The Progressive Era (Part I) NOTES

Essential Question: How have people made American society change?

I. The rise of big business created several economic problems, the most obvious being the lack of competition. There were some main types of businesses that were particularly problematic:

A. Monopolies were when one business controls an entire industry because there is not competition. Sometimes a small group of companies can function as a monopoly as well. Some monopolies are allowed today, but as a general rule, government does not allow this to happen.

B. Trusts were when a group of companies in the same field are run by a single board of trustees. So despite being separate companies on paper, the same people make decisions for all the companies. Trusts create a form of monopoly.

C. Conglomerates are large corporations that own companies in unrelated fields. These are still legal today, but in the days of big business, they also caused problems.

D. Pools were when companies in the same industry make agreements with each other to limit competition and pad their profits. Railroad companies did this, fixing prices.

E. Holding Companies is when a corporation bought a controlling interest in another company in the same field. This gave them the ability to control what the company did without buying it outright. This was a way in which they tried to get around anti-trust legislation.

II. Industrialists—entrepreneurs— robber barons A. Andrew Carnegie, a Scottish immigrant, invested factories that produced steel at a time when steel was beginning to be the preferred building material.

B. John D. Rockefeller ran the Standard Oil Company. As oil became an important resource, Standard Oil became wealthy and powerful.

C. J. P. Morgan was a banking tycoon who helped fund the rise of big business.

D. Henry Ford began the Ford Motor Company that mass produced the Model T, the first affordable automobile. Ford’s company pioneered many new manufacturing techniques, such as the use of the modern assembly line.

III. Attitudes toward business and society A. Laissez Faire was the belief, going back the founding of the United States, that government should stay out of the economy.

B. Social Darwinism was the belief that, like the natural world, the strongest members of society succeeded and that weak struggled. It was used to justify the gap between the rich and the poor.

C. Philanthropy is the act of doing good works—like donating money to building things for the benefit of the community, like parks, libraries and hospitals. Late in life, many of the big industrialists gave away their fortunes to do things like this.

D. Government regulation became necessary due to the problems of industrialization. Since 1900, the government has gotten increasingly involved in the economy, regulating business in many ways, from safety standards to pollution standards.

IV. Government policies toward business began to change during this era, known as the Progressive Era.

A. Legislation regulating business started to become more common as government started to feel a responsibility to protect the people.

1. Interstate Commerce Commission (1887) gave the federal government the ability to regulate trade between states. Despite this law being passed in 1887, it was a challenge for the government to enforce.

2. Sherman Anti-trust Act (1890) was passed to preserve competition by stopping forms of monopolies, like trusts. This legislation was also not enforced much until Teddy Roosevelt took office.

3. Pure Food and Drug/ Meat Inspection Acts (1906) were passed at the urging of President Roosevelt after reading Upton Sinclair’s The Jungle. It gave the federal government the authority to inspect food and food- producing factories to make sure the food purchased by consumers was safe.

4. Employers’ Liability Act of 1906 made employers compensate employees who were injured on the job. Before this, the employees who were injured on the job were left on their own.

5. Clayton Anti-trust Act of 1914 expanded federal power to prevent anti- competition practices in business.

6. Federal Trade Commission (FTC) Act of 1914 gave the federal government expanded powers to protect consumers in the United States, created the FTC to investigate into unfair business practices and prosecute any wrongdoings.

7. Government also began setting laws on working conditions, although this was usually done at the state level. State governments sets laws on minimum wage, the length of the work day and/or, safety standards and child labor.

B. Supreme Court Decisions 1. Munn v. Illinois (1877) was over grain elevators in the state of Illinois. The Grangers felt that the operators of the railroads and the associated elevators were taking advantage and denying them due process under law. The Supreme Court ruled that states could set prices on business that were operated in the public good.

2. Wabash, St. Louis & Pacific Railway Co. v. Illinois (1886) established the power of federal government to regulate trade between states, not individual states. It created the Interstate Commerce Commission to oversee trade over multiple states.

3. United States v. E. C. Knight Company (1895) came about when the American Sugar Refining Company bough out all of its competitors to form a monopoly. The United States sued, citing a violation of the Sherman Anti-Trust Act. In this case, the Court ruled against the government, limiting it’s ability to regulate monopolies.

4. In re Debs (1895) was a case about labor leader Eugene V. Debs’ refusal to follow a court order to stop the Pullman Strike (1894). The strike had turned violent, prompting the government’s injunction to stop the strike and force the workers back on the job. Debs refused and was charged with contempt of court.

The issue behind the case was whether or not the federal government had the right to issue the injunction because it was unclear if it was a inter- or intra-state case. The Court ruled that the federal government could issue the injunction because the federal government could regulate interstate trade. It also set that government had a responsibility to do thing to “ensure the general welfare of the public.”

5. Northern Securities v. the United States (1904) was the case President Teddy Roosevelt brought against J. P. Morgan’s monopoly on the western railroads. Enforcing the Sherman Anti-Trust Act, the court ruled that the monopoly was illegal and ordered the Northern Securities Company disbanded. The Court’s attitude toward regulating monopolies from the E. C. Knight case was that the federal government could not do it. This case reversed the Court’s stance.

6. Swift & Co. v. United States (1905) was a case concerning a meat trust that developed in Chicago. The companies engaged in price fixing— where companies make agreements to all sell things for a certain price so they can make higher profits. Local authorities served the company with an injunction to stop conducting business.

The company sued, claiming the federal government did not have the power to issue the order. The Court upheld the federal government’s ability to regulate trade, again showing the reversal from the decision in the Knight case.

7. Lochner v. New York (1905) was a step backward in the Progressive Era. A New York State law limiting the work day for bakers was struck down by the Supreme Court for being a violation of the Fourteenth Amendment. The Court reasoned that government had no right to interfere with employment contracts. The Court did assert that in cases where work was dangerous—like mining—that the government could interfere, but only in extreme cases.

8. Muller v. Oregon (1908) reversed the Lochner decision. A laundry business in Oregon was fined for being in violation of a state law limiting the work day for women to under ten hours. Muller, the owner of the business, appealed, hoping the Court would rule as it did in Lochner. The Court did not, however. It instead ruled that the labor law was constitutional, meaning that states could set labor laws that effected employment contracts.

V. The Labor Movement A. Collective bargaining is when a group of employees send representatives to negotiate with their employer for them as a group to get better treatment.

B. When employee’s demands are not being taken seriously, they can call a strike—when no one shows up to work to force the employer to listen to the employee’s demands. The government didn’t allow strikes either, often sending police or troops to break up the strike. Companies often hired their own “strike breakers” to attack workers on picket lines.

C. The Knights of Labor (U of M), American Federation of Labor (AFL) and the Industrial Workers of the World (IWW) are three of the most influential unions from this time.

D. Labor conflict 1. Great Railway Strike (1877) took place in West Virginia when the B&O Railroad cut wages for the second time in one year. The workers refused to work until wages were restored. The government acted by sending in the state militia—who refused to use force against the strikers—and, later, federal troops. The strike spread to other cities and turned violent as mobs of unhappy workers rioted. It took the government 45 days to force and end to the strike.

2. Haymarket Riot (1886) occurred during a large, nation-wide strike over limiting the work day from 12 hours to 8 hours. In Chicago, tensions between the police and the workers were intense as police fired on a crowd showing support for the workers a few days earlier.

Another rally was held at Haymarket Square. When police came to disperse the crowd, a bomb exploded and the square erupted into chaos. Eight policemen and four workers were killer; many more were wounded. The riot gave unions and strikes a bad name for a while and was a set back to getting a shorter work day.

3. Homestead Strike (1892) took place when Carnegie Steel demanded a wage cut from its workers. When they refused, management staged a lock-out— when the employees aren’t allowed to go into to work until they accept management’s demand (the opposite of a strike).

The workers tried to stop the plant from operating with new workers who cross the picket line—called scabs. The company sent in strikebreaker—from the Pinkerton Security firm—to try to open the plant. The workers and strikebreakers battled and the state militia had to be called in to put down the strike. The strike destroyed the union.

4. Pullman Strike (1894) involved the railroads. The Pullman Palace Car Company cut workers’ wages. When other railroad union member refused to run trains with Pullman cars on them, management decided to have a lock out. The strike got violent as crowds rioted. Rail traffic was halted.

President Grover Cleveland sent federal troops in to put down the striker because it was interfering with the delivery of mail and threatened the general good of the country. Union leader Eugene Debs was later convicted for failing to stop the strike.

5. Anthracite Coal Strike (1902) threatened to create a coal shortage just a winter was looming for the northeast. Workers wanted several demands met and management was unwilling to listen. When the miners struck, President Teddy Roosevelt got involved.

TR threatened to nationalize the mines, forcing labor to the negotiation table. Roosevelt negotiated an agreement between the two side, winning the miners most of the demands.

6. Lawrence Textile Strike (1912) took place in Massachusetts. Management decided to cut wages when they were forced to comply with a new law limiting the work week for women and children. The workers struck and things got nasty.

Management turned fire hoses on the workers; workers threw ice at the windows. The militia was called out to stop the strike. The strike brought the issues of the mills to national attention. The workers won some improvements in wages and working conditions.