Propelled by a Second Industrial Revolution, the United States arose from the ashes of the Civil War to become one of the world’s leading economic powers by the turn of the 20th century. Corporate titans such as Andrew Carnegie, John D. Rockefeller and J.P. Morgan amassed spectacular fortunes and engaged in the most conspicuous of consumptions. Beneath this golden veneer, however, American society was tarnished by poverty and corruption, which caused this period of American history to be called the “Gilded Age,” derived from the title of an 1873 novel co-authored by Mark Twain.
Protected from foreign competition by high tariffs, American industrialists colluded to drive competitors out of business by creating monopolies and trusts in which groups of companies were controlled by single corporate boards. Political corruption ran amok during the Gilded Age as corporations bribed politicians to ensure government policies favored big businesses over workers. Graft fueled urban political machines, such as New York’s Tammany Hall, and the Whiskey Ring and Crédit Mobilier scandals revealed collusion by public officials and business leaders to defraud the federal government.
As the rich grew richer during the Gilded Age, the poor grew poorer. The great wealth accumulated by the “robber barons” came at the expense of the masses. By 1890, the wealthiest 1 percent of American families owned 51 percent of the country’s real and personal property, while the 44 percent at the bottom owned only 1.2 percent.
The Populist Party Pushes for Reforms
Many Gilded Age workers toiled in dangerous jobs for low pay. Approximately 40 percent of industrial laborers in the 1880s earned below the poverty line of $500 a year. With such a yawning chasm between “haves” and “have-nots,” workers fought back against the inequality by forming labor unions. Industrial strikes occurred with greater frequency—and greater violence—following the Great Railroad Strike of 1877. During the 1880s alone, there were nearly 10,000 labor strikes and lockouts.
The belief that big businesses had too much power in the United States led to a backlash. The passage of the Tariff Act of 1890, which hiked import duties to nearly 50 percent and raised consumer prices, sparked an agrarian political rebellion that gave rise to the People’s Party, known as the “Populists.” The party advocated for government ownership of railroad and telephone companies, a graduated income tax, shorter workdays and the direct election of senators. In the 1892 presidential election, Populist candidate James Weaver won 22 electoral votes.
When the Panic of 1893 launched what was at the time the worst economic downturn in American history, President Grover Cleveland was forced to borrow $65 million in gold from financiers including Morgan to keep the federal government afloat, further highlighting corporate power in American society.
“It is no longer a government of the people, by the people and for the people,” proclaimed Populist leader Mary Elizabeth Lease, “but a government of Wall Street, by Wall Street and for Wall Street.” The victory of Tariff Act of 1890 sponsor William McKinley in the 1896 presidential election marked the effective end of the People’s Party, but it foreshadowed the Progressive Era to come.
Theodore Roosevelt Ushers in the Progressive Era
Some historians point to the 1890s as the start of the Progressive Era, but the ascent of Theodore Roosevelt to the presidency after McKinley’s assassination marked its definitive arrival. Like the Populists, Progressives advocated democratic reforms and greater governmental regulation of the economy to temper the capitalistic excesses of the Gilded Age. Historian Richard Hofstadter wrote that the Progressive movement sought to “restore a type of economic individualism and political democracy that was widely believed to have existed earlier in America and to have been destroyed by the great corporation and the corrupt political machine.”
Unlike previous presidents, Roosevelt vigorously enforced the Sherman Antitrust Act to break up industrial behemoths. The “trust buster” was also the first president to threaten to use the army on behalf of labor in a 1902 coal miners’ strike. Roosevelt easily won re-election in 1904 campaigning on a “Square Deal” platform to control corporations, conserve natural resources and protect consumers.
Investigative journalists, writers and photographers spurred Progressive reforms by exposing corporate malfeasance and social injustice. These “muckrakers” included Ida Tarbell, whose investigation of Rockefeller led to the breakup of the Standard Oil Company monopoly. Upton Sinclair’s 1906 novel The Jungle about working conditions in the meatpacking industry sparked the passage of the Meat Inspection Act and Pure Food and Drug Act in 1906.
Progressive Political Reforms Expand Voting Rights
In states across the country, Progressives pushed for greater democratization of government and the expansion of voting rights in order to reduce the power of political machines.
In 1903, Wisconsin became the first state to implement direct primary elections, and the state’s governor, Robert La Follette, was among Progressives championing the enactment of initiatives and referendums, which allowed citizens to propose and vote directly on legislation.
Progressive reforms continued under Roosevelt’s successor, William Howard Taft, who combined tariff reduction legislation with support for the 16th Amendment to the U.S. Constitution, which established a federal income tax. Even though Democrat Woodrow Wilson defeated both Taft and Roosevelt in the 1912 presidential election, he enacted a Progressive agenda that included the creation of the Federal Reserve Board and the Federal Trade Commission as well as the passage of the Clayton Antitrust Act, which further limited the ability of companies to form monopolies.
Additional democratic reforms came into force with the 17th Amendment, which required the direct election of senators, and the 19th Amendment, which guaranteed women the right to vote. Many Progressives also supported the temperance movement and pushed for the enactment of Prohibition, which came into effect with the 18th Amendment. World War I marked the decline of the Progressive Era, which came to an end with the start of the Roaring Twenties.
