The Gilded Age (part I) Ch. 17 (p. 519-537)

1. The Gilded Age (part I)Ch. 17 (p. 519-537) What role did the presidents play in this era? Why is this era “gilded” and with what? Who benefitted from this era? Who lost?

2. Gilded Age-period when corruption existed in society but was overshadowed by the wealth of the period “gilded” is when something is golden/beautiful on the surface but is really cheap/worthless underneath Term comes from a book written about the time period by Mark Twain and Charles Dudley Warner in 1873: The Gilded Age Explored political and economic corruption in the United States The central characters were tied together in a government railroad bribery scheme Depicted an American society that, despite its appearance of promise and prosperity, was riddled with corruption and scandal “What is the chief end of man?--to get rich. In what way?--dishonestly if we can; honestly if we must.” – Samuel Clemens (aka Mark Twain),1871

3. USA in the Gilded Age: 1870-1900 Industrialization Ranching, Mining, Farming Reconstruction & Rise of Jim Crow

4. The West Farmers, ranchers, & miners closed the last of the frontier at the expense of Indians Mining was the 1st attraction to the West; Miners created “instant towns” in areas where gold or silver was discovered The South After the failure of Reconstruction in 1877, the South entered the Jim Crow era Ringing in a new age Industry was regional by 1890: (a) NE had 85% of industry, (b) the sparsely-settled West provided raw materials for industry, & (c) the South was still recovering from war (made tobacco, iron & textiles; but ½ as many manufactured goods as NY state)

5. The Industrial North • Experienced an industrial revolution, mass immigration, & urbanization • America became the world’s leader in railroad, steel, & oil production

6. Second Industrial Revolution 1871-1914 • Marked by enormous growth and consolidation of wealth and ownership • Major Industries • Railroads • Automobile • Steel • Oil • Electricity • Communication • The Industrialists or Robber Barons • William Vanderbilt (Railroads) • Jay Gould (Railroads) • Andrew Carnegie (Steel) • John D. Rockefeller (Oil) • Henry Ford (Automobiles) Forced competitors out of business by reducing wages thereby guaranteeing price control.

7. Socialism v. Capitalism • What is the role of government? • What role should the central government play in the economic development of the country? • How could government stop a Great Depression? More governmentLess government LiberalConservative SocialistCapitalist Democrat Republican Where do you fall ideologically?

8. Inventors/Inventions Thomas Edison Perfected the light bulb in 1880, and motion picture Organized power plants Established first research lab Alexander Graham Bell Telephone (1876) Henry Ford Assembly Line George Eastman Camera (1885) Samuel Morse Telegraph (1837) Wright Brothers Airplane (1903) Christopher Sholes Typewriter (1867) Guglielmo Marconi Radio Wright Brothers on 1903 Flight Samuel Morse 19th Century Typewriter Marconi 19th Century Camera Alexander Graham Bell

9. Presidents of the Gilded Age U.S. Grant 1869-1877 Chester A. Arthur 1881-1885 Rutherford B. Hayes 1877-1881 James Garfield 1881 Grover Cleveland 1885-1889 and 1893-1897 Benjamin Harrison 1889-1893 William McKinley 1897-1901

10. During Grant’s terms as president, material interests (money, industry) became more important than the ideology and civil rights of Lincoln’s time The Gilded Age was enabled partly because most presidents during this era, including Grant, were weak in relation to Congress and business interests. The U.S. government’s economic policy was relaxed during these years, allowing Americans to take advantage of the laissez-faire economics in increased speculation, investment, and corruption. Scandals of the Grant Administration

11. During the Civil War, Congress had authorized the Treasury to issue greenback banknotes to pay huge war debt Unlike the rest of the currency, greenbacks not backed by gold or silver (bimetallism) Caused inflation and forced gold-backed money out of circulation Public Credit Act (1869) guaranteed that bondholders would be repaid in gold, not greenbacks To strengthen the dollar, Treasury Secretary started selling Treasury gold each month and bought back high-interest greenbacks Reduced deficit, deflated currency One group of speculators, “the Gold Ring”, Jay Gould, a Wall Street trader and railroad magnate, and his partner Jim Fisk, recruited Grant’s brother-in-law to get Grant to appoint a new assistant Treasurer of the United States, who agreed to tip the men off when the government intended to sell gold. Tried to convince Grant and the Treasury that high gold prices would make the nation prosperous Gould and Fisk began to quietly stockpile gold as they hoped to sell the gold at high prices Jay Gould and James Fisk: The Gold Ring (1869)

12. Gould began buying large amounts of gold, but never sold it, causing prices to rise and stocks to plummet Gould and Fisk started hoarding gold, driving the price higher: 30% more than 1868 After Grant realized what had happened, Treasury sold $4 million in gold When government’s gold hit the market, its worth plummeted within minutes Investors scrambled to sell their holdings, and many of them bankrupted. This day was known as Black Friday. Fisk and Gould escaped significant financial harm The sale of gold from the Treasury defeated Gould's plan, relieving the growing economic tension and the economy resumed its post-war recovery (until 1873) Grant's suspected involvement also led his presidency to be called the “Era of Good Stealings”

13. Crédit Mobilier scandal involved the Union Pacific Railroad and the fraudulent Crédit Mobilier of America construction company, which was to build the eastern portion of the First Transcontinental Railroad Crédit Mobilier, created by Thomas C. Durant, a vice president of the Union Pacific Railroad, was a deliberate attempt to defraud the U.S. Government and public of millions of dollars. It looked as if CM had been impartially chosen by the Railroad’s officers as the principal construction contractor. However, CM insiders “hired” themselves to build the railroad at inflated prices, earning them high profits In 1868, a Congressman involved in CM sold shares of stock in Crédit Mobilier to other congressmen, in addition to making cash bribes, to keep quiet about the illegal business The muckraking paper The Sun exposed the scandal during the 1872 presidential campaign Crédit Mobilier (1872)

14. Grant signed the Coinage Act (1873), making gold the only money standard: dollars would be exchanged on demand for only gold. End of 1873: NY stock brokerage house fails to fully sell a bond on its own purchases in Northern Pacific Railway, and collapsed Collapse panicked Wall Street: other banks and brokerages with railroad stocks and bonds also collapsed 89 of the 364 U.S. railroads went bankrupt. New York Stock Exchange suspends trade 10 days Grant, traveled to NY to consult leading businessmen and bankers for advice on how to curb this panic, which became known as the Panic of 1873 Grant believed that, as with the Gold Ring’s collapse, the panic was just economic flux affecting only bankers and stockbrokers Response: Treasury bought $10 mill. in government bonds, injecting cash into economy Purchases stopped Wall Street panic, but a five-year industrial depression started (Long Depression) To help the economy, Congress passed an inflationary policy called the Inflation Bill (1874). Farmers/workingmen favored addition of $64 million in greenbacks to circulation Eastern bankers opposed; would weaken the dollar Grant unexpectedly vetoed the bill because he thought it would destroy the nation’s credit Veto was the beginning of the Republican Party's belief in gold-backed dollar Panic of 1873

15. Employees in President Ulysses S. Grant’s administration were accused of pocketing whiskey taxes, with the help of the liquor industry Grant immediately called for swift punishment. That backfired on him when he tried to protect his personal secretary, with whom he allegedly had an affair, causing an even bigger scandal. Whiskey Ring (1875)

16. The Compromise of 1877 was an informal, unwritten deal that settled the intensely disputed 1876 U.S. presidential election, pulled federal troops out of state politics in the South, and ended the Reconstruction Era. Through the Compromise, RepublicanRutherford B. Hayes was awarded the White House over Democrat Samuel J. Tilden. Democrats complained Tilden had been cheated (also called the “Corrupt Bargain II”) The compromise said Southern Democrats would acknowledge Hayes as president, but only if Republicans would meet points of the compromise: Removal of all remaining federal troops from former Confederate States Appointment of at least one Southern Democrat to Hayes's cabinet The construction of another transcontinental railroad using the Texas and Pacific in the South part of the "Scott Plan," proposed by Thomas A. Scott, which initiated the process that led to the final compromise Legislation to help industrialize the South and improve economy Outgoing president, Republican Ulysses S. Grant, removed the soldiers from Florida. As president, Hayes removed the remaining troops in South Carolina and Louisiana. As soon as the troops left, many white Republicans also left and the "Redeemer" Democrats took control. African American historians sometimes call it "The Great Betrayal." Compromise of 1877 Roscoe Conkling as Mephistopheles (the devil) while Rutherford B. Hayes strolls off with the prize of the "Solid South" depicted as a woman. The caption quotes Goethe: "Unto that Power he doth belong Which only doeth Right while ever willing Wrong."

17. In the early 1870s, leadership of the Republican Party (mostly in the North) passed from reformers of the antebellum/CW era… Thaddeus Stevens (13th Amendment, “radical”) Charles Sumner To political manipulators under the influence of state party bosses. Roscoe Conkling (NY) James Blaine (ME) These “spoilsmen” were deeply involved in patronage, or giving jobs and gov’t favors (spoils) to their supporters. This would end with the assassination of Garfield Rise of the “spoilsmen”

18. Corruption in Government Patronage or Spoils System- giving government jobs to loyal party workers or friends (popularized by Andrew Jackson) Were not qualified Used position to get money from government (graft) President James Garfield is assassinated by disappointed office seeker denied a position in the spoils system government James Garfield The assassin, Charles Guiteau

19. Roscoe Conkling was also the leader of the Republican faction known as the “Stalwarts” stalwart—someone/something who is stubborn or unchanging Believed and furthered the idea of the patronage system and continued to believe that sectional appeals (“waving the bloody shirt”) were still valid even after gradual end of Reconstruction in the South James G. Blaine of Maine led the Republican faction known as “Half Breeds” Nickname came from willingness to depart from Stalwart orthodoxy Many, including President Hayes, believed the patronage system contributed to the scandals and graft during Grant’s presidency Civil service reform became a popular cause among the Half Breeds Republicans Split

20. “IS THERE TO BE A POWER BEHIND THE THRONE?” by Thomas Nast, May 1881 Nast opened this series of cartoons by showing Senator Roscoe Conkling (at left) struggling with Secretary of the Treasury James G. Blaine for influence over President James Garfield. Conkling hoped that his friends would be appointed to political positions by the president.

21. Pendleton Civil Service Act 1883 Attempted to end patronage/spoils System Created the Civil Service Commission which required appointed govt. officials to pass the Civil Service Exam to base jobs on merit (qualifications) instead of friendship Federal employees did not have to contribute to campaign funds and could not be fired for political reasons President Chester A. Arthur signed Pendleton Act into effect

22. The Astor Family The Gild The Boldt Castle Breakers of the Vanderbilt Family The Mount of Edith Wharton Lockwood-Mathews Mansion

23. “Big Business” Monopolies (trusts): Companies that controlled the majority of one industry: Rockefeller’s Standard Oil Carnegie’s U.S. Steel Vanderbilt’s railroads Trusts -A group of separate companies placed under the control of a single managing board Critics called these practices unfair and the business leaders “Robber Barons”

24. Social Darwinism Used Darwin’s theory to explain business, promoted by Harvard professor William Graham Sumner Natural Selection, Survival of the Fittest Laissez-faire -policy that US had followed since inception to not allow govt. to interfere with business Govt. should not interfere Sherman Anti-Trust Act of 1890 Law outlawing a combination of companies that restrained interstate trade or commerce; important to prevent monopolies. Not initially enforced properly. Gospel of Wealth -belief that the wealthy are “chosen by God” to be successful and were therefore responsible to look out for the well being of those less fortunate. Many Industrialist shared wealth although rarely through direct welfare. Started museums, etc. Captains of Industry: a positive idea that industrial leaders worked hard and deserved their wealth Rationalizing Big Business

26. A Scottish immigrant, Andrew Carnegie helped build the American steel industry—Carnegie Steel Co. (originally started as an ironworks foundry) 1900 Carnegie Steel produced more of the metal than all of Great Britain Richest man in the world at the time One of the first philanthropists, gave his collected fortune away to cultural, educational and scientific institutions for "the improvement of mankind." (Gospel of Wealth) Carnegie Hall, NYC Carnegie-Mellon University Over 2,500 public libraries $350 million by the time he died Andrew Carnegie • Carnegie was unusual because he preached for the rights of laborers to unionize and to protect their jobs. • However, Carnegie's steel workers were often pushed to long hours and low wages-- Homestead Strike of 1892

27. Building a monopoly(as described by Andrew Carnegie) Vertical Integration A process in which a company buys out all of the suppliers. (Ex. coal and iron mines, ore freighters, RR lines) Horizontal Consolidation -A process in which a company buys out or merges with all competing companies (JP Morgan bought out Carnegie steel and other companies)

28. The Steel Industry’s Impact on America Bessemer Process- developed around 1850 injected air into molten iron to remove impurities and make steel-a lighter, more flexible, rust resistant metal Steel is used in railroads, farm equipment, canned goods Engineers use steel to create skyscrapers and longer bridges (Brooklyn Bridge) View Steel Industry Video

29. Industrialist and financier who started U.S. Steel from Carnegie Steel and other companies Became 1st billion- dollar corporation Bailed out the U.S. economy on more than one occasion J.P. Morgan

31. He was a co-founder of the Standard Oil Company, which dominated the oil industry and was the first great U.S. business trust As kerosene and gasoline grew in importance, became the world's richest man and the first American worth more than a billion dollars Often cited as the richest person in history Like Carnegie, was a philanthropist under the Gospel of Wealth: An abolitionist Creator of Spelman College Major donator to the University of Chicago and other major medical universities Owned a large portion of real estate in Manhattan, NYC John D. Rockefeller

32. Originally a steamboat entrepreneur, C. Vanderbilt became a railroad magnate Initially did not think his son was fit for the job W.H. became president of Central and Hudson River Railroad, Lake Shore and Michigan Southern Railway, the Canada Southern Railway, and the Michigan Central Railroad An active philanthropist, giving extensively to a number of philanthropic causes: Funded the Metropolitan Opera Funded College of Physicians and Surgeons at Columbia University. In 1880, he provided the money for Vanderbilt University in Nashville, Tennessee Cornelius (“The Commodore”) and W.H. Vanderbilt

33. "The Great Race for the Western Stakes, 1870," Cornelius Vanderbilt versus James Fisk

34. An American inventor and businessman. He developed many devices that greatly influenced life around the world, including: Phonograph motion picture camera Long-lasting electric light bulb. one of the first inventors to apply the principles of mass production and large-scale teamwork to the process of invention, and because of that, he is often credited with the creation of the first industrial research laboratory. One of the first to apply the mass production and large-scale teamwork to the process of invention Created the first industrial research laboratory Later electrical genius Nicola Tesla worked for Edison and is (unofficially) credited with many of his inventions 1,093 US patents in his name Inventions established major new industries world-wide: electric light/power, power utilities sound recording, motion pictures Telecommunications: stock ticker, mechanical vote recorder, battery for an electric car, recorded music device Thomas Edison(“The Wizard of Menlo Park”)

35. Videos • The Gilded Age • “Traits of a Titan” from the History Channel’s The Men Who Built America • Captains of Industry (biography.com)