Ch. 16 - America's Gilded Age, 1870-1890

"Progress and Poverty"

(1879) by Henry George. Although it had no direct impact on government policy, it probably commanded more public attention than any book on economics in American history. His book began with a famous statement of "the problem" suggested by its title—the growth of "squalor and misery" alongside material progress. His solution was the "single tax," which would replace other taxes with a levy on increases in the value of real estate. The single tax would be so high that it would prevent speculation in both urban and rural land. No one knows how many of Henry George's readers actually believed in this way of solving the nation's ills. George rejected the traditional equation of liberty with ownership of land (since the single tax in effect made land the "common property" of the entire society). In other ways, however, his definition of freedom was thoroughly in keeping with mainstream thought.

"The Cooperative Commonwealth"

(1884) by Laurence Gronlund. It was the first book to popularize socialist ideas for an American audience. Gronlund began the process of socialism's Americanization. While Karl Marx, the nineteenth century's most influential socialist theorist, had predicted that socialism would come into being via a working-class revolution, Gronlund portrayed it as the end result of a process of peaceful evolution, not violent upheaval. He thus made socialism seem more acceptable to middle-class Americans who desired an end to class conflict and the restoration of social harmony.

"Looking Backward"

(1888) by Edward Bellamy. which promoted socialist ideas while "ignoring that name" (Bellamy wrote of nationalism, not socialism). In this novel, his main character falls asleep in the late nineteenth century only to awaken in the year 2000, in a world where cooperation has replaced class strife, "excessive individualism," and cutthroat competition. Inequality has been banished and with it the idea of liberty as a condition to be achieved through individual striving free of governmental restraint. Freedom, Bellamy insisted, was a social condition, resting on interdependence, not autonomy. Yet the book inspired the creation of hundreds of nationalist clubs devoted to bringing into existence the world of 2000 and left a profound mark on a generation of reformers and intellectuals.

"Wealth against Commonwealth"

(1894) Concentrated wealth degraded the political process, declared Henry Demarest Lloyd in his exposé of how Rockefeller's Standard Oil Company made a mockery of economic competition and political democracy by manipulating the market and bribing legislators. "Liberty and monopoly," Lloyd concluded, "cannot live together."

Middle Border

A new agricultural empire producing wheat and corn for national and international markets arose here (Minnesota, the Dakotas, Nebraska, and Kansas), where the population rose from 300,000 in 1860 to 5 million in 1900. The farmers were a diverse group, including native-born easterners, blacks escaping the post-Reconstruction South, and immigrants from Canada, Germany, Scandinavia, and Great Britain. John Wesley Powell, the explorer and geologist who surveyed this in the 1870s, warned that because of the region's arid land and limited rainfall, development there required large-scale irrigation projects. The model of family farming envisioned by the Homestead Act of 1862 could not apply: no single family could do all the work required on irrigated farms—only cooperative, communal farming could succeed, Powell maintained.

Social Darwinism

According to what came to be called this, evolution was as natural a process in human society as in nature, and government must not interfere. Especially misguided, in this view, were efforts to uplift those at the bottom of the social order, such as laws regulating conditions of work or public assistance to the poor. The giant industrial corporation, followers believed, had emerged because it was better adapted to its environment than earlier forms of enterprise. To restrict its operations by legislation would reduce society to a more primitive level. According to the philosophy of this, workers should practice personal economy, keep out of debt, and educate their children in the principles of the marketplace, not look to the government for aid. The era's most influential follower was Yale professor William Graham Sumner.

Thomas Edison

Born in Ohio in 1847, he had little formal education, but as a teenager he read popular books on science and began doing chemistry experiments. During the course of his life, he helped to establish entirely new industries that transformed private life, public entertainment, and economic activity, including the phonograph, light- bulb, motion picture, and a system for generating and distributing electric power. He opened the first electric generating station in Manhattan in 1882 to provide power to streetcars, factories, and private homes, and he established, among other companies, the forerunner of General Electric to market electrical equipment. The spread of electricity was essential to industrial and urban growth, providing a more reliable and flexible source of power than water or steam.

Social Gospel

Came to take place through the writings of Walter Rauschenbusch. They insisted that freedom and spiritual self-development required an equalization of wealth and power and that unbridled competition mocked the Christian ideal of brotherhood. The movement originated as an effort to reform Protestant churches by expanding their appeal in poor urban neighborhoods and making them more attentive to the era's social ills. The movement's adherents established missions and relief programs in urban areas that attempted to alleviate poverty, combat child labor, and encourage the construction of better working-class housing. They worked with the Knights of Labor and other groups demanding health and safety laws.

"the miner's freedom"

Consisted of elaborate work rules that left skilled underground workers free of managerial supervision on the job. Through their union, skilled iron and steelworkers fixed output quotas and controlled the training of apprentices in the technique of iron rolling. These workers often knew more about the details of production than their employers did. This only applied to a tiny portion of the industrial labor force.

"captains of industry" v. "robber barons"

Depending on one's point of view, industrial leaders were either these, whose energy and vision pushed the economy forward, or these, who wielded power without any accountability in an unregulated marketplace. Most rose from modest backgrounds and seemed examples of how inventive genius and business sense enabled Americans to seize opportunities for success. But their dictatorial attitudes, unscrupulous methods, repressive labor policies, and exercise of power without any democratic control led to fears that they were undermining political and economic freedom.

bonanza farming

Despite the emergence of a few of these that covered thousands of acres and employed large numbers of agricultural wage workers, family farms still dominated the trans-Mississippi West. Even small farmers, however, became increasingly oriented to national and international markets, specializing in the production of single crops for sale in faraway places.

iron law of supply and demand

Given the vast expansion of the nation's productive capacity, many Americans viewed the concentration of wealth as inevitable, natural, and justified by progress. By the turn of the century, advanced economics taught that wages were determined by this and that wealth rightly flowed not to those who worked the hardest but to men with business skills and access to money.

John Rockefeller

He began his working career as a clerk for a Cleveland merchant and rose to dominate the oil industry. He drove out rival firms through cutthroat competition, arranging secret deals with railroad companies, and fixing prices and production quotas. He began with "horizontal" expansion—buying out competing oil refineries. But like Andrew Carnegie, he soon established a vertically integrated monopoly, which controlled the drilling, refining, storage, and distribution of oil. By the 1880s, his Standard Oil Company controlled 90 percent of the nation's oil industry. Like Carnegie, he gave much of his fortune away, establishing foundations to promote education and medical research. And like Carnegie, he bitterly fought his employees' efforts to organize unions.

Nikola Tesla

He was an ethnic Serb born in modern-day Croatia who emigrated to the United States at the age of twenty-eight, who developed an electric motor using the system of alternating current that overcame many of the challenges of using electricity for commercial and industrial purposes.

Andrew Carnegie

He was another industrial giant. He emigrated with his family from his native Scotland at the age of thirteen and as a teenager worked in a Pennsylvania textile factory. During the 1850s, Thomas Scott hired him as his private telegraph operator and, by the eve of the Civil War, had promoted him to one of the Pennsylvania Railroad's major management positions. During the depression that began in 1873, he set out to establish a "vertically integrated" steel company. By the 1890s, he dominated the steel industry and had accumulated a fortune worth hundreds of millions of dollars. His complex of steel factories at Homestead, Pennsylvania, were the most technologically advanced in the world. He learned that life was a ceaseless struggle in which one must strive to get ahead or sink beneath the waves. His life reflected the tension between these elements of his upbringing. Believing that the rich had a moral obligation to promote the advancement of society, he denounced the "worship of money" and distributed much of his wealth to various philanthropies, especially the creation of public libraries in towns throughout the country. But he ran his companies with a dictatorial hand. His factories operated nonstop, with two twelve-hour shifts every day of the year except the Fourth of July.

standard gauge

In 1886, the railroads adopted this (the distance separating the two tracks), making it possible for the first time for trains of one company to travel on any other company's track.

Interstate Commerce Commission

In 1887, in response to public outcries against railroad practices, Congress established this to ensure that the rates railroads charged farmers and merchants to transport their goods were "reasonable" and did not offer more favorable treatment to some shippers over others. It was the first federal agency intended to regulate economic activity, but since it lacked the power to establish rates on its own—it could only sue companies in court—it had little impact on railroad practices.

"The Significance of the Frontier in American History"

In 1893, the historian Frederick Jackson Turner gave a celebrated lecture in which he argued that on the western frontier the distinctive qualities of American culture were forged: individual freedom, political democracy, and economic mobility. The West, he added, acted as a "safety valve," drawing off those dissatisfied with their situation in the East and therefore counteracting the threat of social unrest. Turner's was one of the most influential interpretations of American history ever developed. But his lecture summarized attitudes toward the West that had been widely shared among Americans long before 1893.

"Lochner v. New York"

In a 1905 case that became almost as notorious as Dred Scott and gave the name "Lochnerism" to the entire body of liberty of contract decisions, the Supreme Court voided a state law establishing ten hours per day or sixty per week as the maximum hours of work for bakers. By this time, the Court was invoking "liberty" in ways that could easily seem absurd. In one case, it overturned as a violation of "personal liberty" a Kansas law prohibiting "yellow-dog" contracts, which made nonmembership in a union a condition of employment. In another, it struck down state laws requiring payment of coal miners in money rather than paper usable only at company-owned stores.

Sherman Antitrust Act

It banned combinations and practices that restrained free trade. But the language was so vague that the act proved almost impossible to enforce.

Wounded Knee massacre

On December 29, 1890, soldiers opened fire on Ghost Dancers encamped in South Dakota, killing between 150 and 200 Indians, mostly women and children. This marked the end of four centuries of armed conflict between the continent's native population and European settlers and their descendants. By 1900, the Indian population had fallen to 250,000, the lowest point in American history.

greenbacks

Paper money issued by the Union during the Civil War. Was withdrawn by Republicans by imposing a high national tariff. The Greenback-Labor Party proposed to the federal governement to stop taking these out of circulation. This, they argued, would make funds avilable for investment and give the government, not private bankers, control of the money supply.

Ghost Dance

Some Indians sought solace in this, a religious revitalization campaign reminiscent of the pan-Indian movements led by earlier prophets like Neolin and Tenskwatawa. Its leaders foretold a day when whites disappear, the buffalo would return, and Indians could once again practice their ancestral customs "free from misery, death, and disease." Large numbers of Indians gathered for days of singing, dancing, and religious observances. Fearing a general uprising, the government sent troops to the reservations. On December 29, 1890, soldiers opened fire on partakers encamped near Wounded Knee Creek in South Dakota, killing between 150 and 200 Indians, mostly women and children.

Chief Joseph

The Nez Percé leader delivered a speech in Washington to a distinguished audience that included President Rutherford B. Hayes. Condemning the policy of confining Indians to reservations, he adopted the language of freedom and equal rights before the law so powerfully reinforced by the Civil War and Reconstruction. "Treat all men alike," he pleaded. "Give them the same law. . . . Let me be a free man—free to travel, free to stop, free to work, free to trade where I choose, free to . . . think and talk and act for myself." The government eventually transported the surviving Nez Percé to another reservation in Washington Territory. Until his death in 1904, he would unsuccessfully petition successive presidents for his people's right to return to their beloved Oregon homeland.

Dawes Act

The crucial step in attacking "tribalism" came in 1887 with the passage of this, named for Senator Henry L. Dawes of Massachusetts, chair of the Senate's Indian Affairs Committee. It broke up the land of nearly all tribes into small parcels to be distributed to Indian families, with the remainder auctioned off to white purchasers. Indians who accepted the farms and "adopted the habits of civilized life" would become full-fledged American citizens. The policy proved to be a disaster, leading to the loss of much tribal land and the erosion of Indian cultural traditions. Whites, however, benefited enormously. On the Nez Percé reservation, for example, 172,000 acres were divided into farms for Indians, but white ranchers and land speculators purchased 500,000 acres. When the government made 2 million acres of Indian land available in Oklahoma, 50,000 white settlers poured into the territory to claim farms on the single day of April 22, 1889. Further land rushes followed in the 1890s. In the half century after the passage of this, Indians lost 86 million of the 138 million acres of land in their possession in 1887.

liberty of contract

The growing influence of Social Darwinism helped to popularize an idea that would be embraced by the business and professional classes in the last quarter of the nineteenth century—a "negative" definition of freedom as limited government and an unrestrained free market. Central to this social vision was the idea of contract. Labor contracts reconciled freedom and authority in the workplace. The principle of free labor, which originated as a celebration of the independent small producer in a society of broad equality and social harmony, was transformed into a defense of the unrestrained operations of the capitalist marketplace. The courts played a significant role. Came to be defined as the true meaning of the 14th amendment.

Crédit Mobilier

The most notorious example of corruption came to light during Grant's presidency. This was a corporation formed by an inner ring of Union Pacific Railroad stockholders to oversee the line's government-assisted construction. Essentially, it enabled the participants to sign contracts with themselves, at an exorbitant profit, to build the new line. The arrangement was protected by the distribution of stock to influential politicians, including Speaker of the House Schuyler Colfax, who was elected vice president in 1868.

Patrons of Husbandry

The policies of railroad companies produced a growing chorus of protest, especially in the West. Farmers and local merchants complained of excessively high freight rates, discrimination in favor of large producers and shippers, and high fees charged by railroad-controlled grain warehouses. Critics of the railroads came together as this, or Grange, which moved to establish cooperatives for storing and marketing farm output in the hope of forcing the carriers "to take our produce at a fair price." Founded in 1867, the Grange claimed more than 700,000 members by the mid-1870s. Its members called on state governments to establish fair freight rates and warehouse charges. In several states, the Grange succeeded in having commissions established to investigate—and, in some cases, regulate—railroad practices.

railroad time zones

The railroads reorganized time itself. In 1883, the major companies divided the nation into the four time zones still in use today. Indeed, the centrality of railroads to the national market meant that when railroads experienced financial crises, the entire economy suffered.

"liberal" reformers

Their beliefs were quite different from those called liberals in modern America, who advocate that an activist government try to address social needs. This group of editors and professionals broke with the Republican Party in 1872 and helped to bring about a change in northern opinion regarding Reconstruction. But their program was not confined to the South. Like the men who led the movement for a new constitution in the 1780s, Gilded Age reformers feared that with lower-class groups seeking to use government to advance their own interests, democracy was becoming a threat to individual liberty and the rights of property. Some urged a return to the long-abandoned principle that voting should be limited to property owners.

the Pennsylvania Railroad

Under the aggressive leadership of Thomas A. Scott, for a time the nation's largest corporation, forged an economic empire that stretched across the continent and included coal mines and oceangoing steamships. With an army of professional managers to oversee its far-flung activities, it pioneered modern techniques of business organization.

Civil Service Act of 1883

Was a merit system for federal employees, with appointment via competitive examinations rather than political influence. Although it applied at first to only 10 percent of the more than 100,000 government workers, the act marked the first step in establishing a professional civil service and removing officeholding from the hands of political machines.

"great upheaval" of 1886

Was a wave of strikes and labor protests that touched every part of the nation. Six months before the unveiling of the Statue of Liberty, police had killed four striking workers who attempted to prevent strikebreakers from entering a Chicago factory. This was only one of many violent clashes that accompanied labor unrest between the end of Reconstruction in 1877 and the turn of the twentieth century. The 600 dignitaries (598 of them men) who gathered on what is now called Liberty Island for the dedication hoped the Statue of Liberty would inspire renewed devotion to the nation's political and economic system.

Standard Oil Company

Was owned by John Rockefeller. By the 1880s it controlled 90% of the nation's oil industry.

Knights of Labor

Were at the center of a new wave of labor organizing. They were the first group to try to organize unskilled workers as well as skilled, women alongside men, and blacks as well as whites (although even they excluded the despised Asian immigrants on the West Coast). The group reached a peak membership of nearly 800,000 in 1886 and involved millions of workers in strikes, boy-cotts, political action, and educational and social activities. They were among the few nineteenth-century labor groups to recruit black members.

"Elk v. Wilkins"

Western courts ruled that the citizenship rights guaranteed by the Fourteenth and Fifteenth Amendments did not apply to them, in 1884 the U.S. Supreme Court agreed, even though John Elk had left his tribe in Oklahoma and lived among white settlers in Nebraska. The Court questioned whether any Indian had achieved the degree of "civilization" required of American citizens.

vertical integration

What Andrew Carnegie se out for. That is, one that controlled every phase of the business from raw materials to transportation, manufacturing, and distribution.

Great Railroad Strike of 1877

When workers protesting a pay cut paralyzed rail traffic in much of the country, militia units tried to force them back to work. After troops fired on strikers in Pittsburgh, killing twenty people, workers responded by burning the city's railroad yards, destroying millions of dollars in property. General strikes paralyzed Chicago and St. Louis. The strike revealed both a strong sense of solidarity among workers and the close ties between the Republican Party and the new class of industrialists. President Rutherford B. Hayes, who a few months earlier had ordered federal troops in the South to end their involvement in local politics, ordered the army into the North. In the aftermath of 1877, the federal government constructed armories in major cities to ensure that troops would be on hand in the event of further labor difficulties. Henceforth, national power would be used not to protect beleaguered former slaves, but to guarantee the rights of property.