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| Acknowledgments | viii | ||||
| Introduction | 1 | (14) | |||
| Part I: Overviews and Orientations | |||||
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| Part II: Specific Studies | |||||
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| Part III: Concluding Observations | |||||
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406 | (13) | |||
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| Contributors | 419 | (2) | |||
| Index | 421 |
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Chapter One
American Evangelicalism
and the National Economy, 1870-1997
ROBIN KLAY AND JOHN LUNN,
WITH MICHAEL S. HAMILTON
... seek the peace and prosperity of the city to which I have carried you into exile. Pray to the Lord for it, because if it prospers, you too will prosper.
JEREMIAH 29:7 (NIV)
In 1982 Alan Trachtenberg published a history of the late nineteenth and early twentieth centuries he called The Incorporation of America . Trachtenburg argued that the rise of big business did more than change the economy. The managerial values of large incorporated enterprises also changed the way Americans thought about themselves, and the way they organized themselves in the non-business areas of their lives.
Trachtenberg had little to say about religion, but structural changes in the American economy that occurred around the turn of the century profoundly affected the organizational patterns and fortunes of American evangelicalism. As the U.S. moved from an agricultural to a manufacturing and then to a service economy, the raw fact of enormous economic growth made increasingly large sums of money available to religious organizations. Consequently, first Protestant denominations, and then the large independent evangelical organizations, readily adopted the managerial methods, strategies, and values that had been developed by business corporations. In so doing they grew even larger. By the 1990s evangelical religion in American was thriving, and the evangelical world more closely resembled the business world than ever before.
However, beneath this simple story of growth lies the more complex story of the relationship between evangelicalism and the American economy. At the end of the nineteenth century evangelicalism was fully integrated within the old Protestant denominations. But just as the denominations were experiencing unprecedented growth of their national structures by adopting business values and techniques, the center of gravity in evangelicalism shifted away from the denominations. In the depths of the Great Depression, evangelicalism turned its organizational energies to independent nonprofit agencies. Despite being a stunningly inauspicious time to launch new organizations that depended heavily on direct fund-raising, these "parachurch" agencies thrived. In the end, these organizations would look more like business corporations than did the denominations.
The American Economy, 1870-1930
The most obvious characteristic of the American economy in this period was its impressive growth. High birthrates and high levels of immigration -- from 1870 through 1920, one in every seven American residents was foreign-born -- kept the U.S. population climbing at a rate of 2 percent per year. Yet the economy grew even faster, at an average rate of 4 percent per year, and workers' incomes were rising.
The transition from agriculture to manufacturing fueled the nation's economic growth. Agriculture expanded during this period, whether measured by the increase in land under cultivation (up from 189 million acres in 1870 to 319 million acres in 1900) or by the number of people employed in farming, which increased by 150 percent between 1870 and 1930. Yet industry grew much faster. Railroads led the way, becoming the nation's first genuinely large corporations in the 1870s and stimulating the rapid growth of the iron and steel industries. Between 1870 and 1930 employment in the railroad sector increased by over 1,000 percent, while manufacturing employment increased by over 400 percent. Between 1860 and 1910 total manufacturing output increased by over 1,000 percent, and for the first time in its history the U.S. became a net exporter of manufactured goods.
Most people employed in industry lived in cities, so naturally the urban population grew much faster than the rural population. But some cities grew not as manufacturing centers but as networks of service providers, especially for farmers and for domestic and international trade. The percentage of Americans residing in urban areas increased steadily throughout this period, up from 26 percent in 1870 to 56 percent in 1930.
Yet the overall pattern of economic growth was uneven. Prices actually fell during the last thirty years of the nineteenth century, and in this deflationary environment debtors -- which included most farmers -- suffered greatly Farmers also suffered from the fact that the federal government financed itself mainly through import tariffs. Tariffs helped develop manufacturing by keeping the prices of manufactured goods higher, but tended to lower farm prices by reducing overseas demand for American food products. Economic downturns were so frequent that nearly everyone believed in the idea of a "business cycle" -- the notion that economic depressions are a regular and inevitable part of economic growth. The U.S. economy suffered through major depressions from 1873 to 1879 (10,000 businesses failed in 1878 alone) and from 1883 to 1897; lesser but still serious downturns in 1903, 1907, 1910, 1913; and another major depression in 1920-21 after the nation had demobilized from World War I. These depressions worked enormous hardships on countless lives, but none of them were as bad as the unprecedented economic free fall that began in 1929. In its first four years the Great Depression cut the nation's total economic output nearly in half, and left one-fourth of the nation's labor force unemployed.
Not surprisingly, the unevenness of economic growth produced a good deal of social turmoil, especially in the late nineteenth century. When an economic panic hit, corporations' first response was to slash prices in order to keep production up (high production kept per-unit costs lower). When lower prices produced net losses, their next response was collusion with each other to fix prices. When the government finally intervened in price-fixing, firms began to eliminate competition by merging with each other, producing some of the large corporations that are familiar to us today. Falling prices, economic downturns, monopolies, and price-fixing by banks and railroads generated widespread farm protests. Out of these protests came new regional tensions and a new political party -- the Populists. When the Populist Party fused with the Democrats and nominated William Jennings Bryan for President in 1896, the long-standing equilibrium between the Republicans and Democrats was shattered, and the Republicans reigned over the national government. Meanwhile, cities had grown out of control. And the nearly universal tendency of the industrial leaders to regard their employees not as human beings but as units of production, combined with general economic instability, stimulated several waves of mass labor protest. Between 1881 and 1905 there were nearly 37,000 labor strikes involving some 7 million workers. By the last decade of the nineteenth century, many Americans -- Theodore Roosevelt among them -- believed that economic turbulence had brought the nation to the brink of social and political anarchy.
A partial solution, clear to twentieth-century Americans but far less obvious a century ago, was to increase government regulation of business and the economy. State governments pioneered most of the early forms of business regulation. In the 1870s several states passed "Granger Laws" regulating prices charged by railroads, grain storage facilities, and others who performed services for farmers. In 1893 Illinois became the first state to legislate an eight-hour workday for women, and in 1902 Maryland adopted the first law to compensate workers in case of injury. The federal government later followed suit, establishing the Interstate Commerce Commission in 1887, the Sherman Antitrust Act in 1890, the Meat Inspection and Pure Food and Drug Acts in 1906, the Federal Reserve Act in 1913, the Federal Trade Commission in 1914, and the Keating-Owen Child Labor Act in 1916.
The whole idea of federal intervention in the economy in general was, however, highly controversial. As Congress became more friendly to the idea of regulating big business, the Supreme Court became, from the 1890s forward, an aggressive champion of "laissez-faire" -- keeping the government's hands off business. The Court repeatedly struck down both state and federal efforts to regulate business, using as their Constitutional rationale the "due process" clause of the Fourteenth Amendment -- a clause that had been intended solely to prevent former slaves from being deprived of life, liberty, and property. When the Court did not strike these interventionist laws down, they usually either nullified their effectiveness by severely limiting their scope, or they turned the laws against organized labor. A good example is what the Court did with the Sherman Antitrust Act. The Court refused to allow the breaking up of the American Sugar Refining Company's 98 percent monopoly, saying the law was not intended to apply to manufacturing. But the Court did apply the Act to uphold injunctions against labor strikes. The Court decided that strikes were illegal "restraint of trade," even though the Act clearly was never intended to apply to organized labor.
Behind the economic dislocations, social turmoil, and confusion over what to do about them lay the emergence of a new kind of business entity in America -- the large modern corporation. Before the Civil War, corporations existed only when chartered (by state legislatures) for special public purposes such as education or transportation. Most businesses were organized as proprietorships or partnerships. But after the Civil War states set up procedures whereby corporations could be formed merely by application. This new kind of corporation was encumbered by far fewer restrictions than the old chartered corporations and as a result proved more attractive as a structure for business organizations. Gradually, for-profit corporations acquired legal status as fictional "persons."
The beauty of this new form of business was that it could amass far more capital for expansion than could proprietorships and partnerships. The owners (stockholders) were more eager to invest in a corporation because they were liable only for the amount of their investment -- not for the liabilities of the corporation. In exchange for limited liability, owners yielded operational decisions to a new class of businessmen -- professional managers.
In the last three decades of the nineteenth century, for-profit corporations thoroughly dominated the economy, building huge industrial enterprises in transportation, mining, manufacturing, and processing, and dwarfing the size of state and federal governments. By 1904, three hundred corporations directly controlled 40 percent of all American manufacturing, and indirectly influenced another 40 percent. By 1929, the two hundred largest corporations owned nearly half of all corporate assets.
Because modern corporations dominated the economy, the ideas and values they developed also spread deep into the fabric of American life. The new armies of professional managers that ran the corporations developed a new bureaucratic ideology that explained what they sought to do. The chief tenet of the new ideology held that rational and systematic planning could solve any and all problems. The chief end of rational planning was efficiency -- avoiding waste and duplication in order to maximize profit. The managers believed that the best way to promote rational planning and achieve efficiency was to put decisions in the hand of experts and specialists. Once rational decisions had been made by the managers, "education" and publicity were necessary tools for persuading workers, customers, owners, government, and the general public to go along with the managers' decisions. Once all facets of society -- business, schools, government, the arts, families, churches -- were put on this basis, the result would be a more ordered, rational, improved world.
The Incorporation of Protestant Denominations
Up until the 1920s, most evangelicals were a part of the Protestant mainstream. That is to say, evangelical Protestants and non-evangelical Protestants both participated in the life of the major Protestant denominations. Definitions of evangelicalism are much-debated, but for these purposes evangelicals might be thought of as orthodox Christians influenced by Bible-centered, revivalist modes of faith. The largest groups of these could be found in Methodist, Baptist, Presbyterian, Congregational, and Restorationist denominations. Using the term "evangelical" in this way, there were two large parties of non-evangelical Protestants. The first and larger body of non-evangelicals were those Protestants in confessional or ethnic denominations, such as Episcopalians, Lutherans, Dutch and German Reformed, and Anabaptist groups. The second and probably the smaller group were the folks whose theology was moving toward liberalism, whose signature characteristic was a de-emphasis of the supernatural aspects of traditional Christianity. These proto-liberals could be found in the same denominations as the evangelicals, as well as in their own denominations such as the Unitarians. But the key point is that in these years nearly every denomination with a preponderance of evangelicals had significant numbers of non-evangelicals in leadership positions.
Religion as a whole benefited from the nation's economic growth in this period. In 1870, the ratio of church income to Gross National Product (GNP) was about 1:211. Although the GNP was growing faster than the population, giving to churches was growing even faster. By 1916 the ratio of church income to GNP had risen to 1:153, and in the next ten years it took an incredible leap to 1:119. The Great Depression hit church finances hard, and in 1936 the ratio of church income to GNP had dropped back to 1:159. But even with this downturn, church income rose substantially faster than the GNP between 1870 and 1936 (see Table 1, p. 22).
For the last thirty years of the nineteenth century, church income also grew faster, proportionately, than did income for the federal government. In 1870 federal spending was still inflated from the Civil War and Reconstruction, and the ratio of church income was one dollar to every twelve dollars generated by the federal government. For the next eight years federal receipts actually shrank before starting a very slow upward climb. Still, overall church income grew faster than did federal income, and by 1916 the nation's churches took in half of the amount of the U.S. government. But World War I marked the beginning of the unrelenting expansion of the federal government, and federal receipts began to rise more rapidly than either church income or the GNP. During what was a decade of very rapid growth in church income, 1916-1926, federal income grew so fast that the ratio dropped to 1:5. While the Great Depression lowered both church income and the GNP, federal receipts continued to rise, and by 1936 the ratio of church to federal income was at 1:8 (see Table 1 above).
But should Christians support the increased involvement of the federal government in economic matters? As the economic and social crisis of the late nineteenth century worsened, differing opinions on this question sharpened and became more contentious. Most Protestants, of all stripes, tended to lean conservative on this question. Horace Bushnell may have been a theological liberal, but when it came to economics he was as conservative as his orthodox counterparts. In 1869 he opposed government intervention in women's working conditions: "There is no such possibility as a legally appointed rate of wages; market price is the only scale of earnings possible for women as for men." A minority of theological liberals advocated government-sponsored reform; these are remembered as the ministers of the Social Gospel. But a large number of reform-minded evangelicals -- mostly people from the Wesleyan holiness movement -- strongly advocated government intervention in the form of regulation of business, child labor legislation, and wages and hours laws.
There was far less debate among church leaders over how much the new corporate management ideology ought to affect Christianity. In the antebellum period, Protestant denominations were very modest organizations. The first strong national religious organizations were not denominations but special purpose agencies of the Evangelical United Front (EUF), such as the American Bible Society. The Civil War, however, drew off the reforming energy that had gone into the EUF agencies, and many of them languished. Also before the war, a number of agencies that were related to denominations -- but independent of them -- were created to further Christian work of various kinds. After the war, as the denominations rapidly added members and churches, they took their first steps to imitate corporations by taking over control of these independent agencies. This was done in the name of efficiency and centralized planning. Perhaps the largest example of that trend was the 1872 annexation of the Missionary Society of the Methodist Episcopal Church (founded in 1819), which placed the society into the hands of a special "Board of Managers."
Thus, in the same years that Standard Oil was growing by acquiring oil wells, refineries, railroads, brokers, delivery routes, and retailers, the Methodists, Baptists, Presbyterians, Congregationalists, Disciples of Christ, and other major denominations all expanded their national bureaucracies by acquiring or starting agencies that performed the specialized tasks that constituted their idea of Christian mission. And in the same years that John D. Rockefeller was figuring out how to wring ever more money out of his enterprises so that Standard Oil could continue to expand, the new class of denominational managers were doing the same thing.
They developed methods they called "systematic finance," which by the early 1920s were operating with great success. Gone were the old annual offerings taken up by churches for a given agency; in their place were well-organized multi-year pledge drives that coordinated the efforts of all the agencies within each denomination. Accompanying the drives were sophisticated "education" campaigns -- often developed by secular advertising agencies -- designed to persuade congregations and individuals to make hefty pledges. Membership surveys and canvasses, magazine and leaflet publicity, prepared sermon ideas for pastors, Sunday school materials, crusade dinners, inspirational speakers, and duplex envelopes (one side for regular local gifts, the other side for giving to denominational enterprises) all proved remarkably successful at drawing money into the central denominational headquarters. Between 1916 and 1926, per church income jumped from $1,602 to $3,783 per year -- 29 percent faster than inflation and 35 percent faster than the GNP. The percentage of this amount transferred from local churches into denominational coffers also increased from 15 to 18 percent. But not only the institutions became wealthier. Between 1919 and 1922, the average salaries of Methodist and Congregationalist ministers jumped by 31 percent, while comparable salaries of federal workers in the executive branch went up by 7 percent and clerical workers in industry by 8 percent. In addition to the major campaigns, denominations also began setting up endowment funds, and promoting the annuity plans that funded them. This too was successful. In 1909, 4.6 percent of denominational agency income derived from endowments; by 1929, the figure was 10.7 percent.
However, the financial successes of the denominations' new corporate mentality came with substantial costs. As they built their multiple-agency centralized bureaucracies, experts were added to the payrolls, hierarchy flourished, interagency rivalries sprang up, and administrative expenses soared. Increasingly the managers focused not on religious tasks but on the organizational task of maintaining the administrative machinery In so doing they began to speak a secularized language borrowed from corporate boardrooms. During the nineteenth century, denominational agencies had clearly existed to serve the churches. But in the minds of early twentieth-century managers, the churches existed to serve the denomination. Increasingly the managers came to see churches as local production units whose purpose was to generate income for the real work of the denomination, which was being done by the central agencies. Bureaucrats evaluated which kind of local church produced the most income, and then developed plans to encourage more of that kind of church. Ministers' records were scrutinized for their ability to produce income for the central agencies, and the best producers usually received the best appointments.
Accompanying this change of attitude was a genuine shift of power away from local ministers and bishops and toward the central agency managers. On paper denominational conventions had oversight of the agencies, but in fact most authority lay with the managers. This is the period in which agency bureaucrats learned how to manage appointments, committees, and information flows to retain maximum autonomy for themselves and their enterprises. Local pastors increasingly complained about denominational insensitivity to local needs. But the managers, jealously watching financial returns to make sure that they were getting their share of parishioners' giving, responded with their own complaints about the "parochialism" of local churches for neglecting the "larger work of the Church."
(Continues...)
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