Welcome back, everybody. As you know, weve been in the gilded age for some time now and weve already seen the Technological Innovations that made some of this economic expansion possible. We saw both the economic transformations and the affects of those changes in the economy as far as lifestyles, both of the very rich, these opulent, robert barren lifestyles and on the other hand the very poor. Whether it was the People Living in the shacks of the new england mill towns or whether it was when we explored the gilded age city, the increasing problems of housing and of sanitation that came with this rapid and in many ways chaotic growth of the cities in the late 19th century. All of it, of course, accompanied by problems going along with immigration. And then last time we saw in particular there was some frustration with this new gilded age regime as we talked about the farmers in this period. That lecture really could have been called discontent in the gilded age part one. But today we turn our attention mostly back toward industry and in some ways back towards the cities as well. And i want to look at different types of frustrations with this new order in america. We started with the song eight hours which was a popular labor anthem in the 1880s. In some ways, that song speaks to what were going to be talking about today. On the one hand, eight hours for work, eight hours for rest. Were talking about labor relations. Were talking about more broadly speaking political economy. Were talking about the potential for state regulation. At least arguments over that. But that is somewhat straight forward. What about eight hours for what we will . Right, in the song, they say we want to feel the sunshine. In other words, were not machines. Were human beings. We want to have a life. We want to have a life outside of work and even those on the top of this new gilded age order are also as well see toward the end in many ways growing anxious about this new world that is growing about. As with so much else this semester, a lot of our story starts with the railroads. Youve seen how much the trance Continental Railroad changed the west, changed the economy and i already told you that Railroad Building bonanza didnt stop in 1869. Instead we continue to build by the end of the century, there were four trans Continental Railroads and all sorts of tributary lines to connect the different parts of the west to those main corridors. And it seemed like a good investment. Indeed the lions share of the stocks on the New York Stock Exchange were not industrial stocks, they were Railroad Stocks and a lot of people scrambled to get in on the ground floor and one of those projects was the Northern Pacific railroad. And the chief fund raiser for that project was jay cook. He has been a major financier during the civil war. Investors were starting to realize in the early 1870s that perhaps in our zeal for Railroad Building we had gone too far. Maybe were overbuilt. Maybe the Railroad Bubble is about to burst and all of a sudden jay cook had trouble raising money. He had trouble getting a loan. People found out he was overextended. And on september 18th, 1873, jay cook and company declared bankruptcy. When cook went under, it dragged down other businesses and railroads and banks with him. A panic hit wall street. Beginning september 20th, the New York Stock Exchange, which i said was heavily populated by Railroad Stocks, closed for ten days and over the next two months, 55 railroads went bankrupt and i didnt stop there. By 1874, 25 of the nations Railroad Bonds were in default and it wasnt just railroads that were affected. Over the following two years, there were over 18,000 business failures, many people including this cartoonist clung to the traditional view that ultimately this was a necessary evil, right . Failure is part of the capitalist system and we should see the panic as a sanitation officer cleaning all of the trash out of wall street. And maybe so. But in the meantime, a lot of people had to suffer. In the meantime, Railroad Construction ground to a halt. Unemployment skyrocketed in many sectors. In some cities, unemployment was as high as 25 and joblessness remained ratify for the next five years. At this same moment people were starting to ask questions about whether or not the railroad should have so much power within this new national economy. We saw the farmers asking these questions very loudly last time, didnt we . Here we see Railroad TycoonWilliam Henry vanderbilt pictured as the modern coloss sis of railroads along with some of his colleagues. As we saw last time, farmers considered their rates and their control over the economy to be extortion. And indeed other groups were starting to feel this way as well. The political efforts of frustrated farmers and some allied industrialists led to early attempts at state intervention. In the early 1870s, some states passed what we call the granger laws. They did things like set maximum freight and Grain Elevator rates. Forbid rate discrimination against short halls. Many consumers felt that the railroads were overcharging them. Its not just farmers who are frustrated. They created state railroad commissions to supervise and enforce this new Regulatory Regime. This happened in iowa, minnesota, wisconsin and illinois. In illinois it was there that the law was challenged by the firm of mun and scott who were accused of having overcharged their customers at their Grain Elevator in chicago. And they challenged their 100 fine and it went to the Supreme Court. And in 1877 by a 72 majority the court declared that when private property is devoted to a public use, it is subject to public regulation. And incidentally the federal government is not acting, so theres a door open for the states to step in. But dont consider this a longterm win for statelevel regulation. Because in 1886 a 63 majority at the Supreme Court declared in another case that under the Commerce Clause of the constitution, states were forbidden from imposing direct burdens on interstate commerce and illinoiss Regulatory Regime was considered a direct burden on a radilroad and therefore state regulation was severely hampered moving forward after the case. This along with a couple of other cases in the late 1880s which extended 14th amendment protections to corporations acted to undermine these statelevel regulations. That doesnt mean the public stopped being frustrated with the abuses of the railroads. In fact, public outrage over the wabash decision led to passage of the interstate commerce act in 1887. It created the interstate commerce commission. It made it forbidden to have special rates and rebates for powerful shippers. You remember rockefellers scheme from a few weeks ago. There would be no rate discrimination against short hauls. There would be public inception of rates and if you abused these regulations you could face up to a 5,000 fine. So take that vanderbilt. Moreover, they werent through. In 1890 growing public frustration over the strengths of the trusts in particular, the standard oil trust, led congress to pass the sherman antitrust act which is named from the brother of william sherman. By 1890, 27 states had passed antitrust laws and congress was joining the parade. The sherman law outlawed every contract combination or conspiracy in restraint of trade, again, imposing a 5,000 fine per offense and potentially also a year in prison. But i dont want you to be misled. This hardly represents the foundation of a robust Regulatory Regime. For one thing, the president s of the gilded age were generally uncomfortable with this sort of state intervention. They held to a more traditional laissezfaire view. So this law was signed because it was in accord with Public Opinion, but didnt do too much to enforce them and the same can be said about his successors. In moments when the federal government had tried to enforce it, they were smacked down by the courts. In 1895 the court defanged the sherman act when it came to industrial combinations. Because in the case of u. S. Versus e. C. Knight, the court declared 81 that the sherman act did not apply to manufacturing monopolies. The u. S. Sugar Refining Company controlled 90 of its sector. Certainly this is consolidation, right . But they say production is not interstate commerce. Thats something different. They have narrowly defined the powers given to enforcement under the sherman antitrust act and it wouldnt be until the 20th century that the sherman act was used successfully against monopolies. Something well talk about in a later lecture. It wasnt only the government and Public Opinion, but also workers who were growing frustrated with the commands of gilded age businessman. And like the public and the legislatures, labor would be largely frustrated in its protests. The hard times of the 1870s meant a lot of things for workers. One thing it meant was that hard times begot poor wages, less security, less stability and at times harsh measures by management to try and keep their companies afloat. Railroads in particular had tried to respond to the crises of the 70s by cutting their own rates to try to get their own business and outdo their competitors and how do they make up for the losses of cutting these rates, they cut their workers wages. That led to a decade of mounting frustrations by the workers. There were a series of localized strikes in 1876 and in early 1877. And then resenting the wage cuts and resenting the public that was heaped on the workers if they stood up by themselves because it was believed by many that railroads are a public good and if you strike against a railroad, youre doing something especially evil. The workers began to resent all of this and their resentment exploded in the summer of 1877. A new group called the trainmens union. Baltimore police broke up the first round of pickets. But the next day, they took control of a key Railroad Junction in west virginia, a battle between local police and a mob required state militia intervention and eventually federal troops to restore order. Within days, these sorts of scenes were erupting in a dozen Railway Centers around the country. In baltimore, a mop tried to trap the militia in an armory. The soldiers fired and killed ten people. In pittsburgh, rioters burned rail yards and destroyed 2,000 cars and the depots all while exchanges fire with troops. Strikers in indianapolis seized control of the deep hole and halted all cars and trains except for trains carrying mail for reasons well see in a moment. By july 25th, in fact, all lines outside of new england and the south were being affected in one way or the other. You could feel the tension on streets around the country. In chicago, businessmen patrolled the streets with guns fearing a potential revolution. In buffalo the revolution was under way. And crowds swarmed the yards of the new york central and claimed control of the depots of the Lake Shore Railroad and the erie railroad. Ultimately this collapsed. It was easy to find people to work as strikebreakers. Unemployment was still around 8 nationally. These are estimates. Some companies were fearful of continued strikes and continued chaos and were willing to negotiate. But ultimately we cant call this in any way a win for labor. If anything, the press became increasing indignant over this outburst of street action and they called on the states to beef up their militias, to put down future agitation. Indeed with an eye to the future, statelevel militia units were enhanced and armories were constructed to prepare for the next events. Meanwhile, instances like those in the late 1870s caused many workers to ask a fundamental question. Wouldnt this be more easily accomplished if we had some Better Organization . And in this, many of them turned to a fledging organization, the nights of labor. The knights of labor started as a secret society founded by a garment worker in philadelphia who was obsessed with all sorts of rituals and so forth. After 1877 many workers became interested in organization and they looked to the knights. This was often spontaneous. The knights were never particularly effective recruiters. But people were looking for an organization. And so in 1879, the knights had 8,000 members. They were taken over by new leadership under tendernerrace powderly who moved the group toward reform. In the 1870s and 80s they began stressing monetary reform. They began discussing an eighthour day, organizing for cooperative schemes, trying to gain state and local political influence, many within the knights of labor began embracing the ideas of henry george who called for a single tax on land. Whats interesting besides their sort of wideranging agenda is their broad membership. This group sort of anomalous for this period in america, especially within labor. This group was highly inclusive. They reached across lines of craft, lines of skill, so its skilled and unskilled workers. It is immigrants and nativeborn workers. There are catholics and protestants in this organization. There are black members as well as white members. Female members as well as male members. And so this was a very large and Inclusive Organization and they were building a lot of momentum in the 1880s. Well see in a moment, they will have a precipitous decline, however. At the very moment when we see them start to decline, a totally different ideal in labor comes to the fore and that is craft unionism. And that is the American Federation of labor. Founded in 1886. Their leader is Samuel Gompers whose papers are held at our library. And they werent inclusive. They were focused only on elite craftsman. This is strategic, you can say, because the skilled craftsmen have a little bit more leverage when it comes to negotiation. Unskilled craftsman are replaceable. And they had much narrower goals. The phrase that gompers was pure and simple unionism. Were going to get a better wage, shorter hours. Woor n were not trying to change the world, though. This unionism would be the one that would survive the chaos that were going to talk about now moving forward. In the meantime the 1880s would witness recapitulations of many of the troubling themes of the 1870s. Once again, a Major Economic panic. This one in 1884, followed, once, by an industrial downturn, followed by labor troubles. Most noteworthy in this time was a period known as the great upheaval. Its a sporadic series of events. In may of 1884 there was a successful strike by unorganized Railroad Workers against the Union Pacific railroad. The railroad capitulated in two days. And the workers said, lets join the knights of labor. In june of 1884 we saw the beginning of a major mine strike in the hawking river valley of ohio where 4,000 workers, plus their families and the community, went out on strike. They the strike lasted six months. The miners lost the strike but whats noteworthy about this is it once again taught them the usefulness of organization and coordination. If you go on strike, you dont get paid. The strike doesnt last very long because you have to eat. But they were able to organization and raise funds. They had a hundred thousand dollars relief fund that enabled them to keep this fight up for six months. Once again it demonstrates to workers the value of organization. Then in march of 1885 came a major strike against the Missouri Pacific Railroad which was trying to have a pay cut. That strike spread to virtually the entire Southwestern Railroad network most of which was owned by our friend jay gould. The governors of nebraska and kansas intervened on behalf of the workers which i think tells us more about gould than it does about the governors. But nevertheless, gould gave back the pay cut. And once again workers saw value and organization. It meant dramatic growth for the knights of labor. In 1885, they had 100,000 members. By 1886, they had 700,000 members. But this would be the knights high watermark. And one reason for the decline is the first of several very famous but very telling episodes within American Labor relations, we can call them explosions in the gilded age and that is the hay market affair. There was a strike at the mccormick reaper works in chicago on may 3rd, 1886. They were calling for an eighthour day. There was violence between strikers and police. Shots were fired and two workers were killed. There were anarchists in chicago. And they said this violence to us is a wonderful example of our broader critique of american capitalism and the american system and we want to take advantage of this moment to use this tragedy in order to demonstrate to people the validity of our arguments. And so they called for protests beginning may 4th. The protests were well attended by the working classes, especially german immigrants. There was a large turnout. It was peaceful by all accounts, at least at the beginning. The rhetoric was relatively tame. According to the relatively tame mayor of chicago, a mainstream politician, who witnessed the events and was satisfied that things were going to be fine and went home. In fact, a lot of people were deciding that things were okay and it was time to go home, but it wasnt. Because what happened next, as the rally was starting to break up, someone threw a pipe bomb and a policeman was killed and the police began to fire and a shootout ensued and an additional six police and four protestors were killed in the cross fire. We never figured out who through the pipe bomb, but that doesnt really matter. We knew w