Robert Kennedy's  United States History Class

Subtitle

Learning Objective I
Discuss the change in values in American society and how this change was implemented at the state and federal level on industrial regulation.Discuss the acceptability of the big SIX Values Landed Frontier.




As a result of the experience that Americans had on the landed frontier up until 1890, the "big six" values (opportunity, survival of the fittest, pragmatism , the rugged individual, laissez faire, and social mobility) were found to be acceptable.


These values were found acceptable because Americans felt they- could identify with them and could, perhaps, apply them to their own lives. For example, in the landed frontier it was man vs. the environment, so competition was thought to be good. An individual who could compete against the environment and improve himself against the environment was thought of as the ideal man.


When the industrial frontier developed, Americans followed a natural course by applying the values they had relied upon in their past to their present situation. Their present state was an industrial frontier which differed from the landed frontier in one respect: man was_,pitted <l;gainst man in the competition to acquire natures scarce resources. In the landed frontier it was man vs. environment.


The problem with this type of competition was that the weaker individuals in society who could not compete with a Rockefeller or a Carnegie constituted the majority of people in society. This majority then classified the damage inflicted against them by stronger, more successful individuals as social abuses.


These social abuses came in the form of pooling, rebates, drawbacks, etc., which served the interests of the strong directly, while at times not being in the best interest of society.


By the 1890's the degree of built up dissatisfaction was so great that the majority of the American people were ready to accept a new value system and demanded that the government protect them against the social abuses inflicted upon them.



Discuss the development of government regulation and the beginning of the acceptance of a new value system within society.

As already discussed, during the period between the 1870's and early 1900's large firms expanded at the expense of smaller ones by the process of incorporation.


Trust regulation:


In the 1880's the American public began to demand effective regulation of the trusts; but the problem of regulation was seriously hampered by the federal form of government.


Corporations were chartered by the states, not the nation.


One problem was that a corporation chartered by one state had the right to do business in every other state. Consequently, corporations escaped the restrictions of strict state laws by incorporating in states such as New Jersey and West Virginia where the laws regarding issuing stock and accountability to directors were lax.



Another problem arose because the constitutions of many states contained prohibitions against monopolies or conspiracies in restraint of trade; but most state prohibitions were ineffective, especially: after the federal courts used the 14th Amendment to protect corporations.


The Supreme Court erected similar barriers against the federal government through narrow interpretations of the Constitution. In 1895, it ruled that the power to regulate interstate commerce did not cover manufacturing. This started with the Wabash Case of 1886 and continued until the early 1900's.


The Supreme Court erected similar barriers against the federal government through narrow interpretations of the Constitution. This is exemplified with the Court's actions against the Sherman Antitrust Act of 1890.






The Sherman Antitrust Act of 1890:


As a result of widespread agitation during the late 1880's, Congress enacted the Sherman Antitrust Act.


The act was signed into law by President Benjamin Harrison on July 2, 1890. It stated: "Every contract, combination in the form of a 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.. .."


See video to learn more about the Anti-Sherman Act


It is difficult to determine the precise purpose of the act.  It appears to be a tokenism to the American public because Congress provided no definition of the terms "trust," "conspiracy, and "monopoly", thus leaving the courts the task of interpreting and applying them.   

By placing responsibility upon the courts, the legislators evaded the problem and put the solution off indefinitely because, as discussed, judicial regulation proving effective.


This can be exemplified in the 1895 case of the U.S. vs. E. C. Knight & Co., in which the Supreme Court held that the mere control of 98 percent of the sugar refining of the country did not in itself constitute an act in restraint of trade.

The responsibility for the failure of the Sherman Antitrust Act should not be charged exclusively to the judiciary .


The legislature failed to amend the act; the executive failed to enforce it because the economic and social philosophy of the time had a very strong influence on their decisions and actions. It was only when the law was applied to labor unions was it somewhat effective; strikes were in restraint of trade.


The irony of the act was that it was used by big business as a tool to enforce its will against labor, for example in the Pullman strike of 1893-94.


The organization of U.S. Steel in 1901 when Andrew Carnegie sold it to J.P. Morgan climaxed the concentration of industry and transportation in large units such as pools, trusts, and holding companies .



Of the seventy-three largest industrial companies in 1900, fifty-three had not existed three years earlier.


By 1910, one percent of the nation's manufacturers accounted for 44 percent of llie t0tal industrial output.


From 1902 until America's intervention into World War I there was a move by society and different presidential administrations to bust the trust.


The result of all of this consolidation in the industrial frontier was to create the effect of mass man in mass society. This feeling of isolation which developed within the individual during this period of rapid industrial growth of the l 870's, 80's, and 90's led to the development of two types of insecurities for society:


1. Economic insecurity ......the general public needed economic guarantees.


2. Psychological insecurity ......the general public needed political intervention and protection from the new industrial trusts as the feelings of isolation and helplessness developed as a result of this new industrial growth.


Thus starting in the late l 800's government -policy was starting to move in the direction for the security for individuals within society.


This 'trend developed as a result of the pressure put on government by the common man to have the government solve the common man's problems of economic and psychological insecurity .


Thus, government was doing for the people what.the people could not done for- themselves.  This pressure put upon government in the late 1800's led to the institutionalization of these new government activities and the permanent establishment of a new value system in America with the creation of the New Deal.  


The late 1800's marked the starting point and the New Deal marked the permanent acceptability of the new values and new role and responsibility of government