Wealth and Income in American History: The Persistence of Inequality

TheCanadian Review of American Studies, Volume VIII, Number 1,Spring 1977 Wealth and Income in American History: The Persistence of Inequality Lee Soltow. ['.fenand ~Vea/thin the United States, /850-1870. "Yale Sene~m Economic History." New Haven: Yale University Press, 1975. 206+ xx pp. Stanley Lebergott. The American Economy: Income, Wealth, and Want.Princeton: Princeton University Press, 1976. 382 + viii pp. T. E. Vadney Recent studies of wealth and income in the United States have three characteristics in common. First, such works are increasingly ingenious in both the identification and manipulation of data. Second, though differing in detail, they outline a pattern of radical inequality in the distribution of income and wealth. And third, they are stronger as descriptions of inequality in America than as explanations of its origins and persistence. 1 Lee Soltow's Men and Wealth in the United States, 1850-1870and Stanley Lebergott's The American Economy: Income, Wealth, and Want2 share these characteristics, yet still manage to contribute something new. Soltow provides an unprecedented survey of the distribution of real and personal property for the United States as a whole in the mid-nineteenth century, and for one region, the South, employs information on slave ownership to carry the analysis back to 1790. Lebergott focusses on the twentieth century and compiles an encyclopedia of different ways of looking at economic disparity. Together the two books encompass more than one hundred years of history and confirm the pattern of extreme inequality found by other researchers. Lee Soltow's study takes advantage of hitherto unanalyzed information gathered in the federal censuses of 1850, 1860, and 1870. All three asked the householder to estimate the value of his real estate, while the latter two required an evaluation of personal property as well. The result was a Domesday Book unique in nineteenth-century America, for after the 1870 census, equivalent questions were not asked again until 1940. Other studies of national trends rely heavily on tax and similar records rather than the census, with two consequences. First, they focus on the twentieth century, when taxing powers 90 were expanded, and second, they usually provide more complete information on upper income groups than on the lower classes. 3 Soltow's study is unusual because it surveys such an early period; further, by utilizing the all-inclusive census, it provides equal information on both rich and poor. 4 It is not clear why the census authorities undertook an enumeration of property in the mid-nineteenth century. Indeed, no one fully exploited the data until a hundred years later when Soltow began his studies. The foderal government published only one set of figures relevant to his work, an 1860 table listing the aggregate value of real and personal estate for counties. In this form, of course, the data were useless for identifying the distribution of wealth and hence for gauging class disparities. Consequently, Soltow returned to the manuscript census and derived a sample of the entire population of the United States. The result is a national survey of wealth holding correlated to population characteristics such as age, nativity, ethnicity, residence, and farm or non-farm occupation. The period of the survey, 1850-1870, is ideal for observing the effects of both long-term trends and catastrophic events. The westward movement continued its steady advance, but a more dramatic source of change was the Civil War. It spurred the growth of industry and hence cities, decimated the population, dispossessed the slave-owning aristocracy , created a new industrial elite, changed the legal status of millions of slaves, and finally, displaced a large part of the population. Yet, the overall distribution of wealth was stable in the face of these revolutionary developments . Soltow finds that the pattern of real estate ownership varied little throughout the period. The top one percent of adult males owned 30 percent of the total in 1850, 29 percent in 1860, and (among whites) 24 percent in 1870. Inall three census years, the bottom 60 percent of adult males owned one percent of all real.estate. Combining real and personal property to achieve a measure of total estate alters the figures only slightly. The upper one percent of adult males held...