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The long and contradictory history of judicial interpretations of the Sherman Antitrust Act extended well into the twentieth century, but the courts progressively, if not consistently, prohibited pools, price fixing, and acts in restraint of trade.
Corporations could not cooperate in restraint of trade, but they could find ways to merge and grow larger and larger.71 The eventual solution was the holding company, when New Jersey—the “Traitor State”—permitted corporations to purchase and hold the shares of other corporations.
New Jersey subverted the ability of other states to control corporations, and the holding company seemed to fall outside the scope of the Sherman Antitrust Act.
To increasing numbers of Americans, a dangerous inequality formed the rotten fruit of a system that had escaped their control. Larger and larger firms dominated the economy by the 1890s, wielding a power that seemed to match those of the governments that often enabled and abetted them. The economy produced the “dangerous classes,” the very rich and the very poor. The country seemed European in an inequality that the eradication of slavery had supposedly eliminated. By the standard markers of health and well-being, life had grown worse, not better, for most Americans.
In 1895, Pingree said the vast wealth that accumulated in the midst of human misery was “more dangerous to the liberties of our republic than if all the Anarchists, Socialists, and Nihilists of Europe were let loose on our shores.” Endowing universities or building libraries, he declared, changed nothing.
Hanna more closely resembled Pingree’s original upper-crust supporters than he did the Detroit mayor. Whereas Pingree, the capitalist, grew critical of the abuses of capitalism and the need to constrain it, Hanna never lost faith in capitalism’s expansive possibilities.
To elect McKinley president, Hanna needed Pingree and men like him. Compared to that, ideology was a small thing. And, besides, the two men shared a set of pragmatic beliefs and mutual enemies. Both believed in centralization and both scorned the “bosses” who controlled politics.5
As tactics of political mobilization shifted from locally based “army” campaigns, with their mass rallies to energize loyal voters, to more centralized educational campaigns, which demanded national organization and money, fundraisers and managers like Hanna replaced older bosses for whom they were sometimes mistaken.
in 1893 and 1894, McKinley managed to maintain significant labor support even as he dispatched the National Guard. He walked a fine line, claiming that he used the Guard to suppress violence rather than to break strikes.
During his second term, Grover Cleveland fashioned himself into the Andrew Johnson of the 1890s: a man spectacularly unsuited by temperament and belief for his time and his place.
During his second term, while presiding over the most severe economic downturn of the nineteenth century, he worried mainly about the danger of government paternalism, walking backward into the future undoing what the Republicans had done. He pushed the repeal of election laws protecting black voters. He tried to reform the McKinley Tariff. Nearly everything that had seemed a virtue to his supporters during his first term became a vice or a sign of hypocrisy in his second.
The only thing softening the blow was that the economy had already conditioned workers to endure a quota of misery. The general insecurity of wage work and its rising incidence in American society made the depression only a more intense version of what many workers already knew. In the generally prosperous years of 1890 and 1900, when the federal census measured unemployment, 15–20 percent of workers in industrial states lacked work at some time during the year. The average duration of unemployment ranged between three and four months.
By the eve of the election of 1894, the conditions of 1892 had dramatically reversed themselves. The old Democratic Party was badly wounded everywhere except the South
In 1894 the electoral pendulum made yet another of the era’s characteristically dramatic swings. The Democrats lost 125 seats; the Republicans gained 130.
Even the South sent a few Republicans to Congress. The Republicans also gained control of the Senate, 44–34.
The continuing violent swings between Democrats and Republicans coupled with the rise of the Populists disguised a significant and consistent drift toward centralization and increased federal power.
The process was already under way with the slow rejection of fee-based governance and the growth of fledgling bureaucracies in the Post Office and the USDA.
What rendered this process far less smooth and made it seem contradictory and inconsistent was the simultaneous expansion of the third branch of government, the courts. The extension of judicial authority launched a battle between the branches of the government, which involved power, ideology, and the very nature of governance. The clash between the legislative and judicial branches created an ideological whitewater as antimonopoly, labor, and evangelical reforms passed by Congress and the legislatures encountered judicial resistance. The contest was less over big government versus small
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Labor republicanism focused on the need to “engraft republican principles” onto work and the economy, while liberal judges emphasized freedom of contract and competition.
For Field, the Fourteenth Amendment included the right to pursue a lawful calling “without other restraint than such as equally affects all persons.”
Turning people into commodities was impermissible, but turning people’s labor into a commodity—a piece of property to be bought and sold—was the source of progress. Freedom became the protection of property. Rarely has a minority opinion been so influential.
Substantive due process, as used in the Gilded Age, was largely the work of Thomas Cooley, the same man who headed the ICC. He wrote his A Treatise on the Constitutional Limitations Which Rest Upon the Legislative Power of the States of the Union (1868) just as the postbellum American economy began its transition to large factories and wage labor.
He contended that the due process clauses of the state constitutions imposed “substantive” limits on the power of legislatures to interfere with private property rights, which existed in the common law prior to the Constitution. These sacred property rights limited popular sovereignty.
By property he and other liberal judges meant not only real property, but also anything that had value, or potential value, in the marketplace. This concept of property proved wonderfully plastic, expanding to include gains anticipated in the future.
For Tiedeman, a natural right was what judges thought people believed to be a natural right, and such rights became the basis of law and part of the “unwritten” as well as the written Constitution. The actual Constitution, he argued, was just the skeleton; the flesh and blood was the “unwritten Constitution,” which was in practice largely the work of the Supreme Court. Tiedeman was no originalist; he admitted that the Constitution changed with the times. He argued that changes elucidated by judges reflected the evolving morality of the nation.
the Supreme Court ruled in Lochner v. New York that the due process clause of the Fourteenth Amendment contained an implicit guarantee of “liberty of contract.” The state could not regulate the number of hours bakers worked.
The Sherman Antitrust Act became virtually a dead letter against corporations for much of the 1890s, but unions, which were not the original concern of the legislation, became its targets.
Of the thirteen decisions invoking antitrust law between 1890 and 1897, twelve involved labor unions. Ten came during the Pullman Strike.
The court’s decision in Santa Clara v. Southern Pacific (1886) had been a victory for the railroads since it embraced the idea of corporate personhood. In Santa Clara the Supreme Court had, without discussion or argument, ruled that in regard to the assessment of taxes the equal protection clause applied to corporations in California. The decision itself, however, said nothing about the status of corporations as persons. That came in a preface to the decision by the court reporter, and it did not articulate what personhood might involve.
Between 1894 and 1896, Howells published three essays on the themes of liberty, equality, and fraternity.
That popular magazines would publish such essays by a thoughtful American writer revealed the extent to which the crisis had led to a questioning of existing values.
Howells organized the first essay around equality;
Did the general desire for wealth among all classes and the organization of the economy to fulfill such desires make the United States a plutocracy rather than a democracy?
He thought that the values of capitalism and democracy were antithetical, and that Americans needed to choose between them.
Howells, however, differed from Gompers because he thought that nearly all Americans, rich and poor, could be labeled plutocrats since they assented to the current economic system. “Whether he gets rich or not … ,” Howells wrote, “the man who pays wages with the hope of profit to himself is a plutocrat, and the man who takes wages upon such terms, believing them right, is in principle a plutocrat; for both approve of the gain of money which is not earned, and agree to the sole arrangement by which the great fortunes are won or the worship of wealth is perpetuated.”
Democratic values had not penetrated industry, but plutocratic values had invaded politics despite the expansion of suffrage.
The failure of American democracy registered in the people’s assent to a plutocracy: “If we have a plutocracy, it may be partly because the rich want it, but it is infinitely more because the poor choose it or allow it.”
Howells’s second essay, “The Nature of Liberty,” appeared in the Forum in 1895.
In a nod to new conditions, Howells thought freedom had to yield a common good and not just individual good, and that the common good had to include a guarantee of the means of a livelihood, for without this there could be no independence, on which freedom rested: “Till a man is independent he is not free.”
He now proclaimed that “liberty and poverty are incompatible.” Opportunity was only a phase of liberty; “safety is another.” Freedom from want and fear were essential: “Liberty cannot stop short of it without ceasing to be.”
The final essay, “Who Are Our Brethren?” concerned fraternity.
The idea that those suffering were paying the price for their own faults was no longer tenable.
Howells did not claim fraternity was natural. He deemed it supernatural, by which he meant social. It was necessary for freedom and equality in a mass society.
Technically, the United States was bimetallist since silver coins still circulated, but it was a de facto gold standard nation since its currency and bonds were redeemable in gold and the Treasury always paid out in gold. The gold continued to drain away. The combination of American depression and the growing strength of bimetallists in Congress led European investors to liquidate their American holdings and to withdraw their money in gold.
Default—which simply meant abandoning the gold standard—was precisely what many in Congress wanted.
Arguments against gold sometimes acquired a tinge of anti-Semitism, but anti-Semitism was the language of almost any nineteenth-century discussion of money and banking, and the Populists, the leading critics of the gold standard, were remarkably tolerant in this respect.
When Debs asked, “What is to be done?” part of the answer was easy, and Populists, Republicans, and most Democrats agreed on it: disavow Grover Cleveland and, as far as possible, prevent him from doing any more damage. So complete was the disaster of the Cleveland administration that the election should have been no contest at all. The events of the preceding four years had seemingly killed the chances of Democrats as the party of small government. Most members of Cleveland’s party treated him like an animated corpse, slowly decaying in the White House. He was an unpleasant and unfortunate
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The Democrats in 1892 had accused the Republicans of being hostile to labor, and the tariff of being the tool of callous employers. The Republicans reversed the accusation. Now the Democrats were hostile to labor, and the tariff was the route to prosperity. Outside of the machine-dominated wards of the cities and a few states like Illinois controlled by pro-labor Democrats, it was hard to see why workers would vote for Democrats. Labor hated Cleveland for Pullman and its aftermath. Debs, who had left the Democratic Party, was labor’s hero.
Eugene Debs stood as the real wild card for the Populists; he had declared himself a Populist in 1896 and launched a national speaking tour.
It appeared that Debs did not have a compelling answer to his own question of “What is to be done?” Still, the “middle of the road” faction of the Populists, who wanted to remain an independent party rather than fuse with the Democrats to stop the resurgent Republicans, embraced Debs as their great hope.
