ECONOMIC AND POLITICAL

CHALLENGES

ECONOMIC ISSUES PLAGUED THE NATION…

TO TARIFF OR NOT TO TARIFF? After the Civil War, Congress raised

tariffs to protect new US industries.

Big business wanted to continue this;consumers did not.

1885 tariffs earned the US $100 million in surplus!

THE CURRENCY QUESTION Government had made paper money during

the Civil War led to inflation lack of confidence in paper currency stopped printing paper currency - 1873

Coinage Act of 1873 began a continued debate over use

of gold and/or silver as money

PANIC OF 1893 Business opportunities, especially in RRs, had lead investors to excessive debt

banks & businesses closed

stock market collapsed

Panic triggered 4-year economic depression

Problem: Gold Standard gold = basis of nation’s currency

limited supply of gold scarce and becoming scarcer

Scarcity of gold: caused deflation – prices went down

existing debts were harder to pay

SOLUTIONS: Greenbacks (paper money)

increased supply = inflation prices will go up

“Free” Silver Allow silver to be minted as well as

gold increased supply = inflation prices will go up

POLITICAL CORRUPTION CONITNUES

THE GILDED AGE: 1877-1900

Politics in this time period was

characterized by corruption and

inaction…

POLITICAL CORRUPTION WAS CAUSED BY…

the spoils system (patronage) government jobs awarded to loyal party workers & campaign contributors regardless of their qualifications

government workers changed each time a new candidate won office Why would this be a bad thing?

SPOILS SYSTEM… POSITIVES & NEGATIVES

held political parties together - loyalty

helped each party gain more supporters

boosted political participation

easy way to raise campaign funds

allowed political machines to flourish

CIVIL SERVICE REFORM: Civil Service = working for the

government Reform = change

Pendleton Civil Service Act – 1883 Govt. jobs awarded based on merit system - people earn jobs based on qualifications

created a Civil Service Commission

Benefit = keep the same workers no matter who is in office

WITH THE GOOD COMES THE BAD… Campaign contributions went down

people weren’t guaranteed a govt. job anymore

Politicians had to find other sources of funds Alliance between govt. and big business became even stronger

CORRUPTION CONTINUES…

WE WANT CHANGE!!

Americans wanted the federal government to deal with growing social, political, &

economic problems & to curbthe power of the trusts…

NEXT UNIT:

Populists and Progressives!

POLITICAL INACTION WAS CAUSED BY…1. Balance of power between

White House and Congress (i.e. They couldn’t agree on

anything!)

2. TWO-PARTY STALEMATE

3. VERY LAISSEZ FAIRE GOVERNMENT From 1870-1900 Govt. did very little

domestically Main duties of the federal govt.:

Deliver the mail. Maintain a national military. Collect taxes & tariffs. Conduct a foreign policy.

4. SERIES OF WEAK PRESIDENTS

“The Forgotten Presidents”presidency a symbolic office

RUTHERFORD B. HAYES (1876-1880) Honest politician

Appointed cabinet based on talent not friendship

Began the downfall of spoils system

JAMES GARFIELD (1881) Gave jobs to people

who deserved them

Assassinated by a man who was turned down for a job

CHESTER ARTHUR (1881-1884)

Pushed for Civil Service reform

GROVER CLEVELAND (1884-1888, 1892-1896)

Only democratic president of the era

The “Veto President”

Exposed corrupt RR practices

Created Department of labor

Tried to lower tariffs (unsuccessfully)

BENJAMIN HARRISON (1888-1892) Weak president

Followed the will of Congress