It’s a Business: Baseball’s birth and infancy in the Gilded Age

Ever since Major League Baseball’s owners initiated the lockout on December 2nd and the league immediately began to pretend its biggest stars do not exist, MLB.com has focused its efforts on celebrating the history of America’s national pastime. From commemorating the highlights of Mark McGwire’s career to remembering Satchel Paige’s MLB debut at the age of 42, the website has spent its time honoring the past, eager to remind fans what made us fall in love with baseball in the first place, what made it an international phenomenon.

But behind the heroes and legends, underneath the pomp and circumstance of the game’s illustrious history on the diamond, lays a story that you won’t easily find on MLB.com. It’s a story filled with avarice and greed — one that the league and its owners would much rather be forgotten in the dust bins of history. But no matter how hard they try, that cannot be, for it is not a story of baseball, it is the story of Major League Baseball, of its birth, infancy, and coming of age during that period in which the modern United States of America came of age.

The year was 1875. Amidst a backdrop of increasing industrialization and urbanization powered by new technologies and new waves of immigration, the National Association of Professional Base Ball Players completed its fifth season. The Boston Red Stockings had cruised their way to their fourth straight Association championship, finishing 18.5 games above the second-place Hartford Dark Blues with a 71-8 record. Joe Borden of the Philadelphia White Stockings had just made history, spinning the first recorded no-hitter in the history of professional baseball.

Despite the Association’s prominence, some cracks nonetheless had begun to appear under the surface. Clubs located in the Midwest, such as the Chicago White Stockings, felt that the Association treated them as second-class members, while the lack of a central organizational structure and low entry fee ($10, or the modern equivalent of roughly $255) meant that many clubs often did not play a “full” schedule and ignored league rules whenever they felt like it. Gambling was rampant among players, causing many of the games’ outcomes to be put into question.

Led by William Ambrose Hulbert, a financial backer of the Chicago White Stockings, representatives from four Midwestern clubs — Chicago, the St. Louis Brown Stockings, the Louisville Grays, and the Cincinnati Reds — met in Louisville, on December 16, 1875, to begin the process of withdrawing from the National Association to form their own league. Two months later, he secretly met with representatives of the Boston Red Stockings, the Hartford Dark Blues, the Philadelphia Athletics, and the New York Mutuals. It was at this meeting that the National League would officially be born, tweaked rules and all.

How did Hulbert convince seven of the strongest teams in the National Association to quit the league and start their own? When it came to the Midwestern clubs, it was actually fairly simple. By appealing to their resentment towards their second-class treatment — many Eastern teams refused to play them on the road, citing travel expenses — and promising a more centralized government that would keep its teams in check, Hulbert was easily able to get the Midwest teams on board. Indeed, early in its history, the NL would expel two teams for refusing to play Midwestern teams on the road, citing breach of league rules. For the Eastern teams, however, the NL would be trickier, and for that, he turned to the one language they all understood: business.

Historians call the final quarter of the 19th century the Gilded Age, a period marked by massive economic growth that concentrated extremely large amounts of wealth into the hands of a relatively small number of business moguls. Although much of this growth was powered by the technological advances of the Second Industrial Revolution — railroad, canal, and telegraph networks made transportation and communication cheaper and easier, while electricity and the internal combustion engine increased productivity — new methods of business organization (e.g., the corporation) allowed for large-scale coordination on a scale hitherto undreamt of.

Every person present at the birth of the NL was a successful businessman, and as such, all were familiar with the latest developments in business administration. Hulbert’s family owned several grocery stores, and when he took over, he expanded the business into coal and real estate. Morgan Bulkeley, representing the Hartford club, came from old money (his family claimed descent from Peter Bulkeley, the founder of Concord, Massachusetts, and from passengers on the Mayflower); his father founded the Aetna Life Insurance Company, and over the course of his career, Bulkeley worked for Aetna and H.P. Morgan & Company (not to be confused with J.P. Morgan), founded the United States Bank of Hartford, and had been appointed to the U.S. Senate.

William H. Cammeyer had used the profits of his father’s leather shop to build Union Grounds, the first enclosed ball field (and thus the first to charge admission). Nicholas Apollonio had served as the bookkeeper for Thomas Flint & Company. While it has been more difficult to track down what Philadelphia’s G.W. Thompson and St. Louis’s Charles Fowle did outside of baseball, they undoubtedly came from this same class.

Hulbert brought all these businessmen on board with the NL by proposing to centralize the league by converting the sports’ “clubs” into “teams.” While this does not seem like much today — after all, we tend to use the term interchangeably when it comes to baseball — this was a major distinction at the time. Prior to the creation of the NL, the sport was organized around “clubs,” of which the players were members. The businessmen involved were “backers” who provided resources, managed the schedule, and kept the books. Although the growing professionalization of the sport had meant that the players had begun to receive payment to play, the club structure kept most of the power in the hands of the players.

Hulbert proposed that the NL be an association of teams owned by businessmen and which employ players. He argued that this would benefit everybody, by allowing the businessmen to focus on the business and the players to focus on the game. What this actually did, however, was give to the businessmen complete control over the NL. Within five years, they cracked down on both player agency and movement by implementing the reserve clause, a system that would strip players of any ability to control their own fate for roughly a century.

The formation of the National League turned baseball from an organized entertainment spectacle into a full-blown industry, and indeed, we can find in the exploding industrial enterprises of the time precedent for pretty much every action the NL took to secure its own footing. To preempt the International Association of Professional Baseball Players, the NL coerced a number of teams and leagues to join the League Alliance and respect the validity of each others’ contracts. Similar behavior can be seen when Gustavus Swift built his meatpacking empire by investing in the entire supply chain, from ranches to slaughterhouses.

Then, when the American Association threatened to undercut the market by cutting prices and introducing Sunday games, they took advantage of the 1890 Player’s League (which itself has many parallels in the growing labor movement of the time) to absorb their competitors and adopt the practices that made them a threat. Steel mogul Andrew Carnegie undertook similar behavior, investing in a steel mill that used the Bessemer process after visiting one in Troy, New York. He would use this to kickstart Carnegie Steel, one of the most successful corporations in history.

In 1903, fresh off a brief war with the new American League that threatened both their profits, the NL agreed to form a partnership with the upstarts, signing a new National Agreement that would not only tie the two leagues together, but also affiliate themselves with the National Association of Professional Baseball Leagues (aka the NAPBL, which would be renamed Minor League Baseball after the modern farm system came into existence). Like John D. Rockefeller’s Standard Oil had gained a monopoly in the industry by buying up and forming partnerships with its competitors, the NL forged one over the sport through a partnership with its main competitor and by coercing smaller rivals into line.

The process that began that February night in 1876 was complete. The businessmen, and not the players, or the fans, had control of baseball, and they ensured that it was at its core not a game to be enjoyed, but an industry to generate profits, with players as the commodity. The reserve clause meant that players could not jump between teams within the AL or the NL. The partnership with the NAPBL meant that these teams would not inflate salaries by creating new competition. Despite what Federal Baseball Club v. National League said, Major League Baseball had used every trick in the books to stifle competition and build a veritable monopoly.