Thunder in the Mountains, Plunder on the Tracks

Posted Thursday night, August 31, 2017.

The Last Spike by Thomas Hill. 1881.

For some reason this struck me as relevant. Can’t imagine why.

Toward the end of 1872, Congress began to investigate the construction practices and financing of the transcontinental railroad. The Union Pacific’s directors, it turned out, awarded construction contracts to a company that they had formed themselves, which they called the Crédit Mobilier. Flush with cash from bonds that Congress authorized the UP to issue, the railroad could accept bids from Crédit Mobilier that were far higher than its actual costs. As railroad executives siphoned away millions of dollars of construction profits right off the top, they decided to share the wealth with their many allies in Congress, giving them stock in Crédit Mobilier. Yet by the time 1872 turned to 1873, corrupting the political process was the least of the railroad’s wrongs. If the railroad titans---Stanford of the Central Pacific, Collis Huntington of the Union Pacific---became some of the richest people in the world, the railroads themselves were piling debt upon debt to construct tens of thousands of miles of track with no prospect of any return on the investment. By September 1873, banking institutions had loaned so much money to ever-riskier railroad ventures that they could not cover seasonal withdrawals to finance the fall harvest. Jay Cooke & Co., the biggest investment bank in the United States, collapsed, and the economy collapsed with it. In the year that followed, dozens of railroads defaulted on their loans. Hundreds of banks suffered runs on deposits and failed. Property values plummeted. Foundries and factories closed, and unemployment reached 25 percent in big cities. Tramps became a common sight even in remote rural areas, and all over the country workers demonstrated for public employment. By January 1874, police were fighting pitched battles with seven thousand unemployed rioters in Tompkins Square Park in New York.

---from Thunder in the Mountains: Chief Joseph, Oliver Otis Howard, and the Nez Perce War by Daniel J. Sharfstein.

Comments

[Michael Bains]

I imagine the post civil war egalitarianism came into play here as well. Corruption needed a distraction and trust has to be earned some way... Usually at the expense of political minorities.

[FDChief]

One thing that irks the hell out of me is the degree to which these 19th and early 20th Century "panics" have completely dropped into the memory hole. We've lived for so long in the shade of the big tree of financial regulation and a social safety net that we've forgotten how utterly, horrifically awful the pre-New Deal U.S. was for anyone not in a two-yacht family. Instead we've swallowed the sort of fantasies of the Old West and the Victorian morality tales that animate idiots like the Three-Percenters, the Bundys, and the Malheur Moron Mulisha.

But anathematizing the Bolshviks and the Fascists as Evil Bad we've driven under the sod the reason that whole bunches of people were enthusiastic Communists and Fascists; because the fucking Master of the Universe really WERE Just. That. Goddamn. Evil. They were real-life Snydley Whiplashes; cackling over their moneybags at the starving widows and orphans of the workers impoverished and killed in their reckless adventures.

Fortunately (!) for us our new Republican Overlords luuuuurve them some Gilded Age and are doing their utmost to re-create that time, so we are likely to be lucky enough to find out why the strikers were willing to charge armed soldiers at Homestead or go to prison for fighting to organize steel mills and lumber camps.

UNfortunately the old coalition that beat back these plutocratic bastards - a combination of muckraking journalists, commies/socialists/anarchists, union organizers, Progressive/Good Government types, immigrant organizations, and random noblesse oblige aristos like FDR - is hopelessly fractured into a courtier press, a tattered, Rush-addicted "white working class", and Koch-sucking banksters. Our chances of getting out of this coming mess are slim to none; more likely will be the rise of some sort of American Man on Horseback; wrapped in the flag and carrying a cross...

WASF