There were additional important developments between 1861 and 1877.
In 1862, Congress passed the Homestead Act, which granted 160 acres to anyone who farmed land for 5 years. This encouraged people to migrate westward. Also in 1862, Congress passed the Pacific Railway Act, which provided taxpayer subsidies and land in order to build a transcontinental railroad to connect the East Coast with the West Coast. This railroad was completed in Utah in 1869 and facilitated more of a national economy.
There was one more significant piece of legislation enacted in 1862: the Morrill Land Grant Act, which established agricultural colleges. It gave each state 30,000 acres times the state's number of congressmen.
Immigration was controversial in the 1860s. Specifically, Chinese immigration into California caused many union laborers to object, because the Chinese would work more industriously and for less pay than union workers. The Burlingame Treaty was signed between the United States and China in 1868, and it permitted unrestricted immigration by Chinese to the U.S. The Chinese immigrants were the only ones who could complete the building of the railroad over the treacherous Sierra-Nevada mountain range, which finally enabled linking the West Coast to the East Coast by railroad. Afterward, factory owners as far away as Massachusetts would transport Chinese immigrants from California in order to break a strike by union workers (in other words, replace the local striking workers with the transported Chinese immigrants).
Conflicts with Indians continued during the Civil War and afterward. The Sioux Wars lasted from 1864 to 1867 between Indians and the Union army in Colorado, Montana, and the Dakotas (North and South Dakota). The most famous battle of all, however, occurred a decade later. General George Custer was a highly popular and charismatic cavalry officer who sported long yellow hair and the latest fashions in his clothing. But he had also graduated last in his class at West Point, in contrast to many of the Civil War officers who took their coursework more seriously. In 1876, Custer led his men to Little Big Horn (now in Montana) to handle a conflict with Indians. Custer's superiors opposed an immediate attack on the Indians, and told Custer to wait before leading the charge. Overly aggressive and perhaps attempting to become a hero, Custer charged ahead anyway. The Sioux and Cheyenne warriors, led by Sitting Bull and Crazy Horse, then overwhelmed Custer and his men and slaughtered all of them. The warriors scalped all of Custer's men, except Custer himself, whose strange clothing may have misled the warriors into thinking he was an innocent civilian! This massacre at Wounded Knee is popularly known today as "Custer's Last Stand."
Grant Administration
Once the Civil War ended, the powerful forces of capitalism brought the United States new prosperity remarkably quickly. Most countries, not benefiting from the free enterprise that exists in the United States, would take 50 to 100 years to recover from such a devastating Civil War. But the United States recovered in less than 10 years. By 1875, the United States had a budget surplus (taking in more money than it spent), and it enjoyed a budget surplus for every year until 1893! In contrast, rarely has there been a budget surplus in the United States since 1975.
The first president elected after the Civil War ended was, not surprisingly, the Union General credited with winning it: Ulysses S. Grant. He won the presidency in 1868 (after President Andrew Johnson completed his term) and served two full terms, through 1876. Grant was a Republican who favored the "gold standard" for the economy, which means he preferred "hard money" (gold) over "soft money" (paper that can lose its value due to inflation). Grant, however, was considered a weak executive for not properly supervising the bureaucrats who worked for him. Specifically, Grant is blamed for having a corrupt Administration, even though he was not corrupt himself.
His presidency was at the beginning of the "Gilded Age," a name given by the writer Mark Twain to describe a period that appeared golden on the surface but was the opposite underneath. This period, and the Grant Administration, is criticized for corrupt business and government dealings. We will discuss the Gilded Age more in the next lecture.
But the truth is that the American economy prospered enormously during this period, particularly in the 1870s and 1880s. There was almost no government regulation that burdens businesses so much today. It was a spectacularly creative and industrious period, with many of the greatest inventions (e.g., light bulb, telephone, motion pictures, and phonograph) developed then.
Nevertheless, historians emphasize business and government scandals that occurred in the absence of modern regulation. In 1869, for example, there was the "Fisk-Gould Scandal," in which financiers ("Wall Street" types) tried to corner (monopolize) the gold market. This caused "Black Friday," with the price of gold first going way up, and then going way down. The Grant Administration broke up the scheme by selling gold reserves.