Paul Leland Haworth.

Reconstruction and union, 1865-1912 online

. (page 13 of 20)
Online LibraryPaul Leland HaworthReconstruction and union, 1865-1912 → online text (page 13 of 20)
Font size
QR-code for this ebook


" Legislate for the rich man, and some of the bene-
fits will filter down to the poor man." Materi-
alism was his divinity, and he was not a disciple
of Jean Jacques Rousseau or Thomas Jefferson.
He had secured the election of McKinley, and
besides he now personally occupied a public post
of importance, for old John Sherman had been
"kicked upstairs" from one of the Ohio senator-
ships into the secretaryship of state in order to
make a place for Hanna.

Through the splendid discipline of the Repub-
licans, and under the fostering care of Thomas B.
Reed, who was again "Czar," a tariff bill framed
by a committee of which Nelson Dingley of Maine
was chairman, was quickly carried through the
house. Modifications in the further interests of
the powers that ruled were made in the more
plutocratic senate, and toward the end of July
the Dingley Bill became a law. In the main it
followed the lines of the once repudiated measure
of 1890, though the average rate was slightly
lower. Still the act was an extremely high
tariff measure, being practically prohibitive upon
many articles. Under its operation the people
were to continue to behold the strange anomaly of
great industries selling articles at a much lower
rate abroad than at home and paying the freight
thither. There can be no doubt that the act
tended to put American consumers at the mercy
of monopolies by rendering foreign competition
almost impossible, but that was exactly what many
of the framers of the act desired.



198 RECONSTRUCTION AND UNION

A redeeming feature of the Dingley Act was
that it gave the president power for a period of
two years to negotiate reciprocity treaties pro-
viding for a reduction of not more than 20
per cent of the Dingley rates or to place on the
free list natural products that were not produced
in the United States. The president was also
authorized to make, without the consent of the
senate, certain limited reciprocity agreements.
Several of these limited agreements were entered
into, and seven formal reciprocity treaties were
negotiated. The treaties would have given only
moderate relief from the excessive Dingley rates,
but special influences proved so powerful in the
senate that not one was ratified. The senate's
failure to ratify these treaties was the more
reprehensible because while the bill was pending
it had been distinctly understood that the high
rates in it were to be reduced by reciprocity
agreements.

The country acquiesced in the Dingley Act
and in the defeat of the reciprocity treaties with
better grace than might have been anticipated, for
the cause of freer trade had received a heavy blow
in the panic of 1893, which many people attributed
to the dread of tariff tinkering, forgetting that
the business depression was world- wide and that it
was on the way even before Cleveland's election.
A lull in political agitation, the confidence of the
financial classes in the new administration, the
abatement in the money stringency as a result of
greatly increased gold production in South Africa
and the Klondike, renewed faith in America's
boundless resources all these and other causes



GOLDEN AGE OF MATERIALISM 199

combined to produce a great business revival.
The claims of protectionists were seemingly
justified, and the people, with attention dis-
tracted by foreign affairs, generally accepted
the Dingley Act. Few realized that it was help-
ing a comparative few to reap an altogether
disproportionate share of the country's rich
harvest.

The demand for protection was carried to such
an extent that the nation failed to deal justly
in trade matters with its new possessions, Porto
Rico and the Philippines. Common fairness
demanded that there should be free trade between
these possessions and the United States. Even
President McKinley declared it "our plain duty
to abolish all customs-tariffs between the United
States and Puerto Rico." But the disciples
displayed more zeal than the apostle. Repre-
sentatives of protected interests grafted upon a
bill providing a system of civil government for
the island an amendment levying duties on goods
coming from the island to the United States
and going from the United States to the island.
The Democrats and some Republicans took the
view that such a tax would not only be unjust
but also illegal, and cited the constitutional
clause which provides that "all duties, imposts,
and excises shall be uniform throughout the United
States." Supporters of the measure denied that
Porto Rico was a part of the United States, hold-
ing that the constitution does not of its own force
apply to new territory. Ultimately congress
imposed a tariff of 15 per cent of the Dingley



200 RECONSTRUCTION AND UNION

rates, the proceeds of which were to be used in
conducting the government of the island. As a
concession to aroused public sentiment, congress
further provided that the tariff should continue
for only two years and that if in the meantime
the island should establish a system of taxation
for local needs, the president might suspend the
tariff. Porto Rico took advantage of the loop-
hole, and the president proclaimed (July 25, 1901)
free trade with the island.

The Philippines were less fortunate. On
goods coming into the islands duties were for a
time collected under Spanish laws, but a tariff
revision act was presently prepared by the Philip-
pine Commission and submitted to the war de-
partment at Washington. Home interests brought
pressure to bear upon the department, and the
measure was decidedly modified to the disad-
vantage of the Filipinos. American goods going
to the Philippines were to be admitted on payment
of duties of from 15 to 30 per cent., whereas upon
Philippine goods coming to the United States
the much higher Dingley rates were to be col-
lected. It was a miserable act, unworthy of men
whose Revolutionary sires had rebelled against
Acts of Trade conceived in the same selfish spirit.
In 1901, however, the Federal supreme court
held that the Philippines were no longer foreign
territory within the meaning of the Dingley Law
and that the collection of duties under that act
upon goods coming from the islands was illegal.
Congress thereupon enacted (March 8, 1902) a
law providing that Philippine products should



GOLDEN AGE OF MATERIALISM 201

receive the benefit of a reduction of 25 per cent,
and that the export duty levied in the islands
should also be deducted. Governor Taft had
pleaded for a reduction of 75 per cent, but selfish
domestic interests, notably the Tobacco Trust,
proved too strong.

The control which the protected interests
exercised over tariff legislation was symptomatic
of a condition pervading the whole public service
and the country as well. The pursuit of wealth
was glorified as never before, and the millionaire
was regarded by many as worthy of admiration,
no matter how he had obtained his money.
Imperialistic methods abroad were reflected in
imperialistic methods at home. The laws meant
to repress and restrain lawless wealth remained in
abeyance, and the people were left to the tender
mercies of plunderers.

The period was especially notable for the rapid
formation of great business combinations. The
depression of 1893 had caused a lull in consoli-
dation, but with the revival of business an unpre-
cedented rush to combination began. Before
1897 only 63 such combinations had been formed;
within the next three years 183 were organized,
with a total capitalization of over four billions of
dollars, or more than twice the money circulation
of the entire country. Wherever a semblance of a
monopoly could be secured, a promoter stood
ready to effect an organization, and a gullible
public proved eager to buy the securities.

By effecting these organizations the "Captains
of Finance" were not only able to crush competi-



202 RECONSTRUCTION AND UNION

tors, but also to make millions in floating schemes
the ultimate object of which was to oppress the
public that furnished money for its own undoing.
Exaggerated ideas were abroad concerning the
great profits of combination, and these ideas the
promoters sedulously cultivated. Practically
every combination formed was excessively over-
capitalized. Little attention was paid to actual
investment; the savings of combination, good- will,
the profits accruing from tariff protection, even
those due to the evasion of Federal laws against
rebates and restraint of trade all these and other
assets equally intangible were capitalized. And
such was the fever for speculation that the public
bought these watered securities with the avidity
of gudgeons. "To the imagination of millions
of Americans, the financial centres of the country
seemed to be spouting streams of gold into which
anyone might dip at will; and every Wall Street
gutter figured as a new Pactolus."

The largest combination effected in this period
was the United States Steel Corporation, formed
in 1901 under the financial management of J. P.
Morgan and Company. Ten of the leading steel
and iron concerns enlisted in the movement, the
most important being the Carnegie Company.
Each of these concerns was in itself a combination
of smaller companies, representing more than
200 originally independent companies. The cash
value of the investment in all the plants was
about $278,000,000; their combined stock and
bond capitalization amounted to $911,700,000.
But, as a result of favorable natural conditions



GOLDEN AGE OF MATERIALISM 203

and high protection, the steel and iron industry
was enormously profitable, and it was expected
that combination would make it much more so.
The par value of the securities issued by the
United States Steel Corporation reached the enor-
mous sum of $1,404,000,000.

Numerous instances of yet more flagrant
overcapitalization could be cited, but this must
suffice. There is space only for the observation
that when the necessity of paying dividends on
so much "water" is borne in mind, it becomes
evident that the promoters of such companies
had no intention of allowing the general public
the consumers to reap any of the much vaunted
benefits of combination.

For a time the financial frenzy continued, but
in 1903 the inevitable came to pass. Investors
discovered how poorly performance matched
promise and awoke to the fact that the demi-gods
of finance were too often no better than vulgar
swindlers. The disillusionment, combined with
the threatening attitude of the Roosevelt adminis-
tration, stopped the wild rush to consolidation.
Stock exchanges were bloated with "undigested"
and "indigestible" securities. Inflated values
dropped like the barometer before a cyclone.
Some combinations failed altogether. United
States Steel preferred stock, which had once sold
for 101%, touched 49; the common stock, which
had been as high as 55, fell to 8%. For some
time both stocks stood at figures not much higher.
Measured by the stock market's estimate of
value, the concern had been overcapitalized the



204 RECONSTRUCTION AND UNION

enormous sum of upwards of $800,000,000. Yet
the business prospered, and yielded large returns
on the actual investment. Prices fluctuated
enormously, but rose until even the common
stock surpassed its previous high "water" mark.
It is safe to say that this would never have hap-
pened had it not been for the assistance given by
the protective tariff.

Subsequent to its formation the Steel Trust
absorbed other companies, and also adopted the
policy of admitting representatives of independent
companies to meetings at which prices and the
division of business were discussed. Whether in
the trust or not, the men who attended such
meetings managed their business in accordance
with the informal understandings there brought
about. Thus the trust ruled the steel industry
and built up a power never exceeded in the com-
mercial history of the world. Furthermore, the
men controlling the trust were also interested
in many railroad and steamship lines, in the
manufacture of parlor-cars and farm machinery, in
telegraph lines, banks and trust companies, and
by a system of interlacing directorates produced
a wide-spread community of interest that tended
to destroy competition throughout its range.
Men came to call the great octopus with tentacles
thrown out The System, and believed that its
influence was "incompatible with the healthy
commercial life of the nation."

In the midst of the period of "frenzied finance"
occurred the presidential election of 1900. When
the Republican convention met at Philadelphia



GOLDEN AGE OF MATERIALISM 205

(June 19, 1900), it renominated McKinley by
acclamation. The only real problem the con-
vention had to solve was the selection of a vice-
presidential candidate. Several names were
suggested, but it was generally felt that the man
who would add most strength to the ticket was
Theodore Roosevelt. Upon his return from the
Spanish-American War Roosevelt had become
governor of New York. He soon antagonized
certain great business interests and by no means
pleased Thomas C. Platt, the Republican "boss"
of the state. Roosevelt hoped for a renomina-
tion, but Platt determined to make him vice-
president in order to get rid of him. Roosevelt
had future presidential aspirations and had no
desire to be "shelved," but Platt's political
influence and his own great popularity proved
too much for him. Among those who urged the
convention to nominate him was Senator Depew
of New York, who spoke of "William McKinley,
a Western man with Eastern ideas; and Theodore
Roosevelt, an Eastern man with Western charac-
teristics." Roosevelt received the vote of every
delegate present except his own, and perforce
bowed to the party's will.

The Democratic convention, meeting in Kansas
City (July 4, 1900), renominated Bryan by ac-
clamation and selected ex- Vice-president Adlai
E. Stevenson for second place on the ticket. The
platform pronounced imperialism " the paramount
issue of the campaign." Banners were carried
about the hall bearing such inscriptions as:
"Lincoln abolished slavery; McKinley has re-



206 RECONSTRUCTION AND UNION

stored it," and "The Flag of the Republic for-
ever, of an Empire never." For the sake of
consistency Bryan forced through a re-affirmation
of the free silver plank of four years before, but
it was generally recognized that the currency
question was a dead issue. Owing to the greatly
increased output of gold by the mines of the world
our circulation had in four years increased up-
wards of four hundred millions of dollars, and
money was no longer scarce. In the preceding
March congress had passed an act making the
gold dollar of 25.8 grains, nine-tenths fine, the
standard of value, and as the senate was certain
to be Republican for at least two years, the repeal
of this act was not immediately probable or even
possible. The platform also denounced the
Dingley Act as a "trust-breeding measure," and
advocated laws to "protect individuals and
communities from discriminations and the people
from unjust and unfair transportation rates."

In the campaign Bryan again received the
support of the Populists. Many of the Gold
Democrats of four years before returned to their
old party, and some anti-imperialistic Republi-
cans, such as Carl Schurz and George S. Boutwell,
declared for the Democrats. Thousands of Re-
publicans were dissatisfied with the administra-
tion's Philippine policy, for in their inmost hearts
they could not help feeling that we had entered
the war to free a race and had ended by enslaving
one. But the silver heresy of the Democrats
repelled many of these, while others felt that talk
of "the consent of the governed" fell with ill-



GOLDEN AGE OF MATERIALISM 207

grace from the lips of a party that was strongest
in a section where negroes were deprived of
political rights. The Republicans dwelt with
unction upon the fat years of McKinley's rule
and hoisted on high "the full dinner pail." They
endeavored to represent the Filipinos as aggressors,
and the idea embodied in McKinley's flamboyant
sentence, "Whenever the flag is assailed the only
terms we ever make is unconditional surrender,"
weighed heavily with the mob. The Democratic
effort to convince the people that imperialism
abroad meant oppression at home failed to carry
conviction, while the plutocratic tendencies of
the administration were not as yet fully realized.
McKinley received 292 electoral votes to Bryan's
155, and a popular plurality of 832,280.

McKinley olid not long enjoy his new honors.
In September, 1901, he visited Buffalo for the
purpose of attending the Pan-American Expo-
sition. On the 5th he delivered a speech which
was notable because in it he indicated a decided
modification in his old theory of protection in the
direction of freer trade with other nations. " Iso-
lation," said he, "is no longer possible or desir-
able. . . . We must not repose in fancied security
that we can forever sell everything and buy
little or nothing. . . . Reciprocity treaties are in
harmony with the spirit of the times; measures
of retaliation are not."

On the following day he held a public reception
in the Temple of Music and shook hands with
all who came to greet him. While thus engaged
he was shot twice in the body by a young anar-



208 RECONSTRUCTION AND UNION

chist named Leon C. Czolgosz, who was subse-
quently executed for the deed. The wounded
man survived for a few days, and the physicians
held out hopes of his recovery. But one of the
wounds proved more serious than they had
supposed; on the 14th the president died, the
third American president to be assassinated in
less than forty years, a record of which the nation
has no reason to be proud. He was buried at his
old home in Canton, and at the hour of the cere-
monies, by universal agreement, all business ac-
tivities throughout the country were suspended.

In the dead man's private life there had been
much to commend. He was religious, devoted
to his wife, temperate, dignified, kindly, gentle.
Intellectually he was not endowed with originality,
but he possessed shrewdness, tact, and the faculty
of taking advice. Although no orator, he always
secured a hearing. As a politician, he knew
how to hold his ear close to the ground and under-
stood the immense advantage to be derived from
the support of great financial interests. An
opportunist rather than a statesman, he was
consistent only in that he shaped his action to
the party's wishes and demands. Yet he was
not truly democratic nor did he guard carefully
the true interests of democracy. His complai-
sance towards men of wealth and interests repre-
senting wealth and the influence exerted over
him by the corruptionist Hanna form blots that
time will hardly efface, yet in his behalf it can
be urged that probably he did not thoroughly
understand the tendencies of the times. It was



GOLDEN AGE OF MATERIALISM 209

his fortune to be president at a period that was
epoch-making, and hence his place in history
will probably be larger than that of some abler
men. Under him the United States definitely
forsook its time-honored policy of isolation and
became a world power. He also ruled in the
golden age of American materialism.



CHAPTER IX

THE REVOLT AGAINST PLUTOCRACY

AFTER taking the oath as twenty-fifth presi-
dent Theodore Roosevelt announced that he
would retain his predecessor's cabinet and would
endeavor to continue his policy. Yet his tragic
accession to power constituted a political revo-
lution of the first magnitude. Although both
called themselves Republicans, Roosevelt was
McKinley's exact antithesis in an infinite variety
of ways. And in one respect at least he differed
from all of his recent predecessors he had both
the will and the courage to attempt to enforce
the laws of the land against the gigantic financial
interests that had become so sinister and dominant
an influence in the politics of the nation.

In some respects Roosevelt resembled Andrew
Jackson more than any other president. Unlike
Old Hickory he had enjoyed the best of educational
advantages, but he had Jackson's impulsiveness,
his frankness, his courage, his ability to lead, and
his love of a fight for a fight's sake. In reality,
he was less impulsive than he seemed, for he
thought and worked more quickly than most
men, and often an apparently hasty decision was
a well matured judgment. It happened not
210



REVOLT AGAINST PLUTOCRACY 211

infrequently that his enemies believed they had
caught him in a serious mistake, only to discover
themselves entrapped in a mesh of circumstances
whose existence the president had discreetly
held in reserve. In his interests he was more
versatile than any other president with the
possible exception of Thomas Jefferson.

As a political leader Roosevelt proved to be
unapproached since Lincoln, and he enjoyed a
personal popularity unequaled since Jackson.
Independents liked him because they remembered
his long struggle for civil service reform and his
efficient work as police commissioner of New
York. Westerners waxed enthusiastic over him
because he had made himself one of them. Young
men admired him because he had the vigor and
enthusiasm of youth. Politicians supported
him because of his ability to produce pluralities.
Journalists approved of him because he afforded
them abundant "copy." In him millions of
Americans saw, or thought they saw, qualities
or interests that they themselves possessed. The
more discriminating forgot faults that would
have been serious had they not been submerged
in more positive virtues, and, as it was, merely
helped to round out a vigorous, picturesque,
human personality. Enemies he had and virulent,
but, except for short intervals, they were of classes
that do not figure largely in the census returns.
Never before had a president been so talked about,
written about, photographed, and applauded.

Roosevelt's course regarding the civil service
was on the whole what might have been expected
of a man with his record on the subject. His



212 RECONSTRUCTION AND UNION

policy early in his administration of appointing
Southern Democrats to office in sections where
thoroughly competent Republicans could not
be found gave especial satisfaction to friends
of efficient government. Unfortunately the good
feeling caused by this policy was temporarily
dissipated by what in Northern eyes seemed an
unimportant episode. The president had an
interview at the White House with Booker T.
Washington, the negro educator, and at its con-
clusion entertained him at luncheon. Washington
was a worthy man. From nothing he had created
one of the most useful educational institutions
in the country. He was constantly preaching to
his race the much needed doctrine of thrift,
sobriety, and labor. His influence for good was
so widespread that a prominent Southern historian
called him the greatest man, with the exception
of Robert E. Lee, born in the South in a hundred
years. But politicians and sensationalists took
up the episode and succeeded hi convincing
Southerners that the president had offered a
deliberate affront to their section. The tension
between the races was increased, and in the few
instances hi which the president saw fit to appoint
a negro to office in the South a great outcry was
raised. At the village of Indianola, Mississippi,
opposition to negro officeholders developed to such
an extent that mob violence was threatened against
a negro postmistress who had filled the office effi-
ciently for some years. As the local authorities
could not insure her protection, the president
ordered the delivery of the mail at Indianola sus-
pended. A fact that added to Northern bewilder-



REVOLT AGAINST PLUTOCRACY 213

ment was that the patrons themselves engaged a
colored man to carry their mail from the nearest
office, so that they received it from black hands
after all. In reply to protests against the appoint-
ment of negroes to office Roosevelt declared em-
phatically that he could not consent to "close the
door of hope of opportunity " to any man because
of race or color.

Like most sudden effervescences Southern
wrath soon subsided, and ultimately the presi-
dent won a host of warm admirers in that section.
The most dangerous opposition he had to en-
counter came from an altogether different source.
Certain great corporations had already felt the
force of his arm while he was governor of New
York, and "interests" of the same sort in all
parts of the country covertly watched his course
as president. Among many worthy business


1 2 3 4 5 6 7 8 9 10 11 13 15 16 17 18 19 20

Online LibraryPaul Leland HaworthReconstruction and union, 1865-1912 → online text (page 13 of 20)