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A Bit of Perspective

A bit of perspective, that is what we get when studying

history. Without that perspective we are easily manipulated by politicians, demagogues, car salesman, snake oil salesman, televangelists, newspaper reporters, and people armed with alternative facts or altered facts that profit from our ignorance. Without that perspective we can’t even tell if they are alternative facts, altered facts, facts based on half truths, or truth itself.

Let’s set our way back machine to the teens of a century ago. President Wilson was running the show here in America. Without reservation he believed that “America was born to exemplify that devotion to the elements of righteousness which are derived from the revelations of Holy Scripture.” In a speech before Congress about the war (WWI), he warned, “There are citizens of the United States, I blush to admit, … who have poured the poison of disloyalty into the very arteries of our national life…Such creatures of passion, disloyalty, and anarchy must be crushed out.” A manifestation of his “divine appointment by God” was the Espionage Act that he called an imperative necessity.

Congress balked at the legalization of press censorship but the rest of the bill passed with almost unanimous support. Included in the bill was authorization for Postmaster General Albert Sidney Burleson to refuse to deliver magazines, newspapers, or mail he deemed unpatriotic or critical of the administration. Attorney General Thomas Gregory felt that the law did not go far enough, and pushed a new law, the Sedition Act that made it punishable by twenty years in jail to “utter, print, write, or publish any disloyal,profane, scurrilous, or abusive language about the government of the United States.” To enforce the legislation the American Protective League under administration by the Justice Department was formed and within a year there were 200,000 members, some of whom initiated vigilante justice with impunity in communities.

In Rockford, Illinois, the army asked league members for assistance in acquiring confessions from twenty-one African-American men accused of assaulting white women. League patrols targeted seditious speakers, performed citizens arrests or called upon police to break up “unpatriotic” gatherings. States outlawed the teaching of German, an Iowa legislature called for the expulsion or deportation of all first generation German immigrants, people who publicly spoke German were subject to immediate arrest, and government approved front page banners warned that every German or Austrian, unless an acquaintance of years, should be considered a spy.

Meanwhile, as the war raged in Europe with ever mounting casualties, the American auto industry surged with development. War contracts, and unlike in WWII, a burgeoning consumer hunger enabled record profits. Still, numerous companies foundered. Even though the Good Roads movement fostered dramatic improvements in rural “highways” the railroad still served as the primary mode of transport for troops, goods, passengers, and raw materials.

Shortly after the dawn of 1917, Henry Leland resigned his position as chief engineer at Cadillac. A rock solid reputation for business integrity, visionary innovation, and engineering perfection enabled him to establish Lincoln Motor Company, and secure a government contract for the manufacture of 6,000 Liberty aircraft engines. Even more amazing, he was also awarded a $10 million dollar advance to launch the project!

Production had only just begun when the signing of the armistice negated the project leaving Leland in debt with a newly equipped factory and a work force of 6,000 men. So, he decided to retool the factory for the production of automobiles, and within three hours of listing the new venture sold $6.5 million in capital stock.

Charles Nash, like Leland, walked from his position at General Motors when founder William Durant regained control. Nash had been with the company from its inception, and worked his way up through the ranks from cushion stuffing to President of the Buick Division, and eventually, President of General Motors.

With another former GM employee, James Storrow, as his partner, Nash acquired the Kenosha, Wisconsin based Thomas B. Jeffrey Company, manufacturer of the Rambler as well as the four-wheel drive Jeffrey truck, the military’s primary motorized transport vehicle. Reorganization resulted in the establishment of Nash Motors Company on July 29, 1916.

REMEMBER WHEN
Pierce Arrow exemplified the gulf between the haves and have nots during the teens. 

In 1919, Walter Chrysler followed he path of Nash and Leland. Resultant of a heated disagreement with William Durant, he reigned his position as President of the Buick Division. After accepting a position with Chase National Bank to restore Willys Overland to solvency, his next salvage operation was at Maxwell Motor Corporation that had recently merged with Chalmers, a disastrous financial arrangement. This time, however, Chrysler had ulterior motives and after gaining full control of the company, reorganized as Chrysler Motors Corporation.

Even though there was a huge wage disparity between factory workers and factory owners, and conditions were often grueling with little or no compensation for injuries or illness, labor problems were almost nonexistent. President Wilson’s draconian policies had almost completely crushed the fledgling unionization movement, and through extensive use of propaganda, many workers viewed unions as unpatriotic.

As an example, in Bisbee, Arizona league members incited vigilantes to round up 1,200 “union members and agitators”, seize their possessions, beat them, force them into boxcars, and then transport them to a siding across the New Mexico state line. Before being released, the prisoners locked in the box cars endured days under the desert sun without food or water.

Before the institution of Wilson’s policies, Henry Ford had set what many deemed a very dangerous precedent. In January 1914, a time when many companies were pushing the envelope of automotive manufacturing technology to cut labor associated costs, Ford streamlined the production process to trim expenses. This included simplifying the only product he had produced since 1909, the Model T. In turn he continued to lower the sale price of a new Ford, and then doubled the prevailing industry wage from $2.50 per day to $5.00.

A deep economic recession followed the signing of the armistice, and the auto industry was hard hit. Many weak companies fell by the wayside. As the economy tanked, there was a perception that drastic and unprecedented monetary policies at the federal level were needed. These new policies coupled with the dawn of finance programs such as GMAC that allowed the consumer, for the first time, to buy on the installment plan acted like a jolt of adrenaline and the American economy soared. The prosperity, however, was an illusion built on easy credit for the consumer as well as the corporation. The day of reckoning came in October of 1929, and by 1932, the nation and the world was immersed in the worst economic collapse in modern history.

As a final note from the “history repeats itself file”, President Hoover instituted an array of policies in a misguided attempt to stem the onslaught of the Great Depression. One of these was a plan to bail out banks deemed to big to allow to fail.

Okay class, that is our history lesson for the day. Do you see any similarities? Does history repeat itself or is that merely a myth?

 

 

 

 

 

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