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 Introduction | 1792 | 1837 | 1857 | 1874 | 1930 | 2011




At ten o'clock on Thursday morning, September 18, 1873, leading Wall Street bankers and brokers gathered at the New York office of Jay Cooke & Co. The Philadelphia-based investment banking house had long been considered one of the strongest in the country, but it was now teetering at the edge of bankruptcy and Cooke's men pleaded for an immediate transfusion of funds. Their pleas were refused. At eleven o'clock, they closed their doors and telegraphed the bad news to Cooke in Philadelphia. He promptly shut down the entire concern. A titan of American finance had crumpled.

When news of Cooke's suspension was announced on the floor of the New York Stock Exchange, "a monstrous yell went up and seemed to literally shake the building." Now "dread seemed to take possession of the multitude," the Tribune reported. Brokers began trampling one another to sell off stocks which were suddenly, terrifyingly vulnerable. Brokerages failed on all sides. Banks buckled. A "seething mob" filled Broad Street as frenzied depositors surged to remove their funds from banks. One broker moaned that the unfolding catastrophe was the "worst disaster since the Black Death."

New York City's economy fell apart with frightening speed. Wall Street brokerage houses took the first hits, but the damage swiftly spread to other financial institutions that had invested heavily in railroad stocks and bonds. Life insurance companies crumbled: of the 32 companies chartered since 1861 only 8 remained in 1877. A score or more savings banks collapsed as well.

The real estate bubble burst. Inflated values collapsed. The equities of thousands of property owners were wiped away, one industry spokesman wrote, "as with a sponge." An avalanche of foreclosure proceedings drove down land values. Lots near Fifth Avenue that fetched $100,000 in 1873 went for $40,000 in 1876, if they found a buyer at all. Row after row of middle class houses, thrown up so confidently, now went begging.

In Manhattan, the blight spread from the financial district up lower Broadway. By 1876, it was plastered with "For Let" placards. Many former wholesale stores were now occupied by auction marts selling off bankrupts' goods. Two years later, "vacant shops, stores and manufactories," the Mayor reported, "stare at us in every street."

As usual, working people bore the brunt of things. By the winter of 1873-4, 25% of the city's labor force had lost their jobs, and the wages of the rest declined steadily. Hunger and homelessness spread. The shanty-dwelling population of the west side burgeoned. Thousands sought shelter on the floors of police stations or almshouses.

As in prior depressions, hard times stirred popular discontent. Workingmen disliked charity. The YMCA sold "dinner tickets" to New York businessmen to give to the unemployed, but the New York Workingmen's Central Council rejected "crumbs that fall from the tables of the rich." Nor did they like the police lodgings -- "living charnel houses" that reeked "with filth and vermin".

The Spring Street International (the American reformers recently expelled from the IWA) argued that the unemployed were entitled to better, as a matter of right. The government had showered aid and assistance on the wealthy; now it should "legislate for the good of all, not the few." In October 1873 they proposed a comprehensive anti-depression program. New York should provide public employment on street and park improvements, and in building a rapid transit system. The city should also establish municipally-owned markets where people could buy necessities at cost.

Such ideas rapidly gained popularity. The Workingmen's Central Council announced plans for a mass meeting to demand "Work or Bread". J.P. McDonnell, an Irish Fenian and socialist, argued in the New York Sun that to make "wealthy citizens and law-makers" listen, labor should mount the "greatest demonstration ever held in New York." Leading trade unionists endorsed the idea. So did German socialists, currency reformers, and neighborhood mass meetings around the city (including one by 1500 French workers and refugees from the Paris Commune). Wagons paraded through the streets with placards announcing the December 11 gathering at Cooper Institute. On the appointed day 4000 crammed their way in, leaving thousands more outside, as speakers analyzed the nature of the depression (in German and English) and how to respond to it.

Many blamed the financial system. Bankers and brokers -- the "moneyocracy" -- had obtained special privileges by corrupt deals with politicians, then used their ill-gotten wealth to "speculate in stocks, money, gold, or other commodities." These operations had brought on the crisis that now endangered the producing classes and the Republic itself. One long term answer was to set limits on the accumulation of personal wealth, at a maximum of $300,000, by imposing a graduated income tax. In the short run, the city should undertake massive street, pier and park improvements, and construct housing for the homeless.

Socialists at the Cooper meeting offered similar prescriptions, and added some novel ones, including suspension of evictions for non payment of rent during the coming winter, and dispensation of a week's supply of food or money to distressed families. Peter J. McGuire, a young socialist carpenter, later endorsed the meeting's no-violence pledge but argued that if relief was not forthcoming, then "a provisional committee" in each ward should "take food" to keep people from starving and "send the bills to the city for collection."

The Cooper meeting appointed a fifty-man Committee of Safety -- nomenclature borrowed from the Commune -- and selected German, French, Irish and American representatives. The Committee organized ward clubs of the unemployed throughout the city and called for a meeting with city authorities. When Mayor Havemeyer did get together with a delegation of workers it became clear that they inhabited different universes. Havemeyer expressed concern for the men's plight but suggested, none too subtly, it was their own fault for not having prepared themselves for such contingencies. "I know that it is hard for you to be out of employment," he said, "but don't you think that workingmen should lay up something for a rainy day?" "Yes, sir," a delegate replied, "that's all very well, but workingmen can't save much out of their wages. Rents are so high; and then many of us can only work four or five days out of a week." The Mayor responded with homilies: "Men who get rich, gentlemen, are men who save. When a man has $100 in a bank he becomes a capitalist." His father (an extremely wealthy sugar manufacturer), Havemeyer remarked pointedly, "didn't go to the beer shops and theaters every night." Besides, public works meant higher taxes and the "confiscation" of property, and so were out of the question.

The press was even less diplomatic. The New York Graphic said that "there is no point in railing at the rich nor in scowling at the capitalists nor in condemning corporations simply because one's stomach is empty and he happens to be dinnerless." "Whining and whimpering," the paper snarled, "are as useless as they are disgusting." The Times loftily lectured the unemployed on the hard facts of political economy. The "natural laws of trade" were "working themselves out." Governments could "only watch the process." "Things must regulate themselves."

"Things" got rapidly worse. Unemployment rose as the thermometer dropped, and the Committee of Safety issued a call to all "in sympathy with the suffering poor" to rally in Tompkins Square on January 13, 1874, and then march on City Hall to demand a municipal contribution of $100,000 to a Labor Relief Bureau for the unemployed.

The press, badly alarmed, insisted the meeting be suppressed as a "communist agitation". The Committee of Safety was adopting the "favorite tactics of the worst class of European socialists" and on behalf of the unemployed -- a "thriftless and improvident" lot. More hysterically (or cynically), it was asserted that leaders of the defeated Commune had smuggled diamonds -- stolen from the churches of Paris -- into the city to buy ammunition and bombs to launch a revolution. The Department of Parks had already given permission to use the Square, but the Police Board, composed of wealthy entrepreneurs and powerful politicians, forced them to renege at the last minute. Word of the revocation did not reach the working class quarters.

The next morning, by eleven o'clock, over seven thousand people had turned out despite below freezing temperatures. The ten acre park was filled, and the crowd, which included many women and children, overflowed into the surrounding streets. One corner of the square was occupied by 1200 resolute members of the German Tenth Ward Workingmen's Association.

At that moment the Police Commissioner and a squad of patrolmen marched into the square. Announcing "Now, you all go home, right away!", they immediately waded into the assemblage with clubs flailing. The crowd scattered "like wild birds" except for the German workers who battled back until mounted police drove them from the square. As the demonstrators fled into adjacent streets, a Sun reporter noted, the police kept "close at their heels, their horses galloping full speed on the sidewalks," their batons flailing. One zealous young German socialist, Justus Schwab, marched boldly back to the square waving the red flag of the Commune, only to be attacked and arrested. The police continued clubbing groups of workers for hours, Samuel Gompers remembered, in "an orgy of brutality," until, finally, the area was cleared and still.

The Tompkins Square clash was a minor affair materially -- a few score bloodied heads and arrested bodies -- but a major one symbolically. It hardened attitudes on both sides of the class divide and shaped larger patterns of response to the depression.

Organized labor bitterly attacked the police, asserting their rights of free assembly and free speech had been violated. Iron molders rejected the way "every protest, petition, or demand of labor is met with the cry of 'Commune'". Unions and ethnic organizations raised funds for the arrested, tried and failed to oust the Police Board, and held protest meetings. At one, a German woman shouted angrily that the police would never interfere if "A.T. Stewart, John Jacob Astor, or William Dodge should assemble." The New York Irish World denounced the police as "Grand Bashaws" who exhibited a "brutal contempt for law." The New York Graphic and the New York Sun --both editorial antagonists of the unemployed movement -- similarly condemned the "clubbing of innocent and peaceful men."

Such reactions were exceptional. The authorities, the press and the upper and middle classes were virtually united in their satisfaction with the outcome. Mayor Havemeyer was delighted: "Nothing better could have happened," he declared. The Police Board characterized the unemployed as "a parcel of vagabonds" who had deserved "a sound flogging". The Police Commissioner was elated: "It was the most glorious sight I ever saw the way the police broke and drove that crowd. Their order was perfect as they charged with their clubs uplifted."

The press was convinced that vigorous action had forestalled a host of horrors. Behind the Tompkins Square "rabble," the World was sure, stood "the red spectre of the commune." The Times reported (incorrectly) that all those arrested were "foreigners" which at least proved that communism was not a weed of "native growth". Religious spokesmen were even more ferocious, with one prominent clergyman vowing that if workers "lift their hands against law, order, and good government, they will be mowed down like grass before a scythe."

The depression overrode middle class republican inclinations to respect the "rights of labor," or even labor's right to public protest. Also set aside was the notion that capital and labor shared a fundamental harmony of interest. In smaller cities and towns the urban middle classes would continue to harbor older republican convictions and even blame the newly rich for many of the nation's ills. But in New York City, a social and cultural chasm had opened up, and for the moment, most of the middle class jumped to the side of the rich and powerful.

So, if more reluctantly, did Tammany Hall – the Democratic Party machine. It did set out to topple the deeply unpopular Mayor Havemeyer. The mayor had given total support to the slashing cutback efforts of Comptroller Andrew Haswell Green (the future "Father of Greater New York"), which had accelerated after the onset of the depression. Their candidate won, as did the Democrats generally, but though the new mayor made an initial effort to launch public building programs, the landowners, insurance companies, trust companies, and savings banks, whose property investments had dropped drastically in value during the depression, fervently resisted expensive new municipal programs, which would largely be paid for by taxes on property. Their agent, Comptroller Green, stonily pressed on with retrenchment.

Taxes actually declined, despite complaints by city and state tax commissioners and several legislative investigations that the city's wealthy, far from being fiscally overburdened, were flagrantly evading their fair share of such exactions as existed. William H. Vanderbilt paid taxes on only $500,000 of personalty income, though his total such holdings were estimated at $40,000,000, and his New York Central railroad, while reporting a capital of $143 million, paid taxes on only $22 million. Corporations in general proved particularly skillful tax dodgers, deliberately violating the rules by cooking books, establishing phony indebtedness, or simply by bribing tax collectors. Investigators calculated that corporate evasion alone cost the state and city millions each year, but the notion of increasing revenues rather than cutting expenses was not to be placed on the political table.

Quite the opposite: to slice the budget, reduce taxes, and restore investor confidence, municipal officials cut the relief budget. In 1873, 5,000 families had been receiving public assistance; by 1874, given the crisis, 24,000 were being aided. In March of that year, then-Mayor Havemeyer, convinced that the level of "destitution and suffering" did not "warrant the interference of the Municipal authorities," announced the suspension of all public outdoor relief from July through December. In 1876, the new Tammany administration announced such assistance would be henceforth be permanently discontinued, apart from cash stipends to the blind, and fuel handouts to the proven poor (an exemption that pleased Democratic coal merchants). The Board of Aldermen protested, saying there were "more needy and deserving poor in this city than ever before in any one winter, rendered so in consequence of the general prostration of business," but outdoor relief would not return to New York City for nearly sixty years.

[For a fuller account, see Burrows & Wallace, Gotham, Chapter 58]


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