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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