1913 - Commerce

Commerce

Rochester, N.Y., garment worker Ida Brayman, 17, dies February 15 of gunshot wounds sustained when she was shot by her employer during a labor-management struggle. Police arrest Elizabeth Gurley Flynn February 25 at Paterson, N.J., in a strike called by local silk workers to protest the installation of improved machinery that will eliminate jobs (see Luddites, 1811). The IWW (International Workers of the World) has led the strike, which continues for 5 months (see Flynn, 1912). A general strike of lingerie makers in Brooklyn and Manhattan brings out 35,000 young women, many still in their early teens, who march in picket lines organized by Rose Schneiderman. But the ILGWU strike that began last December is called off March 15 after 13 weeks.

The Sixteenth Amendment to the U.S. Constitution proclaimed in force February 25 by Secretary of State Philander Chase Knox, 59, empowers Congress to levy graduated income taxes on incomes above $3,000 per year. The progressive income tax will bring drastic changes to the lifestyles of a few thousand rich Americans, but the great majority does not earn enough to be subject to the tax, and the very rich will find loopholes for avoiding taxes.

The Pujo Report published February 28 by the House Committee on Banking and Currency creates a sensation by exposing the "money trust" that controls U.S. financial power. Rep. Arsène P. (Paulin) Pujo, 50, (D. La.) heads the committee that has called witnesses, including financier J. P. Morgan. The report reveals that Morgan, George F. Baker, and James Stillman have between them controlled at least nine banks or trust companies with assets of about $1.5 billion and have had a voice in the management of most railroads, industries, and public utilities. Their representatives have held 341 directorships in 112 concerns with resources exceeding $22 billion.

President Taft signs a law just before leaving office March 4 creating the Department of Labor. Congress has passed the Sulzer Bill in response to demands by the American Federation of Labor (AFL), whose membership has reached 2 million.

J. P. Morgan dies at Rome March 31 at age 75, leaving an art collection valued at about $50 million plus about $68 million in securities, prompting John D. Rockefeller to say, "To think, he wasn't even a rich man"). The largest single item in his estate is his interest in his New York and Philadelphia firms, appraised at $29,875,847, but the estate also includes many worthless securities.

The Underwood-Simmons Tariff Act passed by Congress May 8 lowers import duties by an average of 30 percent, the first real break in tariff protection since the Civil War. President Wilson has called a special session of Congress and addressed the legislators in person April 8 to urge passage of a new tariff bill, the first such appearance by a president in 113 years. Agricultural implements, raw wool, iron ore, pig iron, and steel rails are admitted duty-free under the new law, and tariffs on raw materials and foodstuffs are substantially reduced. The United States accounts for about 40 percent of world industrial production, up from 20 percent in 1860, but the new measure hurts many manufacturers; pressure mounts for restoration of tariff protection (see 1922).

The United Mine Workers strike Colorado Fuel and Iron September 23 to protest policies of the company controlled by John D. Rockefeller Jr. The United States has the world's worst mine safety record, and the record in Colorado is worse than in any other state (accidents killed 319 workers in 1910 and injured hundreds more). CFI owns 600 square miles of coal properties, operates 39 mines, produces 6 million tons of coal per year, and routinely rigs the scales at pitheads to underweigh output per worker, but miners who demand that scales be checked are fired, and 1,000 miners were fired last year on suspicion that they were union members. Detectives from the Baldwin Felts agency have picked a fight in August with labor organizer Gerald Lippiati and shot him dead in broad daylight on the streets of Trinidad, but instead of intimidating the workers the incident enrages them; they demand union recognition, an 8-hour day, a 10 percent wage boost, the withdrawal of company guards, and the right to elect their own checkweightmen. A CFI guard who has raped several miners' wives is shot dead September 18; other guards evict strikers' families from company housing, forcing them to live in tent colonies as winter approaches. Guards arrest union organizers and lock them up without trial, they escort scabs into the mines, 27 of the 11,000 strikers are killed, and some of the others set two mines afire. The U.S. Commission on Industrial Relations meets in the fall with members appointed by President Wilson to root out the causes of industrial unrest (see 1912). American Federation of Labor lawyer Frank P. Walsh heads the commission, but violence in the Colorado coal fields continues, with fatalities on both sides (see Ludlow massacre, 1914)

A Christmas party for children of copper-mine strikers at Calumet, Mich., ends in disaster as company thugs shout, "Fire!" and then lock all the doors of the building; 73 children are trampled and smothered to death in their efforts to get out.

The average British worker still earns less than £1 per week ($5 in U.S. currency) while American workers average more than $2 per day (see Ford, 1914). The U.S. Bureau of Labor Statistics computes its first monthly Consumer Price Index to help determine the fairness of wage levels (see Fisher, 1911).

Bethlehem Steel's Charles M. Schwab acquires Fore River Shipbuilding and makes his New Jersey-born protégé Eugene G. (Gifford) Grace, 37, president of Bethlehem. Grace will develop the company into the world's second largest steelmaker (see 1912; Sparrows Point, 1916).

Singer Manufacturing Co. sells 2.5 million sewing machines, 675,000 of them in Russia.

The Federal Reserve System created under terms of a measure signed into law by President Wilson December 23 will reform U.S. banking and currency. The charters of two previous central banks have been allowed to expire, largely because many Americans have distrusted the eastern financial establishment, and former U.S. senator Nelson W. Aldrich, now 72, has spoken out against the measure, although it contains many elements derived from his own plan to provide the nation with a modified central banking system and "elastic" currency system. Drafted to prevent panics such as the one in 1907 and still allay Populist aversion, the Glass-Owen Currency Act establishes 12 Federal Reserve banks in America's 12 major cities, with 25 branch offices, and requires member banks to maintain cash reserves proportionate to their deposits with the Fed—which loans money to the banks at low rates of interest relative to the rates the banks charge customers. The Fed's seven-man Board of Governors is appointed by the president to staggered 14-year terms and needs no congressional appropriations to operate; it acts as a lender of last resort, determines the amount of money in circulation at any given time, provides elasticity to the supply of currency, and can act to control inflation, but Aldrich has opposed it on grounds that giving the reserve banks power to issue notes is inflationary (see Banking Act, 1935).

Wall Street's Dow Jones Industrial Average closes December 31 at 78.78, down from 87.87 at the end of 1912.