The great corporations, however, had a most consistent foreign policy, as they reached out for new markets and new investments: Rockefeller’s Standard Oil began selling its products abroad in 1879; J.P. Morgan floated loans for Peru; Cyrus McCormick introduced his wire binder to Russia in the 1880s, just as the Equitable Company began selling life insurance to the Czar’s subjects. The impact of foreign sales reached down through the economy, to Pullman workers making railroad cars for England and to midwestern farmers raising wheat for Germany and hogs for Bulgaria.
“If all thim gr-great powers … was ... to attack us,” Mr. Dooley said, “I’d blockade the Armour an’ Company an’ th’ wheat ilivators iv Minnysoty. I tell ye, th’ hand that rocks th’ scales in th’ grocery store is th’ hand that rules th’ wurruld.”
Neither commerce nor travel had much impact on the rhetoric of the age. Congressmen still courted votes with speeches that harked back to the isolationist dicta of Washington and Jefferson, while journalists sought to sell papers by calling for the abolition of the professional foreign service. “It is a costly humbug and a sham,” said the New York Sun, that “spoils a few Americans every year, and does no good to anybody.” But rather than disband the diplomatic corps, Congress and the State Department significantly strengthened it during the 1870s and 1880s. Businessmen in the burgeoning export trade—which grew from $13 million to $2 billion before the century ended—successfully pressured the government to upgrade the consular service, which in turn made available to merchants a wealth of detailed information on commercial opportunities abroad. The prestige and effectiveness of the professional diplomats were greatly enhanced when Congress created the rank of ambassador in 1893.
The government took one other step to put America on a par with its neighbors, after a long period of neglect. The Civil War had sparked revolutionary developments in naval warfare: ironclad warships; mines and torpedoes; revolving gun turrets and heavy rifled cannon; the central direction of fleets over long distances by telegraph. Yet, while the nations of Europe and South America rushed to apply and improve the new naval technology, the United States disbanded most of its wartime fleet and allowed its remaining ships slowly to rot. The steam-driven, armored warships of the other powers outclassed the wooden cruisers—many of which still relied on sails—and tiny ironclad monitors of the U.S. Navy. By the end of the 1870s, America was surpassed as a seapower by Chile, China, and ten other countries.
Studying the progress in ship design made by other navies, American officers struggled to train themselves in the use of weapons that they did not have. Pressure from the sailors—and from Republican politicians eager to get rid of the embarrassing budget surpluses generated by protective tariffs—finally bore fruit when President Chester Arthur agreed that “every condition of national safety, economy, and honor” demanded a “thorough rehabilitation of the Navy.” The first bill to pass Congress called for building three armored cruisers; over the next decade, money was granted for a dozen more cruisers, as well as for five battleships to be the equal of any fielded by the Europeans.
The armored war fleet that slowly took shape was a monument to American industrial progress. In the yards of the Bethlehem Steel Company first one behemoth and then another grew and took form: the four-hundred-foot hull, reaching up forty or more feet over the heads of workmen; the twin propellers, projecting out the stern from steam engines larger than Americans had ever before installed in ships; the long plates of rolled steel stretching along the deck and waterline. After being launched, the ship was fitted out with heavily armored turrets mounting eight- or twelve-inch guns, torpedoes newly designed by inventor Arthur Whitehead, electric searchlights, modern signaling devices, and—after 1892—an internal telephone system.
As more and better ships came off the ways, some men in the naval establishment began to think in terms of a broader role than home defense for the navy. Benjamin Tracy, Secretary of the Navy during most of the period of expansion, consistently advocated an oceangoing fleet capable of attacking the shipping and coasts of any potential foe, and at the new Naval War College Captain Alfred Thayer Mahan conducted an influential series of lectures on seapower and the need for coaling stations abroad. But Congress remained committed to a smaller, defensive fleet. The very names of the battleships spoke of the nation’s homeward-looking character: the Texas, the Indiana, the Maine.
Showdown 1896
Even as the nation’s economy pounded toward new peaks of investment and production in the early 1890s. men of affairs were assailed by doubts about the future. Suddenly the days were gone when an Andrew Carnegie could write his Triumphant Democracy and, when asked “What had become of the shadows?,” could answer that his book was “written at high noon, when the blazing sun overhead casts no shadow.” Now there were shadows—produced by strains in the economy, a persistent agricultural depression, racial and religious tensions, and, above all, ferment among farmers and workers. Editorialists worried about immigration, trusts, liquor, socialism, woman suffrage.
Though some feared a war between haves and have-nots, history would be less simple but more decisive. Few at the start of the 1890s could predict that the decade would produce social and political torrents that would wash over old lines of conflict, precipitate an electoral showdown, and leave in its wake a realigned and polarized party system that would dominate American politics for decades.
Still, a war between rich and poor seemed plausible as the rich in 1892 looked at the poor in farm and factory. In the West and South, the Populists were mobilizing for the 1894 elections with a militant campaign to seek out black support, even while toning down their radicalism to win urban and middle-class voters. In Georgia, Tom Watson ran again for Congress in 1894, after winning nomination in a Populist convention that was about one-third black—probably the peak of Southern black participation in the 1890s. The Populists increased their total vote in 1894 over the previous presidential election, but both Watson and “Sockless Jerry” Simpson were defeated, and widespread election fraud left the Populists in a bitter mood as they planned for 1896.
The labor front appeared even more ominous to economic elites, especially after the bloody struggle at Andrew Carnegie’s Homestead steel works in July 1892. That summer Carnegie was reaching the height of his economic power and world celebrity. His was now the biggest steel company on the globe, able to produce half as much as all the British steel makers combined. A few years earlier, Carnegie had happily acquired the most modern of rail mills in Homestead, Pennsylvania—but with it he had less happily acquired several hundred members of the Amalgamated Iron, Steel and Tin Workers, one of the best-organized unions of skilled workers in the country. When Carnegie departed for Scotland in the spring of 1892, he left in charge of Homestead his forty-three-year-old managing partner, Henry Clay Frick. Named after his wealthy grandfather’s political hero, Frick from his tenderest years had epitomized the Horatio Alger ideal of pluck and luck. Through a fanatical commitment to the making and selling of coke he had made his first million by the age of thirty, and as the steel plants devoured more and more of the soft black “coal cake,” Frick had borrowed against his own future legacies, borrowed from his uncles, borrowed from his father—who mortgaged his small farm to raise the cash—to buy coal lands and build hundreds of coke ovens. Soon the “coke king” was invited to join Carnegie’s expanding empire.
Carnegie had defended unionism, especially in his preachings abroad, but behind his rhetoric it was weak, local unions he favored, not national organizations. Frick suffered no such ambivalence. Viewing the Amalgamated with implacable hostility, he sought a showdown that would break this union which was resisting his demand for a lower sliding wage rate. When their request for continued negotiations was denied, union workers closed down the plant. Refusing concessions, Frick surrounded the mill with a stockade of planks topped by barbed wire, ordered up three hundred Pinkerton guards as strikebreakers, and arranged for his hired private army to be brought
by barges to Homestead and landed inside the stockade in the dead of night.
The events of July 6, 1892, would become a grim saga of American labor: the alarm sounded by sirens and factory whistles after union guards spotted the Pinkertons; the frantic efforts of workers to beat off the barge landings with hoes, guns, and fence staves; the Pinkerton strikebreakers, drifting offshore in the infernal heat of the barges, finally running up a white flag; the granting of safe-conduct to the Pinkertons so they could march away; and then the gory climax as workers and their wives, now a maddened horde bent on vengeance, fell on the Pinkertons, flailed at them with clubs and iron-filled stockings, jabbed at their eyes with umbrellas, tore off their bright-buttoned uniforms, and left three dead, a dozen injured, and the rest naked and bloodied.
In the end Frick and Carnegie won, of course, because they could summon superior force—in this case 8,000 state troops to open up the plant. Both men paid a price. A “Nihilist” immigrant from Lithuania, Alexander Berkman, burst into Frick’s office, shot him twice in the neck, and stabbed him repeatedly. Frick coolly wrote out telegrams to his mother and to Carnegie about the event, informed the press that the company’s anti-union policy would not be changed, and went home to recuperate. Carnegie, who had remained almost incommunicado in a Scottish retreat, was ridiculed in the British and American press for his autocratic practices as compared to his democratic preachings.
“Say what you will of Frick,” the St. Louis Post-Dispatch trumpeted, “he is a brave man. Say what you will of Carnegie, he is a coward, and gods and men hate cowards.”
The Homestead violence had embarrassed the Republican party, which had an election to win against Grover Cleveland in 1892. A GOP emissary visited the convalescing Frick with a proposal to recognize the union and settle the strike. “I will never recognize the Union, never, never!” Frick burst out. President Harrison—even Carnegie himself—could not make him do this, he said. Later Harrison blamed Homestead for his defeat. But if Harrison hoped to prick the industrialists’ conscience, he did not know these men. They considered Cleveland safer than Harrison.
“Cleveland! Landslide!” Carnegie wrote Frick on hearing the returns. “Well we have nothing to fear and perhaps it is best….” He was quite right. Cleveland, in this his second White House stint, soon proved himself sounder than ever on gold, civil service, federal spending—everything save the tariff. He struck the theme of his Administration in his Inaugural Address with a denunciation of “paternalism.” The lesson must be learned, he said, “that while the people should patriotically and cheerfully support their Government its functions do not include the support of the people.” He would teach that lesson.
Hosts of farmers facing debts and declining prices, workers toiling sixty hours a week, financiers skittish over bank failures abroad, and a President who barred his government from “supporting the people”—the combustibles were there for the igniting. The fuse was lighted in May 1893 when converging financial pressures produced a detonation on Wall Street that left prices sagging. By year’s end, almost six hundred banks and perhaps 15,000 businesses had failed. Within a few months stocks lost several hundred million dollars in value. At the depth of the depression, over a quarter of the nation’s railroad mileage was in receivership. Farm prices dropped further. Two and a half million persons, it was estimated, were left looking for work.
Cleveland’s response to the crisis was to cling even more tightly to orthodoxy. To stem the drain on the nation’s gold reserve the President forced repeal of the Sherman Silver Purchase Act through Congress, amid the indignation of the silverites. He pressed for a lower tariff, then let a moderate bill become law without his signature. He was in no mood to make concessions to farmers desperate over mortgages or workers facing wage cuts and layoffs. Soon he faced both these specters.
By the spring of 1894, masses of men who had been wandering the countryside looking for work were beginning to cohere as leaders arose to channel their desperate needs into a political force. The self-appointed leader of the “Commonweal Army of Christ” was a thirty-nine-year-old Ohio Populist and factory owner named Jacob Coxey. Soon Coxey was leading his army, half-a-thousand strong, several hundred miles through Ohio and Pennsylvania to Washington to offer a living petition, a “petition in boots.” Arrested in the capital amid much publicity for “walking on the grass,” the army was forcibly dispersed. Coxey’s proposals for public works jobs through the issuance of paper currency were introduced in Congress—only to be ignored or jeered at by many of the lawmakers.
No one could laugh off the trouble that developed in Chicago in a conflict between a paternalistic employer and a militant union leader. By 1894, George Pullman had developed his Palace Car Company into a $36 million business employing 5,000 workers who built, serviced, and operated his plush and paneled sleepers. Pullman had also built a model town “bordered with bright beds of flowers and green velvety stretches of lawn,” as the company proclaimed, which Pullman’s men ruled with benevolent authority. “We are born in a Pullman house,” one worker said, “fed from the Pullman shop, taught in the Pullman school, catechized in the Pullman church, and when we die we shall be buried in the Pullman cemetery and go to the Pullman hell.”
When the company laid off men, cut wages, and yet maintained rents during the spreading depression, the workers turned to Eugene Debs’s militant American Railway Union. Long active in the railroad brotherhoods, Debs had founded the ARU as a means of transcending craft rivalries and uniting the 150,000 railroad workers in the Midwest. When Pullman refused to negotiate with his workers, the ARU ordered a boycott of Pullman cars, the railroads began to fire any man who refused to switch Pullman cars, and soon 125,000 men on twenty railroads had quit.
Behind the issues of wages and rents was the central question of power—and the employers had far greater power resources. The General Managers Association, a militant organization of railroads, took command of the anti-strike effort. The ARU turned to the American Federation of Labor for support, but its president, Samuel Gompers, believed neither in industrial unionism nor in the prospects of an ARU victory. The AFL issued words of encouragement to the ARU but decided against a general strike. When some minor disturbances occurred along the tracks and an injunction was defied, Cleveland sent several thousand “special deputies” to restore order over the vociferous objections of Illinois Governor John P. Altgeld. Intensified violence followed, the strike was broken, and Debs was jailed.
The political pendulum oscillated wildly in response to the economic and social pressures of the early nineties. In the most volatile part of the country—the more heavily urban areas stretching from Wisconsin and Illinois through New England—the Republicans won 115 congressional seats to the Democrats’ 54 in 1888, lost to the Democrats 63 to 106 two years later, split 88 to 89 in 1892, and overwhelmed their foes 168 to 9 two years later. The Democrats lost a total of 113 seats in the 1894 congressional elections, the largest pendulum sweep since the Civil War. Former Republican Speaker Thomas B. Reed—who now would return to the speakership—had predicted such Democratic losses that the dead would be buried in trenches and marked “unknown.” He hardly exaggerated.
This midterm repudiation of Cleveland served mainly to harden the Administration in its economic policies. The Treasury now faced dwindling federal revenues, at the same time that gold reserves declined despite the repeal of the Sherman Silver Purchase Act. Desperately Cleveland turned to the big bankers for loans through bond issues, without much response; ultimately he was bailed out by a syndicate headed by J. Pierpont Morgan and August Belmont, Jr., which purchased 3.5 million ounces of gold.
With mounting indignation, silverites. Populists, and socialists watched Cleveland’s failure to cope with the depression, his hard-money policies, his “sellouts” to the Morgans and the rest of the hard-eyed bankers. He was so unpopular personally by now— “I hate the ground that man walks on,” declared an Alabama senator—as to have lost any hope for renomina
tion in 1896, or even to have decisive influence in the convention. Richard (“Silver Dick”) Bland and other leaders of the silver bloc in the House framed an “Appeal of the Silver Democrats” asking immediate restoration of free and unlimited coinage of silver at the ratio of 16 to 1, but the Administration was adamant. As a party the Democrats were in disarray, with Cleveland and the old “Bourbon” element almost impotent, except in their veto power, the silverites tied to one issue and lacking a compelling leader, and the whole party confronted on the left by a militant populist movement.
The Populists, however, were facing a severe internal crisis. Sobered by their election defeats in 1894 and pressured by the growing clamor for “free silver,” Jerry Simpson and others resolved to make silver a magnet to draw the nation’s reform forces into the People’s party. Other Populist leaders held that narrowing their broad platform to free silver would mean dumping the rest of their reforms. “The scheme,” roared Tom Watson, “is a trap, a pitfall, a snare, a menace, a fraud.” It would mean “forever checking our advance toward government ownership of the railroads” and other key goals. Only as part of a broad set of measures could free coinage of silver do any good. A Populist party convention early in 1895 reaffirmed the whole sacred creed by a large majority, but it was clear that internal trouble lay ahead.
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