Episode 2

The leading characteristic of our industries, as compared with present conditions, was that they were individualized.Nearly all had outgrown the household stage, the factory system had gained a foothold in nearly every line, even the corporation had made its appearance, yet small-scale production prevailed in practically every field.In the decade preceding the War, vans were still making regular trips through New England and the Middle States, leaving at farmhouses bundles of straw plait, which the members of the household fashioned into hats.The farmers' wives and daughters still supplemented the family income by working on goods for city dealers in ready-made clothing.We can still see in Massachusetts rural towns the little shoe shops in which the predecessors of the existing factory workers soled and heeled the shoes which shod our armies in the early days of the Civil War.

Every city and town had its own slaughter house; New York had more than two hundred; what is now Fifth Avenue was frequently encumbered by large droves of cattle, and great stockyards occupied territory which is now used for beautiful clubs, railroad stations, hotels, and the highest class of retail establishments.

In this period before the Civil War comparatively small single owners, or frequently copartnerships, controlled practically every industrial field.Individual proprietors, not uncommonly powerful families which were almost feudal in character, owned the great cotton and woolen mills of New England.Separate proprietors, likewise, controlled the iron and steel factories of New York State and Pennsylvania.Indeed it was not until the War that corporations entered the iron industry, now regarded as the field above all others adapted to this kind of organization.The manufacture of sewing machines, firearms, and agricultural implements started on a great scale in the Civil War; still, the prevailing unit was the private owner or the partnership.In many manufacturing lines, the joint stock company had become the prevailing organization, but even in these fields the element that so characterizes our own age, that of combination, was exerting practically no influence.

Competition was the order of the day: the industrial warfare of the sixties was a free-for-all.A mere reference to the status of manufactures in which the trust is now the all-prevailing fact will make the contrast clear.In 1865 thousands of independent companies were drilling oil in Pennsylvania and there were more than two hundred which were refining the product.Nearly four hundred and fifty operators were mining coal, not even dimly foreseeing the day when their business would become a great railroad monopoly.The two hundred companies that were making mowers and reapers, seventy-five of them located in New York State, had formed no mental picture of the future International Harvester Company.One of our first large industrial combinations was that which in the early seventies absorbed the manufacturers of salt; yet the close of the Civil War found fifty competing companies making salt in the Saginaw Valley of Michigan.In the same State, about fifty distinct ownerships controlled the copper mines, while in Nevada the Comstock Lode had more than one hundred proprietors.The modern trust movement has now absorbed even our lumber and mineral lands, but in 1865 these rich resources were parceled out among a multiplicity of owners: No business has offered greater opportunities to the modern promoter of combinations than our street railways.In 1865 most of our large cities had their leisurely horse-car systems, yet practically every avenue had its independent line.New York had thirty separate companies engaged in the business of local transportation.Indeed the Civil War period developed only one corporation that could be described as a "trust" in the modern sense.This was the Western Union Telegraph Company.Incredible as it may seem, more than fifty companies, ten years before the Civil War, were engaged in the business of transmitting telegraphic messages.These companies had built their telegraph lines precisely as the railroads had laid their tracks; that is, independent lines were constructed connecting two given points.

It was inevitable, of course, that all these scattered lines should come under a single control, for the public convenience could not be served otherwise.This combination was effected a few years before the War, when the Western Union Telegraph Company, after a long and fierce contest, succeeded in absorbing all its competitors.Similar forces were bringing together certain continuous lines of railways, but the creation of huge trunk systems had not yet taken place.How far our industrial era is removed from that of fifty years ago is apparent when we recall that the proposed capitalization of $15,000,000, caused by the merging of the Boston and Worcester and the Western railroads, was widely denounced as "monstrous" and as a corrupting force that would destroy our Republican institutions.

Naturally this small-scale ownership was reflected in the distribution of wealth.The "swollen fortunes" of that period rested upon the same foundation that had given stability for centuries to the aristocracies of Europe.Social preeminence in large cities rested almost entirely upon the ownership of land.