A Patriot's History of the United States: From Columbus's Great Discovery to the War on Terror (90 page)

Consider a Scots-Irish family in Atlanta in 1890 with one child—the McGloins—whose main source of income came from the father’s job in a textile mill, supplemented by his wife’s sewing and rent from a boarder. The husband’s textile job brought in $312 a year; the wife’s sewing added $40 and the boarder’s rents another $10. In a typical year, though, the family spent nearly $400, paying for the extra expenses out of credit at the mill store. The McGloins heated their home with wood, used oil lamps for indoor lighting, gave to their church (but only 1 percent), spent no more than $40 per year for clothes, and dealt frequently with roundworm and, in the case of the child, croup.
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The life of the McGloins contrasted sharply with the top end of the income scale, a fact that lay at the root of some of the bitterness and anxiety prevalent in the late nineteenth century. Greed and jealousy worked from opposite ends to create strife. Greed on the part of owners and industrialists could be seen in the lavish and (to most people) outrageous expenditures that seemed obscene. Certainly nothing seemed more ostentatious than the mansions erected at Newport, Rhode Island, where the on-site cleaning staff lived in houses larger than those owned by most Americans. Newport’s “froth of castles,” as one critic described it, often had more rooms than large hotels. Yet the Newport crowd, in truth, did not seek to impress the proletariat as much as each other: they threw extravagant parties replete with party favors consisting of diamond necklaces. Attendees lit cigars with hundred-dollar bills while hosts showered gifts on children, friends, and even pets (one owner had a dinner for the family dog, giving the pooch a necklace worth fifteen thousand dollars). One “castle” had Champagne flowing from its faucets, and one millionaire had his teeth drilled and filled with diamonds so that he literally flashed a million-dollar-smile!
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America’s wealthiest people held between three hundred and four hundred times the capital of ordinary line workers, creating perhaps the greatest wealth gap between the rich and middle class that the nation has ever witnessed. The good news was that there were more of the wealthy: from 1865 to 1892, the number of millionaires in the nation rose from a handful to more than four thousand. That type of upward mobility seemed inconceivable to farmers who faced foreclosure or to factory workers who, despite the fact they actually had more purchasing power, saw their paychecks stagnating. It nevertheless meant that more than ever America was the land of rags to riches.

Still, frustration and jealousy boiled over in the form of calls for specific remedial legislation for what many considered business excesses. Railroads, for example, were excoriated by farmers for the rates they charged, often under the allegation that they enjoyed “monopoly control.”

Farmers also suffered more than any other group when falling prices gripped the economy. Farm owners held mortgages whose rates did not change when they were getting less for their crops. Others argued, they could not even
get
mortgages because of the lack of competition, since banks and lending agencies were (in theory) so scarce in the West. Unquestionably, individuals suffered in some circumstances. But setting anecdotes aside, our measure of the condition of farmers and shippers must be judged by the overall statistics and, when possible, application of microlevel studies. Given those criteria, the charges of widespread distress in the late 1800s must be attributed to perception more than reality. For example, numerous studies exist on the mortgage market that demonstrate that mortgages, which only ran for five years in that period, were readjusted in current dollars with each renewal and that statistics of foreclosures show that “the risk of individual foreclosure was quite small,” as low as 0.61 percent in Illinois in 1880 and 1.55 percent in Minnesota in 1891.
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Other statistics suggest that large numbers of farmers failed, although many may have owned their land free and clear at the time of bankruptcy. Most, however, should not have been farming. Again, government subsidies in the form of absurdly cheap (and free) land through the Homestead Acts encouraged westward migration and farming by millions of Americans who, truth be told, were not good farmers. The Homestead Act was in keeping with Jefferson’s ideals, but realistically it was going to be accompanied by large numbers of failures.

What about factory laborers? What was their real status and condition? Because anecdotal evidence is unreliable, we have to depend on more sterile statistical analysis, such as that of economic historian Stanley Lebergott. He traced the real earnings of the era, based on two series of statistics. It is clear that regardless which series is used, “With a brief downturn between 1870 and 1880, real nonfarm earnings rose more than 60 percent from 1870 to 1900,” and rose more rapidly after the Civil War than ever before.
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A similar study by Kenneth Sokoloff and Georgia Villafor concluded that real wages during the period 1865 to 1900 rose about 1.4 percent per year—which may seem inconsequential until it is remembered that this was a period of
deflation,
and all other prices were falling. Still other investigations of wages, by Clarence D. Long and Paul Douglas, showed real wages hitting a trough in 1867, then rising almost unbroken until the Panic of 1893—from $1.00 to $1.90.
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Thus, the average laborer gained consistently and substantially during the postbellum period.
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Moreover, Joseph Schumpeter noted that “creative destruction” of capitalism often produces benefits to second-generation wage laborers, while the first generation suffered. Averages conceal the angst and poverty that genuinely afflicted many wage laborers, but such is the case in all societies at all times. The issue ultimately comes down to defining the
average
worker, and the evidence is conclusive that American laborers were well paid and their standard of living getting better by the decade.

Even with the cost of higher wages, unprecedented breakthroughs in machinery made businessmen as a class 112 times more productive than the class of lowest-paid laborers. Much of the gain came from the relentless absorption of smaller firms by larger corporations. More, perhaps, came from the application of new technology. Unfortunately, many social critics contended that the ownership of land and factories alone had given the rich their wealth, despite the fact that the sons of the wealthy rarely equaled the success of their fathers and soon saw their fortunes fade.
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Henry George, for example, in his
Progress and Poverty
(1879) originated the phrase “unearned income” to describe profits from land. Less than a decade later, Edward Bellamy’s
Looking Backward
(1888) romanticized about a man who fell asleep in 1887 and woke up a hundred years later to a socialist utopia. One of the most famous children’s books of all time,
The Wonderful Wizard of Oz
, by Frank Baum embraced the themes of downtrodden labor and insufficient money. Henry Lloyd’s
Wealth Against Commonwealth
(1894) claimed that large consolidations constituted an antidemocratic force that should be smashed by the federal government.
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Whether or not the historical statistics support the assertions of farm and labor groups, their perceptions shaped their worldview, and their perception was that the rich were getting richer. In 1899, differences in social strata inspired Thorstein Veblen, an immigrant social scientist, to publish his
Theory of the Leisure Class
, in which he claimed that the rich had a compulsion toward “conspicuous consumption,” or the need to consume ostentatiously in order to, in popular vernacular, rub it in. Although social critics juxtapose the most wealthy with the most desperate, at every level someone had more—or less—than someone else. Such was, after all, the nature of America and capitalism. The urban slum dweller saw the couple living in a duplex as phenomenally blessed; they, in turn, looked at those in the penthouses; and they, in turn, envied the ultrarich in their country manors.

Undoubtedly the reports of Mrs. Vanderbilt’s bedroom, which was a replica of Louis XV’s wife’s room, or the du Pont house, with its electric water-sprinkling systems, its central heating system, and its self-contained drink-bottling plant, stunned many and disgusted others. But there were more than a few who ascribed it to the natural order of things, and still more who saw it as evidence that in America, anything was possible.
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Regardless of why the rich behaved the way they did, or whether disparities were as great as some claimed, it is a fact that by the 1880s, farmers and factory laborers increasingly felt a sense of alienation and anxiety and searched for new forms of political expression. The most prominent of these political outlets were in the form of unions and new political organizations.

“Your Masters Sent Out Their Bloodhounds”

Unions had been declared by several courts to be illegal conspiracies until 1842, when the Massachusetts Supreme Court ruled in
Commonwealth v. Hunt
that unions could legally operate. Even then, however, state conspiracy laws kept unions essentially illegal. After 1890, the Sherman Act was wielded against labor. Employer resistance, pride in the independence of individual workers, and the unfamiliarity with mass movements tended to limit the spread of unionism in the United States prior to 1900, when only 3 percent of the industrial workforce was unionized. High wages also diminished the appeal of organized labor. As might be expected, the expansion of mass production after the Civil War, combined with the discontent over money and nominal, that is, face-value as opposed to real or actual decline in wages, led to a renewed interest in labor organizations.

One of the most successful was Ulrich S. Stephens and Terence V. Powderly’s previously mentioned Knights of Labor, founded in 1869. An “essentially secret society” almost like the Freemasons (although it became more open over time), its mysterious origins and secretive overtones derived in part from the earlier suppression of unions.
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Although the Knights of Labor was not the first national labor organization, it claimed the title and grew the most rapidly. Powderly’s strategy involved enlisting everyone—skilled, unskilled, farmers—in order to make the union as large as possible. By 1886, the Knights numbered more than seven hundred thousand, and they successfully struck the Denver Union Pacific railroads and achieved their greatest victory with a strike against Jay Gould’s Missouri, Kansas, Texas, and Wabash Railroads, as well as the related Missouri-Pacific. In the face of such disciplined opposition, Gould had to restore the pay cuts he had made earlier.

A more disastrous incident occurred at Chicago’s Haymarket Square in 1886, where the Knights protested at the McCormick Reaper Works for an eight-hour day. On May third, two hundred policemen were watching an angry, but still orderly crowd of six thousand when the work day ended and strikebreakers left the plant. As the strikers converged on them, the police assumed the worst and began clubbing and shooting the strikers. Calling for a new mass meeting on May fourth, radical editors like August Spies set the table for more violence: “Revenge! Workingmen, to arms! Your masters sent out their bloodhounds!”
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At the meeting the next day, a bomb exploded, killing seven policemen and leaving more than sixty wounded, and the city was placed under martial law for what became known as the Haymarket Riot. Subsequent trials produced evidence that anarchists only loosely associated with the Knights had been involved, but a jury nevertheless convicted eight Knights of murder. Governor John Peter Altgeld, in 1893, pardoned three of the men.

The affair marked the end of the Knights as a force in organized labor (as well as the anarchist threat in America), but they appeared to have peaked anyway: Powderly’s strategy of admitting anyone could not succeed in sustaining strikes by the highly skilled workers for the unskilled, and farmers never had a clear role in the organization.

A more powerful and effective union movement came out of the efforts of a former Knight, Samuel Gompers, who in 1886 founded a rival union, the American Federation of Labor (AFL). Like Carnegie, he had started his career at age thirteen, moving to New York from London, where he had been born into a family of Dutch Jews. (Karl Marx, another Jewish refugee, arrived in London the year before Gompers was born.)
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While still a boy in England, Gompers had watched his father work as a cigar maker, and he became enamored of the union organization, seeing it as the locus of social interaction and security. Indeed, even before he left for America, Samuel Gompers treated the union as a creed or a religion. Unlike many laborers, though, Gompers acquired a broad education, learning the rudiments of several languages, the basics of geography and politics, and even dabbling in logic and ethical philosophy. He arrived in New York City in the middle of the Civil War, disembarking only a few weeks after the draft riots there.

Working his way through the Cigar Makers Union, Gompers came to reject the radical ideologies of the socialists. On one occasion he grew so agitated by a socialist diatribe that he grabbed the speaker by the throat with the intent to kill him, only to be dragged off by other patrons.
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Gompers rejected socialism, often voicing his anger at agitators who he knew had never set foot on a shop floor. For Gompers, pragmatism had become the objective: “We are fighting only for immediate objects,” he told the U.S. Senate, by which he meant his staples of wages and hours.
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By 1877, when he took over as president of the New York local, he was a stocky man with a thick handlebar mustache. Already he had surpassed Powderly as a strategist on a number of levels. He could drink with his fellow workers on the shop floor one moment, and negotiate boundaries between rival shops the next. He understood that the strength of the unions lay in the skilled labor and craft unions, not in the unskilled masses. Above all, he kept his eye on the ball: wages and hours.