01:512:104 Lecture Notes - Lecture 23: Greenback Party, Specie Payment Resumption Act, Gilded Age

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Chapter 23 - Political Paralysis in the Gilded Age 1869-1896
The Era of Good Stealings
Post-Civil War, the majority of businesspeople and government officials continued to do their jobs with
decency and honor, but the whole postwar atmosphere was fetid. People went as far as to say that the
Man on the Moon had to hold his nose when passing over America. Free wheeling railroad promoters
scammed investors. Many people scammed the stock-market with price manipulation. Judges and
legislators put their powers up for higher.
Notorious in this new financial world was a pair of partners, "Jubilee Jin" Fisk, the brass, and Jay Gould,
the brains. They convinced Grant through his stepbrother not to sell gold through the Treasury, then
raised the price themselves by buying out all available gold. Contrary to his promises, Grant had the
Treasury sell gold.
Another example was Burly "Boss" Tweed who scammed New York City citizens out of as much as
200million. He was stopped when the New York Times secured damning evidence in 1871.
Depression, Deflation, and Inflation
Crash in 1873:promoters had laid more railroad track, sunk more mines, erected more factories, and
sowed more grainfields than existing markets could bear--bankers made toom many imprudent loans to
finance these enterprises--profits failed to materialize and loans went unpaid, causing credit based house
of cards to fall
more than fifteen thousand businesses went bankrupt
black americans hard hit:Freedman's Savings and Trust Company made unsecured loans to companies
that went under
"folding money" issued during the war depreciated b/c of popular mistrust and legality
by 1868, treasury had already withdrawn $100 million of the "battle-born currency" from circulation: "hard
money" people excited for total disappearance, "cheap money"(debtor groups) wanted a reissuance of
the greenbacks-->more money=cheaper money=rising prices and easier to pay debts
creditors want deflation, debtors want inflation
"hard money" advocates get Grant to veto a bill to print more paper money in 1874 and Resumption Act
of 1875(pledged gov't to further withdrawl of greenbacks from circulation and redemption of all paper
currency in gold at face value)
debtors looked for relief in silver, wanted coinage of more silver
Hard money Republicans pushed "contraction":treasury began to accumulate gold stocks agains tthe
appointed day for resumption of metallic-money payments coupled with reduction of greenbacks--
>deflationary effect:amount of money per capita decreased(1870-1880--$19.42-$19.37)
contraction worsened the impact of depression, but did restore the gov'ts credit rating and brought
embattled greenbacks up to full face value
republican hard-money policy helped elect a democratic HofR in 1874 and spawned Greenback Labor
Party in 1878
Pallid Politics in the Gilded Age
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