From the End of the Gilded Age to the Progressive Era, 1893-1918
German-American entrepreneurs of both the first and second generation continued to develop and expand their businesses during the complex period 1890-1918. This period is bracketed, on one end, by the so-called Gay Nineties, which were known for optimism and American self-awareness, and, on the other, by the horrific world-shattering “Great War,” which raged in Europe from 1914 to 1918. America joined the war effort in 1917, and the conflict overseas resulted in anti-German sentiment at home.
The Progressive Period, with all its intricacies, provided entrepreneurial German immigrants and their families considerable opportunities within the American economy, which continued to grow in fits and starts. But German-American entrepreneurs also found opportunities within their own community. For example, the presence of a large, generally literate, and motivated workforce of people from German-speaking areas meant that fledgling businesses could rely on a talented labor pool. And the German-American community was large enough to offer entrepreneurs a potential customer base.
German immigration had continued unabated in the post-Civil War period. In spite of the founding of the “Second German Empire” in 1871 and rapid industrialization in the unified Germany, 1882 saw the highest number of German immigrants in a single year, with over 250,000 registered arrivals. A million and a half departed from the Empire during the 1880s –more than in any other decade before or after. Around 1900, however, German immigration began to taper off. German industrialization had advanced far enough that the country’s economy provided jobs for its population. Still, about 330,000 Germans immigrated to the U.S. during the first decade of the twentieth-century.
While Germans remained the largest ethnic group in the U.S., despite large Irish and Italian immigrant populations, they were highly diversified when it came to region of origin, religion, and period of emigration. Certainly the German-Jewish community typifies the diversity of the German-American community, and no where more than in business. The Progressive Period is replete with highly significant German-Jewish entrepreneurs, as is shown by the biographies in volume three – for example, David May, Jacob Schiff, and Julius Rosenwald, to name just a few, changed the way Americans engaged in retail buying. One might note that women, even with Progressive reforms, were still not encouraged or able to engage in business, some small business being the exception.
Progressivism, the movement for which the period is known, developed in response to the blatant economic and social disparities of the post Civil War period, when what was viewed as rampant economic exploitation on the part of the “robber barons” caused considerable tension within American society, especially in the wake of the economic downturn of the 1890s. There were many problems facing society, including immigration, urbanization and the resultant overcrowding, and industrialization, which brought with it poor working conditions and an increasingly uneven distribution of wealth. Progressives in their many variations all shared the desire to relieve the pressures within society and to achieve a more equitable socio-economic arrangement. They were helped in this by the journalistic endeavors of the “muckrakers,” who described in detail the plight of the underclass and the socially marginalized.
Progressivism’s tenets come from a multiplicity of socio-economic theories and a variety of political directions, though they did derive from a specific time and place and from specific socio-economic conditions. The theoretical center of the Progressive Movement at the turn of the twentieth century was comprised by a group of social scientists, many of whom had studied at German universities in the period after the Civil War. German universities were arguably on the cutting edge in many fields, including the nascent modern social sciences. The economists among them were greatly influenced by their studies with the faculty of the German Historical School of Economics and by its Hegelian conception of the historical process. Richard T. Ely (1854-1943) was instrumental in establishing several reform-minded organizations such as the American Economic Association and the Christian Social Union. Ely believed in the role of the state in reform, but he also believed in private property and competition and disliked socialism. Ely stressed social ethics, the progress of the individual in an environment conducive to positive, educative development. Ely is a prime example of the theorists who envisioned the intellectual basis of American progressivism insofar as he incorporated many of its problematic contradictions. While espousing the social ethical ideal, he was also oriented toward the “Nordic” peoples who made up the majority of the population of the time. Other groups would need to progress at their own speed to achieve the level of the white majority. This certainly reflects the tenor of the times if not the diversity that present-day progressives seek. Certainly the progressive movement was in itself very much divided along geographical (rural vs. urban, Midwest vs. East Coast), racial, and social lines.
On the applied political side, Theodore “Teddy” Roosevelt (1858-1919) stands out as the quintessential American progressive, incorporating both the ideals and contradictions of the movement. Roosevelt vigorously attacked the problems he saw in the business arena, especially cronyism and the monopolistic control of major businesses by a small minority, and he did much to further the cause of protecting America’s natural resources.
The effect of progressivism for the development of business was profound. By 1916 hundreds of national, state and local laws had begun to make the cities cleaner and healthier, the workplace safer, and businessmen more considerate of their workers and customers. Trade unions, which had a large German-American component, played a considerable role in improving the lot of workers. Significant national legislation included regulatory acts such as the Food and Drug Act and the 1916 Meat Inspection Act. Generally business was less monopolistic, giving more opportunity for new start-ups, and regulations made for increased fair trade. The German-American business people in our biographies were, like their Anglo-American counterparts, made essential contributions to the progressive era.