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Ferment of Reform

Stan Rubenstein
[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.