Effects of the American Civil War
The American Civil War created relationships between government and business concerns that continued after the war and sparked Gilded Age industrialization.
The coming of the post Civil War industrial society can be traced to key factors that enabled the North to win the war in 1865. These factors include a laissez faire relationship between government and business, the continuance of population growth through immigration, and a national spirit of sacrifice in order to achieve a goal. At the same time, these factors created significant problems affecting integrity of government, treatment of industrial works and immigrants, and the needs of western farmers.
The Civil War and American Business
The conduct and course of the war necessitated strong bonds between government and business. This was the debut of the billion dollar federal budget and direct governmental relationships with big business, notably the railroad industry. Railroads had played a significant role in Union victory, freighting supplies and carrying soldiers. After the Mississippi was closed, railroads picked up the cargo traffic normally assigned to the river and its tributaries.
As historian Howard Zinn demonstrates, Union generals at times contracted directly with businesses for arms and supplies. Without government regulatory policies, businesses grew through a self-policing financial community, failing when greed overtook prudence as in the Panic of 1873. Congressional leaders curried favor with big businesses, accepting loans that were never repaid, shares of stocks, and seats on corporate boards. As in the railroad industry, the quid pro quo was substantial land grants enabling railroads to connect the oceans and build hundreds of subsidiary lines.
The amount of railroad construction remained the same in the decade of the Civil War as it has the decade before the war. In the decade of the 1870s, however, railroad construction more than doubled from 20,000 miles of track to over 45,000 miles of track. [1] Much of this can be directly traced to Congressional support, often resulting in kickbacks and other favors. The 1872 Credit Mobilier scandal is but one salient example of graft.
Spirit of Sacrifice and Determination
The war had taught average Americans that victory would come if everyone shared in the sacrifices demanded. This included rationing as well as serving on the front lines. Four years of often intense conflict inculcated this mentality in the minds of Americans. As the United States grew and industrialization changed the face of American aspirations, growing a middle class and producing spectacular innovations, Americans worked within the mentality of sacrifice and determination.
Industrialization harnessed the power of millions of workers, men, women, and children that had no other recourse then to working twelve hour days for low wages. Inequities arising out of Gilded Age wealth production produced labor movements – unions – that challenged the status quo and demanded better working conditions.
Many of these workers were immigrants, unskilled, poor Europeans and Asians, thrust into the economic machine of rapid industrialization. Government, for its part, supported big business and viewed unionization as a step toward anarchism and socialism. Governmental leaders, including Presidents and Cabinet members, had close ties to big business and legislation that attempted to regulate businesses, such as the first Interstate Commerce Commission, had no regulatory teeth.
The End of Laissez Faire
The war between capital and labor would not abate until the Progressive Movement of the early 20th Century and legislation passed under the leadership of Theodore Roosevelt and Woodrow Wilson. Yet even before Roosevelt, American voters, notably in 1894 and 1896, rejected Populism and chose the status quo conservatism of on-going capitalism. While the 1890 Sherman Anti-Trust Act did little to effectively “curb” the power of the Trusts and rescue American workers from abuse, it was a first step in recognizing that a problem existed.
Sources:
[1] U.S. Bureau of the Census, Historical Statistics of the United States, Colonial Times to 1970, Bicentennial Edition, Washington, DC, 1975.
Page Smith, The Rise of Industrial America: A People’s History of the Post Reconstruction Era Vol. 6 (Penguin Books, 1984)
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