American History Lecture Seven

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Lecture - Questions - Student Answers

On the SAT II, about 20% of the test concerns economic history. That's a big portion of the exam. That includes questions about unions, money standards (gold or silver or paper), inventions, trade, tariffs, other taxes, farming, court decisions about economic disputes, disputes over the size of pensions for Civil War veterans, government spending and anything else affecting the economy. Economic trends influence the course of human events more than students realize.

In the time period after the end of Reconstruction (1877) until the key presidential election of 1896, economic issues were particularly important. Very little else was happening: the presidents were unremarkable and, frankly, entirely forgettable. Social disputes like slavery were resolved. And for the longest time in American history, there were no wars. America had no wars between the end of the Civil War in 1865 and the beginning of the Spanish-American War in 1898, a period of 33 years. Ask yourself: when was the second longest time of peace in American history?[1]

There is almost nothing to learn about civil rights during the late 1800s. The Supreme Court ruled in 1883, in the Civil Rights Cases, that the Fourteenth Amendment was limited to prohibiting racial discrimination by government. These decisions held that the Fourteenth Amendment does not apply to racism by private groups. This ended the civil rights movement until the 1950s.

So what's left to study about 1877 to 1896? The economy. Many of the economics questions on the SAT II will come from 1877-1896 because little else was happening then. If you like economic issues, then this is an exciting time period to study. The economy was booming. The greatest inventions in the history of mankind occurred during this period. Our prosperity today is mostly a result of the tremendous breakthroughs of that era.

But first, a little review.

Contents

Review

After the North won the Civil War in 1865, the Republican Party claimed victory and blamed the Democratic Party for the war itself. From then until 1912, only one Democratic candidate for president was able to win a presidential election: Grover Cleveland, who won in 1884, then lost in 1888, and then won again in 1892. And he was a conservative Democrat from the traditionally Republican northern state of New York. The reason the Republican Party won so often was because it was "waving the bloody shirt" every election, which means it was reminding voters of how the Democrats sided with the supposedly treasonous South in seceding and causing the Civil War.

Republican rule of the nation meant that free enterprise and big business were favored. This led to tremendous prosperity, and the nation grew into a world power in the second half of the 1800s.

The United States also grew in size when the Secretary of State under Presidents Lincoln and Johnson, William Seward, agreed to purchase Alaska from Russia in 1867. Critics ridiculed this purchase as "Seward's Folly," describing the land as a mere "icebox". At the time, no one knew there was oil and gold there, or that Sarah Palin would be its future governor!

Russia needed money to pay for its defensive efforts at the time, as it felt threatened by the massive and growing British Empire. The purchase price was $7,200,000, which was only about 1.9¢ per acre. The Senate approved this deal nearly unanimously, but the House of Representatives delayed and was divided in authorizing the funding for it. The property became useful in World War II in fighting Japan, and during the Cold War in opposing the communist Soviet Union. As Governor Sarah Palin has pointed out, one can see Russia from Alaska.

But while the Republicans controlled the presidency from 1868 to 1912 (with the exception of Grover Cleveland), the Democratic Party controlled much of local politics. "Tammany Hall" was the name of the Democratic Party organization that controlled New York City. It was a completely corrupt "machine" that elected people, gave out jobs, and even stole money from the City. Eventually, it was the New York Times and America's most famous cartoonist, Thomas Nast, who harshly mocked its leader, "Boss" Tweed. Thomas Nast's cartoons whipped the public into scorning Boss Tweed and demanding that he be brought to justice. When Boss Tweed was eventually sent to jail, Nast cheered Tweed's humiliation. This demonstrated the growing influence of political cartoons in changing the course of history.

Shortly after the Civil War the Republicans won presidential elections easily. But the presidential contest of 1876 was virtually a tie, and former Ohio Governor Rutherford B. Hayes was able to win only due to a post-election deal between the Republican and Democratic Parties. The deal, as mentioned in the last lecture, was for the Republicans to end Reconstruction in the South in exchange for the Democrats agreeing to the swearing in of Hayes as President. Hayes served for only one term. He was considered a "moderate" and the Hayes Administration was uneventful. To its credit, it was free of the scandals that plagued the Grant Administration before him.

In the period just after the end of Reconstruction, many African Americans moved away from discrimination in the South towards the Midwest, especially Kansas. These migrants are known as the "Exodusters".

Most of our images from the Civil War period and afterward are from pictures taken by Mathew Brady, the greatest photographer of the 19th century. Born in Albany, New York, he learned to make daguerreotypes[2] when he was about 15 years old and went on to take portrait pictures of many Civil War soldiers and most prominent Americans for the rest of his life.[3] Brady maintained studios in New York City and Washington, D.C., but also struggled through financial failures in his self-employed business. The photograph of Thomas Edison below was taken by Mathew Brady.

Yankee Ingenuity

America was not the origin of major religions, or even most great ideas like free enterprise. America was not the place where most scientific breakthroughs occurred. America has not been the leader in great writers, or great statesmen. Most of the concepts that have been so successful in America, like the "separation of powers" structure in the Constitution, are based on insights that originated in Europe.

Indeed, it is not easy to name what did originate in America. Not democracy. Virtually none of the great physicists, mathematicians, composers, writers, or other great thinkers came from America. What, if anything, is so special about America in its place in the world?

The answer, in two words, is "Yankee ingenuity." Virtually all great inventions since about 1776 came from America, and these creations of man have brought the world a wealth beyond all imagination.

America creates, and the rest of the world copies. The Encyclopedia Britannica, which is the leading encyclopedia, listed the greatest inventions in the history of the world along with the originating country, and by far the highest percentage are attributed to the United States.[4] For example, the Encyclopedia Britannica lists 29 inventions for the United Kingdom, but that includes useless and even harmful creations like cloning, as well as other inventions that predate the United States such as carbonated soft drinks (which are also not particularly productive). The United States, meanwhile, is credited with over five times as many inventions: 170. All other countries are even further behind America and Britain in inventions.

The American invention of the cotton gin in 1792 illustrates how inventions create wealth. Previously, the separation of cotton from cotton seeds required backbreaking labor by many men (often slaves). But the U.S. Constitution has a unique clause that authorizes Congress to grant special rights of ownership to inventors for a period of time, in order to give them an incentive to invent:[5]

To promote the progress of science and useful arts, by securing for limited times to authors and inventors the exclusive right to their respective writings and discoveries

Soon after the Constitution was ratified in 1788, the first Congress passed the first patent law in 1790 to encourage Americans to invent useful devices,[6] and ever since Americans have been doing exactly that. The inventor makes money for himself because no one else may copy his invention for 20 years without paying him for it, and the public benefits from how the inventions save time and money in performing useful tasks.

Within a few years of the ratification of the U.S. Constitution and passage of the first patent law, Eli Whitney invented the cotton gin, which was a machine that replaced the hard labor of 50 men to separate cotton from cotton seeds. He received a patent (which is sole ownership and a right to prohibit copying) for his invention beginning in 1794. Whitney became wealthier due to his creation as people paid him for the right to make and use his invention; southern plantations became wealthier from his invention because it reduced their costs; and the entire public became wealthier because the price of clothes containing cotton decreased due to the lower costs. This is how an invention creates wealth for the world.

Several of the most important inventions concerned communications, which created wealth by reducing the costs of exchanging information, and increasing the amount of information available. In 1831, an American scientist named Joseph Henry invented the first electric telegraph, which enabled communication across distances by using codes to represent letters.

Soon thereafter, the American Samuel Morse created Morse code to standardize the codes used (1835), and then in 1843 he invented the first long distance electric telegraph line. This enabled the sending and receiving of messages almost instantaneously over long distances, without having to wait for someone to travel the distance. Morse is often credited with inventing telegraphy because he made it practical. In 1844 he sent first long-distance telegraphic message: "What hath God wrought?"[7] Obviously this greatly increased the ability of people to communicate with each other, and for businesses to communicate their needs and purchases. This was not like the internet yet, but it was a tremendous improvement over sending letters by U.S. Mail, which could take weeks if the distance was long. The Pony Express was not even available then; it was first established in 1861 to try to speed up mail delivery.

In 1866, after four attempts, the transatlantic cable established permanent communication with Europe based on laying a cable on the ocean floor. This facilitated trade between the continents, and helped families communicate with grandparents back in Europe.

Then, in 1876, the greatest invention of all for communications occurred: Alexander Graham Bell invented the telephone. His motivation was to help his deaf mother hear. He had been homeschooled by his mother in order to learn to read and write, and Alexander (called Aleck) wanted to repay the favor:[8]

Unlike others, who spoke to Mrs. Bell through her ear tube, Aleck chose to communicate with her by speaking in low, sonorous tones very close to her forehead. Young Aleck surmised that his mother would be able to "hear" him through the vibrations his vocal intonations would make. This early insight would prove significant as Alexander Graham Bell went on to develop more elaborate theories regarding the characteristics of sound waves. It would also lend rationale to Bell's opinions as to how the deaf could be assimilated into a world of sound.

In Boston, 100 years after the Declaration of Independence, Bell spoke the first sentence over the telephone to his assistant Watson: "Watson, come here; I want you."

But just as John the Baptist was immediately followed by someone far greater, Jesus, Alexander Graham Bell was immediately followed by someone far greater, Thomas Edison (pictured to the right with one of his inventions, the phonograph). When Thomas was 7 years old, Mrs. Edison put him in the local public school. The public school teacher was irritated by Edison's curiosity and questions, and aggravated by his failure to follow directions like the rest of the class. The teacher concluded that Edison was incapable of learning,[9] and after merely three months the teacher told young Edison's mother that her son was an idiot.

Mrs. Edison was furious at the teacher and the public school. She immediately pulled young Thomas out of school and never sent him back. She then homeschooled him by reading from the Bible, and his father encouraged young Thomas to read the classics. Young Thomas became a voracious reader and, by the age of 12, became interested in science, chemistry and the works of Isaac Newton. Young Thomas also became an entrepreneur as a teenager, first publishing a newspaper and then memorizing Morse Code so that he could get a job transmitting messages over the telegraph by age 15. He had a tremendous "work ethic," putting in 12-hour work days, 6 days a week, and then inventing in his spare time. His famous quotes include:[10]

  • Genius is one per cent inspiration and ninety-nine percent perspiration.
  • Everything comes to him that hustles while he waits.
  • I never did anything by accident, nor did any of my inventions come by accident; they came by work.
  • Our greatest weakness lies in giving up. The most certain way to succeed is always to try just one more time.

This homeschooler changed the world, and was ranked by Life magazine as the most influential person in the entire world over the last millennium (1000 years). Known as the "Wizard of Menlo Park," which is a town in northern New Jersey next to the town named after him (Edison), Edison did his best work in New Jersey. One historian wrote about him:[11]

Thomas Edison was more responsible than any one else for creating the modern world .... No one did more to shape the physical/cultural makeup of present day civilization.... Accordingly, he was the most influential figure of the millennium.

Edison's inventions (from 1875 to about 1900) include most of modern technology:

  • an automated telegraph system
  • a mouthpiece transmitter to make the telephone practical
  • an office copying machine (mimeograph)
  • a stock ticker for Wall Street
  • the phonograph (record player) (1877) (Edison is shown with his phonograph in the picture on the prior page)
  • a practical light bulb (1879)[12]
  • the electric power station (1882)
  • the industrial research laboratory
  • motion pictures (movies) (1889)
  • fluoroscopes (used for X-rays today)

Self-employed, Edison created one marvelous invention after another, acquiring more than 1300 U.S. and foreign patents throughout his life. The wealth generated by Edison's work is unfathomable.

A biographer credited Edison's "highly individualistic style of acquiring knowledge that eventually led him to question scores of the prevailing theories on the workings of electricity."[11] Edison's success was not caused by any special advantages: his family was poor and Edison himself was nearly totally deaf. Imagine that: the inventor of the phonograph (record player) was deaf! Edison said, "Of all my inventions, I liked the phonograph best."[13] In the picture of him on the prior page, he cannot fully hear what his own invention is playing. We should remember that the next time we resort to excuses for not accomplishing what we could have.

One of Edison's sons, Charles, became a conservative governor of New Jersey and was later a co-founder of the Conservative Party of New York, which remains active today.

There were other marvelous inventions and engineering feats in the second half of the 19th century. The Brooklyn Bridge, which still stands today on the east side of lower Manhattan (connecting it with Brooklyn), is a cable suspension bridge that was completed in 1883. It was remarkable at its time, and heralded in many new suspension bridges to span across many American waterways. Soon the Brooklyn Bridge enabled the transportation of 33 million persons a year, and that was before the arrival of automobiles!

Not every invention was American, but often the Americans ("Yankees") are best at making a creation practical and most productive. Henry Bessemer of England invented a means for converting molten pig iron into valuable steel, which was called the "Bessemer process." The process removes impurities from the molten iron by oxidizing it with air that is blown through it. In the 1870s Americans built steel mills, particularly in Pennsylvania, to take advantage of this process and produce large quantities of steel. Those steel mills brought wealth to Pennsylvania for a century, until cheaper labor in Asia and a lack of protective tariffs drove the American mills out of business, leaving Pennsylvania depressed today.

The Election of 1880

The marvelous inventions of the 1870s led up to a very interesting presidential election in 1880. The race of 1876 had been a virtual tie, and the general election in 1880 was nearly as close, with only 10,000 separating the winner (the Republican) from the loser (the Democrat).

The Republican Party had a difficult time choosing its nominee for president. There was an historic stalemate and deadlock during the Republican National Convention when the delegates attempted to make a selection. Former President Ulysses S. Grant wanted to become president again, despite having served two terms. His main rival was a powerful Republican Senator from Maine, James Blaine. A third candidate, John Sherman of Ohio, also ran. None was able to obtain a majority of the delegates despite dozens of ballots (mini-elections) cast by the delegates. James Garfield went to the convention without any desire to be considered for president, and sought to support his fellow Ohioan John Sherman.

The big issue in 1880 was the "spoils system," which was an important part of the political "machines" common at the time. The view of many politicians, from President Andrew Jackson to President Ulysses S. Grant, was that the victor in an election should be able to "clean house" and install his supporters in the new Administration. Under the "spoils system" or "patronage system," the winner of an election gets to hand out government jobs to his supporters. "To the victors go the spoils," is the famous saying for this.

The "Stalwarts" in the Republican Party favored the spoils system, which insured that holdovers who disagreed with the winner would be fired and everyone in the new Administration would agree with the new leader. These Stalwarts included former Radical Republicans. Opposed to the Stalwarts were moderates like Blaine and Garfield, who wanted a civil service system where a government employee would keep his job even after a new leader is elected. They sought so-called "reform" of the spoils system to stop the corruption that a spoils system might lead to.

After many "ballots" (mini-elections) among the delegates at the 1880 Republican National Convention, Blaine realized he could not win. He and Sherman then withdrew their candidacies and threw their support behind a "dark horse" candidate, James Garfield. At first Garfield refused to be a candidate, but delegates elected (nominated) him anyway, on the 36th ballot! The delegates had met for days in a hot summer convention center in Chicago, without air conditioning, and debated and voted 36 times before nominating James Garfield, who was a former Union general and a current Republican congressman.

But Stalwarts, like a powerful Republican Party Senator from New York, Roscoe Conkling, supported the "spoils system" and opposed Garfield and Blaine over it. To appease the Stalwarts and try to earn their support, Garfield picked a Stalwart, Chester Arthur, as his running mate (Vice President).

Garfield, however, did not compromise after he was sworn into office. He appointed an anti-Stalwart and arch-rival of Senator Conkling to run the New York Customs House, which was a key position that Conkling had expected to fill based on patronage. Garfield insulted Conkling in order to establish that the president had control over these positions based on merit, rather than local senators based on patronage.

Conkling contested this nomination and tried to block it in the U.S. Senate. Conkling even arranged for the Senate to confirm all of Garfield's uncontested nominations except this one; Garfield responded by withdrawing all those other nominations except the one that Conkling opposed! That forced the other senators to choose between Conkling and all the other nominees, who were friends of other senators. Conkling, having been checkmated, resigned in protest in the expectation that he would be reappointed by the New York legislature to his position. Fed up, however, the New York legislature refused to reappoint him (in those days U.S. Senators were picked by the legislatures rather than elected by the people), and Conkling was gone from the Senate. The issue had thereby been resolved in Garfield's favor and against the Stalwarts.[14]

But then tragedy struck Garfield. On July 2, 1881, in a railroad station in Washington, D.C., an embittered attorney, who had unsuccessfully sought a consular post, shot President Garfield. Garfield then lived for several weeks as experts from around the country examined his wound, and tried to get the bullet out. Garfield even asked Alexander Graham Bell to develop a device (an induction-balance electrical gadget) to find the bullet. Nothing worked, and all the doctors who probed Garfield's wound had the effect of infecting him. This was before doctors took better care to sterilize instruments and wash their hands to kill the germs.

Garfield was removed to the "Jersey Shore" (ocean-front property along the coast of New Jersey) to recuperate. This helped at first, but ultimately an infection in the wound killed him on September 19, 1881, when he died from an internal hemorrhage.

The assassination shocked the country and discredited the Stalwarts. Vice President Chester Arthur, who was Garfield's running mate in order to appease the Stalwarts, had never been elected to any public office before, and was never elected to one afterward either! He had been an abolitionist and a New York attorney. Historians view him as being ineffective as a president, which is not surprising given his lack of experience for the position.

The Democratic Party next won big in the congressional elections of 1882, by advocating reform of the patronage or "spoils system." President Arthur then abandoned the Stalwarts and established a civil service system whereby the victor cannot fire and replace government workers with his supporters. Specifically, President Arthur signed into law the Pendleton Act in 1883, which established an examination system for federal jobs. It also established the Civil Service Commission, which is a bipartisan committee to administer federal exams. Those who supported "reform" of the government employment system declared victory.

Debate: Do you support a "spoils system" or a "civil service system"?

The Grange Movement

Not everyone in America was happy with Republican dominance in the White House, and unregulated free enterprise in the economy. Many farmers, for example, felt that railroads were charging prices that were too high. From 1867 to 1874, there was a political movement for States to regulate the prices charged by railroads, which was led by "Granger" politicians. A leader in "The Grange Movement" was Oliver Kelley, a former official in the U.S. Department of Agriculture. Initially the Grange was devoted to social gatherings and educational programs for farmers, who otherwise had a somewhat isolated and tedious lifestyle.

In many ways farmers in the 1870s were like homeschoolers today: divided and lacking in political force. The Grange Movement attempted to change that. When there was a financial crisis known as the Panic of 1873, the Grange surged in popularity among farmers who had too much debt and faced expensive rates to ship their goods on the railroads. Popularity grew in the farm States of Iowa, Minnesota, Wisconsin and Illinois, and the Grangers were able to pass "Granger laws" to regulate the railroads and storage facilities for the benefit of farmers.[15]

The owner of a grain elevator (which charges farmers to store their grain) fought an Illinois Granger law all the way to the U.S. Supreme Court in Munn v. Illinois, decided in 1876. That decision upheld the power of States to regulate (lower or limit increases in) the rates charged by grain warehouses or any other public facility made available for the general public good, such as railroads. This ruling in favor of the farmers energized the populist movement. But a subsequent lawsuit brought by the railroads to challenge State regulation of railroad contracts, the Wabash case (1886), invalidated the State regulation and put the farmers back to square one (powerless to regulate). The Wabash case led to the federal government ultimately intervening in favor of the farmers by creating the Interstate Commerce Commission in the Interstate Commerce Act (1887). This new federal agency, known by its initials as the "ICC", regulates railroad rates and the terms of use in its contracts with the public.

The Grange Movement reached its zenith (peak) in 1875. It then began to decline as its activists started more powerful organizations: the Greenback Party (in the 1870s), the Farmers' Alliances (in the 1880s) and the Populist Party (in the 1890s, which eventually joined with the Democratic Party).

Debate: Do you think government should be able to set the rates charged by railroads and other "public facilities"?

Big Business and Big Oil

The railroads and grain elevators were not the only types of "big business" that began to generate wealth while also aggravating ordinary Americans. The biggest and wealthiest business of all, perhaps in the entire history of mankind, was built by John D. Rockefeller to control the production and supply of oil.

Oil has been used since the Ancient Greeks learned to pour it into the sea and then set fire to it in order to defend against attacking fleets of ships. Noah may have used thick oil (called "pitch") to waterproof Noah's ark. Moses' basket may have been made waterproof using oil, just as American Indians used it to waterproof canoes.[16]

But the first modern oil well was in Pennsylvania, when Colonel Edwin L. Drake drilled down 72 feet near Titusville (just east of Pittsburgh) and struck "Oil Creek." Oil production there started in 1859. That oil sold for $40 a barrel (note that a dollar was worth far more then), so oil was even more expensive then than it is today! It was used for medicine, as there were no cars then.[16]

A devout Christian who abandoned public high school before finishing,[17] John D. Rockefeller had just started his first job a few years earlier. He developed a tremendous work ethic, and was immediately attracted to the discovery of oil in 1859. He quickly entered the business and hooked up with an inventor who knew how to cheaply refine the oil into something usable. By 1870 Rockefeller founded Standard Oil Company, and then began pursuing highly aggressive business tactics to drive out competitors and consolidate his control (monopolize the industry).[18]

In 1882, Rockefeller formed a new type of business entity called the "trust", and named it the Standard Oil Trust of Ohio. But ten years later a decision by the Ohio Supreme Court forced him to break up his Trust into 20 smaller businesses. In 1899 he formed a holding company for all his businesses in the name of Standard Oil Company of New Jersey. By 1911 it controlled an astounding 95% of the entire oil industry, but then the U.S. Supreme Court forced Rockefeller to break up it up into smaller pieces and separately controlled companies, one of which became Exxon. Rockefeller then retired and devoted the remainder of his long life to philanthropy (giving away his money to charitable causes).[18]

Rockefeller became perhaps the wealthiest man in the history of the world. Predictably, people became jealous and his competitors sometimes lost their businesses. Many politicians became determined to break up his huge company, and many critics accused him or his employees of engaging in illegal activities, even bribes, to build his business empire. But other industries began to follow his example, and large industrial companies formed "trusts" (a type of monopoly) to control sugar, lead, beef and even whiskey.

Congress ultimately passed the Sherman Antitrust Act to prohibit monopolization and "restraint of trade," or interference with competition, in 1890. This law was sponsored by Senator John Sherman of Ohio (a candidate for the Republican presidential nomination in 1880 and the brother of General William Sherman). The Sherman Antitrust Act was not what broke up Rockefeller's oil empire, because in 1895 the Supreme Court weakened the law by upholding a powerful Sugar Trust, in U.S. v. Knight Co. The Sugar Trust controlled 98% of the sugar market, and the Supreme Court allowed it to continue. Despite being weakened, the Sherman Antitrust Act remains a very important law that is used frequently today.

The controversy about Rockefeller and monopolies divides free enterprise thinkers. Some insist that the free market will deal with monopolies adequately. Others say that monopolies are an impediment to free market competition and should be broken up by the government.

Debate: Should government break up monopolies?

Good or bad, Rockefeller was part of a huge economic boom that began before the end of Reconstruction in 1877 and continued through 1900. There was an increase in America's "gross domestic product," which is the total output (in dollars) of all the goods and services produced by labor and property located our country. It is basically how much our entire country is producing, valued in dollars. When we are prosperous it increases, and when we are in a depression it goes down or does not increase as much.

By the late 1800s the wealthiest city in the United States was Williamsport, Pennsylvania, which was the center of the profitable lumber industry. Now it is best known for hosting the Little League World Series!

The "Gilded Age"

In our last lecture we introduced the term the "Gilded Age," which was first coined by an extremely successful writer from Missouri, Mark Twain (his real name was Samuel Clemens).

He described the era towards the end of the 1880s as "gilded" because it appeared golden, but beneath the shiny surface was greed, corruption and hardship. Mark Twain wrote a novel by that name in which Washington, D.C. was run by greedy businessmen and corrupt government officials. (Mark Twain wrote several other influential novels, including "The Adventures of Huckleberry Finn," describing a fictional journey on a raft on the Mississippi).

The Gilded Age featured "robber barons," who were people who became extremely wealthy through ruthless business practices. The worst"“robber baron" was Jay Gould, a financier on Wall Street who committed rampant fraud by printing false stock certificates to defraud investors. He even tried to corner the gold market in 1869. That led to a financial panic known as Black Friday. After Gould drove up the price of gold by hoarding it, President Grant learned of the scheme and started selling the government gold reserves on the market to cause the price to fall. The price of gold then fell sharply, and many lost everything they had. Gould, however, had sold out at the highest price!

There were also phenomenal successes during this era. Andrew Carnegie, immigrated from Scotland without any money and ended up with massive wealth from founding the Carnegie Steel Co. (later became U.S. Steel Co.). He amassed a fortune that he then donated to build structures like Carnegie Hall, Carnegie-Mellon University, and the enormous New York Public Library (plus 2800 other public libraries). He wrote the "Gospel of Wealth" in 1900 to describe his vision of capitalism.

Debate: it wasn't the "Gilded Age," it was the "Golden Age!" Agree?
Debate: do you support "caveat emptor," or government regulation of monopolies and robber barons?

Bimetallism

Under the Grant Administration, gold was the only standard for money: debts were payable in gold, and paper money could be exchanged at any time for a fixed amount of gold. This prevented inflation because the amount of gold in the world was small and nearly constant.

But from about 1878 to the end of the century there was strong pressure to return the nation's standard for money to Alexander Hamilton's "bimetallism", under which money and debts were based on two metals rather than one (gold and silver). Because gold had been the standard, advocating "bimetallism" meant adding a silver standard to the gold standard.

Two forces drove this pro-silver or "free silver" movement: Westerners had discovered silver mines so they wanted the silver to become more valuable, and farmers wanted more money available in order to cause inflation to increase the prices for their goods and lower the real cost of their debts to the banks.

Westerns and Southerners arranged for passage of the Bland-Allison Act in 1878, which required the government to purchase $2-4 million worth of silver each month. In addition, a bill passed (over President Rutherford Hayes' veto) allowing for the free and unlimited coinage by the government of silver, such as silver dollars, at a ratio of 16 to 1 relative to gold. The government began minting silver dollars that are collectors' items today (and worth much more than one dollar now).

But the price of silver fell as more was mined, because more of something usually means it is less valuable. The monthly government purchases declined also. Deflation continued for the next ten years. $100 in 1878 was equivalent to only $84.43 in 1890. Imagine that! Deflation is devastating to farmers, as their income from goods decreases and their debts grow higher in real value.

Westerners wanted more silver purchased, and the debtors and farmers wanted inflation. They forced passage of the Sherman Silver Purchase Act in 1890, which required even greater purchases by the government of silver. The Silver Purchase Act required the government to issue notes (like large-denomination dollar bills) to purchase 4.4 million ounces of silver each month, regardless of its value in dollars. The bill passed in a compromise with the Northerners, who obtained a high tariff at the same time through passage of the McKinley Tariff Bill.

But the notes used to buy the silver each month were redeemable in gold, which was more valuable than the increasingly plentiful silver. So pretty soon the public was demanding gold from the government in return for these new notes. This created a "run" on the government's gold reserves of our nation, with its total supply falling below $100 million and headed quickly towards zero.

This became the Panic of 1893, and the Silver Purchase Act was repealed in order to stop the run on gold. An immensely wealthy Wall Street banker, J.P. Morgan, arranged for more gold to be imported from Europe to protect the government reserves. The "run" on the government's gold reserves then stopped.

There was a bestselling and influential pamphlet called "Coin's Financial School" which was published just after the panic and economic depression of 1893. In this fictional work, professor Coin lectures gold-standard advocates on the benefits of monetizing silver at a 16:1 ratio. The pamphlet swept the country, much as Thomas Paine's "Common Sense" had been so influential over a century earlier. Coin's pamphlet laid the foundation for William Jennings Bryan's "Free Silver" presidential campaign in 1896 against pro-gold Republican William McKinley. Bryan, one of the greatest orators in history, delivered his famous "Cross of Gold" speech to the Democratic National Convention in 1896:[19]

There are two ideas of government. There are those who believe that if you just legislate to make the well-to-do prosperous, that their prosperity will leak through on those below. The Democratic idea has been that if you legislate to make the masses prosperous their prosperity will find its way up and through every class that rests upon it. ...
If they dare to come out in the open field and defend the gold standard as a good thing, we shall fight them to the uttermost, having behind us the producing masses of the nation and the world. Having behind us the commercial interests and the laboring interests and all the toiling masses, we shall answer their demands for a gold standard by saying to them, you shall not press down upon the brow of labor this crown of thorns. You shall not crucify mankind upon a cross of gold.

Reporters wrote that Bryan's remarkable speaking style for this speech "came like one great burst of artillery" and that "some, like demented things, divested themselves of their coats and flung them high in the air." Bryan was then selected by the delegates who heard this speech as the Democratic nominee for president on the next day.[19]

Unions and Immigrant Workers

As the American economy grew, and businesses became more profitable, workers began to band together and "unionize" (create "unions"). A union is a group of workers at a factory or business who join together in order to negotiate better wages and working conditions. They acquire power in joining together, and they threaten to strike if the owner does not give in to their demands. In the early 1800s there were no unions and no strikes, but by the late 1800s workers began to see that they could increase their wages and improve their conditions by forming unions and threatening to strike. Today, Wal-Mart does everything it can to keep its workers from unionizing, and union organizations despise it for that reason.

Factory owners began hiring Chinese workers at lower wages, and unions objected to that. Factory owners would also import Chinese workers to "break a strike," and keep the factory operating despite the refusal of the regular employees to work. So quickly the unions became opposed to immigration from China.

From 1877 to 1880, the Workingmen's Party existed with support by ordinary workers. It was socialistic (against capitalism) and opposed to immigration from China. Its leader was Dennis Kearney, who was actually imprisoned for provocative speeches. (Today the broad interpretation of the First Amendment prohibits such imprisonments.)

In 1882, the Chinese Exclusion Act was enacted as a culmination of growing opposition to Chinese immigrants, who were thought to lower wages for workers. This Act banned the Chinese from immigrating to the United States, and was not repealed until 1943 when America sought Chinese cooperation in the war against Japan.

Some cities passed laws to frustrate efforts by Chinese to operate businesses in competition with Americans. San Francisco, for example, passed a law requiring laundries to be in only stone or brick buildings, which made it more difficult for the Chinese to open laundry businesses. But the Chinese challenged that law and took it to the U.S. Supreme Court, which invalidated the law and gave the victory to the Chinese in Yick Wo v. Hopkins (1886).

In 1886, Samuel Gompers formed the American Federation of Labor (AFL) in order to demand limiting the workday to 8 hours and stop employers who required longer workdays. Initially this was a non-political organization, not aligned with either political party. By 1901 it had 1 million members. The Knights of Labor, another labor group in the 1880s, had 700,000 members at that time. So these labor groups were quite large.

In 1886, workers at the McCormick Harvesting Machine Co. in Chicago began a strike in the hopes of shortening the workday to 8 hours. The company tried to break the strike by using new workers, and police were called in to protect the new workers. A fight broke out and one person was killed.

Anarchists were anti-civilization extremists who sided with the unions, and the anarchists planned a large rally the next day to protest the alleged police brutality. They expected 20,000 to show up at the public Haymarket Square in Chicago, but actually only 1500 to 2000 were there, with the police there also. At one point a protester threw a pipe bomb at the policemen, and its explosion killed seven policemen and injured more than 60 others. The police then fired into the crowd, and killed four.

Eight anarchists were tried for conspiracy to commit murder; seven were convicted, and four were hanged in November 1887. This was a huge embarrassment for the union movement, which did include many socialists and anarchists. It caused a delay in acceptance of the eight-hour workday, and many workers left the Knights of Labor to join the more moderate American Federation of Labor.[20]

Despite the fact that radicals killed policemen in the Haymarket Square riots, radicals in 1969 (including Barack Obama's friend Bill Ayers) detonated a bomb to destroy a statute honoring the fallen policemen. The mayor of Chicago correctly criticized it as an attack on law and order.[21]

Another violent conflict involving striking workers occurred near Pittsburgh in 1892. Called the Homestead Strike, guards hired by wealthy businessman Andrew Carnegie suppressed a strike by workers, and ten were killed in the conflict.

The most aggressive leader of the labor movement was Eugene V. Debs, who headed the American Railway Union (railroad workers). Debs was jailed for leading strike against Pullman railroad cars in 1894 over wages. In 1895, in a case entitled "In re Debs," the U.S. Supreme Court upheld judicial power to prohibit strikes against railroads, and upheld the power of courts to jail those who disobey court orders and engage in strikes anyway (as Debs had).

Debate: Are Unions a Good Thing?

Indians and the Frontier

Conflicts with the Indians started to subside after "Custer's Last Stand." There were bloody battles in 1877 between the U.S. Army and the Nez Perce, an Indian tribe led by Chief Joseph in Oregon and Idaho. This tribe did better against the U.S. Army than other tribes had, but ultimately this tribe was relocated to Oklahoma just as many others had been. Oklahoma has by far the largest Indian population (by percentage) of any State.

Today there are 38 national historic sites in the northwest (Oregon, Washington, Montana and Idaho) in honor of the Nez Perce,[22] which are frequently visited by tourists.

In 1881, a book was published that attempted to do for the Native Americans what "Uncle Tom's Cabin" did for African Americans. Called "A Century of Dishonor," it complained about and exposed unjust treatment of Indians by the United States. Its author was Helen Hunt Jackson.

In 1887, partly in reaction to this book, Congress enacted the Dawes Act to help Indians. This law granted landholdings (allotments, usually 160 acres or 65 hectares) to individual Native Americans, which replaced communal tribal holdings. In other words, this law attempted to convert the tribal structure of Indian life into the individualized private property system used by Europeans and most Americans. It sought to absorb tribe members into the general public.

This law was a complete failure. Within decades most of the tribal land had been transferred into ownership by non-Indians, and the Indians were worse off than they were before. This was an example of government trying to make something better, but actually making it worse.

In 1890, the U.S. Census Bureau declared that the frontier was settled and officially closed. The era of frontier America, which first began with the settlement at Jamestown, Virginia, and then spread westward for nearly 300 years, was finally over. Frederick Jackson Turner wrote in 1893 that frontier experience had promoted individualism and democracy. Do you agree?

By the end of 1890, 44 States had been admitted to the United States. The only States that were not yet admitted into the United States were Utah, Oklahoma, New Mexico, Arizona, Alaska and Hawaii. They joined later.

Tariffs and an Income Tax

Recall that the tariffs were a cause of the Civil War: the North wanted higher protective tariffs, while the South opposed them. The Civil War resolved the dispute over slavery, but it did not resolve the dispute over tariffs. After the War, the North still supported higher tariffs and the South still opposed them. The West, particularly farmers, also opposed higher tariffs.

In 1890, the McKinley Tariff established the highest tariffs ever, but in a compromise it did make sugar "duty free" (no tariff on sugar). Other than sugar, prices increased on goods and products due to the higher tariffs. These higher tariffs reflected the continued dominance by the Republican Party, which controlled the White House in 1890 (Benjamin Harrison, the grandson of William Henry Harrison, was president). Partly due to public outrage over the higher tariffs, the Democratic Party won many seats in Congress in the 1890 elections after the McKinley Tariff was enacted.

In 1894, the Wilson-Gorman Tariff and Income Tax Act passed, which added an income tax to even more tariffs. In the case of Pollack v. Farmers Loan and Trust Company, the Supreme Court declared the Income Tax Act unconstitutional because that particular direct tax did not apportion the tax by population as required by the Constitution.[23][24] The Supreme Court decision required a constitutional amendment (the 16th Amendment) to be passed before allowing a direct taxation based purely on income without regard for population.

The Conservative Democrat

After Chester Arthur served out the presidential term for the late James Garfield, Republicans were so unhappy with Arthur that they did not renominate him. Meanwhile, the Democratic Party -- which had not won a presidential election in nearly 30 years, turned to a conservative candidate from the Republican State of New York: Grover Cleveland. The Democrats hoped that by nominating Grover Cleveland they could pick up some Republican support and finally win a presidential election.

His opponent was the Republican Senator James Blaine from Maine, who was a moderate. Blaine is best known today for his opposition to funding by States of religiously affiliated schools (and particularly Catholic schools). In 1875, Blaine tried to amend the U.S. Constitution to prohibit States from providing any funding to religiously affiliated elementary and high schools. When that failed, his "Blaine Amendment" was incorporated into 36 State Constitutions, where they remain today and frustrate school voucher programs.[25] A recent effort in Florida to establish school vouchers and to repeal the Blaine Amendment there failed.

Some key eastern Republicans opposed James Blaine in 1884 due to scandals, and supported Grover Cleveland for president instead. These Republicans were known as the "Mugwumps"; they felt Blaine could not be trusted, and they were probably right! The defection by the Mugwumps to support Cleveland enabled him to win his key home state of New York, despite its Republican tradition at the time. (Today New York is very Democratic.)

This strategy of the Democrats, aided by division within the Republican Party, worked. Cleveland was elected president in 1884 for his integrity, his support of gold standard, his opposition to unions, his opposition to government spending, and his support of free enterprise. Cleveland was the most conservative president since James Monroe, even though Cleveland was a Democrat.

Cleveland did as he said he would. He vetoed a record number of bills passed by Congress, mostly concerning pensions for Civil War veterans. Cleveland was frugal like most conservatives, and did not want more government spending.

In 1888, Cleveland faced a new Republican challenger for president, Benjamin Harrison. Cleveland won more votes, but Harrison won more electoral college votes and thereby won this close election. Harrison, who was from Indiana and enjoyed the popularity of his grandfather (who had been president), favored protective tariffs and increasing veterans' pay.

Cleveland came back for a rematch in the presidential election of 1892, and beat Harrison that time. But then he was faced with the financial Panic of 1893, during which hundreds of banks and businesses failed, President Cleveland was criticized for doing nothing, but refusing to bail out the banks is a conservative solution. In fall 2008, President Bush and Congress did bail out the banks, in contrast to Cleveland's conservative approach.

The Panic of 1893 caused a wealthy Ohio populist who had been hurt by it to lead a march on Washington, D.C., setting a precedent for "marching on Washington." Jacob Coxey promised to gather 10,000, but by the time he arrived in D.C. "Coxey's Army" consisted of only 500 people, which is still enough to attract attention. But the conservative Cleveland held his ground:[26]

Upon arriving in Washington, Coxey and his supporters demanded that the federal government immediately assist workers by hiring them to work on public projects such as roads and government buildings. The United States Congress and President Grover Cleveland refused. Law enforcement officials arrested Coxey for trespassing on public property. Coxey's Army quickly dispersed upon its leader's arrest.

Historians cite this march on Washington as an example of how Americans increasingly looked to the national government to solve their problems.

Cleveland also held his ground against problems instigated by unions. He put down the (railroad) Pullman Strike in Chicago in 1894.

Preparing for the "Turn of the Century"

Social movements in the late 1800s also occurred, preparing the nation for the turn of the century (that is, the beginning of the 20th century):

  • Women's rights: Elizabeth Cady Stanton, who was pro-life, founded National Woman Suffrage Association in 1869 and, before that, led the Seneca Falls Convention in 1848. This foreshadowed the women's suffrage movement in the early 20th century.
  • Women in government: The Hull House was founded by Jane Addams in Chicago in 1889, and it grew into a city-based social movement that argued for reform of city government by the involvement of women. It is still active today.[27]
  • City government: The National Municipal League was founded in 1894 in order to make city government more honest, efficient and effective. It is active today under the new name of the National Civic League.
  • Self-improvement: the Chataugua Movement, founded in New York in 1874, was a part of a "knowledge revolution" devoted to promoting adult education (along with some entertainment!). This foreshadowed the adult learning programs of the 20th century.
  • Hawaii: the United States dethroned the Hawaii leader Queen Liliuokalani in 1893, because she recognized only natives on the islands and opposed joining the United States. Nearly 50 years later an attack on Hawaii by the Japanese would put America into World War II.
  • Imperialism: Alfred Thayer Mahan wrote books beginning in 1890 on American sea power, urging a strong navy and imperialism by United States. This foreshadowed American imperialism around 1900.
  • Racial accommodation: Booker T. Washington, a self-taught former slave, urged an approach of self-help and accommodation in order to improve conditions for African Americans. He founded the Tuskegee Institute for research and gave a famous speech in 1895 to the Atlanta Exposition, in which he urged a racially diverse audience to cooperate and accommodate each other. This foreshadowed a later division in the African American community between a conciliatory approach and a confrontational approach.
  • Prohibition (of alcohol): the Women's Christian Temperance Union was founded in 1874 by women in order to combat the problems that alcohol caused in their families and society. The WCTU sought nationwide "prohibition" (of alcohol), and eventually obtained it early in the 20th century (for a while). Even today there are some regions of the country (such as some rural counties) that are "dry" (do not allow any alcohol to be sold there).

References

  1. ↑ The second longest time period of peace in American history was between the end of the War of 1812 (in 1815) and the beginning of the Mexican War (in 1846), a period of 31 years. See http://americanhistory.about.com/library/timelines/bltimelineuswars.htm
  2. ↑ A daguerreotype is an early type of imaging that was direct onto a silver surface, and which does not allow copying.
  3. ↑ http://www.npg.si.edu/exh/brady/bradcont.html
  4. ↑ http://corporate.britannica.com/press/inventions.html
  5. ↑ Art. I, Sec. 8, http://www.law.cornell.edu/constitution/constitution.articlei.html#section8
  6. ↑ http://inventors.about.com/library/weekly/aa073100a.htm
  7. ↑ http://www.thehomeschoolmagazine.com/How_To_Homeschool/articles/234.php
  8. ↑ http://www.pbs.org/wgbh/amex/telephone/peopleevents/mabell.html
  9. ↑ Specifically, the teacher thought that Edison's brain had been "scrambled" or "addled".
  10. ↑ http://quotations.about.com/od/stillmorefamouspeople/a/ThomasEdison2.htm
  11. ↑ 11.0 11.1 From "The Heroes Of The Age: Electricity And Man," http://www.thomasedison.com/biography.html
  12. ↑ In 1879, Edison invented the light bulb in Menlo Park, New Jersey, where there is a monument to his honor and a small museum. By 1882, Edison was able to light up New York City, and by 1898 there were 3,000 electrical generators nationwide.
  13. ↑ http://www.phmuseum.org/depot/tour/phonograph.htm
  14. ↑ http://www.whitehouse.gov/history/presidents/jg20.html
  15. ↑ http://www.u-s-history.com/pages/h854.html
  16. ↑ 16.0 16.1 http://www.seed.slb.com/qa2/FAQView.cfm?ID=906
  17. ↑ When John D. Rockefeller later had children of his own, he and his wife homeschooled them until age ten. http://www.associatedcontent.com/article/44035/john_d_rockefeller_jr.html
  18. ↑ 18.0 18.1 http://www.u-s-history.com/pages/h957.html
  19. ↑ 19.0 19.1 http://historymatters.gmu.edu/d/5354/
  20. ↑ http://www.u-s-history.com/pages/h750.html
  21. ↑ Bill Ayers, "Fugitive Days" at p. 176 (Beacon Press: Boston, Massachusetts 2001)
  22. ↑ http://www.nps.gov/nepe/
  23. ↑ The U.S. Constitution, Article I, Section 9, paragraph 4, states that "No Capitation [head], or other direct, Tax shall be laid, unless in Proportion to the Census or Enumeration herein before directed to be taken."
  24. ↑ The Supreme Court had allowed other types of taxes, such as an income tax during the Civil War and an inheritance tax. See http://www.reason.com/news/show/30860.html
  25. ↑ http://pewforum.org/events/rss.php?EventID=194
  26. ↑ http://www.ohiohistorycentral.org/entry.php?rec=583
  27. ↑ http://www.hullhouse.org/
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