Browsing "Aftermath: The Gilded Age"

Credit Mobilier's Gentlemen Thieves

With Southern conservatives absent from the United States Congress after the war, Whig/Republicans had free rein for legislation and schemes to benefit the corporate interests which kept them in power.  Thus the Northern marriage of government and corporations gave birth to public treasury-raiding schemes like the Credit Mobilier scandal, and all under the watchful eye of President U.S. Grant.

Bernhard Thuersam, www.circa1865.org

 

Credit Mobilier’s Gentlemen Thieves

“The looting of the Erie Railroad was accomplished with the help of the easily corruptible legislatures of only two States, New York and New Jersey. It was a fairly simple business. But to loot the immense federal project of the Union Pacific Railroad required far more sophisticated talents. This monumental piece of thievery involved United States representatives and senators. It involved cabinet officers, the Vice-President of the United States, and a future President. The loot ran to approximately forty-four million dollars. It was removed almost painlessly from the Union Pacific’s coffers by a trick outfit with a fancy French name, the Credit Mobilier.

The Union Pacific was sponsored and financed by the United States. The purpose of the Credit Mobilier was to take over the contract for building the road. Stockholders of both companies were identical. They proceeded to contract with themselves to build the road at a cost calculated to exhaust the resources of the Union Pacific. The so-called profits were to be divided among Credit Mobilier stockholders.

Prominent in Credit Mobilier were Oakes and Oliver Ames, brothers of Easton, Massachusetts, who had inherited a business . . . [and the] Hon. Oakes Ames was a representative of the old Bay State in Congress.

From the day it was whelped, the double-jointed money-making machine worked perfectly. As the tracks of the Union Pacific pushed across the Great Plains, the Credit Mobilier collected the enormous bounty granted to the line from the public purse and domain. Mile upon mile the railroad was systematically stripped of its cash, which reappeared almost simultaneously as dividends for the happy stockholders of Credit Mobilier. It was, as the Hon. Oakes Ames told his comrades in the House, “a diamond mine.”

Yet the gentlemen-thieves of Credit Mobilier had a falling out when two factions fought for control; and the warfare gave those senators and congressmen who were not involved the courage to demand an investigation of the Union Pacific-Credit Moblier situation.

In an effort to forestall just such a possibility, the Credit Mobilier officers had been distributing free stock in the House and Senate, and elsewhere. But Congress was at last forced to act, and the revelations of its investigating committee . . . were so appalling that “all decent men trembled for the honor of the nation.”

No one was more hopelessly involved in the scandal than Vice-President Schuyler Colfax . . . except of course, Representative Oakes Ames of Massachusetts . . . along with Representative Brooks, also of Massachusetts . . .

Although the Congressional investigation resulted in an almost complete official whitewash, it did leave strong doubt in many minds regarding the character of such eminent men as James A. Garfield, James G. Blaine, and almost a score more.”

(The Age of the Moguls, Stewart H. Holbrook, Doubleday & Company, 1953, pp. 49-50)

 

Democracy Controlled with Machine Money

Republican party manager and future Senator Mark Hannah spent vast sums to ensure the election of William McKinley to the presidency in 1896, and was known as McKinley’s “political master.” It  was common in the postwar for the Republican president to have little or no say in selecting their own cabinet as these positions were already promised to party hacks and wealthy campaign contributors.  So desperate were the Republicans to maintain political hegemony after 1865 that only Democrat Grover Cleveland briefly served two terms before Woodrow Wilson in 1912.

Bernhard Thuersam, www.circa1865.org

 

Democracy Controlled with Machine Money

“[William Howard] Taft’s career would owe much to Mark Alonzo Hanna’s control of Ohio politics. Hanna, a former grocery clerk in Cleveland, had become a great merchant whose fleets transported tonnages of coal and iron ore along the Great Lakes. He was often portrayed in the press as a bully, smoking a big cigar, drinking whiskey, and stamping on the skeletons of working class women and children.

A big man, he was once described as looking like a “well-fed merchant prince from an old Dutch masterpiece.” Above all, he was the new man in party politics, the businessman who constructed a well-run machine that forced out the political adventurers who had come into Ohio after the Civil War and who were often personally corrupt and willing to prey on the rich as well as the poor.

Once Hanna became wealthy, he turned over his business to his brother and concentrated all his efforts on creating the “business state.” As he once remarked to a group of dinner companions, “All questions of government in a democracy [are] questions of money.” Eventually he became chairman of the Republican National Committee, and the most powerful boss in Republican politics. His signal triumph was putting Ohio’s governor William McKinley into the presidency in 1896, and a year later he himself served as a senator from Ohio until his death in 1904.

Will Taft was not particularly close to Hanna, but after Hanna became the dominant force in Ohio politics after 1888, Taft was responsive to the new order and backed McKinley. A telling factor that connected the Taft family to Hanna was the willingness of Taft’s brother Charles to join a “syndicate,” organized by Hanna to pay off McKinley’s debts when the governor found himself in serious trouble after endorsing large sums of notes owned by a ruined business associate. (Several future cabinet members and ambassadors were also in the “syndicate.”)

Under Hanna’s direction, political professionalism was allied to financial capitalism, whose mantra was high tariff protectionism for industry coupled with “sound money,” tying the dollar to gold. Under these conditions, foreign monies soon flowed into the United States, making the country independent of European capital markets and one of the great creditor nations of the world.”

(1912, Wilson, Roosevelt, Taft & Debs, The Election That Changed the Country, James Chace, Simon & Shuster, 2004, pp. 24-25)

Lincoln's Political Millenium

Southern conservative M.E. Bradford saw Lincoln as the politician he was – one who used the abolitionist movement as a partisan tactic to destroy the Democratic Party in the North and pursued Alexander Hamilton’s dream of a commercial empire. The Northern military victory enabled Lincoln’s to break with the original Constitution and implement a new interpretation with the support of fellow revolutionaries.

Bernhard Thuersam, www.circa1865.org

 

Lincoln’s Political Millenium

“Lincoln’s personal opinions about and his actual public policies toward African Americans are evidence, according to Bradford, that partisan politics were behind Lincoln’s high-sounding rhetoric . . . His claim that a nation half free and half slave cannot endure in spite of a historical record to the contrary, the Black Codes of his home State of Illinois, the racist attitudes of his Northern electoral base, his support for recolonization of African Americans to Liberia, selective emancipation, and the plight of freedmen overall (at the Hampton Roads Conference of 1865 Lincoln is quoted as saying they can “root, hog, or die”) give an empty ring to his rhetoric of universal human rights.

As Bradford poignantly remarked, “For the sake of such vapid distinctions he urged his countrymen to wade through seas of blood.”  . . . [Can] one reasonably assume that Lincoln was zealously obsessed with the pursuit of power for a just cause and that the “seas of blood” that flowed during his tenure were justifiable consequences of his “new birth of freedom” he alluded to in his Gettysburg Address? Or, was there a more mundane motive behind Lincoln’s policies, with the ensuing war unexpectedly getting out of hand?

There can be little question that Lincoln and his Republican supporters had a mundane public policy agenda that overshadowed the rhetoric and legacy of their tenure in power. That agenda was Hamiltonian, insofar as it required a substantial transfusion of power from the States to the national government, in order for the latter to more effectively promote the style and pace of development toward a commercial empire and the corresponding opportunities for personal and national profits that such rapid commercial development entailed.

The politically contentious issues of internal improvements, the national bank, and [tariff] protectionism made giant strides on behalf of national supremacy during the Lincoln Administration. In fact the Gilded Age can be traced to the political economy of those Republicans who controlled the national government in the early 1860s:

“It is customary to deplore the Gilded Age, the era of the Great Barbeque. It is true that many of the corruptions of the Republican Era came to a head after Lincoln lay to rest in Springfield. But it is a matter of fact that they began either under his direction or with his sponsorship. Military necessity, the “War for the Union,” provided an excuse, and umbrella of sanction, under which the essential nature of the changes made in the relation of government to commerce could be concealed [Bradford, Remembering Who We Are, 146].”

Lincoln’s rhetoric in the Gettysburg Address reveals the importance of a Republican Party committed to the fulfillment of Hamilton’s dream of a commercial empire. The emergence of a commercial empire within the conceptual framework of Lincoln’s incorporation of the Declaration [of Independence] into the Constitution (or vice versa) would result in the political millennium he alludes to in the Gettysburg Address.

And Lincoln had good reason to be optimistic. During the Republican Party’s Civil War and postbellum dominance, the use of government as a means toward commercial expansion and personal aggrandizement was shifted into overdrive.

[And] Lincoln’s expansive interpretation of presidential powers made him the most imperial president in American history, thereby setting a dangerous precedent for predisposed successors. The incarceration of approximately twenty-thousand political prisoners, the closing of over three hundred newspapers, the interruptions of State legislatures, the blockade of the South, the unilateral suspension of habeas corpus, explicit and implicit defiance of the Supreme Court, the sanctioning of the creation of West Virginia, private property seizures, and electioneering/voting irregularities have all been rationalized as necessary war measures.

[Bradford suggests] the evidence indicates that “in this role the image of Lincoln grows to be very dark – indeed, almost sinister . . . Thousands of Northern boys lost their lives in order that the Republican Party might experience rejuvenation, to serve its partisan goals.”

(A Southern Reactionary’s Affirmation of the Rule of Law, Marshall L. DeRosa; A Defender of Southern Conservatism, M.E. Bradford and His Achievements, Clyde N. Wilson, editor, University of Missouri Press, 1999, pp. 111-113)

Revolutionary Rule of the Industrialists

With conservative Southern statesmen of the past absent from the halls of the United States Congress, “fraud and trickery were the revolutionary devices resorted to by Northern industrialists to complete the job begun by Grant’s cannon and bayonets.” Presidents became the creation of the wealthy classes, with “a maze of frauds and trickeries . . . [extending] from the Civil War to the end of the century.”

Bernhard Thuersam, www.circa1865.org

 

Revolutionary Rule of the Industrialists

“Government has been the indispensable handmaiden of private wealth since the origin of society. And far from having embellished history with significant exception, the government of the United States, without the camouflage of custom or tradition, ritual or dogma, Church or Aristocracy, has actually done more to prove the truth of this generalization than have all the governments in Europe.

So perfect, so thorough, has been the collaboration of politics and private fortune since the founding of the American colonies that it is difficult to ascertain from the date of any given period where political intrigue on behalf of specific private interest has terminated.

The Constitution, written in the furtive atmosphere of a coup d’etat during secret deliberations of a convention called merely to regulate commerce, was received with hostility by the populace, which forced the precipitate addition of the first ten amendments. The document provided for a government of ostensible checks and balances, (but really, as a wit has said, of all checks and no balances), and at the same time guaranteed the utmost freedom, unchecked and unbalanced, to propertied interests. “The result . . . is a modern government that is about five times as inflexible, and much less democratic, than the government of Great Britain.”

Through the decades leading to the Civil War, the fuel of political strife was provided by the propertied classes . . . [and] when a series of political defeats at the hands of Northern industrialists and merchants eventually became ominously foreboding, the Southern planter faction did not hesitate to draw the sword. The Civil War began as a counter-revolution, but ended as a revolution.

The triumph of the North in the war, however, forever dislodging the landed gentry from political power, brought sweeping authority to the tariff-minded industrialists – authority that has since been seriously disputed . . . only by the Western agrarians under William Jennings Bryan . . . From 1865 to 1896 the essentially revolutionary rule of the industrialists was unbroken.

Marcus Alonzo Hanna, commissar extraordinary of John D. Rockefeller, became the political architect of the new era, whose unique characteristics have been a tremendous drive into foreign markets, unprecedented industrial consolidation, expansion of the mass-production industries to a staggering degree, and unexampled application of technology to production, and the fateful gravitation of the nation’s producing resources as well as the political apparatus into the hands of bank capitalists.

Before Hanna the unconstitutional control by the industrialists had been furtive, half ashamed, and vehemently denied even in the face of the most damning evidence; under Hanna the control was for the first time brazenly admitted and, cynically or sincerely, justified on the pretense that it was in the national interest.”

(America’s Sixty Families, Ferdinand Lundberg, Halcyon House, 1937, pp. 50-53)

Saving the British Empire

 

Though American political leaders claimed high moral purpose in our entry into war in 1917, American banks did not want their deeply in debt clients to lose and without ability to repay the  principal and interest. Within five years of the 1934 Johnson Act mentioned below, a bankrupt Britain was engaged in yet another war, more deeply in debt and in need of saving once again.

What should have been an armistice between exhausted European combatants in 1917, American intervention at the urging of the media, moral crusaders, banks and munitions dealers bailed out the British and French.  This ensured the rise of a German nationalist who would seek retribution, and more American men buried on European soil.

Bernhard Thuersam, Circa1865

 

Saving the British Empire

“The First World War marked the death of many human values, and if Christianity was not numbered among the fatalities it certainly suffered injuries from which it has not recovered. Another faith shattered on the battlefield was the faith that the [British] Empire had in the Motherland.

[General Alexander] Haig had ordered too many Australians, New Zealanders and Canadians to certain death for their countrymen ever again to trust their regiments to the direct command of Whitehall.

The Australian Official History quotes one officer saying his friends were “murdered” through “the incompetence, callousness and personal vanity of those in high authority.” Of the [Battle of the] Somme, another Australian officer is quoted as saying “a raving lunatic could never imagine the horror of the last thirteen days.”

Mammon too was among the wounded. In July 1917 Britain’s chancellor of the exchequer had admitted to the Americans that Britain’s financial resources were virtually at an end. The United States began lending the British $180 million per month. By war’s end Britain’s national debt had risen from 650 million [pounds] in 1914 to 7,435 millions [pounds] of which 1,365 millions was owed to the USA.

This provided an unbearable postwar burden for the taxpayer, and in 1931 Britain defaulted on its debt. Congress responded with the Johnson Act of 1934; Britain’s purchases would now have to be paid for in cash.”

(Blood, Tears and Folly, Len Deighton, HarperCollins, 1993, pp. 129-130)

Gilded Age Workers Endure

In 1876, the North had been free from the political and moral restraint of Southerner leaders for 15 years. This morally-superior North had been very concerned about the welfare of black slaves down South not long before, and who at the same time worked children and young women in unhealthy factories for fourteen hours a day. A decent and moral people need no laws to protect young children from abuse such as this, and yet Sumner, Thad Stevens, Garrison, Greeley, all the various abolitionists previously concerned about the plight of those cared for from cradle to grave, remained silent.

 

Bernhard Thuersam, Circa1865

 

Gilded Age Workers Endure:

 “Factory Life:  For those lucky enough not to be out of work, factory conditions were far from ideal. Skilled workers, who had earned $4.50 to $5 per day in 1873, in 1876 had their wages reduced to between $1.50 and $2. Nevertheless, the New York times chided workers for not accepting wage reductions necessitated by the 1873 Panic; why should skilled laborers who “earned liberal wages…sullenly refuse to accept any reduction…It seems almost incredible than men should be capable of such blind folly.”

Child Labor: In 1876 Massachusetts passed a child-labor law, but child-labor laws were not enforced and had no effect until years later. Thus in 1876, children worked long, hard days and were often involved in very dangerous work. Harper’s Weekly stated:

“Recent legislation in Massachusetts has introduced new regulations for protecting young children from overwork and neglect in factories and workshops. A law which went into operation last March [1876] forbade, under penalty of from twenty to fifty dollars, the employment in any manufacturing, mechanical, or mercantile establishment of children under ten years of age at all, and of children under fourteen, unless during the preceding year the child has attended school at least ten consecutive weeks.”

John F. Weir, “Forging the Shaft, 1877:

“When a workingman was injured in shop, mine or on the railroad, the claim agent of the employing company would at once present himself with an instrument of agreement for the injured man and his wife, if he had one, to sign,” wrote Terrance Powderly. “By the terms of the instrument the company would be released from all responsibility in consideration of the payment of a few dollars. Let me tell you of one such case out of the hundreds I witnessed. A coal miner, a neighbor of mine, had his back injured through a fall of rock in the darkness of the mine. The claim agent called to see him; he asked for time to consider and sent for me. He had a wife and children, his means were meager. I advised against signing a release, and here is what he said: “I am buying this house from the company. If I don’t sign this release, I can never get a day’s work under that company or any other round here, for if I get well I’ll be blacklisted. When my next payment on the house falls due, or the interest not paid we’ll be thrown out on the street. With no work, no money, no friends, what will my wife and babies do? . . . ”

(America in 1876, The Plight of the Poor, Lally Weymouth, Vintage Books, 1976, page 195)

 

 

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