Welfare Capitalism- Part Six- Labor Day
Recognizing nuance, seeing both sides, labor history
Capitalism built much of the western world we enjoy today. However, during the late 1800's American capitalism was an unregulated monster.
A side effect of unregulated capitalism is frequent and disruptive economic crashes, recessions and predatory practices. Much of the late 19th century and early 20th century was defined by it. Every time a crisis hit, the wealthy pulled back on wages and employees to protect their investments and the poor were often left jobless and destitute.
The Panic of 1796
Recession in 1802
Depression of 1807
Recession of 1812 - caused by war
Depression 1815
Recession of 1822
Recession of 1825
Recession of 1828
Recession of 1833
Recession of 1836
Recession of 1839
Recession of 1845
Recession of 1847
Recession of 1853
Panic of 1857
Recession of 1860
Recession of 1865
Recession of 1869
Panic of 1873
Depression of 1882
Recession of 1887
Recession of 1890
Panic of 1893
Panic of 1896
Recession of 1899
Recession of 1902
Panic of 1907
Panic of 1910
Recession of 1913
Recession of 1918 - caused by WW1
Depression of 1920
Recession of 1923
Recession of 1926
The Great Depression- 1929-1933
Recession of 1937
1945 - caused by WW2
Recession of 1949
Recession of 1953
Recession of 1958
Recession of 1960
Recession of 1969
Recession of 1973
Recession of 1980
Recession of 1981
Recession of 1990
2001 - dot com bubble
The Great Recession- 2007
The Covid Crisis -2020
Black Friday (1869)
Two wealthy men, Jay Gould & James Fisk aka Diamond Jim, made a plan to manipulate the gold market. They knew the government had gold reserves and that when that became available the price of gold would drop drastically. They needed to know when the government decided to do that, so they approached president Ulysses S Grant's new brother in law, Abel Corbin and promised to make him money too.
Between Gould and Fisk they purchased as much gold as possible, lowering the amount of gold within trade, raising the price of it because it had become rarer. They raised the cost of gold so much that people rushed to buy it and the price became 6 times more than normal. If you had a million dollars in gold it was now worth 6 million. Fisk and Gould owned between $50 and $60 million in gold between the two of them. This would normally only be worth $10 million.
It was getting ridiculous. President Grant had to do what Frick, Gould & Corbin expected and that was to release 4 million dollars of government gold into the market to bring the price down. This meant gold was less rare and therefore cheaper. Grant expected this to lower the value of Frick & Gould's gold. However, Grant didn't know that these two men were working with his brother in law, Corbin and so Corbin told Gould. Gould decided not to tell Fisk as agreed upon but instead secretly started selling his own gold. When news of the government's release of gold reached the trading room, it was chaos. The price dropped rapidly and men were screaming to sell their investments. It was too late. Many men were now bankrupt and had lost everything they had. Entire companies went out of business. Gould had got out at the perfect time to make a profit. Fisk got put with some losses but made a profit overall. They used their profits to pay for the best lawyers and both got off without punishment.
Panic of 1873
Page 217 of reconstruction
The Long Depression, beginning in the United States with the financial Panic of 1873 became the longest economic hardship in American history, including the later more famous, Great Depression of the 1930s.
Unemployment rose dramatically, reaching 14 percent by 1876, many more were severely underemployed, and wages overall dropped to 45% of their previous level. Thousands of American businesses failed. One in four laborers in New York were out of work in the winter of 1873-1874. The financial crisis caused fear, poverty and violence. Big companies such as train companies started lowering wages leaving workers in poverty.
The Great Railroad Strikes of 1877
When the Civil War ended, railroad construction was a popular business. Tens of thousands of miles of new track was being laid from coast to coast. Train cars were being developed for the wealthy, cars for sleeping and cars for dining. Train cars were also transporting working class people across country. The Railroad industry became the second biggest employer in the US, after farming. Industrialists fed massive amounts of money into the railroad industry and were able to hire a massive workforce to get the job done.
When the Panic of 1873 hit, industrialists wanted to cut back on spending and protect their fortunes. So they laid employees off or cut their wages. When the Panic hit, it was the poor who paid the price. Thousands of workers who were previously on minimum wage, the bare survival budget, were now either jobless or desperately poor. Getting by on a minimum budget, many hadn’t been able to build up a savings. No severance pay or unemployment benefit existed in those days and the workers were out on their own. With so many unemployed, many were willing to take jobs for lower pay and the factory owners knew this, so began offering lower wages. The rich prioritized the protection of their wealth over the wellbeing of their workers. The poor struggled to feed themselves and their families. This enraged many and caused workers to protest for better pay and their jobs back.
The protests started in West Virginia where the Baltimore & Ohio Railroad companies had cut salaries for the third time that year. The protesters blocked trains from moving until their demands were met. The Railroad owners had two choices, give in to the demands and hire workers back at full pay OR if they waited long enough the government would have to get involved.
What would you do? Take a personal loss or wait for the problem to get worse and an issue for the whole country?
The Railroad owners requested the Maryland National Guard to break up the protesters and unblock the railroads. When the National Guard met with the protesters, they shot 35 people, killing 10. The rioters injured several National Guards and burned portions of the train station in Baltimore. The shootings enraged the locals and even more people joined the protest. The Maryland National Guard became trapped in the shipyards. US President, Rutherford Hayes sent in the US Marines to restore order.
The conflict triggered other dissatisfied communities within the US. Strikes began in Albany, Syracuse, Buffalo, New York, Pittsburg, Philadelphia, Reading, Scranton, Shamokin, Chicago, St. Louis and San Francisco.
At several of these protests local police refused to fire at strikers and the National Guard needed to be called in. In Philadelphia, 20 rock-throwing protesters were killed and another 29 injured. Rather than settling down the riots instead they escalated. Infuriated protesters burned down buildings and toppling a hundred trains. The next day, 20 more protesters were killed by the National Guard in Philadelphia. In Reading, the National Guard shot 16 citizens. In Chicago, 20 protesters were killed and another 18 in St. Louis. In 1877 alone, at least 140 workers were killed by authorities in 8 separate strikes.
By August, President Hayes had sent the national guard in to city after city to bring control back.
Labor Violence
For every economic crisis, the poor would suffer and Industrialists would protect their own interests. The government and the industrialists would reinforce the way things were. Many progressives, civil rights activists and labor leaders would get hugely frustrated. Some lost their patients and turned to violence. These acts of terrorism always set the cause back, hurting public opinion and making everyone's lives harder. In 1901, a young progressive would shoot President McKinley, turning public opinion against what he was advocating for. In 1892, a labor activist attempted to kill industrialist Henry Frick, only to fail, get locked up for 14 years and turn public opinion against his cause. Being Jewish, he also sparked an increase in antisemitism.
Haymarket Affair (1886)
9 years later, unhappy with low pay, long hours and bad working conditions, unions organized a general strike. They asked for an 8-hour work day for the same pay. Workers would do 10-12 hour shifts for minimum wage.
Fair to business owners? Pay same but get less? Someone would work it if they didn't want to. If they agreed to this, next it would be 6 hours.
The workers held a strike and refused to work. However, the factory owners attempted to keep the factory running by hiring people who weren't part of a union or desperate for money. Outside the factory, the protesters tried to stop the emergency workers. They believed these workers were being selfish and foolish. When they tried to push their way into the factory, police opened fire and shot two of them.
Later that day they held a gathering in Chicago city center, exercising their 1st ammendment and listening to speeches. Some of the speakers blamed the police for the two dead workers earlier that day. Police closed in to break up the event. Out of the blue, an unknown person threw a bomb, killing a police officer and injuring 5 others. Police opened up retaliatory fire and people in the crowd fired back. Hundreds were arrested. 12 died, 8 of whom were policemen. A trial was rushed and with no evidence of violence, they charged speakers who "insighted" the violence. 8 were convicted and 4 executed. They were portrayed as dangerous radicals.
https://youtu.be/6okibrpyeUs
May Day
The Haymarket Affair was commemorated by the American Socialist and Communist parties in remembrance of the laborers killed fighting for their rights. They called it May Day and every year unions would organize BBQ'S and protest events. Authorities saw these groups as radicals and troublemakers.
Panic of 1893
Once again, railroads were over built and invested and when the profits slowed down, a economic panic ensued. Railroads and banks went out of business. People rushed to sell their shares but ultimately many people lost everything they owed.
Pullman Strike (1894)
The Pullman company was a railway company in Illinois. The company owned it's own town with homes to rent for workers. It also owned the only store in town. The railway owner George Pullman held sole say-so in the town, making all decisions for the community. He was essentially King of the town, everything was his property.
The Panic of 1893 meant there was less demand for train cars at that time. In response, Pullman let some workers go and reduced wages by 25% for those who remained. However, he kept rent and store prices the same. This made life difficult for the workers and made them feel trapped. Their boss George Pullman was protecting his wealth by making his workers live in poverty.
On May 11th, 4,000 employees went on strike. Unions across the country boycotted Pullman trains. This ended up causing major problems and before long the president, Grover Cleveland was getting involved. He demanded that the trains continue running.
Pullman brought in new workers from further away and would settle for lower pay. Instead of standing to the side the strikers tried to scare these men away. They saw these men as harming themselves and others by accepting the work.
The disruption was harmful to the American economy. Workers knew this and were hoping it would pressure their boss to give in to their demands. However, Pullman did not and Cleveland decided to get involved. He couldn't force Pullman to pay his employees but he could break up the strike using the national guard. Grover Cleveland sent in the troops to break up the protests and get everything back on track. 30 people died, 60 were badly injured.
30 US states had already been recognizing Labor day as a State holiday. A day to rest, in the name of labor. Grover Cleveland declared the first Monday in September, likely to try and bring peace in the economy and win votes for his political party.
https://youtu.be/xPhLKARAve4 -
https://youtu.be/YqmPE2HtkyU
https://youtu.be/ewu-v36szlE
What should labor day be remember for?
Cleveland strikes deal with JP Morgan
With the American economy in crisis, JP Morgan, tycoon banker, saw an opportunity to help and make a healthy profit for himself. Meeting with Cleveland, Morgan offered to buy $65 million in government bonds in exchange for gold. The government recovers economically and JP Morgan makes millions in profits.
https://youtu.be/5jjdErDkDZE -
(24:45-29:32)
Do you think what JP Morgan did was out of compassion? Was it out of greed? Could it be both?
Capitalism built much of the western world we enjoy today. However, during the late 1800's American capitalism was an unregulated monster.
A side effect of unregulated capitalism is frequent and disruptive economic crashes, recessions and predatory practices. Much of the late 19th century and early 20th century was defined by it. Every time a crisis hit, the wealthy pulled back on wages and employees to protect their investments and the poor were often left jobless and destitute.
The Panic of 1796
Recession in 1802
Depression of 1807
Recession of 1812 - caused by war
Depression 1815
Recession of 1822
Recession of 1825
Recession of 1828
Recession of 1833
Recession of 1836
Recession of 1839
Recession of 1845
Recession of 1847
Recession of 1853
Panic of 1857
Recession of 1860
Recession of 1865
Recession of 1869
Panic of 1873
Depression of 1882
Recession of 1887
Recession of 1890
Panic of 1893
Panic of 1896
Recession of 1899
Recession of 1902
Panic of 1907
Panic of 1910
Recession of 1913
Recession of 1918 - caused by WW1
Depression of 1920
Recession of 1923
Recession of 1926
The Great Depression- 1929-1933
Recession of 1937
1945 - caused by WW2
Recession of 1949
Recession of 1953
Recession of 1958
Recession of 1960
Recession of 1969
Recession of 1973
Recession of 1980
Recession of 1981
Recession of 1990
2001 - dot com bubble
The Great Recession- 2007
The Covid Crisis -2020
Black Friday (1869)
Two wealthy men, Jay Gould & James Fisk aka Diamond Jim, made a plan to manipulate the gold market. They knew the government had gold reserves and that when that became available the price of gold would drop drastically. They needed to know when the government decided to do that, so they approached president Ulysses S Grant's new brother in law, Abel Corbin and promised to make him money too.
Between Gould and Fisk they purchased as much gold as possible, lowering the amount of gold within trade, raising the price of it because it had become rarer. They raised the cost of gold so much that people rushed to buy it and the price became 6 times more than normal. If you had a million dollars in gold it was now worth 6 million. Fisk and Gould owned between $50 and $60 million in gold between the two of them. This would normally only be worth $10 million.
It was getting ridiculous. President Grant had to do what Frick, Gould & Corbin expected and that was to release 4 million dollars of government gold into the market to bring the price down. This meant gold was less rare and therefore cheaper. Grant expected this to lower the value of Frick & Gould's gold. However, Grant didn't know that these two men were working with his brother in law, Corbin and so Corbin told Gould. Gould decided not to tell Fisk as agreed upon but instead secretly started selling his own gold. When news of the government's release of gold reached the trading room, it was chaos. The price dropped rapidly and men were screaming to sell their investments. It was too late. Many men were now bankrupt and had lost everything they had. Entire companies went out of business. Gould had got out at the perfect time to make a profit. Fisk got put with some losses but made a profit overall. They used their profits to pay for the best lawyers and both got off without punishment.
Panic of 1873
Page 217 of reconstruction
The Long Depression, beginning in the United States with the financial Panic of 1873 became the longest economic hardship in American history, including the later more famous, Great Depression of the 1930s.
Unemployment rose dramatically, reaching 14 percent by 1876, many more were severely underemployed, and wages overall dropped to 45% of their previous level. Thousands of American businesses failed. One in four laborers in New York were out of work in the winter of 1873-1874. The financial crisis caused fear, poverty and violence. Big companies such as train companies started lowering wages leaving workers in poverty.
The Great Railroad Strikes of 1877
When the Civil War ended, railroad construction was a popular business. Tens of thousands of miles of new track was being laid from coast to coast. Train cars were being developed for the wealthy, cars for sleeping and cars for dining. Train cars were also transporting working class people across country. The Railroad industry became the second biggest employer in the US, after farming. Industrialists fed massive amounts of money into the railroad industry and were able to hire a massive workforce to get the job done.
When the Panic of 1873 hit, industrialists wanted to cut back on spending and protect their fortunes. So they laid employees off or cut their wages. When the Panic hit, it was the poor who paid the price. Thousands of workers who were previously on minimum wage, the bare survival budget, were now either jobless or desperately poor. Getting by on a minimum budget, many hadn’t been able to build up a savings. No severance pay or unemployment benefit existed in those days and the workers were out on their own. With so many unemployed, many were willing to take jobs for lower pay and the factory owners knew this, so began offering lower wages. The rich prioritized the protection of their wealth over the wellbeing of their workers. The poor struggled to feed themselves and their families. This enraged many and caused workers to protest for better pay and their jobs back.
The protests started in West Virginia where the Baltimore & Ohio Railroad companies had cut salaries for the third time that year. The protesters blocked trains from moving until their demands were met. The Railroad owners had two choices, give in to the demands and hire workers back at full pay OR if they waited long enough the government would have to get involved.
What would you do? Take a personal loss or wait for the problem to get worse and an issue for the whole country?
The Railroad owners requested the Maryland National Guard to break up the protesters and unblock the railroads. When the National Guard met with the protesters, they shot 35 people, killing 10. The rioters injured several National Guards and burned portions of the train station in Baltimore. The shootings enraged the locals and even more people joined the protest. The Maryland National Guard became trapped in the shipyards. US President, Rutherford Hayes sent in the US Marines to restore order.
The conflict triggered other dissatisfied communities within the US. Strikes began in Albany, Syracuse, Buffalo, New York, Pittsburg, Philadelphia, Reading, Scranton, Shamokin, Chicago, St. Louis and San Francisco.
At several of these protests local police refused to fire at strikers and the National Guard needed to be called in. In Philadelphia, 20 rock-throwing protesters were killed and another 29 injured. Rather than settling down the riots instead they escalated. Infuriated protesters burned down buildings and toppling a hundred trains. The next day, 20 more protesters were killed by the National Guard in Philadelphia. In Reading, the National Guard shot 16 citizens. In Chicago, 20 protesters were killed and another 18 in St. Louis. In 1877 alone, at least 140 workers were killed by authorities in 8 separate strikes.
By August, President Hayes had sent the national guard in to city after city to bring control back.
Labor Violence
For every economic crisis, the poor would suffer and Industrialists would protect their own interests. The government and the industrialists would reinforce the way things were. Many progressives, civil rights activists and labor leaders would get hugely frustrated. Some lost their patients and turned to violence. These acts of terrorism always set the cause back, hurting public opinion and making everyone's lives harder. In 1901, a young progressive would shoot President McKinley, turning public opinion against what he was advocating for. In 1892, a labor activist attempted to kill industrialist Henry Frick, only to fail, get locked up for 14 years and turn public opinion against his cause. Being Jewish, he also sparked an increase in antisemitism.
Haymarket Affair (1886)
9 years later, unhappy with low pay, long hours and bad working conditions, unions organized a general strike. They asked for an 8-hour work day for the same pay. Workers would do 10-12 hour shifts for minimum wage.
Fair to business owners? Pay same but get less? Someone would work it if they didn't want to. If they agreed to this, next it would be 6 hours.
The workers held a strike and refused to work. However, the factory owners attempted to keep the factory running by hiring people who weren't part of a union or desperate for money. Outside the factory, the protesters tried to stop the emergency workers. They believed these workers were being selfish and foolish. When they tried to push their way into the factory, police opened fire and shot two of them.
Later that day they held a gathering in Chicago city center, exercising their 1st ammendment and listening to speeches. Some of the speakers blamed the police for the two dead workers earlier that day. Police closed in to break up the event. Out of the blue, an unknown person threw a bomb, killing a police officer and injuring 5 others. Police opened up retaliatory fire and people in the crowd fired back. Hundreds were arrested. 12 died, 8 of whom were policemen. A trial was rushed and with no evidence of violence, they charged speakers who "insighted" the violence. 8 were convicted and 4 executed. They were portrayed as dangerous radicals.
https://youtu.be/6okibrpyeUs
May Day
The Haymarket Affair was commemorated by the American Socialist and Communist parties in remembrance of the laborers killed fighting for their rights. They called it May Day and every year unions would organize BBQ'S and protest events. Authorities saw these groups as radicals and troublemakers.
Panic of 1893
Once again, railroads were over built and invested and when the profits slowed down, a economic panic ensued. Railroads and banks went out of business. People rushed to sell their shares but ultimately many people lost everything they owed.
Pullman Strike (1894)
The Pullman company was a railway company in Illinois. The company owned it's own town with homes to rent for workers. It also owned the only store in town. The railway owner George Pullman held sole say-so in the town, making all decisions for the community. He was essentially King of the town, everything was his property.
The Panic of 1893 meant there was less demand for train cars at that time. In response, Pullman let some workers go and reduced wages by 25% for those who remained. However, he kept rent and store prices the same. This made life difficult for the workers and made them feel trapped. Their boss George Pullman was protecting his wealth by making his workers live in poverty.
On May 11th, 4,000 employees went on strike. Unions across the country boycotted Pullman trains. This ended up causing major problems and before long the president, Grover Cleveland was getting involved. He demanded that the trains continue running.
Pullman brought in new workers from further away and would settle for lower pay. Instead of standing to the side the strikers tried to scare these men away. They saw these men as harming themselves and others by accepting the work.
The disruption was harmful to the American economy. Workers knew this and were hoping it would pressure their boss to give in to their demands. However, Pullman did not and Cleveland decided to get involved. He couldn't force Pullman to pay his employees but he could break up the strike using the national guard. Grover Cleveland sent in the troops to break up the protests and get everything back on track. 30 people died, 60 were badly injured.
30 US states had already been recognizing Labor day as a State holiday. A day to rest, in the name of labor. Grover Cleveland declared the first Monday in September, likely to try and bring peace in the economy and win votes for his political party.
https://youtu.be/xPhLKARAve4 -
https://youtu.be/YqmPE2HtkyU
https://youtu.be/ewu-v36szlE
What should labor day be remember for?
Cleveland strikes deal with JP Morgan
With the American economy in crisis, JP Morgan, tycoon banker, saw an opportunity to help and make a healthy profit for himself. Meeting with Cleveland, Morgan offered to buy $65 million in government bonds in exchange for gold. The government recovers economically and JP Morgan makes millions in profits.
https://youtu.be/5jjdErDkDZE -
(24:45-29:32)
Do you think what JP Morgan did was out of compassion? Was it out of greed? Could it be both?
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