| |
|
Wall Street History
https://www.gofundme.com/s3h2w8
|
05/17/2002
The Spanish-American War, Part I
I was looking at the biggest percentage declines in the history of
the Dow Jones Industrial Average and in 5th place is December
18, 1899, as the index fell from 63.84 to 58.27 (8.7%) in a single
day. In all of my Wall Street history books, though, there isn’t a
single mention of this event, so I turned to general history and
found nothing there either. Well, I did glean from an old Journal
article I had saved that the causes for the decline were casualties
in the Philippines, British losses in the Boer War, and / or rising
interest rates. With my curiosity piqued, I looked into the
Spanish-American War (from which the Filipino casualties
emerged) and once again, folks, I am about to go way off track.
Alas, the following discussion will remind many of you of the
issues of today, including globalization, guerrilla insurgencies,
the Taliban, and market reaction to bad news. So here we go.
Let’s see where this takes us.
Back in the 1840s, a journalist by the name of John O’Sullivan
originated the phrase, “manifest destiny.” As justification for
U.S. expansion into Texas, Oregon, and Mexico, O’Sullivan
wrote that it was the manifest destiny of the United States “to
overspread the continent allotted by Providence for the free
development of our yearly multiplying millions.”
By the 1890s, however, manifest destiny took on a different
connotation. It now became the mission of many in the U.S. to
pursue a policy of expansion that took the form of an imperialist
Western duty to conquer and/or uplift territories that would
eventually be turned back over to the native people. More
specifically, manifest destiny dealt with expansion in the
Caribbean, the Pacific and the Far East.
Noted naval strategist Captain A.T. Mahan wrote, “Whether they
will or no, Americans must now begin to look outward.” One
vocal constituency echoing this thought was American business,
whose leaders pointed to the potential for vast profits, while
Mahan, in his definitive series on the history of seapower,
promoted the principle that those who possessed big navies
inherited the earth.
The Washington Post opined on the eve of the Spanish-American
War:
“The taste of Empire is in the mouth of the people even as the
taste of blood in the jungle. It means an Imperial policy, the
Republic, renascent, taking her place with the armed nations.”
[Morison, Commager, Leuchtenburg]
So the stage was set for a momentous year in the early history of
America, 1898. On February 15, the U.S. battleship ‘Maine’
exploded in Havana harbor, resulting in the loss of 266 lives.
Immediately, some newspapers screamed, “The Maine was
destroyed by treachery,” yet no one stepped forward to claim
responsibility and to this day, no one knows for sure what
happened. But back then, President McKinley ordered an
official investigation into the cause and the report concluded that
the explosion was external in nature. War seemed inevitable.
But while debate raged in the Congress, Spain beat the U.S. to
the punch, and declared war on America on April 24. [Congress
finally adopted its war resolution on April 25, but, not wanting to
be second, made it retro to April 21!]
The battle was to be waged against Spanish interests in Cuba,
Puerto Rico and the Philippines, though there was one problem.
President McKinley knew that the U.S. army was woefully
unprepared. While the nation greeted the coming of war with
patriotic zeal and as enlistment soared from a pitiful force level
of 28,000 to 250,000, the army was faced with issues like winter
woolens for war in the tropics, little ammunition, and an abysmal
transportation system that forced many to find their own
connections to the Port of Tampa.
But the navy was in far better shape, thanks to the work of
people like Captain Mahan and Navy Secretary William
Whitney. It wasn’t always that way, however, as in the 1880s
the Army and Navy Journal determined that the navy was
nothing but “a heterogeneous collection of naval trash.” At that
time an ambitious program of reorganization and development
led to the construction of 30 armored ships. In 1880 the U.S.
Navy had ranked 18th in the navies of the world; by 1900, it was
third.
In the spring of 1898, America was also fortunate to have as its
assistant secretary of the navy a young man by the name of
Theodore Roosevelt. Two months before the actual declaration
of war, T.R. cabled Commodore George Dewey, who had
recently received command of the Asiatic squadron.
“Secret and confidential. Order squadron to Hong Kong. Keep
full of coal. In the event of declaration of war (on) Spain, your
duty will be to see that the Spanish squadron does not leave the
Asiatic coast, and then offensive operations in Philippine
Islands.”
[Roosevelt, not wanting to miss the action, left the navy in April
to make his mark with the army in Cuba. This story, however, is
going to focus on the action in the Philippines and its aftermath.]
As soon as the official word went out, Dewey steamed towards
Manila Bay, arriving at the entrance on April 30. In opposition
was Spain’s Admiral Montojo and his decrepit fleet. On May 1,
Dewey entered and destroyed the Spanish naval forces (“You
may fire when ready, Gridley”), while suffering only 8 wounded.
Spain wasn’t as fortunate, losing 381 seamen.
President McKinley, under pressure from some, but not all,
business quarters, had concluded that the only course of action
was to take the islands, improve the conditions for the natives
and then turn it back over to the people at the appropriate time.
He also became convinced that if the U.S. didn’t act, Germany or
Japan would, and on this he was right.
As the war unfolded, some said at the time that the U.S.
overestimated Spain because of the treachery in taking out the
Maine. When I read this I couldn’t help but think of the current
case of 9/11, the Taliban and Afghanistan (or Iraq and its
‘vaunted’ Republican Guard from the Gulf War, to name two
similar instances). In the case of the Spaniards, their navy was
incapable of returning fire and mines that were planted in the bay
didn’t even have fuses.
But while U.S. naval forces were spectacular in their
performance, Dewey had to wait on reinforcements before the
Americans could enter Manila itself, so, while a German
expeditionary force waited outside the entrance to the harbor,
like vultures hovering over Dewey’s men, the army finally
arrived, and, accompanied by the Filipino rebel leader Emilio
Aguinaldo, entered Manila on August 13.
What future Secretary of State John Hay described as the
“splendid little war” was over (the U.S. having mopped up in
Cuba and Puerto Rico as well). But now there was the issue of a
peace treaty, dealing with Spain’s humiliation and a restive
Aguinaldo. It’s only the summer of 1898 and I told you at the
beginning that Wall Street’s 5th worst day occurred on December
18 of the following year. Which means one thing, there’s a lot
more to this story, even if little of it deals directly with the forces
at Wall and Broad.
Part II next Friday.
Sources:
George Brown Tindall and David E. Shi, “America: A Narrative
History”
Samuel Eliot Morison, Henry Steele Commager and William E.
Leuchtenburg, “The Growth of the American Republic”
Henry Graff / editor, Paul Glad, “The Presidents”
Michael Beschloss / editor, Donald Young, “American Heritage:
The Presidents”
Paul S. Boyer / editor, “The Oxford Companion to United States
History”
Brian Trumbore
|
|
|
