document_title: History of the United States (1865–1918)

question_text: which action marked the end of reconstruction in the united states

question_tokens: which action marked the end of reconstruction in the united states

text: History of the United States (1865–1918)

text: Reconstruction Era[edit]

text: Reconstruction was the period from 1863 to 1877, in which the federal government temporarily took control—one by one—of the Southern states of the Confederacy. Before his assassination in April 1865, President Abraham Lincoln had announced moderate plans for reconstruction to re-integrate the former Confederates as fast as possible. Lincoln set up the Freedmen's Bureau in March 1865, to aid former slaves in finding education, health care, and employment. The final abolition of slavery was achieved by the Thirteenth Amendment, ratified in December 1865.[4] However, Lincoln was opposed by the Radical Republicans within his own party who feared that the former Confederates would never truly give up on slavery and Confederate nationalism, and would always try to reinstate them behind-the-scenes. As a result, the Radical Republicans tried to impose legal restrictions that would strip most ex-rebels' rights to vote and hold elected office. The Radicals were opposed by Lincoln's Vice President and successor, Tennessee Democrat Andrew Johnson. However, the Radicals won the critical elections of 1866, winning enough seats in Congress to override President Johnson's vetoes of such legislation. They even successfully impeached President Johnson (in the House of Representatives), and almost removed him from office (in the Senate) in 1868. Meanwhile, they gave the South's "freedmen" new constitutional and federal legal protections.

text: The Radicals' reconstruction plans took effect in 1867 under the supervision of the U.S. Army, allowing a Republican coalition of Freedmen, Scalawags (sympathetic local whites), and Carpetbaggers (recent arrivals from the North), to take control of Southern state governments. They ratified the Fourteenth Amendment, giving enormous new powers to the federal courts to deal with justice at the state level. These state governments borrowed heavily to build railroads and public schools, increasing taxation rates. The backlash of increasingly fierce opposition to these policies drove most of the Scalawags out of the Republican Party and into the Democratic Party. President Ulysses S. Grant enforced civil rights protections for African-Americans that were being challenged in South Carolina, Mississippi, and Louisiana. The Fifteenth Amendment was ratified in 1870 giving African-Americans the right to vote in American elections.

text: U.S. Representative Stevens was one of the major policymakers regarding Reconstruction, and obtained a House vote of impeachment against President Andrew Johnson. Hans Trefousse, his leading biographer, concludes that Stevens "was one of the most influential representatives ever to serve in Congress. [He dominated] the House with his wit, knowledge of parliamentary law, and sheer willpower, even though he was often unable to prevail."[5]

text: Reconstruction ended at different times in each state, the last in 1877, when Republican Rutherford B. Hayes won the contentious presidential election of 1876 over his opponent, Samuel J. Tilden. To deal with disputed electoral votes, Congress set up an Electoral Commission. It awarded the disputed votes to Hayes. The white South accepted the "Compromise of 1877" knowing that Hayes proposed to end Army control over the remaining three state governments in Republican hands. White Northerners accepted that the Civil War was over and that Southern whites posed no threat to the nation.[6][7]

text: The end of Reconstruction marked the end of the brief period of civil rights and civil liberties for African Americans in the South, where most lived. Reconstruction caused permanent resentment, distrust, and cynicism among white Southerners toward the federal government, and helped create the "Solid South," which typically voted for the (then-)socially conservative Democrats for all local, state, and national offices. White supremacists created a segregated society through "Jim Crow Laws" that made blacks second-class citizens with very little political power or public voice.[8] The white elites (called the "Redeemers"—the southern wing of the "Bourbon Democrats") were in firm political and economic control of the south until the rise of the Populist movement in the 1890s. Local law enforcement was weak in rural areas, allowing outraged mobs to use lynching to redress alleged-but-often-unproven crimes charged to blacks.[9]

text: Historians' interpretations of the Radical Republicans have dramatically shifted over the years, from the pre-1950 view of them as tools of big business motivated by partisanship and hatred of the white South, to the perspective of the neoabolitionists of the 1950s and afterwards, who applauded their efforts to give equal rights to the freed slaves.[10]

text: In the South itself the interpretation of the tumultuous 1860s differed sharply by race. Americans often interpreted great events in religious terms. Historian Wilson Fallin contrasts the interpretation of Civil War and Reconstruction in white versus black using Baptist sermons in Alabama. White preachers expressed the view that:

text: In sharp contrast, Black preachers interpreted the Civil War, emancipation and Reconstruction as:

text: Historians in the 21st century typically consider Reconstruction to be a failure, but they "disagree on what caused Reconstruction to fail, focusing on whether it went too far, too fast or did not go far enough."[12]

text: However, historian Mark Summers in 2014 sees a positive outcome:

text: The West[edit]

text: In 1869, the First Transcontinental Railroad opened up the far west mining and ranching regions. Travel from New York to San Francisco now took six days instead of six months.[14] After the Civil War, many from the East Coast and Europe were lured west by reports from relatives and by extensive advertising campaigns promising "the Best Prairie Lands", "Low Prices", "Large Discounts For Cash", and "Better Terms Than Ever!". The new railroads provided the opportunity for migrants to go out and take a look, with special family tickets, the cost of which could be applied to land purchases offered by the railroads. Farming the plains was indeed more difficult than back east. Water management was more critical, lightning fires were more prevalent, the weather was more extreme, rainfall was less predictable. The fearful stayed home. The actual migrants looked beyond fears of the unknown. Their chief motivation to move west was to find a better economic life than the one they had. Farmers sought larger, cheaper and more fertile land; merchants and tradesmen sought new customers and new leadership opportunities. Laborers wanted higher paying work and better conditions. With the Homestead Act providing free land to citizens and the railroads selling cheap lands to European farmers, the settlement of the Great Plains was swiftly accomplished, and the frontier had virtually ended by 1890.[15]

text: American Indian assimilation[edit]

text: Expansion into the plains and mountains by miners, ranchers and settlers led to conflict with some of the regional Indian tribes. The government insisted the American Indians either move into the general society and become assimilated, or remain on assigned reservations, and used force to keep them there. The violence petered out in the 1880s and practically ceased after 1890.[16] By 1880 the buffalo herds, a foundation for the hunting economy, had disappeared.

text: American Indians had the choice of living on reservations, but some tribes refused to live there. Here food, supplies, education and medical care was provided by the federal government, or living on their own in society and earning wages, typically as a cowboy on a ranch, or manual worker in town. Reformers wanted to give as many American Indians as possible the opportunity to own and operate their own farms and ranches, and the issue was how to give individual Indians land owned by the tribe. To assimilate the Indians into American society, reformers set up training programs and schools, such as the Carlisle Indian Industrial School in Carlisle, Pennsylvania, that produced many prominent Indian leaders. The anti-assimilation traditionalists on the reservations, however, resisted integration. The reformers decided the solution was to allow Indians still on reservations to own land as individuals.

text: The Dawes Act of 1887 was an effort to integrate American Indians into the mainstream; the majority accepted integration and were absorbed into American society, leaving a trace of  American Indian ancestry in millions of American families. Those who refused to assimilate remained in poverty on the reservations, supported by Federal food, medicine and schooling. In 1934, U.S. policy was reversed again by the Indian Reorganization Act which attempted to protect tribal and communal life on the reservations.[17]

text: Farming[edit]

text: A dramatic expansion in farming took place.[18] The number of farms tripled from 2.0 million in 1860 to 6.0 million in 1905. The number of people living on farms grew from about 10 million in 1860 to 22 million in 1880 to 31 million in 1905. The value of farms soared from $8.0 billion in 1860 to $30 billion in 1906.[19]

text: The federal government issued 160-acre (65 ha) tracts virtually free to settlers under the Homestead Act of 1862. Even larger numbers purchased lands at very low interest from the new railroads, which were trying to create markets. The railroads advertised heavily in Europe and brought over, at low fares, hundreds of thousands of farmers from Germany, Scandinavia and Britain.[20]

text: Despite their remarkable progress and general prosperity, 19th-century U.S. farmers experienced recurring cycles of hardship, caused primarily by falling world prices for cotton and wheat.[21]

text: Along with the mechanical improvements which greatly increased yield per unit area, the amount of land under cultivation grew rapidly throughout the second half of the century, as the railroads opened up new areas of the West for settlement. The wheat farmers enjoyed abundant output and good years from 1876 to 1881 when bad European harvests kept the world price high. They then suffered from a slump in the 1880s when conditions in Europe improved. The farther west the settlers went, the more dependent they became on the monopolistic railroads to move their goods to market, and the more inclined they were to protest, as in the Populist movement of the 1890s. Wheat farmers blamed local grain elevator owners (who purchased their crop), railroads and eastern bankers for the low prices.[22]

text: The first organized effort to address general agricultural problems was the Grange movement that reached out to farmers. It grew to 20,000 chapters and 1.5 million members. The Granges set up their own marketing systems, stores, processing plants, factories and cooperatives. Most went bankrupt. The movement also enjoyed some political success during the 1870s. A few Midwestern states passed "Granger Laws", limiting railroad and warehouse fees.[23]

text: Family life[edit]

text: Few single men attempted to operate a farm; farmers clearly understood the need for a hard-working wife, and numerous children, to handle the many chores, including child-rearing, feeding and clothing the family, managing the housework, and feeding the hired hands.[24] During the early years of settlement, farm women played an integral role in assuring family survival by working outdoors. After a generation or so, women increasingly left the fields, thus redefining their roles within the family. New conveniences such as sewing and washing machines encouraged women to turn to domestic roles. This was further supported by the scientific housekeeping movement, promoted across the land by the media and government extension agents, as well as county fairs which featured achievements in home cookery and canning, advice columns for women in the farm papers, and home economics courses in the schools.[25]

text: Although the eastern image of farm life on the prairies emphasizes the isolation of the lonely farmer and farm life, in reality rural folk created a rich social life for themselves. For example, many joined a local branch of the Grange; a majority had ties to local churches. It was popular to organize activities that combined practical work, abundant food, and simple entertainment such as barn raisings, corn huskings, and quilting bees,.[26] One could keep busy with scheduled Grange meetings, church services, and school functions. The womenfolk organized shared meals and potluck events, as well as extended visits between families.[27]

text: Childhood on the American frontier is contested territory. One group of scholars argues the rural environment was salubrious for it allowed children to break loose from urban hierarchies of age and gender, promoted family interdependence, and in the end produced children who were more self-reliant, mobile, adaptable, responsible, independent and more in touch with nature than their urban or eastern counterparts.[28][29] However other historians offer a grim portrait of loneliness, privation, abuse, and demanding physical labor from an early age.[30][31]

text: Industrialization[edit]

text: From 1865 to about 1913, the U.S. grew to become the world's leading industrial nation. Land and labor, the diversity of climate, the ample presence of railroads (as well as navigable rivers), and the natural resources all fostered the cheap extraction of energy, fast transport, and the availability of capital that powered this Second Industrial Revolution.[32] The average annual income (after inflation) of non-farm workers grew by 75% from 1865 to 1900, and then grew another 33% by 1918.[33]

text: Where the First Industrial Revolution shifted production from artisans to factories, the Second Industrial Revolution pioneered an expansion in organization, coordination, and the scale of industry, spurred on by technology and transportation advancements. Railroads opened the West, creating farms, towns, and markets where none had existed. The First Transcontinental Railroad, built by nationally oriented entrepreneurs with British money and Irish and Chinese labor, provided access to previously remote expanses of land. Railway construction boosted opportunities for capital, credit, and would-be farmers.[34]

text: New technologies in iron and steel manufacturing, such as the Bessemer process and open-hearth furnace, combined with similar innovations in chemistry and other sciences to vastly improve productivity. New communication tools, such as the telegraph and telephone allowed corporate managers to coordinate across great distances. Innovations also occurred in how work was organized, typified by Frederick Winslow Taylor's ideas of scientific management.[35]

text: To finance the larger-scale enterprises required during this era, the corporation emerged as the dominant form of business organization. Corporations expanded by merging, creating single firms out of competing firms known as "trusts" (a form of monopoly). High tariffs sheltered U.S. factories and workers from foreign competition, especially in the woolen industry. Federal railroad land grants enriched investors, farmers and railroad workers, and created hundreds of towns and cities.[36] Business often went to court to stop labor from organizing into unions or from organizing strikes.[37]

text: Powerful industrialists, such as Andrew Carnegie, John D. Rockefeller and Jay Gould, known collectively by their critics as "robber barons", held great wealth and power, so much so that in 1888 Rutherford B. Hayes noted in his diary that the United States ceased being a government for the people and had been replaced by a "government of the corporation, by the corporation, and for the corporation."[38] In a context of cutthroat competition for wealth accumulation, the skilled labor of artisans gave way to well-paid skilled workers and engineers, as the nation deepened its technological base. Meanwhile, a steady stream of immigrants encouraged the availability of cheap labor, especially in mining and manufacturing.[39]

text: Labor and management[edit]

text: In the fast-growing industrial sector, wages were about double the level in Europe, but the work was harder with less leisure. Economic depressions swept the nation in 1873–75 and 1893–97, with low prices for farm goods and heavy unemployment in factories and mines.[40] Full prosperity returned in 1897 and continued (with minor dips) to 1920.[41]

text: The pool of unskilled labor was constantly growing, as unprecedented numbers of immigrants—27.5 million between 1865 and 1918[2] —entered the U.S. Most were young men eager for work. The rapid growth of engineering and the need to master the new technology created a heavy demand for engineers, technicians, and skilled workers. Before 1874, when Massachusetts passed the nation's first legislation limiting the number of hours women and child factory workers could perform to 10 hours a day, virtually no labor legislation existed in the country. Child labor reached a peak around 1900 and then declined (except in Southern textile mills) as compulsory education laws kept children in school. It was finally ended in the 1930s.[42]

text: Labor organization[edit]

text:
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text: The first major effort to organize workers' groups on a nationwide basis appeared with The Noble Order of the Knights of Labor in 1869. Originally a secret, ritualistic society organized by Philadelphia garment workers, it was open to all workers, including African Americans, women, and farmers. The Knights grew slowly until they succeeded in facing down the great railroad baron, Jay Gould, in an 1885 strike. Within a year, they added 500,000 workers to their rolls, far more than the thin leadership structure of the Knights could handle.[43]

text: The Knights of Labor soon fell into decline, and their place in the labor movement was gradually taken by the American Federation of Labor (AFL). Rather than open its membership to all, the AFL, under former cigar-makers union official Samuel Gompers, focused on skilled workers. His objectives were "pure and simple": increasing wages, reducing hours, and improving working conditions. As such, Gompers helped turn the labor movement away from the socialist views earlier labor leaders had espoused. The AFL would gradually become a respected organization in the U.S., although it would have nothing to do with unskilled laborers.[44]

text: In times of economic depression, layoffs and wage cuts angered the workers, leading to violent labor conflicts in 1877 and 1894. In the Great Railroad Strike in 1877, railroad workers across the nation went on strike in response to a 10-percent pay cut. Attempts to break the strike led to bloody uprisings in several cities. The Haymarket Riot took place in 1886, when an anarchist allegedly threw a bomb at police dispersing a strike rally at the McCormick Harvesting Machine Company in Chicago.[45] At its peak, the Knights claimed 700,000 members. By 1890, membership had plummeted to fewer than 100,000, then faded away.[46] The killing of policemen greatly embarrassed the Knights of Labor, which was not involved with the bomb but which took much of the blame.[47]

text: In the riots of 1892 at Carnegie's steel works in Homestead, Pennsylvania, a group of 300 Pinkerton detectives, whom the company had hired to break a bitter strike by the Amalgamated Association of Iron, Steel and Tin Workers, were fired upon by strikers and 10 were killed. As a result, the National Guard was called in to guard the plant; non-union workers were hired and the strike broken. The Homestead plant completely barred unions until 1937.[48]

text: Two years later, wage cuts at the Pullman Palace Car Company, just outside Chicago, led to a strike, which, with the support of the American Railway Union, soon brought the nation's railway industry to a halt. The shutdown of rail traffic meant the virtual shutdown of the entire national economy, and President Grover Cleveland acted vigorously. He secured injunctions in federal court, which Eugene Debs and the other strike leaders ignored. Cleveland then sent in the Army to stop the rioting and get the trains moving. The strike collapsed, as did the ARU.[49][50]

text: The most militant working class organization of the 1905–1920 era was the Industrial Workers of the World (IWW), formed largely in response to abysmal labor conditions (in 1904, the year before its founding, 27,000 workers were killed on the job[51]) and discrimination against women, minorities, and unskilled laborers by other unions, particularly the AFL.[52] The "Wobblies," as they were commonly known, gained particular prominence from their incendiary and revolutionary rhetoric. Openly calling for class warfare, direct action, workplace democracy and "One Big Union" for all workers regardless of sex, race or skills,[53] the Wobblies gained many adherents after they won a difficult 1912 textile strike (commonly known as the "Bread and Roses" strike) in Lawrence, Massachusetts. They proved ineffective in managing peaceful labor relations and members dropped away. But according to historian Howard Zinn, "the IWW became a threat to the capitalist class, exactly when capitalist growth was enormous and profits huge."[54] The IWW strongly opposed the 1917–18 war effort and faced a campaign of repression from the federal government.[55][56] More than a few Wobblies, such as Frank Little, were beaten or lynched by mobs or died in American jails.[57] The union exists to this day and has been involved in various labor disputes throughout the 2000s.[58][59]

text: Gilded Age[edit]

text: The "Gilded Age" that was enjoyed by the topmost percentiles of American society after the recovery from the Panic of 1873 floated on the surface of the newly industrialized economy of the Second Industrial Revolution. It was further fueled by a period of wealth transfer that catalyzed dramatic social changes. It created for the first time a class of the super-rich "captains of industry", the "robber barons" whose network of business, social and family connections ruled a largely White Anglo-Saxon Protestant social world that possessed clearly defined boundaries. The term "Gilded Age" was coined by Mark Twain and Charles Dudley Warner in their 1873 book, The Gilded Age: A Tale of Today, employing the ironic difference between a "gilded" and a Golden Age.[60]

text: With the end of Reconstruction, there were few major political issues at stake and the 1880 presidential election was the quietest in a long time. James Garfield, the Republican candidate, won a very close election, but a few months into his administration was shot by a disgruntled public office seeker. Garfield  was succeeded by his VP Chester Arthur.

text: Reformers, especially the "Mugwumps" complained that powerful parties made for corruption during the Gilded Age or "Third Party System". Voter enthusiasm and turnout during the period 1872–1892 was very high, often reaching practically all men. The major issues involved modernization, money, railroads, corruption, and prohibition. National elections, and many state elections, were very close. The 1884 presidential election saw a mudslinging campaign in which  Republican James G. Blaine was defeated by Democrat Grover Cleveland, a reformer.[61] During Cleveland's presidency, he pushed to have congress cut tariff duties. He also expanded civil services and vetoed many private pension bills. Many people were worried that these issues would hurt his chances in the 1888 election. When they expressed these concerns to Cleveland, he said "What is the use of being elected or reelected, unless you stand for something?"

text: The dominant social class of the Northeast possessed the confidence to proclaim an "American Renaissance", which could be identified in the rush of new public institutions that marked the period—hospitals, museums, colleges, opera houses, libraries, orchestras— and by the Beaux-Arts architectural idiom in which they splendidly stood forth, after Chicago hosted the World's Columbian Exposition of 1893.[62]

text: Social history[edit]

text: Urbanization (the rapid growth of cities) went hand in hand with industrialization (the growth of factories and railroads), as well as expansion of farming. The rapid growth was made possible by high levels of immigration.[63][64]

text: Immigration[edit]

text: From 1865 through 1918 an unprecedented and diverse stream of immigrants arrived in the United States, 27.5 million in total. In all, 24.4 million (89%) came from Europe, including 2.9 million from Britain, 2.2 million from Ireland, 2.1 million from Scandinavia, 3.8 million from Germany, 4.1 million from Italy, 7.8 million from Russia and other parts of eastern and central Europe. Another 1.7 million came from Canada.[65] Most came through the port of New York City, and from 1892, through the immigration station on Ellis Island, but various ethnic groups settled in different locations. New York and other large cities of the East Coast became home to large Jewish, Irish, and Italian populations, while many Germans and Central Europeans moved to the Midwest, obtaining jobs in industry and mining. At the same time, about one million French Canadians migrated from Quebec to New England.[66]

text: Immigrants were pushed out of their homelands by poverty or religious threats, and pulled to America by jobs, farmland  and kin connections. They found economic opportunity at factories, mines and construction sites, and found farm opportunities in the Plains states.

text: While most immigrants were welcomed, Asians were not. Many Chinese had been brought to the west coast to construct railroads, but unlike European immigrants, they were seen as being part of an entirely alien culture. After intense anti-Chinese agitation in California and the west, Congress passed the Chinese Exclusion Act in 1882. An informal agreement in 1907, the Gentlemen's Agreement, stopped Japanese immigration.[67]

text: Some immigrants stayed temporarily in the U.S. then returned home, often with savings that made them relatively prosperous. Most, however, permanently left their native lands and stayed in hope of finding a better life in the New World. This desire for freedom and prosperity led to the famous term, the American Dream.

text: Religion[edit]

text: The Third Great Awakening was a period of renewal in evangelical Protestantism from the late 1850s to the 1900s.[68] It affected pietistic Protestant denominations and had a strong sense of social activism.[69] It gathered strength from the postmillennial theology that the Second Coming of Christ would come after mankind had reformed the entire earth. A major component was the Social Gospel Movement, which applied Christianity to social issues and gained its force from the Awakening, as did the worldwide missionary movement. New groupings emerged, such as the Holiness movement and Nazarene movements, and Christian Science.[70]

text: At the same time, the Catholic Church grew rapidly, with a base in the German, Irish, Polish, and Italian immigrant communities, and a leadership drawn from the Irish. The Catholics were largely working class and concentrated in the industrial cities and mining towns, where they built churches, parochial schools, and charitable institutions, as well as colleges.[71]

text: The Jewish community grew rapidly, especially from the new arrivals from Eastern Europe who settled chiefly in New York City. They avoided the Reform synagogues of the older German Jews and instead formed Orthodox and Conservative synagogues.[72]

text: Nadir of race relations[edit]

text: Starting in the end of the 1870s, African Americans lost many of the civil rights obtained during Reconstruction and became increasingly subject to racial discrimination. Increased racist violence, including lynchings and race riots, lead to a strong deterioration of living conditions of African Americans in the Southern states. Jim Crow laws were established after the Compromise of 1877. Many decided to flee for the Midwest as early as 1879, an exile which was intensified during the Great Migration that began before World War I.[73]

text: In 1896, the U.S. Supreme Court effectively upheld the Jim Crow system of  racial segregation by its "separate but equal" doctrine.

text: D. W. Griffith's The Birth of a Nation (1915), the first great American film, made heroes of the KKK in Reconstruction.[74]

text: Populism[edit]

text: By 1880, the Granger movement began to decline and was replaced by the Farmers' Alliance. From the beginning, the Farmers' Alliance were political organizations with elaborate economic programs. According to one early platform, its purpose was to "unite the farmers of America for their protection against class legislation and the encroachments of concentrated capital." Their program also called for the regulation—if not the outright nationalization—of the railroads; currency inflation to provide debt relief; the lowering of the tariff; and the establishment of government-owned storehouses and low-interest lending facilities. These were known as the Ocala Demands.[75]

text: During the late 1880s, a series of droughts devastated the West. Western Kansas lost half its population during a four-year span. By 1890, the level of agrarian distress was at an all-time high. Mary Elizabeth Lease, a noted populist writer and agitator, told farmers that they needed to "raise less corn and more hell". Working with sympathetic Democrats in the South and small third parties in the West, the Farmer's Alliance made a push for political power. From these elements, a new political party, known as the Populist Party, emerged. The elections of 1890 brought the new party into coalitions that controlled parts of state government in a dozen Southern and Western states and sent a score of Populist senators and representatives to Congress.

text: Its first convention was in 1892, when delegates from farm, labor and reform organizations met in Omaha, Nebraska, determined at last to make their mark on a U.S. political system that they viewed as hopelessly corrupted by the monied interests of the industrial and commercial trusts.

text: The pragmatic portion of the Populist platform focused on issues of land, railroads and money, including the unlimited coinage of silver. The Populists showed impressive strength in the West and South in the 1892 elections, and their candidate for President polled more than a million votes. It was the currency question, however, pitting advocates of silver against those who favored gold, that soon overshadowed all other issues. Agrarian spokesmen in the West and South demanded a return to the unlimited coinage of silver. Convinced that their troubles stemmed from a shortage of money in circulation, they argued that increasing the volume of money would indirectly raise prices for farm products and drive up industrial wages, thus allowing debts to be paid with inflated dollars.

text: Conservative groups and the financial classes, on the other hand, believed that such a policy would be disastrous, and they insisted that inflation, once begun, could not be stopped. Railroad bonds, the most important financial instrument of the time, were payable in gold. If fares and freight rates were set in half-price silver dollars, railroads would go bankrupt in weeks, throwing hundreds of thousands of men out of work and destroying the industrial economy. Only the gold standard, they said, offered stability.

text: The financial Panic of 1893 heightened the tension of this debate. Bank failures abounded in the South and Midwest; unemployment soared and crop prices fell badly. The crisis, and President Cleveland's inability to solve it, nearly broke the Democratic Party.

text: The Democratic Party, which supported silver and free trade, absorbed the remnants of the Populist movement as the presidential elections of 1896 neared. The Democratic convention that year was witness to one of the most famous speeches in U.S. political history. Pleading with the convention not to "crucify mankind on a cross of gold", William Jennings Bryan, the young Nebraskan champion of silver, won the Democrats' presidential nomination. The remaining Populists also endorsed Bryan, hoping to retain some influence by having a voice inside the Bryan movement. Despite carrying the South and all the West except California and Oregon, Bryan lost the more populated, industrial North and East—and the election—to the Republican William McKinley with his campaign slogan "A Full Dinner Pail".

text: In 1897 the economy began to improve, mostly from restored business confidence. Silverites—who did not realize that most transactions were handled by bank checks, not sacks of gold—believed the new prosperity was spurred by the discovery of gold in the Yukon. In 1898, the Spanish–American War drew the nation's attention further away from Populist issues. If the movement was dead, however, its ideas were not. Once the Populists supported an idea, it became so tainted that the vast majority of American politicians rejected it; only years later, after the taint had been forgotten, was it possible to achieve Populist reforms, such as the direct popular election of Senators in 1914.

text: Women's Suffrage[edit]

text: The women's suffrage movement began with the 1848 Seneca Falls Convention; many of the activists became politically aware during the abolitionist movement. The movement reorganized after the Civil War, gaining experienced campaigners, many of whom had worked for prohibition in the Women's Christian Temperance Union. By the end of the 19th century a few western states had granted women full voting rights,[76] though women had made significant legal victories, gaining rights in areas such as property and child custody.[77]

text: Around 1912, the movement, which had grown sluggish, began to reawaken. This put an emphasis on its demands for equality and arguing that the corruption of American politics demanded purification by women because men could no longer do their job.[78] Protests became increasingly common as suffragette Alice Paul led parades through the capitol and major cities. Paul split from the large National American Woman Suffrage Association (NAWSA), which favored a more moderate approach and supported the Democratic Party and Woodrow Wilson, led by Carrie Chapman Catt, and formed the more militant National Woman's Party. Suffragists were arrested during their "Silent Sentinels" pickets at the White House, the first time such a tactic was used, and were taken as political prisoners.[79]

text: Finally, the suffragettes were ordered released from prison, and Wilson urged Congress to pass a Constitutional amendment enfranchising women. The old anti-suffragist argument that only men could fight a war, and therefore only men deserved the franchise, was refuted by the enthusiastic participation of tens of thousands of American women on the home front in World War I. Across the world, grateful nations gave women the right to vote. Furthermore, most of the Western states had already given women the right to vote in state and national elections, and the representatives from those states, including the first voting woman Jeannette Rankin of Montana, demonstrated that Women's Suffrage was a success. The main resistance came from the south, where white leaders were worried about the threat of black women voting. Nevertheless, Congress passed the Nineteenth Amendment in 1919. It became constitutional law on August 26, 1920, after ratification by the 36th required state.[80]

text: Foreign policy[edit]

text: With the landslide election victory of William McKinley, who had risen to national prominence six years earlier with the passage of the McKinley Tariff of 1890, a high tariff was passed in 1897 and a decade of rapid economic growth and prosperity ensued, building national self-confidence.[81] McKinley brought in a new governing philosophy, one that dominated the 20th century, in which politics was the arena in which compromises among interest groups were worked out for the national benefit. His system of politics emphasized economic growth, prosperity for all, and pluralism that provided benefits for every group. He rejected programs such as prohibition and immigration restriction that were designed to hurt an enemy. He felt parties had the duty to enact the people's will and educate them to new ideas.[82]

text: War with Spain[edit]

text: Spain had once controlled a vast colonial empire, but by the second half of the 19th century only Cuba, Puerto Rico, the Philippines, and some African possessions remained. The Cubans had been in a state of rebellion since the 1870s, and American newspapers, particularly New York City papers of William Randolph Hearst and Joseph Pulitzer, printed sensationalized "Yellow Journalism" stories about Spanish atrocities in Cuba. However, these lurid stories reached only a small fraction of voters; most read sober accounts of Spanish atrocities, and they called for intervention. On February 15, 1898, the battleship USS Maine exploded in Havana Harbor. Although it was unclear precisely what caused the blast, many Americans believed it to be the work of a Spanish mine, an attitude encouraged by the yellow journalism of Hearst and Pulitzer. The military was rapidly mobilized as the U.S. prepared to intervene in the Cuban revolt. It was made clear that no attempt at annexation of Cuba would be made and that the island's independence would be guaranteed. Spain considered this a wanton intervention in its internal affairs and severed diplomatic relations. War was declared on April 25.[83]

text: The Spanish were quickly defeated, and Theodore Roosevelt's Rough Riders gained fame  in Cuba. Meanwhile, Commodore George Dewey's fleet crushed the Spanish in the faraway Philippines. Spain capitulated, ending the three-month-long war and recognizing Cuba's independence. Puerto Rico, Guam, and the Philippines were ceded to the United States.[84]

text: Although U.S. capital investments within the Philippines and Puerto Rico were small, some politicians hoped they would be strategic outposts for expanding trade with Latin America and Asia, particularly China. That never happened and after 1903 American attention turned to the Panama Canal as the key to opening new trade routes. The Spanish–American War thus began the active, globally oriented American foreign policy that continues to the present day.

text: Philippines[edit]

text: The U.S. acquired the Philippines from Spain on December 10, 1898 via the Treaty of Paris, which ended the Spanish–American War. However, Philippine revolutionaries led by Emilio Aguinaldo declared independence and in 1899 began fighting the U.S. troops. The Philippine–American War ended in 1901 after Aguinaldo was captured and swore allegiance to the U.S. Likewise the other insurgents accepted American rule and peace prevailed, except in some remote islands under Muslim control. Roosevelt continued the McKinley policies of removing the Catholic friars (with compensation to the Pope), upgrading the infrastructure, introducing public health programs, and launching a program of economic and social modernization. The enthusiasm shown in 1898–99 for colonies cooled off, and Roosevelt saw the islands as "our heel of Achilles." He told Taft in 1907, "I should be glad to see the islands made independent, with perhaps some kind of international guarantee for the preservation of order, or with some warning on our part that if they did not keep order we would have to interfere again."[85] By then the President and his foreign policy advisers turned away from Asian issues to concentrate on Latin America, and Roosevelt redirected Philippine policy to prepare the islands to become the first Western colony in Asia to achieve self-government.[86] The Filipinos fought side by side with the Americans when the Japanese invaded in 1941, and aided the American re-conquest of the islands in 1944–45; independence came in 1946.[87]

text: Latin America[edit]

text: The U.S. demanded Spain stop its oppressive policies in Cuba; public opinion (overruling McKinley) led to the short, successful Spanish–American War in 1898. The U.S. permanently took over Puerto Rico, and temporarily held Cuba. Attention increasingly focused on the Caribbean as the rapid growth of the Pacific states, especially California, revealed the need for a canal across to connect the Atlantic and Pacific Oceans. Plans for one in Nicaragua fell through but under Roosevelt's leadership the U.S. built a canal through Panama, after finding a public health solution to the deadly disease environment. The Panama Canal opened in 1914.[88]

text: In 1904, Roosevelt announced his "Corollary" to the Monroe Doctrine, stating that the United States would intervene in cases where Latin American governments prove incapable or unstable in the interest of bringing democracy and financial stability to them. The U.S. made numerous interventions, mostly to stabilize the shaky governments and permit the nations to develop their economies. The intervention policy ended in the 1930s and was replaced by the Good Neighbor policy.[89]

text: In 1909, Nicaraguan President José Santos Zelaya resigned after the triumph of U.S.-backed rebels. This was followed up by the 1912–1933 U.S. occupation of Nicaragua.

text: The U.S. military occupation of Haiti, in 1915, followed the mob execution of Haiti's leader but even more important was the threat of a possible German takeover of the island. Germans controlled 80% of the economy by 1914 and they were bankrolling revolutions that kept the country in political turmoil. The conquest resulted in a 19-year-long United States occupation of Haiti. Haiti was an exotic locale that suggested black racial themes to numerous American writers including Eugene O'Neill, James Weldon Johnson, Langston Hughes, Zora Neale Hurston and Orson Welles.[90]

text: Limited American intervention occurred in Mexico as that country fell into a long period of anarchy and civil war starting in 1910. In April 1914, U.S. troops occupied the Mexican port of Veracruz following the Tampico Incident; the reason for the intervention was Woodrow Wilson's desire to overthrow the Mexican dictator Victoriano Huerta. In March 1916, Pancho Villa led 1,500 Mexican raiders in a cross-border attack against Columbus, New Mexico, attacked a U.S. Cavalry detachment, seized 100 horses and mules, burned the town, and killed 17 of its residents. President Woodrow Wilson responded by sending 12,000 troops, under Gen. John J. Pershing, into Mexico to pursue Villa. The Pancho Villa Expedition to capture Villa failed in its objectives and was withdrawn in January 1917.[91]

text: In 1916, the U.S. occupied the Dominican Republic.

text: Progressive Era[edit]

text: A new spirit of the times, known as "Progressivism", arose in the 1890s and into the 1920s (although some historians date the ending with World War I).[92]

text: The presidential election of 1900 gave the U.S. a chance to pass judgment on the McKinley Administration, especially its foreign policy. Meeting at Philadelphia, the Republicans expressed jubilation over the successful outcome of the war with Spain, the restoration of prosperity, and the effort to obtain new markets through the Open Door Policy. The 1900 election was mostly a repeat of 1896 except for imperialism being added as a new issue (Hawaii had been annexed in 1898). William Jennings Bryan added anti-imperialism to his tired-out free silver rhetoric, but he was defeated in the face of peace, prosperity and national optimism.[93]

text: President McKinley was enjoying great popularity as he began his second term,[94] but it would be cut short. In September 1901, while attending an exposition in Buffalo, New York, McKinley was shot by an anarchist. He was the third President to be assassinated, all since the Civil War. Vice President Theodore Roosevelt assumed the presidency.[95]

text: Political corruption was a central issue, which reformers hoped to solve through civil service reforms at the national, state, and local level, replacing political hacks with professional technocrats. The 1883 Civil Service Reform Act (or Pendleton Act), which placed most federal employees on the merit system and marked the end of the so-called "spoils system", permitted the professionalization and rationalization of the federal administration. However, local and municipal government remained in the hands of often-corrupt politicians, political machines, and their local "bosses". Henceforth, the spoils system survived much longer in many states, counties, and municipalities, such as the Tammany Hall ring, which survived well into the 1930s when New York City reformed its own civil service. Illinois modernized its bureaucracy in 1917 under Frank Lowden, but Chicago held out against civil service reform until the 1970s.[96]

text: Many self-styled progressives saw their work as a crusade against urban political bosses and corrupt "robber barons". There were increased demands for effective regulation of business, a revived commitment to public service, and an expansion of the scope of government to ensure the welfare and interests of the country as the groups pressing these demands saw fit. Almost all the notable figures of the period, whether in politics, philosophy, scholarship, or literature, were connected at least in part with the reform movement.

text: Trenchant articles dealing with trusts, high finance, impure foods, and abusive railroad practices began to appear in the daily newspapers and in such popular magazines as McClure's and Collier's. Their authors, such as the journalist Ida M. Tarbell, who crusaded against the Standard Oil Trust, became known as "Muckrakers". In his novel, The Jungle, Upton Sinclair exposed unsanitary conditions in the Chicago meat packing houses and the grip of the beef trust on the nation's meat supply.

text: The hammering impact of Progressive Era writers bolstered aims of certain sectors of the population, especially a middle class caught between political machines and big corporations, to take political action. Many states enacted laws to improve the conditions under which people lived and worked. At the urging of such prominent social critics as Jane Addams, child labor laws were strengthened and new ones adopted, raising age limits, shortening work hours, restricting night work, and requiring school attendance. By the early 20th century, most of the larger cities and more than half the states had established an eight-hour day on public works. Equally important were the Workers' Compensation Laws, which made employers legally responsible for injuries sustained by employees at work. New revenue laws were also enacted, which, by taxing inheritances, laid the groundwork for the contemporary Federal income tax.[97]

text: Roosevelt's Presidency[edit]

text: Roosevelt, a progressive Republican, called for a "Square Deal", and initiated a policy of increased Federal supervision in the enforcement of antitrust laws. Later, extension of government supervision over the railroads prompted the passage of major regulatory bills. One of the bills made published rates the lawful standard, and shippers equally liable with railroads for rebates.[98]

text: Following Roosevelt's landslide victory in the 1904 election he called for still more drastic railroad regulation, and in June 1906, Congress passed the Hepburn Act. This gave the Interstate Commerce Commission real authority in regulating rates, extended the jurisdiction of the commission, and forced the railroads to surrender their interlocking interests in steamship lines and coal companies. Roosevelt held many meetings, and opened public hearings, in a successful effort to find a compromise for the Coal Strike of 1902, which threatened the fuel supplies of urban America. Meanwhile, Congress had created a new Cabinet Department of Commerce and Labor.

text: Conservation of the nation's natural resources and beautiful places was a very high priority for Roosevelt, and he raised the national visibility of the issue.[99] The President called for a far-reaching and integrated program of conservation, reclamation and irrigation as early as 1901 in his first annual message to Congress. Whereas his predecessors had set aside 46 million acres (188,000 km²) of timberland for preservation and parks, Roosevelt increased the area to 146 million acres (592,000 km²) and began systematic efforts to prevent forest fires and to retimber denuded tracts. His appointment of his friend Gifford Pinchot as chief forester resulted in vigorous new scientific management of public lands. TR added 50 wildlife refuges, 5 new national parks, and initiated the system of designating National Monuments, such as the Devils Tower National Monument.[100]

text: President Taft[edit]

text: Roosevelt's popularity was at its peak as the campaign of 1908 neared, but he was unwilling to break the tradition by which no President had held office for more than two terms. Instead, he supported William Howard Taft. On the Democratic side, William Jennings Bryan ran for a third time, but managed to carry only the South. Taft, a former judge, first colonial governor of the U.S.-held Philippines and administrator of the Panama Canal, made some progress with his Dollar Diplomacy.[101]

text: Taft continued the prosecution of trusts, further strengthened the Interstate Commerce Commission, established a postal savings bank and a parcel post system, expanded the civil service, and sponsored the enactment of two amendments to the United States Constitution. The 16th Amendment authorized a federal income tax, while the 17th Amendment, ratified in 1913, mandated the direct election of U.S. Senators by the people, replacing the prior system established in the original Constitution, in which they were selected by state legislatures.

text: Yet balanced against these achievements were: Taft's acceptance of a tariff with protective schedules that outraged progressive opinion; his opposition to the entry of the state of Arizona into the Union because of its progressive constitution; and his growing reliance on the conservative wing of his party. By 1910, the Republican Party was divided, and an overwhelming vote swept the Democrats back into control of Congress.

text: President Wilson[edit]

text: Two years later, Woodrow Wilson, the Democratic, progressive governor of the state of New Jersey, campaigned against Taft, the Republican candidate, and against Roosevelt who was appalled by his successor's policies and thus broke his earlier pledge to not run for a third term. As the Republicans would not nominate him, he ran as a third-party Progressive candidate, but the ticket became widely known as the Bull Moose Party. The election was mainly a contest between Roosevelt and Wilson, Taft receiving little attention and carrying just eight electoral votes.[102]

text: Wilson, in a spirited campaign, defeated both rivals. Under his leadership, the new Congress enacted one of the most notable legislative programs in American history. Its first task was tariff revision. "The tariff duties must be altered," Wilson said. "We must abolish everything that bears any semblance of privilege." The Underwood Tariff in 1913 provided substantial rate reductions on imported raw materials and foodstuffs, cotton and woolen goods, iron and steel, and removed the duties from more than a hundred other items. Although the act retained many protective features, it was a genuine attempt to lower the cost of living for American workers.

text: The second item on the Democratic program was a reorganization of the banking and currency system. "Control," said Wilson, "must be public, not private, must be vested in the government itself, so that the banks may be the instruments, not the masters, of business and of individual enterprise and initiative."

text: Passage of the Federal Reserve Act of 1913 was one of Wilson's most enduring legislative accomplishments, for he successfully negotiated a compromise between Wall Street and the agrarians. The plan built on ideas developed by Senator Nelson Aldrich, who discovered the European nations had more efficient central banks that helped their internal business and international trade. The new organization divided the country into 12 districts, with a Federal Reserve Bank in each, all supervised by a Federal Reserve Board. These banks were owned by local banks and served as depositories for the cash reserves of member banks. Until the Federal Reserve Act, the U.S. government had left control of its money supply largely to unregulated private banks. While the official medium of exchange was gold coins, most loans and payments were carried out with bank notes, backed by the promise of redemption in gold. The trouble with this system was that the banks were tempted to reach beyond their cash reserves, prompting periodic panics during which fearful depositors raced to turn their bank paper into coin. With the passage of the act, greater flexibility in the money supply was assured, and provision was made for issuing federal reserve notes—paper dollars—to meet business demands. The Fed opened in 1914 and played a central role in funding the World War. After 1914, issues of money and banking faded away from the political agenda.[103]

text: To resolve the long-standing dispute over trusts, the Wilson Administration dropped the "trust-busting" legal strategies of Roosevelt and Taft and relied on the new Federal Trade Commission to issue orders prohibiting "unfair methods of competition" by business concerns in interstate trade. In addition a second law, the Clayton Antitrust Act, forbade many corporate practices that had thus far escaped specific condemnation—interlocking directorates, price discrimination among purchasers, use of the injunction in labor disputes and ownership by one corporation of stock in similar enterprises. After 1914 the trust issue faded away from politics.[104]

text: The Adamson Act of 1916 established an eight-hour day for railroad labor and solidified the ties between the labor unions and the Democratic Party.[105] The record of achievement won Wilson a firm place in American history as one of the nation's foremost liberal reformers. Wilson's domestic reputation would soon be overshadowed by his record as a wartime President who led his country to victory but could not hold the support of his people for the peace that followed.

text: World War I[edit]

text: Entry[edit]

text: Firmly maintaining neutrality when World War I began in Europe in 1914, the United States helped supply the Allies, but could not ship anything to Germany because of the British blockade. Sympathies among many politically and culturally influential Americans had favored the British cause from the start of the war, as typified by industrialist Samuel Insull, born in London, who helped young Americans enlist in British or Canadian forces. On the other hand, especially in the Midwest, many Irish Americans and German Americans opposed any American involvement, the Irish because they hated the British, and the Germans because they feared they would come under personal attack. The suffragist movement included many pacifists, and most churches opposed the war.

text: German efforts to use their submarines ("U-boats") to blockade Britain resulted in the deaths of American travelers and sailors, and attacks on passenger liners caused public outrage. Most notable was torpedoing without warning the passenger liner Lusitania in 1915. Germany promised not to repeat; however it reversed position in early 1917, believing that unrestricted U-boat warfare against all ships headed to Britain would win the war, albeit at the cost of American entry. When Americans read the text of the German offer to Mexico, known as the Zimmermann Telegram, they saw an offer for Mexico to go to war with Germany against the United States, with German funding, with the promise of the return of the lost territories of Arizona, New Mexico, and Texas. On Apr 1, 1917, Wilson called for war, emphasizing that the U.S. had to fight to maintain its honor and to have a decisive voice in shaping the new postwar world.[106] Congress voted on April 6, 1917 to declare war, but it was far from unanimous.[107]

text: Germania[edit]

text: German Americans were sometimes accused of being too sympathetic to the German Empire. Former president Theodore Roosevelt denounced "hyphenated Americanism", insisting that dual loyalties were impossible in wartime. A small minority came out for Germany, or ridiculed the British. About 1% of the 480,000 enemy aliens of German birth were imprisoned in 1917–18. The allegations included spying for Germany, or endorsing the German war effort.[108] Thousands were forced to buy war bonds to show their loyalty.[109] One person was killed by a mob; in Collinsville, Illinois, German-born Robert Prager was dragged from jail as a suspected spy and lynched.[110] The war saw a phobia of anything German engulf the nation. Sauerkraut was rechristened "liberty cabbage", for example.[111]

text: Patriotism[edit]

text: The Wilson Administration created the Committee on Public Information (CPI) to control war information and provide pro-war propaganda. The private American Protective League, working with the Federal Bureau of Investigation, was one of many private right-wing "patriotic associations" that sprang up to support the war and at the same time fight labor unions and various left-wing and anti-war organizations. The U.S. Congress passed, and Wilson signed, the Espionage Act of 1917 and the Sedition Act of 1918. The Sedition Act criminalized any expression of opinion that used "disloyal, profane, scurrilous or abusive language" about the U.S. government, flag or armed forces. Government police action, private vigilante groups and public war hysteria compromised the civil liberties of many Americans who disagreed with Wilson's policies.[112]

text: Draft[edit]

text: The United States was remarkably unprepared for war in 1917, since it had not fought a major conflict since 1865. The military was small by modern standards and used out-dated weapons. A hasty expansion and modernization of the armed forces was thus launched. The draft began in spring 1917 but volunteers were also accepted. Four million men and thousands of women joined the services for the duration.[113]

text: Economic confusion in 1917[edit]

text: In terms of munitions production, the 15 months after April 1917 involved an amazing parade of mistakes, misguided  enthusiasm, and confusion. Americans were willing enough, but they did not know their proper role. Washington was unable to figure out what to do when, or even to decide who was in charge. Typical of the confusion was the coal shortage that hit in December 1917. Because coal was by far the major source of energy and heat a grave crisis ensued. There was in fact plenty of coal being mined, but 44,000 loaded freight and coal cars were tied up in horrendous traffic jams in the rail yards of the East Coast. Two hundred ships were waiting in New York harbor for cargo that was delayed by the mess. The solution included nationalizing the coal mines and the railroads for the duration, shutting down factories one day a week to save fuel, and enforcing a strict system of priorities. Only in March 1918 did Washington finally take control of the crisis [114]

text: Women[edit]

text: The war saw many women taking what were traditionally men's jobs for the first time. Many worked on the assembly lines of factories, producing tanks, trucks and munitions. For the first time, department stores employed African American women as elevator operators and cafeteria waitresses. The Food Administration helped housewives prepare nutritious meals with less waste and with optimum use of the foods available. Most important, the morale of the women remained high, as millions joined the Red Cross as volunteers to help soldiers and their families. With rare exceptions, the women did not protest the draft.[115]

text: Labor[edit]

text: Samuel Gompers, head of the AFL, and nearly all labor unions were strong supporters of the war effort. They minimized strikes as wages soared and full employment was reached. The AFL unions strongly encouraged their young men to enlist in the military, and fiercely opposed efforts to reduce recruiting and slow war production by the anti-war labor union called the Industrial Workers of the World (IWW) and also left-wing Socialists. President Wilson appointed Gompers to the powerful Council of National Defense, where he set up the War Committee on Labor. The AFL membership soared to 2.4 million in 1917. In 1919, the Union tried to make their gains permanent and called a series of major strikes in meat, steel and other industries. The strikes, all of which failed, forced unions back to their position around 1910.[116] Anti-war socialists controlled the IWW, which fought against the war effort and was in turn shut down by legal action by the federal government.

text: Over there[edit]

text: On the battlefields of France in spring 1918, the fresh American troops were enthusiastically welcomed by the war-weary Allied armies in the summer of 1918. They arrived at the rate of 10,000 a day, at a time that the Germans were unable to replace their losses. After the Allies turned back the powerful final German offensive (Spring Offensive), the Americans played a central role in the Allied final offensive (Hundred Days Offensive). Victory over Germany was achieved on November 11, 1918.[117]

text: Using questionnaires filled out by doughboys as they left the Army, Gutièrrez reported they  were not cynical or disillusioned. They fought "for honor, manhood, comrades, and adventure, but especially for duty."[118]

text: Treaty[edit]

text: Britain, France and Italy imposed severe economic penalties on Germany in the Treaty of Versailles. The United States Senate did not ratify the Treaty of Versailles; instead, the United States signed separate peace treaties with Germany and her allies. The Senate also refused to enter the newly created League of Nations on Wilson's terms, and Wilson rejected the Senate's compromise proposal.


document_title: History of the United States dollar

question_text: when did us money stop being backed by gold

root

text: History of the United States dollar

text: Background[edit]

text: By the end of 1778, Continental Currency retained only between 1⁄5 to 1⁄7 of its original face value. By 1780, Continental bills – or Continentals – were worth just 1⁄40 of their face value. Congress tried to reform the currency by removing the old bills from circulation and issuing new ones, but this met with little to no success. By May 1781, Continentals had become so worthless they ceased to circulate as money. Benjamin Franklin noted that the depreciation of the currency had, in effect, acted as a tax to pay for the war.[2] In the 1790s, after the ratification of the United States Constitution, Continentals could be exchanged for treasury bonds at 1% of face value.[3]

tag: p

text: Congress appointed Robert Morris to be Superintendent of Finance of the United States following the collapse of Continental currency. In 1782, Morris advocated the creation of the first financial institution chartered by the United States. The Bank of North America was funded in part by specie loaned to the United States by France. Morris helped finance the final stages of the war by issuing notes in his name, backed by his own money. The Bank of North America also issued notes convertible into specie.[4] On July 6, 1785, the Continental Congress of the United States authorized the issuance of a new currency, the US dollar.

text: However, runaway inflation and the collapse of the Continental currency prompted delegates at the Constitutional Convention in Philadelphia in 1787 to include the gold and silver clause in the United States Constitution, preventing individual States from issuing their own bills of credit. Article One states they were prohibited to "make any Thing but gold and silver Coin a Tender in Payment of Debts."[5] Some people use this clause to argue that federal paper money is unconstitutional. [6][7]

text: The United States Mint was created by Congress following the passing of the Coinage Act of 1792. It was primarily tasked with producing and circulating coinage. The first Mint building was in Philadelphia, then the capital of the United States. The Mint was originally placed within the Department of State, until the Coinage Act of 1873 when it became part of the Department of the Treasury (in 1981 it was placed under the auspices of the Treasurer of the United States). The Mint had the authority to convert any precious metals into standard coinage for anyone's account with no seigniorage charge beyond refining costs.

text: Early history[edit]

text: After the creation of the U.S. dollar, the fledgling American administration of President George Washington turned its attention to monetary issues again in the early 1790s under the leadership of Alexander Hamilton, the Secretary of the Treasury at the time. Congress acted on Hamilton's recommendations in the Coinage Act of 1792, which established the dollar as the basic unit of account for the United States. The word dollar is derived from Low Saxon cognate of the High German Thaler. The most commonly circulated and readily available currency, used by common Americans, at this time, was the Spanish Peso, also known as the "Spanish milled dollar", which was valued for its high silver content.

text: In the early 19th century, gold rose in relation to silver, resulting in the removal from commerce of nearly all gold coins, and their subsequent melting. Therefore, in the Coinage Act of 1834, the 15:1 ratio of silver to gold was changed to a 16:1 ratio by reducing the weight of the nation's gold coinage. This created a new U.S. dollar that was backed by 1.50 g (23.22 grains) of gold. However, the previous dollar had been represented by 1.60 g (24.75 grains) of gold. The result of this revaluation, which was the first devaluation of the U.S. dollar, was that the value in gold of the dollar was reduced by 6%. Moreover, for a time, both gold and silver coins were useful in commerce.

text: In 1853, the weights of U.S. silver coins (except the dollar itself, which was rarely used) were reduced. This had the effect of placing the nation effectively (although not officially) on the gold standard. The retained weight in the dollar coin was a nod to bimetallism, although it had the effect of further driving the silver dollar coin from commerce. Foreign coins, including the Spanish dollar, were also, widely used,[8] as legal tender, until 1857.

text: With the enactment of the National Banking Act of 1863, during the American Civil War and its later versions that taxed states' bonds and currency out of existence, the dollar became the sole currency of the United States and remains so today.

text: During the 19th century the dollar was less accepted around the world than the British pound. Nellie Bly carried Bank of England notes on her 1889-1890 trip around the world in 72 days; she also brought some dollars, Bly wrote, "to use at different ports as a test to see if American money was known outside of America". Traveling east from New York, she did not see American money until she found $20 gold pieces used as jewelry in Colombo; there Bly found that as currency dollars were accepted at a 60% discount.[9]

text: In 1878, the Bland-Allison Act was enacted to provide for freer coinage of silver. This act required the government to purchase between $2 million and $4 million worth of silver bullion each month at market prices and to coin it into silver dollars. This was, in effect, a subsidy for politically influential silver producers.

text: The discovery of large silver deposits in the Western United States in the late 19th century created a political controversy. Due to the large influx of silver, the value of silver in the nation's coinage dropped precipitously. On one side were agrarian interests such as the United States Greenback Party that wanted to retain the bimetallic standard in order to inflate the dollar, which would allow farmers to more easily repay their debts. On the other side were Eastern banking and commercial interests, who advocated sound money and a switch to the gold standard. This issue split the Democratic Party in 1896. It led to the famous "cross of gold" speech given by William Jennings Bryan, and may have inspired many of the themes in The Wizard of Oz. Despite the controversy, the status of silver was slowly diminished through a series of legislative changes from 1873 to 1900, when a gold standard was formally adopted. The gold standard survived, with several modifications, until 1971.

text: Gold standard[edit]

text: Bimetallism persisted until March 14, 1900, with the passage of the Gold Standard Act, which provided that:

text: ...the dollar consisting of twenty-five and eight-tenths grains (1.67 g) of gold nine-tenths fine, as established by section thirty-five hundred and eleven of the Revised Statutes of the United States, shall be the standard unit of value, and all forms of money issued or coined by the United States shall be maintained at a parity of value with this standard...

text: Thus the United States moved to a gold standard, making both gold and silver the legal-tender coinage of the United States, and guaranteed the dollar as convertible to 1.5 g (23.22 grains) of gold.[10]

text: The gold standard was suspended twice during World War I, once fully and then for foreign exchange. At the onset of the war, U.S. corporations had large debts payable to European entities, who began liquidating their debts in gold. With debts looming to Europe, the dollar to British pound exchange rate reached as high as $6.75, far above the (gold) parity of $4.8665. This caused large gold outflows until July 31, 1914, when the New York Stock Exchange closed and the gold standard was temporarily suspended. In order to defend the exchange value of the dollar, the US Treasury Department authorized state and nationally chartered banks to issue emergency currency under the Aldrich-Vreeland Act, and the newly created Federal Reserve organized a fund to assure debts to foreign creditors. These efforts were largely successful, and the Aldrich-Vreeland notes were retired starting in November and the gold standard was restored when the New York Stock Exchange re-opened in December 1914.[11]

text: As the United States remained neutral in the war, it remained the only country to maintain its gold standard, doing so without restriction on import or export of gold from 1915 to 1917. During the participation of the United States as a belligerent, President Wilson banned gold export, thereby suspending the gold standard for foreign exchange. After the war, European countries slowly returned to their gold standards, though in somewhat altered form.[11][12]

text: During the Great Depression, every major currency abandoned the gold standard. Among the earliest, the Bank of England abandoned the gold standard in 1931 as speculators demanded gold in exchange for currency, threatening the solvency of the British monetary system. This pattern repeated throughout Europe and North America. In the United States, the Federal Reserve was forced to raise interest rates in order to protect the gold standard for the US dollar, worsening already severe domestic economic pressures. After bank runs became more pronounced in early 1933, people began to hoard gold coins as distrust for banks led to distrust for paper money, worsening deflation and depleting gold reserves.[11][12]

text: The Gold Reserve Act[edit]

text: In early 1933, in order to fight severe deflation Congress and President Roosevelt implemented a series of Acts of Congress and Executive Orders which suspended the gold standard except for foreign exchange, revoked gold as universal legal tender for debts, and banned private ownership of significant amounts of gold coin. These acts included Executive Order 6073, the Emergency Banking Act, Executive Order 6102, Executive Order 6111, the Agricultural Adjustment Act, 1933 Banking Act, House Joint Resolution 192, and later the Gold Reserve Act.[11] These actions were upheld by the U.S. Supreme Court in the "Gold Clause Cases" in 1935.[13]

text: For foreign exchange purposes, the set $20.67 per ounce value of the dollar was lifted, allowing the dollar to float freely in foreign exchange markets with no set value in gold. This was terminated after one year. Roosevelt attempted first to restabilize falling prices with the Agricultural Adjustment Act; however, this did not prove popular, so instead the next politically popular option was to devalue the dollar on foreign exchange markets. Under the Gold Reserve Act the value of gold was fixed at $35 per ounce, making the dollar more attractive for foreign buyers (and making foreign currencies more expensive for those holding dollars). This change led to more conversion of gold into dollars, allowing the U.S. to effectively corner the world gold market.[14][15]

text: The suspension of the gold standard was considered temporary by many in markets and in the government at the time, but restoring the standard was considered a low priority to dealing with other issues.[11][14]

text: Under the post-World War II Bretton Woods system, all other currencies were valued in terms of U.S. dollars and were thus indirectly linked to the gold standard. The need for the U.S. government to maintain both a $35 per troy ounce (112.53 ¢/g) market price of gold and also the conversion to foreign currencies caused economic and trade pressures. By the early 1960s, compensation for these pressures started to become too complicated to manage.

text: In March 1968, the effort to control the private market price of gold was abandoned. A two-tier system began. In this system all central-bank transactions in gold were insulated from the free market price. Central banks would trade gold among themselves at $35 per troy ounce (112.53 ¢/g) but would not trade with the private market. The private market could trade at the equilibrium market price and there would be no official intervention. The price immediately jumped to $43 per troy ounce (138.25 ¢/g). The price of gold touched briefly back at $35 (112.53 ¢/g) near the end of 1969 before beginning a steady price increase. This gold price increase turned steep through 1972 and hit a high that year of over $70 (2.25 $/g). By that time floating exchange rates had also begun to emerge, which indicated the de facto dissolution of the Bretton Woods system. The two-tier system was abandoned in November 1973. By then the price of gold had reached $100 per troy ounce (3.22 $/g).

text: In the early 1970s, inflation caused by rising prices for imported commodities, especially oil, and spending on the Vietnam War, which was not counteracted by cuts in other government expenditures, combined with a trade deficit to create a situation in which the dollar was worth less than the gold used to back it.

text: In 1971, President Richard Nixon unilaterally ordered the cancellation of the direct convertibility of the United States dollar to gold. This act was known as the Nixon Shock.

text: U.S. dollar value vs. gold value[edit]

text: The sudden jump in the price of gold after the demise of the Bretton Woods accords was a result of the significant prior debasement of the US dollar due to excessive inflation of the monetary supply via central bank (Federal Reserve) coordinated fractional reserve banking under the Bretton Woods partial gold standard. In the absence of an international mechanism tying the dollar to gold via fixed exchange rates, the dollar became a pure fiat currency and as such fell to its free market exchange price versus gold. Consequently, the price of gold rose from $35 per troy ounce (1.125 $/g) in 1969 to almost $500 (29 $/g) in 1980.

text: Shortly after the gold price started its ascent in the early 1970s, the price of other commodities such as oil also began to rise. While commodity prices became more volatile, the average exchange rate between oil and gold remained much the same in the 1990s as it had been in the 1960s, 1970s and 1980s.

text: Fearing the emergence of a specie gold-based economy separate from central banking, and with the corresponding threat of the collapse of the U.S. dollar, the U.S. government approved several changes to the trading on the COMEX. These changes resulted in a steep decline in the traded value of precious metals from the early 1980s onward.

text: In September 1987 under the Reagan administration the U.S. Secretary of the Treasury James Baker made a proposal through the International Monetary Fund to use a commodity basket (which included gold).[citation needed]

text: Silver standard[edit]

text: United States silver certificates were a type of representative money printed from 1878 to 1964 in the United States as part of its circulation of paper currency.[16] They were produced in response to silver agitation by citizens who were angered by the Fourth Coinage Act, and were used alongside the gold-based dollar notes. The silver certificates were initially redeemable in the same face value of silver dollar coins, and later in raw silver bullion.

text: Since the early 1920s, silver certificates were issued in $1, $5, and $10 denominations. In the 1928 series, only $1 silver certificates were produced. Fives and tens of this time were mainly Federal Reserve notes, which were backed by and redeemable in gold. In 1933, Congress passed the Agricultural Adjustment Act which included a clause allowing for the pumping of silver into the market to replace the gold. A new 1933 series of $10 silver certificate was printed and released, but not many were released into circulation.

text: In 1934, a law was passed in Congress that changed the obligation on Silver Certificates so as to denote the current location of the silver.

text: The last government regulation regarding the silver standard was in 1963, when President John F. Kennedy issued Executive Order 11110, delegating to the Treasury Secretary his authority to authorize the US Department of Treasury to issue silver certificates for any silver held by the U.S. Government in excess of that not already backing issued certificates. This was necessary because of Kennedy's signing of Public Law 88-36 on the same day, one of the effects of which was a repeal of the Silver Purchase Act of 1934-this act had authorized the Treasury Secretary to purchase silver bullion and issue silver certificates against it. Silver certificates continued to be issued for a short period of time in the $1 denomination, but were discontinued in late 1963.

text: Use as international reserve currency[edit]

text: History[edit]

text: World War II devastated European and Asian economies while leaving the United States' economy relatively unharmed.[17] As European governments exhausted their gold reserves and borrowed to pay the United States for war material, the United States accumulated large gold reserves. This combination gave the United States significant political and economic power following the war.[18]

text: The Bretton Woods agreement codified this economic dominance of the dollar after the war. In 1944, Allied nations sought to create an international monetary order that sustained the global economy and prevented the economic malaise that followed the First World War. The Bretton Woods agreement laid the foundations for an international monetary order that created rules and expectations for the international economic system. It created the International Monetary Fund (IMF), the predecessor of the World Bank, and an international monetary system based on fixed exchange rates. It valued the dollar at $35 per ounce of gold and the remaining signatories pegged their respective currency relative to the dollar, leading some economists to argue that Bretton Woods “dethroned”[19] gold as the default asset.[20]

text: While Bretton Woods institutionalized the dollar's importance following the war, Europe and Asia faced dollar shortages. The international community needed dollars to finance imports from the United States to rebuild what was lost in the war.[21] In 1948 Congress passed the European Recovery Program - generally known as the Marshall Plan – giving dollars to European countries to purchase imports needed to rebuild their economies. The plan helped European countries by providing them dollars to purchase the imports needed to produce exports, eventually allowing the countries to export enough of their own goods to obtain the dollars necessary to sustain their economies without reliance on any Marshall-like plan. At the same time, Joseph Dodge worked with Japanese officials and Congress to pass the Dodge Plan in 1949, which worked similarly to the Marshall Plan, but for Japan rather than Europe.[20]

text: The Marshall and Dodge plans' successes have brought new challenges to the U.S. dollar. In 1959, dollars in circulation around the world exceeded U.S. gold reserves, which became vulnerable to the equivalent of a bank run. In 1960, Yale economist Robert Triffin described the problem to Congress: either the dollar was not freely available and other countries could not afford to import American goods, or the dollar was freely available but confidence that the dollar could be converted to gold would wane.[22]

text: Eventually, the United States chose to devalue the dollar. During the early 1960s American officials largely prevented the conversion of dollars to gold with a series of "gentlemanly" agreements and other policies – which included the London Gold Pool - but these actions were not sustainable; the danger of a run on U.S. gold reserves was too high.[23] With Nixon's election in 1968, American officials became increasingly concerned until Nixon finally issued Executive Order 11615 in August 1971, ending the direct convertibility of dollars to gold. He said, "We must protect the position of the American dollar as pillar of monetary stability around the world… I am determined that the American dollar must never again be hostage in the hands of the international speculators."[24] This became known as the Nixon Shock and marked the dollar's transition from the gold standard to a fiat currency.

text: Impact[edit]

text: The United States enjoys some benefits because the dollar serves as the international reserve currency. The United States is less likely to face a balance of payments crisis.

text: The position of the dollar as the international reserve currency also has a cost: the American government is more likely to forego fiscal expansionary policies in order to maintain confidence in the dollar.[25]

text: United States Notes[edit]

text: A United States Note, also known as a Legal Tender Note, was a type of paper money that was issued from 1862 to 1971 in the U.S. Having been current for over 100 years, they were issued for longer than any other form of U.S. paper money. They were known popularly as "greenbacks" in their day, a name inherited from the Demand Notes that they replaced in 1862.

text: While issuance of United States Notes ended in January 1971, existing United States Notes are still valid currency in the United States today, though rarely seen in circulation.

text: Both United States Notes and Federal Reserve Notes are parts of the national currency of the United States, and both have been legal tender since the gold recall of 1933. Both have been used in circulation as money in the same way. However, the issuing authority for them came from different statutes.[26] United States Notes were created as fiat currency, in that the government has never categorically guaranteed to redeem them for precious metal - even though at times, such as after the specie resumption of 1879, federal officials were authorized to do so if requested.

text: The difference between a United States Note and a Federal Reserve Note is that a United States Note represented a "bill of credit" and was inserted by the Treasury directly into circulation free of interest. Federal Reserve Notes are backed by debt purchased by the Federal Reserve, and thus generate seigniorage for the Federal Reserve System, which serves as a lending intermediary between the Treasury and the public.

text: Fiat standard[edit]

text: Today, like the currency of most nations, the dollar is fiat money, unbacked by any physical asset. A holder of a federal reserve note has no right to demand an asset such as gold or silver from the government in exchange for a note.[27] Consequently, some proponents of the intrinsic theory of value believe that the near-zero marginal cost of production of the current fiat dollar detracts from its attractiveness as a medium of exchange and store of value because a fiat currency without a marginal cost of production is easier to debase via overproduction and the subsequent inflation of the money supply.

text: In 1963, the words "PAYABLE TO THE BEARER ON DEMAND" were removed from all newly issued Federal Reserve notes. Then, in 1968, redemption of pre-1963 Federal Reserve notes for gold or silver officially ended. The Coinage Act of 1965 removed all silver from quarters and dimes, which were 90% silver prior to the act. However, there was a provision in the act allowing some coins to contain a 40% silver consistency, such as the Kennedy Half Dollar. Later, even this provision was removed, with the last circulating silver-content halves minted in 1969. All previously silver coins minted for general circulation are now clad. During 1982, the composition of the cent was changed from copper to zinc with a thin copper coating. The content of the nickel has not changed since 1946.[citation needed] Silver and gold coins are produced by the U.S. government, but only as non-circulating commemorative pieces or in sets for collectors.

text: All circulating notes, issued from 1861 to present, will be honored by the government at face value as legal tender. This means that the federal government will accept old notes as payments for debts owed to the federal government (taxes and fees), or exchange old notes for new ones, but will not redeem notes for gold or silver, even if the note states that it may be thus redeemed. Some bills may have a premium to collectors.[citation needed]

text: The only exception to this rule is the $10,000 gold certificate of Series 1900, a number of which were inadvertently released to the public because of a fire in 1935. A box of them was literally thrown out a window. This set is not considered to be "in circulation" and, in fact, is stolen property. However, the government canceled these banknotes and removed them from official records. Their value, relevant only to collectors, is approximately one thousand US dollars.[28]

text: According to the Federal Reserve Bank of New York, there is $1.2 trillion in total US currency in worldwide circulation as of July 2013.[29]

text: Color and design[edit]

text: The federal government began issuing currency like the Spanish dollars during the American Civil War. As photographic technology of the day could not reproduce color, it was decided the back of the bills would be printed in a color other than black. Because the color green was seen as a symbol of stability, it was selected. These were known as "greenbacks" for their color and started a tradition of the United States' printing the back of its money in green. The author of that invention was chemist Christopher Der-Seropian.[citation needed] In contrast to the currency notes of many other countries, Federal Reserve notes of varying denominations are the same colors: predominantly black ink with green highlights on the front, and predominantly green ink on the back. Federal Reserve notes were printed in the same colors for most of the 20th century, although older bills called "silver certificates" had blue highlights on the front, and "United States notes" had red highlights on the front.

text: In 1928, sizing of the bills was standardized (involving a 25% reduction in their current sizes, compared to the older, larger notes nicknamed "horse blankets").[30] Modern U.S. currency, regardless of denomination, is 2.61 inches (66.3 mm) wide, 6.14 inches (156 mm) long, and 0.0043 inches (0.109 mm) thick. A single bill weighs about fifteen and a half grains (one gram) and costs approximately 4.2 cents for the Bureau of Engraving and Printing to produce.

text: Microprinting and security threads were introduced in the 1991 currency series.

text: Another series started in 1996 with the $100 note, adding the following changes:

text:
A larger portrait, moved off-center to create more space to incorporate a watermark.
The watermark to the right of the portrait depicting the same historical figure as the portrait. The watermark can be seen only when held up to the light (and had long been a standard feature of all other major currencies).
A security thread that will glow pink when exposed to ultraviolet light in a dark environment.[31] The thread is in a unique position on each denomination.
Color-shifting ink that changes from green to black when viewed from different angles. This feature appears in the numeral on the lower right-hand corner of the bill front.
Microprinting in the numeral in the note's lower left-hand corner and on Benjamin Franklin's coat.
Concentric fine-line printing in the background of the portrait and on the back of the note. This type of printing is difficult to copy well.
The value of the currency written in 14pt Arial font on the back for those with sight disabilities.
Other features for machine authentication and processing of the currency.

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text: Annual releases of the 1996 series followed. The $50 note June 12, 1997, introduced a large dark numeral with a light background on the back of the note to make it easier for people to identify the denomination.[32] The $20 note in 1998 introduced a new machine-readable capability to assist scanning devices. The security thread glows green under ultraviolet light, and "USA TWENTY" and a flag are printed on the thread, while the numeral "20" is printed within the star field of the flag. The microprinting is in the lower left ornamentation of the portrait and in the lower left corner of the note front. As of 1998[update], the $20 note was the most frequently counterfeited note in the United States. The new design of the $5 and $10 notes were released in 2000.

text: May 13, 2003, The Treasury announced that it would introduce new colors into the $20 bill, the first U.S. currency since 1905 (not counting the 1934 gold certificates) to have colors other than green or black. The move was intended primarily to reduce counterfeiting, rather than to increase visual differentiation between denominations. The main colors of all denominations, including the new $20 and $50, remain green and black; the other colors are present only in subtle shades in secondary design elements. This contrasts with notes of the euro, Australian dollar, and most other currencies, where strong colours are used to distinguish each denomination from the other.

text: The new $20 bills entered circulation October 9, 2003, the new $50 bills, September 28, 2004. The new $10 notes were introduced in 2006 and redesigned $5 bills began to circulate March 13, 2008. Each will have subtle elements of different colors, though will continue to be primarily green and black. The Treasury said it will update Federal Reserve notes every 7 to 10 years to keep up with counterfeiting technology. In addition, there have been rumors that future banknotes will use embedded RFID microchips as another anti-counterfeiting tool.[33]

text: The 2008 $5 bill contains significant new security updates. The obverse side of the bill includes patterned yellow printing that will cue digital image-processing software to prevent digital copying, watermarks, digital security thread, and extensive microprinting. The reverse side includes an oversized purple number 5 to provide easy differentiation from other denominations.[34]

text: On April 21, 2010, the U.S. Government announced a heavily redesigned $100 bill that featured bolder colors, color shifting ink, microlenses, and other features. It was scheduled to start circulating on February 10, 2011, but was delayed due to the discovery of sporadic creasing on the notes and "mashing" (when there is too much ink on the paper, the artwork on the notes are not clearly seen). The redesigned $100 bill was released October 8, 2013.[35] It costs 11.8 cents to produce each bill.[36]

text: "The soundness of a nation's currency is essential to the soundness of its economy. And to uphold our currency's soundness, it must be recognized and honored as legal tender and counterfeiting must be effectively thwarted," Federal Reserve Chairman Alan Greenspan said at a ceremony unveiling the $20 bill's new design. Prior to its current design, the most recent redesign of the U.S. dollar bill was in 1996.

text:
Current $20 bill front.

Current $20 bill back.

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text: As a result of a 2008 decision in an accessibility lawsuit filed by the American Council of the Blind, the Bureau of Engraving and Printing is planning to implement a raised tactile feature in the next redesign of each note, except the $1 and the current version of the $100 bill. It also plans larger, higher-contrast numerals, more color differences, and distribution of currency readers to assist the visually impaired during the transition period.[37] In 2016, the Treasury announced a number of design changes to the $5, $10 and $20 bills; to be introduced in this next redesign. The redesigns include:[38][39]

text:
The back of the $5 bill will be changed to showcase historical events at the pictured Lincoln Memorial by adding portraits of Marian Anderson (due to her famous performance there after being barred from Constitution Hall due to her race), Martin Luther King Jr.'s (due to his famous I Have A Dream speech), and Eleanor Roosevelt (who arranged Anderson's performance).
The back of the $10 bill will be changed to show a 1913 march for women's suffrage in the United States, plus portraits of Sojourner Truth, Lucretia Mott, Susan B. Anthony, Alice Paul, and Elizabeth Cady Stanton.
On the $20 bill, Andrew Jackson will move to the back (reduced in size, alongside the White House) and Harriet Tubman will appear on the front.