THE "GREENBACK" PERIOD, 1862-1879
The few national trade unions which were formed at the close of the
fifties did not constitute by themselves a labor movement. It needed the
industrial prosperity caused by the price inflation of the Civil War
time to bring forth again a mass movement of labor.
We shall say little of labor's attitude towards the question of war and
peace before the War had started. Like many other citizens of the North
and the Border States the handful of organized workers favored a
compromise. They held a labor convention in Philadelphia, in which a
great labor leader of the sixties, William H. Sylvis, President of the
International Molders' Union, took a prominent part and pronounced in
favor of the compromise solution advanced by Congressman Crittenden of
Kentucky. But no sooner had Fort Sumter been fired upon by the
secessionists than labor rallied to the support of the Federal Union.
Entire local unions enlisted at the call of President Lincoln, and
Sylvis himself assisted in recruiting a company composed of molders.
The first effect of the War was a paralysis of business and an increase
of unemployment. The existing labor organizations nearly all went to the
wall. The period of industrial stagnation, however, lasted only until
the middle of 1862.
The legal tender acts of 1862 and 1863 authorized the issue of paper
currency of "greenbacks" to the amount of $1,050,000,000, and
immediately prices began to soar. For the next sixteen years, namely
until 1879, when the government resumed the redemption of greenbacks in
gold, prices of commodities and labor expressed in terms of paper money
showed varying degrees of inflation; hence the term "greenback" period.
During the War the advance in prices was due in part to the
extraordinary demand by the government for the supply of the army and,
of course, to speculation.
In July 1863, retail prices were 43 percent above those of 1860 and
wages only 12 percent above; in July 1864, retail prices rose to 70
percent and wages to 30 percent above 1860; and in July 1865, prices
rose to 76 percent and wages only to 50 percent above the level of 1860.
The unequal pace of the price movement drove labor to organize along
trade-union lines.
The order observed in the thirties was again followed out. First came a
flock of local trade unions; these soon combined in city centrals--or as
they came to be called, trades' assemblies--paralleling the trades'
union of the thirties; and lastly, came an attempt to federate the
several trades' assemblies into an International Industrial Assembly of
North America. Local trade unions were organized literally in every
trade beginning in the second half of 1862. The first trades' assembly
was formed in Rochester, New York, in March 1863; and before long there
was one in every town of importance. The International Industrial
Assembly was attempted in 1864, but failed to live up to the
expectations: The time had passed for a national federation of city
centrals. As in the thirties the spread of unionism over the breadth of
the land called out as a counterpart a widespread movement of employers'
associations. The latter differed, however, from their predecessors in
the thirties in that they made little use of the courts in their fight
against the unions.
The growth of the national trade unions was a true index of the
condition of business. Four were organized in 1864 as compared to two
organized in 1863, none in 1862, and one in 1861. During 1865, which
marked the height of the intense business activity, six more national
unions were organized. In 1866 industry entered upon a period of
depression, which reached its lowest depth in 1867 and continued until
1869. Accordingly, not a single national union was organized in 1866 and
only one in 1867. In 1868 two new national labor unions were organized.
In 1869 two more unions were formed--a total of seven for the four
depressed years, compared with ten in the preceding two prosperous
years. In the summer of 1870 business became good and remained good for
approximately three years. Nine new national unions appeared in these
three years. These same years are marked also by a growth of the unions
previously organized. For instance, the machinists and blacksmiths, with
only 1500 members in 1870, had 18,000 in 1873. Other unions showed
similar gains.
An estimate of the total trade union membership at any one time (in view
of the total lack of reliable statistics) would be extremely hazardous.
The New York _Herald_ estimated it in August 1869, to be about 170,000.
A labor leader claimed at the same time that the total was as high as
600,000. Probably 300,000 would be a conservative estimate for the time
immediately preceding the panic of 1873.
Although the strength of labor was really the strength of the national
trade unions, especially during the depression of the later sixties, far
greater attention was attracted outside as well as inside the labor
movement by the National Labor Union, a loosely built federation of
national trade unions, city trades' assemblies, local trade unions, and
reform organizations of various descriptions, from philosophical
anarchists to socialists and woman suffragists. The National Labor Union
did not excel in practical activity, but it formed an accurate mirror of
the aspirations and ideals of the American mechanics of the time of the
Civil War and after. During its six years' existence it ran the gamut of
all important issues which agitated the labor movement of the time.
The National Labor Union came together in its first convention in 1866.
The most pressing problem of the day was unemployment due to the return
of the demobilized soldiers and the shutting down of war industries. The
convention centered on the demand to reduce the working day to eight
hours. But eight hours had by that time come to signify more than a
means to increase employment. The eight-hour movement drew its
inspiration from an economic theory advanced by a self-taught Boston
machinist, Ira Steward. And so naturally did this theory flow from the
usual premises in the thinking of the American workman that once
formulated by Steward it may be said to have become an official theory
of the labor movement.
Steward's doctrine is well expressed by a couplet which was very popular
with the eight-hour speakers of that period: "Whether you work by the
piece or work by the day, decreasing the hours increases the pay."
Steward believed that the amount of wages is determined by no other
factor than the worker's standard of living. He held that wages cannot
fall below the standard of living not because, as the classical
economists said, it would cause late marriages and a reduction in the
supply of labor, but solely because the wage earner will refuse to work
for less than enough to maintain his standard of living. Steward
possessed such abundant faith in this purely psychological check on the
employer that he made it the cornerstone of his theory of social
progress. Raise the worker's standard of living, he said, and the
employer will be immediately forced to raise wages; no more can wages
fall below the level of the worker's standard of living than New England
can be ruled against her will. The lever for raising the standard of
living was the eight-hour day. Increase the worker's leisure and you
will increase his wants; increase his wants and you will immediately
raise his wages. Although he occasionally tried to soften his doctrine
by the argument that a shorter work-day not only does not decrease but
may actually increase output, his was a distinctly revolutionary
doctrine; he aimed at the total abolition of profits through their
absorption into wages. But the instrument was nothing more radical than
a progressive universal shortening the hours.
So much for the general policy. To bring it to pass two alternatives
were possible: trade unionism or legislation. Steward chose the latter
as the more hopeful and speedy one. Steward knew that appeals to the
humanity of the employers had largely failed; efforts to secure the
reform by cooperation had failed; the early trade unions had failed; and
there seemed to be no recourse left now but to accomplish the reduction
of hours by legislative enactment.
In 1866 Steward organized the Grand Eight-Hour League of Massachusetts
as a special propagandist organization of the eight-hour philosophy. The
League was a secret organization with pass words and obligations,
intended as the central organization of a chain of subordinate leagues
in the State, afterwards to be created. Of a total of about eighty local
leagues in existence from 1865 to 1877, about twenty were in
Massachusetts, eight elsewhere in New England, at least twenty-five in
Michigan, four or five in Pennsylvania, about seven in Illinois, as many
in Wisconsin, and smaller numbers in Missouri, Iowa, Indiana, and
California. Michigan, Illinois, Iowa, and Pennsylvania had each a Grand
Eight-Hour League. Practically all of these organizations disappeared
soon after the panic of 1873.
The National Labor Union centered on the passage of an eight-hour law
for employes of the Federal government. It was believed, perhaps not
without some justice, that the effect of such law would eventually lead
to the introduction of the same standard in private employment--not
indeed through the operation of the law of supply and demand, for it was
realized that this would be practically negligible, but rather through
its contagious effect on the minds of employes and even employers. It
will be recalled that, at the time of the ten-hour agitation of the
thirties, the Federal government had lagged about five years behind
private employers in granting the demanded concession. That in the
sixties the workingmen chose government employment as the entering wedge
shows a measure of political self-confidence which the preceding
generation of workingmen lacked.
The first bill in Congress was introduced by Senator Gratz Brown of
Missouri in March 1866. In the summer a delegation from the National
Labor Union was received by President Andrew Johnson. The President
pointed to his past record favorable to the workingmen but refrained
from any definite promises. Finally, an eight-hour bill for government
employes was passed by the House in March 1867, and by the Senate in
June 1868. On June 29, 1868, President Johnson signed it and it went
into effect immediately.
The result of the eight-hour law was not all that the friends of the
bill hoped. The various officials in charge of government work put their
own interpretations upon it and there resulted much diversity in its
observance, and consequently great dissatisfaction. There seemed to be
no clear understanding as to the intent of Congress in enacting the law.
Some held that the reduction in working hours must of necessity bring
with it a corresponding reduction in wages. The officials' view of the
situation was given by Secretary Gideon Wells. He pointed out that
Congress, by reducing the hours of labor in government work, had forced
upon the department of the Navy the employment of a larger number of men
in order to accomplish the necessary work; and that at the same time
Congress had reduced the appropriation for that department. This had
rendered unavoidable a twenty percent reduction in wages paid employes
in the Navy Yard. Such a state of uncertainty continued four years
longer. At last on May 13, 1872, President Grant prohibited by
proclamation any wage reductions in the execution of the law. On May 18,
1872, Congress passed a law for the restitution of back pay.
The expectations of the workingmen that the Federal law would blaze the
way for the eight-hour system in private employment failed to
materialize. The depression during the seventies took up all the impetus
in that direction which the law may have generated. Even as far as
government work is concerned forty years had to elapse before its
application could be rounded out by extending it to contract work done
for the government by private employers.
We have dealt at length with this subject because it marked an important
landmark. It demonstrated to the wage earners that, provided they
concentrated on a modest object and kept up a steady pressure, their
prospects for success were not entirely hopeless, hard as the road may
seem to travel. The other and far more ambitious object of the
workingman of the sixties, that of enacting general eight-hour laws in
the several States, at first appeared to be within easy reach--so
yielding political parties and State legislatures seemed to be to the
demands of the organized workmen. Yet before long these successes proved
to be entirely illusory.
The year 1867 was the banner year for such State legislation. Eight-hour
laws were passed in Illinois, Wisconsin, Connecticut, Missouri, and New
York. California passed such a law in 1868. In Pennsylvania, Michigan,
Maryland, and Minnesota bills were introduced but were defeated. Two
common features characterized these laws, whether enacted or merely
proposed to the legislatures. There were none which did not permit of
longer hours than those named in the law, provided they were so
specified in the contract. A contract requiring ten or more hours a day
was perfectly legal. The eight-hour day was the legal day only "when the
contract was silent on the subject or where there is no express contract
to the contrary," as stated in the Wisconsin law. But the greatest
weakness was a lack of a provision for enforcement. New York's
experience is typical and characteristic. When the workingmen appealed
to Governor Fenton to enforce the law, he replied that the act had
received his official signature and he felt that it "would be an
unwarrantable assumption" on his part to take any step requiring its
enforcement. "Every law," he said, "was obligatory by its own nature,
and could derive no additional force from any further act of his."
In Massachusetts, however, the workingmen succeeded after hard and
protracted labor in obtaining an enforceable ten-hour law for women--the
first effective law of its kind passed in any American State. This law,
which was passed in 1874, provides that "no minor under the age of
eighteen years, and no woman over that age" shall be employed more than
ten hours in one day or sixty hours in any one week in any manufacturing
establishment in the State. The penalty for each violation was fixed at
fifty dollars.
The repeated disappointments with politics and legislation led in the
early seventies to a revival of faith in trade unionism. Even in the
early sixties we find not a few unions, national and local, limiting
their hours by agreement with employers. The national unions, however,
for the most part left the matter to the local unions for settlement as
their strength or local conditions might dictate. In some cases the
local unions were advised to accept a reduction of wages in order to
secure the system, showing faith in Steward's theory that such reduction
could not be permanent.
The movement to establish the eight-hour day through trade unionism
reached its climax in the summer of 1872, when business prosperity was
at its height. This year witnessed in New York City a general eight-hour
strike. However, it succeeded in only a few trades, and even there the
gain was only temporary, since it was lost during the years of
depression which followed the financial panic of 1873.
To come back to the National Labor Union. At the second convention in
1867 the enthusiasm was transferred from eight-hour laws to the bizarre
social reform philosophy known as "greenbackism."
"Greenbackism" was, in substance, a plan to give the man without capital
an equal opportunity in business with his rich competitor. It meant
taking away from bankers and middlemen their control over credit and
thereby furnishing credit and capital through the aid of the government
to the producers of physical products. On its face greenbackism was a
program of currency reform and derived its name from the so-called
"greenback," the paper money issued during the Civil War. But it was
more than currency reform--it was industrial democracy.
"Greenbackism" was the American counterpart of the contemporary
radicalism of Europe. Its program had much in common with that of
Lassalle in Germany who would have the state lend its credit to
cooperative associations of workingmen in the confident expectation that
with such backing they would drive private capitalism out of existence
by the competitive route. But greenbackism differed from the scheme of
Lassalle in that it would utilize the government's enormous Civil War
debt, instead of its taxing power, as a means of furnishing capital to
labor. This was to be done by reducing the rate of interest on the
government bonds to three percent and by making them convertible into
legal tender currency and convertible back into bonds, at the will of
the holder of either. In other words, the greenback currency, instead of
being, as it was at the time, an irredeemable promise to pay in specie,
would be redeemable in government bonds. On the other hand, if a
government bondholder could secure slightly more than three percent by
lending to a private borrower, he would return his bonds to the
government, take out the corresponding amount in greenbacks and lend it
to the producer on his private note or mortgage. This would involve, of
course, the possible inflation of legal tender currency to the amount of
outstanding bonds. But inflation was immaterial, since all prices would
be affected alike and meanwhile the farmers, the workingmen, and their
cooperative establishments would be able to secure capital at slightly
more than three percent instead of the nine or twelve percent which they
were compelled to pay at the bank. Thereby they would be placed on a
competitive level with the middleman, and the wage earner would be
assisted to escape the wage system into self-employment.
Such was the curious doctrine which captured the leaders of the
organized wage earners in 1867. The way had indeed been prepared for it
in 1866, when the wage earners espoused producers' cooperation as the
only solution. But, in the following year, 1867, they concluded that no
system of combination or cooperation could secure to labor its natural
rights as long as the credit system enabled non-producers to accumulate
wealth faster than labor was able to add to the national wealth.
Cooperation would follow "as a natural consequence," if producers could
secure through legislation credit at a low rate of interest. The
government was to extend to the producer "free capital" in addition to
free land which he received with the Homestead Act.
The producers' cooperation, which offered the occasion for the espousal
of greenbackism, was itself preceded by a movement for consumers'
cooperation. Following the upward sweep of prices, workmen had begun
toward the end of 1862 to make definite preparations for distributive
cooperation. They endeavored to cut off the profits of the middleman by
establishing cooperative grocery stores, meat markets, and coal yards.
The first substantial effort of this kind to attract wide attention was
the formation in December 1862, of the Union Cooperative Association of
Philadelphia, which opened a store. The prime mover and the financial
secretary of this organization was Thomas Phillips, a shoemaker who came
from England in 1852, fired with the principles of the Rochdale
pioneers, that is, cash sales, dividends on purchases rather than on
stock, and "one man, one vote." By 1866 the movement had extended until
practically every important industrial town between Boston and San
Francisco had some form of distributive cooperation. This was the high
tide of the movement. Unfortunately, the condition of the country was
unfavorable to these enterprises and they were destined to early
collapse. The year 1865 witnessed disastrous business failures. The
country was in an uncertain condition and at the end of the sixties the
entire movement had died out.
From 1866 to 1869 experiments in productive cooperation were made by
practically all leading trades including the bakers, coach makers,
collar makers, coal miners, shipwrights, machinists and blacksmiths,
foundry workers, nailers, ship carpenters, and calkers, glass blowers,
hatters, boiler makers, plumbers, iron rollers, tailors, printers,
needle women, and molders. A large proportion of these attempts grew out
of unsuccessful strikes. The most important undertakings were among the
workers in iron, undoubtedly due in large measure to the indefatigable
efforts of William H. Sylvis, the founder of the Iron Molders'
International Union.
At the close of 1869 members of the Iron Molders' International Union
owned and operated many cooperative foundries chiefly in New York and
Pennsylvania. The first of the foundries established at Troy in the
early summer of 1866 was followed quickly by one in Albany and then
during the next eighteen months by ten more--one each in Rochester,
Chicago, Quincy, Louisville, Somerset, Pittsburgh, and two each in Troy
and Cleveland. The original foundry at Troy was an immediate financial
success and was hailed with joy by those who believed that under the
name of cooperationists the baffled trade unionists might yet conquer.
The New York _Sun_ congratulated the iron molders of Troy and declared
that Sylvis had checkmated the association of stove manufacturers and,
by the establishment of this cooperative foundry, had made the greatest
contribution of the year to the labor cause.
But the results of the Troy experiment, typical of the others, show how
far from a successful solution of the labor problem is productive
cooperation. Although this "Troy Cooperative Iron Founders' Association"
was planned with great deliberation and launched at a time when the
regular stove manufacturers were embarrassed by strikes, and although it
was regularly incorporated with a provision that each member was
entitled to but one vote whether he held one share at $100, or the
maximum privilege of fifty in the total of two thousand shares, it
failed as did the others in furnishing permanent relief to the workers
as a class. At the end of the third year of this enterprise, the
_American Workman_ published a sympathetic account of its progress
unconsciously disclosing its fatal weakness, namely, the inevitable
tendency of cooperators to adopt the capitalistic view. The writer of
this account quotes from these cooperators to show that "the fewer the
stockholders in the company the greater its success."
A similar instance is furnished by the Cooperative Foundry Company of
Rochester. This venture has also been a financial success, though a
partial failure as a cooperative enterprise. When it was established in
1867 all employes were stockholders and profits were divided as follows:
Twelve percent on capital and the balance in proportion to the earnings
of the men. But the capitalist was stronger than the cooperative
brother. Dividends on capital were advanced in a few years to seventeen
and one-half percent, then to twenty-five, and finally the distribution
of any part of the profits in proportion to wages was discontinued.
Money was made every year and dividends paid, which in 1884 amounted to
forty percent on the capital. At that time about one-fifth of the
employes were stockholders. Also in this case cooperation did not
prevent the usual conflict between employer and employe, as is shown in
a strike of three and a half months' duration. It is interesting to
notice that one of the strikers, a member of the Molders' Union, owned
stock to the amount of $7000.
The machinists, too, throughout this period took an active interest in
cooperation. Their convention which met in October, 1865, appointed a
committee to report on a plan of action to establish a cooperative shop
under the auspices of the International Union. The plan failed of
adoption, but of machinists' shops on the joint-stock plan there were a
good many. Two other trades noted for their enthusiasm for cooperation
at this time were the shoemakers and the coopers. The former, organized
in the Order of St. Crispin, then the largest trade union in the
country, advocated cooperation even when their success in strikes was at
its height. "The present demand of the Crispin is steady employment and
fair wages, but his future is self-employment" was one of their mottoes.
During the seventies they repeatedly attempted to carry this motto into
effect. The seventies also saw the beginning of the most successful
single venture in productive cooperation ever undertaken in this
country, namely, the eight cooperative cooperage shops in Minneapolis,
which were established at varying intervals from 1874 to 1886. The
coopers took care to enforce true cooperation by providing for equal
holding of stock and for a division of ordinary profits and losses in
proportion to wages. The cooper shops prospered, but already ten years
later four out of the eight existing in 1886 had passed into private
hands.
In 1866 when the eight-hour demand was as yet uppermost, the National
Labor Union resolved for an independent labor party. The espousal of
greenbackism in 1867 only reenforced that resolution. The leaders
realized only too well that neither the Republican nor Democratic party
would voluntarily make an issue of a scheme purporting to assist the
wage earner to become an independent producer. Accordingly, the history
of the National Labor Union became largely the history of labor's first
attempt to play a lone political hand on a national scale.
Each annual session of the National Labor Union faithfully reaffirmed
the decision to "cut loose" from the old parties. But such a vast
undertaking demanded time. It was not until 1872 that the National Labor
Union met as a political convention to nominate a national ticket. From
the first the stars were inauspicious. Charges were made that political
aspirants sought to control the convention in order to influence
nominations by the Republican and Democratic parties. A "greenback"
platform was adopted as a matter of course and the new party was
christened the National Labor and Reform Party. On the first formal
ballot for nomination for President, Judge David Davis of Illinois, a
personal friend of Abraham Lincoln, received 88 votes, Wendell Phillips,
the abolitionist, 52, and the remainder scattered. On the third ballot
Davis was nominated. Governor J. Parker of New Jersey was nominated for
Vice-President. At first Judge Davis accepted the nomination, but
resigned after the Democrats had nominated Horace Greeley. The loss of
the candidate spelled the death of the party. The National Labor Union
itself had been only an empty shell since 1870, when the national trade
unions, disaffected with the turn towards politics, withdrew. Now, its
pet project a failure, it, too, broke up.
In 1873, on the eve of the financial panic, the national trade unions
attempted to reconstruct a national labor federation on a purely
trade-union basis in the form of a National Industrial Congress. But the
economic disaster of the panic nipped it in the bud just as it cut off
the life of the overwhelming majority of the existing labor
organizations. Another attempt to get together on a national basis was
made in the National Labor Congress at Pittsburgh in 1876. But those who
responded were not interested in trade unionism and, mirroring the
prevailing labor sentiment during the long years of depressions, had
only politics on their mind, greenback or socialist. As neither
greenbacker nor socialist would meet the other half-way, the attempt
naturally came to naught.
Greenbackism was popular with the working people during the depressed
seventies because it now meant to them primarily currency inflation and
a rise of prices and, consequently, industrial prosperity--not the
phantastic scheme of the National Labor Union. Yet in the Presidential
election of 1876 the Greenback party candidate, Peter Cooper, the well
known manufacturer and philanthropist, drew only a poor 100,000, which
came practically from the rural districts only. It was not until the
great strikes of 1877 had brought in their train a political labor
upheaval that the greenback movement assumed a formidable form.
The strikes of 1877, which on account of the wide area affected, the
degree of violence displayed, and the amount of life and property lost,
impressed contemporaries as being nothing short of social revolution,
were precipitated by a general ten percent reduction in wages on the
three trunk lines running West, the Pennsylvania, the Baltimore & Ohio,
and the New York Central, in June and July 1877. This reduction came on
top of an earlier ten percent reduction after the panic. The railway men
were practically unorganized so that the steadying influence of previous
organization was totally lacking in the critical situation of unrest
which the newly announced wage reduction created. One must take also
into account that in the four terrible years which elapsed since the
panic, America had developed a new type of a man--the tramp--who
naturally gravitated towards places where trouble was expected.
The first outbreak occurred at Martinsburg, West Virginia, on July 17,
the day after the ten percent reduction had gone into effect. The
strike spread like wildfire over the adjacent sections of the Baltimore
& Ohio road, the strikers assuming absolute control at many points. The
militia was either unwilling or powerless to cope with the violence. In
Baltimore, where in the interest of public safety all the freight trains
had stopped running, two companies of militia were beleaguered by a mob
to prevent their being dispatched to Cumberland, where the strikers were
in control. Order was restored only when Federal troops arrived.
But these occurrences fade into insignificance when compared with the
destructive effects of the strike on the Pennsylvania in and around
Pittsburgh. The situation there was aggravated by a hatred of the
Pennsylvania railway corporation shared by nearly all residents on the
ground of an alleged rate discrimination against the city. The
Pittsburgh militia fraternized with the strikers, and when 600 troops
which arrived from Philadelphia attempted to restore order and killed
about twenty rioters, they were besieged in a roundhouse by a furious
mob. In the battle the railway yards were set on fire. Damages amounting
to about $5,000,000 were caused. The besieged militia men finally gained
egress and retreated fighting rear-guard actions. At last order was
restored by patrols of citizens. The strike spread also to the Erie
railway and caused disturbances in several places, but not nearly of the
same serious nature as on the Baltimore & Ohio and the Pennsylvania. The
other places to which the strike spread were Toledo, Louisville,
Chicago, St. Louis, and San Francisco.
The strikes failed in every case but their moral effect was enormous.
The general public still retained a fresh memory of the Commune of Paris
of 1871 and feared for the foundations of the established order. The
wage earners, on the other hand, felt that the strikers had not been
fairly dealt with. It was on this intense labor discontent that the
greenback agitation fed and grew.
Whereas in 1876 the greenback labor vote was negligible, notwithstanding
the exhortations by many of the former trade union leaders who turned
greenback agitators, now, following the great strikes, greenbackism
became primarily a labor movement. Local Greenback-Labor parties were
being organized everywhere and a national Greenback-Labor party was not
far behind in forming. The continued industrial depression was a
decisive factor, the winter of 1877-1878 marking perhaps the point of
its greatest intensity. Naturally the greenback movement was growing
apace. One of the notable successes in the spring of 1878 was the
election of Terence V. Powderly, later Grand Master Workman of the
Knights of Labor, as mayor of Scranton, Pennsylvania.
The Congressional election in the autumn of 1878 marked the zenith of
the movement. The aggregate greenback vote cast in the election exceeded
a million, and fourteen Representatives were sent to Congress. In New
England the movement was strong enough to poll almost a third of the
total vote in Maine, over 8 percent of the total vote in both
Connecticut and New Hampshire, and from 4 to 6 percent, in the other
States. In Maine the greenbackers elected 32 members of the upper house
and 151 members of the lower house and one Congressman, Thompson Murch
of Rochland, who was secretary of the National Granite Cutters' Union.
However, the bulk of the vote in that State was obviously agricultural.
In Massachusetts, the situation was dominated by General Benjamin F.
Butler, lifelong Republican politician, who had succeeded in getting
the Democratic nomination for governor and was endorsed by the Greenback
convention. He received a large vote but was defeated for office.
But just as the Greenback-Labor movement was assuming promising
proportions a change for the better in the industrial situation cut
under the very roots of its existence. In addition, one month after the
election of 1878, its principal issue disappeared. January 1, 1879, was
the date fixed by the act for resumption of redemption of greenbacks in
gold and on December 17, 1878, the premium on gold disappeared. From
that day on, the greenback became a dead issue.
Another factor of great importance was the large increase in the volume
of the currency. In 1881 the currency, which had averaged about
$725,000,000 for the years 1876-1878, reached over $1,111,000,000. Under
these conditions, all that remained available to the platform-makers and
propagandists of the party was their opposition to the so-called
"monopolistic" national banks with their control over currency and to
the refunding of the bonded debt of the government.
The disappearance of the financial issue snapped the threads which had
held together the farmer and the wage-worker. So long as depression
continued, the issue was financial and the two had, as they thought, a
common enemy--the banker. The financial issue once settled, or at least
suspended, the object of the attack by labor became the employer, and
that of the attack by the farmer--the railway corporation and the
warehouse man. Prosperity had mitigated the grievances of both classes,
but while the farmer still had a great deal to expect from politics in
the form of state regulation of railway rates, the wage earners'
struggle now turned entirely economic and not political.
In California, as in the Eastern industrial States, the railway strikes
of 1877 precipitated a political movement. California had retained gold
as currency throughout the entire period of paper money, and the labor
movement at no time had accepted the greenback platform. The political
issue after 1877 was racial, not financial, and the weapon was not
merely the ballot, but also "direct action"--violence. The anti-Chinese
agitation in California, culminating as it did in the Exclusion Law
passed by Congress in 1882, was doubtless the most important single
factor in the history of American labor, for without it the entire
country might have been overrun by Mongolian labor and the labor
movement might have become a conflict of races instead of one of
classes.[10]
The seventies witnessed another of those recurring attempts of
consumers' cooperation already noticed in the forties and sixties. This
time the movement was organized by the "Sovereigns of Industry," a
secret order, founded at Worcester, Massachusetts, in 1874 by one
William H. Earle. The spirit of the Order was entirely peaceful and
unobtrusive as expressed in the first paragraph of the Declaration of
Purposes which reads as follows:
"The Order of the Sovereigns of Industry is an association of the
industrial or laboring classes, without regard to race, sex, color,
nationality, or occupation; not founded for the purpose of waging any
war of aggression upon any other class, or for fostering any antagonism
of labor against capital, or of arraying the poor against the rich; but
for mutual assistance in self-improvement and self-protection."
The scheme of organization called for a local council including members
from the town or district, a state council, comprising representatives
from the local councils and a National Council in which the States were
represented. The president of the National Council was the founder of
the Order, William H. Earle.
Success accompanied the efforts of the promoters of the Sovereigns of
Industry for a few years. The total membership in 1875-1876 was 40,000,
of whom seventy-five percent were in New England and forty-three percent
in Massachusetts. Though the Order extended into other States and even
reached the territories, its chief strength always remained in New
England and the Middle States. During the last period of its existence a
national organ was published at Washington, but the Order does not
appear to have gained a foothold in any of the more Southern sections of
the country.
In 1875, 101 local councils reported as having some method of supplying
members with goods, 46 of whom operated stores. The largest store
belonged to the council at Springfield, Massachusetts, which in 1875
built the "Sovereign Block" at a cost of $35,500. In his address at the
fourth annual session in Washington, President Earle stated that the
store in Springfield led all the others with sales amounting to $119,000
for the preceding year. About one-half of the councils failed to report,
but at the Congress of 1876 President Earle estimated the annual trade
at $3,000,000.
Much enthusiasm accompanied the progress of the movement. The hall in
"Sovereign Block" at Springfield was dedicated amid such jubilation as
marks an event thought to be the forerunner of a new era. There is
indeed a certain pathos in the high hopes expressed in the Address of
Dedication by President Earle, for, though the Order continued to thrive
until 1878, shortly after a decline began, and dissolution was its fate
in 1880.
The failure of the Sovereigns marked the latest attempt on a large
scale[11] to inoculate the American workingmen with the sort of
cooperative spirit which proved so successful in England.[12]
This failure of distributive cooperation to gain the strong and lasting
foothold in this country that it has abroad has been accounted for in
various ways by different writers. Great emphasis has been laid upon the
lack of capital, the lack of suitable legislation on the subject of
cooperation, the mutual isolation of the educated and wage-earning
classes, the lack of business ability among wage earners, and the
altogether too frequent venality and corruption among cooperators.
Probably the lack of adequate leadership has played as important a part
as any. It is peculiar to America that the wage earner of exceptional
ability can easily find a way for escaping into the class of independent
producers or even employers of labor. The American trade union movement
has suffered much less from this difficulty. The trade unions are
fighting organizations; they demand the sort of leader who is of a
combative spirit, who possesses the organizing ability and the "personal
magnetism" to keep his men in line; and for this kind of ability the
business world offers no particular demand. On the other hand, the
qualifications which go to make a successful manager of a cooperative
store, namely, steadiness, conservatism of judgment, attention to detail
and business punctuality always will be in great demand in the business
world. Hence, when no barrier is interposed in the form of preempted
opportunities or class bias, the exceptional workingman who possesses
these qualifications will likely desert his class and set up in business
for himself. In England, fortunately for the cooperative movement, such
an escape is very difficult.
The failure of consumers' cooperation in America was helped also by two
other peculiarly American conditions. European economists, when speaking
of the working class, assume generally that it is fixed in residence and
contrast it with capital, which they say is fluid as between city and
city and even between country and country. American labor, however,
native as well as immigrant, is probably more mobile than capital; for,
tradition and habit which keep the great majority of European wage
earners in the place where their fathers and forefathers had lived
before them are generally absent in this country, except perhaps in
parts of New England and the South. It is therefore natural that the
cooperative spirit, which after all is but an enlarged and more
generalized form of the old spirit of neighborliness and mutual trust,
should have failed to develop to its full strength in America.
Another condition fatal to the development of the cooperative spirit is
the racial heterogeneity of the American wage-earning class, which
separates it into mutually isolated groups even as the social classes of
England and Scotland are separated by class spirit. As a result, we find
a want of mutual trust which depends so much on "consciousness of kind."
This is further aggravated by competition and a continuous displacement
in industry of nationalities of a high standard of living by those of a
lower one. This conflict of nationalities, which lies also at the root
of the closed shop policy of many of the American trade unions, is
probably the most effective carrier that there is to a widespread growth
of the cooperative spirit among American wage earners. This is further
hindered by other national characteristics which more or less pervade
all classes of society, namely, the traditional individualism--the
heritage of puritanism and the pioneer days, and the emphasis upon
earning capacity with a corresponding aversion to thrift.
FOOTNOTES:
[10] The National Labor Union came out against Chinese immigration in
1869, when the issue was brought home to the Eastern wage earners
following the importation by a shoe manufacturer in North Adams,
Massachusetts, of Chinese strike breakers.
[11] There were many cooperative stores in the eighties and a concerted
effort to duplicate the venture of the Sovereigns was attempted as late
as 1919 under the pressure of the soaring cost of living.
[12] Where Consumers' Cooperation has worked under most favorable
conditions as in England, its achievements have been all that its most
ardent champions could have desired. Such is the picture presented by
Mr. and Mrs. Sidney Webb in the following glowing terms:
"The organization of industry by Associations of Consumers offers, as
far as it goes, a genuine alternative to capitalist ownership, because
it supersedes the capitalist power, whether individual or joint-stock,
alike in the control of the instruments of production by which the
community lives, and in the absorption of the profits, which otherwise
support a capitalist class. The ownership and control are vested in, and
the profits are distributed among, the whole community of consumers,
irrespective of their industrial wealth. Through the device of dividend
on purchases the Cooperative Movement maintains an open democracy,
through the control of this democracy of consumers it has directly or
indirectly kept down prices, and protected the wage-earning class from
exploitation by the Credit System and from the extortions of monopolist
traders and speculators. By this same device on purchases, and the
automatic accumulation of part of the profit in the capital of each
society and in that of the Wholesales, it has demonstratedly added to
the personal wealth of the manual working class, and has, alike in Great
Britain, and in other countries, afforded both a valuable financial
reserve to the wage earners against all emergencies and an instrument
for their elevation from the penury to which competition is always
depressing them. By making possible the upgrowth of great business
enterprises in working class hands, the Cooperative Movement has,
without divorcing them from their fellows, given to thousands of the
manual workers both administrative experience and a well-grounded
confidence; and has thus enabled them to take a fuller part in political
and social life than would otherwise have been probable."--_New
Statesman_, May 30, 1916. "Special Supplement on the Cooperative
Movement."
Indeed the success of the consumer's cooperative movement in European
countries has been marvellous, even measured by bare figures. In all
Europe in 1914, there were about 9,000,000 cooperators of whom one-third
lived in Great Britain and not less than two and a half millions in
Germany. In England and Scotland alone, the 1400 stores and two
Wholesale Cooperative Societies controlled in 1914 about 420 million
dollars of retail distributive trade and employed nearly 50,000
operatives in processes of production in their own workshops and
factories.