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From the 1870s to the 1890s, the United States entered a period of dramatic change and rapid industrialization. The economy was gradually shifting from agrarian to industrial and urbanization was happening at an exponential rate. Mark Twain named this period the Gilded Age and described it as a time during which greed and political corruption ruled. While there were millions of industrial workers, farmers, and clerks, the wealthy entrepreneurs who owned the factories controlled most of the wealth in the United States during this time.
Laissez-faire ideology had a massive influence on many aspects of society, politics, and economics during this time. This ideology incorporated corruption in government, which flourished during the Gilded Age. Politicians diverged from their duty to serve the people; instead, they were busy distributing government jobs to the party loyalists, giving favors to wealthy entrepreneurs, and enriching themselves rather than dealing with important policy issues; it was this lack of political will to introduce change to this situation that hit the workers and the farmers the hardest.
At the city level, what were then called “political machines” skimmed off money from the business, some kept it for themselves, and some distributed it to the poor. To finance their activities and election campaigns, bosses exchanged favors for votes and money. Having to influence the local government, machines were able to control the awarding of public contracts, the granting of streetcar franchises, and the distribution of city jobs. The recipients were expected to repay with a fraction of their salary and votes. It is worth noting that the political machines were really important to the immigrants as they improved their conditions by providing them with many necessities like food and clothing in exchange for their votes. The immigrants’ major concerns did not revolve around corruption at this time and they, in fact, welcomed it as they saw it as something of great benefit to them. However, machines were awarding more contracts than the budget could afford. Consequently, they raised taxes, which eventually dissatisfied the working class.
- When President James A. Garfield was assassinated, people were stunned to discover that the assassin was a resentful office seeker who had been trying to get a position in Garfield’s administration but failed to do so. Besides, as society grew more complex, the ability of government employees to perform routine became increasingly complex and challenging. It was apparent for these reasons that a professional civil service reform was required, with employees that would be no longer subject to the ever-changing political winds. The result was the passage of the Pendleton Civil Service Reform Act in 1883. This act dealt a major blow to the spoils system and saw the establishment of the United States Civil Service Commission which would construct a system under which people would be hired on merit rather than based on political favoritism.
- Additionally, during the Progressive Era, we have the introduction of the direct primary, the initiative, the referendum, and the recall. In a direct primary voters elect delegates who choose the party’s candidates at a nominating convention. The initiative is a power reserved to the voters to propose legislation, by a petition that would enact, amend or repeal a piece of government legislation. The referendum is a power reserved to the voters that allow the voters, by petition, to demand the reconsideration of any legislative action. The recall is a power reserved to the voters that allow the voters, by petition, to demand the removal of an elected official. On top of that, we also have the Seventeenth Amendment (1911) to the United States Constitution which established the popular election of United States senators by the people of the states.
At the national level, only a handful of extremely rich individuals exercised a powerful influence over Congress. All the presidents from Abraham Lincoln’s death until Teddy Roosevelt were remarkably weak. Presidents and cabinet members were put under tremendous amounts of pressure by job seekers and political machines seeking to capitalize on campaign promises. As a consequence of this relationship, the rare pieces of legislation passed were clearly responses to satisfy the interests of businessmen whose support helped put the politicians reach success.
The main source of corruption at the national level involved Railroads. The only way to recover from the War was to incentivize economic growth. To do this, the country needed Railroads and for this reason, the government started lowering taxes and giving aid to the Railroads. These Railroads turned out to be corrupt. To get the right to build the Railroads, they started bribing the legislators. On top of that, as rail networks spread, so did the competition. On noncompetitive routes, railroads made pricing disproportionate to distance as they increased charges as high as possible to compensate for unprofitably low rates on competitive routes. On top of that, railroads had a monopoly on the transportation of goods from producer to market. Shipping rates were uneven and often unfair, especially on non-competitive lines. Additionally, large corporations such as Carnegie Steel or Standard Oil were able to pressure rail companies to give them favorable rates and low charges. Farmers, in particular, suffered the most from these unfair practices as they could exercise no pressure on the railroads.
- In order to answer those questionable practices, Congress passed the Interstate Commerce Act in 1877. The law created the Interstate Commerce Commission (ICC) which was designated to investigate railroad rate-making. The commission faced a lot of resilience from the railroads as corrupt courts usually ruled in favor of the companies when cases were prosecuted.
However, the most influential factor in politics during these tense times was monopolies. During the last half of the 19th century, it became apparent that large businesses needed to be regulated and it was apparent that the tradition of laissez-faire was not only impractical but hazardous.
- The concept of laissez-faire was first challenged by the 1890 Sherman Antitrust Act. Businesses were prohibited from using monopolistic practices or taking unfair advantage of competitors. Like the Interstate Commerce Act, the Sherman Act had to be modified and reinforced by later legislation, but the passage of the Act demonstrated that the age of unregulated corporate excess was finally coming to an end.
- The Hepburn Act is 1906 United States was another federal law aimed at defeating monopolies; it strengthened the Interstate Commerce Commission (ICC) giving it greater authority to set railroad freight rates and power to set maximum railroad rates and extend its jurisdiction.
- The Clayton Antitrust Act, which Congress passed in 1914, was also a piece of legislation that regulates business practices even further. It prohibited some anti-competitive business practices, such as fixed pricing and other malpractices (in which the same people sit on the executive boards of competing companies in one industry). This act complemented the Federal Trade Commission law passed the same year, which created a new government board appointed by the president and empowered to investigate and publicize competitive, corrupt, or anti-business practices.
The Gilded Age was a time when the greed and ego of humankind were at full display. To say that the United States during the Gilded Age was corrupt would be an understatement. However, it is important to emphasize that even though this was a time filled with corruption, unequal treatment, racism, inequality, and poverty, this era played a really important part in initiating reform in the coming decades. As a response to the Gilded Age flaws, we have the birth of the Progressive era, which brought about a tremendous amount of progress to America and the whole world
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