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Chapter 19

Economic Change and the Crisis of


the 1890s

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Economic Growth
• 15 years between 1878 – 1893: U.S.
economy grew at one of the fastest rates in
history
• Growth in manufacturing:
– 180% increase
• Agriculture:
– 26% increase

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Value Added by Economic Sector, 1869-1899 (In 1879 Prices)
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Railroads
• Railroads: single most important agent of
economic growth
• Railroad “pools” and other sources of resentment
• Patrons of Husbandry or Grange (1867)
– "Granger laws"
– Munn v. Illinois (1877)
• Interstate Commerce Act (1887)
– Interstate Commerce Commission (ICC)
• Standard time zones

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Technology
• Advancements in:
– Railroads
– Steel Mills
– Telephone
– Electricity: light and the generator
– Typewriter
– Elevators and skyscrapers
– Entertainment: phonographs and motion picture
– Household items: refrigerators, washing machines
– Internal Combustion engine leads to automobiles and
first flight (Wright Brothers)

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The American Middle Class
• Middle class achieves class consciousness
• Tries to recreate nation in their image
Philadelphia Centennial
Exposition
• American inventions on display
• Alexander Graham Bell and the telephone
• Christopher Sholes and the typewriter
• Corliss Steam Engine
• Fair demonstrated that the antebellum
Market Revolution had become industrial
Gilded Age Cities
• Urbanization increased
– U.S. 20% urban in 1860, 40% in 1900
• Streetcars allow urban growth beyond
“walking city”
• Great disparities of wealth in cities
• Suburbs for middle class
• Public vs. private utilities and urban
services
American Museum
• Museums move from warehouse of
curiosities to ornate display of fine art and
scientific artifacts
– Natural History Museum in New York
– Field Museum in Chicago
• Labor groups pressure museums to open on
Sundays
• Middle class decorum maintained
The Department Store and Mail
Order Catalogs
• Department stores replace small, single item shops
– John Wanamaker’s Philadelphia 1876
• Mail Order catalogs bring department experience
to rural areas
– Montgomery Ward
– Sears Roebuck
• Chain Stores
– A&P
– Woolworth’s
• All required standardization of goods
Advertising and magazines
• Advertising becomes a major industry
• Magazines
– Primary method of advertising distribution
– Pioneered artistic style like Realism
– Pioneered literary forms like short stories
– Made important technical breakthroughs for media like
photo reproduction and printing
• Newspapers
– Sunday editions and comic strips
African-American Middle Class
Culture
• Segregation forces Blacks to organize their
own economic and social institutions
• The Colored American
• Frances E. Harper
• Paul Laurence Dunbar
• W. E. B. Du Bois
The New Woman
• Women challenge “separate spheres” in
generation after the Civil War
• More women obtain high school and college
degrees
• Women begin to work in professional and white
collar occupations
– Work put women away from supervision of male
family members
– Wages gave them some independence
• Women and volunteer associations
– Settlement Houses and YWCA
World’s Columbian Exposition
• Chicago 1893: culmination of the middle
class revolution
• White City— middle class ideal for future
of America
• Midway Plaisance
– Sol Bloom
– Ferris Wheel
Wealth and Inequality
• Gulf between rich and poor widened
dramatically
• Thorstein Veblen and Conspicuous
Consumption
– The Theory of the Leisure Class (1899)
• “Robber barons“
– Criticism was of power, not wealth

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Real Wages of Workers and per capita Income of
all Americans, 1870-1900
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The Antitrust Movement
• Standard Oil Trust
• John Sherman and the Sherman Antitrust
Act (1890)
– “Restraint of trade”
• U.S. v. E. C. Knight Company (1895)

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Labor Strife
• Labor discontent
– U.S. had world’s highest rate of industrial accidents
– Decline in status of craft labor
• National Labor Union (1866)
• Bureau of Labor (1884)
• Labor Day (1894)
• Molly Maguires
• Greenback-Labor Party

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The Great Railroad Strike of
1877
• Railroad wage cuts
– Baltimore and Ohio Railroad
• 10 states call out militia

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The Knights of Labor
• Terence V. Powderly and the Knights of Labor
(1869)
• Rank and file wanted to concentrate on
improvement in bread and butter issues
• Leadership wanted alternative to wage system
• Although leadership opposed strikes, Knights
greatest triumphs were through strikes

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Haymarket
• National general strike for 8 hour day 5-1-1886
• McCormick strike, police kill 4 strikers 5-3-1886
• Protest of killings at Haymarket Square 5-4-1886
– Anarchists
– Bomb kills 10, 6 police
– 8 Anarchist tried for murder
– Knights of Labor caught in anti-labor backlash
• American Federation of Labor (1886)
– Samuel Gompers
– Accepted capitalism and wage system
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Henry George
• Progress and Poverty (1879)
• Land monopoly is source of wealth
disparity
• Solution: 100% tax on “unearned
increment” of land value
• Sensitized generation that become the
Progressives to social issues

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Edward Bellamy
• Looking Backward (1887)
• Social Gospel and Christian Socialism
– Aid to poor as important as saving souls
– Settlement houses
– Contributed to rise of Progressives

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The Homestead Strike
• Carnegie Steel Company
• Henry Clay Frick
• Amalgamated Association of Iron, Steel and
Tin Workers
• Lockout vs. sitdown 1892
• Pinkertons and state militia break strike

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The Depression of 1893-1897
• Panic of 1893
– Reading Railroad
– National Cordage Company
• Jacob Coxey
– End depression with road building
– "Coxey's army"

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The Pullman Strike
• George Pullman
• Company town
• Pullman cuts wages, but keeps rents and store
price the same
• American Railway Union (ARU)
– Eugene V. Debs
– Success in spring 1894 against Great Northern Railroad
– Sympathy strike with Pullman workers
– Federal troops sent, 34 die
– Strike broken, Debs jailed
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Farmers’ Movements

• Settlers fill plains states in generation after Civil


War
• Agricultural challenges for farming in the west
– Severe weather was devastating
– Precipitation swings “in God we trusted, in Kansas we
busted”
– Isolation and loneliness for farm families
• Global agricultural glut in wheat and cotton by
1880s
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Credit and Money
• Deflation hurt farmers in debt
– “Greenbacks"
• Public Credit Act (1869)
• Specie Resumption Act (1875)
• Effects mixed
– Facilitated overall economic growth
– Hurt rural economies of South and West

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Wholesale and Consumer Price Indexes, 1865-1897

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The Greenback and Silver
Movements

• Greenback Party
– "the Crime of 1873"
• Bland-Allison Act (1878)
• “Free Silver”
• Sherman Silver Purchase Act (1890)

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The Farmers’ Alliance
• Farmers' Alliance
– Marketing cooperatives
– Ocala, Florida demands (1890)
• Graduated income tax
• Direct election of Senators
• Free silver
• Government control of railroads, telegraph, and telephone
industry
• Subtreasury Plan
• People's Party
– Populists

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The Rise and Fall of the People’s
Party
• Support for Populists strong in Plains and
mountain states
• Leonidas L. Polk
• Omaha platform (1892)
– Mirrors Ocala demands
• James B. Weaver
• Results
– Gain control of some Western legislatures
– Defeated by racial demagoguery in the South

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The Silver Issue

• William Jennings Bryan


– “Cross of gold" speech
– Democratic nominee
• Populist dilemma
– Democratic whale swallowed the Populist fish
in 1896

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The Election of 1896
• Republicans and William McKinley
– Preferred tariff campaign
– Bryan is irresponsible inflationist
– Mark Hanna
– "front porch campaign"
• 1896 election most impassioned in a generation
• Section pattern: South and West vs. North
• International gold discoveries reverse deflation,
prosperity returns

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Conclusion
• 1890s in America:
– American Past: large rural and agricultural
economy
– American Future: cities and commercial-
industrial economy
• Social and Political upheavals
– Economic changes and the widening gap
between rich and poor

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