tive years after panics and both were attended with large crops in the United States, a failure in Europe, or, as Noyes expressed it, "A European famine and a bumper crop at home," immense exportations of breadstuffs, an import of gold and a buying-back of securities which Europe had taken in former years. Hay and Adams in their walks, discoursed of "the insolent prosperity of the United States." While the dominant characteristics of 1879 were an advance in the price of pig iron and railroad shares, 1899 was noted for its "boom" in industrials and putting railroads on their feet. John Pierpont Morgan is the hero of 1899 and of the succeeding years, and he came into public notice from his reorganization of railroads which had been badly hurt by the panic of 1893 and by conditions prevailing before and after. While circumstances favored his operations, they were really marvellous and may be fully appreciated by putting the question whether any other man in the country could have accomplished what he did. Not by affability and not by any strong hold on public sentiment did he work his results; for he was reticent, taciturn, decisive and blunt; his manner was stern and brusque; endowed with great energy, he was ruthless. He lacked a wide range of knowledge, but somehow he arrived quickly at decisions involving millions to the amazement of the beholder. He rarely read books and, on a constitutional question, he once displayed an ignorance that would have disgraced a College freshman. But the apologists for a mathematical training may point to Morgan as a shining example. From the English High 'Hay, Letters, iii. 140. School of Boston he went to the University of Göttingen where he so distinguished himself in mathematics that the professor, under whom he sat, wanted him to remain. "You would have been my assistant as long as I lived," he said, "and unquestionably at my death you would have been appointed professor of mathematics in my place." This incident Morgan used to tell in the day of his success with justifiable pride. His action showed "precision" and "wariness of mind" which John Stuart Mill mentioned as some of the "excellencies of mathematical discipline." 2 The railroads had tried competition with the result that large numbers of them were in the hands of receivers and the sounder ones had difficulty in making both ends meet. Morgan substituted combination for competition. In the parlance of the street his first name was Jupiter and this was properly bestowed, for his word was "I command." Those who wished a reorganization of their railroads must accept his terms; and the result proved their justification. A contrast of the condition of the railroads in 1899 and before that year is one between excellent business management and the proper payment of interest and dividends, and a cutthroat competition that did no one, except perhaps speculators, any good. Naturally Morgan added to his great reputation of a banker that of a reorganizer of railroads. He always bore in mind what his father told him. Junius S. Morgan was one of America's first men of business who developed an influential London banking house. This was the advice he gave to his son: 1 Life of Morgan, Hovey, 316. * See my vol. ii. 333. "Remember one thing always. Any man who is a bear on the future of the United States will go broke. There will be many times when things look dark and cloudy in America, when everyone will think there has been over development. But remember yourself that the growth of that vast country will take care of it all. Always be a 'bull' on America." 1 Along with the reënhancement of the railroads was the revival of industrial conditions. Captains of industry showed their ability and power and forged to the front with their manufactures, so that Europe began to hear of what they called the "American invasion." "European nations," said the Austrian Minister of Foreign Affairs, "must close their ranks and fight shoulder to shoulder, in order successfully to defend their existence." 2 A conspicuous development was in the steel industry which is fully represented in a report of Charles M. Schwab, dated May 15, 1899. "I know positively," he wrote, "that England cannot produce pig iron at actual cost for less than $11.50 per ton, even allowing no profit on raw materials, and cannot put pig iron into a rail with their most efficient works for less than $7.50 per ton. This would make rails at net cost to them of $19.00. We can sell at this price and ship abroad so as to net us $16.00 at works for foreign business, nearly as good as home business has been. As a result of this we are going to control the steel business of the world. You know we can make rails for less than $12.00 per ton, leaving a nice margin on foreign business." Schwab 2 Noyes, 273. 1 McClure's Magazine, Nov., 1910, 16. was President of the Carnegie Steel Co. and his report was to Henry Clay Frick, chairman, his superior officer, but both were under Andrew Carnegie, who, despite his obvious faults, was the greatest iron master of the world, was now at the head of the best equipped steel works and could make steel cheaper than anyone else. "Between 1893 and 1899 our export of manufactures actually doubled." 1 In the old school-books it was set down that the development of a State lay in commerce, manufactures, and agriculture. Agriculture was the largest single interest in the United States and commerce and manufactures owed more to it than it owed to the others. In 1899 the farmer was prosperous. "Every barn in Kansas and Nebraska has had a new coat of paint." "For anyone," wrote Ray Stannard Baker, "who knew the West of 1895 and 1896, with its bare weather-stained homes, its dilapidated barns, its farm machinery standing out in the rain, its ruinous 'boom' towns, its discontented inhabitants crying out for legislation to relieve their distress, this bit of observation raises a picture of improvement and smiling comfort such as no array of figures, however convincing, could produce. The West painted again: how much that means! The farmer has provided himself with food in plenty and the means for seeding his fields for another year; he has clothed himself and his family anew; he has bought an improved harvester, a buggy and a sewing machine; and now with the deliberation which is born of a surplus and a sturdy confidence in himself and in the future, he is painting his 1 Noyes, 275. barn. Paint signifies all of these preliminary comforts. And after paint comes a new front porch, a piano and the boys off to college." Baker might have added that cancelled farm mortgages were reckoned by the carload.' Since the campaign of 1896, there had been an enormous increase in the production of gold so that circum- • stances were ripe for the Republicans to fulfil the promises they had made in their platform of 1896 and during that lively canvass. Unquestionably the gold Democrats, who had supported McKinley, were disappointed that financial legislation was not enacted as the result of his victory, but those who believed in a protective tariff dominated the councils of the party and before they tackled the subject of finance they felt that the tariff demanded their attention: hence the Dingley Tariff Bill. McKinley and his immediate advisers had come to believe in a gold standard and were right in their conviction that a better law could be later secured than in 1897. But this conviction was based on the education of their party, as they could not have foreseen how Nature was going to work on their side. On March 14, 1900, a law was enacted declaring the gold dollar to be the standard unit of value. It provided that "United States notes [greenbacks] and Treasury notes" issued under the Act of 1890 "shall be redeemed in gold coin; and, in order to secure the prompt and certain redemption of such notes, it shall be the duty of the Secretary of the Treasury to set apart a reserve fund of 1 Ray Stannard Baker, The New Prosperity, McClure's Magazine, May, 1900, 86. In addition to authorities already cited, I have used The Nation for 1899, and conversations with Mark Hanna and J. P. Morgan. |