The Gilded Age

Historians have given the time period between then end of Reconstruction in 1877 and approximately 1889 the moniker "The Gilded Age," after a humorous novel written by Mark Twain and Charles Dudley  Warner of the same name. Twain and Warner lampooned the avarice and greed that they saw as pervasive during this era. This time period did witness the rise of the "robber barons" who used their great wealth to make themselves even wealthier. Twain and Dudley chose the term "gilded" because of the connotation that by applying a thin veneer of gold to something, it could be made more attractive--implying that these men believed that gaining great wealth, they could eventually make their unsavory actions appear in a better light.

The United States was moving toward a capitalist economic system in the years before the outbreak of the American Civil War, but the changes in the political and economic systems that developed because of the war helped make conditions ripe for capitalism to take off as an economic system in the years after the war ended. The war promoted the growth of rail transportation in particular, and this became the "engine" of economic growth for much of the era.

Building a railroad necessitated the expenditure of huge amounts of capital. State and local governments in the years before the Civil War helped railroad companies raise this capital by giving them land along railroad right-of-ways, which the companies could then sell to investors or interested settlers. With this money, railroad companies could purchase necessary equipment--engines, rolling stock, rails. Companies also gained the ability to sell stock to raise capital. Selling stock, companies promised to pay dividends from future earnings in return for this investment. The fact that this practice was unregulated, however, allowed companies to sell more stock than they could hope to pay back--they promised to make payments that they had little hope of actually making. This practice was known as "watering" the stock, and was the cause of much of the economic chaos that characterized this era.

Economic hardship is always most difficult upon the poorest, and the process of capitalist industrialization helped to create a large class of people who were extremely poor. The jobs created during boom times led people (largely males) to leave their homes and migrate to the United States to take advantage of these new economic opportunities. These people tended to live in the growing cities, where the jobs were. When they had money to spend, they tended to spend in those establishments that catered to their needs. Saloons provided not only a place to drink beer, but offered cheap meals, and often acted as a permanent address for the transient people who frequented these establishments. Brothels also prospered during this time, since they offered sex and female companionship. These practices led many native whites to see moral failings in a large (and growing) portion of the population, and to begin to legislate against these practices; this leads eventually to their adaption by Progressives.