The Gilded Age was a time of great industrial expansion for the nation. In the years following the Civil War, the idea of laissez-faire would become popular among many presidents. The Presidents from the end of the Civil War until the 1890s are often called “The Forgettable Presidents. ” They took little action and politics and government was largely dominated by Congress. Many issues would arise during this period, including the practice of patronage, the abuses of the railroads, the rise of trusts and monopolies, and issues concerning currency and the money supply.
Most of these issues would be addressed, but the solutions and legislation was very weak. The practice of patronage was very popular during the Gilded Age. If a politician won an election, he would give his supporters jobs in public office. The office holder would also pay part of his salary to who he supported. The assassination of a second President in office, James Garfield, would spark the passing of the Pendleton Act in 1883. President Garfield was assassinated when a man, Charles Guiteau, assisted Garfield during his campaign and wasn’t rewarded for his service.
Congress would pass the Pendleton Act, which created the Civil Service Commission to ensure that hiring of federal employees was based on examination and merit rather than political patronage. This would include a new, competitive examination which became required to take in order to hold public office. While the Pendleton Act was successful in putting patronage to rest, politicians had to find a new source of income in order to fill their pockets. Politicians would now rely on funding from big business. The Pendleton Act might have ended patronage, but it brought on a new kind of corruption into politics.
Throughout the Gilded Age, there were many railroad strikes as unions began to grow in numbers. The first railroad strike was the Great Strike, which occurred in 1877. Railroad workers’ wages were lowered by 10% and some workers were going to be laid off. This sparked a strike among workers. In order to break up the strike, President Rutherford B. Hayes used federal troops to suppress the uprisings and bring peace. A second railroad strike that occurred was the Pullman Strike of 1894. George Pullman was forced to cut wages by as much as a third of a workers wage.
The prices of the company housing and stores remained the same, and the workers went on strike. This strike was ended by a court injunction based on the Sherman Anti-Trust Act, and President Grover Cleveland sent in 10,000 federal troops. Railroad companies abused the power they had over their workers. During the Gilded Age, there was little government regulation regarding big business. Big business owners were able to create monopolies, companies that control all aspects of production for certain products. Monopolies often stifle competition in the market, inflate prices and hurt consumers.
The United States government stepped in to try and start regulating the growing number of monopolies. In 1887, Congress passed the Interstate Commerce Act, which outlawed railroad rebates and kickbacks. It also established the Interstate Commerce Commission to ensure that the railroads companies obeyed the new laws. Congress also passed the Sherman Anti-Trust Act in an attempt to ban trusts. Both of these laws were very ineffective because they were very poorly written. Big businesses hired lawyers to find loopholes in the legislation.
Although the legislation was ineffective, it set the precedent that the government needs to become involved in regulating business. During the Gilded Age, there were many problems with the money supply. During the Panic of 1873, bankers made too many risky loans. The banking system began to collapse. The value of money also depreciated. The treasury withdrew funds and decreased the money supply. Democrats sought inflation by printing more greenbacks. In 1878, the Greenback Labor Party formed, and their goal to install soft money in America. After the depression ended in 1878, the currency issue would not come center stage until the 1890s.
During President Cleveland’s second term in office, another depression would take place. It was partially caused by the reduced money supply in the market. Gold reserves dwindled to below $100 million. In 1890, the Sherman Silver Purchase Act was passed. The act required the treasury to purchase 4. 5 million ounces of silver per month to be converted into coins and silver certificates (paper money backed by and redeemable as silver. ) The $500 bill pictured would have been redeemable in gold. Although the issue was addressed, the issue persisted.
During the Gilded Age, industry grew a significant amount. This caused many problems. The growth of industry made things look like they were on the upswing, but societies problems and corruption were veiled by a thin layer of gold. During the Gilded Age, civil service reform took place in order to end patronage. Railroad companies grew in number and abused their power. Trusts and monopolies had a grip on the market and corruption in politics. Lastly, there were problems created by currency issues and shortages in the money supply. Many of these problems went unanswered at the turn of the century.