PART II

The Gilded Age through World War I and the 1920s

8

Social and Economic Transformations

Theodore Roosevelt opened his reminiscence of his days as a cattle rancher with this portrait of the borderlands between the Dakota Territory and the plains to the west:

The great middle plains of the United States, parts of which are still scantily peopled by men of Mexican parentage, while other parts have been but recently won from the warlike tribes of Horse Indians, now form a broad pastoral belt, stretching in a north and south line from British America to the Rio Grande. Throughout this great belt of grazing land almost the only industry is stock-raising. . . . The northern cattle plains occupy the basin of the Upper Missouri, that is, they occupy all of the land drained by the tributaries of that river, and by the river itself, before it takes its long trend to the southeast. They stretch from the rich wheat farms of Central Dakota to the Rocky Mountains, and southward to the Black Hills and the Big Horn chain, thus including all of Montana, Northern Wyoming, and extreme Western Dakota.¹

Roosevelt’s book was a best seller. Written when he was only twenty-six years old, it revealed his keen eye for topography and for flora and fauna, despite being a “dude” from the East. He relished shooting game, such as deer, elk, and waterfowl—a somewhat surprising passion, given his interest in birds. He wandered for days in search of buffalo, which had already been virtually eradicated from the West. But Roosevelt did not begrudge his days stalking the plains’ largest beast because he firmly believed that emersion in the outdoors fostered a “manly” character.²

Roosevelt particularly admired the rugged lifestyle of the cowboys of the middle plains, which was the primary motivation for his 1883 purchase of two cattle ranches on the Little Missouri River in the western Dakotas. A cattle boom was in progress on the northern plains, and Roosevelt hoped to cash in on what looked like a sure thing, as did many other eastern and European investors. But then disaster struck. It began with dwindling grasslands caused by overgrazing and a summer drought, followed by a record cold winter in 1886–1887, accompanied by monstrous blizzards. The severe weather wiped out three-quarters or more of the livestock that roamed the open range; Roosevelt estimated that he lost two-thirds of his herd.³ The financial wreckage prompted cattlemen to change their livestock practices on the plains. As miners, farmers, and cattlemen learned while chasing their fortunes in the West, the unpredictable environment and the volatile commercial markets made stern taskmasters. Roosevelt sold his ranches and shrugged off his financial losses, looking back on his Dakota days with fondness. He took away from the experience a heightened appreciation of the great bounty of America’s wilderness, as well as a sense of its fragility in the face of relentless pressure from settlers and entrepreneurs. These sentiments influenced his performance when he became the twenty-sixth president of the United States in 1901.

Born in 1858, Theodore Roosevelt lived through the great transformation of American society between 1870 and 1919. A series of dramatic changes swept the United States during these years, when the western half of the country was integrated into the union and the nation’s economy recorded an extraordinary expansion. A dual burst of economic development—a vast increase in the country’s agricultural capacity and the rapid growth of industrial manufacturing—was responsible for one of the most remarkable stories in modern history. The results of these two linked economic pathways substantially increased the standard of living for most Americans during the Gilded Age and the Progressive Era (1870–1917). The number of farm owners and homeowners increased markedly during these decades, giving millions of people a property stake in America.

An increase in the nation’s population, which grew from 40 million in 1870 to 106 million in 1920, helped fuel these developments. The attraction of America drew 26 million people from Europe and elsewhere. Many of them settled in the countryside, including new farms in the West, but even more headed for the cities, where factories and other employers welcomed workers. The foreign-born proportion of the population hovered at 13 to 14 percent, but it was much higher in the industrial cities, which lured Americans as well as immigrants. A quarter of the nation’s population lived in cities in 1870; slightly more than half were city dwellers in 1920. Chicago, one of the nation’s commercial powerhouses, grew from 299,000 residents in 1870 to 2,702,000 in 1920 (see table 8.1).

Table 8.1. Population of Major Cities, 1870–1920

Source: US Bureau of the Census, Census of Population 1960, vol. 1, Characteristics of the Population, Part A: Number of Inhabitants (Washington, DC: Government Printing Office, 1961).

^a Originally included only Manhattan; Brooklyn and the Bronx were added as of 1899. By 1920 Queens was also included.

Socioeconomic change substantially altered the context in which government operated. Although the form of governmental entities (e.g., representative bodies) and ideological principles (e.g., individual rights) continued essentially unchanged, the consequences of social and economic changes during the Gilded Age and Progressive Era altered the direction of governance. Theodore Roosevelt’s career illustrates how an attentive citizen saw the rise of new problems and proposed solutions for them. These developments are the subject of chapters 9–12. Here, the task is to sketch the social, geographic, and economic transformations that occurred between Reconstruction and World War I.

INTEGRATION OF THE WEST

James Bryce, the famous British interpreter of American politics, was enamored by the American West. “There has been nothing in the past resembling its growth, and probably there will be nothing in the future,” he wrote. “A vast territory, wonderfully rich in natural resources of many kinds; a temperate and healthy climate . . . a soil generally, and in many places, marvelously fertile . . . our planet contains no such other favored tract of country.”⁴

In his adoration of the American West, Bryce gave no indication of the near extermination of its original inhabitants. From the conclusion of the Civil War to 1890, the US Army, with the occasional assistance of state militias, subdued Indian resistance to white incursion in the West. From the Sand Creek massacre in eastern Colorado (1864) to the massacre at Wounded Knee in South Dakota (1890), Indians suffered defeat after defeat in the Great Plains. Between 1865 and 1898 there were more than 900 combat actions between the US Army and natives, mainly in the western Great Plains and the foothills of the Rockies. Engaged in vicious guerrilla warfare, the army searched for hostile Indians, occasionally attacking entire villages and killing women and children as well as warriors. During the Red River campaign against the Kiowa, Comanche, and Cheyenne in the Palo Duro Canyon of the Texas panhandle, the army took the Indians’ best ponies and killed 1,000 others after burning native lodges.

Horses were critical to the Plains Indians for hunting buffalo as well as for engaging in mounted warfare. Railroad construction accelerated the decimation of vast herds of buffalo, depriving many tribes of their main food source. Although limited in manpower, the army operated out of scores of forts across the western frontier that relied on railroads and steamboats for logistical maneuverability. Seldom taking more 2,000 soldiers into combat, the army possessed a level of coordination and organization that the separate Indian tribes lacked. Despite their skill as mounted warriors, the Indians were outgunned by the soldiers, especially after the revolver became standard equipment. Troops used field artillery against the Sioux at Wounded Knee, killing 300.⁵

After years of war, the Sioux had agreed in 1868 to settle on a reservation in western South Dakota. The allotted territory included the Black Hills, where gold was discovered in 1875. Thousands of prospectors flocked to region, ignoring treaty protections for the Indians. The federal government’s failure to restrain “the avarice of the white man,” as President Ulysses S. Grant characterized the trespassers’ penetration, along with other grievances, spurred the Sioux to flee their homes. A large aggregation of refugees camped on the Little Bighorn River in Montana, where Colonel George A. Custer and his troops stumbled upon them and were annihilated. The Sioux victory at Little Bighorn was short-lived. Within the year, the army had forced the group back onto the reservation. This scenario was repeated numerous times: Indians were forced at gunpoint or lured by liquor and promises of government subsidies to accept life on reservations, which were usually located on wasteland. Grant’s effort at a humane “peace policy” failed.⁶

In 1887 the Dawes Severalty Act capped generations of efforts to acculturate the natives to Anglo-American ways, including the abandonment of their tribal structure. The law offered tribesmen small plots of land to which they would receive title after twenty-five years of cultivation. Citizenship was possible if individual Indians rejected tribal membership and “adopted the habits of civilized life.” As President Grant phrased it, the goal was to get Indians to “live in houses and have schoolhouses and churches.”⁷ Reservation land could then be opened to white settlement. In 1889 Congress purchased Creek and Seminole reservation land in Oklahoma, which was the site of a land rush by 100,000 people. Indian reservations there and elsewhere in the West were whittled down by various subterfuges over the next fifteen years.

Military pacification of the Indians was a key step in opening the West to white settlement. The extension of railroads was a second catalyst for moving people into the interior and beyond. Railroads had bridged the Mississippi before the outbreak of the Civil War and pushed across the first tier of states west of the river by 1870. The so-called Granger Roads, such as the Burlington, crisscrossed the upper Midwest with spurs that directed traffic onto the main lines to Chicago and eastern cities. In 1869 the Central Pacific and Union Pacific completed a rail link between Omaha, Nebraska, and Sacramento, California, with connections to cities on San Francisco Bay, creating the first “transcontinental” railroad (see figure 8.1). The following year the Kansas Pacific reached Denver from Kansas City. Construction during the 1870s pushed the rails into the Dakota Territory, Montana, and New Mexico as far as Santa Fe. By 1887 the Santa Fe Railroad was connected with Los Angeles; this connection, along with the Southern Pacific Railroad, stimulated a land boom in southern California reminiscent of the land rush in Oklahoma. The Northern Pacific Railroad, running from Minneapolis, Minnesota, to Portland, Oregon, forged a second transcontinental line in 1883. Nearly 70,000 miles of track was laid west of the Mississippi River between 1865 and 1890.⁸

Figure 8.1. Map of expansion, 1900. Source: Randall D. Sale and Edwin D. Karn, American Expansion: A Book of Maps (Homewood, IL: Dorsey Press, 1962), 25.

Railroads were instrumental in facilitating the settlements that stretched from the Dakotas south to central Texas and west to Colorado and elsewhere along the Rocky Mountains, as well as down the Pacific coast from Seattle to San Diego. By 1920 the West’s nine million inhabitants constituted 9 percent of the nation’s population. Sizable migrations also populated the upper reaches of the Midwest and the Gulf coast. Like those who were drawn to the West, people flocked to the country’s middle zones largely to access natural resources, with agricultural land being a prime objective. The number of farms increased from 2.7 million in 1870 to 6.5 million in 1920; farmland more than doubled during this period. With greater acreage devoted to farming and ranching, the output of wheat, corn, cotton, and beef soared. Most farms were located in the Midwest and South, but many new homesteads were established in the Great Plains and in the valleys between the Pacific coast mountains. New England and the mid-Atlantic region lost population during this transitional era. Some migrants from the Northeast took up wheat cultivation or cattle ranching on the Great Plains. Citrus groves and vegetables sprouted in southern California and central Florida. With the exception of New England, American agriculture underwent a surge of growth in the two generations following Reconstruction.

The West held a special fascination for transplants. Reminiscent of the California gold rush, opportunists swarmed to the Comstock lode in Virginia City, Nevada; its silver output boosted San Francisco’s economy in the early 1860s. The West yielded a variety of industrial metals, such as iron ore in Minnesota, copper in Montana and Arizona, and coal in Wyoming, although most coal mining occurred between Pennsylvania and Illinois and in the southern Appalachians. Oil, which was first pumped in Pennsylvania and the Midwest, was later discovered in Texas, Oklahoma, and California. The northern Midwest was a locus of the timber industry during the Gilded Age, until lumbermen migrated to the Pacific Northwest and the piney woods of the South; however, lumberjacks continued to work Maine’s north woods.

Water was a critical commodity in the arid West, and there were fierce battles over this scarce resource. California took the lead in formulating water policy for urban growth and farm irrigation. Los Angeles’s growth was enabled by the Owens River aqueduct project, completed in 1913, which brought water from the mountains more than 200 miles away. The construction of a dam in the Hetch-Hetchy Valley of Yosemite National Park to supply water to San Francisco, proposed in the 1880s, was bitterly opposed by environmentalists; it was authorized by Congress in 1913 and completed in 1934. Western cities were dependent on access to water and, after electrification arrived, coal.⁹

Economic opportunity in the West did not rest solely on access to natural resources. Cities were also economic magnets. San Francisco, with its magnificent harbor, became a gateway to the Pacific coast and was the region’s commercial center, supplying goods such as mining supplies to western locations. By 1900 San Francisco contained numerous businesses, including transportation facilities, mercantile outlets, manufacturing, and banking, providing jobs for thousands. Seattle, with its protected harbor, developed similar synergies, while Spokane became an inland emporium of western wheat after the railroad arrived. Most large Pacific cities had both railroad and ocean access, whereas inland cities such as Denver were dependent on the railroad for economic linkages. Positioned on the fringe of the Great Plains, Denver occupied a relatively favorable location in comparison to other cities in the Rocky Mountains. Dallas, another city that blossomed as a result of rail connections, offered commercial services for the southern Great Plains.¹⁰

The urbanization of the West was part of a national trend. The Pacific coast region became as urbanized as the Midwest, while the Great Plains was more urbanized than the South, the nation’s most rural region. The largest cities, located in the Northeast and upper Midwest, dwarfed municipalities elsewhere. By 1880 New York City (then including only Manhattan) had 1.2 million people, which exceeded the population of twenty-three of the thirty-eight states. After Manhattan was consolidated with Brooklyn, Queens, and the Bronx, New York City counted 5.6 million inhabitants in 1920. By then, Chicago had become the nation’s “second city,” with 2.7 million people. Once railroads reached northern Florida in the 1880s, city building began in that state, starting with Jacksonville and later Tampa. Railroads extended down both coasts of Florida, mimicking their impact on western destinations such as Los Angeles and Phoenix, where transportation connections and a mild climate lured newcomers.¹¹

GOVERNMENT AND WESTERN DEVELOPMENT

Governments were established as people flowed into the West. With the admission of New Mexico and Arizona to the union in 1912 (the last of the twelve new states admitted since 1867), state governments covered the continental United States, with the exception of the District of Columbia. Territorial residents eagerly sought statehood, which promised economic and political benefits. Each new state added seats to the US House and Senate, electoral votes for the presidency, and federal aid. Statehood was viewed as a prerequisite for attracting eastern capital for development.¹² Given these stakes, proposals for new admissions sparked partisan conflicts in Washington.

Political contests also swirled around the creation of local governments, especially the designation of county seats, which were administrative focal points in the nineteenth century. County officers in Wisconsin included the sheriff, district attorney, judges, registrar of deeds, treasurer, surveyor, coroner, county clerk, and county superintendent. County tax assessors existed in some states.¹³ Municipal, county, and state governments numbered close to 3,000 in 1870 and increased to 5,700 by 1920 (see table 8.2). With the addition of minor civil divisions, mainly rural districts such as townships, the number of governments in 1900 increased to more than 13,000. A more accurate national census of governments taken in 1933 found close to 40,000 civil units. These surveys excluded public school districts, which usually had their own governing boards and sometimes separate revenue mechanisms. There were 125,000 school districts in 1870, and the number had doubled by 1933. The spread of people into the West and other parts of the country expanded the geographic matrix of civic entities. Cities were a major element in this spatial radiation. Municipal jurisdictions increased more than threefold between 1870 and 1920; “big” cities recorded a fivefold increase. The expansion of subnational governments between end of Reconstruction and World War I added hundreds of thousands of policymakers and administrators, underscoring the geographic fragmentation underpinning American governance.¹⁴

Table 8.2. Governments in the United States, 1870–1933

Sources: William Anderson, The Units of Government in the United States: An Enumeration and Analysis (Chicago: Public Administration Service, 1934), fig. 1; US Department of Commerce and Labor, A Century of Population Growth . . . 1790–1900 (Washington, DC: Government Printing Office, 1909), 71; US Bureau of the Census, Historical Statistics of the United States to 1970 (Washington, DC: Government Printing Office, 1975), series A43–56, table II, 1086.

^a Based on the census definition of incorporated places with populations of 2,500 or more.

^b General-purpose governments, consisting of United States, states, counties, and rural territories in 1900; United States, states, counties, incorporated places, towns, and townships in 1933. The 1900 and 1920 figures are estimates, using rural territories as a proxy for minor civil divisions; both figures probably underestimate the number of local minor political subdivisions.

^c Cities with populations of 100,000 or more.

^d Excluding federal territories.

An important congressional task was designing new territories, appointing their administrators, and admitting new states. The West presented a different geographic canvas for this process than the East. The West was a massive region, and Congress relied more heavily on surveyors’ lines than natural features to determine state boundaries. Montana was twice the size of all six New England states. Wyoming’s dimensions, like those of Colorado and New Mexico, were strictly rectangular. The army removed Indians from the path of settlers; then federal officials surveyed the public domain and recorded land transferred to individuals.¹⁵ The government in Washington sponsored explorations of the Yellowstone and Colorado River regions. Some of the public domain was transferred to states to support schools (embedded in the acts that created the states) and colleges (Morrill Act of 1862).

Congress generously granted public land to railroads between 1850 and 1871, initially using states as conduits and then transferring land directly to railroad companies in 1862, chiefly for lines that would traverse the central and western portions of the country. Land grants were important inducements to railroad companies that were considering building lines in advance of settlement, as was the case for the transcontinental lines. Counties and municipalities from Maine to Missouri, anxious to attract feeder routes that linked with trunk lines, bought railroad securities. Southern states and localities invested enthusiastically in new railroad ventures during Reconstruction. Widespread rail bankruptcies and unsustainable government debts arising from the depression of the 1870s largely ended these subventions and spawned restrictions on local governmental subsidies for railroads.¹⁶

The Homestead Act of 1862, which initially allotted 160 acres to individuals who improved their plots over five years, symbolized the liberalization of federal land policy in the late nineteenth century. Additional acts granted large tracts of desert land, mineral rights, and permission to graze on the public domain. National lawmakers assisted agriculture in the arid West through the Newlands Reclamation Act of 1902, which funded the construction of reservoirs and irrigation ditches. In 1891 the president gained the authority to set aside public forest reserves, which expanded in subsequent years. The creation of Yellowstone National Park in 1872, a region seen as unfit for agriculture or grazing, inaugurated federal retention of areas of unique beauty. Yosemite, which Congress had granted to California, became a national park in 1890. Other national parks included Sequoia in California (1890), Glacier in Montana (1910), and Grand Canyon in Arizona (1919). The National Park Service was created in 1916 to manage the growing list of scenic reserves. Collectively, these decisions document Washington’s significant role in the development of the West. In 1890 the US Census Bureau put an exclamation point on these decisions by announcing that a frontier line no longer existed.¹⁷

TRANSPORTATION AND COMMUNICATIONS REVOLUTIONS

The Centennial Exposition held in Philadelphia in 1876 commemorated the first hundred years of American independence. The Pennsylvania Railroad and the Philadelphia and Reading Railroad pulled out all the stops for this celebration, creating special tracks to transport visitors to the fairgrounds. The Pennsylvania Railroad built new stations for the event; Centennial Station, the finest on its system, reached Chicago and St. Louis. The Penn transported five million of the nearly nine million people who attended the Centennial Exposition during its six-month run. It also contributed exhibits to the fair, which displayed the latest products and inventions related to mining, manufacturing, agriculture, and machines. Best-in-class medals were awarded to Sharp rifles, Otis elevators, Gatling guns, and Pullman railroad sleeping cars. Penn’s engineer of buildings and bridges designed Machinery Hall, where “machines in motion” were displayed, including the giant Corliss steam engine that supplied power to the exhibits. President Grant opened the exposition by turning the handle that activated the forty-foot-tall dynamo. The inventions and machinery showcased at the exposition reflected the country’s economic advances during the 1870s.¹⁸

The railroad connections to the Centennial Exposition heralded the beginning of a second transportation revolution. In 1860, 30,000 miles of railroad track had crossed the Mississippi, reaching eastern Iowa and St. Joseph, Missouri. The rails spread rapidly in the late 1860s and early 1870s and again in the 1880s; by 1916 track mileage peaked at 254,000 miles (see figure 8.2). Few counties in the agriculturally rich Midwest lacked a rail connection; by the turn of the century lines extended into northern Maine and deep into Florida. Critical to the emerging national rail network was the standardization of track gauge in 1886. Until this occurred, freight and passengers had to be off-loaded and reloaded at many junctions. The consolidation of numerous railroad companies into larger corporations, the opening of “union” stations that served several roads, and the inauguration of limited express service between distant destinations assisted in establishing a national railroad network. Additional contributions came from technological improvements in locomotives (more powerful), the substitution of steel for iron rails (more durable), the shift to coal for fuel (more British thermal units per pound), the introduction of air brakes, more reliable bridges, and similar refinements that allowed trains to pull more weight (and cars) and to travel faster and more safely—all cost-saving developments.¹⁹

Figure 8.2. Map of US railroad network, 1900. Source: D. W. Meinig, Transcontinental America, 1850–1915 (New Haven, CT: Yale University Press, 1998), 254, reprinted from Jacques Redway and Russel Hinman, Natural Advanced Geography (New York: American Book, 1901).

The railroad had a younger sibling in the electric trolley, which became operational in 1888. The conveyance spread like wildfire through cities and their suburban fringes, rapidly replacing horse-drawn trolleys. Streetcars not only made intercity transportation affordable for workers but also facilitated the spatial expansion of large cities, enabling the middle class to live further from the urban core and its dense crowds. In addition to advancing intracity transportation, intercity trolleys allowed riders to enjoy weekend trips to rural parks and beaches, excursions the transit companies promoted. The subway, initiated in the 1890s, put electric trains underground in Boston and New York; Chicago ran its intraurban train as an elevated railway, while San Francisco was famous for its cable cars. By the first decade of the new century, urban America had reinvented its transit system.²⁰

Ocean travel also underwent a technological transformation, as steam engines and twin screw propellers replaced wind and sail power, and iron and later steel replaced wooden hulls. The voyage from Liverpool to New York took about thirty-five days in the early 1850s; that same journey was cut to less than eight days in 1879. Wireless signal transmission, available in 1901, made ocean travel safer, although it did not save the victims of the Titanic in 1912. Two years later the Panama Canal opened, significantly cutting the transit time between the Atlantic and Pacific Oceans. These improvements, however, did not stop the decline of the American maritime industry.²¹

The advent of motor vehicles drove the transportation revolution to another level. The automobile debuted in the 1890s, and commercial production was under way at the turn of the century. Henry Ford led the new industry, developing simple, durable, and inexpensive vehicles, beginning with his Model T. Using an assembly-line production technique, Ford made nearly 600,000 Model Ts in 1916, offered at about one-third the price charged in 1909. In the early days of auto manufacturing, Ford faced numerous competitors, including Will Durant, who organized General Motors in 1908, lost control of the firm in the recession of 1910, and regained control in 1916, largely based on the success of his newest line, Chevrolet. Initially seen as a novelty for the wealthy, auto ownership grew rapidly after 1910, with a third of urban families owning a vehicle by 1920. By then, horses were largely absent from downtown areas, which had become snarled with motorized traffic. Motor vehicles ranked second in value among industrial products in 1919. With the expansion of a national grid of highways in the 1920s, another transportation network had emerged.²² Air travel was slower to get off the ground following the Wright brothers’ successful flight in 1903. Passenger service awaited aircraft capable of sustained flight and infrastructure such as airports. The appearance of the DC3 in 1936 was instrumental in turning passenger flights into a paying proposition.

Innovations in communications forged another kind of network. Five years after the telegraph spanned the continent in 1861, an underwater cable was laid to Europe. The telephone arrived in 1876, and long-distance connections were possible by 1884. Six million telephones were in use in 1906, and a coast-to-coast telephone hookup was in place by 1915. By 1891 Americans could listen to recorded music on phonographs. In the 1910s they could watch films shown in large, ornate theaters; these venues were wired for “talkies” starting in 1927. Birth of a Nation, released in 1915, is conventionally cited as the first feature film and established the cinematic genre. Newsreels of national and world events were part of each theater performance. Commercial radio began in 1920 and rapidly entered homes throughout America.

The typewriter was in wide use by the 1880s. This, along with innovations in printing (e.g., photoengraving in 1873 and Linotype machines in 1886), enabled major advances in print communications. As early as 1884, Chicago morning newspapers reached Monmouth, Illinois, 180 miles away, by 7:00 a.m. A few years into the twentieth century, trucks began to replace horse-drawn carts to deliver newspapers to street vendors. By then, the US Postal Service’s rural free delivery was bringing letters and the Sears Roebuck catalog to rural residents; by 1912 buyers could receive their purchases via parcel post. Businesses used these new communications technologies to advertise to customers and to contact other firms. As Robert Gordon observes, “isolation was replaced by communication.”²³ Technologies that advanced printing, film, and radio greatly increased the volume of information and the speed of its dissemination.

The transportation and communications revolutions had major impacts on economic development, and the railroads were most influential. Transportation costs fell as trunk through-lines were expanded. The operation of a rail network—first in the Northeast (1870s) and then throughout the United States (1890s)—opened up national markets for various commodities and increased competition, both of which tended to lower prices. The organizational skills required to run a railroad encouraged executives to adopt cost accounting, a technique that spread through the corporate world. Because capital investment was mandatory to build a railroad, their construction stimulated financial markets, especially the bond market. Western railroads received millions of acres of land from government grants as collateral to entice investors.

Railroads purchased a substantial portion of the economy’s output. They consumed large quantities of coal, wood, and oil and ordered equipment ranging from steel rails to locomotives and rolling stock. Rivers were bridged, real estate was purchased, and stations and maintenance facilities were built. Railroads hired mechanical engineers, managers, accountants, statisticians, and attorneys, as well as an army of workers that included locomotive engineers, brakemen, conductors, station managers, and baggage handlers. In 1920 railroad employment peaked at two million workers. Railroads were clearly the engines of economic growth.²⁴

The auto industry offered similar synergies. Automakers bought materials such as steel, as well as specialized parts ranging from ball bearings to rubber tires and eventually radios. Henry Ford’s production facilities, first at Highland Park (1910) to mass-produce Model Ts and then at River Rouge (1919), which manufactured steel in addition to assembling cars, heralded the emergence of massive manufacturing complexes.²⁵ As motor vehicles hit the road, secondary industries arose in response, such as gasoline refineries, service stations, road builders, and travelers’ services such as A&W root beer stands.

THE INDUSTRIAL TRANSITION

Cars, locomotives, and communications equipment became the banner products of America’s expanding industrial output. No single index kept track of industrial companies over the long nineteenth century, but the number grew substantially after the Civil War. Census takers recorded 140,000 “factories and neighborhood industries” in 1859 and half a million in 1899, of which 205,000 were “manufacturing establishments.” During this period, John D. Rockefeller produced oil, Andrew Carnegie manufactured steel, Thomas Edison made lightbulbs, George Pullman produced railroad sleeper cars, and Kodak introduced its Brownie camera. Lesser-known firms turned out chemicals, fabrics and apparel, fabricated metal products (e.g., razor blades, iron stoves), and mechanical devices such as typewriters, cash registers, and threshing machines. By 1919, 270,000 manufacturing firms existed, with double the number of production workers employed twenty years earlier.

Other industrial manufacturers processed mineral resources such as copper, coal, and iron; food and beverages (e.g., Swift meats, Quaker oats, Coca-Cola, Anheuser beer); tobacco products; lumber; paper; and publications. Procter and Gamble advertised Ivory soap and Crisco shortening, products aimed at the growing retail market. Much of the bounty that poured forth from the nation’s workshops was sold by mail-order firms such as Montgomery Ward and Sears Roebuck; the latter’s 1909 catalog listed more than 100,000 items. Both these retail giants were headquartered in Chicago, where railheads sped products around the nation.²⁶

This pace of industrial expansion propelled America to global leadership. The US manufacturing establishment, largely situated within a parallelogram bounded by Milwaukee, St. Louis, Baltimore, and Boston, accounted for one-third of the world’s industrial output in 1900. The value of its output matched that of Great Britain in 1870 and doubled it in 1913, when US manufacturing was four times larger than that of either France or Germany. Expansion of the economy lifted the national income from $152 per person in 1869–1878 to $287 in 1909 (in 1860 prices), signifying an increase in the average American’s income. With millions of farms, resource extraction industries, manufacturing establishments, and service firms, the United States was the world’s largest economy by World War I. American incomes were among the highest in the world. And because indexes of national income do not measure all aspects of human existence, the rise in the standard of living between 1870 and 1920 was greater than quantitative indicators implied.²⁷

Several factors drove this economic growth. Most scholars acknowledge the contribution of America’s abundant natural resources and favorable climates for diversified agriculture. A second stimulus was population growth, which increased 2.5-fold between 1870 and 1920. Immigrants, largely young males, were a major component of this increase. More people meant more labor in the newly opened territories. Other Americans gravitated toward cities, which spurred the purchase of American goods and services. Urban residents were especially important consumers because they produced a limited range of goods at home. Given that the United States relied less heavily on exports than did European nations, the country’s domestic market was a key stimulus to economic growth.²⁸

Wherever they settled, both native-born and newcomers were immersed in a culture of acquisitiveness. Capitalism, protection of private property, entrepreneurship, and individualism were fundamental components of popular American ideology. The country’s historical tradition denigrated landed aristocracy and prohibited state-sanctioned nobility. The national self-image heralded the opportunity for self-advancement, as expressed in the hugely popular children’s novels by Horatio Alger, and accepted the notion that wealth conveys social status.

Besides producing a high rate of literacy, education, especially publicly supported grammar and high schools, imparted basic skills that were increasingly important to a commercially oriented workplace, such as arithmetic, diction, and typing. Schools also socialized children to American norms, teaching them the importance of punctuality and manners and emphasizing the notion that success is the reward for hard work.²⁹ Still, earning a living was never easy or assured. Many new city dwellers felt lucky to hold a job at a time when steady employment throughout the year was rare for the working class. African Americans, immigrants from outside northeastern Europe, and women faced innumerable economic barriers.

Economists emphasize technology as a critical factor in American economic growth. Americans had an affinity for adopting new technology, regardless of its origin. In fact, many important devices, such as the electric railway, wireless radio, and internal combustion engine, were invented in Europe. The late nineteenth century witnessed a succession of transformative inventions and productive processes. Steam power, the telephone, electric power plants, and the Bessemer process of steelmaking were important innovations of the latter nineteenth century. Agriculture benefited from these advances, which led to the introduction of steel plows, barbed wire, and machinery such as reapers and threshers. Improved horticulture and husbandry techniques increased agricultural output, allowing farmers to grow more crops per acre and breed cows that gave more milk. These transformations were well under way before the widespread use of the gasoline tractor in the 1930s.³⁰

The greatest engineering achievement of the twentieth century, according to the National Academy of Engineering, was electrification, followed by the automobile, the airplane, water supply and distribution, and electronics—all of which appeared between the 1870s and 1903. Right behind these top-ranked inventions were the radio, agricultural mechanization, and the telephone.³¹ Technological progress embodies not only seminal inventions but also continual refinements and adaptations. The end product of all this tinkering and improvement was increased productivity, or getting more output from less labor. For consumers, it meant a stream of new products, and for many workers, it meant higher wages.³²

Technological innovations were instrumental in the expansion of some businesses, from small family-owned firms to large corporations. Incorporation of their enterprises offered owners limited financial liability and greater flexibility in managing their investments. These attributes were attractive to firms involved in large-scale operations, such as railroads, which pioneered corporate management. Likewise, incorporation was attractive to manufacturing companies that emphasized continuous-process production techniques, such as Standard Oil. Firms of this nature generally organized as corporations, hired professional managers, and expanded in size and market influence. The Pennsylvania Railroad hired 50,000 workers in the 1880s, Carnegie Steel employed 20,000 in 1900, and General Motors had 49,000 on its payroll in 1918. By this date, corporations were responsible for the lion’s share of the value of manufactured products. The increase in corporate size resulted from efforts to take advantage of economies of scale and improve product marketing. Until the 1880s corporations received charters that permitted them to operate only within their home states. Firms such as John D. Rockefeller’s Standard Oil devised a trust arrangement to circumvent this restriction. When state courts began to block this scheme, New Jersey (1889) and New York (1892) enacted laws that permitted multistate holding companies, allowing corporations to go national.

Worried about the effects of big business, Congress enacted the Sherman Antitrust Act of 1890, which made it illegal to monopolize commerce. The law spurred some corporations to merge with their competitors (rather than try to put them out of business) as a tactic to avoid prosecution. The Panic of 1893 and the ensuing depression, which put severe financial strain on some firms, accelerated these consolidations. A wave of mergers between 1897 and 1904 reduced more than 4,000 firms to just 257 corporations, essentially laying the foundation for big business in America. Reorganization produced the American Tobacco Company, Pillsbury, Heinz, and Procter and Gamble—all corporate giants in their fields. Although corporate expansion made considerable sense to managers in terms of reining in costs, the public tended to see big business as the mother of monopolies and higher prices. The dominance of large corporations in numerous industries by the early twentieth century touched a raw political nerve.³³

Government had a hand in the nation’s economic growth. At the federal level, the distribution of land to individuals and corporations continued a century-long practice. National policy encouraged labor recruitment by keeping the gates to immigration open, protected American firms from foreign competitors through tariffs, and nurtured an imperfect currency system through national banking legislation and the monetization of silver. Federal court decisions struck down state impediments to the development of national markets, thus fostering a legal climate favorable for interstate businesses. State and local governments stimulated economic development through tax exemptions, stock subscriptions, and incorporation laws. Government at all levels fostered transportation connections through municipal harbor improvements, railroad rights-of-way, and, late in the period, road and bridge construction. Public education, from the primary level through high school, assisted economic growth. State universities conducted research in agriculture and mining, work that was partially supported by federal funds. Favoring business over workers, government at all three levels countered strikes and repeatedly suppressed labor violence during the late nineteenth century and into the next (see chapter 9).

These policies document public contributions to economic development. Since independence, political leaders had recognized the importance of a successful economy to a viable polity. Consequently, they offered governmental assistance where they could, justifying these actions as supportive of private enterprise and an economically robust society.

ECONOMIC FLUCTUATIONS AND SOCIAL CLASSES

Viewed in the long run, the American economy recorded extensive growth between 1870 and 1920. In the short run, however, entrepreneurs, workers, and families were buffeted by repeated economic slumps. Several of these depressions were severe and prolonged and had wide ramifications, causing bankruptcies, unemployment, and social violence. As in earlier eras, major depressions put significant pressure on government, as leaders faced reduced revenue, financially stressed families, and public protests, some of which degenerated into riots. Depression was experienced differently in particular regions of the country and among the various social classes—from the very affluent and business owners to the middle class, farmers, and industrial workers. Examination of the worst of these crises underscores how situational conditions affected the performance of the American state.

Three major depressions slowed the economy between Reconstruction and the onset of World War I. Each depression had its own narrative, yet they shared some common features. The pre–World War I slumps were preceded by financial panics (1873, 1893, and 1907) in which leading brokerage firms or banks failed. On each occasion, stock prices and interest rates fell. Each slowdown had links to events in Europe, either as causes, such as the tightening of central bank policy and fewer foreign purchases, or as consequences, such as reduced American sales and investment abroad. These connections testify to the United States’ integration into the world economy by the late nineteenth century.

Major depressions caused a decline in national income, resulting in business bankruptcies, worker layoffs, and wage cuts. Massive worker strikes rocked communities during each downturn. Individual consumption slowed; revenue collection at each level of government declined, leading to fiscal (budget) deficits. In the throes of these financial crosswinds, conservatives demanded the reduction of public spending, while distressed groups pushed for measures that slowed mortgage foreclosures and lowered property taxes. Numerous voices called for the reform of tax and financial policy.³⁴

The collapse of Jay Cooke and Company, a brokerage firm that marketed bonds for the Northern Pacific Railroad, triggered the Panic of 1873. Investor caution about the durability of the railroad boom of the early 1870s was instrumental in causing the crisis, but other factors also strained the financial markets, such as the repercussions of the devastating fires in Chicago (1871) and Boston (1872); revelations about the Credit Mobilier bribery scandal in Congress (1872–1873), which involved stock in the Union Pacific Railroad; and financial crises in Austria and Germany. In 1877 New York governor Lucius Robinson bemoaned the hardships facing state canal operations due to “the great depression in every branch of business.” Railroad revenue dropped annually between 1873 and 1877. Rail companies defaulted on a quarter of their debt, even after cutting wages, which sparked the massive railroad strike of 1877. By the time recovery set in (1879), hundreds of banks had closed their doors, and savings and loan institutions had seen their assets contract.³⁵

The bankruptcy of the National Cordage Company, a twine-making firm, triggered a financial panic in 1893. Wall Street traders were already nervous about a European depression, which had led Britain to liquidate investments in the United States. The ensuing depression pushed one-fourth of American railroads into bankruptcy and idled about one-fifth of the industrial workforce during the worst of the slowdown. Businesses cut wages, provoking work stoppages and public demonstrations, the largest of which was the Pullman strike, which shut down rail traffic in Chicago and other northern cities for weeks. Declining prices for agricultural commodities caused numerous farmers to lose their land. Businesses searched for solutions to these uncertain conditions by reducing costs and pursuing mergers with rival firms. Renowned financier J. P. Morgan was a leading figure in reorganizing the troubled railroads, which accounted for two-thirds of the country’s mileage. Seven major rail systems emerged from the consolidation of scores of lines. Recovery was under way by 1897, helped by the Spanish-American War in 1898.

Another financial meltdown on Wall Street in 1907 provoked a sharp recession in 1908. Trouble began when an attempt to corner the stock of the United Copper Company led to the failure of the Knickerbocker Trust Company, a New York firm. Its collapse triggered a crisis in the stock market, which was largely unregulated at the time. Once again, J. P. Morgan’s intervention prevented a complete financial collapse. The devastating earthquake and subsequent fire in San Francisco in 1906 apparently caused a liquidity crisis in New York and Europe, as foreign banks tightened interest rates in the face of rising insurance claims. Outflows of gold, which anchored the American dollar, led to higher interest rates and a slowdown in industrial production. The 1908 depression was short, but recovery was incomplete, as business slowed in 1910 and 1911 and dipped again in 1914 with the outbreak of World War I. Joblessness peaked in 1915, then declined as the war fueled recovery. Although the slowdowns between 1908 and 1915 were milder than the depressions of the 1870s and 1890s, a second problem—rising consumer prices—overlapped the economic stagnation. Prices had been increasing since 1898 and jumped higher in 1910–1911, even though the economy remained sluggish. The combination of the rising cost of living and a languishing economy contributed to the adoption of reforms during the Progressive Era.³⁶

Economic slumps did not have a uniform effect throughout the country, partly because a fully integrated national market had not yet developed. Regional economic differences continued to exist in the United States. Besides well-recognized sectional tendencies, such as the agricultural South, the industrializing Northeast, and the corn and hog belt of the Midwest, numerous locally distinct economies existed in every region. The manufacturing belt was concentrated in lower New England, the mid-Atlantic, and the lower Great Lakes region of the Midwest. New York and Chicago, each with a distinct urban persona, anchored this industrial sector. New York became known for its banks, financial brokerages, insurance companies, and a variety of manufacturing firms, as well as a busy international port. Chicago anchored a railroad hub that made it the gateway to the West, and it hosted a number of heavy industries, making it a “city of broad shoulders.” The geographic expansion in these years brought additional subregions into this socioeconomic matrix. Smaller cities and single-industry regions lacked the economic diversity of the larger urban areas, rendering them particularly vulnerable to commercial slowdowns. Urbanization, ethnic and racial makeup, and class differences within specific locales produced microstriations in economic circumstances.³⁷

Millions of workers and their families lived on the edge of poverty in the industrializing era, even in the absence of economic depression. During the hard times of the 1870s, many tramped from town to town in search of work; in the early twentieth century, these unemployed wanderers were called hobos. Even when they found work, their pay was stretched thin because food consumed nearly half the family budget around the turn of the century. Most semiskilled and unskilled laborers experienced unpredictable work shortages and layoffs, which contributed to high rates of poverty. Employers often cut wages during depressions, which sparked violent strikes, such as the Pullman strike of 1894. The 1908–1915 recessions provoked wage cuts and strikes in the Massachusetts textile mills and shoe factories and among garment workers in New York and Chicago; steelworkers walked off the job in Pennsylvania.³⁸

Labor unions made little headway in cushioning the effects of these cyclical crises or in persuading employers to reduce hours, raise wages, and accept collective bargaining. Strike leaders and union organizers were vulnerable to blacklisting, which barred them from employment in their industries. Factory and mine foremen could fire workers for numerous reasons, including age. Industrial accidents were a common occurrence among workers engaged in metalworking, mining, construction, and railroading; these mishaps, as well as diseases related to cotton and stonecutting dust, could bring financial devastation to a laborer’s family. Economic circumstances for Blacks, most of whom skimped along as tenant farmers in the South or as unskilled urban workers, and for women who worked outside the home were worse than for white men. Employers commonly hired blacks, some of whom were recruited in the South, to replace striking miners and factory workers in the North.

Worker compensation improved over time. Available data indicate that the per capita “real” gross national product (GNP) increased 88 percent between the 1870s and 1909. Nominal income more than doubled when the data are extended into the 1920s. Moreover, these figures understate gains in the standard of living because measures of GNP do not take into account product improvements; better working conditions; the health benefits of improved water and sewer systems; the availability of gas, electric, and telephone hookups; greater longevity; and other amenities. Both quantified and nonquantified advances in social and economic conditions indicate that most Americans achieved a higher standard of living over the course of the industrial transition.³⁹

Some workers were able to join the middle class. Entrance into this group usually required a salaried income or ownership of a business, although some skilled workers and successful farmers qualified. Industrialization created numerous occupations that provided steady, salaried employment, such as managers of businesses, banks, or railroad divisions. Members of the learned professions, such medical doctors, attorneys, college presidents, accountants, and engineers, usually commanded middle-class incomes. So did some government administrators, such as the head of the Smithsonian Institution in Washington, or high school principals in larger cities. Although no precise measurement of middle-class status exists, a rough guess is that 15 percent of urbanites achieved middle-class status in the 1870s, and perhaps 25 percent did so by the early 1920s.⁴⁰

Entrance into the middle class generally enabled the purchase of a home. Available evidence for urban locations shows considerable variation in homeownership, with the lowest rates in the largest cities, such as New York, and considerably higher levels in smaller cities, such as Muncie, Indiana. Census data show that homeownership increased nationwide, accounting for 37 percent of nonfarm housing units in 1890 and 41 percent in 1920. Although the proportional gain seems small, the number of homes occupied by owners more than doubled during these thirty years. Moreover, middle-class homes received significant upgrades between 1870 and 1920, acquiring indoor plumbing (running water), sewer connections, electricity, central heating, and gas and telephone connections. Forty-seven percent of urbanites had electricity in 1920, and one-third owned a motor vehicle. The vast majority of city homes had flush toilets by 1930.⁴¹

Income left over after paying housing costs allowed the middle class to buy a widening array of consumer products, perhaps at downtown department stores. Increased manufacturing productivity reduced the price of many goods; the branding of products, which implied consistent quality, attracted repeat customers. Rural residents could order items from catalogs they received in the mail. The postman also brought newspapers and magazines, which proliferated during the Progressive Era. By the early twentieth century manufacturers and advertisers sought to expand their markets by inserting women’s sections into newspapers, based on the assumption that women were the primary consumers in their households. Middle-class affluence allowed parents to keep their children in school rather than sending them into the labor market; a high school diploma was a key credential for getting a middle-class job by 1920.⁴²

Economist Robert Gordon has called the rising standard of living between 1890 and 1930 a “unique achievement.”⁴³ His conclusion is persuasive, yet there were limits to this improvement. Many Americans continued to face significant difficulties, ranging from reduced income during depressions to the barriers encountered by groups pushed to the social periphery. Nonetheless, from a macroeconomic view, the United States developed a more prosperous economy in the half century after Reconstruction.

This growth had important ramifications for the development of the American state. First, the industrial transition produced a host of new problems. Some maladies took the form of random events, such as fires ignited by sparks from railroad locomotives or ruptured gas lines, as occurred in San Francisco following the 1906 earthquake. Depression-related disruption of business, labor, and consumers came to be recognized as a cyclical problem. Each economic downturn raised the pressure to reform public finances. Other quandaries grew out of structural changes in the economy, such as the rise of corporate monopolies, a flawed banking system, dangerous urban tenements, and no safety nets for workers. Economic change, in short, altered the socioeconomic landscape. These changes spawned new problems that commanded attention from politicians.

Second, although rising incomes were welcomed, the trend was relative. Millions of people experienced little or no gain in their economic situation. Improvement in the standard of living was more apparent after 1900 than before. Nonetheless, long-run trends such as rising wages, expansion of the middle class, increased homeownership, and declining infant and child mortality—key elements of an improving standard of living—held out hope of personal advancement. A reasonable speculation is that these advances bolstered support for the political regime and diminished the prospect of revolution, numerous labor strikes notwithstanding. Most Americans seemed willing to accept the political arena as the appropriate place to debate their grievances.

Third, greater wealth in the United States led to increased tax revenue, enabling more investment in public goods. Few people enjoy paying taxes, yet the historical record suggests that people are willing to share their affluence with the government if they think the benefits are worth the price tag. Evidence lies in the expansion and reform of taxation during these decades. Conversely, when hard times stressed people’s pocketbooks, there were demands to cap taxes, reduce expenditures, and limit indebtedness. These interconnections are examined in the following chapters.