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APUSH: America's Gilded Age (1870-1900)
Terms in this set (38)
Pools, trusts, and holding companies
Pools: In a pool or cartel industrial competitors make informal or "gentlemen's" agreements about production levels and pricing. Critics charged that these violated the competitive principles of the marketplace. Defenders argued that they eliminated the irregularity and wastefulness of unregulated markets.
Trusts & Holding COs: While technically different, holding companies and trusts operated in much the same way. They were large partnerships, formed by ostensibly competing companies in order strengthen their control over the market without violating anti-monopoly laws. In these partnerships, the stock certificates from several companies were exchanged for trust certificates, and then a board of trustees exercised governance over all of the theoretically independent companies within the trust or holding company.
This refers to the method used by Andrew Carnegie and other indutrialists to gain control over their industries. It involved controlling all aspects of the production process. In Carnegie's case, he owned not just steel mills, but also coal mines, coke refineries, iron ore barges, and railways.
This refers to the method used by John D. Rockefeller and other industrialists to gain control over their industries. It involved controlling one aspect of the production process. Rockefeller eventually controlled 90% of the nation's oil refining capacity.
Andrew Carnegie = Gospel of Wealth
-Andrew Carnegie: A Scottish-born industrialist who emigrated to the US as a teenager
=Hired by Thomas Scott in the 1850s; worked as a telegraph operator before being promoted to a management position at the Penn. RR
=Set out to establish a vertically integrated steel company--one that controlled every phase of business = dominated the steel industry by the 1890s, amassing a huge fortune that continued to grow with his state-of-the-art steel plant in Homestead, Penn.
=Carnegie took from his father a commitment to social equality and democracy; his mother taught him that life was a ceaseless struggle
=Felt obligated to provide aid to the struggling lower classes = noblesse oblige
=Denounced "worship of money," choosing instead to distribute his wealth to various philanthropies
=Published "Savage Wealth" or "Gospel of Wealth" in 1899: surplus of wealth is best put to use when it is redistributed carefully by the wealthy
=Approach contrasted with traditional bequest (patrimony) This approach was contrasted with traditional bequest (patrimony)
=Condemned lavish living
John D. Rockefeller and Standard Oil
-Rockefeller: rags to riches story, as celebrated during the Gilded Age
-Rose from a position as a working clerk to dominate the oil industry = employed tactics of horizontal expansion (i.e. buying out competing oil refineries; drove out rival firms using cutthroat competition, arranged secret deals, engaged in price fixing
="Get rich honestly if we must, dishonestly if we can"
=Eventually adopted Carnegie's tactic of vertical integration--controlled drilling, refining, storage, distribution of oil = suppressed worker's movement to organize labor unions
-By the 1880s, SO controlled 90% of the nation's oil industry
=Gave away much of his fortune for philanthropic pursuits
=Captain of industry v. robber baron = Energy and vision pushed the economy forward; still resorted to shady modes of business, wielded unbridled power
-Financier who dominated industrial consolidation and corporate finance
=In 1892 Morgan arranged the merger of Edison General Electric and Thomson-Houston Electric Company to form General Electric
= After financing the creation of the Federal Steel Company, he merged in 1901 with the Carnegie Steel Company and several other steel and iron businesses, including Consolidated Steel and Wire Company owned by William Edenborn, to form the United States Steel Corporation = first billion dollar economic enterprise
Jacob Riis, "How the Other Half Lives"
-Danish-American photographer accredited with "muckraking," calling to attention the extreme separation between wealth and poverty in NYC during the Industrial Era
-1890: the richest 1% of Americans received the same total income as the bottom half of the pop. and owned more property than the remaining 99%
-Wealthy Americans pursued aristocratic lifestyles: married into each other's families, attended social clubs/colleges
-1899: Thorstein Veblen = "The Theory of the Leisure Class", detailing conspicuous consumption and the life habits of the ultra-wealthy
="conspicuous consumption": spending money not on needed goods, but simply to demonstrate wealth
=Much of the urban public--especially those in NYC--lived in utter poverty: Matthew Smith's bestseller "Sunshine and Shadow in New York" opened with an engraving that contrasted the $2 mil dollar home of Alexander T. Stewart, with the slums
-In 1890, Jacob Riis offered a shocking account of living conditions of urban poor (How the Other Half Lives) = depicted apartments in dark, airless, overcrowded tenement houses
=Settlers flocked to the West in search of arable land, in spite of hostile Indian populations
=Gov't, eager to raise revenue, promoted legislation (Homestead Act); settlers purchased land from railroad companies and speculators
=Large numbers of immigrants in search of land provided ethnic diversity in the Middle Border = site of a new agricultural empire that produced wheat and corn for national and intl markets
=Farming on the Great Plains was challenging work=burdens fell on women and families, who would live in isolation for weeks
-Bonanza Farms = John Wesly Powell, geologist and surveyor of the Middle Border, warned that development there rested on the construction of large scale irrigation projects; only cooperative, communal farming could succeed
=bonanza farms: covered thousands of acres and employed large numbers of agricultural wage workers
=Family farms still dominated trans-Mississippi West
Battle of Little Bighorn (1876)
-White settlement resulted in the destruction of the Plains Indians
=Historic tensions between old Indian tribes and new Indian groups = persistent warfare took place between established tribes and newcomers
=Although most migrants on the Oregon and California trails encountered little conflict with the Indians, bloody conflicts began to arise between the army and the Plains tribes in the 1850s
=President Ulysses S. Grant announced "peace policy" in the west, with no effect; ex-Union generals like Philip H. Sheridan sought to destabilize the Indians by uprooting their culture= extinction of buffalo
=Nez Percé tribe leader, Chief Joseph, advocated for Indian rights, condemned the practice of confining Indians to reservations, and adopted the language of freedom in a speech he presented before a distinguished Washington audience
=June 1876: General Custer and his entire command of 250 men perished = Sioux and Cheyenne warriors, led by Sitting Bull and Crazy Horse, were defending tribal land
=Acted to preserve 1868 treaty that protected their lands for "as long as the grass will grow" = would not surrender until the mid-1880s
The Dawes Act (1887)
-Crucial step for attacking tribalism = named for Senator Henry L. Dawes (Mass), chair of the Senate's Indian Affairs Committee
=Act broke up land of nearly all tribes into small parcels to be distributed to Indian families= remainder auctioned off to white purchasers
=Sought to civilize Indians: Indians who adopted "habits of civilized life" would become full-fledged American citizens
=Disaster for Indians; white settlers profited
=Land rushes by white settlers occurred in throughout the 1890s
Elk v. Wilkins (1884)
=Laws were in place in the 1890s to help Indians assimilate into white society if they renounced their tribal heritage
-Supreme Court case=1884
-John Elk = a Winnebago Indian born on an Indian reservation and later resided among whites in the non-reservation U.S. territory in Omaha, Nebraska, where he renounced his former tribal allegiance and claimed citizenship by virtue of the Citizenship Clause.
=Western courts ruled that 14th and 15th amendments did not apply to Indians = SC agreed in Elk v. Wilkins, even though John Elk had left his tribe in Oklahoma and lived among white settlers in Nebraska
=Court questioned whether any Indian had achieved the degree of "citizenship" required by American citizens
The Ghost Dance
-Religious revitalization campaign reminiscent of the pan-Indian movements led by earlier prophets such as Neolin and Tenskwatawa
=Leaders foretold of a time when "whites would disappear, buffalo would return, and Indians could live in peace"
=Large numbers of Indians gathered for singing and dancing/religious observances
=Wounded knee massacre: the gov't sent troops to reservations, fearing a general uprising = December 29, 1890, troops killed between 150 and 200 Ghost Dancers encamped near Wounded Knee Creek in South Dakota
=Wounded knee massacre marked the end of 4 centuries of armed conflict between natives and European settlers and their descendants
1900: the Indian pop. had fallen to 250,000
Pendleton Civil Service Act (1883)
=A federal law established in 1883 that stipulated that government jobs should be awarded on the basis of merit.
=The act provided selection of government employees by competitive exams rather than ties to politicians or political affiliation.
=Illegal to fire or demote government employees for political reasons and prohibited soliciting campaign donations on Federal government property
=To enforce the merit system and the judicial system, the law also created the United States Civil Service Commission
= A crucial result was the shift of the parties to reliance on funding from business, since they could no longer depend on patronage hopefuls.
=The law applied only to federal government jobs: not to the state and local jobs that were the basis for political machines
Interstate Commerce Act (1887)
=Munn v. Illinois (1877): Upheld the constitutionality of an Illinois law that established a state board empowered to eliminate rate discrimination
=Nine years later (1886), in Wabash v. Illinois, the Court reversed its previous ruling: the federal gov't, not the states, could regulate railroads engaged in Interstate commerce
=Decision led to the passage of the Interstate Commerce Act (1887) = company emerged victorious in most cases brought before the SC
= Law that was designed to regulate the railroad industry, particularly its monopolistic practices.
- The Act required that railroad rates be "reasonable and just," but did not empower the government to fix specific rates.
- It also required that railroads publicize shipping rates and prohibited short haul or long haul fare discrimination, a form of price discrimination against smaller markets, particularly farmers.
=The Act created a federal regulatory agency, the Interstate Commerce Commission (ICC), which it charged with monitoring railroads to ensure that they complied with the new regulations
Sherman Antitrust Act (1890)
=First law to restrict monopolistic trusts and business combinations; extended by the Clayton Antitrust Act of 1914
=ICC: Ensured that the rates railroads charged farmers and merchants to transport their goods were fair and reasonable; railroads could not offer more favorable treatment to some shippers over others
=ICC (first federal agency to regulate economic activity) lacked the power to establish rates on its own: could only sue companies in court-little impact on railroad practices
=Sherman Antitrust Act (1890) = Banned combinations and practices that restrained free trade; language was vague
=Both laws helped the national gov't regulate the economy for the public good
=Idea of natural superiority of some races over others reemerged in the 1890s, backed by modern science = explained successes and failures of different races
-Charles Darwin (1859) published "Origin of Species" = survival of the fittest
=Darwin's language (i.e. "natural selection," "the struggle for existence," and the "survival of the fittest") entered public discussion during the Gilded Age
=Social Darwinism: Evolution was a natural process and government must not interfere (human society in nature)
=Condemned laws that benefitted the lower classes/struggling poor; social darwinists believed that giant corps had emerged because they were better suited to their environment than their predecessors: to restrict operations of these companies would reduce society to a primitive level
=William Graham Sumner = published What Social Classes Owe to Each Other (1883); no one was entitled to another person's aid; gov't existed to protect the property of men and the honor of women
=Laws of contract=labor contracts reconciled freedom and authority in the workplace
-Term adopted from the French: "let the people do as they choose"
-Described opposition to government action to regulate economic or personal behavior
=Most commonly used to describe a set of economic theories that supports maximum private freedom and minimal government interference in the economy.
=During the Gilded Age, laissez faire advocates argued that government involvement hindered economic development and distorted the natural and equitable forces of economic progress. Government intervention was considered tantamount to "class legislation"—an unjust and artificial reallocation of economic resources and power from one group to another.
The Social Gospel
=Social Darwinism and laissez-faire definitions of freedom under attack by labor movement and middle-class writers like George and Bellamy
=Protestant preachers concentrated on reprimanding individual sins like drinking and Sabbath-breaking; nothing immoral about the pursuit of riches
=Gospel of Wealth=Protestant take on liberty of contract
=Social Gospel Movement=Took shape in the writings of Walter Rauschenbusch, Baptist minister in NY; Washington Gladden, Congregational minister in Columbus, Ohio; et al
=Originated as an effort to reform Protestant churches: expanding their appeal in poor neighborhoods and making them attentive to era's social needs
=Established missions and relief organizations: alleviate poverty, combat child labor, better working-class housing
=Worked with Knights of Labor and other groups demanding better health and safety regulations
=Catholic movement to aid social reform
-Middle class reformer=dissatisfied with social conditions in the Gilded Age
=John Mashall Harlan (USSC justice) spoke of a "new kind of slavery"; result of capital in the hands of a few
=Major author of utopian or cataclysmic novels=social conflict would either end in new, harmonious order or total catastrophe
=Sought to expose unequal distribution of wealth
="Progress and Poverty" (1879) = book began with statement of a problem--the growth of "squalor" and "misery"
-Posed solution: "single tax"=so high that it would prevent speculation in both urban and rural land
=Old word problems reaching the new world
=Worked as anti-slavery newspaper editor during the 1850s and 60s
=Ran for mayor of NYC in 1886=bring attention to single tax on land; received 70,000 votes, but placed second to Democrat Adam Hewitt
-Writer, activist, middle class reformer=dissatisfied with social conditions during the Gilded Age
=Published "Looking Backward" (1888)=utopian
=Succeeded Laurence Gronlund's "The Cooperative Commonwealth" = began process of socialism's Americanization
=Lived entire life in small, industrial city of Chicopee Falls, Mass.
=Promoted socialist ideas in "Looking Backward"
=Main character in "Looking Backward" falls asleep in the 19th cent., waking up in the year 2000=world where the corp. has replaced class strife, "excessive individualism," and cutthroat competition
=Inequality has been banished; freedom, Bellamy insisted, was a social condition, resting on interdependence, not autonomy
=Utopian: material abundance w/o inequality
Terrence Powderly and the Knights of Labor
-New wave of labor organizing; Knights were the first group to organize unskilled workers as well as skilled workers; women and men; blacks and whites
-Group reached a peak in 1886 (800,000 members) and involved millions of workers in strikes, boycotts, political action, and education and social reform
=Social conditions of the 1880s needed drastic change
=Terrence V. Powderly: Leader of the Knights of Labor
=Launched attack on social Darwinism and labor of contract
=Political corruption and unrestrained economic growth: Americans had lost control of economic livelihoods
=Remedy: to create a basic set of economic rights for all Americanc
Sam Gompers and the AFL
=Gompers: English-born American cigar-manufacturer and labor organizer
=American Federation of Labor: Founded in 1881 as a federation of trade unions composed of mostly skilled, white, native-born workers
=Formed as the Knights of Labor began to decline
=Pullman and Homestead strikes proved ineffective: Sam Gompers advocated that labor unions should not seek economic independence or pursue the Knight's utopian dream of creating a "cooperative commonwealth"; labor movement should devote itself to negotiating with employers for better working conditions and higher wages
=Labor movement on the rise in the 1890s: Gompers embraced "freedom of contract"
=AFL represented skilled laborers--unlike the Knights of Labor which represented a wide variety of skill-sets and races
=Centered on sectors of the economy
Great Railroad Strike (1877)
The Great Railroad Strike of 1877, sometimes referred to as the Great Upheaval, began on July 14 in Martinsburg, West Virginia, United States and ended some 45 days later, after it was put down by local and state militias, and federal troops. Labor unions were not involved; these were spontaneous outbreaks in numerous cities of violence against railroads
Haymarket Square Riot (1886)
The Haymarket affair (also known as the Haymarket massacre or Haymarket riot) refers to the aftermath of a bombing that took place at a labor demonstration on Tuesday May 4, 1886, at Haymarket Square in Chicago. It began as a peaceful rally in support of workers striking for an eight-hour day. An unknown person threw a dynamite bomb at police as they acted to disperse the public meeting. The bomb blast and ensuing gunfire resulted in the deaths of seven police officers and at least four civilians; scores of others were wounded.
=Police raided offices of labor leaders; jury convicted "Haymarket martyrs"=four hanged, one committed suicide in prison
=Employers portrayed the labor movement as un-patritotic and dangerous
Homestead Strike (1892)
The Homestead Strike, also known as the Homestead Steel Strike, was an industrial lockout and strike which began on June 30, 1892, culminating in a battle between strikers and private security agents on July 6, 1892. The battle was one of the most serious disputes in U.S. labor history, second only to the Battle of Blair Mountain. The dispute occurred at the Homestead Steel Works in the Pittsburgh area town of Homestead, Pennsylvania, between the Amalgamated Association of Iron and Steel Workers (the AA) and the Carnegie Steel Company. The final result was a major defeat for the union and a setback for efforts to unionize steelworkers.
Pullman Strike (1894) and Eugene Debs
=Workers in the company-owned town of Pullman, Illinois--where railroad sleeping cars were manufactured--called a strike to protest a reduction in wages
=Strike continued, upset national rail service: Grover Cleveland's Attorney General, Richard Olney, obtained a federal court injunction ordering the men back to work
=Violent clashes between federal troops and strikers occurred at railroad centers, leaving 34 persons dead
=Strike collapsed when the union's president, Eugene Debs was jailed for contempt of court for violating the judicial order
=In re Debs: SC unanimously confirmed the sentences and approved use of injunctions against striking labor unions
Munn v. Illinois (1877)
=Social Darwinism gave rise to idea of liberty of contract: Contracts reached between individuals prevented the gov't or labor unions from complaining about loss of freedom/worker's rights = right of laborer to choose his own employment and working conditions; entrepreneur's right to utilize property as he saw fit
=For decades, courts viewed state regulation of business--(i.e. laws regulating maximum hours of work and working conditions--as an insult to free labor
=Munn v. Illinois: SC was, at first, willing to accept laws regulating enterprises that represented a significant "public interest"
=Upheld the constitutionality of an Illinois state law that established a state board to eliminate railroad rate discrimination and set maximum charges
Wabash v. Illinois (1886)
-Nine years after Munn
-Court reversed ruling: only the federal gov't, not states, could regulate railroads engaged in interstate commerce, as all important lines were
=Decision led to passage of Interstate Commerce Act (1887)
Santa Clara Case (1886)
US v. E.C. Knights (1895)
=Courts typically sided with business enterprises that complained of a loss of economic freedom
=SC ruled that the Sherman Antitrust Act (1890)--which barred combinations in restraint of trade--could not be used to break up a sugar refining monopoly
=Constitution empowered Congress to regulate commerce, but not manufacturing
=Sherman Act--intended to prevent business mergers that stifled competition--was used by judges to issue injunctions prohibiting strikes=interfered with freedom of trade
Following the example set by the Grange, the Farmers Alliance was founded in Texas in 1876 to address the problems confronting American farmers during the second half of the nineteenth century. The Alliance formed equipment and marketing cooperatives, encouraged federal regulation of the railroads, and developed a plan for government storage and credit facilities, labeled regional subtreasuries, that would loan farmers money while they waited for crop prices to rise. In 1892, Farmers' Alliance leaders joined others farmer advocates in calling for a third party leading to the founding of the Populist or People's Party.
=Only Democrat to be elected during a time of Republican political dominance (1861-1913)
=Leader of pro-business "Bourbon Democrats"= opposed high tariffs, free silver, inflation, subsidies to famers
=Relentlessly fought corruption, patronage, and bossism
=Panic of 1893 ruined his Democratic Party=opened way for Republican landslide in 1894
=Formidable policy maker, drew harsh criticism: put down Pullman Strike of 1894 (angered labor unions) and opposed free silver
The People's Party
The Populists, or People's Party organized during the 1890s to secure political and economic reforms benefitting farmers and, to a lesser extent, industrial workers. The party ran its first presidential candidate in 1892 and adopted a platform calling for increased government regulation of the railroads, the substitution of income taxes for property taxes, the creation of government storage and credit facilities, labeled regional subtreasuries, that would loan farmers money while they waited for crop prices to rise.
=Price of cotton plummeted after the Civil War (from 11 cents in 1881-4.6 cents in 1894)=American cotton production languished, rapid expansion of cotton in Egypt, India, and Brazil
=Farmers, unable to pay mortgages on property, believed that their plight came out of the high freight rates, excessive interest rates for loans from merchants and bankers, and the fiscal policies of the federal gov't
=Farmer's alliance=largest labor movement in the 19th century; farmers sought to regain independence and stabilize their declining condition (founded in Texas in the 1870s)
=Alliance initially remained aloof from politics=attempted to improve rural conditions by the cooperative financing and marketing of crops
=Evolved into the People's Party early in the 1890s = spoke for all "producing classes"
-major base lay in the cotton and wheat belts of the South and West
="Cyclone Davis" and education campaign
=Last great political expression of the 19th cent vision of America as a commonwealth of small producers
Omaha Platform (1892)
=Political platform of the Populist party, written by Ignatius Donnelly--Minnesota editor and former Radical Republican of Congress during Reconstruction
=Spoke of: the effect of political corruption on the nation; economic inequality
=Called opponents "possessors who despise the republic and endanger liberty" = hyperbole
=Platform put forward a long list of proposals to restore democracy and economic opportunity
-direct election of US senators, gov't control of the currency, a graduated income tax, a system of low-cost public financing to enable farmers to market crops, a recognition of the right of workers to form labor unions
=Populists called for public ownership of railroads to guarantee farmers inexpensive access to markets for their crops
Panic of 1893
=Serious economic depression = marked by a collapse of railroad overbuilding and shaky railroad infrastructure, causing a series of bank failures
=One of the causes for the Panic of 1893 can be traced back to Argentina. Investment was encouraged by the Argentinean agent bank, Baring Brothers. However, a failure in the wheat crop and a coup in Buenos Aires ended further investments. This shock started a run on gold in the U.S. Treasury, as investors were cashing in their investments.
=The Free Silver movement arose, gaining support from farmers (who sought to invigorate the economy and cause inflation, thus allowing them to repay their debt with cheaper dollars) and mining interests (who sought the right to turn silver directly into money)
William Jennings Bryan
=Democrats and Populists stood behind William Jennings Bryan
-36 year old congressman from Nebraska, Bryan won Democratic nomination after delivering an electrifying speech that included a strong pro-farmer sentiment
=Called for the "free coinage" of silver
=Condemned the gold standard, invoked Biblical language and imagery
=Advocated that the increasing amount of currency in circulation would raise the prices farmers received for their crops and make it easier for them to pay off debts
=Wrested control from Grover Cleveland, who had been a long-time supporter of businessmen
=Strongly influenced by Social Gospel movement
This referred to the proposal advanced by the Populists and other currency reformers interested in expanding the nation's money supply. While fiscal conservatives argued that all currency should be backed by gold, ensuring a limited supply of money with a certain, fixed value, others suggested that the money supply should be expanded through the introduction of "greenbacks" or the unlimited coining of silver. Free silver proponents generally suggested that silver should be valued at a ratio of 16 to 1—sixteen ounces of silver would equal one ounce of gold.
Election of 1896
=Republicans opposed gold standard, nominated William McKinley
=First modern election=Republicans (Mark Hanna as chief political organizer and director for McKinley) raised $10 mil; distributed buttons and pamphlets; advertising became key
=Bryan=Democratic candidate who supported farmers and "free silver"
=Sectional divides: Bryan carried the South and West and receive 6.5 mil votes; McKinley carried the more populous industrial states of the Northeast and Midwest, attracting 7.1 mil votes
=The Wonderful Wizard of Oz (L. Frank Baum, 1900) offered commentary on election of 1896 and its outcome
=Last election with high voter turnout
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