On 13th February 1866, members of the Jesse James gang entered the Clay County Savings Association in Liberty, Missouri, in broad daylight, drew their pistols and held up the bank. The robbers shot a 19-year-old student, George Wymore, and escaped on horseback with $60,000. The significance of this event is that it was the first bank robbery in American history – the first of many – and it took place just months after the end of the American Civil War.
Criminals had stolen from US banks before, but in the past they had entered at night, and burgled the safe when no one was around. The James gang didn’t wait for the cover of night – they robbed in broad daylight and shot anyone who got in their way. Something in American life had changed forever. A new spirit of ruthlessness was abroad following four years of bloody Civil War.
Wind the clock forward fifty years. In October 1919, London’s police headquarters, Scotland Yard, forms the “Flying Squad” a team of mobile detectives specifically to combat a new breed of armed robbers that had begun to target banks and businesses in London. Shortly after, the British government introduces the Firearms Act of 1920 amid fears of a surge in armed robberies following the First World War – the bloodiest war in European history. Something had changed in the British way of life, too.
These events, fifty years apart, have important common elements historically. In both cases, some men had become so hardened and ruthless after years of total war that they were prepared to go to lengths no-one had dared to before. Some kind of customary social restraint had been removed. But serious crime was only the outward sign of social change. In both America and Britain, even deeper and more far-reaching social effects of modern war were felt, nowhere more so than in the way that commercial companies carried on their business.
In 1925, US President Calvin Coolidge famously remarked that ‘The business of America is business.’ Throughout the twentieth century, the Unites States took a world lead in the growth of global multinational corporations and in setting standards in business efficiency and management practice.
But the business of America wasn’t always business. Until only decades before Coolidge made his speech, America had remained an insular, sleepy, farming community not much different from India or China. While Britain and the other leading European nations became highly industrialised, America slept.
What was it that brought about the revolutionary transformation of America from a sleepy backwater in 1850 to world industrial leader by 1900?
Factors sometimes cited as being the drivers of American industrial power are its great wealth of natural resources, and the pioneering entrepreneurial spirit of the new world and the new frontier. Yet these factors were present in the century from 1750 to 1850 when Britain and Europe grew industrially powerful and prospered, while America did not.
So what triggered America’s transformation into the world’s industrial powerhouse in the second half of the Nineteenth century? The idea explored in this article is that it was the American Civil War of 1861-1865 that acted as the catalyst for corporate expansionism. That it was the advent, for the first time in history, of total war – war involving not just armies but all the people – that led to a loss of social inhibition and a new national mood of cynicism that in turn led to the birth of modern corporate capitalism of a new and ruthless kind.
Part of the reason for identifying the ruthlessness of modern war as a primary cause of these market changes is that exactly the same process took place in Britain and other European powers from 1914 to 1918 and with the same set of causes. The new kind of warfare, total warfare in which millions of ordinary people died, brought about a new mindset of cynicism, a new set of live-for-today values, which led to what Prime Minister Edward Heath described, 40 years later, as “the unacceptable face of capitalism”.
But the difference between America and Britain is that the bitter lessons that Europe learned in 1914-18, America had already learned the hard way in 1861-65. By the time the Civil War began, defence had become stronger than attack thanks to the rifled barrel and the machine gun. America thus experienced the industrial-scale slaughter of trench warfare, and the massacre of civilians, 50 years before anyone in Britain or France or Germany.
It was not a head start in industry or commerce or technology that America enjoyed – it was a head start in death and destruction on a modern scale.
Because of the brutal nature of total war, many ceased to have a conscience about long-held taboos such as the sanctity of civilian life. In July 1864, Union general William Sherman was frustrated by Confederate forces in his attempts to reach the strategic railways south of Atlanta. His response was to launch a month long artillery bombardment of the city, firing indiscriminately on military and civilian targets in the city. The casualties – a dozen or two killed – were very light in comparison with modern wars, but horrified people north and south – described by one contemporary as “barbaric”, because it was the first time a major city had been attacked in such a violent way.
When such deep rooted inhibitions as the taking of life had been removed, it was a small step to ceasing to have a conscience about using every trick to part customers from their money. Whole sections of American industry became the business of hucksters.
The carpetbaggers who descended on the South after the Civil War, and the men who took to the gun and to armed robbery, were a crude and visible manifestation of the social changes that the war had brought about. The more sophisticated and largely invisible manifestation of those same changes were the men founding or expanding businesses devoted to making money with the same ruthlessness with which the North had won the war and restored the Union, killing hundreds of thousands of their brothers in the process.
Customers of these new corporations were treated very differently from customers before the war – not as friends and advocates whose loyalty was rewarded by service and quality, but merely as sources of cash to be hooked and manipulated into spending – spending even beyond their needs or their means.
The ease with which war had become scalable because of mass production of weapons, equipment, uniforms, provisions was a lesson that was quickly transferred to scaling up peacetime production of consumer goods – not to win a war, but to triumph in the marketplace.
President Lincoln and the Northern States had prosecuted the Civil War with a ferocious ruthlessness in the belief that those who supported secession were nothing more than criminals, attempting to break up the Union. As a result, it is estimated that 30 per cent of Southern white men aged between 20 and 45, died in a conflict in which there was neither forgiveness nor mercy, neither compassion nor understanding. The total butcher’s bill has been estimated to have been as high as three-quarters of a million dead.
Once having vanished from American social life, humanity also disappeared from commerce, trade, manufacturing and employment. Any sense of corporate social responsibility that American companies may have embraced before the war disappeared on the battlefields of Bull Run and Gettysburg. In the America of the decades following the war, life was as cheap as a Colt Revolver or a Remington rifle, and social responsibility counted for little compared with the immense profits to be had from running businesses as aggressively as the war had been prosecuted.
This transformation is also captured in the fiction of the time. Margaret Mitchell depicts the heroine of Gone With The Wind vowing that she will “never be hungry again” and jettisoning the principles of her Southern upbringing, stooping instead to the abuse of convict slave-labour to grow rich. What Scarlett O’Hara does on celluloid, men and women had done in real life in the eye-witness accounts gathered by Mitchell.
Certainly, America before the Civil War was an often lawless and violent place. But America after the Civil War was the America of Jesse James and Billy the Kid, of bank robberies, train holdups, and the rise of organised crime gangs in New York and Chicago. The violent and lawless America familiar from so many western films was a post-War phenomenon.
In the years after 1865 some 45 outlaw gangs were active in the west, such as the Clantons, the James Gang and the Wild Bunch. Of these, only six were active before the Civil War, and they were all Mexicans competing to be the best horse thieves in Southern California.
As observed earlier, before the James gang robbed the Clay County Savings Bank in 1866, criminals had broken in at night when no one was on guard and burgled the premises quietly . After the Civil War, criminals walked through the front door during business hours, brandished pistols and robbed staff and customers face to face.
What bank robbers like Jesse James were doing openly with pistols, corporations like Standard Oil and Pittsburgh Steel were doing behind closed doors using cartel-like “Trusts”, price-fixing and dubious bookkeeping methods.
Business became the business of America, in Coolidge’s memorable phrase, because of the Civil War and it wasn’t until Britain experienced the slaughter of modern warfare that it, too, formed multinational corporations with no sense of national loyalty, no sense of duty or compassion and little regard for anything except accumulating profits for its shareholders.