Progressive Era Economic Policy Issues How did the relationship between the federal government and private business change from the 1870s to 1920? ©2012, TESCCC

CHANGING RELATIONSHIP BETWEEN THE FEDERAL GOVERNMENT AND PRIVATE BUSINESS ©2012, TESCCC

Laissez-faire government Cost May allow business practices that could take advantage of the consumer Benefit Allows the market to govern itself Based on supply and demand ©2012, TESCCC -A doctrine that opposes government intervention into business practices and the marketplace

Anti-Trust Acts Cost Law had been in place since the 1890s but was not used to regulate corporations Laissez-faire principles believed in allowing the business to work out its own destiny Benefit Giant corporations were no longer allowed to monopolize the market to set prices or control industries ©2012, TESCCC

Interstate Commerce Commission Cost Regulatory commissions were created to determine if trusts were “bad” or “good” trusts Commissions were not very effective Benefit Even though the commissions were somewhat ineffective, the idea that public good was prioritized over private greed became more apparent ©2012, TESCCC

Pure Food and Drug Act Cost Prevented the manufacture, sale, or transportation of adulterated or misbranded or poisonous or deleterious foods, drugs, medicines, and liquors, and for regulating traffic, etc. Benefit Protected the public consumption of these goods ©2012, TESCCC

FOREIGN POLICIES IMPACT ECONOMIC ISSUES ©2012, TESCCC

Chinese Exclusion Act, 1882 First major law that restricted immigration in the U.S. Extended in 1902, 1904 – and until the 1940s Enacted in reaction to West coast fears that Chinese workers were undercutting American labor and wages ©2012, TESCCC

Open Door Policy Sec. of State John Hay’s economic policy in China Gave imperial powers equal trading rights in the country in Policy spurred the Boxer Rebellion – Chinese nationalists revolted against foreign invasion U.S. had to suppress the rebellion ©2012, TESCCC

Dollar Diplomacy Taft encouraged U.S. investment in Latin America and Far East Promised military protection abroad As priorities shifted in global relations, U.S foreign policymakers returned to a goal of isolationism prior to World War I ©2012, TESCCC

Immigration Quotas 1880s – growing concern about immigration As a result of World War I, National Origins Quota Act, 1921 was passed – set the quota of legal immigrants to 3% of their current ethnic makeup in the U.S. (law changed 3 years later) ©2012, TESCCC

MONETARY POLICY ©2012, TESCCC

Federal Reserve Act, 1913 Created the central banking system Granted legal authority to issue legal tender Charged with regulating U.S. monetary policy Eventually, in 1971, America moves from the gold standard to fiat money ©2012, TESCCC

Between 1870 and 1920 Progressive reforms moved away from the laissez-faire government to offer regulations in business and industries to protect the consumer. Anti-trust acts, regulatory commissions, and multiple regulatory pieces of legislation were enacted to protect the consumer – Federal Reserve, Sherman Anti-Trust Act, etc. American foreign policy emerged on the global stage and retreated to a policy of isolationism ©2012, TESCCC