Echoes Dispatches From Economic History
Wall Street's Long History of Violence: Echoes
If you're fretting over the increasingly assertive "Occupy Wall Street" movement, don't -- at least not yet. The financial system has faced much worse and persevered, mostly unscathed. But violence against capitalism, and the banking industry in particular, is part of our national heritage, and could return under the right circumstances.
The biggest threat to the financial system's existence came not during the New Deal, when major players like Goldman Sachs successfully negotiated regulatory reforms with a (relatively) rational government, but rather during what could be termed the Age of Anarchism.
For three decades, beginning in the 1890s, avowed anarchists or their followers committed numerous acts of violence, including almost assassinating the industrialist and financier Henry Clay Frick in 1892; successfully assassinating the pro-gold, pro-bank U.S. President William McKinley in 1901; burning one of the buildings of the conservative Los Angeles Times in 1910; and mailing 36 bombs to prominent politicians and business leaders in 1919.
This deadly epoch culminated in the explosion of a large bomb composed of dynamite and cast iron shrapnel outside of J.P. Morgan's Wall Street offices during the lunch-hour rush on Sept. 16, 1920.
As the bomb exploded, a lead-filled fireball smashed into bystanders and buildings, rocking skyscrapers blocks away. A shaken survivor who had been standing at the corner of William Street and Wall Street, a block away from the blast's epicenter, "saw two sheets of flame that seemed to envelop the whole width of Wall Street and seemed to reach as high as the tenth story of the tall buildings." A teenage messenger boy hustling nearby recalled being "lifted completely off the ground" by the shock wave. Then followed an eerie moment of stillness. It was soon shattered by falling glass and other debris thundering down, and the wails of the wounded rising up. Thirty-eight people lay dead or dying, an additional 143 seriously injured. Although authorities quickly cleaned up the blood and gore, pockmarks made by the explosion are visible on 23 Wall St. to this day.
The party responsible for the bombing, the worst terrorist attack on U.S. soil prior to the 1995 Oklahoma City bombing, was never identified, but was almost certainly an anarchist or an allied advocate of "direct action" -- of using violent means to achieve political ends.
Anarchism was the most violent of numerous movements protesting the excesses of the so-called Gilded Age that followed the Civil War, a time when robber barons successfully lobbied the government for special privileges and businesses formed cartels or merged into monopolistic "trusts." In addition to criticizing the widening disparity of wealth and unprecedented increase in corporate market power, many Americans advocated replacing the nation's pro-creditor gold standard with a more debtor-friendly monetary system based on silver or fiat paper money ("greenbacks").
The most popular protest movements, such as the Populists and the Progressives, favored ballot boxes over bombs and formed third parties that were eventually co-opted by the two major parties, much as the Republican Party recently subsumed the Tea Party movement. Other movements, however, including radical labor unions such as the Industrial Workers of the World (or the "Wobblies"), advocated violent strikes and stirred up class antagonisms by claiming that workers and their employers were already in a state of war.
But physical violence, especially against the innocent, didn't sit well with most Americans, and it usually backfired politically. Since the 1920s, almost all protest movements have been careful not to condone aggression, instead embracing nonviolent resistance techniques such as sit-ins, boycotts and mass demonstrations. The "Occupy" movement has gone a step beyond nonviolence to nonconfrontation: For the most part, protesters have followed directions from authorities and occupied parks instead of important buildings or thoroughfares, refrained from electronically amplifying their voices and even consented to the removal of generators and propane tanks on the eve of a snowstorm.
As winter weather and frustration set in, however, some protesters could revert to more confrontational 1960s-style civil-rights and anti-war techniques. General strikes and marches have been called, including a major protest planned for Nov. 17 in New York's financial district. And as the Age of Anarchism suggests, more violent protests can't be ruled out, no matter how unlikely they now appear. What it would take to spark a wave of violence is unclear. Hopefully, we won't find out.
(Robert E. Wright is the Nef Family Chair of Political Economy and the director of the Thomas Willing Institute for the Study of Financial Markets, Institutions and Regulations at Augustana College in Sioux Falls, South Dakota. The opinions expressed are his own.)
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