by David Montgomery
Excerpted from The Fall of the House of Labor (Cambridge 1987) p. 44-57
DIGEST PRODUCED FOR TUSG.ORG
The long upswing of American industrial growth in the nineteenth century had different characteristics before and after the depression of the 1870s. Before that decade lay the formative years of the American working class. The ranks of wage laborers had grown hand in hand with rapid accumulation of capital for more than half a century to the point that they represented more than half of those counted by the census of 1870 as gainfully employed. Per capita output had also grown steadily, at least since the 1830s. The 1850s had represented something of a nodal point in this growth: along with the iron ship, the telegraph, and the consolidation of railroad trunk lines, that decade had brought aggressive working-class activity in both economic and political life and had closed with America's achievement of second place in manufacturing output among the nations of the world and a genuine industrial depression. After the early 1870S, industrial growth continued, but at a more erratic tempo. On the one hand, the web of commodity markets and wage labor spread from its source in the Northeast to all but the most remote corners of the land. Steel rails and ubiquitous telegraph wires were the web's visible fibers. Within its domain the number of nonagricultural wage earners increased more than twice as rapidly as the country's population. On the other hand, economic crises appearing in ever shorter intervals, and major depressions only twenty years apart (1873 and 1893), dried up the source of wages for millions of people. Although manufacturing output continued to rise, the rate of growth slowed after 1870, selling prices fell quite steadily, and the resulting downward pressure on profit margins generated, simultaneously, a record rate of business failures in the 1880s, the consolidation of large-scale enterprises, and chronic conflict between employers and workers over the costs of production.
These developments marked the end of the era of competitive industrial capitalism in America. Experiments with business consolidation, with overseas markets for products and investment, with the use of laborers from peasant communities outside the world's industrialized zones and with more systematic management of workers and work relations (all of which were evident in the example of the steelworkers) were previews of a new stage of industrial development that was to mature rapidly after the depression of the 1890s. The amalgamation struggle of the iron and steel craftsmen and Michael McGovern's poetry belong to the final, spasmodic phase of industrial development on the basis of highly competitive capitalist relationships. The character of that period's labor movement was indelibly stamped by the spastic, deflationary character of its economic growth and by the variety of conditions under which different groups of wage earners turned out and distributed its industrial wares.
Between the years 1870 and 1910] the number of manual wage earners in industry rose by 301 percent during these four decades [from approximately 3.5 million to 14.2 million], at a time when the population increased by only 132 percent. Moreover, there were many wage earners not included in these figures at all. In 1870, for example, female domestic servants (902,000) outnumbered construction workers, and by 1910 male and female clerical workers (1,718,500) were more numerous than metalworkers. The point here is simply that the rising output of the century's last decades was fed by the entry of millions of new production workers especially into building construction, metalworking, clothing and textile manufacture, mining, and railroading.
Even more important, all this influx of new wage earners failed to sustain the high rate of growth enjoyed by American industry between the 1830S and the 1870s.[1] Above all else, the boom periods became shorter and the recessions more frequent than they had been before the 1870s. All this does not mean that the United States was experiencing prolonged depression of the sort England suffered between the 1870S and the 1890s. On the contrary, expansion still characterized American industry, and, as Brinley Thomas has argued, both capital and labor moved steadily and massively from Britain to America during these years, so that for the Atlantic economy as a whole, there was no "long depression."
Two points are important here: First, in this final stage in the development of competitive industrial capitalism, ever larger inputs of human toil failed to generate corresponding increases in output. Second, chronic deflation and staggering cycles of boom and bust forced employers to undertake an intensive search for labor that was cheaper and could be more tightly controlled. In that quest they encountered a working class that was becoming not only steadily larger but also more articulate and self-assertive.
It is important to note, however, that those workers still toiled in a variety of settings. Important though factories employing hundreds or thousands of workers were during the late nineteenth century, only a minority of wage earners labored in them. Artisan production existed alongside outwork, sweatshops, and manufacturies.[2]
It was the capital-intensive industries, however, that had the nation's highest rates of growth in the number of workers they employed. The new recruits to the army of labor fed not only a proliferation of small firms but also the new giant enterprises, whose hegemony was unmistakable after the crisis of the 1890s. In the midst of protracted deflation of the century's last decades, entrepreneurs in these industries were creating the firms of the future: consolidating their control over workers in a wide variety of related activities, experimenting with new ways of subordinating those workers directly to management's control, and thus inserting themselves into the front lines in the confrontation with workers' control.
The chemical and oil industries led the way the development of continuous-flow processes. Raising capital, driving out competitors, and distributing the products of high-volume technology were the greatest challenges facing these employers. Their manual workers were almost exclusively common laborers, and such challenges from crafts as the coopers posed in turning out the industries' barrels were ruthlessly overcome as early as the I870S by Standard Oil's smashing of the coopers' union.
Quite different was the case of the railroads. They were the first of the giant enterprises. In the mid-I870S, when Cambria Iron's four thousand employees made it the country's largest manufacturing firm, the Pennsylvania Railroad and its affiliated lines had between fifty thousand and fifty-five thousand wage earners, managed by one thousand officials. Railroads pioneered in the development of management by salaried officials (rather than by the owners personally), as well as in alliances with investment banks to raise the funds needed for building seventy-five thousand new miles of track in the 1880s. The intervention of investment houses in the affairs of bankrupt lines established the pattern of consolidating competing firms, a practice that spread to many industries during the I890s. Moreover, railroad companies promoted standardization of equipment, gauges, accounting methods, and even the time of day (through zones of uniform standard time, established in 1883).
Slowly and unevenly until 1894, rapidly thereafter, railroad managers introduced centralized payroll and discharge lists, personnel records with all infractions of discipline noted, contributory accident insurance, and cooperation among lines to defeat strikes and to standardize wages. As was the case in steel, the systematic personnel policies of the railroads were forged in the furnace of industrial conflict and ultimately were made possible by the decisive intervention of the government in suppression of strikes.
Major metalworking firms, like Philadelphia's Baldwin Locomotive Company, usually were linked to railroad building in the late nineteenth century just as tightly as the steel industry was. But two other groups of large metal firms had appeared by the end of the I880s. One group included the builders of intricate-machinery such as harvesting machines or sewing machines, which needed a widespread network of sales and repair people if they were to be used by hundreds of thousands of individual customers.[3] The second group is typified by the electrical industry, which saw its competing firms quickly consolidated by investment houses, and tightly linked to all levels of government, because they needed capital and franchises to create customers. Power stations, transmission lines, street railways, and urban electrification were all public projects. State capitalism created the markets; productive capacity, concentrated in large modern plants, followed.
Such metalworking industries, together with the machine-tool industry, which remained in relatively small firms, selling to larger ones, could not introduce continuous-flow processes. Metalworking firms did not enjoy economies of scale. Quite small plants were the most efficient. Large and small alike were hopelessly dependent on the skills of labor, in a multitude of different crafts.
This was the domain of the most bitter and protracted struggles the epoch to change work practices, the cradle in which scientific management was born. Here managers sought, first through piecework and inside contracting, to induce "each workman to use his best endeavors, his skill, his ingenuity, and his goodwill - in a word, his 'initiative,' so as to yield the largest possible return to his employer," and subsequently, through standardization of the tasks themselves, to eliminate reliance on the workers' initiative altogether.
Finally, it is important to note the continuing importance of textiles and clothing, mining, and construction. The first of these was the classic habitat of the machine tender. In 1870, cotton goods and worsted goods led all other industries in the average number of workers per plant. Although unions had little staying power in the industry (outside of Fall River, Massachusetts), they were often formed, and strikes were numerous. By way of contrast, the manufacture of clothing was a citadel of outwork and the sweatshop. Factory production grew in several cities (often simply by bringing subcontracting practices indoors) without expelling the older forms. Despite major strikes against the subcontracting system, especially in the 1880s, and despite some growth of factory production, the production of clothing remained subject to uncontrolled, labor-intensive competition past the end of the century.
Building construction and coal mining also remained labor-intensive and fiercely competitive. Although the building trades went through many changes, as standardized wood, metal, and plumbing parts were made in factories, steel girders and electrical power transformed downtown buildings, and speculative contractors began to erect large tracts of uniform housing, the swelling volume of construction was brought about largely by putting hammers, saws, and trowels into the hands of more and more men. In no other industrial country was so large a proportion of the working class made up of building workers. Similarly, despite the introduction of undercutting machinery, especially in the Midwest, the soaring demand for coal was met here, as in Europe, basically by putting ever growing numbers of men underground at the coal face. In fact, it was only after 1920 that the combined impact of rival fuels and mine mechanization reversed the upward spiral in the employment of coal diggers. Construction workers and coal miners together constituted half of the country's union members by the first decade of the twentieth century. Their activities decisively shaped the house of labor, particularly its response to business consolidation and management reform after the 1890s.
These workers, whose numbers were growing so remarkably as competitive industrial capitalism entered its crisis decades, are the historical actors to be examined in the chapters to come. The patterns of struggle found in the iron and steel industry reveal much about late-nineteenth-century craftsmen, but they do not explain all labor activism by any means. Common laborers, factory operatives, and skilled workers in other industries generated their own distinctive challenges to employers' authority during these years. On occasion, workers of all three types acted together, if no in unison. Both their separate initiatives and their concerted class struggles profoundly influenced the responses of industrial managers and government officials to the declining rate of capital accumulation.
[1] According to the calculations of David Gordon, Richard Edwards, and Michael Reich in their book Segmented Work, Divided Workers: The Historical Transformation of Labor in the United States (Cambridge, 1982), industrial output had grown at a rate of 6·5 percent annually between 1839 and 1874, but between 1874 and 1899 the rate slowed somewhat to 5.5 percent. Other measures (real gross national product, capital formation, and inventories) showed similar deceleration of growth.
[2] “Manufacturies” gathered workers under one roof and subjected them to a close supervision and detailed division of labor, but used no power to drive machinery other than that of human muscle.
[3] As Alfred D. Chandler has shown, firms that created such networks (competitive capitalism's counterpart to the state's machine tractor stations amid-Soviet collective farms) readily dominated both national and world markets and thus had an outlet for ever expanding productive, capacity.
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