Echoing Voices from the Past

Political cartoon from the 1890s

"They say this question is so deep that the common people are not fit to decide it.  They say 'leave it to the financiers.'  We have left it to them too long, and while we have been sinking into bankruptcy our financiers have been growing millionaires."  Mary Elizabeth Lease from her speech of 11 August 1896 to a mass meeting at Cooper Union Hall, New York City

 

When I began my blog, the first post was titled:  I Love History.  I wrote, "It gives us such a road map of achievements to emulate and mistakes to avoid.  When I am discouraged by things happening in the world in which I live, I am heartened by reading history.  If they made such a mess of things--and they often did--and their world survived, then perhaps our own mixed-up world can survive the problems we have created."  (You may read that blog in the archives at 3 January 2012.)

 

One of the reasons I decided to write a book about Isaac B. Werner, his community, and the People's Party movement of the late 1800s was that I saw so many similarities with our own times.  In particular, they were going through a time of great disparity between average working people and the wealthy corporate tycoons, railroad magnates, and Wall Street speculators.  When you began reading the words quoted at the beginning of this blog, did you initially realize they were spoken over a century ago?

 

This past week I read through the Forbes list of America's 100 most highly compensated CEOs of 2012, and it reminded me of the complaints made by laborers during the late 1800s, who called themselves "Wage Slaves." Today's wage earners might share some of the same feelings when they compare CEO compensation with their hourly wages.  Forbes reported that the most highly compensated CEO in 2012 was John H. Hammergren, who received 131.19 million dollars, (including salary, bonus,"other" and stock gains)!  Some of the names on the list might be more familiar to you:  Ralph Lauren, who received 66.65 million dollars, and Howard D. Schultz of Starbucks, who received 41.47 million dollars.  (To read the full list of CEO Compensation for 2012 visit http://www.forbes.com/lists/2012/12/ceo-compensation-12_rank.html.)

 

A political cartoon from the 1890s

Contrast those CEO compensation numbers with the current minimum wage standards in the U.S.  An employee earning the minimum wage of $7.25 an hour would make $15,000 a year, which would put him $7,000 below the federally defined poverty line.  The minimum wage for employees who derive part of their income from tips is only $2.13.

 

A little bit of math will offer the following comparison between Mr. Hammergren's earnings and those of a minimum wage worker.  At $7.25 an hour the weekly wage for a 40 hour work week is $290, but Mr. Hammergren makes $2,522,884.61 a week, although I don't really know how many hours he works.  Assuming a 40 hour work week for Mr. Hammergren, he makes $60,572.11 an hour--more or less.  Of course, Mr. Hammergren's compensation is extraordinary, even among his corporate peers.

In the USA Today article published March 28, 2013, "Back in the high (pay) life again," the authors' observed, "[B]ig raises continue even as many companies are laying off employees."  Even CEO Eleanor Bloxham is quoted as admitting, "The continual disconnect between CEO and worker pay is just creating more of a gulf."  ("Special Report:  CEO Compensation," Matt Krantz and Barbara Hansen, B1-2)  Several news sources published reports on this topic, and rankings of the highest paid executives varied, perhaps because compensation often includes such a variety of "other" benefits, such as use of corporate jets and other "perks", as well as stock options and bonuses.  

 

In her 1896 speech at Cooper Union Hall, Mrs. Lease deplored such extremes of compensation in a nation which was formed to avoid an aristocracy among its citizens.  She said, "But here in this country we find in place of an aristocracy of royalty an aristocracy of wealth.  Far more dangerous to the race is it than the aristocracy of royalty.  It is the aristocracy of gold that disintegrates society, destroys individuals and has ruined the proudest nations."

 

A political cartoon from the 1890s

The political cartoons published in the County Capital to which Isaac subscribed and whose editor was a friend illustrate the themes of Mrs. Lease's speech.  The "Golden Empire" stresses the greed of capitalists growing fat by reducing wages to allow workers barely enough to purchase clothing, food, and lodging, often making those purchases at company stores so that their wages were little more than "tickets."  The cartoon with Columbia, as a symbol of the nation, attempting to awaken feelings for the suffering of a poor family in a man clutching his bags of money is an obvious illustration of the disparity in wealth and the difficulty in bridging mutual understanding across the chasm that separates their very different lives and opportunities.  The cartoon showing a group of wealthy Wall Street men sitting on their money is especially reminescent of recent criticism of banks to whom taxpayer money was given in 2007 to avoid a national financial collapse who chose to sit on the loaned assets from taxpayers rather than putting it in circulation to speed the recovery.  The political cartoons I have posted have been particularly popular with visitors in the past, and these three seem to me good examples that we have much in common with the concerns of our ancestors. 

 

The United States has always been a nation that admires success and that believes in the possibility for anyone to work hard and build a better life for him- or herself.  We do not condemn the successful for the money they have earned through their hard work and clever ideas.  Yet, as these cartoons show, our nation has long struggled with the difficulties of preserving the American dream for everyone without allowing a disparity between the fortunate and the unfortunate to mock the idea of this country as a land of opportunity for all its citizens.



Females & Finance in the late 1800s

Image from the County Capital, the newspaper to which Isaac subscribed

 

Two of homesteader Isaac Werner's closest neighbors were single women with claims of their own.  He was friendly and supportive of both his unmarried "spinster" neighbor Persis Vosburgh and his divorced mother of four neighbor Isabel Ross.  I will write more about the surprising number of single, female homesteaders in a later post, but this week's post is about Women and Wall street.  While doing research in the actual copies of the County Capital available at the Stafford County Historical Society, I discovered the wonderful image and story shown above.  Isaac would certainly have seen this story, and one of the things about which he was most certain was women's rights, something the Populist Movement supported more than the other political parties of that time, Republican or Democrat. 

 

Ironically, among the individuals Isaac and the People's Party most disliked were speculators and Wall Streeters.  Therefore, while Isaac would have had no problem with the general idea of women being capable of doing whatever they chose to do, because he disliked the entire class of speculators and Wall Streeters, it would have been interesting to have seen his reaction to this story.

 

The story reads in part, "The fever of Wall street speculation has reached the women of New York.  There are at present enough women gamblers in stocks to make it profitable to run a stock broker's office exclusively for women."  (Remember, you can click on the image to enlarge it in order to read more of the story.)  This story, published in a Populist newspaper, used the derogatory term "gamblers" rather than "stock investors."  The image is from an 1890 newspaper.

 

The history of the New York Stock Exchange goes back to May 17, 1792, when 24 stockbrokers gathered under a buttonwood tree and signed an agreement to establish rules for buying and selling bonds and shares of companies.  The name by which it is currently known was shortened from the original name in 1863.  You can read more about the history of the NYSE at http://www.nyx.com/who-we-are/history/new-york.      

 

The exact location of the "cozy room made attractive to the feminine eye and equiped with all the accessories usually found in the downtown broker's office" is not identified in the story.  According to a Bloomberg article by Kristin Aguilera, the first women to own a Wall Street brokerage were sisters, Victoria Woodhull and Tennessee Claflin, whose firm was known as Woodhull, Claflin & Co.  A New York Times story published in 1870 about the opening of their business predicted "a short, speedy winding up of the firm."

 

Aguilera's article cites Bureau of Labor Statistics in 2010 stating that "women held 53.2 % of the financial management positions in the U.S. and 37.7 % of the financial analyst positions."   At the time of writing the article, Kristin Aguilera was the deputy director of the Museum of American Finance and the editor of Financial History magazine.  You can read the full article at http://www.bloomberg.com/news/print/2011-12-28/a-history-of-wall-street-s-women-echoes.html.

 

While it may surprise many that women were active traders on Wall Street so early, full acceptance of women did not come for decades.  The first woman to own a seat on the NYSE was Muriel "Mickie" Siebert who joined 1,365 men at the exchange as the sole woman on December 28, 1967.  Two endorsements are required on the application to become a member, and Siebert was turned down by nine prospective sponsors before finding two men willing to sign for her.

 

The anomosity Isaac felt toward speculators and Wall Streeters was caused largely by his beliefs about two things:  manipulation of commodity prices to keep famers from receiving a fair price for the crops and livestock they raised and political power that enabled the wealthy to control Senators and Congressmen, both state and federal, to enact laws that favored the wealthy.  Today, many farmers use commodity markets to protect themselves from wide price fluctuations for the crops they raise, and agri-business controls powerful lobbying of politicians.  Neither of the present political parties has exculsively attracted the laborers, miners, and farmers that comprised the old People's Party of Isaac's day, but the perception of the wealthy exerting disproportionate political power remains.  We are left to wonder what Isaac would have thought of today's voter alignment and of women on Wall Street.  



 

 

 

 



 

Isaac & the Plutocrats

America has not always been a nation with great disparity between the wealth of its richest and poorest citizens. In his famous book, Democracy in America published in 1835, Alexis de Tocqueville opened with this observation: "Amongst the novel objects that attracted my attention during my stay in the United States, nothing struck me more forcibly than the general equality of conditions," a statement that obviously ignored American slaves who certainly did not share in such "general equality."

As for the rest of the American population, most were farmers. Writing in 1781, Thomas Jefferson said: "While we have land to labor then, let us never wish to see our citizens occupied at a workbench, or twirling a distaff. Carpenters, masons, smiths, are wanting in husbandry: but, for the general operations of manufacture, let our work-shops remain in Europe." To assure that America continued to have land for the agrarian republic he regarded as the ideal, Jefferson acquired the Louisiana Territory in 1803, providing room for further expansion.

By 1850, farmers still represented 64% of the labor force, although Jefferson's idea of leaving "the general operations of manufacture" in Europe had begun to change. At the beginning of the Civil War there were only a few hundred American millionaires.* By 1890 the number had risen to about 4,000, among them such familiar names as J.P. Morgan, Andrew Carnegie, John D. Rockefeller, and Jay Gould. The number of farmers, however, had dropped to 42% of the labor force. During the time these incredibly wealthy men were creating their fortunes in railroads, steel, and oil, farmers were confronting higher interest rates and foreclosures, lower prices for their crops, and drought, blizzards, and other hardships caused by Mother Nature. It is no wonder that the great disparity in wealth between farmers and laborers, in comparison to the wealthy and politically powerful men of the Gilded Age, created resentment and distrust.

As Isaac Werner wrote in his journal in 1889, "...disgraceful low ruling prices ruining near everybody but 'skimmers' with money. Things getting daily into worse shape and more discontent among the producing class causing oceans of thinking among the commonest people." In a speech delivered in 1890 by Mary Elizabeth Lease, a leading Populist speaker, she said, "Wall Street owns the country. It is no longer a government of the people, by the people, and for the people, but a government of Wall Street, by Wall Street, and for Wall Street. The great common people of this country are slaves, and monopoly is the master. The West and South are bound and prostrate before the manufacturing East. Money rules..."

It is startling how the language of the Populist activists of Isaac's time and the Occupy Wall Street protesters of today is so similar, and the political cartoons of the late 1800s are almost capable of appearing today without modification. Compare some of the goals expressed by the 99ers today with the concerns of Isaac's time--jobs, more equal distribution of income, and a reduction of the influence of corporations on politics. Both then and now, activists sought economic justice and directed much of their anger toward corporate abuses. In their 1880s newspaper The Nonconformist, the Vincent brothers of Winfield, Kansas blamed "corporate greed, that breeds anarchism and everything else that is hideous, in the proportion that it deepens its grip upon the industrial masses."

In Isaac's time the wealth of the few soared during and after the Civil War. Recent statistics from the Congressional Budget Office show that between 1979 and 2007, the incomes of the top 1% of Americans grew by an average of 275%. As for the country's total wealth, in 2007 the richest 1% of Americans owned 34.6% and the next 19% of Americans owned 50.5%. By combining these numbers, it can be seen that the top 20% of Americans owned 85% of the country's wealth, leaving 15% of the wealth in the hands of the bottom 80% of the population.

In the 1800s there were no federal social programs like those we have today to help the aged and the poor. Therefore, the economic extremes between the needy laborers and the very rich were especially severe. When the steel workers in the Carnegie Homestead Steel Mill attempted to negotiate a wage increase because the price of steel had increased during the three years since their prior union contract had been negotiated, they were told that management would instead reduce their wages in the new contract by 22%. When farmers were losing their farms to foreclosure and feeding their children a mixture of ground wheat and water to keep them from starving, the wealthy were building mansions fit for royalty.

The agrarian society upon which Thomas Jefferson placed his faith, believing that farmers possessed a "peculiar deposit for substantial and genuine virtue...[which] keeps alive that sacred fire, which otherwise might escape from the face of the earth" is a mere sliver of the American population today. In the century and a quarter since Isaac joined with other farmers and laborers to form the People's Party to confront the political power of Wall Street, corporations, and trusts, the American population has changed. Data from the 2010 census shows the total U.S. population as 308,745,538, with only 613,000 farmers, with those farmers representing about 2.5% of the nation's working force and only about 0.5% of all employed Americans. As for the present workers in manufacturing and industry, many of them have seen their jobs given to foreign laborers. Yes, America's work force has changed; yet, the issues of economic inequality are being debated as vigorously today as they were in Isaac's time.

*A million dollars in 1890 would be equivalent to about $24,400,250 in 2011.
Plutocracy is defined as government by the wealthy; also, a controlling class of rich men.

Politics Hardly Seem to Change

It is disappointing how unaware most of us are of the past, and although I consider myself a history buff, Isaac's Journal led me to more discoveries about the history of my own community, state, and nation than I can count. One of the intriguing discoveries involves the political history of our country in the later quarter of the 1800s, for there are so many similarities to today. As examples: there was a grassroots movement challenging the two established parties, and willing to work within one of the major parties to defeat the other; there were women who became political celebrities, known for their ability to generate great enthusiasm for candidates and issues through their impassioned speeches; and, there was popular opposition among the laboring classes against the power and greed of Wall Street, corporations, and the wealthy.

Isaac's personal experiences as a homesteader on the Kansas prairie first made me want to tell his story, but as I read further in his journal, I realized he had experienced and described a significant period in history that is nearly forgotten. As he struggled to create a successful and beautiful farm, coped with falling prices and rising interest, and raised crops that now barely covered taxes and interest on his loans, he personified the economic crisis of other farmers and laborers in America at that time. When he joined the Farmers' Alliance, he was only one of many farmers, factory workers, and other laborers who saw themselves as the producers of wealth that was going into the pockets of bankers, speculators, monopolists, and corporate and Wall Street tycoons while many of the working classes were literally starving. The wealth of the nation was being disproportionately distributed, and technology was displacing workers in ways they struggled to combat, giving rise to public demonstrations and political activity. When newspapers owned or influenced by the wealthy published biased "news," laborers established newspapers of their own. Does any of this sound familiar to what we see on television, the newspapers, and on the internet today? I certainly thought so.

These two political cartoons appeared in Isaac's local newspaper, the County Capital in the 1890s, and both address issues still being argued in media today. Carl Sagan believed, "You have to know the past to understand the present." I agree with Sagan. It is essential that history is taught in our schools, and remembered and referenced accurately by adults, if we are to progress. Yet, George Bernard Shaw reminded us: "If history repeats itself, and the unexpected always happens, how incapable must Man be of learning from experience." Forgotten history, or history intentionally distorted, cannot pass the wisdom learned by one generation to generations in the future. Instead, we are condemned to repeat the inevitable struggles without the benefits of knowing history's lessons.

I hope that by telling Isaac's story, I can bring alive the times in which he lived, and in that way offer a context for history's lessons that will make them relevant today. As David McCullough has said, "No harm's done to history by making it something someone would want to read."

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