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August 9 - August 24, 2025
In its place would arise a society with different interests pitted against each other, snarling over the remnants of a decreasing prosperity. The principle of American government was laissez-faire, they argued; it should not help any particular sector of society.
Laissez-faire was an elegant term, but the reality was that the postwar Republican government was closely allied to business interests, just as farmers and laborers claimed.
The Republicans’ use of the government to push postwar economic development centered at first on monetary policy.
Eastern businessmen demanded an early return to hard money after the war, but congressmen dragged their feet at retiring the greenbacks, which were enormously popular with cash-starved, indebted westerners. Hard money, backed ultimately by gold, prevented inflation and kept debt stable.
Their value fluctuated, although they almost always were worth considerably less than hard money. Greenbacks’ lower value created inflation that helped farmers by permitting them to repay loans with money worth less than when they borrowed it. Capitalists hated the greenbacks for the same reason.
When the national economy fell into a recession in the mid-1870s, he blamed the crisis on the unstable currency and forced through the resumption of specie payments. While this pleased eastern creditors, whose loans would be paid back in money more valuable than it was when they lent it, westerners and workers loathed both the deed and the man behind it. Sherman also began to pay off the national debt, which further tightened the money supply by taking cash out of circulation.
His deflationary financial policy was taking the wealth produced by laborers and redistributing it to those already well off.76
Opponents resented government’s concessions to business in part because businessmen spent their wealth in spectacular displays that left poorer Americans agog.
The parties and pricey jewels were not merely offensive, they also seemed to indicate that something was terribly wrong with America. With workers and western farmers sliding into destitution while the Four Hundred dressed their coachmen in suits with $300 buttons, many Americans began to worry that the nation had gone badly astray. Surely, the idea behind a republican government was that it would treat everyone in society evenly. The burgeoning wealth among the upper classes suggested that the cozy friendship between business and government had tilted the scale in favor of businessmen.
The Senate, especially, seemed the private domain of big businessmen. “Behind every one of half of the portly and well-dressed members of the Senate can be seen the outlines of some corporation interested in getting or preventing legislation, or of some syndicate that has invaluable contracts or patents to defend or push,” the Chicago Tribune lamented in 1884.
Senators worked for business most dramatically by strengthening the tariff system the Republicans had established during the Civil War. Protective tariffs had been wartime measures to raise revenue and protect fledgling industries, but after the war they became vital supports for big business.
Tariffs were a disaster for workers and farmers because they kept prices for consumer goods artificially high. They enabled domestic manufacturers to collude in raising the prices of their products, which they did with astonishing speed.
By the mid-1880s, though, business leaders pulled industries together into larger trusts that eliminated competition and fixed consumer prices at artificially high levels. By the late 1880s, trusts controlled most of the nation’s industries, keeping buyers at their mercy for sugar, meat, salt, gas, copper, transportation, and the steel that fed railroads and urban construction.
These new “holding companies” consolidated business to an even greater degree than the previous trusts.
What Congress did have power to do, though, was to regulate the tariff. Tariff revision seemed an obvious way to restore fairness to the American economy.
Republicans nonetheless staunchly supported the protective system, arguing that it was key to the nation’s industrial growth. Money spent domestically stayed in the country for reinvestment, they contended, while money spent on imports was lost forever. Money invested at home would develop more and more domestic industry which, theoretically, should eventually create more jobs and higher wages for American workers.
Their arguments did not convince workers and farmers, though, who paid higher prices but never seemed to see money come back to them in higher wages or grain prices.
By the early 1880s, the fight over the tariff had become a defining issue for Republicans and Democrats. Since before the Civil War, Democrats had tended to support wage laborers and dislike a strong federal government.
As soon as the war ended, taking away party members’ common ground of the Union cause, Democrats found themselves at odds with the Republicans over monetary policy, with Democrats taking the side of the pro-inflation farmers and laborers.
They continued to oppose measures that seemed to favor the wealthy, and nothing irritated them more than the protective tariff. They found it unconscionable that tariffs took taxpayers’ money and put it in the hands of wealthy businessmen.
By 1884, Democratic opposition to the tariffs had begun to attract a wide audience. Even many Republicans had come around to the view that party operators had tied themselves too closely to the big businessmen who funded their political war chest.
1884, for the first time since the Civil War, Americans put a Democrat in the White House. Democratic candidate Grover Cleveland was famous for fighting corruption in New York and stood firmly against the control of government by business.
In the election, Republicans disgruntled by their party’s close relationship with commercial interests voted for the Democratic reformer rather than their corrupt standard-bearer.
was not until 1888 that the Democrats managed to bring forward their own tariff bill. The Mills Bill of that year, sponsored by Roger Q. Mills from the agricultural state of Texas, sought to lower tariffs dramatically and to use them primarily for revenue. Defending it, Mills echoed the Civil War Republicans when he called for “free men, free labor and free trade.”
They refused to entertain the idea of any system but that of industrial protection. Attempts to reform the tariff came to nothing.
Across the country, businessmen generously poured campaign money into the well-oiled Republican machine. Harrison’s men ran an extraordinarily corrupt campaign. Their platform defended the protective tariff, but on the stump Republicans allowed that some “reform” might be appropriate. They charged the Democrats with disloyalty and with stealing the previous election; they reminded voters of the great Republican heroes of the Civil War.
In his 1888 annual message to Congress, delivered a month after Harrison’s election, outgoing President Cleveland warned his countrymen of the danger they faced. He despaired of the country if the government did not divorce itself from big business. The gulf between employers and employed was growing every day, he noted.
Corporations had been created by the government to serve the interests of the people, but they had gained the upper hand. Soon they would be the masters of the people, rather than the other way around. The government had been lost to business, Cleveland lamented. The people must take it back, he insisted, or America as the hope of mankind would be lost.87
The court revoked the charter of the North River Sugar Refining Company because it had joined the “the great Sugar Trust.” The decision was predicated on the idea that a trust had a public duty, and if a judge believed a trust to be neglecting that duty, he could take away the legal basis for its existence. Businessmen panicked, recognizing that this sweeping decision threatened the existence of all trusts. But outside of business circles, the judgment was widely popular.
As Democrats and reformers called for lower tariffs, pro-tariff Republicans more and more stridently insisted that the tariff must be preserved.
To defend America, they were willing to try to make sure that correct policies could not be overturned by the votes of ignorant people who did not understand what was good for the country.
Once in office, Harrison’s people did everything they could to strengthen their position and weaken that of the Democrats and reformers who wanted to lower the tariffs. They turned first to the patronage machine that would funnel government jobs and government contracts to friends of the administration.
As soon as the new administration took over, the first thing it did was to clear out of office the supporters of the previous administration and replace them with their own men.
This system trickled down to individual voters, who could count on a job from a ward boss as long as they voted the correct way.
The spoils system thrived in nineteenth-century America, and never so well as in the years after the Civil War. With the enormous expansion of the government during the war, the number of positions available for politicians to offer to political friends swelled. So, of course, did the opportunities for corruption, as politicians offered government contracts to supporters.
Horrified, the public demanded that the spoils system be cleaned up. In 1883, Congress passed a law to establish a new “civil service” system by which government jobs would be awarded according to a candidate’s fitness for the position rather than his party loyalty. Nominees for office had to take an exam and, once in a job, could not be removed simply to make way for someone else under a new administration.
Republican Benjamin Harrison had no such scruples. Elected by railroad men and trust officers, he knew the value of well-placed jobs and contracts in shoring up political support.
John Wanamaker symbolized Harrison’s idea of a good public servant. Wanamaker was a fervent Christian who was a trustee of the national Christian Endeavor movement to evangelize the nation and the world, he taught Sunday school, and sometimes even preached to “drunkards and abandoned women” in Philadelphia missions.
Wanamaker was just the most prominent example of widespread patronage corruption in the Harrison administration. Harrison’s men intended their appointments to shore up the Republicans, but putting unqualified and corrupt men into bureaucratic positions badly damaged the functioning of government.
Harrison’s men had proved that it was high time to clean up the civil service.
Harrison’s people retaliated aggressively against their critics. Irritated when the owner of Frank Leslie’s bristled about Harrison’s sell-out of the government to businessmen, W. J. Arkell, the wealthy and well-connected son of New York Republican ex-senator James Arkell, bought the paper and installed the president’s ne’er-do-well son, Russell B. Harrison, as its co-editor.
The first issue of the new Frank Leslie’s contained a thorough attack on civil service reform, written by Republican machine kingpin Thomas C. Platt. Platt dismissed the idea that the government was supposed to represent all the people. Rather, he wrote, it was supposed to represent Republicans. That was the whole point of an election.
The wealthy were essentially stewards of the nation’s money, gathering vast amounts of it together so it could be used for the common good, wrote the great steel baron. With their great resources, responsible capitalists built libraries and schools, museums and symphony halls. Indeed, Carnegie argued, American industrialism was the highest form of human civilization.98
According to Frank Leslie’s, virtually every millionaire in the city did great good with his money.99
What he couldn’t know was that, with the election of President Harrison, the general American impulse to take Indian land had become a stated government policy with a clear political goal. Opening the Great Sioux Reservation for settlement had become a matter of political survival for the Harrison administration.
Settlers who had come to Dakota Territory in the Great Dakota Boom wanted more land, and couldn’t bear seeing rich fields lying unplowed on the Great Sioux Reservation. In 1882, Dakota Territorial Delegate Richard Pettigrew, who was working to build a political following, sought to cut the Great Sioux Reservation in half. His plan would give settlers 11 million acres of land in a broad band across the middle of the reservation from the Missouri River to the Black Hills.2
Reducing the size of the Great Sioux Reservation, McLaughlin argued, was an essential step in Americanizing the Sioux. Only that would weaken their traditional hunting economy enough to make farming their sole option. The best way to make them take up the new economy was to destroy the old.
In 1887, he marshaled through Congress the General Allotment Act, a law designed to force Indians into an American way of life. This act, also known as the Dawes Severalty Act, abolished the system of providing tribes with large tracts of land to use as they saw fit. Instead, the government would provide individual Indian men with land for farming. The Allotment Act dramatically reduced the land available to tribes and destroyed their ability to live off game, which relied on unsettled land for its habitat.
Far from being a boon, the Dawes Act was calamitous for the Sioux. Congress designed the law to push Indians into the free labor economy, but the eastern model wasn’t economically viable in the Dakotas.
Policy makers assumed Indians would either receive necessary supplies from government agents or would work for wages to raise money to buy them. But agents awarded the contracts for supplying the Indians to political friends who didn’t fulfill them, and white employers wouldn’t hire Indians.
