Gilded Age Politics: The Baby Walked Today
Politics during the Gilded Age was an odd affair, out of place with the politics we practice today in both style and substance. Unlike today, elections were treated like holidays, election speeches were cause for community celebrations like barbeques, and most everyone who could (remember this does not include women) voted. The issues that concerned Americans were very different. If this time period had had its own Daily Show with Jon Stewart, Stewart would be cracking wise on the tariff instead of congressional inaction. Even though the politics is quite foreign, it is also a critical period that introduces tentative solutions to those entrenched problems created by the experience of industrialization. Once these solutions prove somewhat workable, a consensus builds and the government and society we know begins to form.
Background
Although decades in the making, industrialization peaks during this period and the impact of myriad, rapid changes creates political crises. Corporations and industry have grown to a scale that has no other counterbalance in society. Many believe that industry has manipulated the political process, making a mockery of democracy. The social impact of industrialization changed where people work, how they work, and their ways of living. The economic transformation creates a powerful and large economy that benefits the middle class but also introduces extreme wealth and even more extreme poverty. Criticism and warnings come from the fringes of society. Early efforts to organize voluntary, collective organizations of workers and farmers have disappointing results.
National Issues
Corporate behavior, currency reform, the tariff, and government employment were the dominant issues in the elections, papers, and editorial cartoons during the late 1800s. All of these issues were present because of the impact of industrialization. A theme that underscores these issues is that of wealth and its fair distribution. Workable solutions would be devised for some of these issues while others would have to wait until the early 1900s.
Political parties were one source for proposals for dealing with these issues. The major parties were the Democrats and the Republicans. Generally, the Democrats had their base of support in the South and West and amongst farmers and workers. Republicans viewed their party as the party that protected business. Their base of support was in the Northeast and amongst business owners and professional classes. The parties’ approaches to these issues were very different because of their very different supporters. Usually, Democrats supported low tariffs, an increased money supply, and strong efforts to deal with corporate misdeeds. Republicans usually wanted higher tariffs, a decreased money supply, and a hand’s off approach to business.
Since the time of Andrew Jackson, the appointment of government employment and rewarding of contracts was called the “Spoils System” (based on the old idiom, “To the victor go the spoils”). Every time a new election was held, the winners would fire the old office holders and replace them with their supporters. The parties loved this system because, once in office, government employees were assessed a contribution to the party that helped them to get the job. This is how the parties made their money back then. By the 1880s, this method had developed some major flaws. The transformation of industrialization increased the number of positions in government that required real expertise and knowledge especially in those departments dealing with science, engineering, and health. Being the guy who managed to convince 18 people to vote for the right candidate is great but it does not equip the guy with the knowledge to build a tunnel through a mountain. The facts that elections were held at regular, brief intervals and both parties were evenly divided meant that if that guy ever managed to figure how to build that tunnel, he would be fired in the next election and a different, completely unqualified person would replace him. Presidents despised this system as they often spent six or more hours a day writing appointments for office-seeking supporters.
Then, one day in 1881, Charles Guiteau shot President James Garfield after a mere four months in office. Guiteau was convinced Garfield owed him a job in the diplomatic corps. How assassinating a president was going to make that happen is probably a question Guiteau should have considered before killing Garfield. Good legislation can occasionally come from a tragedy, and in this case, an Ohio Congressman named George Pendleton sponsored a bill that introduced significant civil service reform. The bill established a permanent Civil Service Commission that developed ways to make spoils positions into merit positions. It made 14, 000 jobs merit positions. It granted the President the authority to expand merit positions. This was a good idea because at the end of a term, the President would move many jobs out of the spoils system in order to protect the supporters he appointed using the old system. The old system did not go away, but it slowly eroded. Before 1883, when the Pendleton Act was passed, only 10% of government jobs were merit positions. By 1900, 40% were.
An issue that received great attention then and has been largely forgotten today is the tariff. A tariff is a tax on imports from other countries. Governments will use tariffs for a few reasons, the main ones being to raise money and to protect their producers from competition from people from other countries who are able to make their products more cheaply. The tariff rates had been high because no one ever reduced from the Civil War rates that had been put in place to make money. The federal government during this time spent very little money and its entire budget was funded through the tariff with extra money to spare. Back then, the federal government actually made more money than it spent, which is called a surplus. Those don’t happen to anyone anymore—they are like unicorns. Anyway, many people, particularly those who needed to buy a lot of stuff and did not own businesses that needed to be protected from foreign competition thought that taxing products meant that they had to pay higher prices (they were right). They thought the tariff rates were too high. Others, who did own business, preferred the tariffs that were on the products that competed with them should definitely stay high.
Although people argued about it and tried a couple of times to lower rates, it never worked. One time, when they got together to lower rates, they actually made them go up. The reason is pretty simple. Everyone wanted lower rates on anything that did not affect any industries in their neighborhood, and then they wanted really high protective tariffs for those businesses that affected their communities and lives. So people would argue for higher tariffs on products they cared about and then makes deals to support other people’s products if they could get support in return. It was like a really boring reality show. The tariff was like Big Brother meets CSPAN.
Another wildly popular issue, one that created a massive amount of ill will between regular citizens was currency reform. Currency means money. Currency reform is about how the government is going to use money. Since the government has the authority to make money, it has the power to decide who benefits from fiscal (also having to do with money) policy. The government can decide to put very little money in circulation. Since there is less money that means each individual dollar becomes that more precious and hard to come by. People who had once taken out loans when there was more money flowing in the economy now find it really difficult to find enough money to pay their debts. This effect is that everything becomes more expensive, even though the prices may stay the same or even go down. This is called deflation and the best example of this is the gold standard. The gold standard means that the United States will take a paper dollar is equal to a dollar in gold. This deflates the money supply because there is only so much gold. People who are owed money like a deflated currency because each individual dollar is more precious and hard to come by.
One way to think of it is this: Imagine candy at Halloween. You have a ton of it. You spend wildly with your Reese’s peanut butter cups, bribing your sister to keep quiet about certain exams she is aware you flunked. You pay off your brother to take your turn at washing dishes even though he does not use any soap. In a couple of weeks, that will all change. As you have depleted your pile and pilfered what you can from your siblings, now YOU are trying to increase your candy supply by negotiating your sister taking your Xbox and playing girl games the whole weekend for a couple of twix because you promised a week and a half ago that you would give the neighbor kid a bunch of candy if he let you ride his little tiny motorcycle.
Deflation is hard on debtors. Debtors in this country at the time were very often farmers and workers. Debtors frequently propose an inflation of the money supply. There are a few way to do this. During the 1880s, the US was actually on a bimetal standard, which meant that they should have been backing money with both gold and silver, but the major politicians during this time, tending to come from the class in which one was owed, were a bit skittish about doing this. So they just let the silver stack up in the vaults. In the 1880s, different groups will began arguing that the money supply needs to be inflated. Farmer’s Alliance members will strongly support this measure. They will not meet success and a decade of frustration will lead to the creation of the Populist Party in 1890, which is a big darn deal for a few reasons (next time, though).
Although nothing is done regarding currency reform, the country does make tentative steps toward finding a check against business. States had been experimenting with various efforts to intervene in the economy in order to prevent some of the worst abuses. One way was to regulate certain aspects of a business’ activities, for example how much it can charge. A case went to the Supreme Court in the 1880s that resulted in the decision that only Congress has the authority to regulate interstate commerce. Congressmen, considering the anger of their constituents on this matter and the reality of upcoming elections, passed the Interstate Commerce Act in 1887. The act established the Interstate Commerce Commission and the commission is allowed to investigate and prosecute instances of unjust rates, discrimination, the giving of rebates, and secret agreements between competitors. All of this sounded really great during election speeches. What the incumbents did not share was that the law was exceedingly weak. In order to get the businesses they were regulating to follow their orders, they had to go through the court system, up to and including the Supreme Court. The Supreme Court at that time was officially and undeniably stodgy old men (except for one guy) who belonged to an earlier age—the dark ages. In the first 16 cases the ICC brought before the Supreme Court they lost 15.
Another act that was passed for election credibility was the Sherman Anti Trust Act, passed in 1890. This act forbids trusts, monopolies, and corporate actions that get in the way of competition. In other words, companies that should be competing with each other cannot cooperate. This was a very weak law. The law was again dependent upon the view of the Supreme Court. The American Sugar Refining Company was sued under the act. They controlled 98% of the nation’s refinery capacity. The Supreme Court did not consider this a violation of the Sherman Act and found in their favor. It was also not used that much. The executive branch only brought 18 suits in the decade following passage and four of them were directed at labor unions (definitely NOT the intended target of the authors of the bill).
The practical impact at the time of these two acts was pretty much nil. However, the very fact of their existence signified a major shift in how the government dealt with the economy. The government had made its first step toward regulating parts of the economy. Many people supported this idea and many more would come to support it soon enough, once the commission and law had a few successes. Quickly, the government would increase its active involvement in the economy and begin taking on the size, roles, and characteristics of the government we know today. With the Interstate Commerce Act and the Sherman Anti-Trust Act, not only would the laws become strengthened under future presidents, but they would point the way to a workable check on the worst excesses of what industrialization had wrought.
Background
Although decades in the making, industrialization peaks during this period and the impact of myriad, rapid changes creates political crises. Corporations and industry have grown to a scale that has no other counterbalance in society. Many believe that industry has manipulated the political process, making a mockery of democracy. The social impact of industrialization changed where people work, how they work, and their ways of living. The economic transformation creates a powerful and large economy that benefits the middle class but also introduces extreme wealth and even more extreme poverty. Criticism and warnings come from the fringes of society. Early efforts to organize voluntary, collective organizations of workers and farmers have disappointing results.
National Issues
Corporate behavior, currency reform, the tariff, and government employment were the dominant issues in the elections, papers, and editorial cartoons during the late 1800s. All of these issues were present because of the impact of industrialization. A theme that underscores these issues is that of wealth and its fair distribution. Workable solutions would be devised for some of these issues while others would have to wait until the early 1900s.
Political parties were one source for proposals for dealing with these issues. The major parties were the Democrats and the Republicans. Generally, the Democrats had their base of support in the South and West and amongst farmers and workers. Republicans viewed their party as the party that protected business. Their base of support was in the Northeast and amongst business owners and professional classes. The parties’ approaches to these issues were very different because of their very different supporters. Usually, Democrats supported low tariffs, an increased money supply, and strong efforts to deal with corporate misdeeds. Republicans usually wanted higher tariffs, a decreased money supply, and a hand’s off approach to business.
Since the time of Andrew Jackson, the appointment of government employment and rewarding of contracts was called the “Spoils System” (based on the old idiom, “To the victor go the spoils”). Every time a new election was held, the winners would fire the old office holders and replace them with their supporters. The parties loved this system because, once in office, government employees were assessed a contribution to the party that helped them to get the job. This is how the parties made their money back then. By the 1880s, this method had developed some major flaws. The transformation of industrialization increased the number of positions in government that required real expertise and knowledge especially in those departments dealing with science, engineering, and health. Being the guy who managed to convince 18 people to vote for the right candidate is great but it does not equip the guy with the knowledge to build a tunnel through a mountain. The facts that elections were held at regular, brief intervals and both parties were evenly divided meant that if that guy ever managed to figure how to build that tunnel, he would be fired in the next election and a different, completely unqualified person would replace him. Presidents despised this system as they often spent six or more hours a day writing appointments for office-seeking supporters.
Then, one day in 1881, Charles Guiteau shot President James Garfield after a mere four months in office. Guiteau was convinced Garfield owed him a job in the diplomatic corps. How assassinating a president was going to make that happen is probably a question Guiteau should have considered before killing Garfield. Good legislation can occasionally come from a tragedy, and in this case, an Ohio Congressman named George Pendleton sponsored a bill that introduced significant civil service reform. The bill established a permanent Civil Service Commission that developed ways to make spoils positions into merit positions. It made 14, 000 jobs merit positions. It granted the President the authority to expand merit positions. This was a good idea because at the end of a term, the President would move many jobs out of the spoils system in order to protect the supporters he appointed using the old system. The old system did not go away, but it slowly eroded. Before 1883, when the Pendleton Act was passed, only 10% of government jobs were merit positions. By 1900, 40% were.
An issue that received great attention then and has been largely forgotten today is the tariff. A tariff is a tax on imports from other countries. Governments will use tariffs for a few reasons, the main ones being to raise money and to protect their producers from competition from people from other countries who are able to make their products more cheaply. The tariff rates had been high because no one ever reduced from the Civil War rates that had been put in place to make money. The federal government during this time spent very little money and its entire budget was funded through the tariff with extra money to spare. Back then, the federal government actually made more money than it spent, which is called a surplus. Those don’t happen to anyone anymore—they are like unicorns. Anyway, many people, particularly those who needed to buy a lot of stuff and did not own businesses that needed to be protected from foreign competition thought that taxing products meant that they had to pay higher prices (they were right). They thought the tariff rates were too high. Others, who did own business, preferred the tariffs that were on the products that competed with them should definitely stay high.
Although people argued about it and tried a couple of times to lower rates, it never worked. One time, when they got together to lower rates, they actually made them go up. The reason is pretty simple. Everyone wanted lower rates on anything that did not affect any industries in their neighborhood, and then they wanted really high protective tariffs for those businesses that affected their communities and lives. So people would argue for higher tariffs on products they cared about and then makes deals to support other people’s products if they could get support in return. It was like a really boring reality show. The tariff was like Big Brother meets CSPAN.
Another wildly popular issue, one that created a massive amount of ill will between regular citizens was currency reform. Currency means money. Currency reform is about how the government is going to use money. Since the government has the authority to make money, it has the power to decide who benefits from fiscal (also having to do with money) policy. The government can decide to put very little money in circulation. Since there is less money that means each individual dollar becomes that more precious and hard to come by. People who had once taken out loans when there was more money flowing in the economy now find it really difficult to find enough money to pay their debts. This effect is that everything becomes more expensive, even though the prices may stay the same or even go down. This is called deflation and the best example of this is the gold standard. The gold standard means that the United States will take a paper dollar is equal to a dollar in gold. This deflates the money supply because there is only so much gold. People who are owed money like a deflated currency because each individual dollar is more precious and hard to come by.
One way to think of it is this: Imagine candy at Halloween. You have a ton of it. You spend wildly with your Reese’s peanut butter cups, bribing your sister to keep quiet about certain exams she is aware you flunked. You pay off your brother to take your turn at washing dishes even though he does not use any soap. In a couple of weeks, that will all change. As you have depleted your pile and pilfered what you can from your siblings, now YOU are trying to increase your candy supply by negotiating your sister taking your Xbox and playing girl games the whole weekend for a couple of twix because you promised a week and a half ago that you would give the neighbor kid a bunch of candy if he let you ride his little tiny motorcycle.
Deflation is hard on debtors. Debtors in this country at the time were very often farmers and workers. Debtors frequently propose an inflation of the money supply. There are a few way to do this. During the 1880s, the US was actually on a bimetal standard, which meant that they should have been backing money with both gold and silver, but the major politicians during this time, tending to come from the class in which one was owed, were a bit skittish about doing this. So they just let the silver stack up in the vaults. In the 1880s, different groups will began arguing that the money supply needs to be inflated. Farmer’s Alliance members will strongly support this measure. They will not meet success and a decade of frustration will lead to the creation of the Populist Party in 1890, which is a big darn deal for a few reasons (next time, though).
Although nothing is done regarding currency reform, the country does make tentative steps toward finding a check against business. States had been experimenting with various efforts to intervene in the economy in order to prevent some of the worst abuses. One way was to regulate certain aspects of a business’ activities, for example how much it can charge. A case went to the Supreme Court in the 1880s that resulted in the decision that only Congress has the authority to regulate interstate commerce. Congressmen, considering the anger of their constituents on this matter and the reality of upcoming elections, passed the Interstate Commerce Act in 1887. The act established the Interstate Commerce Commission and the commission is allowed to investigate and prosecute instances of unjust rates, discrimination, the giving of rebates, and secret agreements between competitors. All of this sounded really great during election speeches. What the incumbents did not share was that the law was exceedingly weak. In order to get the businesses they were regulating to follow their orders, they had to go through the court system, up to and including the Supreme Court. The Supreme Court at that time was officially and undeniably stodgy old men (except for one guy) who belonged to an earlier age—the dark ages. In the first 16 cases the ICC brought before the Supreme Court they lost 15.
Another act that was passed for election credibility was the Sherman Anti Trust Act, passed in 1890. This act forbids trusts, monopolies, and corporate actions that get in the way of competition. In other words, companies that should be competing with each other cannot cooperate. This was a very weak law. The law was again dependent upon the view of the Supreme Court. The American Sugar Refining Company was sued under the act. They controlled 98% of the nation’s refinery capacity. The Supreme Court did not consider this a violation of the Sherman Act and found in their favor. It was also not used that much. The executive branch only brought 18 suits in the decade following passage and four of them were directed at labor unions (definitely NOT the intended target of the authors of the bill).
The practical impact at the time of these two acts was pretty much nil. However, the very fact of their existence signified a major shift in how the government dealt with the economy. The government had made its first step toward regulating parts of the economy. Many people supported this idea and many more would come to support it soon enough, once the commission and law had a few successes. Quickly, the government would increase its active involvement in the economy and begin taking on the size, roles, and characteristics of the government we know today. With the Interstate Commerce Act and the Sherman Anti-Trust Act, not only would the laws become strengthened under future presidents, but they would point the way to a workable check on the worst excesses of what industrialization had wrought.