Matt, "An Erie Raid"
During this time railroads and stock exchanges operated without any regulations.[These passages deal with the attempt by Jim Fisk and Jay Gould to gain control of a local railroad by goobling up shares owned by towns along the railroad. Fiske, Gould, and Daniel Drew had battled Cornelius Vanderbilt for control of the Erie. Vanderbilt controlled the New York Central and had wanted the Erie to complete a monopoly over rail traffic between New York and Chicago. In the event, as a result of much fraud, Drew took a share of the swag and withdrew, Vanderbilt got money stolen from him returned, and Fisk and Gould got the Erie.]
"Single men have controlled hundreds of miles of railway, thousands of men, tens of millions of revenue, and hundreds of million of capital."- These men were capitalists, and those that were looking for control over the Erie took advantage of the poor regulations over the railway and stock exchange operations.
Examples:
"These men were suddenly called upon to accept or reject, on their own responsibility, an offer which, a few days before, would have seemed incredible, but the acceptance of which, while it would relieve the town of debt, would also deprive it of all voice in the management of the road waited for so long."- Here the capitalists allowed the party to purchase stock, which would help the town get out of debt, but it would also give them no say in any management of the road. This was a problem because...."This process, however, involved a very considerable outlay of money and no inconsiderable risk of loss. Buying up a majority of the stock was altogether too much like paying for a road. Why should that be obtained at great cost which could equally well be got for nothing ? " - The party was buying a great majority of the stock, which was like paying for the road itself, and they had no say at all in the road. They saw that they entered great risk.
"So they negotiated a new plan, involving the certain transfer of the road into their hands, but avoiding the necessity of further pecuniary outlay. A negotiation was successfully concluded for the purchase of four hundred and fifty thousand dollars of the stock of various towns on the following terms : no money was to pass, but the bonds of Messrs. Gould and Fisk were given, binding them to purchase and pay for the stock after the election, provided the commissioners should at the election vote as the givers of the bond should direct. The legal effect of such an arrangement may well have escaped the town commissioners, but Messrs. Fisk and Gould had not as a rule up to this time been found deficient in matters of technical nicety. These bonds had no binding force whatever. It was not a sale for cash, it was contrary to law and to public policy ; it was an arrangement wholly beyond the powers of the commissioners to make, and one which the courts would not sustain. The commissioners who accepted these bonds and who subsequently did vote as those who gave them dictated, were public officials, as such their duties were prescribed and were sufficiently simple ; they could sell, and they could vote, but if they sold it was to be for cash down, and if they voted it was to be on their own judgments, and not on those of other people. In this case, indeed, what security had they that, after they had voted the road into the hands of the Erie managers, the conditions of the bond in regard to the purchase of the stock would be fulfilled ? As a matter of fact they did vote as they agreed, but nothing further was ever done to complete the transfer of the stock." - The problem here is that the commissioners who accepted the bonds didnt have the power to do so, so the bonds had no binding force so they were never able to complete the stock transfer after the election, even though they voted in the direction they were told to.
Pages of text:
http://cdl.library.cornell.edu/cgi-bin/moa/pageviewer?frames=1&coll=moa&view=50&root=%2Fmoa%2Fnora%2Fnora0112%2F&tif=00255.TIF&cite=http%3A%2F%2Fcdl.library.cornell.edu%2Fcgi-bin%2Fmoa%2Fmoa-cgi%3Fnotisid%3DABQ7578-0112-16 <http://cdl.library.cornell.edu/cgi-bin/moa/pageviewer?frames=1&coll=moa&view=50&root=%2Fmoa%2Fnora%2Fnora0112%2F&tif=00255.TIF&cite=http%3A%2F%2Fcdl.library.cornell.edu%2Fcgi-bin%2Fmoa%2Fmoa-cgi%3Fnotisid%3DABQ7578-0112-16>
http://cdl.library.cornell.edu/cgi-bin/moa/pageviewer?frames=1&coll=moa&view=50&root=%2Fmoa%2Fnora%2Fnora0112%2F&tif=00256.TIF&cite=http%3A%2F%2Fcdl.library.cornell.edu%2Fcgi-bin%2Fmoa%2Fmoa-cgi%3Fnotisid%3DABQ7578-0112-16 <http://cdl.library.cornell.edu/cgi-bin/moa/pageviewer?frames=1&coll=moa&view=50&root=%2Fmoa%2Fnora%2Fnora0112%2F&tif=00256.TIF&cite=http%3A%2F%2Fcdl.library.cornell.edu%2Fcgi-bin%2Fmoa%2Fmoa-cgi%3Fnotisid%3DABQ7578-0112-16>Looking Backward
Rob:
"Was there, then, no way of commanding the services of the mighty wealth-producing principle of consolidated capital without bowing down to a plutocracy like that of Carthage? As soon as men began to ask themselves these questions, they found the answer ready for them. The movement toward the conduct of business by larger and larger aggregations of capital, the tendency toward monopolies, which had been so desperately and vainly resisted, was recognized at last, in its true significance, as a process which only needed to complete its logical evolution to open a golden future to humanity.
"Not at all," was Dr. Leete's reply, "but the conditions of human life have changed, and with them the motives of human action. The organization of society with you was such that officials were under a constant temptation to misuse their power for the private profit of themselves or others. Under such circumstances it seems almost strange that you dared entrust them with any of your affairs. Nowadays, on the contrary, society is so constituted that there is absolutely no way in which an official, however ill-disposed, could possibly make any profit for himself or any one else by a misuse of his power. Let him be as bad an official as you please, he cannot be a corrupt one. There is no motive to be. The social system no longer offers a premium on dishonesty. But these are matters which you can only understand as you come, with time, to know us better."
These quotes confuse me because it seems that it is promoting the development and creation of monopolies in our society and calls for our complete trust and faith as a society in our leaders. We are not supposed to question anything. Why would this message appeal to the normal worker/consumer in our capatilistic society? With rampant corruption in politics, why would the people believe this passage?
Henry George
John:
Henry George was a political economist. He was born in Philadelphia and later in life moved to California to become a journalist. George wrote a famous piece called Progress and Poverty which was issued in New York and London and became famous worldwide. This piece looked into what caused industrial depressions and the increase in wealth and the way money was distributed through classes during times of industrial advancement.
With the inventions of steam and electricity and better machines for industry it was thought that it would help the worker and decrease poverty in the lower class of society. With this industrial revolution it actually made the poor more poor and the rich richer. “It is true that disappointment has followed disappointment. Discovery upon discovery and invention after invention have neither lessened the toil of those who most need respite nor brought plenty to the poor” (Progress and Poverty 1). People could not understand this and Henry was able to explain this to the world in his book.
Instead of helping the poor it actually hurt the poor and brought the poor into more poverty. The new inventions and machines just helped the owners of the factories and the rich make more money. With the new advancements now things could be produced a lot faster. So instead of lightening the load on the poor it only brought them a bigger burden. Now they were expected to produce a lot more. With this their wages weren’t increased but the owners of the industry and the rich were benefiting from this increase in production and making more money. So this explains how the rich was becoming richer and the poor was staying the same and becoming poorer in relation to the rich. George describes how this caused a conflict to arise between capital and labor.