Gotham_ A History of New York City to 1898 - Edwin G. Burrows [941]
In February 1893 the Philadelphia and Reading Railroad failed, a victim of reckless empire building. Its demise heightened fears that the entire overbuilt and shoddily financed rail network might topple too. In May the National Cordage Company went under. Known colloquially as the Twine Trust, its collapse exposed the precariousness of even the biggest American enterprises.
In June the credit system seized up. Over the summer stock prices scudded downward, drawing crowds to brokerage houses to watch their fortunes melt away. Banks, mainly in the South and West, began to founder. Calling home their reserves on deposit in New York City, they created near-insolvency in the nation’s money center. Before the summer was out 141 national banks had failed, and hundreds more state banks, private banks, savings banks, and loan, trust, or mortgage companies soon followed them into oblivion.
The sharp credit contraction sent debt-ridden or cash-strapped transportation and industrial corporations over the edge. During 1893 companies crashed with terrifying frequency. By year’s end nearly sixteen thousand businesses had gone belly-up, the worst-ever toll in U.S. history. Among the felled firms were institutions that controlled over a third of the nation’s rail system. J. P. Morgan and his fellow financiers worked mightily, and profitably, reorganizing failed lines and bringing them under banker control. Virtually every bankrupt road east of the Mississippi was eventually “Morganized,” and by decade’s end most of the country’s trackage would be combined into six huge systems controlled by Wall Streeters.
The panic raised the curtain on a five-year depression. Foreign and domestic investors sat on their funds, and the economy languished accordingly. With roughly 20 percent of the nonagricultural work force unemployed, class warfare broke out as some corporations sought worker givebacks and others seized the opportunity to crush unions altogether. Federal troops and state militias battled miners and railroad workers in uprisings spanning a score of states and involving hundreds of thousands.
In New York City, layoffs commenced during the summer of 1893 and reached fearsome levels during the freezing winter months. In January 1894 Mayor Thomas F. Gilroy ordered police to make a house-to-house canvass. They found about seventy thousand unemployed, of whom about 25 percent were female. An additional twentyfive thousand were reported down and out in Brooklyn. Destitution among African Americans was particularly terrible, and the Colored Mission reported people “were found actually dying of want.” The disaster was only partly mitigated by a collapse in prices—sensational ads proclaimed “slaughtered” prices and “sacrificed” goods—though deflation brought no joy to tradesmen or manufacturers.
The mayor’s report found that twenty thousand were homeless as well as jobless. People piled up in parks and squares, in the Salvation Army Hall, on Blackwell’s Island, and in Bowery lodging houses. In February 1894 Stephen Crane, impersonating a tramp, spent a night in a Bowery flophouse and reported, in “An Experiment in Misery,” on the men who lay there “in death-like silence, or heaving and snoring with tremendous effort, like stabbed fish.”
Some charitable and business groups estimated a lower total unemployment figure, some settlement houses a higher one, but few disputed the mayor’s conclusions that there were an “unprecedentedly large number of people unable to secure employment” and that “distressing destitution and hardship are imminent in thousands of homes among those worthy and willing to work.”
DEALING WITH HARD