There was, of course, another side to the picture. Many of the corporations sought to become monopolies and to make profits, not by economies and good management, but by extortion from purchasers. Sometimes they mercilessly crushed small business men, their competitors, bribed members of legislatures to secure favorable laws, and contributed to the campaign funds of both leading parties. Wherever a trust approached the position of a monopoly, it acquired a dominion over the labor market which enabled it to break even the strongest trade unions. In short, the power of the trust in finance, in manufacturing, in politics, and in the field of labor control can hardly be measured.
The Corporation and Labor.—In the development of the corporation there was to be observed a distinct severing of the old ties between master and workmen, which existed in the days of small industries. For the personal bond between the owner and the employees was substituted a new relation. "In most parts of our country," as President Wilson once said, "men work, not for themselves, not as partners in the old way in which they used to work, but generally as employees—in a higher or lower grade—of great corporations." The owner disappeared from the factory and in his place came the manager, representing the usually invisible stockholders and dependent for his success upon his ability to make profits for the owners. Hence the term "soulless corporation," which was to exert such a deep influence on American thinking about industrial relations.
Cities and Immigration.—Expressed in terms of human life, this era of unprecedented enterprise meant huge industrial cities and an immense labor supply, derived mainly from European immigration. Here, too, figures tell only a part of the story. In Washington's day nine-tenths of the American people were engaged in agriculture and lived in the country; in 1890 more than one-third of the population dwelt in towns of 2500 and over; in 1920 more than half of the population lived in towns of over 2500. In forty years, between 1860 and 1900, Greater New York had grown from 1,174,000 to 3,437,000; San Francisco from 56,000 to 342,000; Chicago from 109,000 to 1,698,000. The miles of city tenements began to rival, in the number of their residents, the farm homesteads of the West. The time so dreaded by Jefferson had arrived. People were "piled upon one another in great cities" and the republic of small farmers had passed away.
To these industrial centers flowed annually an ever-increasing tide of immigration, reaching the half million point in 1880; rising to three-quarters of a million three years later; and passing the million mark in a single year at the opening of the new century. Immigration was as old as America but new elements now entered the situation. In the first place, there were radical changes in the nationality of the newcomers. The migration from Northern Europe—England, Ireland, Germany, and Scandinavia—diminished; that from Italy, Russia, and Austria-Hungary increased, more than three-fourths of the entire number coming from these three lands between the years 1900 and 1910. These later immigrants were Italians, Poles, Magyars, Czechs, Slovaks, Russians, and Jews, who came from countries far removed from the language and the traditions of England whence came the founders of America.
In the second place, the reception accorded the newcomers differed from that given to the immigrants in the early days. By 1890 all the free land was gone. They could not, therefore, be dispersed widely among the native Americans to assimilate quickly and unconsciously the habits and ideas of American life. On the contrary, they were diverted mainly to the industrial centers. There they crowded—nay, overcrowded—into colonies of their own where they preserved their languages, their newspapers, and their old-world customs and views.
So eager were American business men to get an enormous labor supply that they asked few questions about the effect of this "alien invasion" upon the old America inherited from the fathers. They even stimulated the invasion artificially by importing huge armies of foreigners under contract to work in specified mines and mills. There seemed to be no limit to the factories, forges, refineries, and railways that could be built, to the multitudes that could be employed in conquering a continent. As for the future, that was in the hands of Providence!
Business Theories of Politics.—As the statesmen of Hamilton's school and the planters of Calhoun's had their theories of government and politics, so the leaders in business enterprise had theirs. It was simple and easily stated. "It is the duty of the government," they urged, "to protect American industry against foreign competition by means of high tariffs on imported goods, to aid railways by generous grants of land, to sell mineral and timber lands at low prices to energetic men ready to develop them, and then to leave the rest to the initiative and drive of individuals and companies." All government interference with the management, prices, rates, charges, and conduct of private business they held to be either wholly pernicious or intolerably impertinent. Judging from their speeches and writings, they conceived the nation as a great collection of individuals, companies, and labor unions all struggling for profits or high wages and held together by a government whose principal duty was to keep the peace among them and protect industry against the foreign manufacturer. Such was the political theory of business during the generation that followed the Civil War.
The Supremacy of the Republican Party (1861-85)
Business Men and Republican Policies.—Most of the leaders in industry gravitated to the Republican ranks. They worked in the North and the Republican party was essentially Northern. It was moreover—at least so far as the majority of its members were concerned—committed to protective tariffs, a sound monetary and banking system, the promotion of railways and industry by land grants, and the development of internal improvements. It was furthermore generous in its immigration policy. It proclaimed America to be an asylum for the oppressed of all countries and flung wide the doors for immigrants eager to fill the factories, man the mines, and settle upon Western lands. In a word the Republicans stood for all those specific measures which favored the enlargement and prosperity of business. At the same time they resisted government interference with private enterprise. They did not regulate railway rates, prosecute trusts for forming combinations, or prevent railway companies from giving lower rates to some shippers than to others. To sum it up, the political theories of the Republican party for three decades after the Civil War were the theories of American business—prosperous and profitable industries for the owners and "the full dinner pail" for the workmen. Naturally a large portion of those who flourished under its policies gave their support to it, voted for its candidates, and subscribed to its campaign funds.
Sources of Republican Strength in the North.—The Republican party was in fact a political organization of singular power. It originated in a wave of moral enthusiasm, having attracted to itself, if not the abolitionists, certainly all those idealists, like James Russell Lowell and George William Curtis, who had opposed slavery when opposition was neither safe nor popular. To moral principles it added practical considerations. Business men had confidence in it. Workingmen, who longed for the independence of the farmer, owed to its indulgent land policy the opportunity of securing free homesteads in the West. The immigrant, landing penniless on these shores, as a result of the same beneficent system, often found himself in a little while with an estate as large as many a baronial domain in the Old World. Under a Republican administration, the union had been saved. To it the veterans of the war could turn with confidence for those rewards of service which the government could bestow: pensions surpassing in liberality anything that the world had ever seen. Under a Republican administration also the great debt had been created in the defense of the union, and to the Republican party every investor in government bonds could look for the full and honorable discharge of the interest and principal. The spoils system, inaugurated by Jacksonian Democracy, in turn placed all the federal offices in Republican hands, furnishing an army of party workers to be counted on for loyal service in every campaign.