Bonanza farms were free homesteads in california

1 8 7 0–1 8 9 0

A M E R I C A ’ S G I L D E D A G E

★ C H A P T E R 1 6 ★

F O C U S Q U E S T I O N S • What factors combined to make the United States a mature industrial society

after the Civil War?

• How was the West transformed economically and socially in this period?

• Was the Gilded Age political system effective in meeting its goals?

• How did the economic development of the Gilded Age affect American freedom?

• How did reformers of the period approach the problems of an industrial society?

An immense crowd gathered in New York harbor on October 28, 1886, for the dedication of Liberty Enlightening the World, a fitting symbol for a nation now wholly free. The idea for the statue originated in 1865 with Édouard de Laboulaye, a French educator and the author of sev- eral books on the United States, as a response to the assassination of Abraham Lincoln. The statue, de Laboulaye hoped, would celebrate both the historic friendship between France and the United States and the triumph, through the Union’s victory in the Civil War, of American freedom. Measuring more than 150 feet from torch to toe and standing atop a huge pedestal, the edifice was the tallest man- made structure in the Western Hemisphere. It exceeded

★ 603

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604 ★ CHAPTER 16 America’s Gilded Age

• C H R O N O L O G Y •

1872 Crédit Mobilier scandal

1873 Mark Twain and Charles Dudley Warner’s Gilded Age

1876 Battle of the Little Bighorn

1877 Reconstruction ends

Munn v. Illinois

Great Railroad Strike

1879 Henry George’s Progress and Poverty

1883 Civil Service Act

Railroads create time zones

William Graham Sumner’s What Social Classes Owe to Each Other

1884 Elk v. Wilkins

1886 Haymarket affair

Wabash v. Illinois

Standard national railroad gauge

1887 Interstate Commerce Commission created

Dawes Act

1888 Edward Bellamy’s Looking Backward

1890 Sherman Antitrust Act

Jacob Riis’s How the Other Half Lives

Massacre at Wounded Knee

1894 Henry Demarest Lloyd’s Wealth against Commonwealth

1895 United States v. E. C. Knight Co.

in height, newspapers noted with pride, the Colossus of Rhodes, a wonder of the ancient world.

In time, the Statue of Liberty, as it came to be called, would become Americans’ most re- vered national icon. For over a century it has stood as a symbol of freedom. The statue has offered welcome to millions of immigrants— the “huddled masses yearning to breathe free” celebrated in a poem by Emma Lazarus inscribed on its base in 1903. In the years since its dedication, the statue’s familiar im- age has been reproduced by folk artists in ev- ery conceivable medium and has been used by advertisers to promote everything from cigarettes and lawn mowers to war bonds. As its use by Chinese students demanding de- mocracy in the Tiananmen Square protests of 1989 showed, it has become a powerful in- ternational symbol as well.

The year of the statue’s dedication, 1886, also witnessed the “great upheaval,” a wave of strikes and labor protests that touched every part of the nation. The 600 dignitaries (598 of them men) who gathered on what is now called Liberty Island for the dedication hoped the Statue of Liberty would inspire re- newed devotion to the nation’s political and economic system. But for all its grandeur, the statue could not conceal the deep social divisions and fears about the future of Amer- ican freedom that accompanied the country’s emergence as the world’s leading industrial power. Nor did the celebrations address the crucial questions that moved to the center stage of American public life during the 1870s and 1880s and remained there for decades to come: What are the social conditions that make freedom possible, and what role should the national government play in defining and protecting the liberty of its citizens?

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THE SECOND INDUSTRIAL REVOLUTION ★ 605

T H E S E C O N D I N D U S T R I A L R E V O L U T I O N Between the end of the Civil War and the early twentieth century, the United States under- went one of the most rapid and profound economic revolutions any country has ever experienced. There were numerous causes for this explosive economic growth. The country enjoyed abundant natural resources, a growing supply of labor, an expanding market for manufactured goods, and the availability of capital for investment. In addition, the federal government actively promoted industrial and agricul- tural development. It enacted high tariffs that protected American industry from foreign competition, granted land to railroad companies to encourage construction, and used the army to remove Indians from western lands desired by farmers and mining companies.

The Industrial Economy

The rapid expansion of factory production, mining, and railroad construction in all parts of the country except the South signaled the transition from Lincoln’s America— a world centered on the small farm and artisan workshop— to a mature industrial society. Americans of the late nineteenth century marveled at the tri- umph of the new economy. “One can hardly believe,” wrote the philosopher John Dewey, “there has been a revolution in history so rapid, so extensive, so complete.”

By 1913, the United States produced one- third of the world’s industrial output— more than the total of Great Britain, France, and Germany com- bined. Half of all industrial workers now labored in plants with more than 250 employees. On the eve of the Civil War, the first industrial revolution, centered on the textile industry, had transformed New England into a center of manu- facturing. But otherwise, the United States was still primarily an agricultural nation. By 1880, for the first time, the Census Bureau found a majority of the workforce engaged in non- farming jobs. The traditional dream of economic independence seemed obsolete. By 1890, two- thirds of Americans worked for wages, rather than owning a farm, business, or craft shop. Drawn to factories by the promise of employment, a new working class emerged in these years. Between 1870 and 1920, almost 11 million Americans moved from farm to city, and another 25 million immigrants arrived from overseas.

Most manufacturing now took place in industrial cities. New York, with its new skyscrapers and hundreds of thousands of workers in all sorts of

1896 Utah gains statehood

1899 Thorstein Veblen’s The Theory of the Leisure Class

1905 Lochner v. New York

• •

What factors combined to make the United States a mature industrial society after the Civil War?

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606 ★ CHAPTER 16 America’s Gilded Age

manufacturing establishments, symbolized dynamic urban growth. After merg- ing with Brooklyn in 1898, its population exceeded 3.4 million. The city financed industrialization and westward expansion, its banks and stock exchange fun- neling capital to railroads, mines, and factories. But the heartland of the second industrial revolution was the region around the Great Lakes, with its factories producing iron and steel, machinery, chemicals, and packaged foods. Pittsburgh had become the world’s center of iron and steel manufacturing. Chicago, by 1900 the nation’s second- largest city, with 1.7 million inhabitants, was home to facto- ries producing steel and farm machinery and giant stockyards where cattle were processed into meat products for shipment east in refrigerated rail cars. Smaller industrial cities also proliferated, often concentrating on a single industry— cast- iron stoves in Troy, New York, furniture in Grand Rapids, Michigan.

Railroads and the National Market

The railroad made possible what is sometimes called the “second industrial revolution.” Spurred by private investment and massive grants of land and money by federal, state, and local governments, the number of miles of rail- road track in the United States tripled between 1860 and 1880 and tripled again

Table 16.1 Indicators of Economic Change, 1870–1920

1870 1900 1920

Farms (millions) Land in farms (million acres) Wheat grown (million bushels)

2.7 408 254

5.7 841 599

6.4 956 843

Employment (millions) In manufacturing (millions)

14 2.5

28.5 5.9

44.5 11.2

Percentage in workforcea Agricultural Industryb Trade, service, administrationc

52 29 20

38 31 31

27 44 27

Railroad track (thousands of miles) Steel produced (thousands of tons)

53 0.8

258 11.2

407 46

GNP (billions of dollars) Per capita (in 1920 dollars)

7.4 371

18.7 707

91.5 920

Life expectancy at birth (years) 42 47 54

a Percentages are rounded and do not total 100. b Includes manufacturing, transportation, mining, and construction. c Includes trade, finance, and public administration.

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THE SECOND INDUSTRIAL REVOLUTION ★ 607

by 1920, opening vast new areas to commercial farming and creating a truly national market for manufactured goods. In 1886, the railroads adopted a stan- dard national gauge (the distance separating the two rails), making it possible for the first time for trains of one company to travel on any other company’s track. By the 1890s, five transcontinental lines transported the products of western mines, farms, ranches, and forests to eastern markets and carried man- ufactured goods to the West. The railroads reorganized time itself. In 1883, the major companies divided the nation into the four time zones still in use today.

The growing population formed an ever- expanding market for the mass production, mass distribution, and mass marketing of goods, essential elements of a modern industrial economy. The spread of national brands like Ivory soap and Quaker Oats symbolized the continuing integration of the economy. So did the growth of national chains, most prominently the Atlantic and Pacific Tea Company, better known as A & P grocery stores. Based in Chicago, the national mail- order firms Montgomery Ward and Sears, Roebuck & Co. sold clothing, jewelry, farm equipment, and numerous other goods to rural families through- out the country.

New OrleansHouston

Mobile

El Paso Dallas

Boston

New York Philadelphia

Buffalo

Pittsburgh

Detroit ClevelandChicago

St. Louis

Memphis Atlanta

Charleston

Norfolk

Washington, D.C.

St. Paul

Omaha

Kansas City Denver

Santa FePhoenix Los Angeles

Salt Lake City Reno

San Francisco

Boise

Portland

Seattle

Helena

Pacific Time Zone

Mountain Time Zone Central

Time Zone Eastern Time Zone Atlantic

Time Zone

Southern Pacific

Central P acific

Union Pacific

Northern Pacific

New York Central Pennsylvania

Baltimore and Ohio

Illinois Central

CANADA

MEXICO Gulf of Mexico

Atlantic Ocean

Pa c i f ic Oce an 0

0

250

250

500 miles

500 kilometers Major railroads in 1880 Time-zone boundaries

T H E R A I L R O A D N E T W O R K , 1 8 8 0

By 1880, the transnational rail network made possible the creation of a truly national market for goods.

What factors combined to make the United States a mature industrial society after the Civil War?

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608 ★ CHAPTER 16 America’s Gilded Age

The Spirit of Innovation

A remarkable series of technological innovations spurred rapid communica- tion and economic growth. The opening of the Atlantic cable in 1866 made it possible to send electronic telegraph messages instantaneously between the United States and Europe. During the 1870s and 1880s, the telephone, type- writer, and handheld camera came into use.

Scientific breakthroughs poured forth from research laboratories in Menlo Park and West Orange, New Jersey, created by the era’s greatest inventor, Thomas A. Edison. During the course of his life, Edison helped to establish entirely new industries that transformed private life, public entertainment, and economic activity, including the phonograph, lightbulb, motion picture, and a system for generating and distributing electric power. He opened the first electric generating station in Manhattan in 1882 to provide power to street- cars, factories, and private homes, and he established, among other companies, the forerunner of General Electric to market electrical equipment. The spread of electricity was essential to industrial and urban growth, providing a more reliable and flexible source of power than water or steam. However, it was not Edison but another inventor, Nikola Tesla, an ethnic Serb born in modern- day Croatia who emigrated to the United States at the age of twenty- eight, who developed an electric motor using the system of alternating current that over- came many of the challenges of using electricity for commercial and industrial purposes.

Competition and Consolidation

Economic growth was dramatic but highly volatile. The combination of a mar- ket flooded with goods and the federal monetary policies (discussed later) that removed money from the national economy led to a relentless fall in prices. The world economy suffered prolonged downturns in the 1870s and 1890s. Indeed, before the 1930s, the years from 1873 to 1897 were known throughout the world as the Great Depression.

Businesses engaged in ruthless competition. Railroads and other compa nies tried various means of bringing order to the chaotic marketplace. They formed “pools” that divided up markets between supposedly competing firms and fixed prices. They established trusts— legal devices whereby the affairs of sev eral rival companies were managed by a single director. Such efforts to coordinate the economic activities of independent companies generally proved short- lived, disintegrating as individual firms continued their intense pursuit of profits.

To avoid cutthroat competition, more and more corporations battled to control entire industries. Many companies fell by the wayside or were gobbled up by others. The process of economic concentration culminated between

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THE SECOND INDUSTRIAL REVOLUTION ★ 609

1897 and 1904, when some 4,000 firms vanished into larger corporations that served national markets and exercised an unprecedented degree of control over the marketplace. By the time the wave of mergers had been completed, giant corporations like U.S. Steel (created by financier J. P. Morgan in 1901 by combining eight large steel companies into the first billion- dollar economic enterprise), Standard Oil, and International Harvester (a manufacturer of agri- cultural machinery) dominated major parts of the economy.

The Rise of Andrew Carnegie

In an era without personal or corporate income taxes, some business leaders accumulated enormous fortunes and economic power. Under the aggressive leadership of Thomas A. Scott, the Pennsylvania Railroad— for a time the nation’s largest corporation— forged an economic empire that stretched across the continent and included coal mines and oceangoing steamships. With an army of professional managers to oversee its far- flung activities, the railroad pioneered modern techniques of business organization.

Another industrial giant was Andrew Carnegie, who emigrated with his family from his native Scotland at the age of thirteen and as a teenager worked in a Pennsylvania textile factory. During the depression that began in 1873, Carnegie set out to establish a steel company that incorporated vertical integration— that is, one that controlled every phase of the business from raw materials to transportation, manufacturing, and distribution. By the 1890s, he dominated the steel industry and had accumulated a fortune worth hundreds of millions of dollars. Carnegie’s complex of steel factories at Homestead, Penn- sylvania, were the most technologically advanced in the world.

Carnegie’s father, an immigrant Scottish weaver who had taken part in pop- ular efforts to open the British political system to working- class participation, had instilled in his son a commitment to democracy and social equality. From his mother, Carnegie learned that life was a ceaseless struggle in which one must strive to get ahead or sink beneath the waves. His life reflected the tension between these elements of his upbringing. Believing that the rich had a moral obligation to promote the advancement of society, Carnegie denounced the “worship of money” and distributed much of his wealth to various philanthro- pies, especially the creation of public libraries in towns throughout the country. But he ran his companies with a dictatorial hand. His factories operated non- stop, with two twelve- hour shifts every day of the year except the Fourth of July.

The Triumph of John D. Rockefeller

If any single name became a byword for enormous wealth, it was John D. Roc kefeller, who began his working career as a clerk for a Cleveland merchant

What factors combined to make the United States a mature industrial society after the Civil War?

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610 ★ CHAPTER 16 America’s Gilded Age

and rose to dominate the oil industry. He drove out rival firms through cutthroat competition, arranging secret deals with railroad companies, and fixing prices and production quotas. Rockefeller began with horizontal expansion— buying out competing oil refineries. But like Carnegie, he soon established a vertically integrated monopoly, which controlled the drilling, refining, storage, and dis- tribution of oil. By the 1880s, his Standard Oil Company controlled 90 percent of the nation’s oil industry. Like Carnegie, Rockefeller gave much of his fortune away, establishing foundations to promote education and medical research. And like Carnegie, he bitterly fought his employees’ efforts to organize unions.

These and other industrial leaders inspired among ordinary Americans a combination of awe, admiration, and hostility. Depending on one’s point of view,

Cleveland (see inset)

Pittsburgh (see inset)

WISCONSIN

ILLINOIS

INDIANA

MICHIGAN

IOWA

MINNESOTA

MISSOURI

KENTUCKY

TENNESSEE ARKANSAS

LOUISIANA

MISSISSIPPI

ALABAMA GEORGIA

FLORIDA

SOUTH CAROLINA

NORTH CAROLINA

VIRGINIA

WEST VIRGINIA

OHIO

PENNSYLVANIA

NEW YORK

NEW JERSEY

DELAWARE

MARYLAND

VERMONT

NEW HAMPSHIRE

MASSACHUSETTS

CONNECTICUT

RHODE ISLAND

MAINE

La ke

M ic

hi ga

n

Lake H uron

Lak e Er

ie

Lake Ontario

Gulf of Mexico

Atlantic Ocean

Lake Erie

Cleveland

Pittsburgh Monroeville

McKeesport

New Kensington

0

0

100

100

200 miles

200 kilometers

Firms Incorporated into U.S. Steel: Type of plant: Blast furnace Rolling mill, steel work Bridge-building plant Companies: The Carnegie Co. Federal Steel Co. National Steel Co. National Tube Co. American Tin Plate Co. American Steel Hoop Co. American Sheet Steel Co. American Bridge Co. Lake Superior Iron Mines American Steel and Wire Co. of New Jersey

U . S . S T E E L : A V E RT I C A L LY I N T E G R AT E D C O R P O R AT I O N

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THE SECOND INDUSTRIAL REVOLUTION ★ 611

they were “captains of industry,” whose energy and vision pushed the economy forward, or “robber barons,” who wielded power without any accountability in an unregulated marketplace. Most rose from modest backgrounds and seemed examples of how inventive genius and business sense enabled Americans to seize opportunities for success. But their dictatorial attitudes, unscrupulous methods, repressive labor policies, and exercise of power without any demo- cratic control led to fears that they were undermining political and economic freedom. Concentrated wealth degraded the political process, declared Henry Demarest Lloyd in Wealth against Commonwealth (1894), an exposé of how Rockefeller’s Standard Oil Company made a mockery of economic competition and political democracy by manipulating the market and bribing legislators. “Liberty and monopoly,” Lloyd concluded, “cannot live together.”

Workers’ Freedom in an Industrial Age

Remarkable as it was, the country’s economic growth distributed its benefits very unevenly. For a minority of workers, the rapidly expanding industrial system created new forms of freedom. In some industries, skilled workers commanded high wages and exercised considerable control over the produc- tion process. A worker’s economic independence now rested on technical skill rather than ownership of one’s own shop and tools as in earlier times. What was known as “the miner’s freedom” consisted of elaborate work rules that left skilled underground workers free of managerial supervision on the job. Through their union, skilled iron- and steelworkers fixed output quotas and controlled the training of apprentices in the technique of iron rolling. These workers often knew more about the details of production than their employers did.

Such “freedom,” however, applied only to a tiny portion of the industrial labor force and had little bearing on the lives of the growing army of semi- skilled workers who tended machines in the new factories. For most workers, economic insecurity remained a basic fact of life. During the depressions of the 1870s and 1890s, millions of workers lost their jobs or were forced to accept reductions of pay. The “tramp” became a familiar figure on the social landscape as thousands of men took to the roads in search of work. Many industrial work- ers labored sixty- hour weeks with no pensions, compensation for injuries, or protections against unemployment. Although American workers received higher wages than their counterparts in Europe, they also experienced more dangerous working conditions. Between 1880 and 1900, an average of 35,000 workers perished each year in factory and mine accidents, the highest rate in the industrial world.

Much of the working class remained desperately poor and to survive needed income from all family members. In 1888, the Chicago Times published a series

What factors combined to make the United States a mature industrial society after the Civil War?

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612 ★ CHAPTER 16 America’s Gilded Age

of articles by reporter Nell Cusack under the title “City Slave Girls,” exposing wretched conditions among the growing number of women working for wages in the city’s homes, factories, and sweatshops. The articles unleashed a flood of letters to the editor from women workers. One woman singled out domestic service— still the largest employment category for women— as “a slave’s life,” with “long hours, late and early, seven days in the week, bossed and ordered about as before the war.”

Sunshine and Shadow: Increasing Wealth and Poverty

At the other end of the economic spectrum, the era witnessed an unprecedented accumulation of wealth. Class divisions became more and more visible. In frontier days, all classes in San Francisco, for example, lived near the waterfront. In the late nineteenth century, upper- class families built mansions on Nob Hill and Van Ness Avenue (known as “millionaire’s row”). In eastern cities as well, the rich increasingly resided in their own exclusive neighborhoods and vacationed among members of their own class at exclusive resorts like Newport, Rhode Island. The growing urban middle class of professionals, office workers, and small businessmen moved to new urban and suburban neighborhoods linked to central business districts by streetcars and commuter railways. “Passion for money,” wrote the novelist Edith Wharton in The House of Mirth (1905), domi- nated society. Wharton’s book traced the difficulties of Lily Bart, a young woman of modest means pressured by her mother and New York high society to “bar- ter” her beauty for marriage to a rich husband in a world where “to be poor . . . amounted to disgrace.”

By 1890, the richest 1 percent of Americans received the same total income as the bottom half of the population and owned more property than the remaining 99 percent. Many of the wealthiest Americans consciously pursued an aristocratic lifestyle, building palatial homes, attending exclusive social clubs, schools, and colleges, holding fancy- dress balls, and marrying into each other’s families. In 1899, the economist and social historian Thorstein Veblen published The Theory of the Leisure Class, a devastating critique of an upper- class culture focused on “conspicuous consumption”—that is, spending money not on needed or even desired goods, but simply to demonstrate the possession of wealth. One of the era’s most widely publicized spectacles was an elaborate cos- tume ball organized in 1897 by Mrs. Bradley Martin, the daughter of a New York railroad financier. The theme was the royal court of prerevolutionary France. The Waldorf- Astoria Hotel was decorated to look like the palace of Versailles, the guests wore the dress of the French nobility, and the hostess bedecked her- self with the actual jewels of Queen Marie Antoinette.

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THE TRANSFORMATION OF THE WEST ★ 613

Not that far from the Waldorf, much of the working class lived in desperate conditions. Matthew Smith’s 1868 best- seller Sunshine and Shadow in New York opened with an engraving that con- trasted department store magnate Alex- ander T. Stewart’s two- million- dollar mansion with housing in the city’s slums. Two decades later, Jacob Riis, in How the Other Half Lives (1890), offered a shocking account of living conditions among the urban poor, complete with photographs of apartments in dark, air- less, overcrowded tenement houses.

T H E T R A N S F O R M A T I O N O F T H E W E S T Nowhere did capitalism penetrate more rapidly or dramatically than in the trans- Mississippi West, whose “vast, trackless spaces,” as the poet Walt Whitman called them, were now absorbed into the expanding economy. At the close of the Civil War, the frontier of continuous white settlement did not extend very far beyond the Mississippi River. To the west lay millions of acres of fertile and mineral- rich land roamed by giant herds of buffalo whose meat and hides provided food, clothing, and shelter for a population of more than 250,000 Indians.

In 1893, the historian Frederick Jackson Turner gave a celebrated lecture, “The Significance of the Frontier in American History,” in which he argued that on the western frontier the distinctive qualities of American culture were forged: individual freedom, political democracy, and economic mobility. The West, he added, acted as a “safety valve,” drawing off those dissatisfied with their situation in the East and therefore counteracting the threat of social unrest. Turner’s was one of the most influential interpretations of American history ever developed. But his lecture summarized attitudes toward the West that had been widely shared among Americans long before 1893. Ever since the beginning of colonial settlement in British North America, the West— a region whose definition shifted as the population expanded— had been seen as a place of opportunity for those seeking to improve their condition in life.

Baxter Street Court, 1890, one of numerous photographs by Jacob Riis depicting living conditions in New York City’s slums.

How was the West transformed economically and socially in this period?

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614 ★ CHAPTER 16 America’s Gilded Age

Many Americans did indeed experience the westward movement in the way Turner described it. From farmers moving into Ohio, Indiana, and Illinois in the decades after the American Revolution to prospectors who struck it rich in the California gold rush of the mid- nineteenth century, millions of Americans and immigrants from abroad found in the westward movement a path to economic opportunity. But Turner seemed to portray the West as an empty space before the coming of white settlers. In fact, of course, it was already inhabited by Native Americans, whose dispossession was essential to the opening of land for settle- ment by others. Moreover, the West was hardly a uniform paradise of small, independent farmers. Landlords, railroads, and mining companies in the West also utilized Mexican migrant and indentured labor, Chinese working on long- term contracts, and, until the end of the Civil War, African- American slaves.