History of the Great American Fortunes Part 22

[176] In the course of inquiries among the Chicago religious missions in 1909, the author was everywhere informed that the great majority of native prost.i.tutes were products of the department stores. Some of the conditions in these department stores, and how their owners have fought every effort to better these conditions, have been revealed in many official reports. The appended description is from the Annual Report of the Factory Inspectors of Illinois, 1903-04, pp. ix and x:

"In this regard, and worthy of mention, reference might be made to the large dry goods houses and department stores located in Chicago and other cities, in which places it has been customary to employ a great number of children under the age of sixteen as messenger boys, bundle wrappers, or as cash boys or cash girls, wagon boys, etc. In previous years these children were required to come to work early in the morning and remain until late at night, or as long as the establishment was open for business, which frequently required the youngsters to remain anywhere from 8:00 to 9:00 o'clock in the morning until 10:00 and 11:00 p.m., their weak and immature bodies tired and worn out under the strain of the customary holiday rush. In the putting a stop to this practice of employing small children ten and thirteen hours per day, the department found it necessary to inst.i.tute frequent prosecutions. While our efforts were successful, we met with serious opposition, and in some cases almost continuous litigation, some 300 arrests being necessary to bring about the desired results, which finally secured the eight hour day and a good night's rest for the small army of toilers engaged in the candy and paper box manufacturing establishments and department stores.

"In conducting these investigations and crusades the inspectors met with some surprises in the way of unique excuses. In Chicago a manager of a very representative first cla.s.s department store, one of the largest of its kind, gave as his reason for not obeying the law, that they had never been interfered with before. Another, that the children preferred to be in the store rather than at home. The unnaturalness of this latter excuse can be readily realized by anyone who has stepped into a large department store during the holiday season, when the clerks are tired and cross and little consideration is shown to the cash boy or cash girl who, because he or she may be tired or physically frail, might be a little tardy in running an errand or wrapping a bundle. This character of work for long hours is deleterious to a child, as are the employments in many branches of the garment trade or other industries, which labor is so openly condemned by those who have been interested in anti-child labor movements."

[177] For detailed particulars see that part of this work comprising "Great Fortunes from Public Franchises."

[178] The acts here summarized are narrated specifically in Part III, "Great Fortunes from Railroads."

CHAPTER X

FURTHER VISTAS OF THE FIELD FORTUNE

But if only to give at the outset a translucent example of Field's method's in the management of industrial corporations, it is well to advert here to the operations of one of his many properties--the Pullman Company, otherwise called the "Palace Car Trust." This is a necessary part of the exposition in order to bring out more of the methods by which Field was enabled to fling together his vast fortune.

The artificial creation of the law called the corporation was so devised that it was comparatively easy for the men who controlled it to evade personal, moral, and often legal, responsibility for their acts.

Governed as the corporation was by a body of directors, those acts became collective and not individual; if one of the directors were a.s.sailed he could plausibly take refuge in the claim that he was merely one of a number of controllers; that he could not be held specifically responsible. Thus the culpability was s.h.i.+fted, until it rested on the corporation, which was a bloodless thing, not a person.

FIELD'S PULLMAN WORKS.

In the case of the Pullman Co., however, much of the moral responsibility could be directly placed upon Field, inasmuch as he, although under cover, was virtually the dictator of that corporation.

According to the inventory of the executors of his will, he owned 8,000 shares of Pullman stock, valued at $800,000. It was a.s.serted (in 1901) that Field was the largest owner of Pullman stock. "In the popular mind," wrote a puffer, probably inspired by Field himself, "George M.

Pullman has ever been deemed the dominant factor in that vast and profitable enterprise." This belief was declared an error, and the writer went on: "Field is, and for years has been, in almost absolute control. Pullman was little more than a figurehead. Such men as Robert T. Lincoln, the president of the company, and Norman B. Ream are but representatives of Marshall Field, whose name has never been identified with the property he so largely owns and controls." That fulsome writer, with the usual inaccuracies and turgid exaggerations of "popular writers," omitted to say that although Field was long the controlling figure in the management of the Pullman works, yet other powerful American multimillionaires, such as the Vanderbilts, had also become large stockholders.

The Pullman Company, Moody states, employed in 1904, in all departments of its various factories at different places, nearly 20,000 employees, and controlled 85 per cent of the entire industry.[179] As at least a part of the methods of the company have been the subject of official investigation, certain facts are available.

To give a brief survey, the Pullman Company was organized in 1867 to build sleeping cars of a feasible type officially patented by Pullman.

In 1880 it bought five hundred acres of land near Chicago. Upon three hundred of these it built its plant, and proceeded, with much show and advertis.e.m.e.nt of benevolence, to build what is called a model town for the benefit of its workers. Brick tenements, churches, a library, and athletic grounds were the main features, with sundry miscellaneous accessories. This project was heralded far and wide as a notable achievement, a conspicuous example of the growing altruism of business.

THE NATURE OF A MODEL TOWN.

Time soon revealed the inner nature of the enterprise. The "model town,"

as was the case with imitative towns, proved to be a cunning device with two barbs. It militated to hold the workers to their jobs in a state of quasi serfdom, and it gave the company additional avenues of exploiting its workers beyond the ordinary and usual limits of wages and profits.

In reality, it was one of the forerunners of an incoming feudalistic sway, without the advantages to the wage worker that the lowly possessed under medieval feudalism. It was also an apparent polished improvement, but nothing more, over the processes at the coal mines in Pennsylvania, Illinois and other States where the miners were paid the most meager wages, and were compelled to return those wages to the coal companies and bear an incubus of debt besides, by being forced to buy all of their goods and merchandise at company stores at extortionate rates. But where the coal companies did the thing boldly and crudely, the Pullman Company surrounded the exploitation with deceptive embellishments.

The mechanism, although indirect, was simple. While, for instance, the cost of gas to the Pullman Company was only thirty-three cents a thousand feet, every worker living in the town of Pullman had to pay at the rate of $2.25 a thousand feet. If he desired to retain his job he could not avoid payment; the company owned the exclusive supply of gas and was the exclusive landlord. The company had him in a clamp from which he could not well escape. The workers were housed in ugly little pens, called cottages, built in tight rows, each having five rooms and "conveniences." For each of these cottages $18 rent a month was charged.

The city of Chicago, the officials of which were but the mannikins or hirelings of the industrial magnates, generously supplied the Pullman Company with water at four cents a thousand gallons. For this same water the company charged its employees ten cents a thousand gallons, or about seventy-one cents a month. By this plan the company, in addition, obtained its water supply for practically nothing. Even for having shutters on the houses the workers were taxed fifty cents a month. These are some specimens of the company's many devious instrumentalities for enchaining and plundering its thousands of workers.

In the panic year of 1893 the Pullman Company reduced wages one-fourth, yet the cost of rent, water, gas--of nearly all other fundamental necessities--remained the same. As the average yearly pay of at least 4,497 of the company's wage workers was little more than $600--or, to be exact, $613.86--this reduction, in a large number of cases, was equivalent to forcing these workers to yield up their labors for substantially nothing. Numerous witnesses testified before the special commission appointed later by President Cleveland, that at times their bi-weekly checks ran variously from four cents to one dollar. The company could not produce evidence to disprove this. These sums represented the company's indebtedness to them for their labor, after the company had deducted rent and other charges. Such manifold robberies aroused the bitterest resentment among the company's employees, since especially it was a matter of authentic knowledge, disclosed by the company's own reports, that the Pullman factories were making enormous profits. At this time, the Pullman workers were $70,000 in arrears to the company for rent alone.

THE PULLMAN EMPLOYEES STRIKE.

Finally plucking up courage--for it required a high degree of moral bravery to subject themselves and their families to the further want inevitably ensuing from a strike--the workers of the Pullman Company demanded a restoration of the old scale of wages. An arrogant refusal led to the declaration of a strike on May 11, 1894. This strike, and the greater strike following, were termed by Carroll D. Wright, for a time United States Commissioner of Labor, as "probably the most expensive and far-reaching labor controversy which can properly be cla.s.sed among the historic controversies of this generation."[180] The American Railway Union, composed of the various grades of workers on a large number of railroads, declared a general sympathetic strike under the delegated leaders.h.i.+p of Eugene V. Debs.

The strike would perhaps have been successful had it not been that the entire powers of the National Government, and those of most of the States affected, were used roughshod to crush this mighty labor uprising. The whole newspaper press, with rare exceptions, spread the most glaring falsehoods about the strike and its management. Debs was personally and venomously a.s.sailed in vituperation that has had little equal. To put the strikers in the att.i.tude of sowing violence, the railroad corporations deliberately instigated the burning or destruction of their own cars (they were cheap, worn-out freight cars), and everywhere had thugs and roughs as its emissaries to preach, and provoke, violence.[181] The object was threefold: to throw the onus upon the strikers of being a lawless body; to give the newspapers an opportunity of inveighing with terrific effect against the strikers, and to call upon the Government for armed troops to shoot down, overawe, or in other ways thwart, the strikers.

Government was, in reality, directed by the railroad and other corporations. United States judges, at the behest of the railroad companies (which had caused them to be appointed to the Bench), issued extraordinary, unprecedented injunctions against the strikers. These injunctions even prevented the strikers from persuading fellow employees to quit work. So utterly lacking any basis in law had these injunctions that the Federal Commission reported: "It is seriously questioned, and with much force, whether the courts have jurisdiction to enjoin citizens from 'persuading' each other in industrial matters of common interest."

But the injunctions were enforced. Debs and his comrades were convicted of contempt of court and, without jury trial, imprisoned at a critical juncture of the strike. And what was their offense? Nothing more than seeking to induce other workers to take up the cause of their striking fellow-workers. The judges const.i.tuted themselves as prosecuting attorney, judge and jury. Never had such high-handed judicial usurpation been witnessed. As a concluding stroke, President Cleveland ordered a detachment of the United States army to Chicago. The pretexts were that the strikers were interfering with interstate commerce and with the carrying of mails.

VAST PROFITS AND LOW WAGES.

That the company's profits were great at the identical time the workers were curtailed to a starvation basis, there can be no doubt. The general indignation and agitation caused by the summary proceedings during the strike, compelled President Cleveland to appoint a commission to investigate. Cleveland was a mediocre politician who, by a series of fortuitous circ.u.mstances, had risen from ward politics to the Presidency. After using the concentrated power of the Federal Government to break the strike, he then decided to "investigate" its merits. It was the s.h.i.+ft and ruse of a typical politician.

The Special Commission, while not selected of men who could in the remotest degree be accused of partiality toward the workers, brought out a volume of significant facts, and handed in a report marked by considerable and unexpected fairness. The report showed that the Pullman Company's capital had been increased from $1,000,000 in 1867 to $36,000,000 in 1894. "Its prosperity," the Commission reported, "has enabled the company for over twenty years to pay two per cent. quarterly dividends." But this eight per cent. annual dividend was not all. In certain years the dividends had ranged from nine and one half, to twelve, per cent. In addition, the Commission further reported, the company had laid by a reserve fund in the form of a surplus of $25,000,000 of profits which had not been divided. For the year ending July 31, 1893, the declared dividends were $2,520,000; the wages $7,223,719.51. During the next year, when wages were cut one-fourth, the stockholders divided an even greater amount in profits: $2,880,000.

Wages went to 4,471,701.39.[182]

If Field's revenue was so proportionately large from this one property--the Pullman works--it is evident that his total revenue from the large array of properties which he owned, or in which he held bonds or stock, was very great.

It is probable that in the latter years of his life his annual net income was, at the very least, $5,000,000. This is an extremely conservative estimate. More likely it reached $10,000,000 a year.

Computing the sum upon which the average of his workers had to live (to make a very liberal allowance) at $800 a year, this sum of $5,000,000 flowing in to him every year, without in the slightest trenching upon his princ.i.p.al, was equal to the entire amount that 6,250 of his employees earned by the skill of their brains and hands, and upon which they had to support themselves and their families.

Here, then, was one individual who appropriated to his use as much as six thousand; men and more who laboriously performed service to the community. For that $5,000,000 a year Field had nothing to do in return except to worry over the personal or business uses to which his surplus revenues should be put; like a true industrial monarch he relieved himself of superfluous cares by hiring the ability to supervise and manage his properties for him.

Such an avalanche of riches tumbled in upon him that, perforce, like the Astors, the Goelets and other multimillionaires, he was put constantly to the terrible extremity of seeking new fields for investment.

Luxuriously live, as he did, it would have required a superior inventive capacity to have dissipated his full income. But, judging his life by that of some other multimillionaires, he lived modestly. Of medium height and spare figure, he was of rather un.o.btrusive appearance. In his last years his hair and mustache were white. His eyes were gray and cold; his expression one of determination and blandly a.s.sertive selfishness. His eulogists, however, have glowingly portrayed him as "generous, philanthropic and public-spirited."

"A MODEL OF BUSINESS INTEGRITY."

In fact, it was a point descanted upon with extraordinary emphasis during Field's lifetime and following his demise that, (to use the stock phrase which with wearying ceaselessness went the rounds of the press), he was "a business man of the best type." From this exceptional commentary it can be seen what was the current and rooted opinion of the character of business men in general. Field's rigorous exploitation of his tens of thousands of workers in his stores, in his Pullman factories, and elsewhere, was not a hermetically sealed secret; but this exploitation, no matter to what extremes to which it was carried, was an ordinary routine of prevailing business methods.[183]

Of the virtual enslavement of the worker; of the robbing him of what he produced; of the drastic laws enforced against him; of the debas.e.m.e.nt of men, women and children--of all of these facts the organs of public expression, the politicians and the clergy, with few exceptions, said nothing.

Everywhere, except in obscure quarters of despised workingmen's meetings, or in the writings or speeches of a few intellectual protestors, the dictum was proclaimed and instilled that conditions were just and good. In a thousand disingenuous ways, backed by nimble sophistry, the whole ruling cla.s.s, with its clouds of retainers, turned out either an increasing flood of praise of these conditions, or ma.s.ses of misinforming matter which tended to reconcile or blind the victim to his pitiful drudgery. The masters of industry, who reaped fabulous riches from such a system, were covered with slavish adulation, and were represented in flowery, grandiloquent phrases as indispensable men, without whom the industrial system of the country could not be carried on. Nay, even more: while being plundered and ever anew plundered of the fruits of their labor, the workers were told, (as they are increasingly being told), that they should honor the magnates and be thankful to them for providing work.

HE STEALS MILLIONS IN TAXES.

Marshall Field, as we have said, was heralded far and wide as an unusually honest business man, the implication being that every cent of his fortune was made fairly and squarely. Those fawners to wealth, and they were many, who persisted in acclaiming his business methods as proper and honorable, were grievously at a loss for an explanation when his will was probated, and it was found that even under the existing laws, favorable as they were to wealth, he had been nothing more than a common perjurer and a cheat. It was too true, alas! This man "of strict probity" had to be catalogued with the rest of his cla.s.s.

For many years he had insisted on paying taxes on personal property on a valuation of not more than $2,500,000; and the pious old shopkeeper had repeatedly threatened, in case the board of a.s.sessors should raise his a.s.sessment, that he would forthwith bundle off his domicile from Chicago, and reside in a place where a.s.sessors refrain from too much curiosity as to one's belongings. But lo! when the schedule of his property was filed in court, it was disclosed that for many years he had owned at least $17,500,000 of taxable personal property subject to the laws of the State of Illinois. Thus was another idol cruelly shattered; for the aforesaid fawners had never tired of exulting elaborately upon the theme of Field's success, and how it was due to his absolute integrity and pure, undented character.

At another time the facts of his thefts of taxes might have been suppressed or toned down. But at this particular juncture Chicago happened to have a certain corporation counsel who, while mildly infected with conventional views, was not a truckler to wealth. Suit was brought in behalf of the city for recovery of $1,730,000 back taxes. So clear was the case that the trustees of Field's estate decided to compromise. On March 2, 1908, they delivered to John R. Thompson, treasurer of Cook County, a check for one million dollars. If the compound interest for the whole series of years during which Field cheated in taxation were added to the $1,730,000, it would probably be found that the total amount of his frauds had reached fully three million dollars.

The chorus of astonishment that ascended when these facts were divulged was an edifying display. He who did not know that the entire propertied cla.s.s made a regular profession of perjury and fraud in order to cheat the public treasury out of taxes, was either deliciously innocent or singularly uninformed. Year after year a host of munic.i.p.al and State officials throughout the United States issued reports showing this widespread condition. Yet aside from their verbose complainings, which served political purpose in giving an air of official vigilance, the authorities did nothing.

PERJURY AND CHEATING COMMON.

As a matter of fact, the evasion of taxes by the Pullman Company had been a public scandal for many years. John P. Altgeld, Governor of Illinois in 1893-95, frequently referred to it in his speeches and public papers. Field, then, not only personally cheated the public treasury out of millions, but also the corporations which he controlled did likewise. The propertied cla.s.s everywhere did the same. The unusually thorough report of the Illinois Labor Bureau of 1894 demonstrated how the most valuable land and buildings in Chicago were a.s.sessed at the merest fraction of their true value--the costliest commercial buildings at about one-tenth, and the richest residences at about one-fourteenth, of their actual value. As for personal property it contributed a negligible amount in taxes.[184]