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Old Friday, June 02, 2006
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Economist In Equilibrium
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The Late Nineteenth Century

The remainder of the 19th cent. was marked by railroad building (assisted by generous federal land grants) and the disappearance of the American frontier. Great mineral wealth was discovered and exploited, and important technological innovations sped industrialization, which had already gained great impetus during the Civil War. Thus developed an economy based on steel, oil, railroads, and machines, an economy that a few decades after the Civil War ranked first in the world. Mammoth corporations such as the Standard Oil trust were formed, and “captains of industry” like John D. Rockefeller and financiers like J. P. Morgan controlled huge resources.
The latter part of the 19th cent. also saw the rise of the modern American city. Rapid industrialization attracted huge numbers of people to cities from foreign countries as well as rural America. The widespread use of steel and electricity allowed innovations that transformed the urban landscape. Electric lighting made cities viable at night as well as during the day. Electricity was also used to power streetcars, elevated railways, and subways. The growth of mass transit allowed people to live further away from work, and was therefore largely responsible for the demise of the “walking city.” With the advent of skyscrapers, which utilized steel construction technology, cities were able to grow vertically as well as horizontally.
Into the “land of promise” poured new waves of immigrants; some acquired dazzling riches, but many others suffered in a competitive and unregulated economic age. Behind the facade of the “Gilded Age,” with its aura of peace and general prosperity, a whole range of new problems was created, forcing varied groups to promulgate new solutions. In the 1870s the expanding Granger movement attempted to combat railroad and marketing abuses and to achieve an element of agrarian cooperation; this movement stimulated some regulation of utilities on the state level. Labor, too, began to combine against grueling factory conditions, but the opposition of business to unions was frequently overpowering, and the bulk of labor remained unorganized.
Some strike successes were won by the Knights of Labor, but this union, discredited by the Haymarket Square riot, was succeeded in prominence by the less divisive American Federation of Labor . Massachusetts led the way (1874) with the first effective state legislation for an eight-hour day, but similar state and national legislation was sparse , and the federal government descended harshly on labor in the bloody strike at Pullman, Ill., and in other disputes. Belief in laissez faire and the influence of big business in both national parties, especially in the Republican party, delayed any widespread reform.
The Presidents of the late 19th cent. were generally titular leaders of modest political distinction; however, they did institute a few reforms. Both Hayes and his successor, James A. Garfield, favored civil service reforms, and after Garfield's death Chester A. Arthur approved passage of a civil service act; thus the vast, troublesome presidential patronage system gave way to more regular, efficient administration. In 1884 a reform group, led by Carl Schurz, bolted from the Republicans and helped elect Grover Cleveland, the first Democratic President since before the Civil War. Under President Benjamin Harrison the Sherman Antitrust Act was passed (1890).
The attempt of the Greenback party to combine sponsorship of free coinage of silver and other aids to the debtor class with planks favorable to labor failed, but reform forces gathered strength, as witnessed by the rise of the Populist party. The reform movement was spurred by the economic panic of 1893, and in 1896 the Democrats nominated for President William Jennings Bryan, who had adopted the Populist platform. He orated eloquently for free silver, but was defeated by William McKinley, who gained ardent support from big business.
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