APUSH6 - APUSHistoryHardee

AP US HISTORY “SETTLING THE WEST AND BECOMING AN INDUSTRIAL SOCIETY” Unit 6

FOCUS ON WHILE READING:  Role

of the State and Federal Government in promoting Big Business  The Rise of the Corporation  Support and Opposition to Laissez-Faire Economics  Rise of Labor Unions  Supreme Court Cases that affected Labor Unions and the Growth of Big Business.

INTRODUCTION TO INDUSTRIALIZATION In 1877, most of the nation’s population was still living in agricultural areas, with few major urban exceptions.  By 1900 the urban population of the United States had grown by three times that of just thirty years earlier.  By 1920 more Americans lived in the cities than on farms representing a major cultural shift in national social norms.  A first time visitor to New York City may find himself in awe of the new marvels of city life, but would also soon become acquainted with the “dark side” of urbanization. 

UNIT 6.1: THE RISE OF INDUSTRIALIZATION IN AMERICA What signs pointed to the growth of the United States as an industrial powerhouse?  How did American industrialization branch out from New England and impact every region of the United States?  What role did the Government play in the industrialization of the United States?  Who were the “Captains of American Industry” that spawned the rise of the Corporation in the United States? 

UNIT 6.1: THE RISE OF INDUSTRIALIZATION IN AMERICA 

What signs pointed to the growth of the United States as an industrial powerhouse? 

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Gross National Product increased by 56% between 1869 and 1913. Due to new technological developments production of wheat and corn had grown by 200% between 1860 and 1900. Coal production increased by 2000% Petroleum production was up 9000% Steel production up 10,000% Over 150,000 miles of new railroad track was laid between 1865 and 1895 By 1910 the United States accounted for 1/3 of the world’s manufacturing capacity.

UNIT 6.1: THE RISE OF INDUSTRIALIZATION IN AMERICA 

How did American industrialization branch out from New England and impact every region of the United States? Steel and Lumber production made Birmingham, Alabama and Memphis, Tennessee the jewels of the “New South”.  Availability of cheap labor, resistance to labor organizations, acceptance of capitalism, and well-developed transportation and communication systems helped industrialize the South.  Cattle Ranching, Mining, the growth of the Transcontinental Railroad allowed the west to industrialize during this period. 

UNIT 6.1: THE RISE OF INDUSTRIALIZATION IN AMERICA 

What role did the Government play in the industrialization of the United States?  

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Very important was the protective tariff imposed by the Federal Government (The Morrill Tariff) The Federal and State governments initiated a boom in Railroad construction through land grants and loans. (The Pacific Railroad Act) By encouraging the settling of the west the Federal Government created a national market for Eastern manufactured goods. (The Homestead Act of 1862). The Federal Government’s loose immigration policies created a large pool of unskilled workers, but by consequence drove down wages and inspired intense nativism. The Federal Government left large-scale business virtually untaxed to encourage investment and development. State and Federal Court systems were used to prevent regulation of Big Business. (“The Supreme Court became the handmaiden of private enterprise”) Trade Unions were suppressed.  

The Supreme Court fortified protection of private enterprise under the “due process” shield of the 5th Amendment The Police, National Guard, and U.S. Military was also used to suppress Union activities.

UNIT 6.1: THE RISE OF INDUSTRIALIZATION IN AMERICA 

Who were the “Captains of American Industry” that spawned the rise of the Corporation in the United States? A poor, Scottish immigrant, Andrew Carnegie soon came to dominate the Steel Industry.  Carnegie built his monopoly through “vertical integration” buying up all of the components necessary for the production and distribution of steel.  After selling his company to J.P. Morgan he retired and became a philanthropist (he was the poster-child for a Captain of Industry)  John D. Rockefeller’s Standard Oil Company controlled 90% of America’s oil industry.  Rockefeller became the face of the “Robber Barons” (ruthless businessmen that crushed their competitors and abused the worker and consumer).  He used numerous “extralegal” methods to build his monopoly.  Like his father, Cornelius, William Vanderbilt dominated the Railroad industry.  An investment banker, J.P. Morgan orchestrated the consolidation of the Railroad industry and bought Carnegies Steel interest to form U.S. Steel (the nation’s first Billion-dollar company).  J.P. Morgan cancelled his reservation on the maiden voyage of the Titanic. 

UNIT 6.2: RISE OF MONOPOLY CAPITALISM How are monopolies built?  What methods do the Monopolies use to maximize profit?  How can Industrialists minimize organized labor unions that form in resistance of their business practices? 

UNIT 6.2: RISE OF MONOPOLY CAPITALISM 

How are monopolies built? 

The Capitalist Class has to be in a position to dominate the free market system. Regulate production  Create stable markets  Set prices and wages 

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Wealth then needs to be consolidated into the hands of just a few influential people. Use of new technologies like the steam engine, conveyer belt, and use of better construction materials.  Utilize a huge labor force of men, women, and children  Construct large-scale factories and production centers  Accumulate an enormous amount of capital 

UNIT 6.2: RISE OF MONOPOLY CAPITALISM 

What methods do the Monopolies use to maximize profit?      

The wealthy capitalist must then eliminate competition. Use pools, Gentlemen’s Agreements, Mergers, Holding Companies, and Conglomerates. Cut prices to drive competitors with less capital out of business Introduce new labor-saving technology when it is profitable to do so Research innovations in industrial and managerial techniques Industrial spying

UNIT 6.2: RISE OF MONOPOLY CAPITALISM 

How can Industrialists minimize organized labor unions that form in resistance of their business practices? 

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Give the workers a choice of whether or not to join a union (run an “open shop”) and give incentives for not joining unions. Use “Scabs” if your workers do go on strike Utilize government connections to suppress Union activities (court injunctions) Blacklist Union organizers Divide the working class through differentiated wages (usually based on race or gender).

UNIT 6.2: RISE OF MONOPOLY CAPITALISM 

How are monopolies built? 

Once these are accomplished different types of monopolies can be formed.  Vertical Merger: Vertical Mergers occur when an industrialist acquires each of the components necessary for the entire production and distribution process of his product. 

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Horizontal Merger: Horizontal Mergers occur when an industrialist forces his competitors out of business and is able to dominate a particular phase of the production of a commodity. 

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For example Carnegie bought up land rich in iron-ore, Refineries to employ the Bessemer Process, Railroad and Shipping Companies, etc.

For example Rockefeller knew that refining oil was much more profitable than drilling for it, so he drove price down and put his competitors out business.

Trust: Method of running several companies as if they are one entity, typically would allow the Trust to fix prices in an industry. (typically synonymous with monopolies) Holding Company: A Company that owns other companies, it may not produce any goods or services itself. Gives the owner the ability to own or have influence over many companies. Conglomerate: A combination of two or more companies that engage in different types of economic activity. (often a feature of Horizontal mergers).

UNIT 6.3: THE ERA OF RAPID CAPITAL ACCUMULATION

What was life in the Big Cities like for the urban worker in this new industrial age?  How did the Economists justify laissez-faire economics during this period?  In what ways did authors, ministers, and even industrialists themselves justify laissez-faire economics during this period?  Is anybody sounding an alarm about the abuses of unregulated capitalism? 

UNIT 6.3: THE ERA OF RAPID CAPITAL ACCUMULATION 

What was life in the Big Cities like for the urban worker in this new industrial age? By the late 1800s many Americans were living in squalor and despair in the urban centers of the United States.  Wage earners lived in overcrowded cities, constantly exposed to disease, crime, fire, and poor sanitation. Life was to say the least severe.  Big Business, to keep its own subsidies flowing, urged the government to suppress social spending to deal with poverty issues.  Although there was a few private organizations forming to provide aid, the urban poor were (for the most part) left to their own devices. 

UNIT 6.3: THE ERA OF RAPID CAPITAL ACCUMULATION  How did the Economists justify laissez-faire economics during this period?  

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In 1776 Adam Smith published The Wealth of Nations, the Bible for Laissez-Faire Economists. Smith argued that prices and wages and supply and demand were already regulated by the “invisible hand” (a self-seeking equilibrium) of the marketplace. Smith assumes that the industrialist would never sell a commodity to the consumer at a price they could not afford, nor would he offer wages that are unattractive to the worker. The industrialist will naturally seek a balance between cost and profit. This will bring a natural balance to supply and demand free of Government’s artificial influence.

UNIT 6.3: THE ERA OF RAPID CAPITAL ACCUMULATION 

In what ways did authors, ministers, and even industrialists themselves justify laissez-faire economics during this period? 

Herbert Spencer  

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Horatio Alger  

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He wrote “rags-to-riches” stories that popularized the notion that through selfsacrifice, determination, and hard work one could overcome poverty. His works became the inspiration of those seeking the “American Dream”

Russell Cornwell 

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Spencer, a British Social Philosopher, developed the theory of Social Darwinism, which was popularized in the U.S. by Yale Professor William Graham Sumner. Government should not provide assistance to those who could not make it on their own, but rather protect the wealthy for it was through them that the species would be further developed. This became the rallying cry of the Robber Barons as they developed Monopoly Capitalism.

A Baptist Minister, his “Acres of Diamonds” sermon asserted that it is your duty to get rich and that it is wrong to be poor. Now, not only were the poor destitute, but they were morally offensive as well. Shakespeare once wrote that “The fault…is not in our stars, but in ourselves, that we are underlings”

Andrew Carnegie 

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Wealthy industrialist, he wrote “The Gospel of Wealth” explaining why he became a philanthropist in his retirement. It is the duty of the wealthy, not the government, to be society’s benefactor.

UNIT 6.3: THE ERA OF RAPID CAPITAL ACCUMULATION 

Is anybody sounding an alarm about the abuses of unregulated capitalism? 

Journalists: 

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Small Producers: 

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Consumers began demanding investigations of how Corporations were using their influence to charge exorbitant prices.

Social Reformers: 

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Farmers and small businessmen warned of inflated shipping rates and unfair business practices that would soon destroy the economy.

Consumers: 

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Edward Bellamy, Henry George, and Henry Lloyd all wrote articles calling for government regulation that would maintain the competitive nature of capitalism. Bellamy’s Looking Backward envisioned a future world where socialist principles were applied in a “blended” economy.

The Social Gospel, founded by Baptist Minister Walter Rauschenbusch, began sounding alarms about the condition of the Urban Poor. Jane Addams and other intellectuals began the Settlement House Movement to provide assistance to the poor.

Radicals and Revolutionaries: 

Anarchists, Marxists, and Socialists (led by Eugene V. Debs) maintained that capitalism was by nature exploitive and must be replaced by a more humane economic system.

UNIT 6.4: THE RISE OF THE LABOR UNIONS What conditions prompted the rise of Labor Unions?  What were some of the early labor unions to form and on what were they focused?  How was the strike used to combat the abuses of the Robber Barons and how did the Robber Barons respond?  What event turned the American public against Labor Unions and radicalized the attempt to protect workers? 

UNIT 6.4: THE RISE OF THE LABOR UNIONS 

What conditions prompted the rise of Labor Unions? 

Low wages 

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Harsh Working Conditions 

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No safety standards, no emissions standards, no workman’s compensation, few pension plans, etc.

Long Hours 

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Many worked at subsistence wages, by this meaning just enough to survive in squalor. African Americans, Women, and Children were paid much less.

Workers typically worked 6-7 days per week on 12-14 hour shifts.

Existence of Child Labor 

Children working in factories were not in school, not to mention damage to health and development.

Wages differentiated by race and gender  All the while they were suffering, the Industrialists were raking in enormous profits. 

UNIT 6.4: THE RISE OF THE LABOR UNIONS 

What were some of the early labor unions to form and on what were they focused? 

The National Labor Union (NLU)   

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The Knights of Labor 

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Led by Terrence Powderly, who preferred third party arbitration over strikes. (their methods were much less radical than their aims). A rising star in the labor movement, they faded in the aftermath of the Haymarket Square Riot.

The American Federation of Labor (AFL)  

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Organized workers regardless of race or gender, skilled or unskilled, agrarian or industrial. Won an eight-hour workday for federal employees. Goals included higher wages, gender and racial equality, and the eight-hour workday.

Led by Samuel Gompers, this union was open exclusively to skilled workers. The most successful union of this period, they would become even more powerful in the twentieth century.

The Industrial Workers of the World (IWW) 

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The “Wobblies” led by William “Big Bill” Heywood believed that the workers’ ownership of the means of production was the only solutions to the exploitation of monopoly capitalism. This Union was extremely radical and prone to violence.

UNIT 6.4: THE RISE OF THE LABOR UNIONS 

How was the strike used to combat the abuses of the Robber Barons and how did the Robber Barons respond? 

Railroad Strike of 1877   

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The Homestead Strike of 1892    

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First major post-Civil War strike Employees of the Baltimore and Ohio Railroad Company went on strike when the company lowered their wages. The Strike turned violent and President Rutherford B. Hayes called in the U.S. Army to suppress the strike. Despite high profits, Carnegie’s Steel Corporation cut wages. Carnegie hired a private security firm, The Pinkerton Detective Agency, to engage the strikers. When the strikers opened fire on the Pinkertons, killing several, the Pennsylvania State Militia was called in. Out of funds, the Union itself called off the strike.

The Pullman Strike of 1894     

During the Depression of 1893 the Pullman Company cut wages to workers to keep stockholders dividends up. The American Railway Union, led by Eugene V. Debs, organized a boycott of the Railroad. A Federal Court cited the Sherman Anti-Trust Act and ordered an injunction to end the strike. Striking workers continued their interference in defiance of the injunction. President Cleveland was forced to send in the U.S. Military to protect “the delivery of the U.S. Mail”.

UNIT 6.4: THE RISE OF THE LABOR UNIONS 

What event turned the American public against Labor Unions and radicalized the attempt to protect workers? 

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The Haymarket Square Riot at the McCormick Reaper Works Factory in Chicago would be devastating blow to the Labor Movement in the United States. The protest organized at Haymarket Square was not only to protest treatment of workers, but to also protest the police department’s handling of protests. Chaos erupted as an unknown assailant threw a bomb that killed a number of police officers who were there on orders to break up the demonstration. Although there was no proof of their involvement, eight anarchists (four of whom were eventually executed) were arrested and charged in the case. The American public blamed the Knights of Labor, and trade unions in general, charging that they had become radicalized (later associated with communism and anarchy).

UNIT 6.5: THE SUPREME COURT, CONGRESS, AND STATE LEGISLATURES ENTER THE FRAY How did reform-minded state governments use the 14th Amendment to protect their people from the abuses of monopoly capitalism?  How were these efforts undermined by a Pro-Business Congress and Supreme Court? 

UNIT 6.5: THE SUPREME COURT, CONGRESS, AND STATE LEGISLATURES ENTER THE FRAY 

How did reform-minded state governments use the 14th Amendment to protect their people from the abuses of monopoly capitalism? Some State Governments believed that the 14th Amendment gave them commission to protect the life, liberty, and property of their citizens.  These government passed: 

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Housing Laws Safety and Health regulations in the workplace Regulation of Corporations whose behavior exploited the consumer and capitalist system. Sanitation Laws Minimum Wage Laws Maximum Work Hour Laws Child Labor Laws

UNIT 6.5: THE SUPREME COURT, CONGRESS, AND STATE LEGISLATURES ENTER THE FRAY 

How were these efforts undermined by a Pro-Business Congress and Supreme Court? 

The Sherman Anti-Trust Act  

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Most historians believe this law was passed in the interest of protecting the worker from abuse by the Corporations. It was based on the premise that monopolies existed in obstruction of the free market system. However, the law’s key phrase “any combination or condition which is in restraint of trade is illegal” would be used to attack Labor Unions and break strikes. The law would eventually be used by Progressives like Theodore Roosevelt and William Howard Taft to break up Monopolies in the early 1900s.

The United States v. E.C. Knight Company  

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The E.C. Knight Company owned 98% of the Sugar industry in the United States. In this case, despite the fact that this is a national corporation, the Supreme Court ruled that since its individual factories refined sugar in a particular state that they did not engage in interstate commerce. This meant the Federal Government had no jurisdiction with which to attempt to regulate the company or break up its monopoly through the Sherman Anti-Trust Act.

PRACTICE QUESTION #1 1.

Andrew Carnegie’s use of vertical integration was significant in that it: A. B. C. D. E.

Synthesized the various immigrant labor groups into on cohesive productive force Led to substantial cooperation between industry and banking Stimulated competition in the steel industry Allowed a capitalist to control all aspects of the production process Ultimately led to the construction of massive steel factories in Pittsburgh

PRACTICE QUESTION #2 2.

Which of the following statements accurately reflects the impact that industrialization had on the American worker? A. B.

C. D. E.

The standard of living for most workers had declined by the late nineteenth century The standard of living for most workers improved by the late nineteenth century, but workers had become mere mechanisms in the production process. Many wage laborers ultimately saved enough of their salaries to start their own businesses Most workers came to develop a lasting economic and social bond with their employers Most workers experienced even higher wages and even greater control over what they produced

PRACTICE QUESTION #3 3.

In the “Gospel of Wealth” Andrew Carnegie articulated the view that: A. B. C.

D. E.

The wealthy are entitled to their riches and had no responsibility to share it with others. Only those born into wealth were the real economic leaders of the nation Religious leaders had a responsibility to convince their parishioners that success was attainable to those who worked hard Capitalism and Christianity were intimately related in the progress of individuals and nations The wealthy were morally obligated to use some of their wealth for the improvement of society

PRACTICE QUESTION #4 4.

By the late nineteenth century: A. B.

C. D.

E.

The U.S. economy ranked fourth in the industrialized world The U.S. had surpassed France and Germany in industrial output, but still lagged behind Great Britain. The U.S. economy had fallen to fourth in industrial output behind Britain, France, and Germany The U.S. economy was producing as much as Britain, France, and Germany combined in many sectors The U.S. economy had not grown significantly since the 1860s

PRACTICE QUESTION #5 5.

The Industrial Workers of the World differed from the other major trade unions in that: A. B. C. D. E.

It sought to negotiate and mediate its differences with management Unlike the other unions, it disdained using boycotts and strikes against capital Its objective was to eliminate the private ownership of the means of production It was recognized by capitalists as the legitimate bargaining agent of its members It was outlawed by the U.S. Government

PRACTICE QUESTION #6 6.

Which of the following would not be used by a supporter of the capitalist system as it existed in the Gilded Age? Reform Darwinism B. Social Darwinism C. Russell Cornwell’s “Acres of Diamonds” sermon D. The novels of Horatio Alger E. Adam Smith’s “invisible hand” A.

PRACTICE QUESTION #7 7.

In order to promote the interests of labor, trade unions would support: A. B. C. D. E.

The Open Shop Corporate tax breaks Subsistence Wages Yellow-Dog Contracts The Closed Shop

PRACTICE QUESTION #8 8.

The Railroad Strike of 1877: A. B. C. D. E.

Was the first time a President ordered U.S. troops to stop a strike Led to significant wage increases for railroad workers Was the first time that management recognized the legitimacy of a trade union Was the only time in the nineteenth century that government sided with the strikers Led to significant improvements in worker safety laws but not wage increases

PRACTICE QUESTION #9 9.

This capitalist created U.S. Steel, the nation’s first “Billion Dollar Corporation”. A. B. C. D. E.

Andrew Carnegie J.P. Morgan “Big Bill” Haywood Cornelius Vanderbilt John D. Rockefeller

PRACTICE QUESTION #10 10.

In United States v. E.C. Knight Company, the Supreme Court ruled that: A. B. C. D. E.

Trade unions that were on strike were in restraint of trade Monopolies such as the E.C. Knight Company were illegal combinations Since the company was involved in production and not commerce, it fell under state jurisdiction Monopolies were in restraint of trade Vertical integration was not in restraint of trade

ANSWER KEY 1. 2. 3.

4. 5. 6.

7. 8. 9.

10.

D B E D C A E A B C

FOCUS ON WHILE READING: Presidential support for Big Business  The efforts of the Grange, Farmers’ Alliances, and Populists opposing Big Business’s control of the marketplace.  The Populist Agenda  What brought the Populist and Democratic Parties together in the late 1800s? 

INTRODUCTION TO SETTLING THE WEST AND POPULISM 

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The Republican Administrations of the late 1800s (a neo-Federalist Party) did much to push the agenda of Big Business and push the nation toward greater industrialization. By 1914 the United States (even though we did not even know it) was the most powerful industrial nation in the world. In the process of industrialization the plight of the farmer was neglected and forced many into foreclosure, prompting a political movement to protect farming interests and limit the influence of monopoly. The Populists, though somewhat successful regionally, were more important for their ideas than for their successful legislation.

UNIT 6.6: POLITICS OF THE GILDED AGE 

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How did the Republican Presidents of the Industrial Age contribute to the problems of Patronage and “Do-Nothingism” following the corrupt administration of Ulysses S. Grant? In what ways did the Political Machines of this period destroy American Democracy and trample the urban working class in the process? Was there anything positive that came from these Political Machines? What other groups or individuals were working to help the urban poor and fight the corruption of the Political Machines?

UNIT 6.6: POLITICS OF THE GILDED AGE 

How did the Republican Presidents of the Industrial Age contribute to the problems of Patronage and “Do-Nothingism” following the corrupt administration of Ulysses S. Grant? Rutherford B. Hayes tried to restore honesty to the Presidency. He was a supporter of the Temperance Movement (abolish alcohol), but was also a supporter of restricting Chinese immigration.  James Garfield (although he only served 4 months) demonstrated the division within the Republican Party: The Conservative Stalwarts, the Reform-minded Half-breeds, and the anti-Patronage (Spoils System) Mugwumps.  Chester A. Arthur (originally supported by the Stalwarts) pushed the Pendleton Civil Service Act through Congress creating the Civil Service System and ending Patronage (The Spoils System) and nepotism in government hiring.  Benjamin Harrison was a supporter of high protective tariffs and generally deferred to Congress during his weak Presidency. 

UNIT 6.6: POLITICS OF THE GILDED AGE 

In what ways did the Political Machines of this period destroy American Democracy and trample the urban working class in the process? 

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The most influential of the “political machines” of this period was Tammany Hall, led by the infamous Boss Tweed. The Tweed Ring controlled the politics of New York City and was responsible for rampant voter fraud, bribes of city officials, and illegal contracts to various businessmen in the city. It is estimated that the Tweed Ring bilked New York City of at least $200 Million during the reign over the city. Because Tweed was in control of who ran for what office and how they were elected, he essentially ruled New York City like a King, even though he himself was never elected by the people. All municipal revenue flowed through his fingers and very little of this money went to helping the poor, what little that did was primarily for the purpose of perpetrating voter fraud.

UNIT 6.6: POLITICS OF THE GILDED AGE 

Was there anything positive that came from these Political Machines? The only “silver lining” that existed around this dark cloud of “Gilded Age” politics was that the Political Machines did at least provide some assistance to the poor at a time when State and Federal Agencies were embracing Social Darwinism and providing no aid at all.  The shelter, employment, living assistance provided by Tammany Hall and others came with a price tag.  Taking their assistance obligated you to participate with voter fraud and other illegal tactics to assist in getting their candidates elected to office. 

UNIT 6.6: POLITICS OF THE GILDED AGE 

What other groups or individuals were working to help the urban poor and fight the corruption of the Political Machines? 

The Social Gospel  

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The Settlement House Movement  

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Akin to the Second Great Awakening, this movement urged congregations to get involved with social reform. Walter Rauschenbusch maintained that the path to heaven was through active faith, put your belief into action. One of the most important manifestations of the Social Gospel was the Settlement House Movement. Intellectuals would purchase homes in rundown neighborhoods and go live their operating community centers that provided educational opportunities, shelter, food, etc. to the urban poor living in the area. One of the most famous Settlement Houses was Hull House in Chicago, operated by Jane Addams.

Thomas Nast  

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Thomas Nast was a political cartoonist. He launched a campaign to bring down Tammany Hall. He portrayed the Tweed Ring as a viscous Tammany Tiger bent on destroying liberty, justice, and democracy. His work ultimately resulted in the arrest of Boss Tweed and the dissolving of Tammany Hall.

UNIT 6.7: THE TARIFF, THE GOLD STANDARD, AND THE “BILLION DOLLAR” CONGRESS In what ways did the Protective Tariff raised during the Civil War revive the twoparty system in American politics?  What was the “Billion Dollar” Congress and why was it called that?  What elements supported an expanded money supply, how did they propose to expand the money supply, and what did they stand to gain?  What elements supported a limited money supply, how did they stop monetary expansion, and what did they believe was to gain from this? 

UNIT 6.7: THE TARIFF, THE GOLD STANDARD, AND THE “BILLION DOLLAR” CONGRESS 

In what ways did the Protective Tariff raised during the Civil War revive the two-party system in American politics?  

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The Tariff issue of the late 1800s pitted Western Farmers against Eastern Industrialists. After the Civil War Southern Democrats aligned with Northern Democrats to push for a lowered or eliminated Tariff. They argued that the Tariff caused higher consumer prices and retaliatory tariffs abroad. In 1888 the Tariff created a true division in American politics. The Republicans won the election convincing the American Public that a lower tariff would cause an economic catastrophe and mass unemployment.

UNIT 6.7: THE TARIFF, THE GOLD STANDARD, AND THE “BILLION DOLLAR” CONGRESS 

What was the “Billion Dollar” Congress and why was it called that? After a brief stint with a Democrat President (Grover Cleveland) the Republican Benjamin Harrison was returned to the White House, where he promptly safeguarded the Tariff.  Republicans also won majorities in the House and Senate, which they used to launch massive spending projects. 

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The McKinley Tariff of 1890 The Sherman Silver Purchase Act of 1890 The Sherman Anti-Trust Act of 1890 A Negro Voting Rights Bill (defeated in Congress) The Wilson-Gorman Tariff, further increasing the tariff Increased monthly pensions to Civil War veterans and their families.

Grover Cleveland was reelected in 1892, becoming the only American President to serve two nonconsecutive terms in office.

UNIT 6.7: THE TARIFF, THE GOLD STANDARD, AND THE “BILLION DOLLAR” CONGRESS 

What elements supported an expanded money supply, how did they propose to expand the money supply, and what did they stand to gain? An expanded money supply would devalue the money supply and create inflation that would drive prices for goods and services up.  Supporters included: Expectant Capitalists, Debtors, and Farmers. 

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They would be able to borrow money at lower interest rates. They could pay off loans faster with inflated dollars. They would increase profit from increased prices for the commodities they produced.

They argued that the Depression of 1873 was caused by the insistence on backing the United States’ money supply with Gold (The Gold Standard).  They believed that answer to the nation’s economic woes was soft currency (greenbacks) and the unlimited coining of silver. 

UNIT 6.7: THE TARIFF, THE GOLD STANDARD, AND THE “BILLION DOLLAR” CONGRESS 

What elements supported a limited money supply, how did they stop monetary expansion, and what did they believe was to gain from this? Restricting the money supply creates a more valuable, stable dollar. Increased value of money keeps prices for goods and services low and allows the dollar to hold its value more consistently over time.  Supporters of this policy included Bankers, Entrenched Capitalists, Creditors, and Investors. 

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They favored a “hard” currency backed by gold stored in U.S. Government vaults (Fort Knox). Gold-backed money is less susceptible to inflationary instabilities. Their belief was that as the population expanded, which meant more people and less gold, the value of gold would increase dramatically.

The Specie Resumption Act of 1875 removed all remaining greenbacks from circulation leaving only “hard” currency that was backed by the gold standard.  Eventually the “Gold Bugs” would win this argument but the United States is off the Gold Standard today, which is partly responsible for issues related to inflation. 

UNIT 6.8: THE FARMERS UNITE What factors led to the boom in production in the Agrarian Sector of the economy?  Why was that increased productivity did not result in increased profitability?  What role did the Grange Movement play in combating Railroad and Grain Elevator Operator abuses? How did the Supreme Court factor into this equation?  What were the key components of the Omaha Platform in 1892?  What role did the election of 1896 play in settling the debate between the Gold Standard and Free Silver? 

UNIT 6.8: THE FARMERS UNITE 

What factors led to the boom in production in the Agrarian Sector of the economy?  

  



Improvements in the Cotton Gin The introduction of Harvesters, Combines, and Reapers that sped up the process of plowing, planting and harvesting produce. The Steel Plow first introduced by John Deere. Specialization in agricultural production: Cotton in the South, Wheat in the West, etc. The time it took to grow and harvest crops was cut in half during this period. Beware that greater productivity does not automatically equal greater profits.

UNIT 6.8: THE FARMERS UNITE 

Why was it that increased productivity did not result in increased profitability?  



 



Grain Elevator Operators stored grain when it was not in transit and charged excessively high rates for their services. Even though Farmers found themselves with increasingly less disposable income, manufacturers were charging higher and higher prices for the commodities they produced. Farmers are particularly dependent on credit to do business. Banks during this period began raising interest rates on loans and created a level of debt that was near impossible to pay off. New Harvesters and Combines became necessities, prices went up dramatically. The Railroads charged increasingly high shipping rates, often changed rates without warning, and used numerous extralegal means to maximize profits. (consequently the Railroads became the focal point of farmer discontent during this period). In many cases the Railroads, Banks, and Manufacturers were immune from government regulation and had free hand to milk the Midwest Farmer for everything he had.

UNIT 6.8: THE FARMERS UNITE 

What role did the Grange Movement play in combating Railroad and Grain Elevator Operator abuses? How did the Supreme Court factor into this equation? 

By the mid-1890s prices for cotton, wheat, and corn were quickly diminishing. 



The Answer as stated by Mary Lease was to “raise less corn and more hell!!!”

Many factors were causing the rising debt of the Nation’s farmers.   



New technology that increased production drove prices down and drove the farmer deeper into debt. Land was less available, much had been given to the railroads or sold to land speculators. With tax breaks given to the Railroads, Grain Elevator Companies, and Big Business that left more of the tax burden for everybody else (especially farmers). The cost of storing and shipping produce was extremely high.

Farmers’ Alliances quickly merged into what became known as the National Grange of the Patrons of Husbandry (The Grange) and became politically active.  The Grange was particularly influential in the West and South and passed numerous “Granger Laws” that attempted to regulate the Railroads and Grain Elevator Operators. 

UNIT 6.8: THE FARMERS UNITE 

What role did the Grange Movement play in combating Railroad and Grain Elevator Operator abuses? How did the Supreme Court factor into this equation? 

Pelk v. The Chicago and Northwestern Railway (1876)  



Munn v. Illinois (1877)  







If Federal Law is not present, then States can establish their own interstate trade regulations. Victory for the Granger Laws As long as property was “devoted to public use” the states could place regulations on the railroads for the good of the public. Sort of a Victory for the Granger Laws The Court did rule that the States could not regulate “longhauls”, on which many farmers depended, so the Railroads jacked up their prices on these runs. Both the Pelk and Munn cases were based on using the 14th Amendment to authorize the States to create jurisdiction of matters related to Interstate Commerce.

Illinois v. Wabash (1886)  

The Court reversed its ruling in Pelk, stating that the Federal Government has jurisdiction over all interstate commerce. Major defeat for the Granger Laws.

UNIT 6.8: THE FARMERS UNITE 

What role did the Grange Movement play in combating Railroad and Grain Elevator Operator abuses? How did the Supreme Court factor into this equation? After the Courts ruling in the Wabash Case, the Federal Government got involved.  Congress passed the Interstate Commerce Act creating the Interstate Commerce Commission.  Under the ICC, certain rules had to be abided by: 

Reasonable Shipping Rates  Advance warnings on any changes to rate schedules  The ICC was able to use the courts to force the Railroads into compliance. 

UNIT 6.8: THE FARMERS UNITE 

What were the key components of the Omaha Platform in 1892? By 1890 the various Farmers’ Alliances merged into what became known as the National Farmers’ Alliance and Industrial Union.  This group would form a set of proposals that would later be adopted by the Populist Party as the Omaha Platform in the election of 1892. 

        



Nationalization of the Railroads and other industries Free and unlimited coining of silver Graduated Federal Income Tax Any excess lands that had been granted to the Railroads should be reclaimed by the Federal Government. Labor Unions should be granted the 8-hour Workday and have the right to collective bargaining guaranteed Federal storage facilities would allow farmers to sell their product when value was high and store it when value was low. Immigration should be restricted in order to limit the work force Groups like the Pinkertons are banned from breaking up strikes Increased democratization: Direct election of Senators, Secret Ballot, One Term Presidencies, increased use of the initiative/recall/referendum.

Although the various “Farmers’ groups” had moderate success at the State and Congressional levels, they fell short of electing a President.

UNIT 6.8: THE FARMERS UNITE



What role did the election of 1896 play in settling the debate between the Gold Standard and Free Silver? The Populist Movement (as this Farmers’ Crusade became known) was revolutionary in its attacks on Monopoly Capitalism and Laissez-Faire economics.  The Populists also challenged the status quo by trying to forge a political alliance between poor whites and African Americans.  Many, like Coxey’s Army, were simply fed up with the hardships they faced at the hands of monopoly capitalism. 







Led by Jacob Coxey, these Populists marched to Washington D.C. to demand work-relief for the unemployed suffering from the depression of 1893. Several of Coxey’s followers were arrested, not for rioting but for walking on the grass. The rest were dispersed by police.

The Populist Party was the definition of a “Coalition”         

Grangers Farmers’ Alliances The Greenback Party Knights of Labor Socialists Free Silver Party Prohibitionists Women’s Rights Activists Anarchists

UNIT 6.8: THE FARMERS UNITE 

What role did the election of 1896 play in settling the debate between the Gold Standard and Free Silver? In essence the Populist Party was a diverse group of deeply passionate people opposed to the evil of Monopoly Capitalism.  In 1892 the Populist Candidate, James Weaver, won 1 million votes and even won electoral college votes, extremely rare for a third-party candidate. Other results were much better: 

   

1500 Populists were elected to State Legislatures 3 Populist Governors were elected 5 Populists were elected to the US Senate 10 Populists were elected to the US House of Representatives

Not surprisingly, the Populist Party faired poorly in the South (their courting of African Americans soured many Southern Democrats).  Very surprisingly, they also faired poorly in the Northeast among hot Labor Union Activism. 

UNIT 6.8: THE FARMERS UNITE 

What role did the election of 1896 play in settling the debate between the Gold Standard and Free Silver? 

  

In 1896 the Democrat Party nominated William Jennings Bryan (only 36 at the time) as their Presidential Candidate after he delivered the impassioned “Cross of Gold” Speech at the nominating convention. In a bold move, not unanimous within the party, the Populists also nominated Bryan as their candidate. Under the leadership of Marc Hanna, the Republican campaign successfully blamed the Democrats for the Depression of 1893. Other factors contributed to Republican victory in 1896:   







The defection of the Gold Bugs from the Democrat Party Temporary increases in Grain prices Fear mongering by Republicans that a lower tariff would result in massive unemployment.

In the end, the power of the Monopolies and their own inability to “leap the hurdle of racism” despite common interests caused the Populist Party to fade as a national influence. The silver lining is that elements of the Omaha Platform would reemerge later in the platforms of both the Republican and Democrat Parties during the Progressive movement. The most important contribution of the Populist Party is that government is not a force to be overthrown, but to be redefined and used to bring about opportunities for all citizens.

PRACTICE QUESTION #11 11.

All of the following were political objectives of the Populists except which one? A. B. C. D. E.

Government ownership of major industries such as the railroads and telegraphs Replacing the fixed income tax with a graduated income tax The free and unlimited coinage of silver Direct election of U.S. Senators Creating a national system of unemployment insurance

PRACTICE QUESTION #12 12.

William Jennings Bryan became the presidential candidate of both the Democrat and Populist Parties in 1896 because of his support for: A. B.

C. D. E.

High protective tariffs to protect domestic industries Unlimited and free coinage of silver Nationalizing the railroad industry Policies that would unite poor black and white farmers A single six-year term for Presidents

PRACTICE QUESTION #13 13.

A major reason why McKinley was able to defeat Bryan in 1896 was: A. B. C. D. E.

The Populists ultimately withdrew their support for Bryan The Republicans were split between gold and silver advocates American farmers experienced an increase in farm prices during the campaign Bryan’s repudiation of the silver cause during his campaign Most Democrats favored Cleveland over Bryan

PRACTICE QUESTION #14 14.

Coxey’s Army: A. B. C. D.

E.

Reflected discontent with the government’s response to the Depression of 1893 Was the military wing of the Populist Party Was the name given to supporters of Jacob Coxey’s candidacy for President in 1896 Were strong advocates of the gold standard Were Democrats who switched their political allegiance to the Republicans in the 1896 election

PRACTICE QUESTION #15 15.

Which of the following did the nation’s farmers advocate in the late nineteenth century? A. B. C.

D.

E.

Government should reduce farmers’ costs by providing farmers with seed and farm implements The government should privatize the railroads A sub-Treasury system should be established that would allow farmers to sell their crops on the market when prices rose The use of federal troops to ensure farmers’ safety against private security agents hired by the railroads A high protective tariff

PRACTICE QUESTION #16 16.

Which of the following did not lead to greater productivity by farmers in the late nineteenth century? Iron and steel plows B. The use of new farm machinery, such as harvesters C. Improved cotton gins D. Greater specialization of agricultural production E. The rates charged by Grain Elevator Operators A.

PRACTICE QUESTION #17 17.

In which Supreme Court case did the Court rule that as long as property was “devoted to public use”, states could place regulations on the railroad for the good of the public? A. B. C.

D. E.

Pelk v. Chicago and Northern Railway Munn v. Illinois Illinois v. Wabash Pollock v. Farmers Loan and Trust Dred Scott v. Sanford

PRACTICE QUESTION #18 18.

Which industry, more than any other, became the symbol and source of agrarian discontent in the post-Civil War period? The insurance industry B. Companies that developed harvesters and combines C. Railway Companies D. Telephone and telegraph companies E. Banks A.

PRACTICE QUESTION #19 19.

Which of the following groups was not identified with the Populist Party? A. B. C. D. E.

Supporters of the Gold Standard Anarchists Knights of Labor Grangers Greenback Party

PRACTICE QUESTION #20 20.

The Specie Resumption Act of 1875: A. B.

C. D. E.

Led to a dramatic increase in the amount of silver in the economy Was a compromise bill that allowed for an equal amount of gold and silver to be introduced into the economy each month Established the ratio of gold to greenbacks at 16:1 Removed all of the greenbacks from circulation Dramatically inflated currency, which led to a depression

ANSWER KEY 1. 2. 3.

4. 5. 6.

7. 8. 9.

10.

E B C A C E B C A D