Chapter 6 of 14 · The Transformation of the American Economy, 1865-1914 by Robert Higgs
Introduction: Progress and Poverty
INTRODUCTION: PROGRESS AND POVERTY
Some get an infinitely better and easier living, but others find it hard to get a living at all.
HENRY GEORGE
Building, wrecking, and rebuilding, with immense energy and boundless optimism, Americans in the half century after 1865 outstripped all rivals in the race to create wealth. But progress had its price. The creation of a modern, ever-expanding economy disrupted and then destroyed the old order in economic life, and casualties lay strewn along the road of progress. No one remained unaffected, nor did any industry or region escape the vast transformation that swept the nation. Men’s reactions varied as widely as the events themselves. Some, their own fortunes swept along with the general upsurge, rejoiced in the economy’s development, while others, caught in the backwaters of progress, lamented the losses and disappointments that unanticipated changes had imposed on them. By examining the effects of this great transformation on particular men, industries, and regions, we can begin to grasp their extent, to appreciate their bewildering variety. These introductory pages present a few illustrations.
To millions of downtrodden Europeans, America was the land of promise. Seeking that promise, William Carnegie, a hand weaver displaced by machinery, left Scotland with his family in 1848 for the United States. Like many other immigrants, however, he found the promise illusory, and his son Andrew, aged 13, went to work in a textile mill at $1.20 a week to help support the family. Many years later Andrew recalled: “It was a hard life. In the winter father and I had to rise and breakfast in the darkness, reach the factory before it was daylight, and, with a short interval for lunch, work till after dark. The hours hung heavily upon me and in the work itself I took no pleasure.” During the years that followed, as a messenger boy, a telegraph operator, a railroad superintendent, and finally an independent businessman of diversified interests, he advanced until in the early 1870’s, already moderately wealthy, he made a fateful decision: “I would concentrate on the manufacture of iron and steel and be master in that.” The decision proved wise. For the next 30 years the rise of Carnegie paralleled the spectacular rise of the American iron and steel industry. His fortune mounted steadily, and in 1901 he finally sold the business for over $225 million and “resolved to stop accumulating and begin the infinitely more serious and difficult task of wise distribution.” One of the world’s richest men, he spent the last 18 years of his life giving away his wealth to promote various humanitarian organizations, many of his own creation. It seemed that America was, after all, really the land of promise.1
While Carnegie concentrated his energies on iron and steel, others supposed that a farm in the West offered an opportunity for material success. In ignorance of the true risks, many committed themselves to failure. Writing to the state governor in 1874, a Minnesota girl, Jennie Flint, described her family’s condition:
We have no money now nothing to sell to get any more clothes with as the grasshoppers destroyed all of our crops what few we had for we have not much land broke yet; as we have no team of our own we have to hire one in order to get it worked what little we have to sow, so you see it is rather hard on us to hire so much and get along. We managed to raise a few potatoes and some corn and a little buckwheat and that is all we have to depend upon. We are very bad off for bedding not having but two quilts and two sheets in the house and have to make them serve two beds. We have to use our clothing, that we wear, on the beds to keep us from suffering with the cold and then it [is] most impossible to keep warm for our house is so open. . . . We have not got our house plastered as yet only on the outside with mud could not get any lime to do it with for we had no money nor could not get any, almost perish here sometimes with the cold. . . . Now if you will be so kind as to send us some bedding and clothes and yarn to knit us some stockings with we have no wool nor yarn. Or send us some money so we can get them ourselves, we would be thankful. . . .
Twenty years later, a Kansas housewife, Mrs. Susan Orcutt, wrote to her state’s governor:
I take my pen in hand to let you know that we are starving to death. It is pretty hard to do without anything to eat here in this God forsaken country. . . . My husband went away to find work and came home last night and told me that we would have to starve. . . . It is pretty hard for a woman to do without anything to eat when she doesn’t know what minute she will be confined to bed. If I was in Iowa I would be all light. . . . I haven’t had nothing to eat today and it is 3 o’clock.2
Not everyone, it seems, shared equally in the fruits of progress.
While the fortunes of individuals differed dramatically, the development of different industries varied no less. Some expanded by leaps and bounds, steel being perhaps the best example. In 1886 a leading financial newspaper reported:
New steel plants are being put up in all sections of the country. In the Bulletin of the Steel Association for February 10, 1886, we find no less than 13 works for the manufacture of Bessemer steel that have either recently been completed or are in process of construction and expect to be in operation some time in the present year. These new works are going up in a great many different States—Pennsylvania, New York, New Jersey, Ohio, Illinois, West Virginia—and it is true, as the Bulletin says, that the Bessemer steel industry is no longer confined to a few establishments located in three or four States.3
And despite such enormous additions to supply, the demand for steel expanded so rapidly that entrepreneurial returns remained high, making millionaires of Carnegie and many other steel producers.
Not every industry yielded such returns, however, and agriculture in particular seemed unable to keep pace. Writing in 1891, Rodney Welch gave an account with which many farmers surely agreed:
I doubt if farmers are any better contented with their lot, or if they obtain more enjoyment from life, than they did in old times. I also question if they are more prosperous. They are generally in a condition of unrest, if not of discontent. Their social condition has not improved, as has that of mechanics and traders. Most of them are anxious to leave the farm for the store, the shop, the mine, or the locomotive. . . . Farmers have long been losing their place and influence in the councils of the State and nation. Our later Congresses have not contained enough farmers from the northern States to constitute the committees on agriculture. Our national law-makers have known so little about what would promote the prosperity of farmers that they have favored measures that have greatly injured agriculture. . . . [T]he price of nearly every farm product has declined sometimes below the cost of the labor required to produce it.4
Sharply contrasting changes not only occurred among individuals and industries but had a geographic dimension as well; whole regions developed quite differently. In 1869, the hamlet of Wichita, Kansas, boasted four shops, a blacksmithy, a saddlery, a saloon, and 20 families betting on the future of the little place. It proved a good bet. By 1880 Wichita’s population had expanded to 5000, by 1890 to 24,000. And such growth occurred commonly in that booming part of the country. During the same period, for example, Omaha grew from 16,000 to 149,000, Kansas City from 35,000 to 176,000, and hundreds of new towns sprang up west of the Mississippi.5
Elsewhere the scene differed markedly. On a trip through southern Vermont in the 1880’s Charles Nott observed:
Midway between Williamstown and Brattleboro . . . I saw on the summit of a hill against the evening sky what seemed a large cathedral. Driving thither, I found a huge, old-time, two-story church, a large academy (which had blended in the distance with the church), a village with a broad street, perhaps 150 feet in width, I drove on and found that the church was abandoned, the academy dismantled, the village deserted. The farmer who owned the farm on the north of the village lived on one side of the broad street, and he who owned the farm on the south lived on the other, and they were the only inhabitants. All of the others had gone—to the manufacturing villages, to the great cities, to the West. Here had been industry, education, religion, comfort, and contentment, but there remained only a drear solitude of forsaken homes.6
And the story could have been repeated, with minor variations, for scores of other villages across northern New England.7
We could continue to pile fact upon fact, but such efforts alone would certainly generate as much confusion as understanding. How can we see all these facts as parts of an overall pattern and relate them to one another in sequences of cause and effect? In short, how can we understand them?
1 Andrew Carnegie, Autobiography of Andrew Carnegie (Boston: Houghton-Mifflin, 1920). pp. 34, 177, 255.
2 Both, letters as cited in Gilbert C. Fite, “Daydreams and Nightmares: The Late Nineteenth-Century Agricultural Frontier,” Agricultural History, XL (Oct. 1966), 289, 292.
3Commercial and Financial Chronicle, XLII (Feb. 13, 1886), 199.
4 Rodney Welch, “The Farmer’s Changed Condition,” The Forum, X (1891), 695, 699.
5 Constance McLaughlin Green, American Cities in the Growth of the Nation (New York: Harper Colophon Books, 1965), pp. 148-66; Robert Higgs, “The Growth of Cities in a Midwestern Region, 1870–1900,” Journal of Regional Science, IX (Dec. 1969), 369–70.
6 Charles C. Nott, “A Good Farm for Nothing,” The Nation, XLIX (Nov. 21, 1889), 406.
7 Harold Fisher Wilson, The Hill Country of Northern New England: Its Social and Economic History, 1790–1930 (New York: Columbia University, 1936), pp. 97–115.
The Transformation of the American Economy, 1865-1914
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