History of the Great American Fortunes Part 1

History of the Great American Fortunes.

by Myers Gustavus.

Vol. I.

PREFACE

In writing this work my aim has been to give the exact facts as far as the available material allows. Necessarily it is impossible, from the very nature of the case, to obtain all the facts. It is obvious that in both past and present times the chief beneficiaries of our social and industrial system have found it to their interest to represent their acc.u.mulations as the rewards of industry and ability, and have likewise had the strongest motives for concealing the circ.u.mstances of all those complex and devious methods which have been used in building up great fortunes. In this they have been a.s.sisted by a society so const.i.tuted that the means by which these great fortunes have been ama.s.sed have been generally lauded as legitimate and exemplary.

The possessors of towering fortunes have hitherto been described in two ways. On the one hand, they have been held up as marvels of success, as preeminent examples of thrift, enterprise and extraordinary ability.

More recently, however, the tendency in certain quarters has been diametrically the opposite. This latter cla.s.s of writers, intent upon pandering to a supposed popular appet.i.te for sensation, pile exposure upon exposure, and hold up the objects of their diatribes as monsters of commercial and political crime. Neither of these cla.s.ses has sought to establish definitely the relation of the great fortunes to the social and industrial system which has propagated them. Consequently, these superficial effusions and tirades--based upon a lack of understanding of the propelling forces of society--have little value other than as reflections of a certain aimless and disordered spirit of the times.

With all their volumes of print, they leave us in possession of a scattered array of a.s.sertions, bearing some resemblance to facts, which, however, fail to be facts inasmuch as they are either distorted to take shape as fulsome eulogies or as wild, meaningless onslaughts.

They give no explanation of the fundamental laws and movements of the present system, which have resulted in these vast fortunes; nor is there the least glimmering of a scientific interpretation of a succession of states and tendencies from which these men of great wealth have emerged.

With an entire absence of comprehension, they portray our multimillionaires as a phenomenal group whose sudden rise to their sinister and overshadowing position is a matter of wonder and surprise.

They do not seem to realize for a moment--what is clear to every real student of economics--that the great fortunes are the natural, logical outcome of a system based upon factors the inevitable result of which is the utter despoilment of the many for the benefit of a few.

This being so, our plutocrats rank as nothing more or less than as so many unavoidable creations of a set of processes which must imperatively produce a certain set of results. These results we see in the accelerated concentration of immense wealth running side by side with a propertyless, expropriated and exploited mult.i.tude.

The dominant point of these denunciatory emanations, however, is that certain of our men of great fortune have acquired their possessions by dishonest methods. These men are singled out as especial creatures of infamy. Their doings and sayings furnish material for many pages of a.s.sault. Here, again, an utter lack of knowledge and perspective is observable. For, while it is true that the methods employed by these very rich men have been, and are, fraudulent, it is also true that they are but the more conspicuous types of a whole cla.s.s which, in varying degrees, has used precisely the same methods, and the collective fortunes and power of which have been derived from identically the same sources.

In diagnosing an epidemic, it is not enough that we should be content with the symptoms; wisdom and the protection of the community demand that we should seek and eradicate the cause. Both wealth and poverty spring from the same essential cause. Neither, then, should be indiscriminately condemned as such; the all-important consideration is to determine why they exist, and how such an absurd contrast can be abolished.

In taking up a series of types of great fortunes, as I have done in this work, my object has not been the current one of portraying them either as remarkable successes or as unspeakable criminals. My purpose is to present a sufficient number of examples as indicative of the whole character of the vested cla.s.s and of the methods which have been employed. And in doing this, neither prejudice nor declamation has entered. Such a presentation, I believe, cannot fail to be useful for many reasons.

It will, in the first place, satisfy a spirit of inquiry. As time pa.s.ses, and the power of the propertied oligarchy becomes greater and greater, more and more of a studied attempt is made to represent the origin of that property as the product of honest toil and great public service. Every searcher for truth is ent.i.tled to know whether this is true or not. But what is much more important is for the people to know what have been the c.u.mulative effects of a system which subsists upon the inst.i.tutions of private property and wage-labor. If it possesses the many virtues that it is said to possess, what are these virtues? If it is a superior order of civilization, in what does this superiority consist?

This work will a.s.sist in explaining, for naturally a virtuous and superior order ought to produce virtuous and superior men. The kind and quality of methods and successful ruling men, which this particular civilization forces to the front, are set forth in this exposition.

Still more important is the ascertainment of where these stupendous fortunes came from, their particular origin and growth, and what significance the concomitant methods and inst.i.tutions have to the great body of the people.

I may add that in Part I no attempt has been made to present an exhaustive account of conditions in Settlement and Colonial times. I have merely given what I believe to be a sufficient resume of conditions leading up to the later economic developments in the United States.

GUSTAVUS MYERS.

September 1, 1909.

PART I

CONDITIONS IN SETTLEMENT AND COLONIAL TIMES

CHAPTER I

THE GREAT PROPRIETARY ESTATES

The noted private fortunes of settlement and colonial times were derived from the ownership of land and the gains of trading. Usually both had a combined influence and were frequently attended by agriculture.

Throughout the colonies were scattered lords of the soil who held vast territorial domains over which they exercised an arbitrary and, in some portions of the colonies, a feudal sway.

Nearly all the colonies were settled by chartered companies, organized for purely commercial purposes and the success of which largely depended upon the emigration which they were able to promote. These corporations were vested with enormous powers and privileges which, in effect, const.i.tuted them as sovereign rulers, although their charters were subject to revision or amendment. The London Company, thrice chartered to take over to itself the land and resources of Virginia and populate its zone of rule, was endowed with sweeping rights and privileges which made it an absolute monopoly. The impecunious n.o.blemen or gentlemen who transported themselves to Virginia to recoup their dissipated fortunes or seek adventure, encountered no trouble in getting large grants of land especially when after 1614 tobacco became a fashionable article in England and took rank as a valuable commercial commodity.

Over this colony now spread planters who hastened to avail themselves of this new-found means of getting rich. Land and climate alike favored them, but they were confronted with a scarcity of labor. The emergency was promptly met by the buying of white servants in England to be resold in Virginia to the highest bidder. This, however, was not sufficient, and complaints poured over to the English government. As the demands of commerce had to be sustained at any price, a system was at once put into operation of gathering in as many of the poorer English cla.s.s as could be impressed upon some pretext, and shipping them over to be held as bonded laborers. Penniless and lowly Englishmen, arrested and convicted for any one of the mult.i.tude of offenses then provided for severely in law, were transported as criminals or sold into the colonies as slaves for a term of years. The English courts were busy grinding out human material for the Virginia plantations; and, as the objects of commerce were considered paramount, this process of disposing of what was regarded as the sc.u.m element was adjudged necessary and justifiable. No voice was raised in protest.

THE INTRODUCTION OF BLACK SLAVES.

But, fast as the English courts might work, they did not supply laborers enough. It was with exultation that in 1619 the plantation owners were made acquainted with a new means of supplying themselves with adequate workers. A Dutch ship arrived at Jamestown with a cargo of negroes from Guinea. The blacks were promptly bought at good prices by the planters.

From this time forth the problem of labor was considered sufficiently solved. As chattel slavery harmonized well with the necessities of tobacco growing and gain, it was accepted as a just condition and was continued by the planters, whose interests and standards were the dominant factor.

After 1620, when the London Company was dissolved by royal decree, and the commerce of Virginia made free, the planters were the only factor.

Virginia, it was true, was made a royal province and put under deputy rule, but the big planters contrived to get the laws and customs their self-interest called for. There were only two cla.s.ses--the rich planters, with their gifts of land, their bond-servants and slaves and, on the other hand, the poor whites. A middle cla.s.s was entirely lacking.

As the supreme staple of commerce and as currency itself, tobacco could buy anything, human, as well as inert, material. The labor question had been sufficiently vanquished, but not so the domestic. Wives were much needed; the officials in London instantly hearkened, and in 1620 sent over sixty young women who were auctioned off and bought at from one hundred and twenty to one hundred and sixty pounds of tobacco each.

Tobacco then sold at three shillings a pound. Its cultivation was a.s.siduously carried on. The use of the land mainly for agricultural purposes led to the foundation of numerous settlements along the sh.o.r.es, bays, rivers, and creeks with which Virginia is interspersed and which afforded accessibility to the sea ports. As the years wore on and the means and laborers of the planters increased, their lands became more extensive, so that it was not an unusual thing to find plantations of fifty or sixty thousand acres. But neither in Virginia nor in Maryland, under the almost regal powers of Lord Baltimore who had propriety rights over the whole of his province, were such huge estates to be seen as were being donated in the northern colonies, especially in New Netherlands and in New England.

FEUDAL GRANTS IN THE NORTH.

In its intense aim to settle New Netherlands and make use of its resources, Holland, through the States General, offered extraordinary inducements to promoters of colonization. The prospect of immense estates, with feudal rights and privileges, was held out as the alluring incentive. The bill of Freedoms and Exemptions of 1629 made easy the possibility of becoming a lord of the soil with comprehensive possessions and powers. Any man who should succeed in planting a colony of fifty "souls," each of whom was to be more than fifteen years old, was to become at once a patroon with all the rights of lordship. He was permitted to own sixteen miles along sh.o.r.e or on one side of a navigable river. An alternative was given of the ownership of eight miles on one side of a river and as far into the interior "as the situation of the occupiers will permit." The t.i.tle was vested in the patroon forever, and he was presented with a monopoly of the resources of his domain except furs and pelts. No patroon or other colonist was allowed to make woolen, linen, cotton or cloth of any material under pain of banishment.[1]

These restrictions were in the interest of the Dutch West India Company, a commercial corporation which had well-nigh dictatorial powers. A complete monopoly throughout the whole of its subject territory, it was armed with sweeping powers, a formidable equipment, and had a great prestige. It was somewhat of a cross between legalized piracy and a body of adroit colonization promoters. Pillage and butchery were often its auxiliaries, although in these respects it in nowise equalled its twin corporation, the Dutch East India Company, whose exploitation of Holland's Asiatic possessions was a long record of horrors.

THE DUTCH WEST INDIA COMPANY.

The policy of the Dutch West India Company was to offer generous prizes for peopling the land while simultaneously forbidding compet.i.tion with any of the numerous products or commodities dealt in by itself. This had much to do with determining the basic character of the conspicuous fortunes of a century and two centuries later. It followed that when native industries were forbidden or their output monopolized not only by the Dutch West India Company in New Netherlands, but by other companies elsewhere in the colonies, that ownership of land became the mainstay of large private fortunes with agriculture as an accompanying factor.

Subsequently the effects of this continuous policy were more fully seen when England by law after law paralyzed or closed up many forms of colonial manufacture. The feudal character of Dutch colonization, as carried on by the Dutch West India Company, necessarily created great landed estates, the value of which arose not so much from agriculture, as was the case in Virginia, Maryland and later the Carolinas and Georgia, but from the natural resources of the land. The superb primitive timber brought colossal profits in export, and there were also very valuable fishery rights where an estate bounded a sh.o.r.e or river. The pristine rivers were filled with great shoals of fish, to which the river fishing of the present day cannot be compared. As settlement increased, immigration pressed over, and more and more ships carried cargo to and fro, these estates became consecutively more valuable.

To encourage colonization to its colonies still further, the States General in 1635 pa.s.sed a new decree. It repeated the feudal nature of the rights granted and made strong additions.

Did any aspiring adventurer seek to leap at a bound to the exalted position of patroonship? The terms were easy. All that he had to do was to found a colony of forty-eight adults and he had a liberal six years in which to do it. For his efforts he was allowed even more extensive grants of land than under the act of 1629. So complete were his powers of proprietorship that no one could approach within seven or eight miles of his jurisdiction without his express permission. His was really a princ.i.p.ality. Over its bays, rivers, and islands, had it any, as well as over the mainland, he was given command forever. The dispensation of justice was his exclusive right. He and he only was the court with summary powers of "high, low and middle jurisdiction," which were harshly or capriciously exercised. Not only did he impose sentence for violation of laws, but he, himself, ordained those laws and they were laws which were always framed to coincide with his interests and personality. He had full authority to appoint officers and magistrates and enact laws. And finally he had the power of policing his domain and of making use of the t.i.tles and arms of his colonies. All these things he could do "according to his will and pleasure." These absolute rights were to descend to his heirs and a.s.signs.[2]

OLD WORLD TRADERS BECOME FEUDAL LORDS.

Thus, at the beginning of settlement times, the basis was laid in law and custom of a landed aristocracy, or rather a group of intrenched autocrats, along the banks of the Hudson, the sh.o.r.es of the ocean and far inland. The theory then prevailed that the territory of the colonies extended westward to the Pacific.

From these patroons and their lineal or collateral descendants issued many of the landed generations of families which, by reason of their wealth and power, proved themselves powerful factors in the economic and political history of the country. The sinister effects of this first great grasping of the land long permeated the whole fabric of society and were prominently seen before and after the Revolution, and especially in the third and fourth decades of the eighteenth century.

The results, in fact, are traceable to this very day, even though laws and inst.i.tutions are so greatly changed. Other colonies reflected the constant changes of government, ruling party or policy of England, and colonial companies chartered by England frequently forfeited their charters. But conditions in New Netherlands remained stable under Dutch rule, and the acc.u.mulation of great estates was intensified under English rule. It was in New York that, at that period, the foremost colonial estates and the predominant private fortunes were mostly held.

The extent of some of those early estates was amazingly large. But they were far from being acquired wholly by colonization methods.

Many of the officers and directors of the Dutch West India Company were Amsterdam merchants. Active, scheming, self-important men, they were mighty in the money marts but were made use of, and looked down upon, by the old Dutch aristocracy. Having ama.s.sed fortunes, these merchants yearned to be the founders of great estates; to live as virtual princes in the midst of wide possessions, even if these were still comparative solitudes. This aspiration was mixed with the mercenary motive of themselves owning the land from whence came the furs, pelts, timber and the waters yielding the fishes.

One of these directors was Kiliaen van Rensselaer, an Amsterdam pearl merchant. In 1630 his agents bought for him from the Indians a tract of land twenty-four miles long and forty-eight broad on the west bank of the Hudson. It comprised, it was estimated, seven hundred thousand acres and included what are now the counties of Albany, Rensselaer, a part of Columbia County and a strip of what is at present Ma.s.sachusetts. And what was the price paid for this vast estate? As the deeds showed, the munificent consideration of "certain quant.i.ties of duffels, axes, knives and wampum,"[3] which is equal to saying that the pearl merchant got it for almost nothing. Two other directors--G.o.dyn and Bloemart--became owners of great feudal estates. One of these tracts, in what is now New Jersey, extended sixteen miles both in length and breadth, forming a square of sixty-four miles.[4]