Mark Twain called this period the Gilded Age: shiny gold on the outside, cheaper metal underneath. Elections were close, turnout was high, and the two parties were evenly matched. Meanwhile machines in the cities and big companies held great power.
Key idea
Reforms of the era: the Pendleton Act (1883) began a merit-based civil service after President Garfield's assassination; the Interstate Commerce Act (1887) set up the first federal regulatory commission, for railroads. Struggling farmers formed the People's (Populist) Party (1892). In 1896 William McKinley (gold standard) defeated William Jennings Bryan (free silver).
Why it works
Under the spoils system, winners gave government jobs to supporters. In 1881 a disappointed office seeker shot President James Garfield, and Congress answered with the Pendleton Act: some federal jobs would go to people who passed exams. On the farms, prices for crops fell for decades while railroad rates and debts stayed high. Farmers organized in the Grange and the Farmers' Alliances, and in 1892 the Populists' Omaha Platform called for free coinage of silver, a graduated income tax, the direct election of senators, and government ownership of the railroads.
Work it through
Worked example: Who wanted what?
A Kansas farmer owes the bank \$1,000. Why would he want more silver coined, and why would the banker disagree?
- More money in circulation tends to raise prices, including crop prices.
- Higher crop prices make a fixed debt of \$1,000 easier to repay.
- The banker who lent the money wants to be paid in dollars that hold their value, so he favors gold.
Answer: Debtors wanted more money (silver, higher prices); creditors wanted sound money (gold).
Common mistake
The free-silver debate was not about jewelry or coins for their own sake. It was about the money supply: farmers in debt wanted more money in circulation and higher prices, while bankers and creditors favored the gold standard. After 1896 new gold discoveries raised the money supply anyway, and the Gold Standard Act of 1900 settled the question for a time.