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Monday, February 14, 2011

Gilded Age Discussion Question 1

Here is the first online discussion question.  For this question, you must provide TWO responses.  One response must be made to the question itself.  The other response should be made to another student's response.  Your responses  MUST be rooted in text.  That is, you must have evidence.  Your responses do not need to be long, but it might be good to formulate a response in another program and then cut and paste tot he comment box.

Consider everything you have read about the Gilded Age and big business.  Based on what you have read, was Big Business steering US politicians or were politicians steering Big Business in the period from 1890-1910?   Provide evidence to support your answer.

Click on the comment link below and be sure to use your name.  You can use your first name only, if you want.  Only rule:  be civil.

Let the discussion begin!

32 comments:

Austin Menzia said...

Clearly, in the time period between 1890 and 1910, big business owners were steering the government rather than the government steering the big businesses. Throughout the Gilded Age, Congress passed legislation that favored corporations over all else. For example, the 14th Amendment was designed to secure the rights of African Americans, but it was manipulated by the Supreme Court in order to give corporations more rights. This basically gave corporations the rights that any citizen would have, including allowing corporations to sway politics in the US. Also, the Sherman Act was supposed to limit the power of corporations, but was interpreted in a way that the corporations barely lost anything. Corporations were considered monopolies of manufacturing rather than commerce. This means that these monopolies could not be regulated by Congress. By this time, it was clear that the United States Government had decided to stand behind corporations and allow them to make the bulk of economic decisions for the country. A New York banker toasted the Supreme Court in 1895: “I give you, gentlemen, the Supreme Court of the United State-guardian of the dollar, defender of private property, enemy of spoilation, sheet anchor of the Republic.” The main question is why did the government decide to take these actions, and let the big businesses steer the government? During this time, the United States had just gotten over a Civil War and was trying to reconstruct. In the 1890s, the country also experienced a depression that wouldn’t be matched until the Great Depression. Almost everyone was concerned with the future health of the country. Quality of life depends on the overall health of an economy. A country will be better off with more industry, a solid transportation system, higher domestic output, and solid leadership with a strong workforce. During this time, all of these aspects of success were lacking. Government could obviously not handle these problems by themselves. For example, when Congress was attempting to develop a steamboat line to improve transportation, the man they backed, Edward Collins failed miserably even with millions of dollars in subsidies. On the other hand, Vanderbilt was extremely successful, even with no federal aid. After this situation, the government realized that when an economy is in as rough shape as the early 1890s economy was, laissez faire is the only option, and the government recognized this. In promising young industries like the steel, railroad, and oil industries, there are only two options for maximum success. You can either have perfect competition where many firms compete and continue to progress the industry. Or you can have a monopoly run by a business genius who would control and develop every level of the entire industry. For example, today, there are only two main computer companies (Microsoft and Apple) because it allows for the most technological growth. Seeing the success that men like Carnegie, Rockefeller, Morgan, and Vanderbilt were having, it was a wise idea to side with them and let them take control of the vital aspects of the economy. One benefit of this was that the unlike the government, these big businesses were allowed to collude as long as the government did not restrict it. Collusion, although illegal, can be effective because it allows firms to become more efficient and more cost effective. Because Congress allowed this, Vanderbilt was allowed to hand out rebates to favorable customers and Carnegie and Rockefeller were able to complete vertical and horizontal integration quicker than if collusion was not allowed.

Austin Menzia said...

CONTINUED

Although this is extremely illegal, in a time like the early 1890s, government needed the economy to grow and it needed to grow fast, so by not making collusion illegal, it was able to grow at a much faster rate. In addition to this instead of making these businesses become completely free market, they attempted to assist them in any way possible. For example, congress gave Vanderbilt acres and acres of land in order to build his rail line. Vanderbilt did not straight up demand this; government just saw the opportunity to help make the industry grow even more. Although these CEOs had the majority impact on the economy at the time, the government was always there to aid them and ensure that they succeeded because if they didn’t, there was a good chance that the American economy would just get worse. Although the government deciding to not play a major part in the economy and make millions poor, they knew that if they focused on the growth of capital goods (goods that are used to advance industry) rather than consumer goods (goods that are meant for everyday people) the future of the US would be extremely bright. An industry with a huge steel production capacity, a massive transportation net work, and a surplus of oil would create an economic powerhouse that would be able to get through countless problems and have a higher quality of life than any other countries for decades if not centuries. If the government would have focused on consumer goods to help the struggling population, the industrial aspects of the United States would have never grew to their full capacity. The entire world would have been affected by this. Government was steered in this way because they knew that these men (Carnegie, Morgan, Vanderbilt, and Rockefeller) had proven themselves in the business world and could make the economy, which basically controls the overall health of a nation, better for the future of the country. In a way, many aspects of the United States were better due to these corporate leaders. For example: key goods in a developing industry (oil and steel) were cheaper than ever due to the government allowing Rockefeller and Carnegie to do whatever they wanted. “By the 1890s, Standard Oil had a 60 percent market share of all the oil sold in the world. Rockefeller sold the oil at eight cents a gallon- that would be around $1.60 today. Eight cents a gallon! Nobody in the world could do it that cheaply. Kerosene was so inexpensive that people could light their homes for less than one cent an hour.” Not only did these amazing business men create an amazing economy for the US, but there were clearly some positive aspects that they created that made the “Gilded Age” shine even brighter. This is perfect justification for why the government would allow corporations to get behind the wheel in the national economy. It was better for the present and future generations of America. Who knows what would have happened if all industries were completely government funded like Edward Collins’ steamboat industry? What would the US have been like if the government did not allow men like Carnegie and Rockefeller to steer the government in the right direction? After some thought, it will be clear that it was a necessary evil that had to be allowed for success in the nation.

Claire said...

During the time between 1890 and 1910, the Government gave the allusion of steering industry; however, in actuality, industry was driven by its leaders at the time. As Austin claimed, the monopolies of the steel and oil industries went completely unregulated. The Sherman Anti-Trust Act was interpreted in such a way that it had virtually no effect on corporate structures. More importantly, is the interpretation of the 14th amendment. Of the 14th amendment cases heard at the time, 288 were based on the rights of corporations, whereas only about 20 had to do with the rights of African Americans in the United States. Measures put in place by the government, whether it was to help business or to try to put a hold on these giant corporations, were exploited. Railroads were given land grants to connect the US, but the railroads were so shoddily built they needed to be replaced quickly. On the other hand, the Great Northern rail line received no subsidies and it was a quality line. Austin brought up Edward Collins and how he dwindled his government subsidy and lost to Vanderbilt, a man who was self made. Overall, these businesses were steering the United States government, and then when they got what they wanted, pushing for more.

kyle said...

Throughout the Gilded age, corporation giants steered politicians and the US government. By having a dominate control over the economy they were able influence aspects of the government to their own benefit; one being how laws are enforced and interpreted. The fourteenth amendment was originally created as a protection for Blacks. Corporations managed to influence the Supreme Court to also rule this as a protection for corporations. This made it harder for Congress to pass laws to control corporations because they would end up violating the fourteenth amendment. Even attempts to subdue monopolous corporations, like the Sherman Act, was bypassed because of the corporation’s overwhelming influence on the government. Because of the fourteenth amendment and the weakness of the Sherman Act, corporations were able to prosper without government restraint because the corporations had control over the government.

Karolina said...

Based on information provided in the readings as well as in-class discussions, during the time period 1890-1910, big businesses were steering the government rather than the other way around. As mentioned in earlier responses, the Fourteenth Amendment was “tweaked” by the government in order to protect the thriving businesses. However, this would only show that the government did have control over the businesses because it was able to regulate laws that influenced these companies both in positive and negative ways. Only by giving the companies more freedom did politicians begin to “lose control” of them, and they (companies) became driven by its leaders, like Claire mentioned. Some politicians became “controlled” by big businesses and its leaders through bribes that would require politicians to work in the best interests of the businesses. An example of this is Justice Samuel Miller who said “It is vain to contend with Judges who have been at the bar the advocates for forty years of railroad companies, and all forms of associated capital.” Nevertheless, people who made deals with businesses were among the politicians. The Sherman Anti-Trust Act is also another great example showing just how politicians interpreted laws differently and minimally changed conditions for monopolies. Although it is difficult to know for certain if big business was completely steering the US politicians, the not so negative influence the Fourteenth Amendment and Sherman Anti-Trust Act had on the businesses shows the government didn’t completely, if at all, control the businesses.

Cory said...

From the period of 1890 to 1910 the joystick to American industry was in the hands of the businessmen running the monopolies of steel, oil, and railroads, rather than the federal government. These captains of industry (for the joystick metaphor, this name is better suited than ‘robber barons,’ so don’t take this as an assumption of what they are) managed to rise far beyond the average American, some emerging from the dredges of poverty, others increasing the wealth they already owned. In the instance of Cornelius Vanderbilt, his early successes came from the steamboat across the Atlantic. In contrast to Edward Collins who built his company on government subsidies (and eventually filed for bankruptcy), he began his company with his own money and economic talent, conquering Atlantic trade quickly and effectively. This is a prime example of the way the captains of industry truly steered the American economy rather than American politicians. Yet what about after Vanderbilt invested (and flourished) in the railroad industry? He needed the thousands of free plots of land issued from the government to lay his tracks, so it seems that the government had the upper hand in this instance. However, upon further contemplation, Vanderbilt, and many other tycoons of the time, bribed and manipulated politicians in legislature into favoring their corporations. So perhaps the generous donations from the federal government to aid and encourage the American industry’s prosperity were not in the government’s complete control after all, and the tycoons had more subtle ways of flexing their economic muscles.

Olivia said...

Since the Captains of Industry were able to manipulate the government and politicians to enforce the laws and adjustments they saw fit for the growth of their corporations, I would agree that Big Business was steering politicians from 1890-1910. The Sherman Act and the 14th Amendment were manipulated and changed in ways that favored corporations, as my classmates suggested earlier. Claire brought up the valid point that the rail lines that had government subsidies failed in comparison to the Great Northern, which was privately funded. Cory talked about Vanderbilt and his success as an entrepreneur in contrast with Collins who kept asking for more from the government to support him. After these incidents, Congress realized and took the position that success in American business would come from entrepreneurs who had sufficient funds, motivation and drive to accomplish their goals in the business realm. For this to be able to work, the government had to be able to make exceptions and “bend the rules” already written, in order for these corporations to succeed. Along with success comes a massive amount of money because they happen to be the bosses of the whole corporation, which in many cases monopolized the whole industry. That brings up the argument: Does the money really belong to these Captains of Industry? Or should they receive less and the workers have better wages and working conditions?

Hannah said...

I agree with Kyle's assessment of the 14th amendment. These "Captains of Industry" became professional manipulators, and were soon pulling strings in congress with bribes. A twisted view of the 14th amendment allowed these corporations to be viewed as a person. Although this was meant to protect the rights of African Americans, it was overshadowed by the corporations. After the Southern Pacific Railroad company won in their case against Santa Clara county, many other corporations began to take advantage. About 85% of supreme court cases regarding the 14th amendment had to do with corporation's rights as people. This proves that corporations were not afraid to take extreme measures, and this soon allowed them the majority of control.

Josh Koutnik said...

Throughout the Gilded Age, big business owners as well as corporations were steering the government rather than the latter. The 14th Amendment clearly was proof of this as 288 cases compared to 19 dealt with corporations to negros. This amendment was supposed to be for the rights of African Americans, but mostly this amendment basically gave corporations the rights many humans would have. Along with the 14th Amendment, the the government allowed big business men to eliminate competition as to create corporations. Although the government passed the Sherman Anti-Trust Act, the power of the corporation did not diminish and these huge business owners such as Carnegie and Rockefeller still controlled the economy.

kyle said...

As I stated before, big business steered the government, but I would have to disagree with Austin about why corporations were able to steer politicians. Austin claimed that “Government was steered in this way because they knew that these men (Carnegie, Morgan, Vanderbilt, and Rockefeller) had proven themselves in the business world and could make the economy, which basically controls the overall health of a nation, better for the future of the country.” Corporations could control the government because of their sheer power over the economy and weak laws by the government to contain them. The Sherman Act is a combination of both. It was a weak law that was vaguely worded. The law sought to “protect trade and commerce against unlawful restraint and monopoly”. However, the law didn’t clearly define what a “trust” or a “monopoly” was, in addition to lacking strength needed for true reform. When discrepancies did come up over the law, corporations could sway the courts to favor them because of their mass power.

Cory said...

I agree with Kyle's most recent comment. It was indeed the vagueness of the laws passed against corporations that allowed them to gain such freedom and power rather than the government's deliberate "blind-eye." Take the railroads for example. Hundreds of cases were brought to the courts, fighting over which rebates were legal, which weren't, whether they were legal at all, and so on. It was only through time and lots more thorough legislation that standard rates, times, and restrictions were established. In the meantime, during all those years of weak legislation against big business, monopolies grew and corruption reigned-- allowing big businesses to remain in control of the economy.

Grace said...

The Gilded Age hosted a trend of corporations driving U.S. politicians. A perfect example of this is the 14th amendment's shift in focus as a result of the increasing number of corporations demanding their rights as persons. While the U.S. government had originally intended the 14th amendment to "protect Negro rights," 288 of the 307 cases brought before the Supreme Court regarding this amendment dealt with corporations rather than with Negros. The fact that corporations had the power to shift a national amendment's intentions from its original objective proves that these big businesses did indeed steer the government.

Grace said...

I like how Kyle put it: "Corporations were able to prosper without government restraint." Claire validated this statement when she wrote, "Measures put in place by the government, whether it was to help business or to try to put a hold on these giant corporations, were exploited." Corporations blockaded the government from taking any action to alter or enhance what these business had begun; they had the power.

Molly said...

During the period of 1890-1910 Big Businesses were steering the US government. One example is how companies, such as J. P. Morgan & Company, offered the government gold in exchange for government bonds. In addition, some companies, like Standard Oil Companies, bought and controlled the stocks of other companies. Both of these examples allowed corporations to completely control the industry. I agree with how Claire said, "Government gave the allusion of steering industry; however, in actuality, industry was driven by its leaders at the time." Although the government passed the laws and regulations, they were heavily influenced by bribes and such from big businesses and corporations. Also, as Austin stated, the oil and steel industries went unregulated so corporations could create monopolies. Finally, some laws were interpreted in order to benefit corporations, such as the 14th Amendment and Sherman Anti-Trust Act. So, although the government attempted to make it seem like they were steering big businesses, in actuality they were greatly influenced by the needs of those corporations.

Claire said...

I agree with Cory's post- government regulation hindered Collins's chances at success, but where would Vanderbilt be without them? The manipulation these men used to get favorable legislation shows the true ways these men ran the government. As we saw in political cartoons, Rockefeller was depicted as a king, with everything building off of Standard Oil. With Vanderbilt and others, the control was, as Cory stated, more subtle. These business tycoons had a major role in government at the time, so much so that they practically ran the country.

Becky said...

I like what Karolina mentioned about the Fourteenth Amendment- the large influence big businesses had on the government is clearly shown here. The Fourteenth Amendment was originally instated to protect the rights of blacks. Eventually, big businesses were able to use their connections to persuade government officials to extend the rights protected by the Fourteenth Amendment to include those of corporations. Now, corporations were viewed as people. The example of the Fourteenth Amendment clearly shows that big businesses controlled the government

Josh Koutnik said...

I agree with what Cory said,"However, upon further contemplation, Vanderbilt, and many other tycoons of the time, bribed and manipulated politicians in legislature into favoring their corporations." Even though the government funded these tycoons with money and gave them land grants, these business men controlled their own fates by bribing the government. Ultimately these men therefore ran the economy of the time period of 1890-1910. Along with these bribes given to the government, these big business men were able to get past the extremities of the Sherman Anti-Trust Act and were able to run the economy. These business tycoons ran the government and the economy during this time period.

Michelle said...

During the Gilded Age, big business tycoons and corporations steered the government. For example, it surprises many to hear that the 14th amendment was be manipulated in a way to consider US corporations as people. The amendment was intended for African Americans but was twisted in a way that gave businesses many rights that otherwise shouldn’t have been granted to them. Maybe politicians felt that they owed business owners because many loans had been given from these rich men to the government. So if in court for violating the Sherman Anti-Trust Act, corporations were most likely able to buy off the judges. Although government adopted this act, it was never followed through because of the power businesses had over politicians

Michelle said...

I liked what Karolina said about when the government gives more freedom to corporations, they just loose more control over them. They actually began to rely on them and ask for loans. Businesses became a big part of politics. Once bribery came into the picture, companies were able to get away with paying their workers low wages and giving them no benefits. There was nothing the government could do to stop this.

Olivia said...

I agree with Kyle when he said, “Because of the fourteenth amendment and the weakness of the Sherman Act, corporations were able to prosper without government restraint because the corporations had control over the government.” Corporations were running the show with the government just trying to keep up. Vanderbilt, Carnegie, Morgan and Rockefeller all proved themselves in their respective industries. They showed that they could control the economy and make what they wanted of it without the governments say. The government adjusted to these men and that’s why they are Captains of Industry.

Becky said...

In most aspects, big businesses controlled the government. Many policies created by the government were clearly for the benefit of businesses. In some cases, such as with the Sherman Anti-Trust Act, everyday workers were able to be exploited legally. Businesses were able to dismember unions because of extremely vague wording in the act. There are some instances, however, where it appeared that the government had great influence over big businesses. When railroads were being laid down, for example, the government gave free land to railroad companies. This facilitated the costly process of laying down tracks, making it easier for railroad companies to get started.

Miranda said...

i would have to agree with the majority and say that big business was controlled politicians rather than the other way around. the Sherman anti-trust act is a perfect example. Politicians knew the power that corporations held. Monopolies could eliminate competition and set prices for oil, shipping, etc which in turn could influence all aspects of society. Politicians used such documents like the Sherman Anti-trust act as a way of succumbing to big business. By submitting this act they appeared to be neutral, while in truth they seemingly gave even more power to monopolies. Monopolies interpreted this act as giving them the right to advocate the illegality of unions and therefore use the act to discredit the institutions. If politicians really held the long end of the stick their act wouldn't have been so easily manipulated into an advantage for large corporations and would have actually served its original purpose of bringing back competition in commerce.

Kevin Druffel said...

Adding to what grace said, Corporations did in fact steer the government during the Gilded Age. When strikes and protest were happening the government would favor the factory owners instead of the workers. The supreme court dealt with my corporation cases than Negro rights cases. Since corporations demanded to rights as a person this altered the 14th amendment which is a clear cut example of how they had power in the government.

Miranda said...

it was suggested earlier that the vague nature of the government's legislation proved big business more powerful. I 100% agree. As Cory and several others indicated, the vagueness of the railroad polices enforced only made the corporations stronger. Business controlled railroads because they controlled prices and the rights of the track. In addition, the Sherman Act was ineffective. While meaning to spike commercial competition it actually just allowed for corporations to legally defend their actions. So if the politicians really held the floor then why was their legislation so ineffective in controlling business; Corporate America was just too strong .

Emily Labbe said...

Big business tromped government without a doubt between 1890-1910. Businessmen knocked out competitors, formed monopolies, overpriced products (most of the time), and barely paid workers. Little or independent businesses were forced to sell to the big boys or they would be crushed. Laws made against corporations in attempts to narrow their power were slightly modified and reinterpreted, protecting big business as "persons" with rights to liberty and property (the 14th Amendment, though originally created for black rights, was manipulated to better serve corporations). All the wrong done in factories and the dangers presented to workers were glossed over and swept under the rug, by the government. During the Cleveland administration, Mr. President turned to New York City banks for gold in exchange for bonds when the gold reserve was depleted. With big business controlling banks, transportation, and fuel, they essentially and quite literally controlled everyone around them. The world was seen through rose-colored glasses by those with money and the rest of the country was left to struggle and forced to submit.

Ty said...

The corporate power structure controlled the American government in every way that they could manage. Business got the money it could not take from laborors by "investing" in govornment. By paying bribes to federal government workers and policymakers, business leaders could profit from favorable legislation. Thomas Edison gave New Jersey politicians $1000 each, and very quickly govornment offices had expensive electric lighting. Howard Zinn writes that the Central Pacific Railroad was actually created on free land granted by government employees who had collectivly taken over $9 million in bribes. This type of corrupt government by the corporations, for the corporations, shot down movements for workers rights. The government was no longer Lockeian, but now a tool to be used by the billionaire bourgeoisie.

Ryan said...

Like Ty has said, big businesses were the ones steering the politicians during this time period. With the amount of wealth being poured into the economy and in the hands of a few rich upper class members, it was sought to see who would be the ones controlling who. With the Supreme Court's decision of Corporations being interpreted in the 14th amendment as a person, it was then evident. Big businesses with their enormous amounts of wealth were able to control aspects of the government with investments and loans. By doing this, it made the government feel obligated to these members of society because of the debts to these people. Also, almost nothing was done to the corporations considered as monopolies because of the powers of these companies. Many of the business owners also bribed or supported politicians they favored. This leads to a government ran by people paid by big business owners and therefore they had the control.

Karolina said...

I like the way Ty described the government as a “tool” of the big businesses. It seems that almost everything the businesses wanted, they got (without much effort) from the government, mainly through bribes. Like Emily said, the businesses were controlling “banks, transportation, fuel, and essentially everything around them.” What is left for the government to control? Monopolies became very powerful through their “great control” and who knows if not more powerful than the government itself. If the government really did have control over the big businesses, they would have enforced their policies in a more effective way and also help struggling people in passing policies for minimum wage ,for example, because after all, the government is there to serve the people (as a whole not just a small portion of the population).

Molly said...

I agree with Karolina when she said-"the Fourteenth Amendment was “tweaked” by the government in order to protect the thriving businesses." this does a good job of how much big businesses influenced the actions of government.It also shows that the government would benefit in the success of the wealthy, and therefore favored those businesses in their decision making.

Agnes said...

Based on the readings, discussions, and lectures in class, I believe that during the period of 1890-1910, Big Businesses didn’t steer the US politicians, nor did the politicians steer the Big Businesses.
One example of how this is true comes from the reading, “The Myth of the Robber Barons.” Here, under the section entitled, “Competition Versus Subsidy in the Steamship Industry” the author states that “…Collins asked Congress to provide him with a grant of $3 million to underwrite the construction of five vessels and a yearly supplement of $385,000…” Collins eventually got his money and set to work on his ships. However, things didn’t always go as he planned, so he ended up asking the government for more money, once again. And, once again, he got his money. On the other hand, when Vanderbilt approached Congress with a proposal and asked for money, he was turned down. So, he set out without the support of the government, and he ended up better than Collins. “Collins had his subsidy stripped and had to compete head to head --unsupported--with Vanderbilt. Within a year, Collins went bankrupt, and Vanderbilt was the dominant force on the seas from the American side.”
This shows that Big Businesses and US politicians functioned independently of each other.

Agnes said...

I agree with Emily that, “Laws made against corporations in attempts to narrow their power were slightly modified and reinterpreted, protecting big business as ‘persons’ with rights to liberty and property (the 14th Amendment, though originally created for black rights, was manipulated to better serve corporations).” Just as other people have said, the 14th Amendment was manipulated by Congress so as to “protect” the big businesses. This amendment was meant to give more rights to the blacks. However, it mostly focused on granting rights to corporations and businesses, not African Americans.

Hannah said...

Taking everyone's opinions into consideration, I think it has become obvious that these institutions were dependent on each other. You can't deny that businesses had power they shouldn't have, but the government allowed it to happen because it was helping them. Without one, the other could not have existed.