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Christopher Esther

N. McAllister

AP United States History

18 March 2019

The Effects of Corporations on Post-Civil War Era America

In the years after the American Civil War, the wealth of the United States quintupled in

just under four decades (Editorial). Much of this growth was fueled by major corporations, which

grew rapidly and provided the economy with consumer goods and jobs. However, these big

businesses also posed economic and political problems for Americans, as competition decreased

and large business owners exerted greater control over politics. Therefore, although large

corporations provided significant benefits to the American economy, their ultimate impact was

more detrimental than helpful, and the American people responded with movements to regulate

and control these big businesses.

While big businesses provided clear economic benefits, these benefits were outweighed

by the emergence of monopolies and reduced competition. The benefits stemmed largely from

the shift from agriculture to industry, which made consumer goods more readily available and

decreased the cost of living (USDOL - Figure 1). However, as monopolies emerged, employment

opportunities narrowed, forcing many to work in the corporations’ factories for very low wages.,

These low wages negatively impacted the financial security of the lower class citizens while

boosting that of the upper class business owners. In addition to low wages and poor working

conditions, the increase in large monopolies and trusts left little room for small businesses. As

noted by George Rice, owner of the Ohio Oil Works company, monopolies gave themselves
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“discriminating rates and privileges of all kinds as against myself and all outside competitors”

(Rice). This hurt the American

economy as the monopolies were

free to increase the prices of many

necessities due to the lack of

competition. Thus, the increase in

big businesses served as a

detriment to the American

economy during the post-Civil War

period.

The growth of big businesses and corporations also had negative impacts on the politics

of post-Civil War America. The owners

of large corporations exerted power and

control over the proceedings of the

government, often by bribing

congressmen (Texas). This created a

corrupt government that was controlled

more by the businesses than the

politicians. A political cartoon of the era represents how the monopolists had created a Senate

“of the monopolists, by the monopolists, and for the monopolists” (Keppler - Figure 2). The

control exercised by large corporations posed a significant threat to the democratic system of

America.
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Americans responded to the growth of corporate power with movements to help limit the

influence of big business. Strikes were an effective method of exerting power over a corporation,

as the company often needed to satisfy their workers demands before they would return to work.

An example of the power of strikes is the Great Railroad Strike of 1877, which began on July 14

in West Virginia in response to the Baltimore & Ohio Railroad reducing pay several times during

one year. The workers on strike did not allow any of the freight trains on the railroad to move

until the wage cuts were revoked (Ohio), which forced Baltimore & Ohio Railroad to increase

wages to appease the workers. Another response to the growth of industry was the formation of

organizations to voice the opinions of the workers. One of these groups was the Populist Party.

Formed in 1891 (Populist), the Populist Party set out the goal of restoring the power of the

government back to the people, instead of it belonging only to the wealthy elite. They believed in

the free coinage of silver and graduated taxes (Peoples), both of which would help to preserve

the small businesses and farmers while maintaining control over the monopolies and trusts,

thereby helping reverse some of the damages that they corporations had inflicted on the

American economy. Although the Populist Party had only limited politics success, their views

helped influence the Sherman Antitrust Act of 1890. This act, named for Senator John Sherman

of Ohio, was passed by the U.S. Congress to prohibit trusts, which are large business

corporations managed by a few select individuals, or trustees. This act regulated competition and

provided a means to break up the monopolies that were hurting the economy and controlling the
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government. Through strikes and political actions, Americans responded to the growth of

corporations to limit their influence.

The years after the Civil War was a defining time for America. The growth of

corporations in the post-Civil War United States had positive effects on the economy, but the

negative effects on typical Americans were often greater than the beneficial ones. The

Americans’ response to these detrimental changes played a key role in shaping the economy and

politics that would come to define the American culture, political, and economic systems for

decades to come.
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Works Cited

Carnegie, Andrew “Wealth,” North American Review, June 1889.

Editorial Team. “Economy in The Gilded Age.” Shmoop, Shmoop University, 11 Nov.

2008, www.shmoop.com/gilded-age/economy.html.

Gilded Age, The. Ushistory.org, Independence Hall Association,

www.ushistory.org/us/36.asp.

Gompers, Samuel What Does Labor Want?, International Labor Congress in Chicago,

August 28, 1893.

Impact of Big Business on Politics and the Economy Essay.” Bartleby,

www.bartleby.com/essay/Impact-of-Big-Business-on-Politics-and-PKCUM2PJTJ.

Ohio Historical. “Great Railroad Strike of 1877.” Great Railroad Strike of 1877 - Ohio

History Central, Ohio Historical,

www.ohiohistorycentral.org/w/Great_Railroad_Strike_of_1877.

People’s Party Platform, Omaha Morning World-Herald, July 5, 1892.

Populist Party: Formation of the Party. Infoplease, Infoplease,

www.infoplease.com/encyclopedia/history/north-america/us/populist-party/formation-of-

the-party.

Rice, George “How I Was Ruined by Rockefeller,” New York World, October 16, 1898.

Texas Gateway. The Gilded Age | Texas Gateway,

www.texasgateway.org/resource/gilded-age.

Wells, David A. Recent Economic Changes and Their Effect on the Production and

Distribution of Wealth and the Well-Being of Society, 1889.

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Figures

Figure 1 - USDOL, Index of Prices of Food, Fuel and Lighting, United States Department

of Labor and Statistics, June 13, 2005

Figure 2 - Keppler, Joseph “The Bosses of the Senate,” Puck, January 23, 1889.

Figure 3 - Ronan, Anne “The Great Railroad Strike of 1877” Though Co.