Gotham_ A History of New York City to 1898 - Edwin G. Burrows [825]
The Seventh Regiment Armory was only the first of many to follow, but for all the bourgeoisie’s readiness to militarize Manhattan, many of its leading figures—John Pierpont Morgan chief among them—were becoming convinced that this was not a viable long-term solution to the problems and divisions wracking city and country. Morgan was appalled by the chaos of the national economy. Unrestrained competition, rate wars, depressions, strikes, and warfare in the streets—this was not the way to attract European investors for American securities. As the depression hit bottom, Morgan busied himself with developing an alternative: the consolidation of the continental economy under the aegis of a manageable number of large-scale corporations, manageable, that is, by him and his fellow investment bankers in New York City. As Morgan reorganized many of the era’s failed railroads, he took care to obtain seats on the boards of the new, more powerful companies he fashioned. In 1879 the New York Central itself passed into Morgan’s control, after he brokered the sale of 250,000 shares owned by Commodore Vanderbilt’s heirs. Slowly he and his fellow financiers were accumulating unheard-of levels of power. The consolidation of a nationwide corporate economy under the control of Manhattan bankers in the next two decades would have enormous consequences for the global economy, for the United States, and, perhaps above all, for New York City.
PART FIVE
INDUSTRIAL CENTER AND CORPORATE COMMAND POST (1880-1898)
Greater New York birdseye view, especially drawn and painted for the New York Tribune. (General Research. The New York Public Library. Astor, Lenox and Tilden Foundations)
59
Manhattan, Inc.
In 1879 the national and metropolitan economies swung upward again. Reconstruction was over, the South was wide open for investment, and cotton billowed north again. Out west, the U.S. Army was winning its way to the rich trans-Mississippi territories, and within a decade obstinate Apache, Nez Perce, and Oglala Sioux resistance would be only a memory, the stuff of Wild West shows and dime novels. Farmers were reaping bountiful harvests, just as European crops were coming up short. The balance of trade turned favorable. For the first time in thirty years New York’s bankers, merchants, and industrialists faced no significant obstacles to profitmaking. Years of depression had crippled unions. Wages were down, the working day up. Activist judges intervened in economic disputes with admirable partiality on the side of capital. Municipal government was no longer wasting taxpayer money on outdoor relief or public works. The federal government too was in splendid hands. The gold standard was back, the income tax was no more, interest rates were down. Not surprisingly, railroad construction exploded. The need for iron horses to shuttle settlers west, and wheat and ore east, seemed limitless. Annual track construction spun up from 2,665 miles in 1878 to a staggering 11,569 in 1882, inducing tremendous output from steel mills, iron mines, the entire industrial sector.
The capital demands of this railroad “boom”—a word first used in this era to describe economic acceleration—revived Wall Street. From 1879 on, frock-coated, silkhatted brokers jostled and pushed at the New York Stock Exchange, buying and selling millions’ worth of stocks amid a great din. Outside, along Nassau, Pine, and William streets, outdoor curb traders created a bedlam of their own, while all around them bank messengers and telegraph