The nation had to weather the effects of drastic economic change and periodic economic crises without leadership from Washington. At the state and local level, however, the Gilded Age was an era of political ferment and conflict over the proper uses of governmental authority. In the immediate aftermath of the Civil War, state governments in the North, like those in the Reconstruction South, greatly expanded their responsibility for public health, welfare, and education, and cities invested heavily in public works such as park construction and improved water and gas services. Those who suffered from economic change called on the activist state created by the war to redress their own grievances.
Third parties enjoyed significant if short-lived success in local elections. The Greenback-Labor Party proposed that the federal government stop taking “greenback” money out of circulation. This, it argued, would make more funds available for investment and give the government, not private bankers, control of the money supply. It also condemned the use of militias and private police against strikes. In the late 1870s, the party controlled local government in a number of industrial and mining communities and contributed to the election of twenty-one members of Congress independent of the two major parties.
The policies of railroad companies produced a growing chorus of protest, especially in the West. Farmers and local merchants complained of excessively high freight rates, discrimination in favor of large producers and shippers, and high fees charged by railroad-controlled grain warehouses. Critics of the railroads came together in the Patrons of Husbandry, or Grange, which moved to establish cooperatives for storing and marketing farm output in the hope of forcing the carriers “to take our produce at a fair price.” Founded in 1867, the Grange claimed more than 700,000 members by the mid-1870s. Its members called on state governments to establish fair freight rates and warehouse charges. In several states, the Grange succeeded in having commissions established to investigate—and, in some cases, regulate—railroad practices.
Laying Tracks at Union Square for a Railroad, an 1890 painting, depicts one of the era’s many public works assisted by state and local governments.
At the same time, the labor movement, revitalized during the Civil War, demanded laws establishing eight hours as a legal day’s work. Seven northern legislatures passed such laws, but since most lacked strong means of enforcement they remained dead letters. But the efforts of farmers and workers to use the power of the state to counteract the inequalities of the Gilded Age inspired a far-reaching debate on the relationship between political and economic freedom in an industrial society.