POLICY ACTORS IN GILDED AGE MUNICIPAL POLICY SYSTEMS
Andrew White, founder of Cornell University and first President of the American Historical Society, wrote: “Without the slightest exaggeration … with few exceptions, the city governments of the United States are the worst in Christendom—the most expensive, the most inefficient, and the most corrupt (White, 1890, p. 213). White echoes Lord James Bryce’s comment that:
There is no denying that the government of cities is the one conspicuous failure of the United States … The faults of state governments are insignificant compared with the extravagance, corruption and mismanagement which mark the administrations of most great cities. (Bryce, 1888, p. 642)
A few years later, reform journalist Edwin Godkin described “the present condition of city governments in the United States is bringing democratic institutions into contempt the world over, and imperiling some of the best things in our civilization” (Godkin, 1894, p. 882). As late as 1933, Arthur Schlesinger half-heartedly muttered that municipal services in the last decades of the nineteenth century were “creditable to a generation … confronted with the phenomenon of a great population everywhere clotting into towns” (Schlesinger Jr., 1933, p. 120).
The perceived fault for this charming state of affairs was fragmented government imposed on cities by state constitutions crafted from earlier Jeffersonian–Jacksonian eras. Population growth, physical expansion of the city and industrialism simply overwhelmed pre-Civil War urban governance. I agree with this argument—as far as it goes. Having made the case that some of the best infrastructure that existed in the world at that time was clumsily but successfully installed in our Big Cities, I would add that the lack of an acceptable HEDO that linked private resources with governmental powers created the perception that the era was worse than it actually was. Moreover, as will be developed, Gilded Age municipal policy systems were bipolar hybrid systems containing two warring elements (machines/businessmen) that collectively produced policy outputs and policy implementation that led to the first paragraph compliments.
Governmental weakness is usually charged off to its fragmentation: bicameral city councils; the election of numerous independent public offices, from the proverbial dog-catcher to city comptroller—and a weak, mostly symbolic mayor. The era’s almost total lack of government bureaucratic capacity is striking. This is a low-tax era, and there were few bureaucrats hanging around city hall—those who were there were tied to elections, not to governance. Budgeting was a line item, audits were often ignored and elected officials tied to an election cycle of two years—sometimes annual. Any change required concurrence from the state legislature, which was not impossible but did consume time and required compromise with state representatives who had local ties and ambitions—not to mention partisan differences. Competent and accountable municipal government took more than a half-century to construct—there was precious little of it during the nineteenth century.
The principal tasks of this section, therefore, are to outline: (1) how municipal governance incorporated warring elements and conflicting ED goals that affected ED policy; and (2) in what ways these hybrid policy systems started down the road to forge governmental EDOs that someday could participate effectively in municipal economic development policy-making. Don’t expect miracles during the Gilded Age, but Big City governmental economic development began its long slog—a slog that would take nearly a century.
Machines, Big City Governance and Economic Development
Mention the words “political machine” and visions of Tammany Hall, Tweed Ring and Christmas turkeys to starving immigrants dance in one’s head. The patronage-saturated but well-meaning Spencer Tracy as Frank Skeffington (Boston’s James Michael Curley) uttering on his deathbed in The Last Hurrah (1958) “Like hell I would”—putting a heartless efficient Yankee in his miserable place. Tons of political machine stereotypes float around in today’s history books; most have precious little relationship to the machines and their involvement in Gilded Age municipal policy-making.
Political machines came in several Gilded Age varieties: Philadelphia exhibited two forms; Boston’s machines operated at the ward level, not city-wide. Baltimore’s machine was state-level; Detroit didn’t really have a machine—and neither did Chicago—but ward bosses amassed power in city councils.5 And then there was Tammany and Cincinnati’s George Cox. There is one element of truth in the machine stereotype with which we begin discussion: the machine rested on immigrant and the working-class neighborhoods of our Big Cities.
A political machine does not have to control the entire urban policy system—it can control or dominate only one element or institution within it. Except for very brief episodes, most Gilded Age municipalities were not machine-dominated policy systems. Yet, nearly every municipal policy system in the Age exhibited somewhere in its policy system machine-controlled institutions and geographical districts.6 Machines impacted economic development hugely. Amazingly, because most economic development of the period was mainly handled by private entities, a great deal of Gilded Age municipal ED lay outside of machine control.
What machines did do is suck the wind out of the Progressive approach to ED. Helping the poor and disadvantaged to the benefit of the entire municipal community was supposedly what that approach is all about. Up to this point Progressively inclined policy systems rested mostly on homogeneous cities—forget about that in Gilded Age Big Cities! Boston, the heart and soul of American Progressivism, was at war with the Irish Catholic—and vice versa. Boston Brahmins headed for the suburbs and engaged in a war some say continues, albeit muted, to this day. The truth be told is that state–municipal level Privatists ran Pennsylvania’s machines, and in most Big Cities (NYC being the exception) machines only occasionally swept to city-wide victory. Rather, most typically ethnic machines, controlling one or both bicameral legislature, delivered policy outputs that strikingly resemble today’s community development initiatives—complete with maximum feasible participation from the disadvantaged. But let’s not get ahead of ourselves. Much of that story lies in future chapters. Let’s outline here how Gilded Age hybrid municipal policy systems produced ED policy.
Machines shared Big City municipal policy-making with increasingly stronger mayors, independent boards and commissions, and comptrollers and aggressive business organizations such as the Chamber and Real Estate Exchanges. To the extent they controlled anything, ward-based machine bosses dominated Big City councils (Teaford, 1984, pp. 176–82). City-wide bosses, however, infrequently existed. On the other hand, machine politicos were among the very first pure political class found in America.
Although the city council of the late nineteenth century may have played a more limited role in formulating policy of city-wide significance … It survived as the voice of the neighborhoods … by which the fragments of the metropolis could win concessions and favors from the ever-more-powerful executive offices of city government. It was the channel through which constituents won exemptions or licenses and neighborhoods obtained pavements, sewers, or water mains … Aldermen of the 1880’s and 1890’s were masters of the microcosm and not overseers of the macrocosm. They were big men at the corner saloon but small fry when compared with the bankers and brokers downtown. (Teaford, 1984, p. 15)
Machine influence was superimposed on the previously existing, fragmented, chiefly business-dominated Big City policy system. In effect, the Gilded Age Big City policy system was one in which two contrasting visions of economic development competed—and cooperated.
Machine power, such as it was, came from the continuous stream (to 1920) of crushingly poor immigrants who, for defensive reasons alone, clustered together in the oldest neighborhoods and housing their city had to offer (Banfield and Wilson, 1963, p. 79). By 1890 rates of foreign-born people in most eastern/midwestern Big Cities were in excess of 30 percent (Mohl, 1985, p. 20 Table 4). Machines rested on and “conveyed” the interests and political “style” of these immigrants and the native working class. With no social service system of any consequence in existence, the famous machine social services, though exaggerated, filled a gap. In this world, an exchange of a turkey for a job was a wonderful offer—a drink at the local bar more important in a Prohibitionist Privatist atmosphere. After all, most immigrants had no intrinsic loyalty to a municipal democracy, and little experience of it.
Immigrants clustered into more or less class-homogeneous neighborhoods that overlapped with electoral wards. The ward is key to understanding Gilded Age (and pre-1920) machines. Ward-dependent machines are congruent with today’s neighborhoods. Machines characteristically revolved around and resolved neighborhood issues; they addressed “people-based” demands their residents wanted (bathhouses, bars and jobs). That they exhibited a personalistic, almost opportunistic political style was reasonably acceptable to their constituencies.
Machines—in addition to social services, ombudsmen and jobs/patronage—also opposed nativism (anti-immigrant) politicians, parties (Know Nothing) and mobs. Whenever possible, machine policy outputs benefited neighborhoods and residents. From the machine’s eye, sewers, roads, streetcar routes and electrification were appreciated through the prisms of ward boundaries and neighborhood residents. Kickbacks didn’t hurt either. Gilded Age machines were not policy neutral as the conventional machine model assumes; they were indifferent to the middle class-style and city-wide policy perspective—like Donald Trump advocates. To the extent machines attempted city-wide economic development-like “growth” policies, it was to suck from them graft, kickbacks, abusive bond issuances and patronage opportunities. This is where Tweed and other ward bosses made their fortune—and why the business community hated them. Late Gilded Age machines (Thomas Pendergast and Murphy, for example), fearing a fate like Tweed, made their deal with the business community and siphoned off kickbacks/patronage in return. By the end of the century the two competing factions had learned how to work with each other to produce acceptable policy outputs.
In the context of their day, their economic development could be described as neighborhood-oriented and people-serving. Jobs, access to affordable urban infrastructure, bathhouses and playgrounds, loans, the parochial school, ethnic moms and pops, bars and alcohol, protection from mobs, bankers and landlords, “their” police/fire departments, cultural identity and the Knights of Columbus—not all of which is pure economic development to be sure, but all of which is intended for neighborhood residents. Whether or not ward machines are among America’s first community developers, I’ll leave to the reader’s judgment; but overlap with present-day community development did exist. Personally, I believe machines are America’s first example of indigenous working class-led community development. But they are only one half of our hybrid Gilded Age policy system.
Businessman Mayors
Through their control over voting in immigrant neighborhoods, ward bosses were a powerful force in city legislatures. That legislative power, significant through it was, did not provide sufficient strength to dominate the municipal policy system. Before the mid-century, mayors were largely symbolic heads of state in the Jeffersonian– Jacksonian democratic policy system. Starting just before the Civil War, and accelerating thereafter, mayoral power was on the rise. Pressures and tensions that fell upon them required cities to greatly enhance their ability to get things done city-wide. The mayor was the logical place.
Providing veto power to the mayor was the first augmentation, and New York City started it off in its charter reform of 1830. Boston and Philadelphia followed suit in 1854; Pittsburgh, in 1874, was relatively late in allowing its mayors to item veto.7 Mayoral vetoes usually required a two-thirds legislative vote to override. Veto power was exercised liberally by mayors; for example New York City’s Mayor Hewitt in 1887 vetoed 285 City Board of Alderman ordinances out of 920—with only 48 overrides. Chicago mayors between 1882 and 1889 issued around 60 vetoes, with only 9 overrides. Baltimore mayors in the same period issued 169 vetoes, suffering only 15 setbacks (Teaford, 1984, p. 44).
The 1857 New York City charter launched a national trend to entrust mayors with appointment power of city administrative officials. St. Louis and Illinois State, copying New York City, did so in 1876 and 1872 respectively. Boston and Philadelphia 1885 charters increased mayoral appointive powers; in both instances city councils lost their right to veto mayoral appointments. Buffalo’s charter of 1892, New Orleans’ charter of 1896 and Baltimore’s 1898 charter followed suit. Appointment power initially had significant limitations: important department heads were appointed for specific terms which seldom corresponded to the mayoral term. It was not at all unusual for mayors to not have complete control over departments until the later years of their term. Yet in 1895 New York City mayors acquired authority to remove department heads appointed by previous mayors. Also, it was customary by 1890 for mayors to sit ex officio on key boards and commissions. By the turn of the century, Big City mayors could form an “administration” loyal to their direction, rendering the office the dominant force in city policy-making.
Who were these Gilded Age Big City mayors? If aldermen were elected because their saloons offered the best “happy hour,” mayors came from a different breed. The mayor’s office possessed dignity, and city-wide governance implied experience and demonstrated success. Incompetents could easily mean future tax increases, boondoggles and higher utility bills. Even bosses like Richard Croker preferred to back “old-stock, downtown … elite Americans of Anglo-Saxon ancestry”:
Late nineteenth century mayors … throughout the nation … conformed to a pattern of business success, outward respectability, and city-wide influence … the preserve of that class of men who dominated the social and economic life of the city … . Mayors Cooper, Grace, Hewitt and Strong of New York City belonged to the same clubs as the Astors, the Duponts, the Morgans and the Vanderbilts. Philadelphia’s chief executives were Union Leaguers and Boston’s mayors were familiar faces to the clubmen of the Back Bay. Nineteenth century Americans looked up the social ladder when choosing their mayors and elected those on the higher rungs. (Teaford, 1984, pp. 48–9)
Only one Gilded Age New York City mayor (Thomas Gilroy) departed from the pattern of businessman mayor: Chicago’s illustrious five-term mayor Carter Harrison Sr. was a successful businessman; in Boston two Quincys served as mayor during the Gilded Age; and Baltimore’s Ferdinand Latrobe descended from one of Maryland’s most distinguished families. With a few exceptions, northeast and midwest Big Cities, regardless of partisan affiliation, consistently elected businessmen (or Civil War generals) as mayors during the Gilded Age. In that mayors of this background usually had longstanding chamber membership, governance experience and contacts, they were the chambers’ principal link to city government.
Real Estate Boards
Speaking of chambers—where are they? Chambers were the most powerful EDO of the Gilded Age, so powerful that a goodly portion of the next chapter will discuss their activities and role. In this chapter urban physical expansion fostered new players whose activities overlapped into economic development. One new player, the National Board of Fire Underwriters (founded in 1866), set uniform fire insurance rates nationwide and acted as lobby for/against state-level legislation. The National Board pushed localities to approve stringent building codes and form well-trained/equipped fire departments. Their logic is fairly self-evident. In 1871 Chicago burned down. The fire destroyed an estimated 15,000 buildings (31⁄2 square miles), driving 68 insurance companies into bankruptcy. The Boston fire of 1872 destroyed 750 buildings and 65 CBD acres (Teaford, 1984, p. 199).
Cities formed boards of fire insurance as early as 1857 (San Francisco). Insurance firms, through city regulation, imposed constraints on home builders, banks and the like. Electrical codes were commonplace by 1892. Insurance firms and fire underwriters affected municipal taxes/regulation and reached into the pockets of real estate businesses—the more stringent the codes, the more expensive. That’s why New York City probably was first to form a Real Estate Exchange. Amendments to its building laws in 1885 and 1892 added four new members to the city’s Board of Examiners: one the Real Estate Owners and Builders Association, another the New York Real Estate Exchange (Teaford, 1984, p. 203). These entities stopped the New York City subway.
Real estate boards/exchanges were, and are, industry trade associations, composed of individuals/firms engaged in real estate, property ownership, development and redevelopment. Membership extended into banking, construction and insurance. State-wide real estate associations were also established. Allegedly the first state-wide Real Estate Board was set up in New York in 1896. However the Greater Boston Real Estate and Auction Board (GBREB)—formed in 1889—claims to be the nation’s oldest metropolitan real estate exchange. The GBREB’s first chairman, Frederic H. Viaux, played a critical role in introducing the electric trolley to Boston. The Board lacked, however, the power to veto municipal real estate actions as did New York City. Originally the GBREB signed up 100 members (7000 today), including the best known real estate men in the city. Its activities and membership grew quickly, and in 1903, at the bequest of the chamber of commerce, the exchange took part in high level conferences regarding reforms under consideration by the Boston city government (Sturges, 1915). In the 1920s the GBREB was deeply involved with planners, formulating/implementing new zoning and building code ordinances.
Most municipal real estate boards followed some version of the GBREB’s evolution—at least until World War II. The Boston Exchange, by virtue of its focus, intense and consistent involvement—and its pivotal intermediary role to private financing and insurance—developed a near monopoly over the city’s residential/ commercial expansion. CBD development was essentially a real estate activity whose policy-making and implementation were shaped by real estate exchanges and property owner associations. In the Gilded Age, privately owned franchises and utilities in close alliance with real estate exchanges fit the image associated with the infamous growth coalition of future years.
These firms translated population growth into private profit. In the Gilded Age, exchanges were neither responsive to nor sympathetic with larger partisan issues. Preferring to stick to their real estate “knitting,” their prosperity resulted from “streetcar chasing,” or following streetcar routes to city peripheries and beyond. Real estate exchanges extended their tentacles into the hinterland, becoming some of the first metropolitan-wide players in the jurisdictional policy system.
Municipal Bureaucracies
Economic development owes much to Gilded Age independent park and public works commissions. Teaford (1984, p. 66) implies that these independent boards, bureaus and commissions were a third force (after executive and legislative) in Gilded Age city government.
These Gilded Age municipal commissions could be regarded as yet another example of hybrid, public–private entities. Commissions were government agencies dominated by mostly private boards of directors whose appointments were shared by mayor and council. Comptrollers and mayors often served ex officio, and commissions were included within the comptroller’s fiscal, expenditure, bond issuance and audit authority. Selection to boards was heavily influenced by chambers, and reserved for “persons of standing and character.” Boards were self-perpetuating, as their members would informally fill vacant positions. Important commissions often possessed independent funding and taxing powers.
Among the earliest examples of autonomous municipal bureaucracies were police bureaus. As early as the 1860s police bureaus, appointed by state governors, operated in New York City, Brooklyn, St. Louis, Baltimore and Cleveland; and by the 1880s in Boston and Cincinnati. Public health, libraries, schools and sinking-bond commissions were usually independent commissions. The motivation to form a board was to: (1) separate politics from administration, i.e. keep the legislature out; (2) reduce machine patronage; and (3) foster specialization of expertise in a critical function such as public health. Between 1870 and 1885 corporate charters endorsed boards and commissions, and these were their golden years (Griffith, 1974, pp. 52–3). They declined after passage of the 1883 Civil Service Act, which strongly suggests the commission’s transitional role between Jeffersonian–Jacksonian city government and strong mayoral government.
The most interesting commissions from an economic development perspective were parks, water and, later in the Age, public works commissions. A hint as to why park commissions are of importance to our history is that Boss Tweed “injected city government” into the construction of Central Park, an ongoing project of a New York City Park Commission. Disruptive at the time to construction, it infuriated our soon-to-be-friend Frederick Law Olmsted Sr., prompting him into a nationwide campaign—the independent parks movement, complete with parks commissions. Big City after city for the next several decades established parks commissions that launched major projects, such as Boston’s Emerald Necklace. This movement provided jobs (formed occupations), training, experience and expertise to a new developing profession of great future importance to economic development planning, and spurred a major ED movement—the City Beautiful.
Another economic development-related policy area was public works, which Griffith believes “were among the most numerous.” He observed that between 1870 and 1890 it was “medium-sized and smaller cities” that were most “remarkable for the frequency with which such boards of public works appeared in these new charters”—Tennessee and Wisconsin were especially active (Griffith, 1974, p. 56). This being an age of infrastructure installation, public works bureaus handled that vital economic development function—we suspect with chamber involvement and perhaps oversight. With some frustration, research on these small/medium-sized cities can be sparse; their sheer number inhibits our ability to deal with them responsibly. Smaller cities, for example Manchester New Hampshire, also followed the Big City trends of strengthening the mayor’s office and the propensity to use boards and commissions. Banfield and Wilson observed:
During the nineteenth century, when reformers were anxious to keep certain functions out of the hands of party machines, the practice was to create a large number of entirely independent boards and commissions—sometimes twenty or thirty. Most of these eventually became city departments under the mayor and council, but today [1963] many are still loosely tied or not tied at all to the city government proper. The distribution of authority in Manchester, New Hampshire [1880 population 32,600 and 1900 population nearly 57,000] is typical of what exists in many small cities. Manchester [in 1963] has twenty-one boards and commissions loosely tied to city government. (Banfield and Wilson, 1963, p. 82)
Did economic development participate in this bureaucratic trend? There are examples of departments and commissions attempting ED-related activities and programs during this period. Indeed, our candidate for the first governmental EDO is drawn from Gilded Age New York City municipal bureaucracy.
Department of Docks
Early in 1870, Boss Tweed, having ensconced himself in New York City Hall, sought to “access” opportunities from municipal construction and contracts. Remembering that Tweed himself maintained strong ties to the New York State legislature, he drafted a new charter for the city which eliminated several important independent boards and commissions (the Olmstead Central Park commission, for example) and converted them into departments within the mayoral-controlled Public Works Agency—of which he was commissioner. Paying state-level Republicans for their support cost Tweed an estimated $600,000, but he was able to secure approval for the charter—with one compromise. Tweed’s charter passed in Albany due to his bribe—and votes by the NYC Chamber, which secured a “carve out” for a department to be lodged in Tweed’s Commission of Public Works.
New York’s docks and wharves had recently been exposed by the New York Times as being in crisis of disrepair: “with rotten structures, the abode of rats and the hiding places of river thieves … it is at great risk that a person can walk on them” (Bone, 1997, p. 17). Business interests involved with the harbor and port facilities were concerned that the facilities had deteriorated to such a point that normal business (and profits) were in jeopardy. Something had to be done to repair this vital infrastructure or the business would flow elsewhere. Working through the state reform elements, they secured a charter carve-out for an independent Department of the Docks within Tweed’s Public Works Commission. It was agreed that business/reform interests would name the department’s head and direct staff.
So, functional responsibility for NYC’s port facilities was handed over in 1870 to a city governmental agency—New York City Department of the Docks. The municipal department’s first “engineer-in-chief” was George B. McClellan—West Point graduate, former railroad civil engineer, former commander-in-chief of the Union Army (fired by Lincoln) and 1864 Democratic presidential candidate. McClellan became a literally card-carrying member of Tammany Hall as his end of the deal (Allen, 1993, p. 149). In any case, I proudly award General McClellan our dubious honor of being America’s first professional governmental economic developer.8 His son would be a twentiethcentury mayor of New York.
McClellan’s first task was to inventory the waterfront and prepare a long-term master plan, including identifying projects that enabled New York City to compete with European harbors. He staffed the new department with able engineers such as George S. Greene Jr., son of General Greene—chief engineer of the massive Croton Aqueduct Commission and seventh president of the American Society of Civil Engineers (Teaford, 1984, p. 136). McClellan’s master plan for the waterfront (including public hearings) served as a benchmark for future economic development/infrastructure initiatives and site use. Establishment of an agency so broadly empowered as to regulate all facets of the (Manhattan) waterfront was unprecedented in the history of (American) municipalities. As cited in the 1919 annual report, the Department of Docks was:
[The] first sincere attempt at municipal ownership and administration of port utilities in America, for it had as its object the girdling of the waterfront of the old city of New York with new wharves and piers to be ultimately owned by the municipality, thus terminating all private ownership along the waterfront. (Betts, 1997, p. 44)
The New York City Department of Docks is the oldest active governmental economic development organization found by my research. The department eventually merged with the New York City Public Development Corporation, which continued ownership and management of piers and wharves, less so of harbor-related facilities, through 1966. In that year, the New York City Public Development Corporation was incorporated into another economic development entity that preserved its division. In 1991 the Public Development Corporation merged with a non-profit to form the current New York City Economic Development Corporation (NYCEDC). The Department Docks’ headquarters until 1959 was Pier A, which at the time of writing is a vacant hot dog stand with Landmark status—a fitting testimony to American economic development’s first municipal-level governmental EDO?
Administration of ports may also be a candidate for the first state-level economic development entity. The Port of Baltimore, the last of our Eastern immigrant ports, became the responsibility of the state of Maryland—not the city of Baltimore—as early as 1783. Articles of Confederation permitted Maryland to appoint “wardens” to oversee construction of wharves, clear waterways and collect duties from ships, including the famous Baltimore clippers. To be sure, the private sector owned and operated the facilities associated with the harbor, and continues to do so to the present day. The state, at first informally, “oversaw” port operations through officials known as “wharfingers.” Among other duties, wharfingers leased piers and wharves on behalf of the state (which operated the state-controlled Tobacco Warehouse) from 1827 to 1956, when the state transferred the function to the newly formed Maryland Port Authority— reorganized in 1971 into the Maryland Port Administration (a division of the Maryland Department of Transportation). The role of the municipality in the administration and management of public port facilities was nonexistent throughout Maryland’s history.
Ron W. Coan 