Between 1870 and 1900, big business played a huge role in government. Big business' influence due to its power and money was especially apparent in Congress. Also, during this time period, big businesses played a big role in the economy through the creation of tariffs. Lastly, there was an American response to the big business' meddling in politics and the economy, especially of big business' dirty tactics in government.
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By pursuing a policy of rule or ruin, Rockefeller created a monopoly of oil, employed spies, extorted secret rebates from railroads, and even forced the lines to pay him rebates on the freight bills of his competitors. This big business’ dirty way of operating impacted politics and it came to symbolize the trusts and monopolies of the Gilded Age. Through it's huge influence, Standard Oil was in control of the oil industry in a time where there was massive industrial development, and it used this power i n vehemently resist government regulation, which was the cause in the delay in the government being able to deal with this abusive trust and others.
Prime example of the corruption of the big business of railroads, the Union Pacific Railroad insiders had formed the Crédit Mobilier construction company and then cleverly hired themselves at inflated prices to build railroad line, "earning" dividends as high as 348%. And, to assure that Congress won't get involved, the company furtively distributed shares of its valuable stock to key congressmen. Later investigations further revealed that the vice president of the U.S had accepted payments from Crédit Mobilier. This is showing that railroads are king because they control the government through its influencing of key congressmen and the vice president, so it was free to do whatever it wanted. Not only this, but other similar railroads would display this power and would discharge workers without cause and withhold wages,delay lawsuits (through big business' take over in the courts), and control freight prices and monopolize food and fuel industries. This is a showing of how railroads dictate government policy, just like how many big businesses do.
The so-called Magna Carta of civil service reform, it made compulsory campaign contributions from federal employees illegal, and it established the Civil Service Commission. The Commission was to make appointments to federal jobs on the basis of competitive examinations rather than "pull". This well-intended reform ran into problems of it's own. With the "plum" federal posts now beyond their reach, politicians were forced to look elsewhere for money. Increasingly, they turned to the help from big business. So, the Pendleton Act might have partially divorced politics from patronage, but it helped drive politicians into "marriages of convenience" with big business leaders.
The court declared invalid an Illinois law prohibiting long-haul and short-haul clauses in transportation contracts as an infringement on the exclusive powers of Congress granted by the commerce clause of the Constitution. The result of the case was denial of state power to regulate interstate rates for railroads, and the decision led to creation of the Interstate Commerce Commission. Now, the Federal government was in control of the railroads, which would be a hit to the big business of the railroad industry.
Congressional legislation that established the Interstate Commerce Commission, compelled railroads to publish standard rates, and prohibiting rebates and pools. This political action by Congress gave the government an important means to regulate big business, and it heralded the arrival of a series of independent regulatory commissions that would be set up in the future. In short, it was a start for Washington to regulate business in the interest of society at large, but only a modest accomplishment.
By this time, Congress, you can say, was controlled by the "Bosses of the Senate". What this means is that over-sized trusts such as Standard Oil, are in control in Congress. This is more evident in the fact that the public isn't electing officials into Congress, but rather the big businesses are through their wealth and influence. In short, Congress, by this time, was one of, by, and for the monopolists.
Officially known as the People's party, the Populists represented Westerners and Southerners who believed that U.S economic policy inappropriately favored Eastern businessmen instead of nation's farmers. Their proposals included nationalizing the railroads, creating a graduated income tax, and most significantly the unlimited coinage of silver. The party emerged out of the frustration over Wall Street and the "money trust" (big business). They were the rural American farmers' responses to big business that seemed to only support the urban Eastern businessmen at their expense.
Through Rockefeller's way of monopolizing the oil business, Standard Oil impacted economies by achieving economies abroad and bolstering the economy at home. By 1877 it controlled 95% of the oil refineries in the U.S. It was also one of the first multinational corporations, where at times it distributed more than half of the company's kerosene outside the U.S.
The crash was one of those periodic plummets that roller-coastered the economy in this period of unbridled capitalist expansion, like the expansion big businesses such as oil and railroads. Overreaching promoters had laid more railroad track, sunk more mines, erected more factories, and sowed more grain fields than existing markets could bear. Bankers, in turn, had made too many imprudent loans to finance those entrepreneurs. When profits failed to become a reality for these hopeful one-day big business owners, loans went unpaid, and the whole credit-based house of cards fluttered down. The U.S wasn't the only one who suffered, since the world suffered similar economic collapse in 1873.
Farmers and debtors bore the brunt of the economic distress after the Panic of 1873 and issued calls for the printing of additional greenbacks and the unlimited coinage of silver. These calls for action were transformed into a political movement and, in 1876, into a political party. The National Greenback Party took up the greenback refrain and was against Republicans, the representatives of the wealthy creditor interests and big names in big business, who wanted the greenbacks removed from circulation and the return to a gold-backed currency. The party was in support of farmers and those in debt by wanting to keep the paper currency because it was easier to pay back than hard money backed by gold. Paperback money would also cause inflation, which would make it easier to pay back debts.
The vehement opposition to the trusts, especially among farmers who protested the high charges for transporting their products to the cities by railroad, finally resulted in the passage of the Sherman Antitrust Act in 1890. It was a law that forbade trusts or combinations in business. This was a landmark in that it was one of the first direct Congressional laws that would regulate big business for the public good. In some way, it remains the most important because of how effective it was against monopolistic corporations, from which we are protected from today.
The Democrats were originally pledging lower tariffs in the creation of this proposed tariff reform bill, where it added a number of items to the free list, including sugar, lumber, coal and wool. Further, the duties on imported manufactured goods would be reduced while maintaining their protective nature. But, by the time in passed through Congress, it was attached with 600 amendments, many of which were special-interest protection to big business. It destroyed its reform intent, where the resulting Wilson-Gorman Tariff offered slight reductions in the overall average rates, an improvement over the McKinley Tariff, but not an example of tariff reform. The tariff also contained an income tax provision , which survived and became law. In 1895, however, the Supreme Court ruled the tax unconstitutional. Through this ruling, the Populists and South and West were convinced that the judicial system was working hand-in-glove with big business.
During the 1896 campaign effort of William McKinley, Northern manufacturing interests were active donors to his party's presidential aspirations. When McKinley summoned a special congress in 1897, their donations were rewarded with a new tariff. The Dingley Tariff was shaped around the desires of manufacturers, where the new proposed average rates, after about 850 amendments were tacked on the bill, were a high 46.5%.
Workers walked off the job to protest a 10 percent wage cut leveled by their employer, the Baltimore & Ohio Railroad. Strikes to protest cutbacks in the midst of a period of nationwide economic depression soon spread westward across the country.
Probably one of the most important inventions influenced by industrial expansion, it transformed night into day. The influence of industrial expansion influenced not only the invention of the light bulb by Edison, but also cash registers and typewriters, among just a few examples of the inventions that resulted in some 440,000 patents being issued between 1860 and 1890.
In 1881, the Atlantic Monthly published Story of a Great Monopoly by the well-known reformer Henry Demarest Lloyd, and the widespread popularity of this article resulted in Lloyd's publication in 1894 of Wealth against Commonwealth, a book-length attack on monopolies based largely on his study of Standard Oil. His publication of this attack on monopolies represented the disgust of not only among the many people who had their businesses or jobs wiped out by the ruthless predatory tactics of the trusts, but also by countless others who were affected by the increased costs and reduced levels of service that often resulted from the elimination of competition. This also shows that the dirty tactics of the trusts, such as Standard Oil, were not unnoticed and the American public showed their response of displeasure.
A national federation of trade unions that included only skilled workers. It was led by Samuel Gompers for nearly 40 years, and it sought to negotiate with employers for a better kind of capitalism that rewarded workers fairly with better wages, hours, and conditions. Even though it only accepted white males, it was a great gain for worker rights in the job place, and the development of the closed shop was authorized in this loose federation of unions. This federation of trade unions shows the American workers' responses to the poor working conditions and low-wages of big business employment.
A violent flare-up accompanied a labor protest in Chicago against the business of the Pullman Palace Car Company, which maintained a model town near Chicago for its employees. It was hit hard by the depression of 1893 and had to cut wages by about one-third, while holding the line on rent for the company houses. The workers, who were part of the American Railway Union, struck. It was organized by Eugene V. Debs, a charismatic labor leader, into a union that had about 150,000 members. The American workers were giving their response by overturning Pullman cars in some places and paralyzing railway traffic from Chicago to the Pacific Coast. The strike was crushed by federal troops.