The End of an Era
I
A LITTLE more than a hundred years ago the close of the Napoleonic Wars found the ten million people of the United States in a high, speculative state of mind. Nine tenths of the nation were farmers; a tenth were commercialists and infant industrialists. The farmers had learned to manufacture their most needful goods in their homes; they sold their wheat at two dollars a bushel, their pork at similarly high prices, and their cotton at forty to thirty cents a pound. For twenty years this amazing prosperity had prevailed. Lands and houses were estimated at high values; bankers and corporations and states had put out hundreds of millions of dollars in paper; rates of interest were high and security was hardly sought at all; and working people received high wages, while slaves sold at high prices. There had never been anything like it; there had never been any country like the new United States; and the Union of Washington and Jefferson was duly canonized.
In two years after the collapse of the Napoleonic empire all changed. England was overwhelmed with debt; her warehouses were stocked to their roofs with unsalable goods; and English farmers and landlords were unable to sell their crops or buy goods or pay unprecedented taxes. Germany was living from hand to mouth, and France was in a slough of despond. Twenty years of war and economic dislocation had wrought their usual effects. Nor was it different in the new and isolated United States — isolated in some men’s imaginations. The price of cotton fell in a few years to six cents a pound; the value of a barrel of flour declined from twelve to three dollars. The Bank of the United States collapsed in 1819, and nearly all the other banks, private or state, closed their doors. A farm in Virginia was worth only a year’s rent. John Adams died in 1826 leaving a mortgage of ten thousand dollars on his farm at Braintree. Common-labor wages in Boston were hardly twentyfive cents a day. Here was a condition, not a theory; and planters of great estates as well as bankers of national reputation did not know what to do. There was no permanent turn for the better before 1830. It was as much a world situation as that which pesters statesmen now in Washington, London, and Berlin. What happened to pull us out of that slough of despond, since mere happening is supposed to be the classic American remedy?
II
Three larger trends set in and were emphasized. The first of these was offered in anticipation by John C. Calhoun and pressed to realities by Henry Clay. The infant industrialists were to be saved from British competition by a protective duty on imports. The American market was to be saved to American industry. In saving the market, cities were to be created and the unemployed on the farms were to join their fellows in the towns and build cities. These would buy the products of agriculture. For twelve years the statesmen debated and quarreled over the great socialistic measure. James Monroe was dazed by the clever, if hothouse, American system of Henry Clay, as this means of relief came to be called. Daniel Webster resisted for ten years, only to reverse himself in 1828; John Quincy Adams, paying the ten-thousand-dollar mortgage of his father, at first resisted and later accepted the system.
At least the industrialists were to be saved. What they would do for farmers who were to receive high prices for their products in the new cities was not written into the bond. Whether they would pay high wages to their employees was another question which it was embarrassing to press.
The next great trend was the migration of more than a million farmers, farm hands, and newcomers from their old and poverty-stricken homes in the Eastern states across the Alleghenies to the valleys of the Ohio and the Mississippi rivers, nearly a fifth of the population, barring natural increase. In many counties like Worcester, Massachusetts, and New Kent, Virginia, half the people went West or South; nor did they present a happy spectacle. Some were on horseback, some pushed little carts, some were in wagons, and greater numbers trudged their way on foot five hundred miles through the wilderness to lands which belonged to the United States, but which many never thought of paying for. Old men and babies died on the way; women camped with their children around little fires while their husbands roamed the woods in search of food; debts were left unpaid in the older counties and other debts were contracted in the new region; while governments, state and national, made little effort to protect their rights to the soil or compel squatters to obey the land laws. In great emergencies, people are not overscrupulous in what they do.
Henry Clay’s governmental aid to industrialists was nullified for a time by the fact that the unemployed farmers simply trekked West, bought few goods, and seized public lands. But as the decade passed, the squatters of the West held fast to their acres, built better homes, and bought better clothes. It required ten years; and the existence of enormous public landed resources was a great factor. But the cotton planters who remained at home, or set up anew in the Southwest, found that the prices of their exports did not rise. The cost of cloth and ploughs and house furnishings rose every time there was a rise in the rate of duty on imports. If a man sold a hundred dollars’ worth of plantation products on the London market, he paid forty dollars of his return in increased prices on his purchases, whether they were made in England or New England.
The aid which Clay and Adams and Webster gave the industrialists to help them in business and restrain their well-developed disposition to secede from the Union was paid in large measure by the plantation masters, who now lost some of their devotion to the Union and talked loudly of secession. Class legislation to remedy the ills of a hundred years ago produced sectional hatreds worse than those which Webster and his friends in the Hartford Convention threatened in 1814. It was the Nullification movement. But men were working their way from the stagnation of 1819 — working and quarreling.
III
The removal of many thousands of people from some of the older states of the East started new anxieties. Such a migration from the great cities to-day would work more havoc in New York and Chicago stock markets than anything yet witnessed. And the states sought remedies: they would gain for themselves as much as possible of the trade of the new settlers beyond the mountains, and the wiser leaders would seek to hold the doubtful allegiance of the new frontier communities. To this end De Witt Clinton finished the famous Erie Canal in 1825; the Pennsylvanians started their elaborate canal system to match or surpass that of New York; and Charles Fenton Mercer united the rival interests of Maryland and Virginia to build the Chesapeake and Ohio Canal. These were, for the time, gigantic undertakings, calling for appropriations and stock subscriptions which might equal a billion dollars in our money.
Nor was this all. The Carolinas, Delaware, and Massachusetts undertook public works and sought to keep their people employed to prevent their moving West, if not to save poor men’s lives. President Adams and his Cabinet in 1827 agreed in an official recommendation to Congress that public lands should no longer be open either to purchasers or to squatters. Thus the great Hayne-Webster debate was started on the assumption that for social, if not class, purposes the Western lands should no longer be a resource for the unemployed.
A semi-bankrupt government of the eighteen-twenties lent still further aid to the people caught in one of the great depressions of history. The United States made large appropriations to the building of the road from Cumberland to the Ohio; a canal was ordered to be built around the falls of the Ohio at Louisville; and elaborate surveys were made for other and greater improvements at national expense. All these unprecedented expenditures, and plans for expenditure, by a government so weak and so young frightened the slaveholders, lest under the rising socialist impulse the Union might question the relation of master and servant. Thus Adams, Clay, and Webster played a vast rôle in the alleviation of the poverty and the distress which the European wars of two decades had brought upon the young United States.
Finally, at the end of the decade, the French broke once more upon the European world with their July Revolution. Wars and economic dislocations followed. Always sympathetic with revolution and class disturbances in the Old World, the leaders of the United States welcomed the French change and invited distressed peoples on the Continent and in revolutionary England to migrate. Improved markets for foodstuffs, tobacco, and cotton followed. War has always been a blessing to the farmers of the United States.
The end of the long depression was at hand when great numbers of fresh immigrants found their way to the then fairyland of North America. Immigrants, whom the government now sternly warns away, then became a vital agent in the recovery. Every immigrant brought a few dollars; many brought hundreds of dollars. They bought lands before they learned the art of squatting; they increased the demand for protected goods made in the East; and they raised the value of city property by building or renting houses. Nobody thought of suggesting that foreigners should be kept away; everybody was happy to welcome even the poorest of Europe’s ‘oppressed.’ And suddenly there was prosperity, with credit expansion and speculation. Wonderful steamboats hurried up and down the Mississippi; railroad companies borrowed huge sums from towns and counties and cities, never very particular to repay their borrowings. De Tocqueville, the French opponent of democracy, visited the magic land to see how it was done, and the skeptical Duke of Weimar traveled from place to place to see what it all meant. The depression was gone, but the renewed legacy of sectional hatreds remained.
IV
Another great European war broke a hundred years later. All the world became involved, and the deepest passions of men were aroused. The people of the United States, now as before, reaped amazing harvests. Cotton sold for forty cents a pound; wheat rose to three dollars a bushel; steel and copper and ammunition plants turned out millionaires by the hundred; and the Federal Reserve banks began to gather the gold supplies of the world into their vaults.
It was a revolution within a revolution. Henry Ford showed the industrialists how to apply mass production. He laid out the country into districts and set his agents the stern task of selling their quotas of cars on penalty of losing their positions. He extended the system of installment selling until a man with ten dollars could buy a car; and he advertised his moves and his prices till his ideas and wishes were as widely known as those of presidents and prime ministers. He became the head and centre of a great industrialfeudal state more powerful than that of the greatest of the dukes of mediæval times. He paid skilled laborers higher wages for shorter hours than had ever been dreamed of before; he expected working people to drive cars and spend their incomes during their free hours.
What the wizard of Detroit did, other industrialists were compelled to imitate. There were amazing profits. There was unimagined leisure on the part of workingmen. Consumption increased beyond all previous bounds. There were everywhere a doubling and a quadrupling of stocks, of real-estate values, of securities of every kind. Credit was as easy as the paper issues of banks and states at the time of Napoleon.
Then came the sudden collapse of the German power. Every European country was bankrupt, as they all had been a hundred years before. Victorious England found her former capital loans of twenty billions converted into debts of some thirty billions; France, with a property of fifty billions, had a debt about half as great and thousands of square miles of devastated area; Germany had wiped out her accumulated domestic obligations and must pay the Allies half a billion a year for five or six decades; and England, France, and Italy owed the United States eleven billions. This was an unprecedented situation, with all the world looking to the United States for leadership, both economic and political. The sorrowful negotiations in Paris in 1919 revealed the depths of the misery of those who take the sword in modern times, as they also revealed to the United States the unwillingness of men to reason upon the facts and take lessons from the past.
At the moment there was a single leader who saw dimly the tangled skein of world politics and warned all men everywhere that a new era had dawned: no nation liveth unto itself; old measures, economic and social, no longer suffice; if men would sell, they must also buy; peoples must associate on terms of give-and-take; both armies and navies must come to an end. It was too much for a generation making peace in the spirit of war. The strange leader was thrust aside; a drastic peace was consummated; and the United States withheld its signature to the treaty because it included the plan of the League of Nations, and then proclaimed an isolation in the name of Washington and Jefferson that never was nor was ever likely to be. American leaders, business and political, went their ways, and there was a prolongation of war-time prosperity in the United States that ran almost a decade — industrial prosperity.
The Henry Fords increased their output and widened the terrain of their operations; the banks increased their loans to amazing volumes and encouraged the building of vast skyscrapers in place of older buildings hardly worn smooth with usage; they lent huge sums to Cuba and Brazil on the basis of sugar and coffee-crop control; and when European nations could not pay their debts, Americans lent them from fifteen to eighteen additional billions with which to pay reparations, set up industries without markets, build ships with which to compete with the United States, and buy American goods. And with it all went the advertising, supersalesmanship, and installment contracts. It was the heyday of industrial prosperity, all the rest of the country hopelessly in debt and all the rest of the world confronted with collapse.
There was never an official voice of warning. Candidates for offices, high and low, proclaimed the new era, an American era in which there was never again to be poverty or unemployment. Hours of labor would steadily shorten and all men would soon be gentlemen of leisure — all with cars, all sleeping of nights in modern apartments, with radios ready to be turned on, Amos and Andy bowing before them, and few or no children to bother. That was the United States of 1929, and there had been full seven years of it while other peoples labored through the slough of despond, overburdened governments utterly unable to pay debts and feed their millions of unemployed. They had even descended to the low expedient of paying doles.
V
There was some inkling of troubles ahead for the United States. European nations enacted burdensome customs systems. American wheat producers could not sell their crops. Cotton fell to fifteen, then to ten cents a pound. Here and there unemployment stalked about the great cities, new machines dismissing every week increasing numbers of laborers. There was some uneasiness. The President called Congress into special session.
Statesmen at once turned to laying still more bricks on the tops of high tariff walls. The Europeans laid other bricks on their walls. A bushel of wheat paid eighty-five cents duty in France; in Germany it paid more than half as much; in Russia there were to be no American goods at all, if the Washington government could prevent it. Before the statesmen had finished their repetition of the tariff of 1828, there was a crash on the New York stock market. Whatever is done in New York must be done all over the country, and when the bankers and brokers of the metropolis turned pale in the face and seemed dazed that anything could go wrong, the rest of the country fell into fits of terror. Was it all untrue — mass production with a world market, universal prosperity, installment sales, and enormous issues of securities?
Was it the end of the era so widely preached? The President could not believe it. He gathered about him the eminent men who had made the system. They declared it could not be true. Everyone would go home and increase the wages of the men he had not dismissed. Organized labor in Washington answered, ‘Amen.’ But the prices of commodities continued to fall. Industrial goods piled up in warehouses and banks began to tremble. In a little while five thousand had failed; and those that had not failed were unable to lend their money. A hundred billions were written off the assets of industry and agriculture in a year. A farm was hardly worth its upkeep; a skyscraper was a liability. It was a panic — something quite as bad as that which Napoleon had left to England in 1815 and which passed on to the new United States three years later. Would statesmen wrestle with their problem as Calhoun and Clay, as James Monroe and John Quincy Adams, had wrestled with theirs?
Congress labored over its old tariff remedy. It became effective in 1930. Immediately the prices of securities and stocks fell again. A Farm Board was appointed to stabilize the prices of wheat and cotton; half a year had not passed till wheat and cotton sold at lower prices than ever. Thus the tariff failed to protect the wealthy, and the Farm Board failed to save the poor. And the masses of unemployed were no longer scattered over the wide stretches of the countryside. They were huddled together in Henry Clay’s cities, which were to have been guarantees of prosperity. There were no wide stretches of public lands to which men might go, supporting themselves on the way by hunting and fishing.
Moreover, the dispossessed of 1930 knew little of the ways of agriculture. If they had been given tracts of land, they would have starved before they learned how to make a living. So the second great remedy of the eighteentwenties was not at command; nor was there a substitute in the minds of statesmen still thinking archaic thoughts.
VI
There was yet a possibility. The internal improvements of a hundred years ago, if reapplied on a scale commensurate with the new scale of life, might give work to a million heads of families; and that would be a beginning. In 1858, Charles Ellet, one of the greatest of civil engineers, prepared the plan for a vast Mississippi Valley river and flood control — a scheme of improved navigation, vast water storage, and concentrated water powers, a plan which engineers and administrators have neglected through the decades in spite of warning floods and droughts. His plan might now be applied. It would make lakes on the dry slopes of the Rocky Mountains; it would set up water powers in West Virginia and Ohio far more important than the litigated New River proposition; it would scatter the unemployed and perhaps bring them into touch again with the countrysides. But here and now, as in 1830, great men would resist governmental creation of water powers, and, above all, governmental participation in business. Bankers and industrial magnates are as jealous now as were slave masters in Calhoun’s time; there is no way out that is not blocked by inherited opposition.
Is there a way of escape where the Farm Board has failed? Henry Ford declares that agriculture must be mechanized like his Dearborn works; he also says that each of his employees must have his own house and plant a garden every spring — a contradiction, for mechanized farming would double the farm output, when the product is already too great. If he means that cities must be scattered and that every man must have a home of his own with cultivated acres around it, something may be said for his wisdom. When Hoover as Secretary of Commerce supervised relief to the sufferers of the last great Mississippi flood, the Ellet plans were reprinted and again urged upon the country. Little was done; but now a greater need has come. The waters of all the great rivers of the Middle West might be impounded in reservoirs, after the Ellet method; releases might be made from them upon parts of the lands made arid by dry weather; and electric powers might be set up to draw great industrial plants from big cities and so improve the unemployment situation. A billion dollars might go into such undertakings and the country be greatly improved. To this might readily be added a new and greater road-building scheme. Perhaps a million men might thus be engaged.
In one respect it would be a repetition of the old internal-improvements work: business men would oppose it on exactly the same grounds that owners of slaves opposed Clay’s system — governmental interference with established business. A slave owner feared that an active and powerful government would emancipate his workers; a utilities magnate dreads the idea of governmental competition in the power field. Nor is this all. The old devices scattered men over the wide stretches of the West. Industrial leaders and the advocates of bigger and better cities would be panic-struck if they saw hundreds of thousands of workers trekking off to set up for themselves in cheap country cottages, there to cultivate little patches of ground and remain non-consumptive elements of a changing economic order. Internal improvements on an adequate scale would relieve cities of many unemployed, but would give stocks and banks another setback in this nervous age.
What has rarely been suggested before now comes up as a proposition, especially in the South where lands are only half productive and where heavy rainfall produces forest trees rapidly: let the government put thousands of men to ploughing abandoned fields and fields that ought to be abandoned, and then to setting young trees. It would bring about a decline in the cotton crop and a prospective increase in needful timber, not to mention the blessings of increased rainfall which some men think would come as a result of reforestation. The farmer would be benefited, the unemployed would be given cottage homes in remote places, and the national wealth would be increased. However, timber companies, not without influence, protest that there is already too much lumber; why reduce prices by increasing prospects of plenty in the future? Moreover, governmental interference in business is always bad in the eyes of eminent men. Thus, whatever way one turns, there is a bar sinister: the old habits of thought and the old ‘sturdy individualism’ — the only remedy left being city, if not national, doles.
Thus the richest country in the world, with debts, public and private, due from other nations approaching twenty-five billions, seems to be more helpless than Henry Clay’s semibankrupt United States of 1820; with protective tariffs kicking backward, free lands nonexistent and occupied lands a burden to their owners, immigrants inadmissible and internal improvements doubtful, if not dangerous. Thus vast cities, enormous gold reserves, and innumerable smokestacks are of no avail. Has the prophecy of Henry Adams, that we are all on a machine which cannot go forward without disaster and cannot be stopped without ruin, come true? It must be a new era — new thought unwelcome and old thought inapplicable.