1920 (3 page)

At the time, the Morgan boasted assets of $200 million, more than two billion in today's money. Numerous other financial institutions, in New York and elsewhere, were also thriving, if not as much as Morgan's. Retail concerns, manufacturing, the import-export trade, various service providers such as life insurance and financial counseling—most of these were profiting too, which is to say that, virtually, so was the entire American economy. The exceptions were few and did not cause alarm.

In the aftermath of the Great War, with much of Europe having been destroyed, the United States flourished almost by default; it was rich and on the verge of growing richer than any other nation in history, a nation being led by the robber barons, to whom we may refer as a second generation of Founding Fathers—no less brilliant, if in too many cases more brutal and uncaring, than the first. They were men who had re-invented the mechanics of industry, the intricacies of investment, the very definition of progress. And venality.

They began their remaking of the American economy after the Civil War, with the building of railroads. Several lines had existed before the war, of course; but now, with the country at peace again, the pace of track-laying became frantic, one company racing to cover more of America with iron strips than any of its competitors. This was especially true in the South, much of
which had been damaged or destroyed by Union troops; as Reconstruction began, Southerners wanted their railroads reconstructed as much as anything else. They pleaded for federal subsidies to “lay down railroad tracks from somewhere, anywhere in the South to the Pacific Coast. In short, they wanted an infrastructure that would allow them to join the commercial-industrial revolution that was convulsing the rest of the country.”

The South got its rails, and quickly. The North also got its rails and began to employ them with almost equal speed. The “technology of haste,” historian Daniel Boorstin called it—and the result was that lines were laid in seemingly helter-skelter fashion, slapped onto the ground and hammered in, metallic trails now running from major city to major city, from village to mining encampment, from some place to no place. In 1900, 193,000 miles of rail were crisscrossing the United States; by the start of 1920, the total was a quarter of a million, and it would be 265,000 before the year was out. The hubs and outposts of the United States were being joined, woven together, in a manner no one had ever previously envisioned.

But the technology of haste, Boorstin cautioned, was also the technology of carelessness, “with little regard to safety, comfort, or durability.”

MEANWHILE, AS TRAIN TRAFFIC SHUTTLED
back and forth across the country and the railroads became the first great American monopoly, automobile production started and experienced its own rapid growth. Motorists were exhilarated when their cars were running well, frustrated when something broke down or even fell off as they bumped along a mud-rutted road, a frequent occurrence. “You'll scare the horses!” farmers yelled as the newfangled machines puttered noisily past them on country roads. Drivers waved back as if they had just heard friendly greetings rather than cries for a more recognizable world.

In 1900, there were a mere 13,824 automobiles in the United States. Horses had little to worry about. But by 1910 the number had risen to half a million, and in 1919 it had climbed fifteen times more, to 7,558,843. In the following year, American automakers, most of them small operators who would soon be out of business, began to produce almost 2.3 million cars annually.

Unfortunately, the roads on which they traveled were “a national disgrace,” nine tenths of them “made of dirt and in a generally appalling condition—with miles of chassis-deep mud the consistency of horse glue.”

As for air travel, it was uncommon and erratic in 1920. Many airlines had three or four vehicles in service, but it didn't help. A small airline would go into business and then out again a few weeks or perhaps months later, to be followed by another that would suffer the same fate, and then another. None of the companies lasted, none offered dependable or safe service. Airports, as well as control towers, were nonexistent. In lieu of runways, there were farm fields; big, empty, and bumpy, with a line of passengers waiting for the next plane to arrive. Often, these passengers stood against a row of cornstalks, their fists wrapped around a handful of dollar bills—this despite the fact that each plane could seat but one or two passengers. Boarding and departing from the aircraft were not lengthy procedures; getting to the front of the line, however, could take most of a day. Those awaiting a plane, needless to say, were delighted to see one coming in for a landing, but if automobiles frightened the horses, airplanes positively terrified the crows.

BUT AMERICA'S MIGHT WAS VISIBLE
in other ways too. As historian Philip McFarland writes about Cuba,

By the final decade of the nineteenth century, Spain had installed over 100,000 troops on the island, charged with supporting a regime that had grown increasingly corrupt and arbitrary. Against so massive a force native resistance was reduced to guerilla warfare: burning crops, blowing up train tracks, striking hit-and-run at isolated detachments of soldiers.

In 1898, though, the United States entered the fray on the side of the rebels. The struggle became known as the Spanish-American War—and the Americans proved victorious, with a mere three months having passed from the start of the U.S. offensive at San Juan on May 12 to the signing of a Protocol of Peace in Washington on August 12. With those strokes of
the pen, Americans removed the Spanish presence not just from Cuba but from the Philippines, where war had also been waging, and both countries now found themselves either “free” or under American imperialistic rule, depending on your political views.

As quickly as that, then, the United States had established itself, for the first time, as a military power with global reach. It was a new role for the country, which, in some ways, it seemed not to want, at least initially. There was no flexing of muscles after the war, no pounding of the chest—except for Theodore Roosevelt, hero of the San Juan Hills, who was always pounding his chest about something or other; rather, President William McKinley, soon to be the victim of an assassin's bullet and to be succeeded by Roosevelt, ordered the shrinkage of the U.S. military. In short time, it became “a small ‘mobilization army,' focusing much of its time and energy on planning and preparing for future expansion to meet contingencies.”

But, apparently, the planning and preparing were enough, at least for the time being. It was America's entrance into the Great War that finally brought the struggle to a close, just as it was America's insistence on punitive measures in the Treaty of Versailles that would lay the foundation for the next great war. President Wilson, remarkably short-sighted for a man of his intellectual gifts, had insisted on these measures, directed primarily at the Germans, perhaps seeking revenge for having been drawn into a conflict of which he swore his nation would never be a part. The Germans had made a liar out of the Chief Executive who, among all who held that office in the twentieth century, sought peace fervidly.

THE RAILROADS, AUTOMOBILE AND AIRPLANE
manufacturers, and military forces needed steel, never-ending shipments of it, millions of tons. Only one nation could have met a demand so immense. Met it, in fact, with barely an increase in normal production quotas. In 1901, the Carnegie Steel Company, the largest venture of its kind in the country, had merged with the National Steel Company to form United States Steel, the world's first billion-dollar corporation. Capitalized at slightly more than that, $1.4 billion, which is forty billion in today's dollars, the new entity was, in the main, the doing of J. P. Morgan. His chief partner in joining the
two firms, attorney Elbert Gary, was also an eminent fellow, giving his name to an Indiana city that would become an official entity in 1906 and would produce smoky, sooty, filthy wealth for the fortunate few until the American steel industry started dying its slow death more than half a century ago.

As for Carnegie, in selling himself out of America's bedrock industry, he made $6,098,351,361, give or take, in present currency, but he did not believe he had been overpaid. Neither did Morgan nor Gary—and neither had, for United States Steel now
was
United States steel, and its output had become staggering, its profits even more so. The railroads were satisfied. The automobile industry was satisfied. The military was satisfied. As for investors, some of the larger ones were beginning to believe in streets of gold after all.

Carnegie was satisfied too, even more than just that. The enormous sum he had been paid for his steel company, in addition to the hundreds of millions he had previously made in the business, was more than enough to fund his second career as a philanthropist, and until the Gates Foundation came along, he was the greatest dispenser of cash for good causes that America has ever known. For one thing, he provided money for the astonishing total of 1,696 public libraries, most of them in the Midwest, 164 in Indiana alone, and another 142 in California.

The philanthropist was one side of the man, and his nobility in this role cannot be overstated. But there was also another side to Carnegie, a side that made his philanthropy seem less an act of charity than an attempt at penance. Before Carnegie could give his money away, he had had to make it—and his methods of achieving the latter were the gruel of existence for virtually all who spent their days and lives in his smoldering mills.

NINETEEN FOURTEEN WAS THE YEAR
in which the Great War began. It was also the year when construction of the Panama Canal ended. More than three decades after the French had started to build the waterway, the United States, still manifesting its destiny, completed the job. The $365 million, 51-mile-long feat of engineering was the most important sea lane
ever created for shipping, and the first oceanic path of any sort to link America's two shores, important not only for shipping but for defense in the event of attack from abroad. “For millions of people after 1914,” writes canal chronicler David McCullough,

the crossing at Panama would be one of life's memorable experiences. The complete transit required about twelve hours, and except for the locks and an occasional community along the shore, the entire route was bordered by the same kind of wilderness that had confronted the first surveyors for the railroad. … This was a military rather than an aesthetic decision … the jungle … was the surest possible defense against ground attack.

MEANWHILE, BACK IN LOWER MANHATTAN
on that mid-September day in 1920, six years after the Panama Canal had opened, passersby might have noticed something unusual about the horse in front of the Morgan Bank, and not just that he was old, tired, and sagging: he was also extraordinarily calm despite the din around him. “Wall Street seemed to be one great construction site,” Yale University's Beverly Gage reports in her definitive study of the day's tragic occurence,
The Day Wall Street Exploded
. “Blasting and hammering echoed through the district's canyons, and shipments of marble, wood and machinery blocked the already congested streets.” The new buildings would not just be plentiful, then; they would be elegant, made of the finest materials and designed by the finest architects in the world.

It was more good economic news, of course. In fact, as the
Wall Street Journal
had reported the previous year, and as was still true, “Sales and re-sales of property in the Wall Street district are greater than ever before.”

The horse, however, oblivious to real estate values, also seemed oblivious to the commotion around him, remaining still in its midst.

As for the cart, the more it remained in place, the more it seemed out of place. The paint on the sides was peeling, the sideboards were warped, and the wheels were slightly misshapen, no longer perfect circles. The
cart might have been red; it might not have been. It might have had a sign on the side; it might not have. The sign might have advertised one of the great companies in all of American industry; it might have named a one-wagon firm. Few people would agree on details when it was time to ask about them.

Regardless, the cart was not the kind of vehicle to be parked, however briefly, in front of a place like the Morgan Bank. There was something wrong with this picture. If only someone had noticed in time.

As the morning's end approached, there was no sign of rain, which the morning papers had predicted. The sky was clear, and the temperature, sixty-nine degrees at midday, also defied predictions; it was not supposed to be this warm. Humidity was virtually non-existent, almost perfect end-of-summer weather.

Suddenly, the Trinity Church bells added to the noise, beginning to ring twelve times, as they did every day at noon. It was the signal for employees of the various financial institutions surrounding the church to begin their mad rush out of the buildings, hundreds of men and women on their way to eat and drink their lunches. Journalist Mark Sullivan writes that “the sidewalks were as usual thronged with stock-exchange traders, brokers, clerks, bank messengers, stenographers—all … jostling each other as they sought to make headway.”

Some of them ran. The rest walked quickly, heels clicking on the sidewalks making a clatter so constant, it was like the sound of marimbas shaking. Most of the people had only a half-hour break, and by the time they got outside, the bells had almost finished striking; close to a minute of meal time was already gone.

AS FOR THE FUEL THAT
was needed to power America's extraordinary growth, quantities seemed inexhaustible. When the nineteenth century came to a close, Philip McFarland points out, Thomas Edison's “aggregation of ingenuity, imagination, and wealth adopted the corporate name General Electric,” properly suggestive of the company's stature. McFarland also wrote that at the World's Columbian Exposition of 1893, Edison's competitor, Westinghouse Electric, had “powered the unprecedented display of 92,000 incandescent lamps all simultaneously and safely alight,
along with an electric sidewalk in motion and the first modern electric kitchen.”