SECTION I: HISTORY AND CONSTITUTION (cont.)
The Reconstructed Nation: 1865-87
305. The Federal Government had begun the war with an honest expression of its determination not to interfere with slavery; the progress of the war had forced it into passing the 13th amendment in 1865, abolishing slavery in the United States for ever. In much the same way circumstances were driving it into interference with what had always been regarded as the rights of the States. In the latter case the process was certain to find an obstacle in Lincolns successor, Johnson. He had been elected, like Tyler, to the comparatively unimportant office of vice-president in order to gain the votes of War Democrats; and now the dominant party found itself with a president opposed to its fundamental views of the powers of the Federal Government. The case was worse for Johnson, since the war had built up a new party. Until 1861 the Republican party had been a mixture of a strong Whig element and a weak Democratic element; now it was a real party, and demanded complete loyalty from its leaders, not skilful compromises between its two elements. Just as in the cases of Seward, Summer, Trumbull, and very many of its original leaders, the party was now ready to repudiate its leaders if they did not come up to its ideas.
306. The universal idea in 1861 had been that the States were to be forced to return with all their rights unimpaired. This original notion was seriously limited by the Emancipation Proclamation of 1862-63; as soon as the president opened a door, by demanding a recognition of the abolition of slavery as a condition precedent to the return of a state, the way was just as open for the imposition of whatever conditions Congress as well should think essential to an abiding peace. But Congress was not called on to face the difficulty for some time. President Lincoln went on to reorganize civil government in Virginia, Tennessee, Arkansas, and Louisiana, by giving amnesty to such voters as would swear to support the Government of the United States and the abolition of slavery, and recognizing the State officers elected by such voters. When Johnson succeeded to the presidency in April 1865 he had a clear field before him, for Congress was not to meet until December. Before that tie he had reorganized the governments pf the seceding States; they had passed the 13th amendment (§ 125); and they were ready to apply for readmission to Congress. Tennessee was readmitted in 1866 by Congress; but the other seceding States were refused recognition for a time.
307. It was not possible that slave-owners should pass at one step from the position of absolute masters to that of political equality with their late slaves. Their State legislation assumed at once a very paternal character. Every means was taken, in the passage of contract and vagrant laws, and enactments of that nature, to force he freedmen to work; and the legislation seemed to the Northern people a re-establishment of slavery under a new name. Johnson had a very unhappy disposition for such a state of affairs; he had strong convictions, great stubbornness, and a hasty, almost reckless, habit of speech. As soon as it became clear that Congress did not intend to readmit the Southern States at once he began (February 1866) to denounce Congress in public speeches as "no Congress" so long as it consisted of representatives from but part of the States. The quarrel grew rapidly more bitter; the Congressional election of 1866 made it certain that the Republicans would have a two-thirds majority in both houses through the rest of Johnsons term of office; and the majority passed over the veto (§ 113) every bill which Johnson vetoed. Thus were passed the Fredmens Bureau Bill (1866) for the emancipated Negroes, the Act for the admission of Nebraska, with equal suffrage for blacks and whites (1867), the Tenure of Office Bill, making the assent of the senate necessary to removals, which had always been regarded as within the absolute power of the president (1867), and the Reconstruction Acts (1867). The increasing bitterness of the quarrel between the president and the majority in Congress led to the impeachment of the president in 1868 for removing Stanton, the secretary of war, without the assent of the senate; but on trial by the senate a two-thirds majority for conviction could not be obtained, and Johnson served out his term.
308. The Reconstruction Acts divided the seceding States into military districts, each under command of a general officer, who was to leave to the State Governments then in existence such powers as he should not consider to be used to deprive the Negroes of their rights. The State Governments of the seceding States were to be considered provisional only, until conventions, elected without the exclusion of the Negroes, but with the exclusion of the leading Confederates, should form new or "reconstructed" State Governments, on a basis of manhood suffrage, and their legislatures should ratify the 14th amendment the constitution (§ 125). This amendment, passed by Congress in 1866, was in five sections, but had three main divisions. (1) All persons born or naturalized in the United States were declared citizens of the United States and of their States, and the States were forbidden to abridge the "privileges or immunities" of such citizens. This was to override the Dred Scott decision (§ 249). (2) The representation of the States in Congress was to be reduced in proportion to the number of persons whom they should exclude from the elective franchise. This was to induce the States to adopt Negro suffrage. On the other hand, specified classes of Confederate officeholders were excluded from office until Congress should remove their disabilities. (3) The war debts of the Confederacy and the seceding States were declared void for ever, and the war debt of the United States was guaranteed. Congress was given power to enforce all these provisions by "appropriate legislation."
309. The presidential election of 1868 sealed the process of reconcstruction. The Democrats opposed it, and nominated Seymour (p. 790) and Blair; the Republicans endorsed it, and nominated Grant (p. 788) and Colfax (p. 788). Virginia, Mississippi, and Texas were the only States of the late Confederacy which were excluded from this election; all the rest had been reconstructed, and readmitted by Congress in June 1868; and the Republican candidates carried twenty six of the thirty-four voting States, and were elected. The legislatures of the reconstructed States, representing mainly the Negroes freed by the war, were devoted supporters of the new order of things; and their ratifications secured the necessary three-fourths of the States to make the 14th amendment a part of the constitution (1868). Congress went on to propose a 15h amendment, forbidding the United States, or any State, to limit or take away the right of suffrage by reason of race, color, or previous condition of servitude. This was ratified by the necessary number of States, and became a part of the constitution (1870). Ratification of it was imposed as an additional condition on Virginia, Mississippi, and Texas, which had rejected the original terms of readmission. They accepted it, and were readmitted (1870). It was not until January 30, 1871, that all the States were once more represented in Congress.
310. The foreign affairs of the United States during this period took on a new appearance. The countrys promptness in disarming at the end of the war put it under no disadvantage in dealing with other nations; power and pacific intentions were united in the act. The successful completion of the Atlantic cable (1866) gave a celerity and directness to diplomacy which was well suited to American methods. The tone of American complaint at the continued presence of French soldiers in Mexico grew more emphatic as the success of the war became assured; and, at the end of the war, significant movements of troops to the Mexican frontier led the French emperor to withdraw his support of Maximilian. Alaska was purchased from Russia in 1867. The treaty of Washington (1871) provided for the settlement by arbitration of the "Alabama" disputes, of the northwestern boundary, and of the claims of Canada for damages for use of the shore by American fishermen. The capture by a Spanish man-of-war of the "Virginius," a vessel claiming American nationality, and the execution of a part of her crew (1873), threatened to interrupt friendly relations with Spain; but the rupture was averted by proof that the vessels papers were false. Chinese immigration had grown largely on the Pacific coast. There were riotous attacks on the Chinese by worthless white men; and many others did not feel that that they were a desirable political addition to the population of the United States. A treaty with China was obtained (1880), by which the limitation of Chinese immigration was allowed. So, also, the raising of money in the United States of assist the destruction of private and public buildings in England by some of the more desperate of the Irish people (1885) gave England reason fore discontent. But the American Government had no power in the premises. The matter was under the exclusive jurisdiction of the State Government; and, as soon as these began to apply the common law to the case, the "dynamite subscriptions" disappeared. Further difficulties made their appearance as to the Canadian fisheries (1886-87). When American fishing-vessels bought ice or bait in Canadian ports, the Canadian Government seized and condemned them, on the ground that such purchase were acts "preparatory to fishing in Canadian waters." Retaliatory measures were suggested, but no full retaliatory system has been adopted, nor has the dispute yet been settled (1887).
311. The prosperity of the United States knew no cessation. It had been found that gold was not confined to California. In 1858 it had been discovered in Colorado, at Pikes Peak. It has since been found in most of the Pacific States and Territories. Silver, a metal hardly known hitherto in the United States, was discovered in Nevada (1858); and this metal also has been found to be widely scattered over the Pacific coast. Petroleum was found in north-western Pennsylvania (1859), and the enormous drain of this oil from the earth still continues without apparently affecting the reservoir. The coal-fields of the country began to be understand clearly. Taylor, in 1848, thought that the coal-area of the United States amounted to 133,000 square miles; it was estimated in 1883 at over 200,000 square miles. Natural gas has since come into use, and has made production of many kinds cleaner, more effective, and cheaper. Manufactures and every variety of production have increased with cumulative rapidity. In 1860 the largest flouring mill in the United States was in Oswego, N.Y. the next two in Richmond, Va., and the fourth in New York city; and the capacity of the largest was only 300,000 barrels a year. In 1887 the flour production of Minneapolis, almost unknown in 1860, is 100,000 barrels a week or 5,000,000 barrels a year. The absolute free trade which prevails between the States has resulted in a constant shifting of centers of production, a natural arrival at the best conditions of production, and an increasing development. Mulhall, perhaps safer as a foreign authority, gives the total manufactures of the United States as £682,000,000 in 1870 and £888,000,000, in 1880, Great Britain coming next with £642,000,000 in 1870 and £758,000,000 in 1880. He estimates the accumulated wealth of Great Britain at £8,310,000,000 in 1780 and £8,960,000,000 in 1880, an increase of £650,000,000 and that of the United States at £6,320,000,000 in 1870 and £7,880,000,000 in 1880, an increase of £1,560,000,000. If he had followed the American census returns his value for 1880 would have been 25 per cent. larger. In 1870 the United States stood third in wealth; in 1880 they had passed France in the race, and stood at least second. The country whose population has been developed within 280 years does already one-third of the worlds mining, one-fourth of its manufacturing, and one-fifth of its agriculture; and at least one-sixth of the worlds wealth is already concentrated in the strip of territory in central North America which is the home of the United States.
312. Of the 290,000 miles of railroad in the world, probably 135,000 are in the United States. Of the 600,000 miles of telegraph lines, more than a fourth are in the united States; and the American telephone lines are probably still longer in the aggregate. The new development of the America railways began in 1869, when Vanderbilt consolidated the Hudson River and New York Central Railroads and formed a trunk line to the west. It was undoubtedly hastened by the completion of the Central Pacific line in that year, and it has resulted in a universal tendency to consolidation of railways and the evolution of "system," under combined managements (§ 273). The coincident introduction of Bessemer steel rails, the steady increase of weight carried by trains, and concentrated competition have reduced railway freight rates through the whole of this period. The average rates per ton per mile were 1.7 cents in New York in 1870 and 0.8 in 1880, 2.4 cents in Ohio in 1870 and 0.9 in 1880. The persistent effects of such a process on the industries of so large a country can hardly be described.
313. The extraordinary stimulus given to a new territory, if it has any basis for production, by the introduction of a new railway, is also quite beyond description. Most of the Western railways have had to build up their own traffic; he railway has been built, and the sales of lands have afterward brought into existence the towns and even States which are to support it. Nebraska was described in the Government reports f 1854 as a desert country, hopelessly unfitted for agriculture, and the maps of the time put it down as a part of the "Great American Desert." It is now one of the leading agricultural States of the Union, with a population of a million; and Dakota is waiting only for the legal form of admission to become a State. The profits of railway construction, the opportunities for skillful management in the development of territory, and the spice of gambling which permeated the whole were great temptations to Americans to embark in the business. The miles of railway constructed per annum, which had been from 1000 to 3000 (averaging about 1500 miles) for the period 1859-68, rose to 4615 miles in 1869 to 6070 miles in 1870, and to 7379 miles in 1871. Masses of laborers were brought into situations from which they could not easily escape; and masses of capital were locked up in railways which were finally unproductive, and resulted only in total loss. The result was the financial crisis of 1873, from which the country has hardly yet fully recovered.
314. For the first time in the history of the United States, the South has taken a normal part in all this development (§ 304), though it was not until about 1885 that Southern progress was fully understood by the rest of the country. Staggering under a load of poverty and discouragement which might have appalled any people, with the addition of social problems which no other country has solved with any great satisfaction, the Southern people began to feel for the first time the healthy atmosphere of free labor. The former slave is a free laborer, and the white man has gone to work; white labor produced 10 per cent. of the cotton crop of 1860 and 55 per cent. of that 1886. The last eighteen slave labor crops of cotton amounted to 51,000,000 bales; the first eighteen free-labor crops amounted to 75,000,000 bales. And the latter figures are deceptive from the fact that, in their period, the South had turned a large percentage of its labor and capital into industries which had not been possible, only longed for, under the slave system. Cotton seeds were waste under slavery: 600,000 tons of them were crushed in 1886, giving an entirely new production of $12,000,000 per annum of cotton-seed oil. Southern railways, which had made but a meagre comparison with those of the North and West in 1860, began to assume something of the network appearance of the latter; they too began to concentrate into "systems," to reduce rates and improve service, and to develop new territory. Southern manufactures began to affect Northern markets; cotton-mills in the South began to reap the advantages of their immediate contiguity to their raw material. Pennsylvania ironmasters were startled as their product was undersold in the Philadelphia markets by Southern iron; and the great mineral fields of Tennessee and northern Georgia, Alabama, and Mississippi, over which Shermans and Hoods men had so lately been tramping and fighting, were brought into notice and development. Wonderful as the general progress of the United States has been during this period, the share of the new South under free labor has been one of the most remarkable phases in it.
315. The population rose from 31,443,321 in 1860 to 38,558,371 in 1870 and 50,783 in 1880. At the normal rate of increase up to 1860 one-third for each ten years the increase from 1860 to 1870 should have been about ten and a half millions, instead of seven millions. The difference represents the physical influences of the civil war. This influence was shown most plainly in the Southern States notably in South Carolina and Alabama, which had hardly any increase, and a real decrease in adult males. It should also be noticed that natural checks on the increase of population are plainly perceptible in the Atlantic States in 1880, and were probably in operation, to a less extent, in 1860-70, though they were made indistinguishable by the war. The increase in 1870-80 at the former normal rate should have been a little over a million more than it was. The tendency will be more evident in future, but it ought to be allowed for in 1860-70.
316. The material prosperity of the country brought its own disadvantages. The sudden development of wealth gave the country for the first time a distinct wealthy class, not engaged in production of any kind, and very often having none of the characteristics of the people who are the real strength of the country. The inevitable extravagance of Government management aggravated by a period of civil war, when the people were disposed to excuse almost any error of detail for which good motives could be shown, had its reflex influence on the people, as well as on the Governments of the nation, the States, and the cities. An era of legal tender paper currency (§ 272), legally unvarying in value, but showing its effects in the constant shiftings of price in every other thing, brought uncertainly as to every article, price, and transaction. The people had learned that "unhappy lesson- that there is an easier way to make a dollar than by working for it"; and it was not long before speculation among the people called out its correlative of dishonesty among Government officials. Money was lavished on the navy; in expenditures on that branch of the service the United States stood third or fourth among the nations, while the effective results were discouraging. "Rings" of politicians obtained control of the larger cities. The "Tweed ring" in New York city was overthrown in 1872; but New York was not the only city of corruption: Philadelphia, Chicago, and almost every city large enough to have fat opportunities for fraud and to deprive universal suffrage of the general acquaintance of neighbors, each fell under control of its "ring," and was plundered without mercy. Corruption even attacked judiciary; for the first time American judges were found who were willing to prostitute their positions, and the members of the "Erie ring" were able to hold their ill-gotten railroads because they owned the necessary judges. A "whisky ring" of distillers and Government employees (1874) assumed national proportions, and robbed the Government of a large percentage of its internal taxation on spirits. The "star-routes," in which the contracts for mail transpiration were altered at the discretion of the contractor and the Government after the competition for the contracts had been decided, gave rise to as great scandals through the connivance of Government agents with dishonest contractors. No one who lived in this period will wonder at the pessimistic tone of the public speeches which marked the hundredth year of the republic (1876).
317. The republic had life and vigor in it, and its people showed no disposition to despair before the mass of corruption which confronted them. The newspapers attacked the star-route contractors, and drove the Government into an attack upon the ring, which broke it up. The efforts of private individuals, backed by newspapers, broke up the Tweed ring, banished or imprisoned its members, expelled the corrupt judges from the bench, and carried destruction into the widespread whisky ring. Local rings were attacked in city after city, were broken up and revived again, but always found the struggle for existence more and more desperate. The people have shown themselves almost vindictive in driving out of public life any who have been proved dishonest: when the "Credit Mobillier," the construction company of the Central Pacific Railroad, was shown to have bribed or influenced members of Congress to vote for it, there is ground for believing that the punishment was distributed more widely than justice demanded; and it has come to be recognized as a decided disadvantage for a public man to be known as shrewd rather than honest.
318. The completion of reconstruction in 1870, and the adoption of the 15th amendment (§ 125), made Negro suffrage the law of the land, even in the Southern States. The Southern whites were the tax-payers; the Negroes were the majority; and the Negro legislatures proved hopelessly corrupt. In one or two States the whites recovered control of their States by hiring their Negroes to remain at home on election day, or by threatening them with discharge for voting. Failing in this line of action in other States, the whites fell into a steady tendency towards violence. A widespread secret society, the "Ku Klux-Klan," beginning with the effort to overawe the Negro population by whipping and arson, was rapidly driven into political murders. The reconstructed Governments resisted as best they could. They tried to use the force of the State against the offenders; but the best part of the force of the State was the white element, which was most deeply involved in the resistance to the legal Government. On the application of the legislature of a State, or of the governor if the legislature cannot be summoned, the president may send Federal troops to suppress rebellion (§ 125). The reconstructed Governments called on President Grant for such aid, and received it. But the whites were the stronger race, struggling for property, and knowing well the letter of the law. They refused to resist the smallest atom of Federal authority; a large force of them, mainly old Confederates and excellent fighting men, who had seized the city of New Orleans and overturned the reconstructed Government (1874), retired quietly before a detachment of United States troops, and allowed the State Government to be restored. The little United States army in the South was kept busy. Wherever it appeared, resistance ceased at once, breaking out at the same time elsewhere. The whites had to gain but a single victory; as soon as they secured a majority in a State legislature they so arranged the election laws and machinery that a Negro majority was thenceforth impossible. The legislatures and governors, with nearly all the local offices, were then Democrats; calls for Federal troops ceased at once; and the Republicans of the North, the dominant party of the nation, were reduced to the necessity of seeing their Southern vote disappear, without the ability to do anything to check the process. As the election of 1876 drew near, the reconstructed Governments of all the seceding States, except Florida, South Carolina, and Louisiana, had become Democratic.
319. Congress, which was controlled by the Republicans, had not been idle. The Civil Rights Acts (1870) provided that fines and damages should be imposed for any attempt to violate or evade the 15th amendment or for conspiracy to deprive the Negroes of the right of suffrage. The Election Act (1870) exercised for the first time the right to alter or amend State laws as to Federal elections which the constitution had given to Congress. This was strengthened by another Act in the following year. The Force Act (1871) went farther than the instincts of the American people could follow Congress. It provided that any conspiracy or combination strong enough to deprive the Negroes of the benefits of the 14th amendment should be evidence of a "denial by the State of the equal protection of the laws" to all its citizens; that the president should be empowered to use the army, navy, and militia to suppress such combinations; that, when any combination should appear in arms, the act should be a rebellion against the United States; and that, in such case, the president should have power to suspend the writ of habeas corpus in the rebellion territory (§ 305).
320. It was plain that the Southern whites meant to govern their States with little present regard to the last two amendments, and that it was impossible to defeat their purpose without cutting up the State system in the South by the roots. Even in 1872 a strong element of the Republican party thought that the party policy had gone too near the latter course. It held a convention of its own, under the name of the Liberal Republican party, and nominated Greeley and Brown. The Democratic party, anxious to save local government and State rights in the South, but completely discredited by its opposition to the war, accepted the Liberal Republican platform and nominations. Its action was in one sense a failure; Greeley had been one of he bitterest and angriest critics of the Democratic party, and so many of the Democrats refused to vote for him that his defeat was hardly ever doubtful. The Republicans denominated Gant, with Henry Wilson for vice-president; and they received the votes of 286 of the 349 electros, and were elected. The action of the Democratic party in adopting the Liberal Republican platform, and thus tacitly abandoning its opposition to reconstruction, brought it back into the lines of political conflict and made it a viable party.
321. The election of 1876 was the first really contested election since 1860. The Democrats nominated Tilden and Hendricks (p. 789) and the Republicans Hayes and Wheeler (p. 790). The platforms showed no distinct grounds of party struggle, except that of the ins and the outs. The election turned on the votes of the Southern States in which the reconstructed Governments still held their own or claimed to do so; and the extra-constitutional device of an electoral commission resulted in a decision in favor of Hayes and Wheeler. As a part of the result, some arrangement had been made for the settlement of the Southern difficulties, for Grant immediately withdrew the troops from Florida, South Carolina, and Louisiana, and the reconstructed Governments of those States surrendered without a struggle. All the Southern States were now Democratic; the Negroes had every right but that of voting; and even this was permitted to a sufficient extent to throw a veil over the well-understood general state of affairs. Colorado, the thirty-eight State (and the last, up to 1887), was admitted in 1876 and took part in this election.
322. The Hayes administration was a welcome period of calm. The main subject of public interest was monetary, and much of it was due to the change of conditions during and since the war. Inorder to sell bonds during the war it had been necessary, not only to make the interest very high (in some cases 7.3 per cent.), but to sell them for the Governments own depreciated paper. The Act of 1869, to restore the public credit, pledged the faith of the United States that the bonds should be paid in coin. This had seemed very inequitable to some, but was acquiesced in. When the price of silver had fallen, in July 1876, to 47d., a ratio for gold and silver of 20:1, and it was found that an Act of 1873 had dropped the silver dollar from the coinage, the people jumped to the conclusion that this was a trick of the bondholders to secure a further advantage in the payment of their bonds in the more valuable metal only. It was useless to urge that for forty years before 1873 the silver dollar had been token money, and that its average coinage had been only about $150,000 a year; the current was too strong to be resisted, and Congress passed (1878) an Act to restore the silver dollar to the coinage, to compel the coinage of at least $2,000,000 in silver per month, and to make the silver dollar legal tender to any amount. The Act is still (1887) in force, in spite of the recommendations of successive presidents and secretaries of the treasury for its repeal. The operation of refunding had been begun under the Act of July 14, 1870, authorizing the issue of 5, 4 _ and 4 per cent. bonds, to take he place of those at higher interest which should be payable. This first refunding operation was completed in the year of resumption of specie payments (1879). This issues were $500,000,000 at 5 per cent. $185,000,000 at 4 _ and $710,345,950 at 4, reducing the annual interest charge from $81,639,684 to $61,738,838. One secret of the success of the Government and its high credit was the persistence of the people inn urging the payment of the national debt. The work was begun as soon as the war was ended; before all the soldiers had been sent home $30,000,000 of the debt had been paid, and hardly a month has passed since without some reduction of the total amount. Between 1865 and 1880 the debt fell from $2,850,000,000 to about $2,000,000,000; and, as it decreased, the ability of the Government to borrow at lower interest increased. About $200,000,000 of 6 per cent, bonds fell due in 1881, and the secretary of the treasury (Windom) took the responsibility of allowing the holders of them to exchange them for 3 _ per cent. bonds, redeemable at he pleasure of the Government. This privilege was extended to about $300,000,00 of other bonds, giving a saving of $10,000,000 interest. The 4 _ per dent. Bonds of 1870-71 ($250,000,000) are not redeemable until 1891, and the 4 bonds ($738,000,000) until 1807. Roughly stated, the whole debt, deducting cash in the treasury, is under $1,400,000,000, about $1,100,000,000 being interest-bearing, the remainder non-interest-bearing, paper currency of different kinds.
323. In 1880 the Republicans nominated Garfield (p. 788) and Arthur (p. 787), and the Democrats Hancock (p. 789) and English. Again there was no great distinction between the party principles advocated. The Democrats, naturally a free-trade party, were not at all ready to fight a battle on that issue; and the Republicans, turning the contest to the point on which their opponents were divided, succeeded in electing their candidates. They were inaugurated in 1881; and the scramble for office which had marked each new administration since 1829 followed (§ 202). The power of the senate to confirm the presidents nominations had brought about a practice by which the appointment in each State were left to the suggestion of the administration senators from that State. The senators from New York, feeling aggrieved at certain appointments in their State, and desiring the prestige of a re-election by their legislature, resigned. Unfortunately for them the legislature took them at their word, and began to ballot for their successors. Their efforts to be re-elected, the caucuses and charges of treachery or corruption, and the newspaper comments made up a disgraceful scene. In the midst of it a disappointed applicant for office shot the president (July 2), and he died two months later. Vice-President Arthur succeeded him (§ 117), and had an uneventful administration. The death of President Garfield called general attention to the abominations of the system under which each party, while in office, had paid its party expenses by the use of minor offices for its adherents. The presidents power of appointment could not be controlled; but the Pendleton Act (1883) permitted the president to make appointments to designated classes of offices on the recommendation of a board of civil service commissioners. President Arthur executed the law faith fully, but its principle could hardly be considered established until it had been put through the test of a Democratic administration; and this consideration undoubtedly had its influence on the next election (1884). The Republicans nominated Blaine and Logan, and the Democrats Cleveland and Hendricks. A small majority for the Democratic candidates in the State of New York gave them its electoral votes and decided the election in their favor. They were inaugurated (1885), and for the first time in more than fifty years no general change of officeholders took place. The Pendleton Act was obeyed; and its principle was applied to very many of the offices not legally covered by it. There have been however, very many survivals of the old system, of appointment, and each of them has been met by a general popular disapproval which is the best proof of the change of public sentiment. At least, both parties are committed to the principle of civil service reform. There is a growing desire to increase the number of offices to which it is to be applied; and the principle is making its way into the administration of States and cities.
324. At home and abroad there is not a cloud on the political future of the United States in 1887. the economic conditions are not to flattering; and there are indications that a new era of struggle is opening before the country, and that it must meet even greater difficulties in the immediate future. The seeds of these may perhaps be found in the way in which the institutions of the country have met the new economic conditions which came in with the railway in 1830.
325. Corporations had existed in the United States before 1830, but the conditions, without the railway or telegraph, were not such as to give them pronounced advantages over the individual. All this was changed under the new regime; the corporation soon began to show its superiority. In the United States at present there are many kinds of business in which, if the individual is not very highly endowed, it is better for him to take service with a corporation. Individual success is growing more rare; and even the successful individuals is usually succeed by a corporation of some sort. In the United States, as in England, the new era came into a country which had always been decided in its leanings to individual freedom; and the country could see no new departure in recognizing fully an individual freedom of incorporation (§ 215). Instead of the old system, under which each incorporation was a distinct legislature act, general provisions were rapidly adopted by the several States, providing forms by which any group of persons could incorporate themselves for any purpose. The first Act of the kind was passed in Connecticut in 1837, and the principle of the English Limited Liability Act of 1855 was taken directly from it. The change was first embodied in New York in its constitution of 1846, as follows: - "Corporations may be formed under generals laws, but shall not be created by special Act, except for municipal purposes and in cases where, in the judgment of the legislature, the objects of the corporation cannot be attained under general laws." The general laws were for a long time merely directions to the corporators as to the form of the certificate and the place where it was to be deposited. The New York provisions was only a development of the principle of a stature of 1811 applying to manufacturing, but it is an instance of what was taking place all over the country.
326. The consequent freedom of corporations was also influenced by the law, as expounded by the Supreme Court of the United States in the "Dartmouth College case" (1819), whose principle has always been the object of vigorous but unsuccessful criticism. The States are prohibited by the constitution from passing any laws which shall alter the obligation of contracts. This decision held that a charter was a contract between the State and the corporation created by it, and therefore unalterable except by consent of the corporation. The States were careful thereafter the insert in all charters a clause giving the State the right to alter the charter; but the decision has tended to give judges a bias in favor of the corporations in all fairly doubtful cases. Corporations in the United States thus grew luxuriantly, guarded by the constitution, and very little trenched upon by the States.
327. American corporations have usually been well managed, and very much of the extraordinary development of the wealth of the United States has been due to them. But a corporation which holds $400,000,000 of property, owns more than one State legislature, and has a heavy lien on several others, is not an easy creature to control or limit. Wars of rates between rival corporations claiming great stretches of territory as "their own," into which other corporation must not intrude, are startling things to any people. The rise of a corporation, built upon the ruins of countless individual business concerns, and showing that it can reduce railway corporation to an obedience which they refuse to the State, is too suggestive of an imperium in imperio to be pleasant to a democracy. The States, to which the whole subject legitimately belongs, confess their inability to deal with it by leaving Congress to pass the Inter-State Commerce Act (1887), intended to stop the encroachments of railway corporations on individual rights (S 106); but the success of even this measure is still quite doubtful.
328. Still more unhappy have been some of the effects of the new regime on the relations between employers and employed. The substitution of a corporation for an individual as an employer could not but affect such relations unhappily, at least for a time; but the freedom and power of the corporate employers strained the relations farther than was at all necessary. The first clumsy attempts to control the corporation, by limiting the percentage of their profits, led to the artifice of "watering," or unnecessarily increasing, their stock. In good years the nominal dividends were thus kept down to an apparently normal percentage. When bad years, or increasing competition, began to cut down the dividends, the managers were often forced to attack the wages, or increase the duties, of their employees. The "bad years" began to be more numerous and constant after the financial crisis of 1873 had set in; and the first serious effects appeared in the "railroad strikes of 1877.
329. For many years past, the drift of population had been towards an urban life. Taking the town of 8000 inhabitants as the lower limit of urban population, we find that 3.3 per cent. of the population was to be classed as urban in 1790, and that the percentage had risen to 22.5 in 1880. If towns of 4000 inhabitants had been taken as the lower limit, the urban population in 1880 would have been 13,000,000, or more than 25 per cent. It may be thought that the policy of protection, of abnormal stimulation of manufactures, had something to do with this tendency; but it is noteworthy that the increase during the generally free-trade period of 1840-60, from 8.5 to 16.1, was the greatest of any twenty years, unless we take the period 1850-70, half free-trade and half protective, when the percentage rose from 12.5 to 20.9. Whatever may have been the cause, the tendency is indubitable, and its effects in increasing the facility of organization among the employees of corporations, whose fields of operation are generally urban, are as easily to be seen.
330. Some of the corporations were controlled by men who were believed, in some cases on the best of evidence, to have gained their control by the defects of American corporation law, particularly by the privilege of the majority of stock-holders to use the whole stock almost at their discretion, even for the wrecking of the road and its repurchase on terms ruinous to the minoritys interests. Disrespect for "property rights" thus acquired was apt to extend to other corporate property, acquired legitimately: in the railroad strikes of 1877, there were cases in which citizens usually law-abiding watched with hardly-concealed satisfaction the destruction of such property as belonged to corporations. Further, the neutral position of the United States had brought about the transfer of considerable English and other foreign capital to the United States to be invested, under corporate privileges, in cattle-ranges or other industries connected with Western agricultural. The American managers of these corporations, feeling little responsibility to any power except their foreign employers, permitted themselves to take liberties with individual settlers and their right which arrayed a large part of the agricultural population of the West against corporate property. Finally, the differential rates made in private, even secret, contracts by railway corporations all over the country, had gathered up passions of all sorts against the corporate "monopolies." The anchor of agricultural conservatism, usually a safe reliance in the United States, and ceased to be of service in this matter. An order, the "Patrons of Husbandry," said to number, 1,500,000 members in 1874, had been formed with the avowed object of checking the common corporate enemy; and, though its prominence was short-lived, its influence remained.
331. The growing power to corporations, and that at a time when the democracy had just shown its strength most forcibly and to its own satisfaction; the evident tendency of the corporations, especially in the protected industries and in transportation, to further combinations, such as "pools" and "trusts"; the consequent partial disappearance of that competition which had seemed to be a restriction on the power of the corporations over the individual; the power and disposition of corporations to cut wages down whenever dividends made it necessary to do so; the half-understood, but heartily dreaded, weapon known as the "black list," by which combinations of employers, especially of corporations, drove employees inclined to "agitation" out of employment; the general misgivings as to the wisdom or honesty of the State legislatures, in which the power over corporations was vested; the unhappy influences of the increase of urban population over the jury system; the complicated systems of appeals which had grown up in American law, with their opportunities for delay or perversion of justice by wealthy and determined corporations; the altered character of American labor, which was now largely made up of a mass of immigration hardly yet fully digested, and more apt than American labor had once been to seek help in something else than individual effort,- all these influences made up a mass of explosive which became seriously dangerous after 1880. It was no longer so easy for the individual to defend himself against corporate aggression; if it had been, the American working man was no longer so apt to trust to an individual defence; and laborers began to turn to combinations against corporations, though these combinations were even more prompt and successful in attacking individual employers than in attacking corporations.
332. The trade unions, which retained most of the conservative influences of their generally beneficiary nature, were not radical enough; and a local Philadelphia society, the "Knights of Labor," was developed into a national organization, following the usual American system of local "assemblies," with delegates to State and national conventions. With but 52,000 members in 1883, it claimed 630,000 in October 1886, and 1,000,000 at the beginning of 1887. Its general object was the union of all classes and kinds of labor into one organization, so that, "an injury to one being the concern of all," the oppression of even the humblest and weakest individual might be answered by the sympathetic action of more important and, if necessary, of all classes of labor. The "boycott," an imported idea, was its most successful weapon: the firm or corporation which oppressed its employees was to be brought to terms by a refusal of all members of the national organization to buy its productions, or to deal with any one who bought or sold them. Such a scheme was directly subversive of all social protection or security; and yet it had gone on for nearly two years before it came plainly to public notice (January 1886). Boycotts increased an number; local assemblies, intoxicable by their sudden success, went beyond the control of the well-intentioned head of the order; the passive obedience on the part of the members, which was a necessary feature of the system, evolved a class of local dictators, or "rings" which were irresponsible as well as tyrannical; and the business of the country was very seriously threatened all through the years 1886 and 1887.
333. Law has begun to pronounced distinctly against both the black list and the boycott, as well as against the systems based upon them. There can be no doubt of the cruel tyranny which the new system of labor organization tends to erect not only over its enemies, the class of employers and those working men who are not of the order, but over its own members. But the demonstration of the illegality and tyranny does not alter the conditions of the problem, of which it is but a single phase. How are the English common law, its statutory development, and its jury system, to exist when a great mass of the population is discontented, distrustful, and under the dominion of a secret public opinion, and when the way does not seem to be open for a removal of their discontents except by the serious curtailment of the corporate system which has been so powerful an agent in American development and wealth? The great American republic, then, seems to be entering upon a new era, in which it must meet and solve a new problem- the reconciliation of democracy with the modern conditions of production.
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