Northern Republicans hated Andrew Johnson. Johnson had succeeded Lincoln as president and now had to deal with the Reconstruction. But his "go easy on the Confederacy" policies and his total lack of commitment to rights for former slaves put him at odds with the radical Republicans in Congress. The South was passing laws designed to make free blacks into virtual slaves, and Johnson nodded along.
In response, Congress passed the Fourteenth Amendment in 1866, which states that all persons born or naturalized in the United States are citizens and are entitled to equal protection and due process of law. The Congress then impeached Johnson on a technicality, but he was acquitted. (Impeachment
does not mean that the president is removed from office, only that he is
for impeachment. Bill Clinton was the only other president ever to be impeached). After Reconstruction, America went back to doing what it does best: making money. It was the era of big business. While corruption plagued the government, money-hungry entrepreneurs took advantage of the government's lax economic policies and formed huge corporations. These powerful men, most notably John D. Rockefeller, Andrew Carnegie, and J. P. Morgan, used their businesses to squash competition and control the market. For two decades, they truly ruled America.
John D. Rockefeller was a young bookkeeper when his bosses told him to report on whether or not oil was a good investment. He lied and told them it had "no future." Then he went on to form what would become the biggest oil company in the United States.
Rockefeller's Standard Oil Company completely dominated the booming oil market. Based in Cleveland, Ohio, Standard Oil grew and grew by buying out smaller rivals. Standard Oil also reportedly attacked rival companies using bribery, sabotage, and secret deals with railroads.
While the government was very hands-off with the economy, there were still some laws in place governing corporations. To bypass these restrictions, Rockefeller (and his attorney Samuel Dodd) invented the trust, a giant organization of big businesses under one umbrella.
This political cartoon illustrates Standard Oil's hold on other industries and even the government.
As soon as Standard Oil became a trust, it could legally own virtually the entire oil industry. Rockefeller quickly gobbled up all of his competitors, forming a giant monopoly. By 1879 Rockefeller controlled more than 90 percent of the nation's oil refineries.
J.P. Morgan first made a name for himself during the Civil War, not as a hero (he dodged the draft by paying $300), but as a moneymaker. He bought rifles from the government, refitted them, and then sold them back to the government for a huge profit.
Morgan was a banker, and after the war he expanded his banking empire to colossal proportions. His bank houses were so large they loaned money to other banks. Morgan also got into the railroad business.
Cornelius Vanderbilt was one of the major robber barons of the time.
The era of big business is also known as the Gilded Age. The word gilded
means gold-plated (but cheap on the inside).
This era is called the Gilded Age because a handful of tycoons were getting insanely rich, but the booming economy hid corruption, dirty-deals, and the working poor that lay below the surface of society. The tycoons themselves were called robber barons
Jay Gould and Cornelius Vanderbilt were the original railroad tycoons following the Civil War, but their empire mostly collapsed after the Black Friday stock market crash of 1869. In the 1890s, J. P. Morgan stepped into the promising railroad industry. He and his friends began buying up huge amounts of America's railroad. By 1900 Morgan himself owned half of America's track mileage, and his friends owned most of the rest, allowing them to set prices and control trade.
Andrew Carnegie was the steel tycoon. His company, Carnegie Steel, dominated steel production in the United States. In 1900 Carnegie teamed up with J. P. Morgan to create U.S. Steel, the first billion-dollar corporation.
Unlike other robber barons, Carnegie was born poor. He emigrated from Scotland with his family and worked in a cotton factory before working his way to the top of the steel empire.
Horatio Alger was an author who wrote fictional tales of American boys going from "rags to riches." These popular books helped create an idea of the Gospel of Success: anyone could become rich and famous in America if he or she had enough ambition and perseverance.
Darwin's extremely important theory of evolution argued that human beings had evolved from more primitive life-forms. Evolution depended on "survival of the fittest": only the strongest and most adaptable animals survive to pass on their genes.
Andrew Carnegie took this idea and applied it to economics and society. In his 1889 essay, "The Gospel of Wealth," Carnegie argued that free- market economics would allow the strongest companies to survive, and that the smartest, most hardworking people would rise to the top of society. This idea was called social Darwinism, and Carnegie and others used it to justify the enormous gap between the rich and the poor.
In 1895 the U.S. government was running out of gold, so it actually turned to one of its citizens to bail it out. J. P. Morgan gave the government $62 million in gold in exchange for U.S. bonds. He then sold the bonds for enormous profit.
Senator John Sherman was the primary author of the Sherman Antitrust Act.
Realizing that things were getting out of hand, Congress began attempting to regulate these giant trusts. In 1888 Congress passed the Interstate Commerce Act to try to stop price-fixing on the railroads. In 1890 Congress passed the Sherman Antitrust Act, which outlawed trusts. But big business wasn't so easily stopped. These acts were rarely enforced. In fact, lawyers for big business began using the Sherman Antitrust against striking unions. So while Congress was trying (meekly) to regulate trade, the courts were clearly pro-business.
Following the Civil War, the government practiced a hands-off policy toward business. The government believed in a laissez-faire economy (laissez-faire
is French for "let be"). The idea is that a free economy will regulate itself and that competition will create fair wages and prices. The government didn't realize that the robber barons would literally stomp out competition.
At the opening of the twentieth century, two more men emerged as extremely influential power brokers. William Randolph Hearst and Joseph Pulitzer owned newspapers, and they used their newspapers to control the views of American citizens.
This political cartoon depicts Pulitzer and Hearst's warmongering.
Pulitzer and Hearst learned during the Civil War that blood and war sold newspapers. Years later, both men began using their newspapers to push America toward war. In Cuba, nationalists had been rebelling against Spanish rule, so Pulitzer and Hearst began exaggerating and even inventing accounts of Spanish atrocities to sell more papers. Soon the American public was clamoring for action against Spain.
The Spanish-American War (1898) lasted only two months. The U.S. invaded Cuba and the Philippines and conquered both. Eager for war heroes, Pulitzer and Hearst sent war correspondents to follow Theodore Roosevelt, who was leading a volunteer cavalry known as the Rough Riders through Cuba. Teddy Roosevelt and the Rough Riders become famous after their victory on San Juan Hill.
This political cartoon shows evil spirits emerging from the press.
The journalistic practices of these newspapers are called yellow journalism
. Actual facts didn't matter much. The newspapers printed almost anything in an effort to sell more papers and influence their readers.
Controlling an entire industry meant having no competition. Having no competition allowed the robber barons to set prices extremely high, while keeping the wages they paid their workers very low.
The workers weren't entirely silent during this period. Hazardous working conditions, low pay, and long hours led hundreds of thousands of workers to organize into unions. The Knights of Labor were one of the first major unions. They demanded equal pay for women and an end to child labor, among other progressive ideas. In 1885 the Knights of Labor led a successful strike against Jay Gould's railroad company. A year later, however, violence and death at the Haymarket Riot in Chicago caused the union to fold.
This political cartoon illustrates Boss Croker as the center of New York's political system.
During the Gilded Age, the power of the vote wasn't in the hands of individuals. It was in the hands of political machines: local organizations that distributed jobs, city contracts and other benefits in exchange for votes. These machine politics were dominated by party bosses who acted a lot like mob bosses, thriving off of power and corruption.
The most powerful local boss in America was William Marcy Tweed. Boss Tweed was, in many ways, the king of New York, and Tammany Hall was his court. Through a mixture of favors and intimidation, Tweed controlled the vote, and by owning the vote, he owned the legislators. So Boss Tweed essentially controlled legislation in New York without even holding an elected position.
The Pulitzer Prize is now one of the world's most revered and distinguished honors. Each year a committee awards the prize to notable authors, photographers, musicians, and journalists for specific works. Ironically, the prize was founded by Pulitzer (in his will), who wasn't exactly known for truthful reporting in his newspapers.
Labor union leader Samuel Gompers.
"The way to make money is to buy when blood is running in the streets."
-John D. Rockefeller
"Upon the sacredness of property civilization itself depends . . . Not evil, but good, has come to the race from the accumulation of wealth by those who have had the ability and energy to produce it."
-Andrew Carnegie, from his article "Wealth" in the North American Review
"Year by year man's liberties are trampled underfoot at the bidding of corporations and trusts, rights are invaded and law perverted. In all ages wherever a tyrant has shown himself, he has always found some willing judge to clothe that tyranny in the robes of legality, and modern capitalism has proven no exception to the rule."
-Samuel Gompers (1894), leader of the American Federation of Labor from 1886 to 1924
1. Why is this song called "Big Ballin'?"
2. According to the song, how did these men become so wealthy?
3. What is your opinion of these people? Why?
4. What new information about this time period did you gain from the song?