The years between 1871 and 1901 have been termed "the Gilded Age",
so-called from the title of a satirical novel by Mark Twain (Samuel L.
Clemens) and his collaborator Charles Dudley Warner, written in 1873.
Following the Civil War, the country experienced unprecedented
expansion of population, territory, business, and government. The
promotion of business interests became one of the essential goals of
Governmental policy. While the term laissez-faire has been applied to
that policy, it is a misnomer: laissez-faire is the philosophy of
non-interference by Government in the operation of markets, but the
Federal Government engaged in a number of practices that were designed
to protect American Business and Industry against competition while
allowing them to avoid scrutiny of oftentimes fraudulent and criminal
behavior. Thus, Government used its powers of taxation and monetary
control to create an artificial environment in which Commerce was
protected by tariffs and free of domestic regulation, a situation that
was contrary to the principle of laissez-faire. The result was a
series of political scandals and financial crises, leading to reforms
of both Government and Commerce.
The recurring themes of Government in the Gilded Age are protectionist
tariffs, frustration of attempts at regulation, preservation of the
gold standard, and deflation. All three branches of the Federal
Government, Legislative, Executive, and Judicial, became increasingly
concerned with these matters. Farmers, small merchants, and laborers
suffered from the effects of Governmental policies to restrict trade
and credit and to maintain the gold standard. There were several
grass-roots attempts to change the policies of Government through
legislation, both in the State Legislatures and Congress, but an
increasingly conservative Supreme Court repeatedly overturned laws
designed to correct the most extravagant examples of misconduct. In
some cases, the Supreme Court reversed itself in order to reach
controversial decisions that struck down reforms.
THE EXECUTIVE
A reasonably concise description of the policy objectives of the
Federal Government regarding the economy, commercial interests, and
industry in that era can be gleaned from a reading of the Inaugural
Addresses of the Presidents who served then. Even Cleveland, who
wished to thoroughly reform Governmental policies, did not talk of
abandoning them.
Inaugural Address of Rutherford B. Hayes
MONDAY, MARCH 5, 1877
http://www.yale.edu/lawweb/avalon/presiden/inaug/hayes.htm
"With respect to the financial condition of the country, I shall not
attempt an extended history of the embarrassment and prostration which
we have suffered during the past three years. The depression in all
our varied commercial and manufacturing interests throughout the
country, which began in September, 1873, still continues. It is very
gratifying, however, to be able to say that there are indications all
around us of a coming change to prosperous times.
Upon the currency question, intimately connected, as it is, with this
topic, I may be permitted to repeat here the statement made in my
letter of acceptance, that in my judgment the feeling of uncertainty
inseparable from an irredeemable paper currency, with its fluctuation
of values, is one of the greatest obstacles to a return to prosperous
times. The only safe paper currency is one which rests upon a coin
basis and is at all times and promptly convertible into coin.
I adhere to the views heretofore expressed by me in favor of
Congressional legislation in behalf of an early resumption of specie
payments, and I am satisfied not only that this is wise, but that the
interests, as well as the public sentiment, of the country
imperatively demand it."
Inaugural Address of James A. Garfield
FRIDAY, MARCH 4, 1881
http://www.yale.edu/lawweb/avalon/presiden/inaug/garfield.htm
"The prosperity which now prevails is without parallel in our history.
Fruitful seasons have done much to secure it, but they have not done
all. The preservation of the public credit and the resumption of
specie payments, so successfully attained by the Administration of my
predecessors, have enabled our people to secure the blessings which
the seasons brought.
By the experience of commercial nations in all ages it has been found
that gold and silver afford the only safe foundation for a monetary
system. Confusion has recently been created by variations in the
relative value of the two metals, but I confidently believe that
arrangements can be made between the leading commercial nations which
will secure the general use of both metals. Congress should provide
that the compulsory coinage of silver now required by law may not
disturb our monetary system by driving either metal out of
circulation. If possible, such an adjustment should be made that the
purchasing power of every coined dollar will be exactly equal to its
debt-paying power in all the markets of the world.
The chief duty of the National Government in connection with the
currency of the country is to coin money and declare its value. Grave
doubts have been entertained whether Congress is authorized by the
Constitution to make any form of paper money legal tender. The present
issue of United States notes has been sustained by the necessities of
war; but such paper should depend for its value and currency upon its
convenience in use and its prompt redemption in coin at the will of
the holder, and not upon its compulsory circulation. These notes are
not money, but promises to pay money. If the holders demand it, the
promise should be kept.
The refunding of the national debt at a lower rate of interest should
be accomplished without compelling the withdrawal of the national-bank
notes, and thus disturbing the business of the country.
I venture to refer to the position I have occupied on financial
questions during a long service in Congress, and to say that time and
experience have strengthened the opinions I have so often expressed on
these subjects.
The finances of the Government shall suffer no detriment which it may
be possible for my Administration to prevent.
The interests of agriculture deserve more attention from the
Government than they have yet received. The farms of the United States
afford homes and employment for more than one-half our people, and
furnish much the largest part of all our exports. As the Government
lights our coasts for the protection of mariners and the benefit of
commerce, so it should give to the tillers of the soil the best lights
of practical science and experience.
Our manufacturers are rapidly making us industrially independent, and
are opening to capital and labor new and profitable fields of
employment. Their steady and healthy growth should still be matured.
Our facilities for transportation should be promoted by the continued
improvement of our harbors and great interior waterways and by the
increase of our tonnage on the ocean.
The development of the world's commerce has led to an urgent demand
for shortening the great sea voyage around Cape Horn by constructing
ship canals or railways across the isthmus which unites the
continents. Various plans to this end have been suggested and will
need consideration, but none of them has been sufficiently matured to
warrant the United States in extending pecuniary aid. The subject,
however, is one which will immediately engage the attention of the
Government with a view to a thorough protection to American interests.
We will urge no narrow policy nor seek peculiar or exclusive
privileges in any commercial route; but, in the language of my
predecessor, I believe it to be the right "and duty of the United
States to assert and maintain such supervision and authority over any
interoceanic canal across the isthmus that connects North and South
America as will protect our national interest.""
First Inaugural Address of Grover Cleveland
WEDNESDAY, MARCH 4, 1885
http://www.yale.edu/lawweb/avalon/presiden/inaug/cleve1.htm
"It is the duty of those serving the people in public place to closely
limit public expenditures to the actual needs of the Government
economically administered, because this bounds the right of the
Government to exact tribute from the earnings of labor or the property
of the citizen, and because public extravagance begets extravagance
among the people. We should never be ashamed of the simplicity and
prudential economies which are best suited to the operation of a
republican form of government and most compatible with the mission of
the American people. Those who are selected for a limited time to
manage public affairs are still of the people, and may do much by
their example to encourage, consistently with the dignity of their
official functions, that plain way of life which among their fellow-
citizens aids integrity and promotes thrift and prosperity.
[...]
A due regard for the interests and prosperity of all the people
demands that our finances shall be established upon such a sound and
sensible basis as shall secure the safety and confidence of business
interests and make the wage of labor sure and steady, and that our
system of revenue shall be so adjusted as to relieve the people of
unnecessary taxation, having a due regard to the interests of capital
invested and workingmen employed in American industries, and
preventing the accumulation of a surplus in the Treasury to tempt
extravagance and waste.
Care for the property of the nation and for the needs of future
settlers requires that the public domain should be protected from
purloining schemes and unlawful occupation."
Inaugural Address of Benjamin Harrison
MONDAY, MARCH 4, 1889
http://www.yale.edu/lawweb/avalon/presiden/inaug/harris.htm
"The surrender of a large measure of sovereignty to the General
Government, effected by the adoption of the Constitution, was not
accomplished until the suggestions of reason were strongly reenforced
by the more imperative voice of experience. The divergent interests of
peace speedily demanded a "more perfect union." The merchant, the
shipmaster, and the manufacturer discovered and disclosed to our
statesmen and to the people that commercial emancipation must be added
to the political freedom which had been so bravely won. The commercial
policy of the mother country had not relaxed any of its hard and
oppressive features. To hold in check the development of our
commercial marine, to prevent or retard the establishment and growth
of manufactures in the States, and so to secure the American market
for their shops and the carrying trade for their ships, was the policy
of European statesmen, and was pursued with the most selfish vigor.
Petitions poured in upon Congress urging the imposition of
discriminating duties that should encourage the production of needed
things at home. The patriotism of the people, which no longer found
afield of exercise in war, was energetically directed to the duty of
equipping the young Republic for the defense of its independence by
making its people self-dependent. Societies for the promotion of home
manufactures and for encouraging the use of domestics in the dress of
the people were organized in many of the States. The revival at the
end of the century of the same patriotic interest in the preservation
and development of domestic industries and the defense of our working
people against injurious foreign competition is an incident worthy of
attention. It is not a departure but a return that we have witnessed.
The protective policy had then its opponents. The argument was made,
as now, that its benefits inured to particular classes or sections.
If the question became in any sense or at any time sectional, it was
only because slavery existed in some of the States. But for this there
was no reason why the cotton-producing States should not have led or
walked abreast with the New England States in the production of cotton
fabrics. There was this reason only why the States that divide with
Pennsylvania the mineral treasures of the great southeastern and
central mountain ranges should have been so tardy in bringing to the
smelting furnace and to the mill the coal and iron from their near
opposing hillsides. Mill fires were lighted at the funeral pile of
slavery. The emancipation proclamation was heard in the depths of the
earth as well as in the sky; men were made free, and material things
became our better servants.
The sectional element has happily been eliminated from the tariff
discussion. We have no longer States that are necessarily only
planting States. None are excluded from achieving that diversification
of pursuits among the people which brings wealth and contentment. The
cotton plantation will not be less valuable when the product is spun
in the country town by operatives whose necessities call for
diversified crops and create a home demand for garden and agricultural
products. Every new mine, furnace, and factory is an extension of the
productive capacity of the State more real and valuable than added
territory.
Shall the prejudices and paralysis of slavery continue to hang upon
the skirts of progress? How long will those who rejoice that slavery
no longer exists cherish or tolerate the incapacities it put upon
their communities? I look hopefully to the continuance of our
protective system and to the consequent development of manufacturing
and mining enterprises in the States hitherto wholly given to
agriculture as a potent influence in the perfect unification of our
people. The men who have invested their capital in these enterprises,
the farmers who have felt the benefit of their neighborhood, and the
men who work in shop or field will not fail to find and to defend a
community of interest.
Is it not quite possible that the farmers and the promoters of the
great mining and manufacturing enterprises which have recently been
established in the South may yet find that the free ballot of the
workingman, without distinction of race, is needed for their defense
as well as for his own? I do not doubt that if those men in the South
who now accept the tariff views of Clay and the constitutional
expositions of Webster would courageously avow and defend their real
convictions they would not find it difficult, by friendly instruction
and cooperation, to make the black man their efficient and safe ally,
not only in establishing correct principles in our national
administration, but in preserving for their local communities the
benefits of social order and economical and honest government. At
least until the good offices of kindness and education have been
fairly tried the contrary conclusion can not be plausibly urged.
I have altogether rejected the suggestion of a special Executive
policy for any section of our country. It is the duty of the Executive
to administer and enforce in the methods and by the instrumentalities
pointed out and provided by the Constitution all the laws enacted by
Congress. These laws are general and their administration should be
uniform and equal. As a citizen may not elect what laws he will obey,
neither may the Executive eject which he will enforce. The duty to
obey and to execute embraces the Constitution in its entirety and the
whole code of laws enacted under it. The evil example of permitting
individuals, corporations, or communities to nullify the laws because
they cross some selfish or local interest or prejudices is full of
danger, not only to the nation at large, but much more to those who
use this pernicious expedient to escape their just obligations or to
obtain an unjust advantage over others. They will presently themselves
be compelled to appeal to the law for protection, and those who would
use the law as a defense must not deny that use of it to others.
If our great corporations would more scrupulously observe their legal
limitations and duties, they would have less cause to complain of the
unlawful limitations of their rights or of violent interference with
their operations. The community that by concert, open or secret, among
its citizens denies to a portion of its members their plain rights
under the law has severed the only safe bond of social order and
prosperity. The evil works from a bad center both ways. It demoralizes
those who practice it and destroys the faith of those who suffer by it
in the efficiency of the law as a safe protector. The man in whose
breast that faith has been darkened is naturally the subject of
dangerous and uncanny suggestions. Those who use unlawful methods, if
moved by no higher motive than the selfishness that prompted them, may
well stop and inquire what is to be the end of this.
An unlawful expedient can not become a permanent condition of
government. If the educated and influential classes in a community
either practice or connive at the systematic violation of laws that
seem to them to cross their convenience, what can they expect when the
lesson that convenience or a supposed class interest is a sufficient
cause for lawlessness has been well learned by the ignorant classes? A
community where law is the rule of conduct and where courts, not mobs,
execute its penalties is the only attractive field for business
investments and honest labor.
[...]
While a Treasury surplus is not the greatest evil, it is a serious
evil. Our revenue should be ample to meet the ordinary annual demands
upon our Treasury, with a sufficient margin for those extraordinary
but scarcely less imperative demands which arise now and then.
Expenditure should always be made with economy and only upon public
necessity. Wastefulness, profligacy, or favoritism in public
expenditures is criminal. But there is nothing in the condition of our
country or of our people to suggest that anything presently necessary
to the public prosperity, security, or honor should be unduly
postponed.
It will be the duty of Congress wisely to forecast and estimate these
extraordinary demands, and, having added them to our ordinary
expenditures, to so adjust our revenue laws that no considerable
annual surplus will remain. We will fortunately be able to apply to
the redemption of the public debt any small and unforeseen excess of
revenue. This is better than to reduce our income below our necessary
expenditures, with the resulting choice between another change of our
revenue laws and an increase of the public debt. It is quite possible,
I am sure, to effect the necessary reduction in our revenues without
breaking down our protective tariff or seriously injuring any domestic
industry."
Second Inaugural Address of Grover Cleveland
SATURDAY, MARCH 4, 1893
http://www.yale.edu/lawweb/avalon/presiden/inaug/cleve2.htm
"Manifestly nothing is more vital to our supremacy as a nation and to
the beneficent purposes of our Government than a sound and stable
currency. Its exposure to degradation should at once arouse to
activity the most enlightened statesmanship, and the danger of
depreciation in the purchasing power of the wages paid to toil should
furnish the strongest incentive to prompt and conservative precaution.
In dealing with our present embarrassing situation as related to this
subject we will be wise if we temper our confidence and faith in our
national strength and resources with the frank concession that even
these will not permit us to defy with impunity the inexorable laws of
finance and trade. At the same time, in our efforts to adjust
differences of opinion we should be free from intolerance or passion,
and our judgments should be unmoved by alluring phrases and unvexed by
selfish interests.
I am confident that such an approach to the subject will result in
prudent and effective remedial legislation. In the meantime, so far as
the executive branch of the Government can intervene, none of the
powers with which it is invested will be withheld when their exercise
is deemed necessary to maintain our national credit or avert financial
disaster.
Closely related to the exaggerated confidence in our country's
greatness which tends to a disregard of the rules of national safety,
another danger confronts us not less serious. I refer to the
prevalence of a popular disposition to expect from the operation of
the Government especial and direct individual advantages.
The verdict of our voters which condemned the injustice of maintaining
protection for protection's sake enjoins upon the people's servants
the duty of exposing and destroying the brood of kindred evils which
are the unwholesome progeny of paternalism. This is the bane of
republican institutions and the constant peril of our government by
the people. It degrades to the purposes of wily craft the plan of rule
our fathers established and bequeathed to us as an object of our love
and veneration. It perverts the patriotic sentiments of our countrymen
and tempts them to pitiful calculation of the sordid gain to be
derived from their Government's maintenance. It undermines the
self-reliance of our people and substitutes in its place dependence
upon governmental favoritism. It stifles the spirit of true
Americanism and stupefies every ennobling trait of American
citizenship.
The lessons of paternalism ought to be unlearned and the better lesson
taught that while the people should patriotically and cheerfully
support their Government its functions do not include the support of
the people.
The acceptance of this principle leads to a refusal of bounties and
subsidies, which burden the labor and thrift of a portion of our
citizens to aid ill-advised or languishing enterprises in which they
have no concern. It leads also to a challenge of wild and reckless
pension expenditure, which overleaps the bounds of grateful
recognition of patriotic service and prostitutes to vicious uses the
people's prompt and generous impulse to aid those disabled in their
country's defense.
Every thoughtful American must realize the importance of checking at
its beginning any tendency in public or private station to regard
frugality and economy as virtues which we may safely outgrow. The
toleration of this idea results in the waste of the people's money by
their chosen servants and encourages prodigality and extravagance in
the home life of our countrymen.
Under our scheme of government the waste of public money is a crime
against the citizen, and the contempt of our people for economy and
frugality in their personal affairs deplorably saps the strength and
sturdiness of our national character.
It is a plain dictate of honesty and good government that public
expenditures should be limited by public necessity, and that this
should be measured by the rules of strict economy; and it is equally
clear that frugality among the people is the best guaranty of a
contented and strong support of free institutions.
One mode of the misappropriation of public funds is avoided when
appointments to office, instead of being the rewards of partisan
activity, are awarded to those whose efficiency promises a fair return
of work for the compensation paid to them. To secure the fitness and
competency of appointees to office and remove from political action
the demoralizing madness for spoils, civil- service reform has found a
place in our public policy and laws. The benefits already gained
through this instrumentality and the further usefulness it promises
entitle it to the hearty support and encouragement of all who desire
to see our public service well performed or who hope for the elevation
of political sentiment and the purification of political methods.
The existence of immense aggregations of kindred enterprises and
combinations of business interests formed for the purpose of limiting
production and fixing prices is inconsistent with the fair field which
ought to be open to every independent activity. Legitimate strife in
business should not be superseded by an enforced concession to the
demands of combinations that have the power to destroy, nor should the
people to be served lose the benefit of cheapness which usually
results from wholesome competition. These aggregations and
combinations frequently constitute conspiracies against the interests
of the people, and in all their phases they are unnatural and opposed
to our American sense of fairness. To the extent that they can be
reached and restrained by Federal power the General Government should
relieve our citizens from their interference and exactions.
[...]
The people of the United States have decreed that on this day the
control of their Government in its legislative and executive branches
shall be given to a political party pledged in the most positive terms
to the accomplishment of tariff reform. They have thus determined in
favor of a more just and equitable system of Federal taxation. The
agents they have chosen to carry out their purposes are bound by their
promises not less than by the command of their masters to devote
themselves unremittingly to this service.
While there should be no surrender of principle, our task must be
undertaken wisely and without heedless vindictiveness. Our mission is
not punishment, but the rectification of wrong. If in lifting burdens
from the daily life of our people we reduce inordinate and unequal
advantages too long enjoyed, this is but a necessary incident of our
return to right and justice. If we exact from unwilling minds
acquiescence in the theory of an honest distribution of the fund of
the governmental beneficence treasured up for all, we but insist upon
a principle which underlies our free institutions. When we tear aside
the delusions and misconceptions which have blinded our countrymen to
their condition under vicious tariff laws, we but show them how far
they have been led away from the paths of contentment and prosperity.
When we proclaim that the necessity for revenue to support the
Government furnishes the only justification for taxing the people, we
announce a truth so plain that its denial would seem to indicate the
extent to which judgment may be influenced by familiarity with
perversions of the taxing power. And when we seek to reinstate the
self-confidence and business enterprise of our citizens by
discrediting an abject dependence upon governmental favor, we strive
to stimulate those elements of American character which support the
hope of American achievement."
First Inaugural Address of William McKinley
THURSDAY, MARCH 4, 1897
http://www.yale.edu/lawweb/avalon/presiden/inaug/mckin1.htm
"The responsibilities of the high trust to which I have been
called--always of grave importance--are augmented by the prevailing
business conditions entailing idleness upon willing labor and loss to
useful enterprises. The country is suffering from industrial
disturbances from which speedy relief must be had. Our financial
system needs some revision; our money is all good now, but its value
must not further be threatened. It should all be put upon an enduring
basis, not subject to easy attack, nor its stability to doubt or
dispute. Our currency should continue under the supervision of the
Government. The several forms of our paper money offer, in my
judgment, a constant embarrassment to the Government and a safe
balance in the Treasury. Therefore I believe it necessary to devise a
system which, without diminishing the circulating medium or offering a
premium for its contraction, will present a remedy for those
arrangements which, temporary in their nature, might well in the years
of our prosperity have been displaced by wiser provisions. With
adequate revenue secured, but not until then, we can enter upon such
changes in our fiscal laws as will, while insuring safety and volume
to our money, no longer impose upon the Government the necessity of
maintaining so large a gold reserve, with its attendant and inevitable
temptations to speculation. Most of our financial laws are the
outgrowth of experience and trial, and should not be amended without
investigation and demonstration of the wisdom of the proposed changes.
We must be both "sure we are right" and "make haste slowly." If,
therefore, Congress, in its wisdom, shall deem it expedient to create
a commission to take under early consideration the revision of our
coinage, banking and currency laws, and give them that exhaustive,
careful and dispassionate examination that their importance demands, I
shall cordially concur in such action. If such power is vested in the
President, it is my purpose to appoint a commission of prominent,
well-informed citizens of different parties, who will command public
confidence, both on account of their ability and special fitness for
the work. Business experience and public training may thus be
combined, and the patriotic zeal of the friends of the country be so
directed that such a report will be made as to receive the support of
all parties, and our finances cease to be the subject of mere partisan
contention. The experiment is, at all events, worth a trial, and, in
my opinion, it can but prove beneficial to the entire country.
The question of international bimetallism will have early and earnest
attention. It will be my constant endeavor to secure it by
co-operation with the other great commercial powers of the world.
Until that condition is realized when the parity between our gold and
silver money springs from and is supported by the relative value of
the two metals, the value of the silver already coined and of that
which may hereafter be coined, must be kept constantly at par with
gold by every resource at our command. The credit of the Government,
the integrity of its currency, and the inviolability of its
obligations must be preserved. This was the commanding verdict of the
people, and it will not be unheeded.
Economy is demanded in every branch of the Government at all times,
but especially in periods, like the present, of depression in business
and distress among the people. The severest economy must be observed
in all public expenditures, and extravagance stopped wherever it is
found, and prevented wherever in the future it may be developed. If
the revenues are to remain as now, the only relief that can come must
be from decreased expenditures. But the present must not become the
permanent condition of the Government. It has been our uniform
practice to retire, not increase our outstanding obligations, and this
policy must again be resumed and vigorously enforced. Our revenues
should always be large enough to meet with ease and promptness not
only our current needs and the principal and interest of the public
debt, but to make proper and liberal provision for that most deserving
body of public creditors, the soldiers and sailors and the widows and
orphans who are the pensioners of the United States.
The Government should not be permitted to run behind or increase its
debt in times like the present. Suitably to provide against this is
the mandate of duty--the certain and easy remedy for most of our
financial difficulties. A deficiency is inevitable so long as the
expenditures of the Government exceed its receipts. It can only be met
by loans or an increased revenue. While a large annual surplus of
revenue may invite waste and extravagance, inadequate revenue creates
distrust and undermines public and private credit. Neither should be
encouraged. Between more loans and more revenue there ought to be but
one opinion. We should have more revenue, and that without delay,
hindrance, or postponement. A surplus in the Treasury created by loans
is not a permanent or safe reliance. It will suffice while it lasts,
but it can not last long while the outlays of the Government are
greater than its receipts, as has been the case during the past two
years. Nor must it be forgotten that however much such loans may
temporarily relieve the situation, the Government is still indebted
for the amount of the surplus thus accrued, which it must ultimately
pay, while its ability to pay is not strengthened, but weakened by a
continued deficit. Loans are imperative in great emergencies to
preserve the Government or its credit, but a failure to supply needed
revenue in time of peace for the maintenance of either has no
justification.
The best way for the Government to maintain its credit is to pay as it
goes--not by resorting to loans, but by keeping out of debt--through
an adequate income secured by a system of taxation, external or
internal, or both. It is the settled policy of the Government, pursued
from the beginning and practiced by all parties and Administrations,
to raise the bulk of our revenue from taxes upon foreign productions
entering the United States for sale and consumption, and avoiding, for
the most part, every form of direct taxation, except in time of war.
The country is clearly opposed to any needless additions to the
subject of internal taxation, and is committed by its latest popular
utterance to the system of tariff taxation. There can be no
misunderstanding, either, about the principle upon which this tariff
taxation shall be levied. Nothing has ever been made plainer at a
general election than that the controlling principle in the raising of
revenue from duties on imports is zealous care for American interests
and American labor. The people have declared that such legislation
should be had as will give ample protection and encouragement to the
industries and the development of our country. It is, therefore,
earnestly hoped and expected that Congress will, at the earliest
practicable moment, enact revenue legislation that shall be fair,
reasonable, conservative, and just, and which, while supplying
sufficient revenue for public purposes, will still be signally
beneficial and helpful to every section and every enterprise of the
people. To this policy we are all, of whatever party, firmly bound by
the voice of the people--a power vastly more potential than the
expression of any political platform. The paramount duty of Congress
is to stop deficiencies by the restoration of that protective
legislation which has always been the firmest prop of the Treasury.
The passage of such a law or laws would strengthen the credit of the
Government both at home and abroad, and go far toward stopping the
drain upon the gold reserve held for the redemption of our currency,
which has been heavy and well-nigh constant for several years.
In the revision of the tariff especial attention should be given to
the re-enactment and extension of the reciprocity principle of the law
of 1890, under which so great a stimulus was given to our foreign
trade in new and advantageous markets for our surplus agricultural and
manufactured products. The brief trial given this legislation amply
justifies a further experiment and additional discretionary power in
the making of commercial treaties, the end in view always to be the
opening up of new markets for the products of our country, by granting
concessions to the products of other lands that we need and cannot
produce ourselves, and which do not involve any loss of labor to our
own people, but tend to increase their employment.
The depression of the past four years has fallen with especial
severity upon the great body of toilers of the country, and upon none
more than the holders of small farms. Agriculture has languished and
labor suffered. The revival of manufacturing will be a relief to both.
No portion of our population is more devoted to the institution of
free government nor more loyal in their support, while none bears more
cheerfully or fully its proper share in the maintenance of the
Government or is better entitled to its wise and liberal care and
protection. Legislation helpful to producers is beneficial to all. The
depressed condition of industry on the farm and in the mine and
factory has lessened the ability of the people to meet the demands
upon them, and they rightfully expect that not only a system of
revenue shall be established that will secure the largest income with
the least burden, but that every means will be taken to decrease,
rather than increase, our public expenditures. Business conditions are
not the most promising. It will take time to restore the prosperity of
former years. If we cannot promptly attain it, we can resolutely turn
our faces in that direction and aid its return by friendly
legislation. However troublesome the situation may appear, Congress
will not, I am sure, be found lacking in disposition or ability to
relieve it as far as legislation can do so. The restoration of
confidence and the revival of business, which men of all parties so
much desire, depend more largely upon the prompt, energetic, and
intelligent action of Congress than upon any other single agency
affecting the situation.
[...]
The declaration of the party now restored to power has been in the
past that of "opposition to all combinations of capital organized in
trusts, or otherwise, to control arbitrarily the condition of trade
among our citizens," and it has supported "such legislation as will
prevent the execution of all schemes to oppress the people by undue
charges on their supplies, or by unjust rates for the transportation
of their products to the market." This purpose will be steadily
pursued, both by the enforcement of the laws now in existence and the
recommendation and support of such new statutes as may be necessary to
carry it into effect.
[...]
There could be no better time to put the Government upon a sound
financial and economic basis than now. The people have only recently
voted that this should be done, and nothing is more binding upon the
agents of their will than the obligation of immediate action. It has
always seemed to me that the postponement of the meeting of Congress
until more than a year after it has been chosen deprived Congress too
often of the inspiration of the popular will and the country of the
corresponding benefits. It is evident, therefore, that to postpone
action in the presence of so great a necessity would be unwise on the
part of the Executive because unjust to the interests of the people.
Our action now will be freer from mere partisan consideration than if
the question of tariff revision was postponed until the regular
session of Congress."
Second Inaugural Address of William McKinley
MONDAY, MARCH 4, 1901
http://www.yale.edu/lawweb/avalon/presiden/inaug/mckin2.htm
"When we assembled here on the 4th of March, 1897, there was great
anxiety with regard to our currency and credit. None exists now. Then
our Treasury receipts were inadequate to meet the current obligations
of the Government. Now they are sufficient for all public needs, and
we have a surplus instead of a deficit. Then I felt constrained to
convene the Congress in extraordinary session to devise revenues to
pay the ordinary expenses of the Government. Now I have the
satisfaction to announce that the Congress just closed has reduced
taxation in the sum of $41,000,000. Then there was deep solicitude
because of the long depression in our manufacturing, mining,
agricultural, and mercantile industries and the consequent distress of
our laboring population. Now every avenue of production is crowded
with activity, labor is well employed, and American products find good
markets at home and abroad.
Our diversified productions, however, are increasing in such
unprecedented volume as to admonish us of the necessity of still
further enlarging our foreign markets by broader commercial relations.
For this purpose reciprocal trade arrangements with other nations
should in liberal spirit be carefully cultivated and promoted."
SUPREME COURT
The Supreme Court of the United States fostered the policy of
unregulated Commerce in a number of important decisions. The income
tax that had been instituted in 1861 to help pay for the costs of
defending the Union was ruled unconstitutional in 1871, thereby
throwing the tax burden unto consumers as the Government relied almost
entirely upon import duties for revenue. Tariffs assumed the central
position in the finances of the Government, and protective tariffs
began to form the basis of economic planning. In 1876, the Supreme
Court handed down a landmark decision in MUNN v. STATE OF ILLINOIS, 94
U.S. 113 (1876), affirming the right of states to regulate, through
legislative action, trade within their own borders, by setting limits
upon rates charged for the storage of grain in warehouses and grain
elevators. Illinois had required by "'An Act to regulate public
warehouses and the warehousing and inspection of grain, and to give
effect to art. 13 of the Constitution of this State,' approved April
25, 1871" that:
"'SECT. 15. Every warehouseman of public warehouses of class A shall
be required, during the first week of January of each year, to publish
in one or more of the newspapers (daily, if there be such) published
in the city in which such warehouse is situated, a table or schedule
of rates for the storage of grain in the warehouse during the ensuing
year, which rates shall not be increased (except as provided for in
sect. 16 of this act) during the year; and such published rates, or
any published reduction of them, shall apply to all grain received
into such warehouse from any person or source; and no discrimination
shall be made, directly or indirectly, for or against any charges made
by such warehouseman for the storage of grain.
'The maximum charge of storage and handling of grain, including the
cost of receiving and delivering, shall be for the first thirty days
or part thereof two cents per bushel, and for each fifteen days or
part thereof, after the first thirty days, one-half of one cent per
bushel; provided, however, that grain damp or liable to early damage,
as indicated by its inspection when received, may be subject to two
cents per bushel storage for the first ten days, and for each
additional five days or part thereof, not exceeding one-half of one
per cent per bushel.'"
The purpose of the law was to provide uniformity of rates for
warehouses, under their role as common carriers, which previously had
varied between large and small customers of the warehouses, the larger
customers receiving discounts to the detriment of smaller customers.
The company of Munn & Scott, public warehousemen in Chicago, were
charged with operating a warehouse without a license and of exceeding
the allowable rates, and were found guilty under the Illinois law.
They appealed, the appeal eventually reaching the Supreme Court.
As stated by Chief Justice Waite, the case was this:
"MR. CHIEF JUSTICE WAITE delivered the opinion of the court.
The question to be determined in this case is whether the general
assembly of Illinois can, under the limitations upon the legislative
power of the States imposed by the Constitution of the United States,
fix by law the maximum of charges for the storage of grain in
warehouses at Chicago and other places in the State having not less
than one hundred thousand inhabitants, 'in which grain is stored in
bulk, and in which the grain of different owners is mixed together, or
in which grain is stored in such a manner that the identity of
different lots or parcels cannot be accurately preserved.'"
The power to regulate the use of private property, the Court found,
was inherited from British Common Law, and already had an history in
precedent dating back more than two hundred years at that date.
"This brings us to inquire as to the principles upon which this power
of regulation rests, in order that we may determine what is within and
what without its operative effect. Looking, [94 U.S. 113, 126] then,
to the common law, from whence came the right which the Constitution
protects, we find that when private property is 'affected with a
public interest, it ceases to be juris privati only.' This was said by
Lord Chief Justice Hale more than two hundred years ago, in his
treatise De Portibus Maris, 1 Harg. Law Tracts, 78, and has been
accepted without objection as an essential element in the law of
property ever since. Property does become clothed with a public
interest when used in a manner to make it of public consequence, and
affect the community at large. When, therefore, one devotes his
property to a use in which the public has an interest, he, in effect,
grants to the public an interest in that use, and must submit to be
controlled by the public for the common good, to the extent of the
interest he has thus created. He may withdraw his grant by
discontinuing the use; but, so long as he maintains the use, he must
submit to the control."
And:
"So if one owns the soil and landing-places on both banks of a stream,
he cannot use them for the purposes of a public ferry, except upon
such terms and conditions as the body politic may from time to time
impose; and this because the common good requires that all public ways
shall be under the control of the public authorities. This privilege
or prerogative of the king, who in this connection only represents and
gives another name to the body politic, is not primarily for his
profit, but for the protection of the people and the promotion of the
general welfare."
And:
"Common carriers exercise a sort of public office, and have duties to
perform in which the public is interested. New Jersey Nav. Co. v.
Merchants' Bank, 6 How. 382. Their business is, therefore, 'affected
with a public interest,' within the meaning of the doctrine which Lord
Hale has so forcibly stated.
But we need not go further. Enough has already been said to show that,
when private property is devoted to a public use, it is subject to
public regulation. It remains only to ascertain whether the warehouses
of these plaintiffs in error, and the business which is carried on
there, come within the operation of this principle."
Further, the matter of a monopoly was pertinent. Thus:
"In this connection it must also be borne in mind that, although in
1874 there were in Chicago fourteen warehouses adapted to this
particular business, and owned by about thirty persons, nine business
firms controlled them, and that the prices charged and received for
storage were such 'as have been from year to year agreed upon and
established by the different elevators or warehouses in the city of
Chicago, and which rates have been annually published in one or more
newspapers printed in said city, in the month of January in each year,
as the established rates for the year then next ensuing such
publication.' Thus it is apparent that all the elevating facilities
through which these vast productions 'of seven or eight great States
of the West' must pass on the way 'to four or five of the States on
the seashore' may be a 'virtual' monopoly."
[...]
"We also are not permitted to overlook the fact that, for some reason,
the people of Illinois, when they revised their Constitution in 1870,
saw fit to make it the duty of the general assembly to pass laws 'for
the protection of producers, shippers, and receivers of grain and
produce,' art. 13, sect. 7; and by sect. 5 of the same article, to
require all railroad companies receiving and transporting grain in
bulk or otherwise to deliver the same at any elevator to which it
might be consigned, that could be reached by any track that was or
could be used by such company, and that all railroad companies should
permit connections to be made with their tracks, so that any public
warehouse, &c., might be reached by the cars on their railroads. This
indicates very clearly that during the twenty years in which this
peculiar business had been assuming its present 'immense proportions,'
something had occurred which led the whole body of the people to
suppose that remedies such as are usually employed to prevent abuses
by virtual monopolies might not be inappropriate here. For our
purposes we must assume that, if a state of facts could exist that
would justify such legislation, it actually did exist when the statute
now under consideration was passed. For us the question is one of
power, not of expediency. If no state of circumstances could exist to
justify such a statute, then we may declare this one void, because is
excess of the legislative power of the State. But if it could, we must
presume it did. Of the propriety of legislative [94 U.S. 113, 133]
interference within the scope of legislative power, the legislature is
the exclusive judge."
Regarding the right of the State to regulate in the absence of
Congressional regulation, the Court found:
"Their regulation is a thing of domestic concern, and, certainly,
until Congress acts in reference to their inter-state relations, the
State may exercise all the powers of government over them, even though
in so doing it may indirectly operate upon commerce outside its
immediate jurisdiction. We do not say that a case may not arise in
which it will be found that a State, under the form of regulating its
own affairs, has encroached upon the exclusive domain of Congress in
respect to inter-state commerce, but we do say that, upon the facts as
they are represented to us in this record, that has not been done."
In the opinion of the Court, then:
"We conclude, therefore, that the statute in question is not repugnant
to the Constitution of the United States, and that [94 U.S. 113, 136]
there is no error in the judgment. In passing upon this case we have
not been unmindful of the vast importance of the questions involved.
This and cases of a kindred character were argued before us more than
a year ago by most eminent counsel, and in a manner worthy of their
well-earned reputations. We have kept the cases long under advisement,
in order that their decision might be the result of our mature
deliverations."
In dissenting from this opinion, Justice Field wrote for himself and
Justice Strong. He summed up the situation in this manner.
"The validity of the legislation was, among other grounds, assailed in
the State court as being in conflict with that provision of the State
Constitution which declares that no person shall be deprived of life,
liberty, or property without due process of law, and with that
provision of the Fourteenth Amendment of the Federal Constitution
which imposes a similar restriction upon the action of the State. The
State court held, in substance, that the constitutional provision was
not violated so long as the owner was not deprived of the title and
possession of his property; and that it did not deny to the
legislature the power to make all needful rules and regulations
respecting the use and enjoyment of the property, referring, in
support of the position, to instances of its action in prescribing the
interest on money, in establishing and regulating public ferries and
public mills, and fixing the compensation in the shape of tolls, and
in delegating power to municipal bodies to regulate the charges of
hackmen and draymen, and the weight and price of bread. In this court
the legislation was also assailed on the same ground, our jurisdiction
arising upon the clause of the Fourteenth Amendment, ordaining that no
State shall deprive any person of life, liberty, or property without
due process of law. But it would seem from its opinion that the court
holds that property loses something of its private character when
employed in such a way as to be generally useful. The doctrine
declared is that property 'becomes clothed with a public interest when
used in a manner to make it of public consequence, and affect the
community at large;' and from such clothing the right of the
legislature is deduced to control the use of the property, and to
determine the compensation which the owner may receive for it. When
Sir Matthew Hale, and the sages of the law in his day, spoke of
property as affected by a public interest, and ceasing from that cause
to be juris privati solely, that is, ceasing to be held merely in
private right, they referred to property dedicated by the owner to
public announced, the legislature may which was granted by the
government, or in connection with which special privileges were
conferred. Unless the property was thus dedicated, or some right
bestowed by the government was held with the property, either by
specific grant or by prescription of so long a time as [94 U.S. 113,
140] to imply a grant originally, the property was not affected by any
public interest so as to be taken out of the category of property held
in private right. But it is not in any such sense that the terms
'clothing property with a public interest' are used in this case. From
the nature of the business under consideration-the storage of
grain-which, in any sense in which the words can be used, is a private
business, in which the public are interested only as they are
interested in the storage of other products of the soil, or in
articles of manufacture, it is clear that the court intended to
declare that, whenever one devotes his property to a business which is
useful to the public,-'affects the community at large,'- the
legislature can regulate the compensation which the owner may receive
for its use, and for his own services in connection with it."
Justice Field strongly disagreed with this interpretation of the
public interest over private property and with the notion that this
interest conferred the power to regulate. In time, this dissenting
opinion would be adopted by the majority in a series of cases that
declared all such regulation unconstitutional.
U.S. Supreme Court
MUNN v. STATE OF ILLINOIS, 94 U.S. 113 (1876)
94 U.S. 113
MUNN v. ILLINOIS.
October Term, 1876
http://caselaw.lp.findlaw.com/scripts/getcase.pl?navby=case&court=us&vol=94&invol=113
The Court had earlier (1873) handed down a similar decision from
Louisiana in Slaughterhouse Cases 83 U.S. 36 (April 14th, 1873), in
which the right of the State to grant and regulate a monopoly was
upheld.
The Slaughterhouse Cases
http://www.tourolaw.edu/patch/Slaughterhouse/
However, the Court effectively nullified the doctrines establsihed by
these rulings when it ruled in WABASH, ST. LOUIS AND PACIFIC RAILROAD
COMPANY v. STATE OF ILLINOIS (October 25, 1886) that, depsite Munn v.
Illinois,
"(4.) The cases of Munn v. Illinois, 94 U. S. 113, Chicago, B. & Q. R.
Co. v. Iowa, Id. 155, and Peik v. Chicago & N. W. R. Co., Id. 164,
examined in regard to this question, and held, in view of other cases
decided near the same time, not to establish a contrary doctrine.
(5.) Notwithstanding what is there said, this court holds now, and has
never consciously held otherwise, that a statute of a state, intended
to regulate or to tax or to impose any other restriction upon the
transmission of persons or property or telegraphic messages from one
state to another, is not within that class of legislation which the
states may enact in the absence of legislation by congress; and that
such statutes are void, even as to that part of such transmission
which may be within the state.
(6.) It follows that the statute of Illinois, as construed by the
supreme court of the state, and as applied to the transaction under
consideration, is forbidden by the constitution of the United States,
and the judgment of that court is reversed."
WABASH, ST. LOUIS AND PACIFIC RAILROAD COMPANY v. STATE OF ILLINOIS
http://www.tourolaw.edu/patch/Wabash/
In CHICAGO, M. & ST. P. RY. CO. v. STATE OF MINN. EX REL., 134 U.S.
418 (1890), the Court continued this rollback of the earlier rulings.
The setting of rates for the railroad by the Commission established by
the legislature of Minnesota for that purpose was deemed to be in
violation of the equal protection and due process clauses of the
Constitution.
"In other words, although the railroad company is forbidden to
establish rates that are not equal and reasonable, there is no power
in the courts to stay the hands of the commission, if it chooses to
establish rates that are unequal and unreasonable. This being the
construction of the statute by which we are bound in considering the
present case, we are of opinion that, so construed, it conflicts with
the constitution of United [134 U.S. 418, 457] States in the
particulars complained of by the railroad company. It deprives the
company of its right to a judicial investigation, by due process of
law, under the forms and with the machinery provided by the wisdom of
successive ages for the investigation judicially of the truth of a
matter in controversy, and substitutes therefor, as an absolute
finality, the action of a railroad commission which, in view of the
powers conceded to it by the state court, cannot be regarded as
clothed with judicial functions, or possessing the machinery of a
court of justice. Under section 8 of the statute, which the supreme
court of Minnesota says is the only one which relates to the matter of
the fixing by the commission of general schedules of rates, and which
section, it says, fully and exclusively provides for that subject, and
is complete in itself, all that the commission is required to do is,
on the filing with it by a railroad company of copies of its schedules
of charges, to 'find' that any part thereof is in any respect unequal
or unreasonable, and then it is authorized and directed to compel the
company to change the same, and adopt such charge as the commission
'shall declare to be equal and reasonable;' and to that end it is
required to inform the company in writing in what respect its charges
are unequal and unreasonable. No hearing is provided for; no summons
or notice to the company before the commission has found what it is to
find, and declared what it is to declare; no opportunity provided for
the company to introduce witnesses before the commission,-in fact,
nothing which has the semblance of due process of law; and although,
in the present case, it appears that, prior to the decision of the
commission, the company apeared before it by its agent, and the
commission investigated the rates charged by the company for
transporting milk, yet it does not appear what the character of the
investigation was, or how the result was arrived at. By the second
section of the statute in question, it is provided that all charges
made by a common carrier for the transportation of passengers or
property shall be equal and reasonable. Under this provision, the
carrier has a right to make equal and reasonable charges for such
transportation. [134 U.S. 418, 458] In the present case, the return
alleged that the rate of charge fixed by the commission was not equal
or reasonable, and the supreme court held that the statute deprived
the company of the right to show that judicially. The question of the
reasonableness of a rate of charge for transportation by a railroad
company, involving, as it does, the element of reasonableness both as
regards the company and as regards the public, is eminently a question
for judicial investigation, requiring due process of law for its
determination. If the company is deprived of the power of charging
reasonable rates for the use of its property, and such deprivation
takes place in the absence of an investigation by judicial machinery,
it is deprived of the lawful use of its property, and thus, in
substance and effect, of the property itself, without due process of
law, and in violaton of the constitution of the United States; and, in
so far as it is thus deprived, while other persons are permitted to
receive reasonable profits upon their invested capital, the company is
deprived of the equal protection of the laws. It is provided by
section 4 of article 10 of the constitution of Minnesota of 1857, that
'lands may be taken for public way, o r the purpose of granting to any
corporation the franchise of way for public use,' and that 'all
corporations, being common carriers, enjoying the right of way in
pursuance to the provisions of this ection, shall be bound to carry
the mineral, agricultural, and other productions and manufactures on
equal and reasonable terms.' It is thus perceived that the provision
of section 2 of the statute in question is one enacted in conformity
with the constitution of Minnesota.
The issuing of the peremptory writ of mandamus in this case was,
therefore, unlawful, because in violation of the constitution of the
United States; and it is necessary that the relief administered in
favor of the plaintiff in error should be a reversal of the judgment
of the supreme court awarding that writ, and an instruction for
further proceedings by it not inconsistent with the opinion of this
court. In view of the opinion delivered by that court, it may be
impossible for any further proceedings to be taken other than to
dismiss the proceeding for a mandamus, if the [134 U.S. 418, 459]
court should adhere to its opinion that, under the statute, it cannot
investigate judicially the reasonableness of the rates fixed by the
commission. Still, the question will be open for review; and the
judgment of this court is that the judgment of the supreme court of
Minnesota, entered May 4, 1888, awarding a peremptory writ of mandamus
in this case, be reversed, and the case be remanded to that court,
with an instruction for further proceedings not inconsistent with the
opinion of this court."
Justice Bradley, writing for himself and Justices Gray and Lamar, in
dissent noted immediately and without equivocation that the decision
of the majority was effectively a reversal of Munn v. Illinois.
"I cannot agree to the decision of the court in this case. It
practically overrules Munn v. Illinois, 94 U.S. 113 , and the several
railroad cases that were decided at the same time. The governing
principle of those cases was that the regulation and settlement of the
fares of railroads and other public accommodations is a legislative
prerogative, and not a judicial one. This is a principle which I
regard as of great importance. When a railroad company is chartered,
it is for the purpose of performing a duty which belongs to the state
itself. It is chartered as an agent of the state for furnishing public
accommodation. The state might build its railroads, if it saw fit. It
is its duty and its prerogative to provide means of intercommunication
between one part of its territory and another. And this duty is
devolved upon the legislative department. If the legislature
commissions private parties, whether corporations or individuals, to
perform this duty, it is its prerogative to fix the fares and freights
which they may charge for their services. When merely a road or a
canal is to be constructed, it is for the legislature to fix the tolls
to be paid by those who use it; when a company is chartered, not only
to build a road, but to carry on public transportation upon it, it is
for the legislature to fix the charges for such transportation. [134
U.S. 418, 462] But it is said that all charges should be reasonable,
and that none but reasonable charges can be exacted; and it is urged
that what is a reasonable charge is a judicial question. On the
contrary, it is pre- eminently a legislative one, involving
considerations of policy, as well as of remuneration; and is usually
determined by the legislature, by fixing a maximum of charges in the
charter of the company, or afterwards, if its hands are not tied by
contract. If this maximum is not exceeded, the courts cannot
interfere. When the rates are not thus determined, they are left to
the discretion of the company, subject to the express or implied
condition that they shall be reasonable-express, when so declared by
statute; implied by the common law, when the statute is silent; and
the common law has effect by virtue of the legislative will. Thus the
legislature either fixes the charges at rates which it deems
reasonable, or merely declares that they shall be reasonable; and it
is only in the latter case, where what is reasonable is left open,
that the courts have jurisdiction of the subject. I repeat, when the
legislature declares that the charges shall be reasonable, or, which
is the same thing, allows the common law rule to that effect to
prevail, and leaves the matter there, then resort may be had to the
courts to inquire judicially whether the charges are reasonable. Then,
and not till then, is it a judicial question. But the legislature has
the right, and it is its prerogative, if it chooses to exercise it, to
declare what is reasonable. This is just where I differ from the
majority of the court. They say in effect, if not in terms, that the
final tribunal of arbitrament is the judiciary. I say it is the
legislature. I hold that it is a legislative question, not a judicial
one, unless the legislature or the law (which is the same thing) has
made it judicial by prescribing the rule that the charges shall be
reasonable, and leaving it there.
It is always a delicate thing for the courts to make an issue with the
legislative department of the government, and they should never do so
if it is possible to avoid it. By the decision now made, we declare,
in effect, that the judiciary, and not the legislature, is the final
arbiter in the regulation of fares and [134 U.S. 418, 463] freights
of railroads, and the charges of other public accommodations. It is an
assumption of authority on the part of the judiciary which, it seems
to me, with all due deference to the judgment of my brethren it has no
right to make. The assertion of jurisdiction by this court makes it
the duty of every court of general jurisdiction, state or federal, to
entertain complaints against the decisions of the boards of
commissioners appointed by the states to regulate their railroads; for
all courts are bound by the constitution of the United States, the
same as we are. Our jurisdiction is merely appellate. The incongruity
of this position will appear more distinctly by a reference to the
nature of the cases under consideration. The question presented before
the commission in each case was one relating simply to the
reasonableness of the rates charged by the companies,-a question of
more or less. In the one case the company charged 3 cents per gallon
for carrying milk between certain points. The commission deemed this
to be unreasonable, and reduced the charge to 2 1/2 cents. In the
other case the company charged $1.25 per car for handling and
switching empty cars over its lines within the city of Minneapolis,
and $1.50 for loaded cars; and the commission decided that $1 per car
was a sufficient charge in all cases. The companies complain that the
charges as fixed by the commission are unreasonably low, and that they
are deprived of their property without due process of law; that they
are entitled to a trial by a court and jury, and are not barred by the
decisions of a legislative commission. The state court held that the
legislature had a right to establish such a commission, and that its
determinations are binding and final, and that the courts cannot
review them. This court now reverses that decision, and holds the
contrary. In my judgment the state court was right; and the
establishment of the commission, and its proceedings, were no
violation of the constitutional prohibition against depriving persons
of their property without due process of law."
U.S. Supreme Court
CHICAGO, M. & ST. P. RY. CO. v. STATE OF MINN. EX REL., 134 U.S. 418
(1890)
134 U.S. 418
March 24, 1890
http://caselaw.lp.findlaw.com/scripts/getcase.pl?navby=case&court=us&vol=134&invol=418
The Court maintained this stance, even against the express desire of
Congress, when it invalidated the anti-trust provisions of the Sherman
Anti-Trust Act of 1890. (q.v.) In UNITED STATES v. E. C. KNIGHT CO. et
al. No. 675. (January 21, 1895), the Court decided that even though
the American Sugar Refining Company, which already controlled the
great majority of sugar refining in the United States, acquired
control of the only five remaining independent refiners, E.C. Knight
Company ,Franklin Sugar Company, Spreckels Sugar Refining Company,
Delaware Sugar House, and the Revere Sugar Refinery, it did not
constitute the formation of a trust.
Writing for the majority, Justice Fuller offered:
"the contracts and acts of the defendants related exclusively to the
acquisition of the Philadelphia refineries and the business of sugar
refining in Pennsylvania, and bore no direct relation to commerce
between the states or with foreign nations. The object was manifestly
private gain in the manufacture of the commodity, but not through the
control of interstate or foreign commerce. It is true that the bill
alleged that the products of these refineries were sold and
distributed among the several states, and that all the companies were
engaged in trade or commerce with the several states and with foreign
nations; but this was no more than to say that trade and commerce
served manufacture to fulfill its function. Sugar was refined for
sale, and sales were probably made at Philadelphia for consumption,
and undoubtedly for resale by the first purchasers throughout
Pennsylvania and other states, and refined sugar was also for warded
by the companies to other states for sale. Nevertheless it does not
follow that an attempt to monopolize, or the actual monopoly of, the
manufacture was an attempt, whether executory or consummated, to
monopolize commerce, even though, in order to dispose of the product,
the instrumentality of commerce was necessarily invoked. There was
nothing in the proofs to indicate any intention to put a restraint
upon trade or commerce, and the fact, as we have seen, that trade or
commerce might be indirectly affected, was not enough to entitle
complainants to a decree. The subjectmatter of the sale was shares of
manufacturing stock, and the relief sought was the surrender of
property which had already passed, and the suppression of the alleged
monopoly in manufacture by the restoration of the status quo before
the transfers; yet the act of congress only authorized the circuit
courts to proceed by way of preventing and restraining violations of
the act in respect of contracts, combinations, or conspiracies in
restraint of interstate or international trade or commerce."
Justice Harlan, in dissent, wrote an opinion that would eventually
inform future interpretations of the anti-trust law.
"In March, 1892, by means of contracts or arrangements with
stockholders of the four Pennsylvania companies, the New Jersey
corporationusing for that purpose its own stockpurchased the stock of
those companies, and thus obtained absolute control of the entire
business of sugar refining in the United States except that done by
the Boston company, which is too small in amount to be regarded in
this discussion.
'The object,' the court below said, 'in purchasing the Philadelphia
refineries was to obtain a greater influence or more perfect control
over the business of refining and selling sugar in this country.' This
characterization of the object for which this stupendous combination
was formed is properly accepted in the opinion of the court as
justified by the proof. I need not, therefore, analyze the evidence
upon this point. In its consideration of the important constitutional
question presented this court assumes on the record before us that the
result of the transactions disclosed by the pleadings and proof was
the creation of a monopoly in the manufacture of a necessary of life.
If this combination, so far as its operations necessarily or directly
affect interstate commerce, cannot be restrained or suppressed under
some power granted to congress, it will be cause for regret that the
patriotic statesmen who framed the constitution did not foresee the
necessity of investing the national government with power to deal with
gigantic monopolies holding in their grasp, and injuriously
controlling in their own interest, the entire trade among the states
in food products that are essential to the comfort of every household
in the land."
He continued that Commerce was unitary, comprising more than mere
trade and not ceasing at the border of a State, and that the power of
Congress to regulate inter-state commerce brought with complete and
plenary, restricted only by the Constitution.
"Congress is invested with power to regulate commerce with foreign
nations and among the several states. The power to regulate is the
power to prescribe the rule by which the subject regulated is to be
governed. It is one that must be exercised whenever necessary
throughout the territorial limits of the several states. Cohens v.
Virginia, 6 Wheat. 264, 413. The power to make these regulations 'is
complete in itself, may be exercised to its utmost extent, and
acknowledges no limitations other than are prescribed in the
constitution.' It is plenary because vested in congress 'as absolutely
as it would be in a single government having in its constitution the
same restrictions on the exercise of the power as are found in the
constitution of the United States.' It may be exercised 'whenever the
subject exists.' Gibbons v. Ogden, 9 Wheat. 1, 195, 196. In his
concurring opinion in that case Mr. Justice Johnson observed that the
grant to congress of the power to regulate commerce carried with it
the whole subject, leaving nothing for the state to act upon, and
that, 'if there was any one object riding over every other in the
adoption of the constitution, it was to keep commercial intercourse
among the states free from all invidious and partial restraints.' Id.
231. 'In all commercial regulations we are one and the same people.'
Mr. Justice Bradley, speaking for this court, said that the United
States are but one country, and are and must be subject to one system
of regulations in respect to interstate commerce. Robbins v. Taxing
Dist., 120 U. S. 489, 494, 7 Sup. Ct. 592.
What is commerce among the states? The decisions of this court fully
answer the question. 'Commerce, undoubtedly, is traffic, but it is
something more; it is intercourse.' It does not embrace the completely
interior traffic of the respective states,that which is 'carried on
between man and man in a state, or between different parts of the same
state, and which does not extend to or affect other states.'but it
does embrace 'every species of commercial intercourse' between the
United States and foreign nations and among the states, and therefore
it includes such traffic or trade, buying, selling, and interchange of
commodities, as directly affects or necessarily involves the interests
of the people of the United States. 'Commerce, as the word is used in
the constitution, is a unit,' and 'cannot stop at the external
boundary line of each state, but may be introduced into the interior.'
'The genius and character of the whole government seem to be that its
action is to be applied to all the external concerns of the nation,
and to those internal concerns which affect the states generally.'
These principles were announced in Gibbons v. Ogden, and have often
been approved. It is the settled doctrine of this court that
interstate commerce embraces something more than the mere physical
transportation of articles of property, and the vehicles or vessels by
which such transportation is effected."
Harlan laid out the argument that the necessity of of the anti-trust
act was self-evident from the plain fact that illegal restraint of
trade must be encompassed by the power of Congress to regulate
Commerce. or the Constitution had failed in one of its primary
clauses.
"It would seem to be indisputable that no combination of corporations
or individuals can, of right, impose unlawful restraints upon
interstate trade, whether upon transportation or upon such interstate
intercourse and traffic as precede transportation, any more than it
can, of right, impose unreasonable restraints upon the completely
internal traffic of a state. The supposition cannot be indulged that
this general proposition will be disputed. If it be true that a
combination of corporations or individuals may, so far as the power of
congress is concerned, subject interstate trade, in any of its stages,
to unlawful restraints, the conclusion is inevitable that the
constitution has failed to accomplish one primary object of the Union,
which was to place commerce among the states under the control of the
common government of all the people, and thereby relieve or protect it
against burdens or restrictions imposed, by whatever authority, for
the benefit of particular localities or special interests.
The fundamental inquiry in this case is, what, in a legal sense, is an
unlawful restraint of trade?"
[...}
"But a general restraint of trade has often resulted from combinations
formed for the purpose of controlling prices by destroying the
opportunity of buyers and sellers to deal with each other upon the
basis of fair, open, free competition. Combinations of this character
have frequently been the subject of judicial scrutiny, and have always
been condemned as illegal because of their necessary tendency to
restrain trade. Such combinations are against common right, and are
crimes against the public."
Harlan then goes on to link the several points he has made, showing
that Commerce, being unitary, cannot be divided merely into
manufacturing, but must include the subsequent sale of the
manufactured product throughout the States, thereby bringing the
combination of American Sugar Refining under the control of Congress.
"The power of congress covers and protects the absolute freedom of
such intercourse and trade among the states as may or must succeed
manufacture and precede transportation from the place of purchase.
This would seem to be conceded, for the court in the present case
expressly declare that 'contracts to buy, sell, or exchange goods to
be transported among the several states, the transportation and its
instrumentalities, and articles bought, sold, or exchanged for the
purpose of such transit among the states, or put in the way of
transit, may be regulated, but this is because they form part of
interstate trade or commerce.' Here is a direct admissionone which the
settled doctrines of this court justifythat contracts to buy, and the
purchasing of goods to be transported from one state to another, and
transportation, with its instrumentalities, are all parts of
interstate trade or commerce. Each part of such trade is then under
the protection of congress. And yet, by the opinion and judgment in
this case, if I do not misapprehend them, congress in without power to
protect the commercial intercourse that such purchasing necessarily
involves against the restraints and burdens arising from the existence
of combinations that meet purchasers, from whatever state they come,
with the threatfor it is nothing more nor less than a threatthat they
shall not purchase what they desire to purchase, except at the prices
fixed by such combinations. A citizen of Missouri has the right to go
in person, or send orders, to Pennsylvania and New Jersey for the
purpose of purchasing refined sugar. But of what value is that right
if he is confronted in those states by a vast combination, which
absolutely controls the price of that article by reason of its having
acquired all the sugar refineries in the United States in order that
they may fix prices in their own interest exclusively?
In my judgment, the citizens of the several states composing the Union
are entitled of right to buy goods in the state where they are
manufactured, or in any other state, without being confronted by an
illegal combination whose business extends throughout the whole
country, which, by the law everywhere, is an enemy to the public
interests, and which prevents such buying, except at prices
arbitrarily fixed by it. I insist that the free course of trade among
the states cannot coexist with such combinations."
UNITED STATES v. E. C. KNIGHT CO. et al. No. 675. (January 21, 1895)
Opinion of the Court
http://www.tourolaw.edu/patch/Knight/
Justice Harlan's Dissent
http://www.tourolaw.edu/patch/Knight/HARLAN.html
It was in 1904 that the provisions of the Sherman Anti-Trust Act that
had been voided by the Court were restored in NORTHERN SECURITIES CO.
v. U.S., 193 U.S. 197 (1904). It was Justice Harlan who now wrote for
the majority.
"Opinions
HARLAN, BROWN, McKENNA and DAY, JJ.
The combination is, within the meaning of the act of Congress of July
2, 1890, known as the Anti-Trust Act, a "trust"; but if not, it is a
combination in restraint of interstate and international commerce, and
that is enough to bring it under the condemnation of the act.
From prior cases in this court, the following propositions are
deducible, and embrace this case:
Although the act of Congress known as the Anti-Trust Act has no
reference to the mere manufacture or production of articles or
commodities within the limits of the several States, it embraces and
declares to be illegal every contract, combination or conspiracy, in
whatever form, of whatever nature, and whoever may be parties to it,
which directly or necessarily operates in restraint of trade or
commerce among the several States or with foreign nations.
The act is not limited to restraints of interstate and international
trade or commerce that are unreasonable in their nature, but embraces
all direct restraints, reasonable or unreasonable, imposed by any
combination, conspiracy or monopoly upon such trade or commerce.
Railroad carriers engaged in interstate or international trade or
commerce are embraced by the act.
Combinations, even among private manufacturers or dealers, whereby
interstate or international commerce is restrained are equally
embraced by the act
Congress has the power to establish rules by which interstate and
international commerce shall be governed, and, by the Anti-Trust Act,
has prescribed the rule of free competition among those engaged in
such commerce.
Every combination or conspiracy which would extinguish competition
between otherwise competing railroads, engaged in interstate trade or
commerce, and which would in that way restrain such trade or commerce,
is made illegal by the act.
The natural effect of competition is to increase commerce, and an
agreement whose direct effect is to prevent this play of competition
restrains, instead of promotes, trade and commerce.
To vitiate a combination such as the act of Congress condemns, it need
not [p*199] be shown that such combination, in fact, results, or will
result, in a total suppression of trade or in a complete monopoly, but
it is only essential to show that, by its necessary operation, it
tends to restrain interstate or international trade or commerce, or
tends to create a monopoly in such trade or commerce, and to deprive
the public of the advantages that flow from free competition.
The constitutional guarantee of liberty of contract does not prevent
Congress from prescribing the rule of free competition for those
engaged in interstate and international commerce.
Under its power to regulate commerce among the several States and with
foreign nations, Congress had authority to enact the statute in
question. United States v. E. C. Knight Co., 156 U.S. 1 ; United
States v Trans-Missouri Freight Association, 166 U.S. 290; United
States v. Joint Traffic Association, 171 U.S. 505; Hopkins v United
States, 171 U.S. 578; Anderson v. United States, 171 U.S. 604;
Addyston Pipe & Steel Co. v United States, 175 U.S. 211; Montague &
Co. v. Lowrey, 193 U.S. 38.
Congress may protect the freedom of interstate commerce by any means
that are appropriate and that are lawful and not prohibited by the
Constitution.
If, in the judgment of Congress, the public convenience or the general
welfare will be best subserved when the natural laws of competition
are left undisturbed by those engaged in interstate commerce, that
must be, for all, the end of the matter if this is to remain a
government of laws, and not of men.
When Congress declared contracts, combinations and conspiracies in
restraint of trade or commerce to be illegal, it did nothing more than
apply to interstate commerce a rule that had been long applied by the
several States when dealing with combinations that were in restraint
of their domestic commerce.
Subject to such restrictions as are imposed by the Constitution upon
the exercise of all power, the power of Congress over interstate and
international commerce is as full and complete as is the power of any
State over its domestic commerce.
No State can, by merely creating a corporation, or in any other mode,
project its authority into other States so as to prevent Congress from
exerting the power it possesses under the Constitution over interstate
and international commerce, or so as to exempt its corporation engaged
in interstate commerce from obedience to any rule lawfully established
by Congress for such commerce; nor can any State give a corporation
created under its laws authority to restrain interstate or
international commerce against the will of the nation as lawfully
expressed by Congress. Every corporation created by a State is
necessarily subject to the supreme law of the land.
Whilst every instrumentality of domestic commerce is subject to state
control, every instrumentality of interstate commerce may be reached
and controlled by national authority, so far as to compel it to
respect the rules for such commerce lawfully established by Congress.
[p*200]"
U.S. SUPREME COURT
NORTHERN SECURITIES CO. v. U.S., 193 U.S. 197 (1904)
193 U.S. 197
NORTHERN SECURITIES COMPANY et al., Appts., v. UNITED STATES. No. 277.
Argued December 14, 15, 1903. Decided March 14, 1904.
http://www.tourolaw.edu/patch/Northern/
Justice Holmes' Dissent
HOLMES, J., Dissenting Opinion
MR. JUSTICE HOLMES, with whom concurred the CHIEF JUSTICE, MR. JUSTICE
WHITE, and MR. JUSTICE PECKHAM, dissenting.
http://www.tourolaw.edu/patch/Northern/Holmes.htm
INCOME TAX
The Income Tax, which had been struck down in 1871, was revisited in
the Wilson-Gorman Tariff Act of 1894 during the Second Cleveland
Administration. The general purpose of the Act had been a reduction of
tariffs (although this purpose was spoiled by the introduction of 600
amendments), and an income tax was included to make good any
diminishment of revenues that would result from the passage of the
Act. President Cleveland, disapproving of the final bill, had allowed
it to become law without his signature. The Income Tax was challenged
and declared unconstitutional again in Pollock v. Farmers' Loan and
Trust Company 157 U.S. 429
No. 898 April 8, 1895
Pollock v. Farmers' Loan and Trust Company
No. 898
SUPREME COURT OF THE UNITED STATES
157 U.S. 429
March 7, 8. 11, 12, 13, 1895 April 8, 1895
http://www2.law.cornell.edu/cgi-bin/foliocgi.exe/historic/query=[Group+157+U.S.+429:]([Level+Case+Citation:]|[Group+citemenu:])/doc/{@1}/hit_headings/words=4/hits_only?
Pollock v. Farmers' Loan & Trust Company (Rehearing), 158 U.S. 601
(1895)
http://www2.law.cornell.edu/cgi-bin/foliocgi.exe/historic/query=[Group+158+U.S.+601:]([Level+Case+Citation:]|[Group+citemenu:])/doc/{@1}/hit_headings/words=4/hits_only?
THE INCOME TAX.
THE DECISION OF THE SUPREME COURT.
By THE HON. GEORGE S. BOUTWELL,
EX-SECRETARY OF THE TREASURY
http://familyguardian.tzo.com/PublishedAuthors/LawReviews/NorthAmerLawRvw/IncomeTaxPollack1895.htm
FUNDAMENTAL COURT DECISIONS
SUPERME COURT DECISIONS
http://simonmagus.org/eb/study_guide/Supreme-Court-Decisions.html
GIBBONS v. OGDEN (Seminal Supreme Court decision affecting the power
of Congress to regulate Commerce. Opinion of the Court by Chief
Justice Marshall.)
"Gibbons v. Ogden-1824- Involved a monopoly granted by the New York
legislature (1808) for the operation of steamboats in state waters.
Aaron Ogden, successor to the exclusive right granted to Robert Fulton
and Robert R. Livingston, sued Thomas Gibbons (who operated under the
federal license) to restrain him from engaging in steam navigation
between New York and New Jersey. The court invalidated the New York
grant. The opinion of Chief Justice Marshall was the first broad
construction of the nature and scope of congressional power under the
commerce clause. Rejecting a narrow definition of commerce as
"traffic" or simple exchange, Marshall construed it as embracing
"every species of commercial intercourse," including navigation and
other agencies of commerce. While he conceded that the regulation of
wholly intrastate commerce was reserved to the state, he asserted that
congressional power to regulate interstate and foreign commerce "does
not stop at the jurisdictional lines of the several states." This curb
on state authority, coming at a time when many states had granted
similar monopoly privileges, freed transportation from state
restraints."
"Slaughterhouse Cases-1873- The first judicial pronouncement on the
14th Amendment. A monopoly grant of the Louisiana legislature was
contested as a violation of the privileges and immunities clause of
that amendment. By a 5-4 decision, the court upheld the grant. For the
majority, Justice Miller distinguished between state and national
citizenship. Only the rights deriving from federal citizenship were
protected by the 14th Amendment, and those rights were narrowly
defined. This interpretation placed the great body of rights under the
protection of the state governments.
Granger Cases-1877- Munn v. Illinois: This case involved an Illinois
law (1873) fixing maximum rates for grain storage. Chief Justice
Waite, for the court, upheld the law as a legitimate expression of the
state's police power in regulating business affected with ". . . a
public interest." He declared that the appeal was "to the polls, not
to the courts," and denied that the due process clause was
substantively violated or that state regulation of intrastate commerce
impaired Congress's unilateral control over interstate commerce."
U.S. CONGRESS
The Congress, being more directly subject to popular political
movements than either the Executive or the Judiciary, was less
consistent in its policies than either of the other branches of the
Federal Government. The idea of Income Tax as a means of raising
revenue rather than reliance upon tariff duties had been adopted in
1861, and then abandoned under judicial rulings, but would be adopted
again in 1894. Tariffs became artificial barriers by which American
industry was protected from foreign competition. While Industry
thrived as a result, consumers were forced to pay inflated prices for
finished goods. Farmers were particularly disadvantaged. Farm
production had risen during the Civil War in order to provide for the
Army, and many farmers had borrowed money to expand their holdings,
repaying the loans with Greenbacks, paper currency that had been
issued without the backing of gold or silver. The inflationary
Greenbacks allowed repayment with relatively cheaper money than that
that had been borrowed. After the War, the number of Greenbacks was
reduced, and a succession of acts of Congress made gold the only
standard for currency. As a result, deflation of the currency caused
the farmers' debt to increase, making repayment in more expensive
dollars difficult or impossible. In addition, the increased efficiency
in production of farm products, in absence of the demand created by
the War, led to a decrease in prices and a concomitant lessening of
farm incomes. To make things worse, the increase in tariffs meant that
farmers, like other consumers of finished manufactured goods, had to
pay unnaturally high prices for necessary products. The result was a
widespread disaffection of the rural populace with Federal monetary,
regulatory, and tax policies, and a Populist Farm movement was created
to seek redress and reform. The Granger Movement and the Granger Laws,
which formed the basis of several cases before the Supreme Court,
after many permutations of popular, labor, consumer, and farm lobbies,
finally led to Congressional action.
There were a number of great financial crises (Panics) in the Gilded
Age, including those of 1873 and 1893. Depressions followed both of
those panics. The value of the dollar plummeted, and the savings of
many families were wiped out. There was an almost continuous demand
from the Western States and much of the populace in general for a
bimetallic specie, currency based upon both gold and silver. The rich
silver strikes in the West seemed to argue forcibly for the policy of
bimetallism, but the only practical results were acts compelling the
purchase of small amounts of sliver by the Government.
TARIFFS
Tariif Table
http://www.u-s-history.com/pages/h963.html
"1872 Tariff of 1872 Post-war reform tariff, reduced rates on
some manufactured goods; (Grant administration).
1875 Tariff of 1875 Continued downward revision; average rates
reduced by 10 percent; (Grant administration).
1883 "Mongrel" Tariff Republicans abandoned reform; compromise
satisfied no one; (Arthur administration).
1890 McKinley Tariff Highest protective tariff to date: average
48 percent; (B. Harrison administration).
1894 Wilson-Gorman Tariff Reform measure crippled by Senate
amendments; (Cleveland 2nd administration).
1897 Dingley Tariff Blatantly protective measure; some rates at
57 percent; (McKinley administration)."
Tariff of 1894 (Wilson-Gorman)
http://www.u-s-history.com/pages/h794.html
Income Tax Provisions of Wilson-Gorman
http://www2.law.cornell.edu/cgi-bin/foliocgi.exe/historic/query=[jump!3A!27157+u!2Es!2E+429ast!27]/doc/{t8951}/pageitems={body}/hit_headings/words=4?
MONETARY POLICY
THE CURRENCY ISSUE
http://www.uscsumter.edu/~tpowers/hist112/currency.html
"1868: Democratic presidential platform includes George H. Pendleton's
"OHIO IDEA" (payment of national debt in greenbacks rather than in
gold-backed currency.)
1869: President Grant signs Public Credit Act, providing for the
payment of government obligations in gold, thus repudiating the "Ohio
Idea."
[...]
1873: Fourth Coinage Act ("THE CRIME OF '73")
[...]
1875: SPECIE RESUMPTION ACT
[...]
1878: BLAND-ALLISON ACT
[...]
1879: Resumption of specie payments.
[...]
1890: SHERMAN SILVER PURCHASE ACT.
[...]
1893: Panic and depression. Gold reserves fall below $100,000,000,
precipitating further panic. Sherman Silver Purchase Act repealed.
[...]
1895: APPEAL OF THE SILVER DEMOCRATS
[...]
1900: CURRENCY ACT (GOLD STANDARD ACT)"
The Gilded Age and the Monetary Question
http://www.history.ohio-state.edu/courses/hist563/lessons/Kimball_on_money_1879.html
INTERSTATE COMMERCE ACT
One of the more important Acts of the Congress in this era was the
passage of the Interstate Commerce Act (1887), which established the
Interstate Commerce Commission (I.C.C.), the function of which was to
regulate rates for railroad freight. The Act for the first time
exercised the Congressional power to regulate an industry or business
directly.
OurDocuments.gov - Interstate Commerce Act (1887)
http://www.ourdocuments.gov/content.php?page=learn_more&doc=49
"In 1887 Congress passed the Interstate Commerce Act, making the
railroads the first industry subject to Federal regulation. Congress
passed the law largely in response to public demand that railroad
operations be regulated."
[...]
"Early political action against these railroad monopolies came in the
1870s from “Granger” controlled state legislatures in the West and
South. The Granger Movement had started in the 1860s providing various
benefits to isolated rural communities. State controls of railroad
monopolies were upheld by the Supreme Court in Munn v. Illinois
(1877). State regulations and commissions, however, proved to be
ineffective, incompetent, and even corrupt. In the 1886 Wabash case,
the Supreme Court struck down an Illinois law outlawing long-and-short
haul discrimination."
[...]
"Years later the ICC would become the model for many other regulatory
agencies, but in 1887 it was unique. The Interstate Commerce Act
challenged the philosophy of laissez-faire economics by clearly
providing the right of Congress to regulate private corporations
engaged in interstate commerce."
Interstate Commerce Act (1887) - Transcript
http://www.ourdocuments.gov/content.php?page=transcript&doc=49
"Begun and held at the City of Washington on Monday, the sixth day of
December, one thousand eight hundred and eighty-six
An act to regulate Commerce.
Be it enacted by the Senate and House of Representatives of the United
States of America in Congress assembled, That the provisions of
this act shall apply to any common carrier or carriers engaged in the
transportation of passengers or property wholly by railroad, or partly
by railroad and partly by water when both are used, under a common
control, management, or arrangement, for a continuous carriage or
shipment, from one State or Territory of the United States, or the
District of Columbia, to any other State or Territory of the United
States, or the District of Columbia, or from any place in the United
States to an adjacent foreign country, or from any place in the United
States through a foreign country to any other place in the United
States, and also to the transportation in like manner of property
shipped from any place in the United States to a foreign country and
carried from such place to a port of trans-shipment, or shipped from a
foreign country to any place in the United States and carried to such
place from a port of entry either in the United States or an adjacent
foreign country: Provided, however, That the provisions of this act
shall not apply to the transportation of passengers or property, or to
the receiving, delivering, storage, or handling of property, wholly
within one State, and not shipped to or from a foreign country from or
to any State or Territory as aforesaid..."
SHERMAN ANTI-TRUST ACT 1890
(Quoted by Justice Harlan in the majority opinion on NORTHERN
SECURITIES CO. v. U.S., 193 U.S. 197 (1904))
U.S. SUPREME COURT
NORTHERN SECURITIES CO. v. U.S., 193 U.S. 197 (1904)
193 U.S. 197
NORTHERN SECURITIES COMPANY et al., Appts., v. UNITED STATES. No. 277.
Argued December 14, 15, 1903. Decided March 14, 1904.
HARLAN, J., Judgment of the Court
http://www.tourolaw.edu/patch/Northern/Holmes.htm
SEC. 1. Every contract, combination in the form of trust or otherwise,
or conspiracy, in restraint of trade or commerce among the several
States, or with foreign nations, is hereby declared to be illegal.
Every person who shall make any such contract or engage in any such
combination or conspiracy, shall be deemed guilty of a misdemeanor,
and, on conviction thereof, shall be punished by fine not exceeding
five thousand dollars, or by imprisonment not exceeding one year, or
by both said punishments, in the discretion of the court.
SEC. 2. Every person who shall monopolize, or attempt to monopolize,
or combine or conspire with any other person or persons, to monopolize
any part of the trade or commerce among the several States, or with
foreign nations, shall be deemed guilty of a misdemeanor, and, on
conviction thereof, shall be punished by fine not exceeding five
thousand dollars, or by imprisonment not exceeding one year, or by
both said punishments, in the discretion of the court.
SEC. 3. Every contract, combination in form of trust or otherwise, or
conspiracy, in restraint of trade or commerce in any Territory of the
United States or of the District of Columbia, or in restraint of trade
or commerce between any such Territory and another, or between any
such Territory or Territories and any State or States or the District
of Columbia, or with foreign nations, or between the District of
Columbia and any State or States or foreign nations, is hereby
declared illegal. Every person who shall make any such contract or
engage in any such combination or conspiracy shall be deemed guilty of
a misdemeanor, and, on conviction thereof, shall be punished by fine
not exceeding five thousand dollars, [p*319] or by imprisonment not
exceeding one year, or by both said punishments, in the discretion of
the court.
SEC. 4. The several Circuit Courts of the United States are hereby
invested with jurisdiction to prevent and restrain violations of this
act, and it shall be the duty of the several district attorneys of the
United States, in their respective districts, under the direction of
the Attorney-General, to institute proceedings in equity to prevent
and restrain such violations. Such proceedings may be by way of
petition setting forth the case and praying that such violation shall
be enjoined or otherwise prohibited. When the parties complained of
shall have been duly notified of such petition the court shall
proceed, as soon as may be, to the hearing and determination of the
case; and, pending such petition and before final decree, the court
may at any time make such temporary restraining order or prohibition
as shall be deemed just in the premises.
SEC.5. Whenever it shall appear to the court before which .my
proceeding under section four of this act may be pending that the ends
of justice require that other parties should be brought before the
court, the court may cause them to be summoned, whether they reside in
the district in which the court is held or not, and subpoenas to that
end may be served in any district by the marshal thereof.
SEC. 6. Any property owned under any contract or by any combination,
or pursuant to any conspiracy (and being the subject thereof)
mentioned in section one of this act, and being in the course of
transportation from one State to another, or to a foreign country,
shall be forfeited to the United States, and may be seized and
condemned by like proceedings as those provided by law for the
forfeiture, seizure, and condemnation of property imported into the
United States contrary to law.
SEC. 7. Any person who shall be injured in his business or property by
any other person or corporation by reason of anything forbidden or
declared to be unlawful by this act may sue therefor in any Circuit
Court of the United States in the district [p*320] in which the
defendant resides or is found, without respect to the amount in
controversy, and shall recover threefold the damages by him sustained,
and the costs of suit, including a reasonable attorney's fee.
SEC. 8. That the word "person" or "persons," wherever used in this act
shall, be deemed to include corporations and associations existing
under or authorized by the laws of either the United States, the laws
of any of the Territories, the laws of any State, or the laws of any
foreign country.
OTHER REFERENCES
FullText of Supreme Court Cases
http://www.tourolaw.edu/patch/SupremeCourtCases.html
Gilded Age: Narrative 1884-1891
Illinois During the Gilded Age: 1884-1891
http://dig.lib.niu.edu/gildedage/narr6.html
"In the Knights' place there emerged the American Federation of
Labor's more traditional craft unionism, which organized skilled
tradesmen while largely ignoring industrial workers. The federal
government also began to pay increased attention to the railroads,
which had so aroused the ire of both the Knights of Labor and the
Grangers. In 1887 the Illinois Senator Shelby Cullom led the drafting
of the Interstate Commerce Act, which formed an Interstate Commerce
Commission devoted to regulating the railroads and other forms of
transportation."
ANTITRUST LAW
LII: Law About...Antitrust
http://www.law.cornell.edu/topics/antitrust.html
US Code 15
http://www4.law.cornell.edu/uscode/15/ch1.html
SUPREME COURT CASE LAW
FindLaw
http://www.findlaw.com/casecode/supreme.html
OUR Documents (Important documents in US History.)
http://www.ourdocuments.gov/content.php?page=learn_more&doc=51
"Agricultural Problems and Gilded Age Politics"
http://www2.austincc.edu/lpatrick/his1302/agrarian.html
"* Tariff Policies
Farmers fell victim as well to the tariff policy of the United States
during the Gilded Age. They were forced to buy all the manufactured
goods they needed for survival on a market protected by tariff
legislation at artificially high prices while selling what they
produced on a largely unprotected and highly competitive market at
depressed prices because of oversupply and foreign competition. Thus,
the tariff policy of the country often worked a double hardship on
agricultural interests.
The aim of American protective tariffs during the Gilded Age was to
try to guarantee the American market to the American manufacturer of
finished products at a profit. The federal government consciously
sought to achieve this aim as a means of encouraging the industrial
revolution after the Civil War. By putting an import tax or duty on
manufactured goods being imported into the United States by foreign
manufacturers , the government hoped to make them more expensive than
the similar American manufactured goods. This virtually guaranteed
that American consumers, seeking to maximize their disposable income,
would buy American goods. Protective tariffs were one of the many
reasons why American industry grew so quickly during the final third
of the nineteenth century."
Illinois During the Gilded Age: 1873-1876
http://dig.lib.niu.edu/gildedage/narr3.html
Politics of the Gilded Age
http://historybytes.net/webnotes/chp26-32politics.html
Poltics in the Gilded Age (sic)
POLITICS IN THE GILDED AGE
http://www.nv.cc.va.us/home/nvsageh/Hist122/Part2/GildedAPolitics.html
"* 1861 Morrill Tariff lays specific duties; readjustments follow;
average rate raised to 47% by 1864
* 1870 Reduces upward trend; 130 articles on free list
* 1872 Reduced manufactured goods tariffs by 10%
* 1875 Higher levels restored
* 1883 Lowers schedules but retains protectionist principle
* 1890 McKinley Tariff of 49.5%, provides for reciprocation
* 1894 Wilson-Gorman tariff lowers rate to 37%
* 1897 Dingey Tariff of 57% highest in history
B. PANIC OF 1893: Banks and businesses failed. Between 1893 and
1897 the nation suffered the worst economic depression ever.
Approximately 20% unemployment. Cost of living dropped.
2. REPEAL OF THE SHERMAN SILVER PURCHASE ACT: 1893. The run on
the gold reserve continued through 1894. The gold reserve was "saved"
by a bail-out arranged by J.P. Morgan. Cleveland was attacked which
was difficult since he had cancer of the jaw and a subsequent secret
operation. The crisis was ended when new gold discoveries in Alaska,
good harvests, and industrial growth brought better times.
D. WILSON-GORMAN TARIFF of 1894 was intended to reduce tariffs but
600 amendments restored most cuts."
Chronology Reconstruction & Gilded Age (1864-1900)
http://www.polytechnic.org/faculty/gfeldmeth/chron.recon.html
WILLIAM GRAHAM SUMNER, 1840-1910:
HIS LIFE AND WORK
http://www.libertarian.co.uk/lapubs/libhe/libhe006.pdf
(Libertarian article about the life and philosophy of a principal
defender of true laissez-faire.)
'William Graham Sumner, stigmatized by Richard Hofstadter as a “Social
Darwinist,” was the Gilded Age’s most renowned teacher of social
science and an indefatigable defender of liberalism and
republicanism."
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