Reform Movement
1870-1900
Conservative/Republican – Laissez Fair
“Hands Off” – When the govt tries to help the economy it usually just makes things
worse.
Pendulum View of the economy.
Cleveland Vetoed 2/3 of the bills that came to him
As a Democrat President, Cleveland often found himself fending off aggressive and
unconstitutional bills from the Republican-controlled congress. Perhaps his best known
veto became known as the Veto of the Texas Seed Bill. After a crop failure in Texas in
1886, Congress decided to “appropriate” $10,000 from the general treasury to purchase
seed grain for those farmers disastrously affected. Cleveland vetoed the measure with
these words:
I can find no warrant for such an appropriation in the Constitution, and I do not believe
that the power and duty of the general government ought to be extended to the relief of
individual suffering which is in no manner properly related to the public service or
benefit…The lesson should be constantly enforced that, though the people support the
government, the government should not support the people…Federal aid in such cases
encourages the expectation of paternal care on the part of the government and weakens
the sturdiness of our national character…
1900-????
Liberal/Democrat
Progressive Era/Welfare State
Elevator View of the Economy
Workers, farming industry (farmers, farm machine industry,) consumers, & economic
downturn lead to reform movement.
Railroads are first target. - oligarchy, collusion
- leads to Granger laws (state laws regulation railroads in medwest)
- laws upheld by Supreme Court in Munn v. Illinois (1877)
- then overturned in Wabash, St. Luis and Pacific railroad v.
Illinois(1886)only Federal Govt can regulate interstate commerce.
- leads to national pressure for a solution
- ICC created in 1887 – supposedly created agency and gave it power to reign in
railroads (discriminatory pricing, collusion & price fixing, etc.)
- ineffective – only one case successfully prosecuted in first 15 years. Presidents
ignore the law, railroads refuse to provide info and repeatedly appeal to delay
judgment until they obtain a favorable judge. (SAME AS TODAY!!!
MICROSOFT – prosecuted under Clinton admin for linking windows with other
programs with no option to separate (browser). Appealed, delayed, until Bush
came into office. Bush ended prosecution and settled. What would have
happened if democrats had won? There was a lot of talk of breaking Microsoft
up. How do all the antitrust prosecutors feel who worked on the case for years
and years? Anybody use Netscape anymore????? MCCAIN FEINGOLD, weak
law to placate the masses???? Political Parties have already found ways around
it!)
- 1901 Frank Norris – The Octopus portrays giant corporations as “a giant parasite
fattening upon the lifeblood of an entire commonwealth.”
Sherman Antitrust Act 1890
- In late 1890’s - Many studies done on the negative impact of monopolies and their
negative impact on consumers through limitation of competition.
- SAA specifically prohibits any restriction in competition though monopoly practices
- very vaguely worded.
- not enforced by presidents
- weakened by conservative courts
- monopolies continue unrestricted
Tariffs
Republicans – pro-business, want high tariffs to protect businesses from European
competition. Feel high tariffs help business and therefore help workers (businesses hire
more workers and can pay more). Also provide $ in taxes.
Democrats – want low tariffs, feels tariffs hurt everyone through higher prices, feel
competition and global trade are good.
McKinley Tariff Act 1890 – raises tariffs to highest level ever
Unions
Early Attempts to Unionize
Many local attempts in various industries
National Trades Union – open to all trades – Survives only a few years and dies after
depression of 1837
National Labor Union 1866, 60,000 members – killed by the depression of 1873
Knights of Labor 1869 – includes both skilled and unskilled, including men women and
Minorities (60,000 blacks join)
Goals – equal pay for equal work, 8 hour work day, end child labor.
They Do Not focus on higher wages
Leadership dislike strikes, but members disagree
1885 Maximum membership 700,000
1886 Blamed for the Haymarket Square and membership drops dramatically
American Federation of Labor 1886 by Samuel Gompers – Craft Union for skilled
workers only (eg electrical workers)
Women and Blacks discouraged
Focus on increasing wages, lower hours and better working conditions
Use strikes and boycotts to force Collective Bargaining
Pushed for “closed shop” where all employees were forced to join the union
International Workers of the World (Wobblies) 1905
Unskilled workers. Socialist. Radical. Violent.
Promote strikes during WWI in war related industries
The Great Railroad Strike of 1877
Baltimore & Ohio Railroad announce a 10% wage cut (2nd in 8 months)
Strike spreads throughout the country, massive violence.
Many states call on Federal Govt for assistance. President Hayes provides troops.
Sets precedent of feds supporting business owners
Eugene Debs reorganizes railroad union into an industrial union
American Railway Union ARU
Haymarket Square 1886
May 1 1886 National demonstration for the 8 hour work day
At a plant in Chicago, police break up a fight between striking workers and scabs
May 4, Haymarket Square Chicago, a protest for workers injured by police
Anarchists join the strike/protest
A bomb is thrown at a group of police, killing dozens of police & protestors
KOL are blamed (wrongly) and membership decreases dramatically
Pullman Strike 1894
Inventor of the sleeping car becomes rich and builds town for workers
Builds parks, lake, school, a theater, health and sanitary conditions are
amazing…but also restricts conduct – no alcohol, church mandatory etc.
Depression of 1893, Pullman lays of workers & reduces wages by 25%
Keeps the prices in the company store at the same high level as before
Strike starts and then goes national. ARU supports.
Even the mail gets shut down.
Grover Cleveland argues the ARU has become a trust, disrupting free trade
Calls in 2500 troops to end strike.