History of the Great American Fortunes Part 7

"THE GREAT BENEFACTOR."

All of the benefactions of the other rich men of the period waned into insignificance compared to those of Girard. His compet.i.tors and compeers had given to charity, but none on so great a scale as Girard.

Distinguished orators vied with one another in extolling his wonderful benefactions,[66] and the press showered encomiums upon him as that of the greatest benefactor of the age. To them this honestly seemed so, for they were trained by the standards of the trading cla.s.s, by the sophistries of political economists and by the spirit of the age, to concentrate their attention upon the powerful and successful only, while disregarding the condition of the ma.s.ses of the people.

The pastimes of a king or the foibles of some noted politician or rich man were things of magnitude and were much expatiated upon, while the common man, singly or in ma.s.s, was of absolutely no importance. The finely turned rhetoric of the orators, pleasing as it was to that generation, is, judged by modern standards, well nigh meaningless and worthless. In that highflown oratory, with its carefully studied exordiums, periods and perorations can be clearly discerned the reverence given to power as embodied by possession of property. But nowhere do we see any explanation, or even an attempt at explanation, of the basic means by which this property was acquired or of its effect upon the ma.s.ses of the people. Woefully lacking in facts are the productions of the time as to how the great body of the workers lived and what they did. Facts as to the rich are fairly available, although not abundant, but facts regarding the rest of the population are pitifully few. The patient seeker for truth--the mind which is not content with the presentation of one side--finds, with some impatience, that only a few writers thought it worth while to give even scant attention to the condition of the working cla.s.s. One of these few was Matthew Carey, an orthodox political economist, who, in a pamphlet issued in 1829[67], gave this picture which forms both a contrast and a sequel to the acc.u.mulations of multimillionaires, of which Girard was then the archetype:

A STARK CONTRAST PRESENTED.

"Thousands of our laboring people travel hundreds of miles in quest of employment on ca.n.a.ls at 62-1/2 cents to 87-1/2 cents per day, paying $1.50 to $2.00 a week for board, leaving families behind depending upon them for support. They labor frequently in marshy grounds, where they inhale pestiferous miasmata, which destroy their health, often irrevocably. They return to their poor families broken hearted, and with ruined const.i.tutions, with a sorry pittance, most laboriously earned, and take to their beds, sick and unable to work. Hundreds are swept off annually, many of them leaving numerous and helpless families. Notwithstanding their wretched fate, their places are quickly supplied by others, although death stares them in the face. Hundreds are most laboriously employed on turnpikes, working from morning to night at from half a dollar to three-quarters a day, exposed to the broiling sun in summer and all the inclemency of our severe winters. There is always a redundancy of wood-pilers in our cities, whose wages are so low that their utmost efforts do not enable them to earn more than from thirty-five to fifty cents per day.... Finally there is no employment whatever, how disagreeable or loathsome, or deleterious soever it may be, or however reduced the wages, that does not find persons willing to follow it rather than beg or steal."

FOOTNOTES:

[61] "Kings of Fortune":16--The pretentious t.i.tle and sub-t.i.tle of this work, written thirty odd years ago by Walter R. Houghton, A.M., gives an idea of the fantastic exaltation indulged in of the careers of men of great wealth. Hearken to the full t.i.tle: "Kings of Fortune--or the Triumphs and Achievements of n.o.ble, Self-made men.--Whose brilliant careers have honored their calling, blessed humanity, and whose lives furnish instruction for the young, entertainment for the old and valuable lessons for the aspirants of fortune." Could any fulsome effusion possibly surpa.s.s this?

[62] "Mr. Girard's bank was a financial success from the beginning. A few months after it opened for business its capital was increased to one million three hundred thousand dollars. One of the incidents which helped, at the outstart, to inspire the public with confidence in the stability of the new inst.i.tution was the fact that the trustees who liquidated the affairs of the old Bank of the United States opened an account in Girard's Bank, and deposited in its vaults some millions of dollars in specie belonging to the old bank."--"The History of the Girard National Bank of Philadelphia," by Josiah Granville Leach, LL.B., 1902. This eulogistic work contains only the scantiest details of Girard's career.

[63] The First Session of the Twenty-second Congress, 1831, iv, containing reports from Nos. 460 to 463.

[64] Ibid.

An investigating committee appointed by the Pennsylvania Legislature in 1840, reported that during a series of years the Bank of the United States (or United States Bank, as it was more often referred to) had corruptly expended $130,000 in Pennsylvania for a re-charter.--Pa. House Journal, 1842, Vol. II, Appendix, 172-531.

[65] In providing for the establishment of Girard College, Girard stated in his will: "I enjoin and require that no ecclesiastic, missionary, or minister of any sect whatsoever, shall ever hold or exercise any station or duty whatsoever in the said college; nor shall any such person be admitted for any purpose, or as a visitor within the premises appropriated to the purposes of said college."--The Will of the Late Stephen Girard, Esq., 1848:22-23.

An attempt was made by his relatives in France to break his will, one of the grounds being that the provisions of his will were in conflict with the Christian religion which was a part of the common law of Pennsylvania. The attempt failed.

[66] For example, an address by Edward Everett, at the Odeon, before the Mercantile Library a.s.sociation in Boston, September 13, 1838: "Few persons, I believe, enjoyed less personal popularity in the community in which he lived and to which he bequeathed his personal fortune.... A citizen and a patriot he lived in his modest dwelling and plain garb; appropriating to his last personal wants the smallest pittance from his princely income; living to the last in the dark and narrow street in which he made his fortune; and when he died bequeathed it for the education of orphan children. For the public I do not believe he could have done better," etc., etc.--Hunt's "Merchant's Magazine," 1830, 1:35.

[67] "The Public Charities of Philadelphia."

PART II

THE GREAT LAND FORTUNES

[Ill.u.s.tration: GEN. STEPHEN VAN RENSSLAER.

The Last of the Patroons.

(From an Engraving.)]

CHAPTER I

THE ORIGIN OF HUGE CITY ESTATES

In point of succession and importance the next great fortunes came from owners.h.i.+p of land in the cities. They far preceded fortunes from established industries or from the control of modern methods of transportation. Long before Vanderbilt and other of his contemporaries had plucked immense fortunes from steamboat, railroad and street railway enterprises, the Astor, Goelet, and Longworth fortunes were counted in the millions. In the seventy years from 1800 the landowners were the conspicuous fortune possessors; and, although fortunes of millions were extracted from various other lines of business, the land fortunes were preeminent.

At the dawn of the nineteenth century and until about 1850, survivals of the old patroon estates were to be met with. But these gradually disintegrated. Everywhere in the North the tendency was toward the part.i.tion of the land into small farms, while in the South the condition was the reverse. The main fact which stood out was that the rich men of the country were no longer those who owned vast tracts of rural land.

That powerful kind of landowner had well-nigh vanished.

THE MANORIAL LORDS Pa.s.s AWAY.

For more than two centuries the manorial lords had been conspicuous functionaries. Shorn of much power by the alterations of the Revolution they still retained a part of their state and estate. But changing laws and economic conditions drove them down and down in the scale until the very names of many of them were gradually lost sight of. As they descended in the swirl, other cla.s.ses of rich men jutted into strong view. Chief among these nascent cla.s.ses were the landowners of the cities, at first grabbling tradesmen and land speculators and finally rising to the crowning position of multimillionaires. Originally, as we have seen, the manorial magnate himself made the laws and decreed justice; but in two centuries great changes had taken place. He now had to fight for his very existence.

Thus, to give one example, the manorial men in New York were confronted in 1839 by a portentous movement. Their tenants were in a state of unrest. On the Van Rensselaer, the Livingston and other of the old feudal estates they rose in revolt. They objected to the continuing system which gave the lords of these manors much the same rights over them as a lord in England exercised over his tenants. Under the leases that the manorial lords compelled their tenants to sign, there were oppressive anachronisms. If he desired to entertain a stranger in his house for twenty-four hours, the tenant was required to get permission in writing. He was forced to obligate himself not to trade in any Commodities except the produce of the manor. He could not get his flour ground anywhere else than at the mill of the manor without violating his lease and facing ejectment, nor could he buy anything at any place except at the store of the manorial magnate. These were the rights reserved to the manorial lords after the Revolution, because theirs were the rights of private property; and as has often been set forth, property absolutely dominated the laws and greatly nullified the spirit of a movement made successful by the blood and lives of the ma.s.ses in the Revolutionary Army. Tardily, subsequent legislatures had abolished all feudal tenures, but these laws were neither effective nor were enforced by the authorities who reflected and represented the interests of the proprietors of the manors.

On their part the manorial men believed that self-interest, pride and adherence to ancient traditions called for the perpetuation of their arbitrary power of running their domains as they pleased. They refused to acknowledge that law had any right to interfere in the managing of what they considered their private affairs. Eager to avail themselves of the police power of the law in dispossessing any fractious or impecunious tenant and in suppressing protest meetings, they, at the same time, denounced law as tyrannical when it sought to inject more modern and humane conditions in the managing of their estates. They stubbornly insisted upon a tenantry, and as obstinately contested any forfeiture of what they deemed their property rights.

FEUDAL TENURES ABOLISHED.

A long series of reprisals and an intense agitation developed. The Anti-Renters mustered such sympathetic political strength and threw the whole state into such a vortex of radical discussion, that the politicians of the day, fearing the effects of such a movement, practically forced the manorial magnates to compromise by selling their land in small farms,[68] which they did at exorbitant prices. They made large profits on the strength of the very movement which they had so bitterly opposed. Affrighted at the ominous unrest of a large part of the people and hoping to stem it, the New York Const.i.tutional Convention in 1846 adopted a Const.i.tutional inhibition on all feudal tenures, an inhibition so drafted that no legislature could pa.s.s a law contravening it.[69]

So, in this final struggle, pa.s.sed away the last vestiges of the sway of the all-powerful patroons of old. They had become archaic. It was impossible for them to survive in the face of newer conditions, for they represented a bygone economic and social era. Their power was one accruing purely from the extent of their possessions and discriminative laws. When these were wrenched from their grasp, their importance as wielders of wealth and influence ceased. They might still boast of their lineage, their aristocratic enclosure and culture and their social alt.i.tude, but these were about the only remnants of consolation left.

The time was unpropitious for the continuation of great wealth based upon rural or small-town land. Many influences conspired to make this land a variable property, while these same influences, or a part of them, fixed upon city land an enhancing and graduating permanency of value. The growth of the s.h.i.+pping trade built up the cities and attracted workers and population generally. The establishment of the factory system in 1790 had a two-fold effect. It began to drain country sections of many of the younger generations and it immediately enlarged the trading activities of the cities. Another and much more considerable part of the farming population in the East was constantly migrating to the West and Southwest with their promising opportunities. Some country districts thinned out; others remained stationary. But whether the rural census increased or not, there were other factors which sent up or down the value of farming lands. The building of a ca.n.a.l would augment the value of land in section and cause stimulation, and depress conditions in another section not so favored. Even this stimulation, however, was often transient. With each fresh settlement of the West and with the construction of each pioneer railroad, new and complex factors turned up which generally had a depreciating effect upon Eastern lands. A country estate worth a large sum in one generation might very well succ.u.mb to a mortgage in the next.

THE NEW ARISTOCRACY.

But fortunes based upon land in the cities were indued with a mathematical certainty and a perpetuity. City real estate was not subject to the extreme fluctuating processes which so disordered the value of rural land. All of the tendencies and currents of the times favored the building up of an aristocracy based upon owners.h.i.+p of city property. Compared to their present colossal proportions the cities were then mere villages. There was a nucleus of perhaps a mile or two of houses, beyond which were fields and orchards, meadows and wastes. These could be bought for an insignificant sum. With the progressing growth of commerce and population, with immigration continually going on, every year witnessing a keener pressure for occupation of the land, the value of this latter was certain to increase. There was no chance of its being otherwise.

Up to 1825 it was a mooted question whether the richest landowners would arise in New York, Philadelphia, Boston or Baltimore. For many years Philadelphia had been far in the lead in extent of commerce. But the opening of the Erie Ca.n.a.l at once settled this question. At a bound New York attained the rank of the foremost commercial city in the United States, completely outstripping its compet.i.tors. While the trade of these fell off precipitately, the population and trade of New York City nearly doubled in a single decade. The value of land began to increase stupendously. The swamps, rocky wastes and flats and the land under water of a few years before became prolific sources of fortunes. Land which had been worth a paltry sum ten or twenty years before sprang to a considerable value and, in course of time, with the same causes in a more intense ratio of operation, was vested with a value of hundreds of millions of dollars. This being so, it was not surprising that the richest landowners should appear first in New York City and should be able to maintain their supremacy.

The wealth of the landowners soon completely eclipsed that of the s.h.i.+ppers. Enormous as were the profits of the s.h.i.+pping business, they were immediate only. In the contest for wealth it was inevitable that the s.h.i.+ppers should fall behind. Their business was one of peculiar uncertainties. The hazards of the sea, the fluctuations and vicissitudes of trade, the severe compet.i.tion of the times, exposed their traffic to many mutations. Many of the rich s.h.i.+powners well understood this; the surplus wealth derived from commerce on the seas they invested in land, banks, factories, turnpikes, insurance companies, railroads and in some instances, lotteries. Those s.h.i.+pping millionaires who clung exclusively to the sea fell in the scale of the rich cla.s.s, especially as the time came when foreign s.h.i.+pping largely supplanted the trade hitherto carried in American cutters. Other s.h.i.+ppers who applied their surplus capital to investments in other forms of trade and owners.h.i.+p advanced rapidly in wealth.

CITY LAND THE SUPREME FACTOR.

Between land owners.h.i.+p and other forms, however, there was a great difference. Trade was then extremely individualistic; the artificial controlling power called the corporation was in its earliest infantile condition. The heirs of the owner of sixty line of sail might not possess the same astuteness, the same knowledge, adroitness, and cunning--or let us say, unscrupulousness--the same severe application as the founder. Consequently the business would decay or fall into the hands of others shrewder or more fortunate. As to factories the condition was somewhat the same; and, after the organization of labor unions the possibility of strikes was an ever-present danger to the constant flow of profits. Banks were by no means fixed, unchangeable establishments. Like other media of profit-making, the extent of their power and profits depended upon prevailing conditions and very largely upon the favoritism or policy of Government. At any time the party controlling government functions might change and a radically different policy in banking, tariff or other laws be put in force.

These changing laws did not, it is true, vitally benefit the ma.s.ses of the people, for one set or other of the propertied interests almost invariably benefited. The laws enacted were usually in response to a demand made by contending propertied interests. The trade and political struggles carried on by the commercial interests were a series of incessant wars, in which every individual owner, firm or combination was fiercely resisting compet.i.tors or striving for their overthrow.

THE INVULNERABLE LANDOWNER.

But the landowner occupied a superior position which neither political conditions nor the flux of changing circ.u.mstances could materially a.s.sail. He was ardently individualistic also in that he demanded, and was accorded, the unimpaired right to get land in any way that he legally could, hold a monopoly of as much of it as he pleased, and dispose of it as he willed. In the very act of a.s.serting this individualism he called upon Society, through its machinery of Government, for the enactment of particular laws, to guarantee him the sole possession of his land and uphold his claims and rights by force if necessary. These were all the basic laws that he needed and these laws did not change. From generation to generation they remained fixed, immovable. The interests of all landowners were identical; those of the traders were varying and conflicting. For long periods the landowner could expect the continuance of existing fundamental laws regarding the owners.h.i.+p of land, while the s.h.i.+pper, the factory owner, the banker did not know what different set of laws might be enacted at any time.

Furthermore, the landowner had an efficient and never-failing auxiliary. He yoked society as a partner, but it was a partners.h.i.+p in which the revenue went exclusively to the landowner. The princ.i.p.al factor he depended upon was the work of collective humans in adding greater and greater values to his land. Broadly speaking, his share consisted in merely looking on; he had nothing to do except hold on to his land. His sons, grandsons, his descendants down to remotest posterity need do even less; they could leisurely hold on to their inheritance, enlarge it, hire the necessary ability of superintendence and vast and ever vaster riches would be theirs. Society worked feverishly for the landowner. Every street laid and graded by the city; every park plotted and every other public improvement; every child born and every influx of immigrants; every factory, warehouse and dwelling that went up;--all these and more agencies contributed toward the abnormal swelling of his fortune.