Industrialization and Large-Scale Exploitation of Natural Resources. During the Gilded Age ambitious and imaginative capitalists ranged the continent looking for new opportunities. Business lurched erratically from upswings to slumps, while the country's industrial base grew rapidly. Factories and mines labored heavily through these years to provide the raw materials and finished products needed for expansion of the railroad system. In 1865 (as construction of the first transcontinental railroad was underway; completed 1869) approximately 56,000 km (35,000 mi) of track stretched across the United States; by 1910 the total reached about 386,000 km (240,000 mi) of interconnected uniform-gauge track. By 1890 the United States contained one-third of the world's railroad trackage.
After new gold and silver discoveries in the late 1850s, until about 1875, individual prospectors explored the western country and desert basins in search of mineral riches. Then mining corporations took over, using hired laborers and eastern-trained engineers. Indians were either brutally exterminated or placed on small reservations. Warfare with the Great Plains Indians broke out in 1864; these Indian Wars did not entirely subside until after the slaughtering of the buffalo herds, the basis of Indian life, which had occurred by the mid-1880s. Through the Dawes Act of 1887, which forced most Indians to choose 160-acre (65-ha) allotments within their reservations, reformers hoped to break down tribal bonds and induce Indians to take up sedentary agriculture. Unallocated reservation lands were declared surplus and sold to whites.
Cattle ranching was the first large-scale enterprise to invade the Great Plains beginning in the late 1860s. By the 1880s, however, the open range began to give way to fenced pastureland and to agriculture, made possible by the newly invented barbed-wire fence and by "dry farming," a technique of preserving soil moisture by frequent plowing. Millions of farmers moved into the high plains west of the 100th meridian. So huge was their grain output that slumping world prices beginning in the mid-1880s put them into severe financial straits. Meanwhile, the vast continental sweep between Kansas and California became filled with new states.
By the early 1900s the nation's economy, tied together by the railroads into a single market, was no longer composed primarily of thousands of small producers who sold to local markets. Rather, it was dominated by a small number of large firms that sold nationwide and to the world at large. With great size, however, came large and complex problems. In 1887, Congress created the Interstate Commerce Commission to curb cutthroat competition among the railroads and to ensure that railroad rates were "reasonable and just." In 1890, on the other hand, Congress attempted to restore competition through passage of the Sherman Anti-Trust Act, which declared illegal trusts and other combinations that restrained trade. The U.S. Supreme Court favored laissez-faire and consistently blocked both federal and state efforts to regulate private business. The so-called robber barons and their immense fortunes were practically unscathed as they exploited the nation's natural resources and dominated its economic life.
New Social Groupings: Immigrants, Urbanites, and Union Members. In 1890 the American people numbered 63 million, double the 1860 population. During these years the nation's cities underwent tremendous growth. Many new urbanites came from the American countryside, but many others came from abroad. From 1860 to 1890 more than 10 million immigrants arrived in the United States; from 1890 to 1920, 15 million more arrived. Most were concentrated in northern cities: by 1910, 75 percent of immigrants lived in urban areas, while less than 50 percent of native-born Americans did so. In the 1880s the so-called new immigration began: in addition to the Germans, Scandinavians, Irish, and others of the older immigrant groups, there came such peoples as Italians, Poles, Hungarians, Bohemians, Greeks, and Jews (from central and eastern Europe, especially Russia). Roman Catholics grew in number from 1.6 million in 1850 to 12 million in 1900, producing a renewed outburst of bitter anti-Catholic nativism in the 1880s. The large cities, with their saloons, theaters, dance halls, and immigrant slums, were feared by many native American Protestants, who lived primarily in small cities and the rural countryside.
The outbreak of labor protests from the 1870s on, often characterized by immigrant workers opposing native-born employers, intensified the hostility. In 1878 the Knights of Labor formed, opening its ranks to all working people, skilled or unskilled. The Knights called for sweeping social and economic reforms, and their numbers rose to 700,000 in 1886. Then, as the organization broke apart because of internal stresses, the American Federation of Labor, under Samuel Gompers, formed to take its place. Concentrating on skilled craftworkers and tight organization, it endured.
Domestic Politics. Gilded Age politics became a contest between evenly balanced Republicans and Democrats. Winning elections by small margins, they alternated in their control of Congress and the White House. Five men served as Republican presidents: Hayes; James A. Garfield (1881); Chester A. Arthur (1881-85), who succeeded Garfield on his assassination; Benjamin Harrison (1889-93); and William McKinley (1897-1901). Their party regarded industrial growth and capitalist leadership with approval, believing that they led to an ever-widening opening of opportunity for all.
Grover Cleveland rose from obscurity to become Democratic governor of New York in the early 1880s and then U.S. president (1885 89; 1893 97; although he won a popular-vote plurality in the election of 1888, he lost to Harrison in the electoral college). Reared a Jacksonian Democrat, he believed that society is always in danger of exploitation by the wealthy and powerful. A vigorous president, he labored to clean up government by making civil service effective; took back huge land grants given out fraudulently in the West; and battled to lower the protective tariff.
In the Great Plains and the South, grain and cotton farmers, suffering from falling crop prices, demanded currency inflation to raise prices. By 1892 a Populist party had appeared, to call for free coinage of silver to achieve this goal. Cleveland resisted, stating that such a monetary policy would destroy confidence, prolong the great depression that began in 1893, and injure city consumers. In 1896 the Democrats, taken over by southern and western inflationists, ran William Jennings Bryan on a free silver platform. Ethnic voters surged into the Republican ranks-for the depression was a disastrous one and the Republican party had always urged active government intervention to stimulate the economy. In addition, as city dwellers they feared inflation. William McKinley's election began a long period of one-party (Republican) domination in the northern states and in Washington.