632 ★ CHAPTER 16 America’s Gilded Age
among the members of Congress tainted by the Crédit Mobilier scandal, but
Robert G. Ingersoll’s speech before the Republican national convention of 1876
nearly secured Blaine’s nomination for president by depicting him as a “plumed
knight” who had raised his “shining lance” against the country’s enemies.
Government and the Economy
The nation’s political structure, however, proved ill equipped to deal with the
problems created by the economy’s rapid growth. Despite its expanded scope
and powers arising from the Civil War, the federal government remained
remarkably small by modern standards. Activities from education to medical
care, business regulation, civil and criminal prosecutions, and many others
were almost entirely under the control of local and state governments or pri-
vate institutions. The federal workforce in 1880 numbered 100,000 (today, it
exceeds 2.5 million).
Nationally, both parties came under the control of powerful political man-
agers with close ties to business interests. Republicans strongly supported a
high tariff to protect American industry, and throughout the 1870s they pur-
sued a fiscal policy based on reducing federal spending, repaying much of the
national debt, and withdrawing greenbacks— the paper money issued by the
Union during the Civil War— from circulation. Democrats opposed the high
tariff, but the party’s national leadership remained closely linked to New York
bankers and financiers and resisted demands from debt- ridden agricultural
areas for an increase in the money supply. In 1879, for the first time since the
war, the United States returned to the gold standard— that is, paper currency
became exchangeable for gold at a fixed rate.
By reducing competition from foreign manufactured goods and leaving the
banks, not the government, in control of issuing money, Republican economic
policies strongly favored the interests of eastern industrialists and bankers.
These policies worked to the disadvantage of southern and western farmers,
who had to pay a premium for manufactured goods while the prices they
received for their produce steadily declined.
Reform Legislation
Gilded Age national politics did not entirely lack accomplishments. Inspired
in part by President Garfield’s assassination by a disappointed office seeker, the
Civil Service Act of 1883 created a merit system for federal employees, with
appointment via competitive examinations rather than political influence.
Although it applied at first to only 10 percent of government workers, the act
marked the first step in establishing a professional civil service and removing