TR, the Labor Question & “Malefactors of Great Wealth”: Lessons for a New Age of Inequality

Friday, October 12th, 2018

Follow this link to watch Joseph McCartin’s presentation on YouTube.

Last month, we partnered with Cornell in Buffalo, the Partnership for the Public Good, and the Western New York Area Labor Federation, AFL-CIO to bring Dr. Joseph McCartin to the TR Site for our ongoing Speaker Nite series. Dr. McCartin is a Professor of History at Georgetown University and the Executive Director of the Kalmanovitz Initiative for Labor and the Working Poor. His presentation, “Theodore Roosevelt, The Labor Question, and ‘Malefactors of Great Wealth’: Lessons for a New Age of Inequality” explored the complex relationship between government and big business at the turn of the previous century, Theodore Roosevelt’s policies, and parallels that can be drawn to today’s world.

Dr. McCartin began his presentation by putting the topic in context. America in 1901 was facing a myriad of economic, social, and political issues brought on by new technological advancements and rapid industrialization. Corporations were becoming larger, more powerful, and more politically connected. The nation’s new class of rich possessed more wealth than had previously been seen in the nation’s history. However, despite all this wealth, the gap between rich and poor was rapidly growing. Corruption was rampant within the government and in response a populist sentiment was brewing within the Democratic party.  The Supreme Court, the branch that was meant to check the power of the government, was acting as an obstacle to virtually any reform for oppressed Americans. In fact, the Supreme Court of 1901 was the same court that had made the Plessy v. Ferguson (1896) ruling which opened the door to segregation, and the Williams v. Mississippi (1898) decision which allowed the disenfranchisement of many African Americans. This same court also decided the Sherman Antitrust Act of 1890 could be applied against unions, which gave the government the ability to break them up. The work force itself was rapidly changing due to the large number of immigrants entering the country; approximately a million per year were entering through places like Ellis Island. In response, anti-immigration sentiment was swirling, and phrases like “close the gate” were indicative of the desire to limit the numbers entering the country. The immigration issue was further exacerbated by the belief that these new immigrants were committing acts of violence and terrorism. In September 1901, an anarchist immigrant by the name of Leon Czolgosz assassinated President McKinley. It was in the midst of this maelstrom that, as Senator  Mark Hanna (OH) said, “that damned cowboy” (Theodore Roosevelt) stepped into the presidency.

If these social, economic, and political issues sound strangely familiar, you’re not wrong. Dr. McCartin suggested that the America of today is not so different from the one of a century ago. Where they faced the rise of industrial might, we find ourselves in a technological revolution that is reshaping nearly every aspect of life. Their giant Standard Oil Company is our megalithic Walmart. Names like Jeff Bezos and Bill Gates could easily be substituted for J.P. Morgan and Andrew Carnegie; and today, America’s wealthy collectively control more of America’s money than the rest of the country combined. The corruption within our current government has encouraged a new wave of populism from the Democratic party, only it is Bernie Sanders rather than William Jennings Bryan pulling the party further left. As opposed to protecting the people’s interests, the Supreme Court’s Citizens United v. Federal Election Commission (2010) ruling has allowed millions of dollars of unaccountable money into our political process. Immigration has continued to be a contentious issue, except the modern version of “close the gate” is “build the wall.” Finally, out of our own quagmire emerged another unlikely president from New York.

While it would seem like history is repeating itself, Dr. McCartin disagreed. Instead he offered words attributed to Mark Twain: “history doesn’t repeat itself, but occasionally it rhymes.” Despite the remarkable similarities between America in 1901 and the world we know now, the context and the complexity of today’s problems create a drastically different set of circumstances. However, that is not to say that the lessons of the past aren’t applicable. In fact, Dr. McCartin made a very compelling case that inspiration for today’s solutions can be found in the events of the past. To demonstrate that point, Dr. McCartin focused on two key episodes within the first year of Roosevelt’s presidency. These two critical moments and the president’s response created an important legacy that helped shape the twentieth century.

The first of these events was the merging of the Northern Pacific Railway and the Great Northern Railway (the two largest lines in the country), into the Northern Securities Company in 1901 by E. H. Harriman, James J. Hill, and J.P. Morgan. The merger made Northern Securities one of the largest companies in the world and created a monopoly on railroad traffic in the western United States. The government, led by President McKinley, did not intend to challenge or prevent the merger. However, his unexpected death left the decision in Roosevelt’s hands, and his position was markedly different. TR made the unprecedented decision to have his Attorney General go after the monopoly. He believed the merger gave the Northern Securities Company and the men who controlled it too much power, which could easily be abused. Roosevelt’s case was aided by his earlier appointment of Oliver Wendell Holmes Jr. to the Supreme Court. He helped shift the court’s stance and they ultimately agreed the Sherman Antitrust Act could be used against the newly-formed monopoly. Remarkably, this was the first time in its 15-year existence that the Antitrust Act had actually be used against a trust, which set a rather significant precedent. By so doing, TR laid the foundation for the belief that private interests should be accountable to the public good.

The second significant case has actually come to be part of Theodore Roosevelt’s legacy in popular politics: The Square Deal. The first time he used the phrase was on August 25, 1902, in Lynn, Massachusetts, saying, “So in our country as a whole we must have wise legislation; we must have honest, fearless, and able administrators of the law. All law must be so administered as to secure justice for all alike - a square deal for every man, great or small, rich or poor.” Dr. McCartin believes that was thinking about the situation in the nation’s coal mines when he gave that speech. Coal had been the backbone of the industrial revolution and the men who worked in the mines made it all possible. However, conditions for the mine workers were horrible and the treatment they received from their employers was even worse.  The hard anthracite coal they mined was particularly valuable as it was a cleaner-burning coal, the demand for which was high. Many of these mines were owned by the railroad companies, which were in turn owned in whole or in part by J. P. Morgan. Morgan and the mine operators were opposed to the idea of union recognition and refused to acknowledge any attempt at collective bargaining. The only success the miners had enjoyed came from a strike in September of 1900. Rather strategically, it fell less than two months before a presidential election. The timing pressured the Republican party to resolve the strike or face the possibility of losing the election to the populist Democratic candidate, William Jennings Bryan. For the sake of expediency, the Republican party pressured J.P. Morgan into to allowing a wage increase. The logic being that a wage increase would pacify the miners enough to break the strike without acknowledging any of their other demands, or more importantly, their right to bargain collectively. The tactic worked: the miners called off the strike and McKinley won the election.

However, by the spring of 1902, miners demanded that their union be recognized and they organized another strike. J.P. Morgan’s man in the mines was Chief Executive of the Reading Railroad George F. Baer, whose stance was that the unions would never be recognized. The impasse lasted into the summer with the miners remaining firm and the owners refusing mediation because, as far as they were concerned, there was nothing to mediate. Roosevelt initially watched from the sidelines, wondering if government intervention might become necessary. Dr. McCartin was quick to point out that any previous government intervention in labor disputes was for the sole purpose of breaking up the strike. On numerous occasions the government intervened on behalf of the employer and crushed the union. However, Roosevelt’s idea of intervention was again contrary to that of his predecessors. He sent his Commissioner of Labor, Carroll D. Wright, to investigate and report back. Wright’s report was critical of the mine owners who refused to negotiate. They were sitting on enormous profits, but refused to work with the union just to spite them. He gave TR several suggestions that seemed fair and reasonable given the circumstances. His suggestions included lowering the work day from 10 hours to at least 9, the creation of a joint committee to negotiate an end to the strike, and the right of the workers to collectively bargain.

While TR supported the findings of the report, he was slow to act on them. He had hoped the strike would conclude on its own. However, as the strike dragged closer to winter and public sentiment started to turn against the mine owners, Roosevelt felt compelled to act. In early October, he invited representatives from both sides to his provisional White House (construction of the West Wing was underway). The union leaders were honored by the invitation and the opportunity to negotiate, while the representatives of the mines, including Baer, were disgusted by the notion and refused to sit in the same room as the labor leaders. Almost nothing was accomplished. The stalemate continued, and the threat of a winter without coal became more imminent. Roosevelt tried a different tactic and dispatched in his Secretary of War, Elihu Root. He had been a corporate lawyer prior to his appointment and was someone who knew J.P. Morgan quite well. Root met with Morgan and after 5 hours, a compromise was reached. They agreed to the creation of an arbitration commission that would examine the situation and make their own suggestions. The commission would include a military engineer, a mining engineer, a judge, an expert in the coal business, and a person they called an “eminent sociologist.” While the compromise was a small victory, the union leaders were concerned about how fair the commission would be. They pushed for a seven-person commission with the addition of a labor leader (the head of the conductors’ union would serve as the “eminent sociologist”) and a Catholic bishop (most miners were Catholic). TR agreed to the request and the commission was formed.

After three months of researching and deliberating, the commission issued its findings which were accepted by both sides. By and large, on points of contention, the commission split the difference. For example, the miners had asked for a 20% wage increase and the commission suggested 10%. In response to the miners’ demand for an 8-hour work day, the commission agreed to a 9-hour day. However, the most significant part about the commission’s concessions to the labor union was that by making these compromises they were effectively recognizing the union and thereby the miners’ right to collectively bargain. This was an enormous turnaround from Baer’s refusal to sit in the same room with the union leaders, let alone acknowledge their existence.

These two events which occurred early in TR’s presidency served as the bedrock of his tenure. His actions set the precedent that the federal government ought to advance the common good, even if that meant confronting the “malefactors of great wealth.” He also believed the government must defend the public welfare. TR wenton to say, “the welfare of each of us is dependent fundamentally upon the welfare of all of us.” He also planted the seed of “Industrial Democracy” which became central to the twentieth century. It was the idea that democracy needed to exist in the workplace so that workers could have a voice. Workers should be involved in making decisions that impacted their working conditions and well-being.

While today’s world resembles the one of a century ago, simply replicating TR’s policies wouldn’t solve the issues we face today. What we can take away from TR is the willingness to approach the problems innovatively. The government should be constantly evolving and examining how it can better serve the public good. Dr. McCartin finished his presentation by exploring the size and scope of the problems facing today’s governments. While the solutions aren’t obvious or clear cut, a little of TR’s spirit and ingenuity certainly wouldn’t hurt.

- Lindsey Lauren Visser, Public Programming Assistant

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Speaker Nite is part of the TR Site’s regular Tuesday evening programming, which is made possible with generous support from M&T Bank, as well as the New York State Council on the Arts (NYSCA), with the support of Governor Andrew Cuomo and the New York State Legislature.

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