Damn Yankees, Inequality and Corporations

November 15, 2012 § Leave a comment

Executive Summary

I have just posted some ideas based on some parts of Walter P. Webb’s book, “Divided We Stand”.  In the following effort I will address other parts of his book.  He discusses the United States in terms of three sections:  The South, the West and The North.  He contends that the South (including Texas) suffers from an inequality of wealth and political power because that power is concentrated in the Northeast.  He identifies the Civil War and the Reconstruction that followed as the initial causes of this inequality.  He also identifies the advent of large and powerful business corporations,  contemporaneous with the closing of the frontier, as a mechanism that has consolidated that inequality.

This will be longer than most of my posts, partly because I will include some extensive quotations.  While I think those quotes are interesting and deserve to be included, they can be skipped over or skimmed if you disagree.

The Civil War andReconstruction

The Civil War left the Confederate states east of the Mississippi prostrate and devastated.  Sherman and Sheridan burned,  pillaged and otherwise destroyed most of the wealth and physical assets in those states.  Texas was spared most of the physical destruction, but shared fully in the financial wreckage.  This was followed by a relentless and ruthless series of federal civil and military policies and laws that were designed not only to destroy completely any vestiges of economic or political power in the “rebel states” as they were named in the legislation, but also to demean and dishonor all who participated or supported the rebellion.

Following the 1867 election, which empowered the followers of Thad Stephens and John Sumner in the House and Senate, the South was placed under military government.  Its laws and constitutions were re-written; its Congressmen were denied the right to claim their seats; all who had any leadership role in the rebellion were  disenfranchised; no state government authority was allowed to be exercised until the 13th, 14th and 15th Amendments to the U.S. Constitution were ratified; no former Confederate state was allowed to make any payment based on a bond purchased to finance the rebellion; the freed slaves were promoted and encouraged to claim positions in new state legislatures.  No one was allowed to vote without signing and swearing or affirming an oath that read:

“”I, _____, do solemnly swear (or affirm), in the presence of Almighty God, that I am a citizen of the State of _____; that I have resided in said State for _____ months next preceding this day, and now reside in the county of _____ or the parish of _____, in said State (as the case may be); that I am twenty-one years old; that I have not be disfranchised for participation in any rebellion or civil war against the United States, nor for felony committed against the laws of any State or of the United States; that I have never been a member of any State legislature, nor held any executive or judicial office in any State and afterwards engaged in insurrection or rebellion against the United States, or given aid or comfort to the enemies thereof; that I have never taken an oath as a member of Congress of the United States, or as an officer of the United States, or as a member of any State legislature, or as an executive or judicial officer of any State, to support the Constitution of the United States, and afterwards engaged in insurrection or rebellion against the United States, or given aid or comfort to the enemies thereof; that I will faithfully support the Constitution and obey the laws of the United States, and will to the best of my ability, encourage others so to do, so help me God”‘

The statute that included this oath also provided for severe penalties for perjury.

My Reaction to This History

I have, and have had two inconsistent, illogical and conflicting reactions to this history.  In the 50’s and 60’s, when I was exposed, first hand, to a new generation of white southern bigots, their mouths dripping with racial hatred, I thought that Reconstruction had been an all-to-brief moment when black citizens in the South temporarily had access to political power to which they were entitled and which had been denied to them through long decades of horrific slavery.  I saw the 1876 compromise that elected Rutherford Hayes in exchange for marching the Union troops out of the South and leaving the black population at the mercy of the Klan as a disgraceful and immoral episode which postponed racial justice for almost a hundred years.

But, . . . . wait for it . . . On the other hand:  When I read Walter Webb’s book while I was in college and became aware of things like the above-quoted oath, realizing that these plainly unfair, unwise and hateful laws were imposed by one set of Americans on another set of Americans, I could easily imagine how enraged I would have been if I had lived in Alabama or Kentucky, where my parents were born about the time those laws were enacted.  [My dad was 54 when I was born.  He was born in 1877, in Kentucky.  His parents named him Robert E. Lee Hall.  My mother was 45 when I was born.  She was born in Alabama in 1886.]

Southerners were enraged and their rage was expressed with violence and smouldering hate that has required decades to dissipate.   I have read scholarly opinions speculating that the “war-guilt clause” in the Versailles Treaty furnished Hitler a basis for mobilizing German enthusiasm for WWII.  That it was a mistake.  It is hard to talk or write about these issues without appearing to excuse Hitler or the Klan, but there is no doubt in my mind that trying forcefully to cause a complete reversal of political, social and financial power in the South, based on military arms following a bitter war, was absolutely guaranteed to result in long term mindless violent hatred.

Concentration and Consolidation of Wealth in the North

The nature of Reconstruction,  however, is tangential to the matter of sectional inequality that Professor Webb addressed.  His book cites persuasive evidence that the post-Civil War devastation was only the beginning of a set of policies that concentrated wealth and economic power in Northeastern America and reduced the South to a status not unlike an ill-treated colony, exploited for its resources, but denied a fair share of the wealth generated by them.

Webb observes that the frontier essentially closed between 1890 and 1900, a decade when powerful financial  and industrial corporations rose to dominance.  As the factories were built in the North, they created an inspiration and a market for a myriad of machines, equipment and techniques, invented to enable and improve them.  That technology was locked into the North where patent laws insured that the wealth resulting  from it would remain there,  owned by the corporations that either employed the inventors or bought the rights to their creativity.

The post-war Congress appropriated generous pensions for the Union troops and their families, resident, of course, primarily in the North.  At the same time, to protect the products of the growing industrial complex, the Congress passed a series of tariffs that raised prices for Southern buyers, but enriched Northern corporations.  The revenue generated by these high tariffs and the large budget surpluses that resulted became an embarrassment to the Congress, a problem they solved by steadily increasing the pension benefits payable to Union military survivors.  Between 1862 and 1923, almost 8 billion dollars was distributed to veterans.  7 billion dollars of that went to veterans living in the North.  Webb speculates that this extra money enabled families of the veterans to start businesses, some of which grew into the corporate behemoths that toned the financial muscle of the North.

Professor Webb also wrote that eighty or ninety percent of the natural resources – gold, silver, oil, timber, and, to a lesser extent, coal – were located in the South and the West.  The ownership of those resources, however, was concentrated in corporations located and controlled by Northern residents.

The Rise of the Corporation

Webb’s book describes how these Northern businesses were initially characterized by personalities, the “Robber Barons” led by Carnegie, Rockefeller, Armour, Swift et al..  Then, as the size and power of the businesses grew, and the individuals who established them died, their direction passed to corporations who could raise the amounts of money necessary to finance them.   That development was empowered by a legal coup that Webb writes about with a combination of sarcasm and outrage:  In 1882, in Munn v. Illinois, the Supreme Court ruled that a state could fix rates for railroads, grain elevators and other business entities that affected the “public interest”.   That threat of a reasonable and just legal doctrine did not last long.

In 1886 and 1889, the Supreme Court accepted the argument of Roscoe Conkling,  the Southern Pacific’s lawyer, described by Webb as “former politician and Republican boss in the State of New York”, who had served as a member of the Committee of Fifteen that drafted the Fourteenth Amendment, who claimed that the Committee had intended that corporations would be legally deemed people and, hence, entitled to “due process” and all other constitutionally protected rights.

Webb’s treatment of this travesty is a pleasure to read.  He imagines the cross-examination of a corporation with questions like, “Are you interested in religious freedom?”; “Aren’t you afraid of going to hell”.  The corporation replies that it has no soul and thus has no fears about hell.

Relying on data in 1935, Webb wrote that of the 200 largest corporations in America, 180 were based in the North.  He perceived these developments as a return to feudalism, with Northern corporate power holding southerners in bondage.  He complained about gas station attendants wearing uniforms with corporate logos and shoemakers required to pay license fees to the Northern owners of patents on their equipment.

One can only imagine how he would react to the modern advent of franchised businesses and chain store empires that have destroyed the business model of small independent entrepreneurs.   He was saddened and enraged at his perceived tiny hint of what has become a wholesale capitulation to the power of corporate capitalism.

The Professor’s Dated Dream

In his last chapter, he offered what he called “A way out.”  He proposed an alliance between the South and the West; between labor unions and Southern agrarian activists.   He proposed a constitutional amendment to undo the grotesque legal fiction that vivifies corporations with the attributes of human beings.   He hoped that new political alliances could remedy economic inequality.   None of that has happened.   Corporations exercise more control over the lives of Americans than the combined authority of all our governments.   Even health care could not become available to all except by agreeing that it would continue to be administered through insurance companies – a result insisted on as a way of preserving “freedom”.  Even the language of liberty has become so corrupted that intelligent discourse is difficult achieve.

A Closing Note

Re-visiting the Civil War and Reconstruction prompted me to remember some of the things I talked about with  my daughters when they (and I) were young.   Here is a short sample of Stephen Vincent Benet’s “John Brown’s Body”.

“Bury the South together with this man,
Bury the bygone South.
Bury the minstrel with the honey-mouth,
Bury the broadsword virtues of the clan,
Bury the unmachined, the planters’ pride,
The courtesy and the bitter arrogance,
The pistol-hearted horsemen who could ride
Like jolly centaurs under the hot stars.
Bury the whip, bury the branding-bars,
Bury the unjust thing
That some tamed into mercy, being wise,
But could not starve the tiger from its eyes
Or make it feed where beasts of mercy feed.
Bury the fiddle-music and the dance,
The sick magnolias of the false romance
And all the chivalry that went to seed
Before its ripening.”


“And with these things, bury the purple dream
Of the America we have not been,
The tropic empire, seeking the warm sea,
The last foray of aristocracy
Based not on dollars or initiative
Or any blood for what that blood was worth
But on a certain code, a manner of birth,
A certain manner of knowing how to live,
The pastoral rebellion of the earth
Against machines, against the Age of Steam,
The Hamiltonian extremes against the Franklin mean,
The genius of the land
Against the metal hand,
The great, slave-driven bark,
Full-oared upon the dark,
With gilded figurehead,
With fetters for the crew
And spices for the few,
The passion that is dead,
The pomp we never knew,
Bury this, too.”


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