The Wealthy Also Have a Dream (continued)

The Dark Days

Many say the beginning of the end to actually enjoying being wealthy was the great railroad strike of 1877 and the many other labor strikes that occurred in its wake. These events served fair warning to the Captains of Industry that the gilded train they had been riding was about to derail. Maybe derail is too strong a word, but the ride was going to get a little bumpier as their grip on the purse strings loosened. But they weren’t going to roll over and die without a fight. They weren’t called Captains of Industry for nothing.

In 1957, the Mafia held an informal, casual dress board meeting at the palatial estate of Joseph “The Barber” Barbara in Apalachin, N.Y to devise a game plan for dividing the underworld empire of assassinated kingpin Albert Anastasia. Big news at the time, it wasn’t the first time the rich and powerful got close and personal. Back in 1889, the great railroad magnates assembled at J. P. Morgan's home at No. 219 Madison Avenue to form, in the phrase of the day, an iron-clad combination on how to deal with the labor issues confronting them.
Key to their plan was maintaining their control over the federal government, which was already very much beholding to these money magnates. How beholden?

In 1887, President Cleveland vetoed a bill appropriating $100,000 to draught-stricken Texas farmers because he didn’t want to weaken the sturdiness of our national character by encouraging the expectation of paternal care by the government. This tough-love approach was for the farmer’s own good. That same year, when it came to dealing with wealthy bondholders, his paternal instincts kicked in, and his concern for the sturdiness of our national character took the day off as he used a treasury surplus to pay off $100 bonds at a rate $28 dollars above value—a gift of $45 million.

Whether Republicans or Democrats held office made little difference because the real power rested with this small group of men with all the money. Socialist and Populist groups took up the cause of workers, but were never more than weak third parties capable of small gains but unable to make a real difference.

The Sherman Anti-Trust Act of 1890 was a perfect example of a good idea used badly. It declared, in no uncertain terms, that forming a "combination or conspiracy" was illegal. This attempt to restrain the obvious monopoly of 30 or so millionaires controlling the whole American economy was turned on its heels in 1894 when the government employed it to shut down a “monopoly” of striking railway workers.

The Carnegies, Rockefellers and Morgans of the day prescribed to the theory that possession was ninety percent of the law, and believed beyond a shadow of a doubt that the national wealth rightfully belonged to them since they possessed ninety percent of it. They couldn’t fathom workers’ claims that some of it belonged to them simply because they had worked for it.

But they were about to learn that all the money in the world—and this select group of men pretty much had all the money in the world—wouldn’t be enough. A hundred years of almost unfettered attacks under the guise of reform turned their world upside down, and exacted a heavy toll on the wealthy—literally and figuratively. The wealthy don’t like paying tolls; bribes yes, but tolls no. They continued to be wealthy but were nowhere near as wealthy as they could have been. If this isn’t the definition of oppression, I don’t know what is.

The nation went through a bitter period of strikes accompanied by brutal retaliations, plant shutdowns, union’s organizing and union’s breaking. No matter how many times workers were clubbed over the head, owners seemed unable to knock any sense into them. Workers always wanted more. And more and more, the government, which seemed to be once firmly embedded on the sunny money side of the street started crossing over and favoring the seedy, needy side.

Populist reformers succeeded in removing kids from the workroom floor and forcing mill owners to find other means of untangling thread in tight, dangerous hard-to-reach places. Next, do-good reformers succeeded in removing children from the mines, which forced companies to find other means of getting explosives into tight spaces. Entrepreneurs were beginning to feel as if they couldn’t do anything right.

Government kept reducing the workday from the natural god-given accepted standard of 24 hours to ten and then eight. But even though workers were working less, owners were told they had to pay them more. Things got so bad that by 1900, fully one-third of the work force was pulling in $500 a year and living the good life.

Then came burdensome restrictions geared to worker-safety and health-care issues—as if mines can be made safe. Dangerous work is dangerous work, and no one was forcing anyone to do it, but all of a sudden government was telling owners that workplace safety was their problem.

From the late 1800s till the mid-1900s government handed workers one concession after another on silver platters stolen from the pantries of the wealthy—the very people who gave them jobs in the first place. It was disgraceful and un-American.

The cruelest cut of all, the dreaded Income Tax, stuck in the craw of the rich like a heavy meal after a polo match. Even before the 16^th Amendment established Income Tax as the law of the land, Congress had passed the Wilson-Gorman tariff of 1894 establishing a tax of two percent on incomes over $4000—$100,000 plus in today’s dollars. The unfairness of this tax was obvious to all but the uneducated masses since it targeted the wealthy and only the wealthy. Hell, 90 percent of workers wouldn’t see that much money in a lifetime.

Thankfully, the tariff was declared unconstitutional, but the writing was on the wall. In 1913, the government launched a full-scale assault on the wealthy. These men who built America from the ground up by taking care of business mostly at the top asked only one thing in return. They wanted to keep every last dime they earned because they believed that if anyone else deserved that dime, John D. would give it to them whenever he crossed tracks with them. The rate for the wealthiest Americans kicked in at seven percent but this was only the beginning. By 1918, it had grown to 77 percent. The rich got a little reprieve in the 1920s as business-minded leaders in Congress and the White House temporarily came to their senses and dropped the rates back into the 25 percent range.

But then came the Depression and a host of government programs the rich didn’t need, didn’t want and didn’t approve of, but that didn’t stop the government from making the wealthy foot the bill. Their rates increased higher and higher, eventually settling at 91 percent for the years 1951 through 1964—a period when the middle class made its greatest strides forward while the wealthy didn’t even want to get out of bed in the morning.

Between 1910 and 1937, the share of income garnered by the top 1 percent averaged around 18 percent, reaching an all-time high of 23.9 percent in 1928. This was commendable but a mere pittance to the fifty-plus percent of national wealth and income this elite group had cornered near the turn of the century. But the flagrant assault waged on the rich by Roosevelt’s New Deal programs hacked away at those numbers until eventually the richest one percent of Americans was barely earning 10 percent of the national income. Numbers like these are why the New Deal and everything related to it sent shivers up the spines of the rich.

All the while, unions continued to grow in strength.  

In 1947, more than a third of non-farm workers were union members and by all accounts doing pretty well. Even better news for all but the rich was that workers who didn’t belong to unions were also doing well, riding the blue shirttails of the union workers.

Someone had to pay for these great strides, and again the burden fell on the rich. They privately wondered how workers could be so happy when they were feeling so sad. Sure the life rafts of the workers were rising in the wakes of the rising pleasure boats, but those big ships had been springing leaks for quite some time. It was time for the rich to plead their case to the government. And Washington answered their call. 

The Taft-Hartley Act of 1947 was a conscious effort to temper the gains made by the labor movement. After suffering through almost a half century of oppression, the rich came to recognize this bill as the beginning of the end. Its passage would set into motion the long overdue struggle to drive that group of pretenders known as the middle class into extinction. It was the opening salvo for what was never called but could easily have been called the “Money Movement”—an effort to reclaim for the wealthy what was legitimately theirs, namely, all the money—so they could move it to “safe banks” off shore

The only concern now for these one-time pillars of society was whether they would ever be able to keep the struggle alive and entirely escape, once and for all, from the shackles of oppression.