| [Reprinted from Land
& Liberty, November-December 1986] |
RIDING the crest of victory from Civil War days, Ulysses S.
Grant emerged in 1865 a war hero, waiting in the wings to turn his
popularity into political gain.
However, engaging in political combat was not comparable to waging war.
One of his most admirable traits, honesty, could not be transmitted to
some of his subordinates. Corruption and bribery were rampant throughout
his administration.
It was not until 50 years later that this nation would witness its
like, under President Harding, and 100 years later during the Watergate
years. But during this era, dishonesty was not confined to the environs
of the White House but permeated the fabric of Civil War society.
Following the Civil War, corruption grew in New York City with the
Tammany organization under Boss Tweed. Most offices of city government
were up for sale, including things like bids for contracts. It is
estimated that between $50 to $200 million was stolen from citizens'
pockets (a sizeable amount even in today's terms). There was much
corruption in the Administration and in Congress.
The whole thing erupted in the Credit Mobilier scandal which exposed
dozens of legislators in dishonorable and illegal actions. Credit
Mobilier had been formed by promoters of the Union Pacific, a leading
railroad builder. Union Pacific funneled money to the Credit Mobilier,
but many Congressmen had been given stock in order to gain their favors.
Stockholders received excessive profits at the expense of the almost
bankrupt railroad company.
And that was only the tip of the iceberg. Grant's Secretary of War, his
vice President and officials of the Treasury Department were all
involved in varying degrees of graft, bribery and favoritism.
Although corruption had become commonplace, it was not the only concern
that fostered a desire for reform. Concommitant with this moral
deterioration was the ever increasing industrialization of the economy.
Monopolies began to form. Because of the complex and often severe
changes that society was witnessing -- the movement from farms to
cities, the isolation of the farmers, dependency of the labor market
upon the corporate structure, industrial depressions and the general
condition of poverty --reform was in the air.
In a situation like this reform, a change for the better, is not an
isolated change, but one which carries over into many avenues of public
and private life. Unless social ills are recognized by those motivated
to redress society's grievances, no reform can occur.
In 1879, at the crossroads of ferment and change, Henry George, an
unknown printer, made these observations:
"Disappointment has followed disappointment ... We
plow new fields, we open new mines, we found new cities, we drive back
the Indians and exterminate the buffalo, we girdle the land with iron
roads and lace the air with telegraph wires, we add knowledge to
knowledge and utilize invention after invention ... Yet it becomes no
easier for the masses of our people to make a living. On the contrary,
it is becoming harder ... The gulf between the employed and employer
is growing wider; social contrasts are becoming sharper as liveried
carriages appear, so do barefooted children."
DURING this period, what was America like -- a nation which had just
fought its most destructive and brutal war?
Recessions and panics prior to the Civil War occurred with regularity,
but the post-war recession which began in 1873 and lasted for several
years was different. It was the first of several economic slumps that
had its roots in the new industrialization.
The United States was already prepared to take its place as an
industrial giant. The corporate structure began to replace the small
businessman, farmer and factory owner. This structure represented
vastness and consolidation, with the elimination of competition. The
corporate structure began to rise in a nation unlike its earlier self in
the small-town, pre-Civil War days. And the corporations had at their
disposal the two ingredients necessary for industrialization -- oil and
steel.
Oil was discovered in the fields of Pennsylvania one year before
Lincoln's election to the presidency. With this, America increased its
wealth-producing capacity many times over. Within several decades of the
implementation of oil energy, the first oil barron, John D. Rockefeller,
rose as America's first billionaire.
It was not the accumulation of money by private groups that triggered
off an avalanche of concern over the grouping of so much money and
power, but the consolidation of the oil industry, and the questionable
methods used to form the monopoly. Corporation after corporation was
swallowed up by Standard Oil as it became a giant monopoly and trust.
This new form of organization, the trust, was a legal means to control
an industry. The trust absorbed other corporations by making corporate
leaders trustees in the newly formed trust.
Along with this enormous concentration of wealth (one percent of the
population controlled more than 99 per cent of the nation's wealth) came
the prevalence of poverty. As the rural-urban relationship changed, its
effects could be witnessed in the major cities as slums, crime and
personal degradation increased.
An increase in the number of farmers added to urban congestion. Farmers
accumulated significant debts and were squeezed economically by the high
rates of railroad owners. The indebted agricultural community had become
heavily dependent upon the railroad magnates for their livelihoods. And
the city workers had seen their pay checks cut as they tried to compete
with the new managerial class.
IT WAS a time for reform. Presidents Hays, Garfield and Arthur took
action to make certain structural reforms. But hopes reached a high
water mark and change permeated the political climate when Cleveland was
elected a reform candidate in 1884.
With the passage of the Interstate Commerce Act of 1887, "control"
and "regulation" entered the lexicon of American politics.
Railroads were ordered j to establish "reasonable and just rates".
Several years later, the ! Sherman Antitrust Act prohibited monopolies,
stating, "Every contract, combination in the form of trust or
otherwise, or conspiracy in restraint of trade or commerce
is
hereby declared illegal". The era of governmental regulation had
begun.
Socialism, the ownership and regulation of industry, was advocated by
Daniel DeLeon, as he garnered support from thousands of city workers,
especially those working in sweatshops. Many Americans, however, felt
that socialism was a European import, and therefore contrary to American
values.
Socialism became Americanized when Eugene Debs emerged from the Pullman
Strike in 1894 as a national labor leader. Although this type of
economic reform had its adherents, it was by no means the only advocated
route to reform. Various types of socialism permeated the spirit of
reformers as they interpreted conditions according to their own specific
backgrounds and experiences. Three such reformers stand out as having
significant impact on the reform movement in our history.
Following in the footsteps of Utopian writers like Plato and Sir Thomas
Moore, Edward Bellamy painted a panoramic scene of society which
contained the best elements of a socialistic world. His novel Looking
Backward is the story of Julian West who awakes in the year 2000 to
a world where man has conquered the evils of poverty, war, crime and
depravation. Industry is nationalized and no one wants for anything
because wealth is distributed equally. With no private property, there
is equal public access to culture.
Illustrating the folies of individualism and the necessities for group
action, Bellamy says: "The difference between the age of
individualism and that of concert is characterized by the fact that, in
the 19th century, when it rained, the people of Boston put up 300,000
umbrellas over as many heads, and in the 20th century they put up one
umbrella over the heads."
"One umbrella" refers to government efforts to improve
sidewalk coverings. Individualism, with all its evils, had given way to
governmental control in Bellamy's world -- a world that had captured the
imagination of thousands. Bellamy's National Clubs took root around the
country.
Muck-raking, a type of mud-slinging journalism which still flourishes
today, was begun by Henry Demarest Lloyd, a journalist who had shunned
the desire for wealth. Lloyd saw first-hand the labor strife in the
1880s and the strangle hold that owners of capital had on the lives of
workers.
He became a leading spokesman against trusts, monopolies and all forms
of large consolidation. A critic of capitalism, he wrote articles
against its abuses, maintaining that some types of control were needed
in order to curb the disdainful appetites of capitalism.
Lloyd's most important and successful book, Wealth Against
Commonwealth, was a vitriolic attack on John D. Rockefeller, then
America's most successful business magnate. Lloyd says, "The
Standard Oil has done everything with the Pennsylvania legislature
except to refine it ... America has the proud satisfaction of having
furnished the world with the greatest, wisest and nearest monopoly known
to history."
Through his articles and best-selling book, Lloyd was instrumental in
arousing the public conscience concerning big business. His style and
the emotional tone of his writing had its impact, not only on the
public, but on legislators. His solution for a new order contained the
idea that there "must be no private use of public power or public
property. These are created by the common sacrifices of all, and can
rightfully be used only for the common good of all -- from all, by all,
for all."
Rounding out the triumverate of reformers was Henry George. He was not
a supporter of socialism but a critic of capital concentration and
poverty. At the heart of poverty, with all its con-commitant evils, he
felt, was the institution of land ownership. Although George recognized
poverty, the maldistribution of wealth, the plight of workers and the
strangling effect that captains of industry had upon the economy, he
felt that the solution lay not in the nationalization of industry, but
rather in the treatment of mother earth.
Land, which includes natural resources, was considered the warehouse of
all potential wealth. No wealth can be produced unless there is access
to land. But, George claimed, land began to be monopolized by the few,
while the majority were compelled to pay for the use of that land. Land
owners bring more land into use when it is profitable to do so.
Otherwise they allow the land to remain vacant, waiting for its value to
rise.
This speculation, in his view, was the culprit and land monopoly was
the mother of most other monopolies. George's remedy was therefore to
abolish land monopoly.
Unlike the socialist, George felt that there were two factors
responsible for producing wealth --labor and capital. Neither should be
restrained in its power to produce wealth since each needs the other,
prospering and suffering together.
The landowner benefits most from the prosperity that has been created
by the worker and his tools, and is the inactive party in the
wealth-producing system. By collecting the full rent from the land, he
no longer makes a profit by owning that land.
Reformers of the 1800s -- the Bellamys, Lloyds and the Georges -- rose
up during a time of increasing industrialization, poverty and corporate
abuse. The individual had begun to be lost to the powerful "whole"
of society. These reformers spoke up to make people notice the problem,
become concerned and cause change. This spirit of reform has become an
American institution, one which continues to help insure the rights of
the individual, and of the less powerful.
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