One principle of the unions is exceedingly unjust to the workingmen to the last degree. It starts with the assumption that all workmen are equal in their capacity as to the quality of service or work and the quantity of production; and upon this false assumption is based the injustice of compelling all members to bind themselves to a uniform rate of pay. A greater injustice and a more flagrant inequity cannot be found in the whole range of the world’s social institutions; nor is the wrong the less culpable because the members voluntarily inflict it upon themselves; for as “no man liveth unto himself” but has dependents for whom he is bound to do the best in his power, so no man is free to throw away to the less industrious or less competent what his superior abilities and industry have earned for himself.
This levelling system is not only in defiance of the law of varied endowment which the Creator has incorporated into the constitution of humanity, but it tends to bind into one cast-iron man the entire working community, debarring them from all chances of progress and consigning them to a degrading condition of semi-slavery or serfdom. Time was when the way was clear to any workingman in this country to the highest positions of wealth, or of social standing or political influence. As a matter of fact, a large proportion of our present successful merchants, and not a few even of our millionaires, are men who have risen from the ranks of labor. The first steps in their progress were won by the superiority of their skill or faithfulness as workmen, which qualified them to rise step by step to higher achievements. Then, the workman was free to rise according to his abilities and his character; he was the free ruler of his own destiny. Now, it seems the tendency of the trades unions is to obliterate all such distinctions and virtually debar the workman from the possibility of earning a rank among his fellowmen proportioned to his merits; and on this plan the American workman would be as completely cut off from the chances of social elevation, as was the American slave twenty-five years ago. This would be a terrible degradation, of which every man who enjoys the rights of American citizenship should deem himself incapable and feel ashamed.
However much political leaders, and even some who rejoice in the reputation of economists, may feel disposed to regard these combinations as a social necessity of the time, and an institution that has come to stay, I cannot resist the conviction that the trades-union movement has already seen its culmination and is destined to a steady disintegration, unless the system is greatly modified. The principle of combination is useless unless it can be successfully employed to compel employers to accept the terms of the employees. In fact, it has been almost the sole object of the unions to employ it, through the agency of strikes, to compel the acquiescence of capital. Up to a recent period, it has been largely successful in this sense. So long as employers could at all afford to comply with the demands of labor, they would make considerable sacrifices to avoid the inconvenience and loss connected with the interruption of their operations involved in a strike. At last, however, the workingmen advanced their demands to a pitch so seriously threatening to industry and so vitally dangerous to the material interests of the country at large, that employers saw, with common consent, that the time had come when a square issue must be made with this modern invasion on their rights.
The spring of 1886 will always be memorable, for its having brought to a fair test the power and principles of trades-unionism. Strikes were suddenly initiated on a stupendous scale, upon the railroads, among the western factories, and among the larger employers in the Middle States, partly to enforce demands for higher wages, partly to shorten the time of work to eight hours a day, and above all, to compel employers to recognize the leaders of the unions in determining the conditions of employment and to submit all disputes between the two parties to arbitration. Employers, simultaneously, but without any concert of action, met the challenge squarely. They refused to concede the demands made; they in many instances declined to recognize the officers of the unions; they proceeded promptly to fill the places of the strikers with non-union men, and refused to make formal conditions with returning strikers; they brought to bear upon the leaders of the strikes the laws against conspiracy; and they took the “boycotters” before the courts. The result of this treatment was an almost universal failure of the strikers; the declaration by the courts that the compulsory methods of the unions are illegal, and in the nature of conspiracies; the throwing out of employment of tens of thousands of union employees, and the exhaustion of the funds raised by the unions for enforcing their coercive tactics.
The result of the contest was that, within one brief month, the power of the unions was shown to be weakness itself; employers everywhere discovered the intrinsic importance of the combinations they had so much before dreaded, and very many respectable and reflecting members of the unions felt themselves discredited in the eyes of the public, while their faith in the efficiency of their system of supposed protection was seriously shaken. After this, if I am not seriously mistaken, employers will find that they have much less to fear from trades-unions than they had once supposed. A defeat so fundamental as this, is likely to be followed by the gradual dispersion of the formidable array of united workmen. Such a result is no more than is to be reasonably expected from an organization based upon no great truth and no sound principle, but resting upon popular ignorance and misconception of the natural laws governing society.
During the progress of the recent strikes, I had occasion to make frequent allusions to the course of events, from which I may be permitted to make the following quotations:
(The following appeared on the 3d of May.)
“The Knights of Labor have undertaken to test, upon a large scale, the application of compulsion as a means of enforcing their demands. The point to be determined is, whether capital or labor shall, in future, determine the terms upon which the invested resources of the nation are to be employed.
“To the employer it is a question whether his individual rights as to the control of his property shall be so far overborne as not only to deprive him of his freedom, but also expose him to interference seriously impairing the value of his capital. To the employees, it is a question whether, by the force of coercion, they can wrest, to their own profit, powers and control, which, in every civilized community, are secured as the most sacred and inalienable rights of the employer.
“This issue is so absolutely revolutionary of the moral relations between labor and capital, that it has naturally produced a partial paralysis of business, especially among industries whose operations involve contracts extending into the future. There has been at no time any serious apprehensions that such an anarchical movement could succeed, so long as American citizens have a clear perception of their rights and their true interests; but it has been distinctly perceived that this war could not fail to create a divided, if not a hostile feeling, between the two great classes of society; that it must hold in check not only a large extent of ordinary business operations, but also the undertaking of those new enterprises which contribute to our national progress, and that the commercial markets must be subjected to serious embarrassments.
“From the nature of the case, however, this labor disease must soon end one way or another; and there is not much difficulty in foreseeing what its termination will be. The demands of the Knights and their sympathizers, whether openly expressed or temporarily concealed, are so utterly revolutionary of the inalienable rights of the citizen, and so completely subversive of social order, that the whole community has come to a firm conclusion that those pretensions must be resisted to the last extremity of endurance and authority; and that the present is the best opportunity for meeting the issue firmly and upon its merits. The organizations have sacrificed the sympathy which lately was entertained for them, on account of inequities existing in certain employments; they stand discredited and distrusted before the community at large as impracticable, unjust and reckless; and, occupying this attitude before the public, their cause is gone and their organization doomed to failure. They have opened the flood gates to the immigration of foreign labor, which is already pouring in by tens of thousands; and they have set a premium on non-union labor, which will be more sought after than ever, and will not be slow to secure superior earnings by making arrangements with employers upon such terms and for such hours as may best suit their interests. Thus, one great advantage will incidentally come out of this crisis beneficial to the workingman, who, by standing aloof from the dead-level system of the unions, will be able to earn according to his capacity, and thereby maintain his chances for rising from the rank of the employee to that of the employer. This result cannot be long delayed, because not only is loss and suffering following close upon the heels of the strikers, but the imprudences of their leaders are breeding dissatisfaction among the rank and file of the organizations, which if much further protracted, will gravely threaten their cohesion. It is by no means certain that we may not see a further spread of strikes, and possibly with even worse forms of violence than we have yet witnessed; but, so long as a way to the end is seen, with a chance of that end demonstrating to the organizations that their aspirations to control capital are impossible dreams, the temporary evils will be borne with equanimity. The coolness with which the past phases of the strikes have been endured, shows that the steady judgment of our people may be trusted to keep them calm under any further disturbance that may arise.
“Prior to the strike in the Missouri Pacific, Jay Gould was one of the most hated men in the people. He was anxious to have public respect and sympathy. He had made all the money he wanted, and was willing to spend part of it in gaining the respect and honor of the country. What his money could not do for him this strike on the Missouri Pacific has done. The sympathy and good-will which previously were with the strikers have been shifted from them to him. There is no doubt that the strikers selected the Missouri Pacific because it was a property with which Gould was known to be most largely identified, and because they thought that general execration would be poured out on him in any event. But, instead of injuring Mr. Gould, they have done him inestimable service.
“The timely and forcible action of Mayor Harrison, of Chicago, will put dynamiters and rioters where they belong, and thus divide the sheep from the goats in a very short time. If officials would sink political bias, the country would soon be rid of law-breakers and disturbers of the peace. As this plan of treatment has now been adopted, it will be far reaching in its effect, and stop mob gatherings, riotous speech-making, and other such bad incentives, which recently have been so conspicuous in Chicago, Milwaukee, St. Louis, and elsewhere. The laboring classes, who are parties to the strike, will now have an opportunity to retire to their homes, where there will be more safety than in the streets, which will bring to them reflection. They will then soon become satisfied that they are the aggrieved parties, and the not unlikely result will be their turning upon their leaders, who have deceived them.
“There have been numerous vacancies created by the strikers voluntarily resigning. There has been no difficulty in filling these vacancies by those who are equally capable, if not more so, from other countries flocking to our shores. The steam ferry between this country and Europe has demonstrated this by the steamer just arrived in six days and ten hours from European shores to our own. As the separation between the oppressed operatives of the Old World and America is thus reduced to hours, Europe will quickly send to us all the labor we need to meet all such emergencies.
“The laboring man in this bounteous and hospitable country has no ground for complaint. His vote is potential, and he is elevated thereby to the position of man. Under the government of this nation, the effect is to elevate the standard of the human race and not to degrade it. In too many other nations it is the reverse. What, therefore, has the laborer to complain of in America? By exciting strikes and encouraging discontent he stands in the way of the elevation of his class and of mankind.
“The tide of emigration to this country, now so large, makes peaceful strikes perfectly harmless in themselves, because the places of those who vacate good situations are easily filled by newcomers. When disturbances occur under the cloak of strikes it is a different matter, as law and order are then set at defiance. The recent outbreaks in Chicago, which resulted in the assassination of a number of valiant policemen through a few cowardly Polish Nihilists firing a bomb of dynamite in their midst, was the worst thing that could have been done for the cause of the present labor agitation, as it alienates all sympathy from them. It is much to the credit, however, of Americans and Irishmen that, during the recent uprisings, none of them have taken part in any violent measures whatsoever, nor have they shown any sympathy with such conduct.
“If the labor troubles are to be regarded as only a transient interruption of the course of events, it is next to be asked, what may be anticipated when those obstructions disappear? We have still our magnificent country, with all the resources that have made it so prosperous and so progressive beyond the record of all nations. There is no abatement of our past ratio of increase of population; no limitation of the new sources of wealth awaiting development; no diminution of the means necessary to the utilization of the unbounded riches of the soil, the mine, and the forest. Our inventive genius has suffered no eclipse. In the practical application of what may be called the commercial sciences, we retain our lead of the world. As pioneers of new sources of wealth, we are producing greater results than all the combined new colonizing efforts which have recently excited the aspirations of European governments. To the over-crowded populations of the Old World the United States still presents attractions superior to those of any other country, as is demonstrated by the recent sudden revival of emigration from Great Britain and the continent to our shores.”
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CHAPTER XLVI.
AN IMPORTANT SYNOPSIS.
A RESUME IN BRIEF OF THE LEADING EVENTS CONNECTED WITH WALL STREET AFFAIRS FOR SEVENTY-SEVEN YEARS.
_December, 1816._—The first savings banks in the United States went into operation.
_July, 1820._—Great financial distress throughout America. The causes were excessive importations and a deranged currency.
_August, 1833._—There was great commercial distress, caused by contraction by the United States Bank. The bank defended its course on the ground of the evident hostilities of the Administration, the public deposits, amounting to $10,000,000, having been withdrawn by order of the President.
_May, 1837._—In this year commercial distress prevailed throughout the United States. On May 10th all the banks in New York city, by common consent, suspended specie payments, banks throughout the country following the example. In New York about 300 large failures took place. In Boston 168 failures were reported. In New Orleans houses stopped payment owing an aggregate of $27,000,000.
_May, 1838._—The banks of New York and New England resumed payment after the suspension due to the panic of 1837. The Philadelphia banks resumed in August, 1838, and in January, 1839, there was nominal resumption throughout the country.
_July, 1840._—The bill organizing the United States Sub-Treasury became a law. The act was repealed in 1841, but was re-enacted in 1846.
_October, 1842._—The first sub-marine telegraph cable, the invention of Prof. Morse, was laid between Governors’ Island and the Battery, New York, October 18th.
_January, 1844._—The first telegraph line in the United States was erected. The telegraph was invented by Morse in 1837.
_August, 1851._—The depression of this year reached its height on the 13th. A bad credit system had been in vogue, trade with California had not met expectations, imports had been large, exports of gold heavy, cotton declined in Europe, the banks contracted, property was sacrificed to raise ready money, mercantile credit was disturbed everywhere, and distress was general in all the cities. In Wall Street large blocks of stock were unloaded and the market was broken. Erie went from 90 to 68¾. Later in the month money became easier, prices advanced, and the market resumed its ordinary aspect.
_October, 1851._—Panic regarding the value of State money. The Metropolitan Bank made war on the country banks to compel them to deposit with it against their notes, which were extensively circulated in the city. After receiving their bills the Metropolitan Bank demanded their redemption in specie. This led to many suspensions. The bills were well secured by State stocks, and the Metropolitan continued to receive them. As brokers refused to take State moneys of any kind there was a rush to the Metropolitan, and a panic prevailed. Ultimately the brokers bought the bills at a discount and made large profits. Their purchases gradually restored confidence, but not before four country banks had failed.
_July, 1853._—A panic in the stock market in consequence of bank contraction. The State Legislature enacted that the banks should publish weekly, in the New York _Times_, statements of their condition. In preparing for this statement the banks called in a large portion of their loans, and ran after each other for specie. The panic was of short duration.
_October, 1853._—Simeon Draper, a railroad banker, failed.—Stocks were depressed on the 19th, in consequence of bank contraction. There were several failures.
_January, 1854._.—California defaulted in its interest on the 1st, and there was much alarm in financial circles in consequence.
_February, 1854._—Heavy failures in California.
_May, 1854._—The New York, Newfoundland & London Telegraph Company was organized, and was the first company to attempt Atlantic cable telegraphy.
_July, 1854._—Robert Schuyler, President of the New York & New Haven Railroad Company, fraudulently issued nearly $2,000,000 stock of the company. About the same time fraudulent entries, made by Secretary Kyle, were discovered in the stock ledger of the Harlem Company, amounting to about $470,000. Frauds were also discovered in the affairs of the Parker Vein and the Vermont Central railway companies. In consequence there was a rapid decline in the stock market, and many suspensions occurred in New York, Boston and Philadelphia.
_September, 1854._—A severe twist in Erie stock on the 13th.
_October, 1854._—Frauds on the Ocean, American Exchange and National banks were discovered.
_December, 1854._—There was a severe run on the savings banks of the city of New York on the 9th.
_September, 1855._—A financial panic in San Francisco and many failures of prominent bankers.
_September, 1856._—Charles B. Huntington committed forgeries amounting to $15,000,000 or $20,000,000. The forgeries were used as collateral security for raising money, and for a time were taken up before maturity.
_April, 1857._—Freight-train men on the Baltimore & Ohio struck. Trains were molested and many fights occurred. The military were called out and a desperate fight ensued, in which many were killed and wounded.
_August, 1857._—The financial panic of this year began on the failure of the Ohio Trust Company, with liabilities about $7,000,000. Banks either failed or suspended specie payments everywhere. The New York banks resumed in December. Business was generally prostrated until the following spring, when improvement became perceptible.
_July, 1860._—Congress authorized a war loan of $250,000,000. The National debt was $64,640,838.11. It reached $2,756,431,571, its greatest point, in 1885.
_August, 1860._—Treasury notes to the amount of $50,000,000 were authorized by Congress.—The first well ever sunk for oil, and the first petroleum ever obtained by boring. The well was at Titusville, Oil Creek, Pa. It gave 1,000 barrels a day. This was the beginning of the petroleum business.
_December, 1860._—The Southern banks suspended specie payment on the 12th.
_April, 1861._—The lowest price at which United States bonds sold during the war was 75 for the 5s of 1874, quoted in this month.
_December, 1861._—The National Bank system was recommended by Secretary Chase.—A premium for gold was quoted at the New York Stock Exchange for the first time, on the 30th.
_April, 1862._—Gold was first quoted at a premium on the 12th, and by October 1 it had advanced to 123.
_February, 1864._—Speculation in stocks was “rampant” and “wild.”
_March, 1864._—There was a panic in the coal stocks on the 10th.—The month was noted for a rapid rise in gold.
_April, 1864._—A semi-panic in Wall Street on the 18th.
_June, 1864._—National currency to the amount of $300,000,000 was authorized by Congress. The full amount was issued before the close of 1867.
_August, 1864._—Gold touched 261¾, its highest point.
_July, 1865._—The Stock Exchange made a rule inflicting a penalty on members who attended Gallaher’s up-town night Exchange.
_August, 1865._—Edward B. Ketchum, a junior partner in a prominent banking house in New York, forged gold certificates to the extent of $1,500,000, and they were negotiated at the banks. In addition he abstracted more than $3,000,000 from the vaults of the firm. The firm failed.
_October, 1865._—Call loans were made as high a per cent. and a heavy commission added. Tight money checked a rise in stocks. Money was wanted in the West for the moving of crops. Relief came on the demand from the West subsiding, and by temporary loans from the Sub-Treasury to the banks.
_November, 1865._—Prairie du Chien common stock was cornered. On the 6th 29,000 shares were bought at about 40. The trap being sprung 200 and more was demanded, and the shorts settled at rates ranging from 110 to 210. There were several failures. It opened on a Monday at 96; on Tuesday it ranged between 160 and 225, and closed on Saturday at 110.
_December, 1865._—The new Stock Exchange building was opened for business on the 9th.
_February, 1866._—Toward the close, on February 20th, everybody seemed to want to borrow money, and no one was willing to lend. The market verged on panic. People were afraid of the course of the Government in selling upwards of $12,000,000 gold.
_April, 1866._—Michigan Southern was cornered. The price rose from 84 to 104. The pool closed out and the price dropped to 80 within 24 hours. Other corners were made in the same month in Reading, Rock Island, Hudson River, Cleveland & Pittsburg and Northwestern preferred. Money was plentiful and speculation was rampant.
_May, 1866._—The marketing of Erie stock by Daniel Drew caused a drop in its price from 74½ on May 18th to 60½ on May 31st. The movement had very little effect on the remainder of the market.
_July, 1866._—A panic in stocks followed the failure of Overend, Gurney & Co., London bankers.
_August, 1866._—London markets were first quoted by Atlantic cable in New York.
_November, 1866._—There was heavy speculation in stocks, produce, dry goods and real estate. Poor men became rich by a single turn of the wheel. Unexpectedly the Treasury drew about $15,000,000 for its own purposes, money became tight and the bears became very active. Prices declined about 10 points, and outsiders lost upwards of $25,000,000.
_December, 1866._—Northwestern preferred and Cumberland Coal were cornered.
_January, 1867._—Prices broke on the 18th with a rush. Cumberland Coal declined 55 points, and the general list went off in sympathy. There were several failures. Money was tied up by bear operators.—President Yelverton, of the Bank of North America, on learning of the failure of A. J. Meyer & Co., the firm having overdrawn its account $219,000, was seized with apoplexy and died.
_May, 1867._—A pool in Erie was broken by the sale of a large block of English stock.
_October, 1867._—Daniel Drew was turned out of Erie, and the stock advanced 10 points.
_December, 1867._—Vanderbilt secured control of New York Central.
_January, 1868._—A corner in Rock Island was broken, owing to the company throwing 49,000 shares on the market. The stock declined heavily.
_February, 1868._—The contest between Drew, Vanderbilt and Frank Worth was at its height.
_April, 1868._—There was a break in Atlantic Mail, with subsequent complications.
_June, 1868._—An unsuccessful attempt to corner Pacific Mail was made.
_July, 1868._—Jay Gould became president of Erie.
_October, 1868._—Money became stringent, owing to the withdrawal of funds from New York for the West. The associated banks lost $20,000,000 in deposits and $12,000,000 in legal tenders, with a reduction of only $9,000,000 in loans. Special efforts were made to break the stock market, but the bull leaders had provided themselves with time loans, running to the end of the year, and were thus enabled to hold prices.
_November, 1868._—Erie was cornered, and a panic extending through the whole list occurred. It was helped by the inability of a leading operator, a director of St. Paul, to meet puts on that stock. The common and preferred fell about 20 points. Erie made an extraordinary issue of shares. Later on money became more plentiful, prices advanced and the market became very strong.
_April, 1869._—A bill to consolidate the New York Central and the Hudson River railroad companies passed the Legislature.
_May, 1869._—The New York Stock Exchange and the Open Board of Brokers were amalgamated under one management. The new Exchange began business with 1,030 members and $750,000 in its treasury.—The era of consolidations. Active stocks advanced to prices never before reached. New York Central sold at 192-5/8. A movement to depress prices at the close of the month met with some success.—The last rails of the Union Pacific and Central Pacific railroads were laid. Trains began running across the continent on the 15th.
_June, 1869._—Many brokers failed, the result of a successful bear attack on the market.
_July, 1869._—Heavy speculation in the Vanderbilt stocks. New York Central advanced to 217-7/8. Money was stringent.
_September, 1869._—New York Central dropped 25 points on the 22d, and a panicky feeling was developed.—Gold reached 165 on Friday, the 24th—Black Friday. Transactions ran up into hundreds of millions, and business was conducted with so much confusion that bids running from 135 to 160 were made at one and the same time in different parts of the room. Between 11 and 12 o’clock the shorts settled on a basis of 148@158, the market price being 5@15 higher. At noon it was officially announced that the Government would sell gold next day and buy bonds, and within 15 minutes the price had fallen to 135, and the great speculation had collapsed.
_April, 1870._—The cliques who had bought stocks on the decline after Black Friday, started an upward movement in the last week of the month. The public came in and top figures were reached about May 10. The cliques unloaded, turned bears, depressed prices until margins were wiped out, bought in again at the decline and were ready for another advance.
_May, 1870._—The process of “shearing the lambs” was repeated in this month.
_June, 1870._—James Boyd, carrying 40,000 shares of stock and $5,000,000 gold, failed. The market showed signs of breaking, but was sustained by the cliques.
_July, 1870._—Congress authorized an addition of $54,000,000 to the national currency.
_January, 1871._—A prominent operator repudiated his orders to buy Reading. Several brokers failed in consequence. The market was only slightly depressed.
_April, 1871._—There was much speculative excitement in the stock market.
_June, 1871._—Rock Island was cornered. The pool began buying at 114½ and advanced it to 130-7/8. On liquidation the stock declined to 110. Many failures occurred and bad faith was charged.
_October, 1871._—The week beginning October 9, 1871, was one of the most eventful in the history of the Stock Exchange. The banks had expanded beyond precedent and were compelled to contract loans to raise money for crop purposes. The payment by France to Germany in settlement of war claims caused the Bank of England rate to advance from 3 to 5 per cent., and produced a feeling bordering on panic in London. The New York market was very sensitive when news of the Chicago fire came. Prices broke 4@10 points. On Tuesday there was great excitement; sales were enormous and fluctuations wide. On Wednesday there was a rally on the belief that the Government would purchase 5-20s. The lowest prices, however, were made on Thursday. On Friday there was more steadiness and prices were higher. The bank statement was favorable and matters quieted down.
_December, 1871._—The Ocean National Bank, the Union Square and the Eighth National Bank failed. Money was scarce, but stocks were firmly held. Operators and brokers were loaded up with stocks and they sustained prices, awaiting an opportunity to get out.
_March, 1872._—The Erie revolution occurred. The Board of Directors was overthrown, and Jay Gould resigned the presidency. Gen. Dix became his successor. The operation caused great activity in the stock market, and money became tight.
_June, 1872._—Stock dividends on Lake Shore and Michigan Central were declared.
_August, 1872._—Gold was cliqued.
_September, 1872._—Erie was cornered. The Gould-Smith clique was short of it. The stock first became scarce on purchases by German brokers for foreign account. Then Drew became a heavy purchaser. At the same time the German brokers were long of gold, and with the double idea of punishing them and compelling those carrying Erie to sell out the Gould-Smith clique endeavored to lock up money. This plan was defeated by the refusal of two banks to pay out legal tenders on certified checks. Just then, too, the Government bought $5,000,000 bonds and sold the same amount of gold. This completely broke the speculative manipulation of money, and a panic was averted. During the height of the panic there were no quotations for money. Among the failures of the week were Northrup, Chick & Co., bankers, the Glenham Woolen Manufacturing Co., Paton & Co., dry goods, George Bird, Grinnell & Co., stock brokers, Hoyt, Sprague & Co. and A. & W. Sprague. The banks suspended their weekly statements, and they were not resumed until late in November.