  The drastic rise in silver caused the American people to believe that the less expensive silver was going to replace gold as the main form of currency.  The American people therefore began to withdraw their assets in gold, depleting the Treasury's gold supply.  Cleveland was forced to repeal the Sherman Silver Act Purchase in 1893. Cleveland turned to J.P. Morgan to lend $65 million in gold in order to increase the Treasury's reserve.

Cleveland Breeds a Backlash The Wilson-Gorman Tariff of 1894 lowered tariffs and contained a 2% tax on incomes over $4,000.  The Supreme Court ruled income taxes unconstitutional in 1895 The Wilson-Gorman Tariff caused the Democrats to lose positions in Congress, giving the Republicans an advantage. Grant, Hayes, Garfield, Arthur, Harrison, and Cleveland were known as the "forgettable presidents“ for their corrupt policies and ineptitude as leaders.