The Gilded Age 1877-1890

CHA3U

The Gilded Age

• Mark Twain dubbed the late 19th Century – The Gilded Age

• Glittering on the surface, but corrupt underneath

• Era of corruption, unfettered capitalism, conspicuous consumption

The Second Industrial Revolution• Gilded Age rooted in industrialization• American manufacturing production surpassed

that of France, England and Germany combined• Railroad mileage 3x b/w 1860-80 – opened new

areas to commercial farming, coal mining and steel production

• The need for capital by the railways meant the consolidation of the nations financial market on Wall St.

Trusts• By 1900, economic concentration had resulted

in industries being by a handful of large corporations – Trusts (steel, oil, sugar, meatpacking, etc)

• John D. Rockefeller created Standard Oil• U.S. Steel – the first billion dollar corporation • Formed by financier J.P. Morgan who

consolidated steel firms of Andrew Carnegie

The “Robber Barons”

• Term critics used to describe bankers and industrialists who dominated their respective industries while amassing personal fortunes

• Rockefeller – America’s first billionaire and the richest person in history

• Standard Oil of Ohio (1870)

How he did it!

• Backroom deal w/ railroads – rebates• Buy competing refineries• Increase efficiency• Rebates from rail co.• Discount his oil• Undercut competitors• Buy out competitor by threatening to run them to

bankruptcy• In two months alone bought of 22 of 26

competitors in Ohio

Monopoly

• Standard Oil gained almost complete control over refining and marketing oil

• Against the law to incorporate in one state and operate in others

• 1882 – Rockefeller finds loophole and creates a centralized corporation to control and centralize all his holdings

• Stand Oil Trust is created

Standard Oil

• Consumers love them – Competitors hate them

• Dropped price of kerosene from 58 cents to 26 cents b/w 1865-1870

• Aggressive business practices – would allow competitors pipeline to built over their railway

• Leads to Sherman Anti-Trust Act (1890)

Robber Barons – The Richest Men in History

• 1st - Rockefeller – $330 billion

• 2nd - Carnegie - $309 billion

• 4th - William Vanderbilt - $240 billion (Railways)

• 6th - Andrew Mellon - $195 billion (Gulf Oil)

Politics

• Post Civil War – the best and brightest no longer entered politics, but business

• Era marked by widespread political corruption• Birth of the political machines – party-linked

political organization that maintained power by controlling votes, the courts and the police

• Graft - Unscrupulous use of one's position to derive profit or advantages; extortion

“Boss” Tweed

• William M. Tweed• Head of Tammany Hall –

Democrat Party Machine in N.Y.

• controlled business, politics, law enforcement

• “Bosses” got rich• Stole b/w $75 – 200

million from N.Y. taxpayers

“Boss” Tweed• Tweed had contractors submit inflated invoices for

work that was never done• Tweed Courthouse – cost $13 million to construct,

actual cost was $3 million• Thomas Nast – father of American editorial

cartoon• Nast’s drawings instrumental in Tweed Ring’s

downfall• Tweed offered Nast a $500 000 bride to stop the

cartoons• Tweed found guilty of embezzlement and died in

prison

Nast – “The Brains”

Nast – “That’s What’s The Matter”

Corruption

• Explosion of lobbyists after the Civil War• Lobbyists – paid to represent a company

or a special interest group • Influence through donations and bribes• Crédit Mobilier (CM) of America Scandal

(1872) involved the Union Pacific Railroad and the CM construction company

• $72 million had been given to CM for building a rail worth $53 million

Crédit Mobilier of America Scandal

• Gave cheap shares of stock to members of Congress who agreed to support extra funding (including future President Garfield)

• Badly tainted the Presidency of Ulysses S. Grant

Stalwarts

• Rutherford B. Hayes declines to run for a second term

• Republicans split b/w Stalwarts and Halfbreeds

• Stalwarts – traditional Republicans in favour of party machine and spoils system who opposed Hayes civil service reform and wanted to nominate Grant for a third term

Halfbreeds

• Opponents of Stalwarts• Opposed nominating Grant• In favour of civil service reform and merit

system• Led by Senator James G. Blaine (Maine) • Factions settle on a compromise

candidates – President - James Garfield (Halfbreed) and Vice-President Chester A. Arthur (Stalwart)

President Garfield (1881)

• 20th President• Defeated Civil War

General Winfield Scott Hancock

• Served 6 months and 15 days

• Named Blaine his Sec. of State

Garfield’s Assassination

• Charles Guiteau believed that Garfield owed him for his narrow election victory

• Asked for an ambassadorship – rejected

• “You and the Republican Party will come to grief”

Garfield’s Assassination

• Stalked Garfield over summer

• July 2, 1881 - Waited at train station for Garfield to leave on vacation

• Shot Garfield at point blank range - bullet lodged in his spine

• “I am a Stalwart of the Stalwarts...Arthur is President now!”

Garfield’s Death

• Garfield survived• Grew seriously ill from blood poisoning

and infection as doctors repeatedly tried to find the bullet – using dirty fingers and unsterilized instruments

• Died 80 days after the shooting• Chester A. Arthur sworn in as President• Guiteau executed

Pendleton Civil Service Reform Act (1883)

• Drafted by Arthur Administration as response to Garfield's assassination

• Placed most government employees on the merit system

• End of the "spoils system“

• Only applied to federal government

• Civil service based on expertise and not politics