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CONTEMPORARY
AMERICAN HISTORY

1877-1913

BY

CHARLES A. BEARD

ASSOCIATE PROFESSOR OF POLITICS IN
COLUMBIA UNIVERSITY

NEW YORK
THE MACMILLAN COMPANY
1914

All rights reserved

Copyright, 1914,
By THE MACMILLAN COMPANY.
Set up and electrotyped. Published February, 1914.

Norwood Press
J. S. Cushing Co.—Berwick & Smith Co.
Norwood, Mass., U.S.A.

PREFACE

In teaching American government and politics, I constantly meet large numbers of students who have no knowledge of the most elementary facts of American history since the Civil War. When they are taken to task for their neglect, they reply that there is no textbook dealing with the period, and that the smaller histories are sadly deficient in their treatment of our age.

It is to supply the student and general reader with a handy guide to contemporary history that I have undertaken this volume. I have made no attempt to present an "artistically balanced" account of the last thirty-five years, but have sought rather to furnish a background for the leading issues of current politics and to enlist the interest of the student in the history of the most wonderful period in American development. The book is necessarily somewhat "impressionistic" and in part it is based upon materials which have not been adequately sifted and evaluated. Nevertheless, I have endeavored to be accurate and fair, and at the same time to invite on the part of the student some of that free play of the mind which Matthew Arnold has shown to be so helpful in literary criticism.

Although the volume has been designed, in a way, as a textbook, I have thrown aside the methods of the almanac and chronicle, and, at the risk of displeasing the reader who expects a little about everything (including the Sioux war and the San Francisco earthquake), I have omitted with a light heart many of the staples of history in order to treat more fully the matters which seem important from the modern point of view. I have also refused to mar the pages with black type, paragraph numbers, and other "apparatus" which tradition has prescribed for "manuals." Detailed election statistics and the guide to additional reading I have placed in an appendix.

In the preparation of the book, I have made extensive use of the volumes by Professors Dunning, Sparks, Dewey, and Latané, in the American Nation Series, and I wish to acknowledge once for all my deep debt to them. My colleague, Mr. B. B. Kendrick, read all of the proofs and saved me from many an error. Professor R. L. Schuyler gave me the benefit of his criticisms on part of the proof. To Dr. Louis A. Mayers, of the College of the City of New York, I am under special obligations for valuable suggestions as to arrangement and for drafting a large portion of Chapter III. The shortcomings of the book fall to me, but I shall be recompensed for my indiscretions, if this volume is speedily followed by a number of texts, large and small, dealing with American history since the Civil War. It is showing no disrespect to our ancestors to be as much interested in our age as they were in theirs; and the doctrine that we can know more about Andrew Jackson whom we have not seen than about Theodore Roosevelt whom we have seen is a pernicious psychological error.

CHARLES A. BEARD.

Columbia University,
November, 1913.

TABLE OF CONTENTS

CONTEMPORARY AMERICAN HISTORY

CHAPTER I

THE RESTORATION OF WHITE DOMINION
IN THE SOUTH

When President Hayes was inaugurated on March 4, 1877, the southern whites had almost shaken off the Republican rule which had been set up under the protection of Federal soldiers at the close of the Civil War. In only two states, Louisiana and South Carolina, were Republican governors nominally in power, and these last "rulers of conquered provinces" had only a weak grip upon their offices, which they could not have maintained for a moment without the aid of Union troops stationed at their capitals. By secret societies, like the Ku Klux Klan, and by open intimidation, the conservative whites had practically recovered from the negroes, whom the Republicans had enfranchised, the political power which had been wrested from the old ruling class at the close of the War. In this nullification of the Fifteenth Amendment to the Federal Constitution and other measures designed to secure the suffrage for the former bondmen, President Grant had acquiesced, and it was openly rumored that Hayes would put an end to the military régime in Louisiana and South Carolina, leaving the southern people to fight out their own battles.

Nevertheless, the Republicans in the North were apparently loath to accept accomplished facts. In their platform of 1876, upon which Hayes was elected, they recalled with pride their achievement in saving the Union and purging the land of slavery; they pledged themselves to pacify the South and protect the rights of all citizens there; they pronounced it to be a solemn obligation upon the Federal government to enforce the Civil War amendments and to secure "to every citizen complete liberty and exact equality in the exercise of all civil, political, and public rights." Moreover, they charged the Democratic party with being "the same in character and spirit as when it sympathized with treason."

But this vehement declaration was only the death cry of the gladiators of the radical Republican school. Stevens and Sumner, who championed the claims of the negroes to full civil and political rights, were gone; and the new leaders, like Conkling and Blaine, although they still waxed eloquent over the wrongs of the freedmen, were more concerned about the forward swing of railway and capitalist enterprises in the North and West than they were about maintaining in the South the rule of a handful of white Republicans supported by negro voters. Only a few of the old-school Republicans who firmly believed in the doctrine of the "natural rights" of the negro, and the officeholders and speculators who were anxious to exploit the South really in their hearts supported a continuance of the military rule in "the conquered provinces."

Moreover, there were special circumstances which made it improbable that President Hayes would permit the further use of troops in Louisiana and South Carolina. His election had been stoutly disputed and it was only a stroke of good fortune that permitted his inauguration at all. It was openly charged that his managers, during the contest over the results of the election in 1876, had promised the abolition of the military régime in the South in return for aid on the part of certain Democrats in securing a settlement of the dispute in his favor. Hayes himself had, however, maintained consistently that vague attitude so characteristic of practical politicians. In his speech of acceptance, he promised to help the southern states to obtain "the blessings of honest and capable self-government." But he added also that the advancement of the prosperity of those states could be made most effectually by "a hearty and generous recognition of the rights of all by all." Moreover, he approved a statement by one of his supporters to the effect that he would restore all freemen to their rights as citizens and at the same time obliterate sectional lines—a promise obviously impossible to fulfill.

Whether there was any real "bargain" between Hayes and the Democratic managers matters little, for the policy which he adopted was inevitable, sooner or later, because there was no active political support even in the North for a contrary policy. A few weeks after his inauguration Hayes sent a commission of eminent men to Louisiana to investigate the claims of the rival governments there—for there were two legislatures and two governors in that commonwealth contending for power. The commission found that the Republican administration, headed by Governor Packard, was little more than a sham, and advised President Hayes of the fact. Thereupon the President, on April 9, 1877, ordered the withdrawal of the Federal troops from the public buildings, and Louisiana began the restoration of her shattered fortunes under the conservative white leadership. A day later, the President also withdrew the troops from the capitol at Columbia, South Carolina, and the Democratic administration under Governor Wade Hampton, a former Confederate veteran, was duly recognized. Henceforward, the freedmen of the South were to depend upon the generosity of the whites and upon their own collective efforts, aided by their sympathizers, for whatever civil and political rights they were permitted to enjoy.

The Disfranchisement of the Negro

Having secured the abolition of direct Federal military interference with state administrations in the South, the Democrats turned to the abrogation of the Federal election laws that had been passed in 1870-1871, as a part of the regular reconstruction policy for protecting the negroes in the exercise of the suffrage. These election laws prescribed penalties for intimidation at the polls, provided for the appointment, by Federal circuit courts, of supervisors charged with the duty of scrutinizing the entire election process, and authorized the employment of United States marshals, deputies, and soldiers to support and protect the supervisors in the discharge of their duties and to keep the peace at the polls.

These laws, the Republican authors urged, were designed to safeguard the purity of the ballot, not only in the South but also in the North, and particularly in New York, where it was claimed that fraud was regularly employed by the Democratic leaders. John Sherman declared that the Democrats in Congress would be a "pitiful minority, if those elected by fraud and bloodshed were debarred," adding that, "in the South one million Republicans are disfranchised." Democrats, on the other hand, replied that these laws were nothing more than a part of a gigantic scheme originated by the Republicans to fasten their rule upon the country forever by systematic interference with elections. Democratic suspicions were strengthened by reports of many scandals—for instance, that the supervisors in Louisiana under the Republican régime had registered "eight thousand more colored voters than there were in the state when the census was taken four years later." Undoubtedly, there were plenty of frauds on both sides, and it is an open question whether Federal interference reduced or increased the amount.

At all events, the Democrats, finding themselves in a majority in the House of Representatives in 1877, determined to secure the repeal of the "force laws," and in their desperation they resorted to the practice of attaching their repeal measures to appropriation bills in the hope of compelling President Hayes to sign them or tying up the wheels of government by a stoppage in finances. Hayes was equal to the occasion, and by a vigorous use of the veto power he defeated the direct assaults of the Democrats on the election laws. At length, however, in June, 1878, he was compelled to accept a "rider" in the form of a proviso to the annual appropriation bill for the army making it impossible for United States marshals to employ federal troops in the execution of the election laws. While this did not satisfy the Democrats by any means, because it still left Federal supervision under the marshals, their deputies and the election supervisors, it took away the main prop of the Republicans in the South—the use of troops at elections.

The effect of this achievement on the part of the Democrats was apparent in the succeeding congressional election, for they were able to carry all of the southern districts except four. This cannot be attributed, however, entirely to the suppression of the negro vote, for there was a general landslide in 1878 which gave the Democrats a substantial majority in both the House and the Senate. Inasmuch as a spirit of toleration was growing up in Congress, the clause of the Fourteenth Amendment excluding from Congress certain persons formerly connected with the Confederacy, was not strictly enforced, and several of the most prominent and active representatives of the old régime found their way into both houses. Under their vigorous leadership a two years' political war was waged between Congress and the President over the repeal of the force bills, but Hayes won the day, because the Democrats could not secure the requisite two-thirds vote to carry their measures against the presidential veto.

However, the Supreme Court had been undermining the "force laws" by nullifying separate sections, although it upheld the general principle of the election laws against a contention that elections were wholly within the control of state authorities. In the case of United States v. Reese, the Court, in 1875, declared void two sections of the law of 1870 "because they did not strictly limit Federal jurisdiction for protection of the right to vote to cases where the right was denied by a state," but extended it to denials by private parties. In the same year in the case of United States v. Cruikshank the Court gave another blow to Federal control, in the South. A number of private citizens in Louisiana had waged war on the blacks at an election riot, and one of them, Cruikshank, was charged with conspiracy to deprive negroes of rights which they enjoyed under the protection of the United States. The Supreme Court, however, held that the Federal government had no authority to protect the citizens of a state against one another, but that such protection was, as always, a duty of the state itself. Seven years later the Supreme Court, in the case of United States v. Harris, declared null that part of the enforcement laws which penalized conspiracies of two or more citizens to deprive another of his rights, on the same ground as advanced in the Louisiana case.[1]

On the withdrawal of Federal troops and the open abandonment of the policy of military coercion, the whites, seeing that the Federal courts were not inclined to interfere, quickly completed the process of obtaining control over the machinery of state government. That process had been begun shortly after the War, taking the form of intimidation at the polls. It was carried forward another step when the "carpet baggers" and other politicians who had organized and used the negro vote were deprived of Federal support and driven out. When this active outside interference in southern politics was cut off, thousands of negroes stayed away from the polls through sheer indifference, for their interest in politics had been stimulated by artificial forces—bribery and absurd promises. Intimidation and indifference worked a widespread disfranchisement before the close of the seventies.

These early stages in the process of disfranchisement were described by Senator Tillman in his famous speech of February 26, 1900. "You stood up there and insisted that we give these people a 'free vote and a fair count.' They had it for eight years, as long as the bayonets stood there.... We preferred to have a United States army officer rather than a government of carpet baggers and thieves and scallywags and scoundrels who had stolen everything in sight and mortgaged posterity; who had run their felonious paws into the pockets of posterity by issuing bonds. When that happened we took the government away. We stuffed the ballot boxes. We shot them. We are not ashamed of it. With that system—force, tissue ballots, etc.—we got tired ourselves. So we had a constitutional convention, and we eliminated, as I said, all of the colored people whom we could under the Fourteenth and Fifteenth Amendments." The experience of South Carolina was duplicated in Mississippi. "For a time," said the Hon. Thomas Spight, of that state, in Congress, in 1904, "we were compelled to employ methods that were extremely distasteful and very demoralizing, but now we are accomplishing the same and even better results by strictly constitutional and legal procedure." It should be said, however, that in the states where the negro population was relatively smaller, violence was not necessary to exclude the negroes from the polls.

A peaceful method of disfranchising negroes and poor whites was the imposition of a poll tax on voters. Negroes seldom paid their taxes until the fight over prohibition commenced in the eighties and nineties. Then the liquor interests began to pay the negroes' poll taxes and by a generous distribution of their commodities were able to carry the day at the polls. Thereupon the prohibitionists determined to find some effective constitutional means of excluding the negroes from voting.

This last stage in the disfranchisement process—the disqualification of negroes by ingenious constitutional and statutory provisions—was hastened by the rise during the eighties and nineties of the radical or Populist party in the South, which evenly balanced the Democratic party in many places and threatened for a time to disintegrate the older organization. In this contest between the white factions a small number of active negroes secured an extraordinary influence in holding the balance of power; and both white parties sought to secure predominance by purchasing the venal negro vote which was as large as, or perhaps larger than, the venal white vote in such northern states as Connecticut, Rhode Island, or Indiana. The conservative wing of the white population was happy to take advantage of the prevailing race prejudice to secure the enactment of legislation disfranchising a considerable number of the propertyless whites as well as the negroes; and the radicals grew tired of buying negro voters.

Out of this condition of affairs came a series of constitutional conventions which devised all sorts of restrictions to exclude the negroes and large numbers of the "lower classes" from voting altogether, without directly violating the Fifteenth Amendment to the Federal Constitution providing against disfranchisement on account of race, color, or previous condition of servitude.

The series of conventions opened in Mississippi in 1890, where the Populistic whites were perhaps numerically fewest. At that time Mississippi was governed under the constitution of 1868, which provided that no property or educational test should be required of voters, at least not before 1885, and also stipulated that no amendment should be made except by legislative proposal ratified by the voters. Notwithstanding this provision, the legislature in February, 1890, called a convention to amend the constitution "or enact a new constitution." This convention proceeded to "ordain and establish" a new frame of government, without referring it to the voters for ratification; and the courts of the state set judicial sanction on the procedure, saying that popular ratification was not necessary. This constitution provides that every elector shall, in addition to possessing other qualifications, "be able to read any section of the constitution of this state; or he shall be able to understand the same when read to him or to give a reasonable interpretation thereof." Under such a general provision everything depends upon the attitude of the election officials toward the applicants for registration, for it is possible to disfranchise any person, no matter how well educated, by requiring the "interpretation" of some obscure and technical legal point.

Five years later South Carolina followed the example of Mississippi, and by means of a state convention enacted a new constitution disfranchising negroes; and put it into force without submitting it to popular ratification.[2] The next year (1896) the legislature of Louisiana called a convention empowered to frame a new constitution and to put it into effect without popular approval. This movement was opposed by the Populists, one of whom declared in the legislature that it was "a step in the direction of taking the government of this state out of the hands of the masses and putting it in the hands of the classes." In spite of the opposition, which was rather formidable, the convention was assembled, and ordained a new frame of government (1898) disfranchising negroes and many whites. The Hon. T. J. Symmes, addressing the convention at the close, frankly stated that their purpose was to establish the supremacy of the Democratic party as the white man's party.

Four principal devices are now employed in the several constitutional provisions disfranchising negroes: (1) a small property qualification, (2) a prerequisite that the voter must be able to read any section of the state constitution or explain it, when read, to the satisfaction of the registering officers, (3) the "grandfather clause," as in Louisiana where any person, who voted on or before 1867 or the son or grandson of such person, may vote, even if he does not possess the other qualifications; and (4) the wide extension of disfranchisement for crimes by including such offenses as obtaining money under false pretenses, adultery, wife-beating, petit larceny, fraudulent breach of trust, among those which work deprivation of the suffrage.

The effect of these limitations on the colored vote has been to reduce it seriously in the far South. If the negro has the amount of taxable property required by the constitution, he is caught by the provision which requires him to explain a section of the state constitution to the satisfaction of the white registering officers. The meanest white, however, can usually get through the net with the aid of his grandfather, or by showing his expertness in constitutional law. Mr. J. C. Rose has published the election statistics for South Carolina and Mississippi;[3] it appears that in those states there were, in 1900, about 350,796 adult male negroes and that the total Republican vote in both commonwealths in the national election of that year was only 5443. At a rough guess perhaps 2000 votes of this number were cast by white men, and the conclusion must be that about ninety-nine out of every hundred negroes failed to vote for President in those states. It is fair to state, however, that indifference on the part of the negroes was to some extent responsible for the small vote.

The legal restrictions completed the work which had been begun by intimidation. Under the new constitution of 1890 in Mississippi, only 8615 negroes out of 147,000 of a voting age were registered. In four years, the number registered in Louisiana fell from 127,000 in 1896 to 5300 in 1900. This was the exact result which the advocates of white supremacy desired to attain, and in this they were warmly supported by eminent Democrats in the North. "The white man in the South," said Mr. Bryan in a speech in New York, in 1908, "has disfranchised the negro in self-protection; and there is not a Republican in the North who would not have done the same thing under the same circumstances. The white men of the South are determined that the negro will and shall be disfranchised everywhere it is necessary to prevent the recurrence of the horrors of carpet bag rule."

Several attempts have been made to test the constitutionality of these laws in the Supreme Court of the United States, but that tribunal has been able to avoid coming to a direct decision on the merits of the particular measures—and with a convincing display of legal reasoning. The Constitution of the United States simply states that no citizen shall be deprived of the right to vote on account of race, color, or previous condition of servitude, and that the representation of any state in Congress shall be reduced in the proportion to which it deprives adult male citizens of the franchise. The ingenious provisions of the southern constitutions do not deprive the negro of the right to vote on account of his color, but on account of his grandfather, or his inability to expound the constitution, or his poverty. In one of the cases before the Supreme Court, the plaintiff alleged that the Alabama constitution was in fact designed to deprive the negro of the vote, but the Court answered that it could not afford the remedy, that it could not operate the election machinery of the state, and that relief would have to come from the state itself, or from the legislative and political departments of the Federal government.[4]

Social Discrimination against the Negro

The whites in the South were even less willing to submit to anything approaching social equality with the negro than they were to accept political equality. Discriminations against the negro in schools, inns, theaters, churches, and other public places had been common in the North both before and after the Civil War, and had received judicial sanction; and it may well be imagined that the southern masters were in no mood, after the War, to be put on the same social plane as their former slaves, and the poor whites were naturally proud of their only possession—a white skin. Knowing full well that this temper prevailed in the South the radical Republicans in Congress had pushed through on March 1, 1875, a second Civil Rights Act designed to establish a certain social equality, so far as that could be done by law.

The spirit of this act was reflected in the preamble: "Whereas it is essential to just government, we recognize the equality of all men before the law, and hold that it is the duty of government in its dealings with the people to mete out equal and exact justice to all, of whatever nativity, race, color, or persuasion, religious or political; and it being the appropriate object of legislation to enact great fundamental principles into law." After this profession of faith, the act proceeds to declare that all persons within the jurisdiction of the United States shall be entitled to the full and equal enjoyment of the accommodations, advantages, facilities, and privileges of inns, public conveyances on land or water, theaters and other places of amusement, subject to limitations applied to all alike, regardless of race or color. The act further provided that in the selection of jurors no discrimination should be made on account of race, color, or previous condition of servitude under a penalty of not more than $5,000. Jurisdiction over offenses was conferred upon the district and circuit courts of the United States, and heavy penalties were imposed upon those who violated the law. This measure was, of course, hotly resisted, and, in fact, nullified everywhere throughout the Union, north and south—except in some of the simple rural regions.

The validity of the act came before the Supreme Court for adjudication in the celebrated Civil Rights Cases in 1883 and a part of the law was declared unconstitutional in an opinion of the Court rendered by Mr. Justice Bradley. According to his view, the Fourteenth Amendment did not authorize Congress to legislate upon subjects which were in the domain of state legislation—that is to create a code of municipal law for the regulation of private rights; but it merely authorized Congress to provide modes of relief against state legislation and the action of state officers, executive or judicial, which were subversive of the fundamental rights specified in the amendment. "Until some state law has been passed," he said, "or some state action through its officers or agents has been taken, adverse to the rights of citizens sought to be protected by the Fourteenth Amendment, no legislation of the United States under said Amendment, nor any proceeding under such legislation can be called into activity: for the prohibitions of the Amendment are against state laws and acts done under state authority."

The question as to whether the equal enjoyment of the accommodations in inns, conveyances, and places of amusement was an essential right of the citizen which no state could abridge or interfere with, Justice Bradley declined to examine on the ground that it was not necessary to the decision of the case. He did, however, inquire into the proposition as to whether Congress, in enforcing the Thirteenth Amendment abolishing slavery and involuntary servitude, could secure the social equality contemplated by the act, under the color of sweeping away all the badges and incidents of slavery. And on this point he came to the conclusion that mere discriminations on account of race or color could not be regarded as badges of slavery. "There were," he added, "thousands of free colored people in this country before the abolition of slavery, enjoying all of the essential rights of life, liberty, and property the same as white citizens; and yet no one at that time thought that it was any invasion of his personal status as a freeman because he was not admitted to all of the privileges enjoyed by white citizens, or because he was subjected to discriminations in the enjoyment of accommodations in inns, public conveyances, and places of amusement."

Clearly, there was no authority in either the Thirteenth or Fourteenth Amendment for the section of the Civil Rights Act relative to inns, conveyances, and places of amusement, at least so far as its operation in the several states was concerned. If, however, any state should see fit to make or authorize unlawful discriminations amenable to the prohibitions of the Fourteenth Amendment, Congress had the power to afford a remedy or the courts in enforcing the Amendment could give judicial relief. Thus, while the Justice did not definitely say that the elements of social equality provided in the Civil Rights Act were not guaranteed by the Fourteenth Amendment, his line of reasoning and his language left little doubt as to what was the view of the Court.

Section four of the Civil Rights Act forbidding, under penalty, discrimination against any person on account of race, color, or previous condition of servitude in the selection of jurors had been passed upon by the Supreme Court in the case of Ex parte Virginia, decided in 1879, in which the section was held to be constitutional as providing not a code of municipal law for the regulation of private rights, but a mode of redress against the operation of state laws. The ground of distinction between the two cases is clear. A section forbidding discrimination in inns and conveyances is in the nature of a code of private law, but a section forbidding discrimination in the selection of jurors under penalty simply provides a mode of redress against violations of the Fourteenth Amendment by state authorities.

Undoubtedly there is an admissible distinction between discrimination against negroes in the selection of juries and the discrimination against them in inns and public conveyances, for the former may have definite connection with the security of those civil rights of person and property—as distinct from social rights—which the Fourteenth Amendment was clearly designed to enforce. This was the principle which was brought out by the Court in the two decisions.[5] But if Justice Bradley in the Civil Rights cases had frankly made the distinction between civil and social rights, and declared the act unconstitutional on the ground that it attempted to secure social rights which the Fourteenth Amendment was not intended to establish, then the decisions of the Court would have been far more definite in character.

Even if the Supreme Court had not declared the social equality provision of the Civil Rights Act unconstitutional, it is questionable whether any real attempt would have been made to enforce it. As it turned out, the Court gave judicial sanction to a view undoubtedly entertained by the major portion of the whites everywhere, and it encouraged the South to proceed with further discriminatory legislation separating the races in all public and quasi-public places. Railroads and common carriers were compelled to provide separate accommodations for whites and blacks, "Jim Crow Cars," as they are called in popular parlance, and to furnish special seats in street railway cars. These laws have also been upheld by the courts; but not without a great strain on their logical faculties.

Undoubtedly there are mixed motives behind such legislation. It is in some part a class feeling, for whites are allowed to take their colored servants in the regular coaches and sleeping cars. Nevertheless, the race feeling unquestionably predominates. As the author of the Louisiana "Jim Crow Car" law put it: "It is not only the desire to separate the whites and blacks on the railroads for the comfort it will provide, but also for the moral effect. The separation of the races is one of the benefits, but the demonstration of the superiority of the white man over the negro is the greater thing. There is nothing that shows it more conclusively than the compelling of negroes to ride in cars marked for their especial use."

The Attitude of the North

Although all possibility of northern interference with the southern states in the management of their domestic affairs seemed to have disappeared by Cleveland's first administration, the negro question was continuously agitated by Republican politicians, and at times with great vigor. They were much distressed at losing their Federal patronage after the election of Cleveland in 1884; and this first Democratic presidential victory after the War led many of them to believe that they could recover their lost ground only by securing to the negro the right to vote. The Republicans were also deeply stirred by the over-representation of the South in the House of Representatives under the prevailing system of apportionment. They pointed out that the North was, in this respect, at even a greater disadvantage than before the Civil War and emancipation.

Under the original Constitution of the United States, only three fifths of the slaves were counted in apportioning representatives among the states; under the Fourteenth Amendment all the negroes were counted, thus enlarging the representation of the southern states. And yet the negroes were for practical purposes as disfranchised as they were when they were in servitude. It was pointed out that "in the election of 1888 the average vote cast for a member of Congress in five southern states was less than eight thousand; in five northern states, over thirty-six thousand. Kansas, which cast three times the vote of South Carolina, had only the same number of congressmen." The discrepancy tended to increase, if anything. In 1906, a Mississippi district with a population of 232,174 cast 1540 votes, while a New York district with 215,305 cast 29,119 votes.

The Republicans have several times threatened to alter this anomalous condition of affairs. In 1890, Mr. Lodge introduced in the House of Representatives a bill providing for the appointment of federal election commissioners, on petition of local voters, endowed with powers to register and count all votes, even in the face of the opposition of local officers. This measure, which passed the House, was at length killed in the Senate. In their platform of 1904, the Republicans declared in favor of restoring the negro to his rights under the Constitution, and for political purposes the party in the House later coupled a registration and election law with the measure providing for publicity of campaign contributions. It was not acted upon in the Senate. In 1908, the Republicans in their platform declared "once more and without reservation, for the enforcement in letter and spirit of the Thirteenth, Fourteenth, and Fifteenth Amendments to the Constitution which were designed for the protection and advancement of the negro," and condemned all devices designed to disfranchise him on grounds of color alone. Although they have been in possession of all branches of the Federal government several times, the Republicans have deemed it inexpedient to carry out their campaign promises.

With the decline in the influence of the Civil War veterans in politics, the possibility of Federal interference has steadily decreased. The North had never been abolitionist in temper or political belief, as the vote of the Free Soil party demonstrates. The Republican party was a homestead, railway, and protectionist party opposed to slavery in the territories, and its great leader, Lincoln, had long been on record as opposed to political and social equality for the negro. Emancipation had come as a stroke of fortune—not because a majority of the people had deliberately come to the conclusion that it was a measure of justice. As in the French Revolution at its height, the extreme radicals forged to the front for a time, so during the Civil War and its aftermath, "radical" Republicans held the center of the stage and gave to politics a flavor of talk about "human rights" which was foreign to practical statesmen like Clay and Webster. In a little while, practical men came to the helm once more, and they were primarily interested in economic matters—railways, finance, tariff, corporations, natural resources, and western development. The cash nexus with the South was formed once more, and made far stronger and subtler than in olden days. Agitation of the negro question became bad form in the North, except for quadrennial political purposes.

The Negro Problem

Thus the negro, suddenly elevated to a great height politically, was almost as suddenly dropped by his new friends and thrown largely upon his own ingenuity and resources for further advance. His emancipation and enfranchisement had come almost without effort on his own part, without that development of economic interest and of class consciousness that had marked the rise of other social strata to political power. It was fortuitous and had no solid foundation. It became evident, therefore, that any permanent advance of the race must be built on substantial elements of power in the race itself. The whites might help with education and industrial training, but the hope of the race lay in the development of intellectual and economic power on its own account.

In relative numerical strength the negro is not holding his own, because of the large immigration from Europe. In 1790, the negro population formed 19.3 per cent of the whole, and since that time it has almost steadily declined, reaching at the last census 10.7 per cent of the whole. Even in the southern states where the stream of foreign immigration is the least, the negro population has fallen from 35.2 per cent in 1790 to 29.8 per cent in 1910. In education, the negro has undoubtedly made great progress since the War, but it must be remembered that he was then at the bottom of the scale. The South, though poor as compared with the North, has made large expenditures for negro education, but it is authoritatively reported that "nearly half of the negro children of school age in the South never get inside of the schoolhouse."[6] The relative expenditures for the education of white and colored children there are not ascertainable, but naturally the balance is heavily in favor of the former. When we recall, however, the total illiteracy of the race under slavery and then discover that in 1910 there was an average daily attendance of 1,105,629 colored children in the southern schools, we cannot avoid the conclusion that decided changes are destined to be made in the intellectual outlook of the race.

Reports also show that negroes are accumulating considerable property and are becoming in large numbers the holders of small farms. Nevertheless a very careful scholar, Dr. Walter Willcox, believes that the figures "seem to show that the negro race at the South, in its competition with the whites, lost ground between 1890 and 1900 in the majority of skilled occupations which can be distinguished by the aid of the census figures." Taking the economic status of the race as a whole, the same authority adds: "The conclusion to which I am brought is that relatively to the whites in the South, if not absolutely as measured by any conceivable standard, the negro as a race is losing ground, is being confined more and more to the inferior and less remunerative occupations, and is not sharing proportionately to his numbers in the prosperity of the country as a whole or of the section in which he mainly lives."

The conclusions of the statistician are confirmed by the impressions of such eminent champions of the negro as Dr. W. B. Dubois and Mr. Thomas Fortune. The former declares that "in well-nigh the whole rural South the black farmers are peons, bound by law and custom to an economic slavery, from which the only escape is death or the penitentiary." The latter holds that the negro has simply passed from chattel to industrial slavery "with none of the legal and selfish restraints upon the employer which surrounded and actuated the master." These writers attribute the slow advance of the race to the bondage of law and prejudice to which it is subjected in the South, and everywhere in the country, as a matter of fact. Whatever the cause may be, there seems to be no doubt that the colored race has not made that substantial economic advance and achieved that standard of life which its friends hoped would follow from emancipation. Those writers who emphasize heredity in social evolution point to this as an evidence of the inherent disabilities of the race; while those who emphasize environment point out the immense handicap everywhere imposed on the race by law, custom, and prejudice.

Whatever may be the real truth about the economic status of the race, and after all it is the relative progress of the mass that determines the future of the race, there can be no doubt that there is an increasing "race consciousness" which will have to be reckoned with. The more conservative school, led by Booker T. Washington, is working to secure for the negro an industrial training that will give him some kind of an economic standing in the community, and if this is achieved for large numbers, a radical change in social and political outlook will follow, unless all signs of history fail. On the other hand, there is growing up a radical party, under the inspiration of Dr. W. B. Dubois, which pleads for unconditional political and social equality as a measure of immediate justice. Dr. Dubois demands "the raising of the negro in America to full rights and citizenship. And I mean by this no halfway measures; I mean full and fair equality. That is, a chance to work regardless of color, to aspire to position and preferment on the basis of desert alone, to have the right to use public conveniences, to enter public places of amusement on the same terms as other people, and to be received socially by such persons as might wish to receive them."

With both of these influences at work and all the forces of modern life playing upon the keener section of the colored population, nothing but congenital disabilities can prevent a movement which ruling persons, North and South, will have to take into account. How serious this movement becomes depends, however, upon the innate capacity of colored masses to throw off the shiftlessness and indifference to high standards of life that, their best friends admit, stand in the way of their gaining a substantial economic basis, without which any kind of a solid political superstructure is impossible. The real negro question now is: "Can the race demonstrate that capacity for sustained economic activity and permanent organization which has lifted the white masses from serfdom?"

FOOTNOTES:

[1] In 1894 the Democrats during Cleveland's administration completed the demolition of the system by repealing the remaining provisions.

[2] Disfranchising provisions were adopted in other southern states as follows: North Carolina, in 1900; Alabama and Virginia, in 1901; Georgia, in 1908. See Lobingier, The People's Law, pp. 301 ff.; W. F. Dodd, Revision and Amendment of State Constitutions.

[3] The Political Science Review, November, 1906, p. 20.

[4] Giles v. Harris, 189 U. S., 474.

[5] See a Massachusetts case decided before the Civil War upholding similar discriminations against negroes. Thayer, Cases on Constitutional Law, Vol. I, p. 576.

[6] This is partly due to the absence of compulsory attendance laws.

CHAPTER II

THE ECONOMIC REVOLUTION

Long before the Civil War, steam and machinery had begun to invade American industries and statesmen of the new commercial and industrial order had appeared in Washington. The census of 1860 reported nearly a million and a half wage earners in the United States, and more than a billion dollars invested in manufacturing. By that year over thirty thousand miles of railway had been constructed, including such important lines as the New York Central, the Erie, the Baltimore and Ohio, and the Pennsylvania. Politicians of the type of Stephen A. Douglas, who discussed slavery in public and devoted their less obvious activities to securing grants of public lands and mineral resources to railway and manufacturing corporations, had begun to elbow the more cultivated and respectable leaders like Calhoun, Webster, and Alexander Stephens, who belonged to the old order.

But the spectacular conflict over slavery prevented the political results of the economic transformation from coming to the surface. Those who had occasion to watch the proceedings of Congress during the two decades just before the War discovered the manipulations of railway corporations seeking land grants and privileges from the Federal Government and the operations of the "protected" interests in behalf of increased tariffs. Those were also harvest days for corporations and companies in the state legislatures where special charters and privileges were being bartered away by the wholesale. There was emerging in a number of the larger industrial centers a small, though by no means negligible, labor movement. But the slavery issue overshadowed everything. The annexation of Texas, slavery in the territories, the Compromise of 1850, the Nebraska bill, and Bleeding Kansas kept the mind of the North from the consideration of the more fundamental economic problems connected with the new order. The politicians, to be sure, did not live by the slavery agitation alone, but it afforded the leading topics for public discussion and prevented the critical from inquiring too narrowly into the real staples of politics.

The Civil War sharply shifted the old scenery of politics. It gave a tremendous impetus to industry and railway construction. The tariff measures during the War gave to manufacturers an unwonted protection against foreign competition; the demand for war supplies, iron, and steel, railway materials, textiles, and food supplies, quickened every enterprise in the North; the great fortunes made out of speculations in finances, contracts for government supplies, and land-grants placed an enormous capital in private hands to carry forward business after the War was over.

Within little more than a quarter of a century the advance of industry and commerce had made the United States of Lincoln's day seem small and petty. The census of 1905 showed over twelve billion dollars invested in factories and nearly five and one half million wage earners employed. In that year, the total value of manufactured products was over fourteen billion dollars—fifteen times the amount turned out in 1860. As late as 1882 the United States imported several hundred thousand tons of steel rails annually, but within ten years the import had fallen to 134 tons and no less than 15,000 tons were exported. At the close of the Civil War about 3000 tons of Bessemer steel were produced annually, but within twenty years over two million tons were put out every twelve months.

The building of railways more than kept pace with the growth of the population and the increase in manufacturing. There were 30,000 miles of lines in 1860; 52,000 in 1870; 166,000 in 1890; and 242,000 in 1910. Beginning at first with the construction of lines between strategic centers like Boston and Albany, and Philadelphia and Reading, the leaders in this new enterprise grew more bold. They pushed rapidly into the West where there were no cities of magnitude and no prospect of developing a profitable business within the immediate future. Capital flowed into the railways like water; European investors caught the fever; farmers and merchants along prospective lines bought stocks and bonds, expecting to reap a harvest from increased land values and business, only to find their paper valueless on account of preferred claims for construction; and the whole West was aflame with dreams of a new Eldorado to be created by transportation systems.

The era of feverish construction was shortly followed by the combination of lines and the formation of grand trunk railways and particular "systems." In 1869, Cornelius Vanderbilt united the Hudson River and New York Central lines, linking the metropolis and Buffalo, and four years later he opened the way to Chicago by leasing the Lake Shore Michigan and Southern. About the same time two other eastern companies, the Pennsylvania and Baltimore and Ohio secured western connections which let them into Chicago.

It must not be thought that this rapid railway expansion was due solely to private enterprise, for, as has been the standing custom in American politics, the cost of doubtful or profitless undertakings was thrown as far as possible upon the public treasury. Up to 1872, the Federal Government had granted in aid of railways 155,000,000 acres of land, an area estimated as "almost equal to the New England states, New York, and Pennsylvania combined; nineteen different states had voted sums aggregating two hundred million dollars for the same purpose; and municipalities and individuals had subscribed several hundred million dollars to help railway construction." To the Union Pacific concern alone the Federal Government had granted a free right of way through public lands, twenty sections of land with each mile of railway, and a loan up to fifty million dollars secured by a second mortgage on the company's property. The Northern Pacific obtained lands which a railway official estimated to be worth enough "to build the entire railroad to Puget Sound, to fit out a fleet of sailing vessels and steamers for the China and India trade and leave a surplus that would roll up into the millions." Cities, townships, counties, and states voted bonds to help build railways within their limits or granted rights of way and lands, in addition, with a lavish hand.

The chronicle of all the frauds connected with the manipulation of land grants to railways and the shameless sale of legal privileges cannot be written, because in most instances no tangible records have been left. Perhaps the most notorious of all was the Crédit Mobilier scandal connected with the Union Pacific. The leading stockholders in that company determined to secure for themselves a large portion of the profits of construction, which were enormous on account of the prodigal waste; and they organized a sham concern known as the Crédit Mobilier in which they had full control and to which the construction profits went. Inasmuch as the Federal Government through its grants and loans was an interested party that might interfere at any time, the concern, through its agent in Congress, Oakes Ames, a representative from Massachusetts, distributed generous blocks of stock to "approachable" Senators and Representatives. News of the transaction leaked out, and a congressional investigation in 1872 showed that a number of men of the highest standing, including Mr. Colfax, the Vice President, were deeply implicated. Nothing was done, however; the leading conspirator, Ames, was merely censured by the House, and the booty, for the most part, remained in the hands of those connected with the scandal. When the road was complete, "it was saddled with interest payments on $27,000,000 first mortgage bonds, $27,000,000 government bonds, $10,000,000 income bonds, $10,000,000 land grant bonds, and if anything were left, dividend payments on $36,000,000 of stock."

It would be easy to multiply figures showing astounding gains in industry, business, foreign trade, and railways; or to multiply stories of scandalous and unfair practices on the part of financiers, but we are not primarily concerned here with the technique of inventions or the history of promotion.[7] The student of social and political evolution is concerned rather with the effect of such material changes upon the structure of society, that is, with the rearrangements of classes and the development of new groups of interests, which are brought about by altered methods of gaining a livelihood and accumulating fortunes. It is this social transformation that changes the relation of the individual to the state and brings new forces to play in the struggle for political power. The social transformation which followed the Civil War embraced the following elements.

In the first place, capital, as contrasted with agriculture, increased enormously in amount and in political influence. Great pecuniary accumulations were thenceforward made largely in business enterprise—including the work of the entrepreneur, financier, speculator, and manipulator under that general term. Inevitably, the most energetic and the keenest minds were attracted by the dominant mode of money-making. Agricultural regions were drained of large numbers of strenuous and efficient men, who would otherwise have been their natural leaders in politics. To these were added the energetic immigrants from the Old World. That forceful, pushing, dominating section of society historically known as the "natural aristocracy" became the agents of capitalism. The scepter of power now passed definitively from the masters of slaves to the masters of "free laborers." The literary and professional dependents of the ruling groups naturally came to the defense of the new order.[8] The old contest between agrarianism and capitalism now took on a new vigor.[9]

On the side of the masses involved in the transition this economic revolution meant an increasing proportion of wage workers as contrasted with agriculturalists, owning and operating their farms, and with handicraftsmen. This increase is shown by the following table, giving the number of wage earners in manufacturing alone:

In terms of social life, this increase in wage workers meant, in the first place, a rapid growth of city populations. In 1860, the vast majority of the people were agriculturists; in 1890, 36.1 per cent of the population lived in towns of over 2500; in 1900, 40.5 per cent; in 1910, 46.3 per cent. In the forty years between the beginning of the Civil War and the close of the century, Chicago had grown from 109,260 to 1,698,575; Greater New York from 1,174,779 to 3,437,202; San Francisco from 56,802 to 342,782.

In the next place, the demand for labor stimulated immigration from Europe. It is true there was a decline during the Civil War, and the panic of 1873 checked the tide when it began to flow, but by 1880 it had nearly touched the half-a-million mark, and by 1883 it reached the astounding figure of 788,992. Almost all of this immigration was from Germany, Ireland, Great Britain, and Scandinavian countries, less than one in twenty of the total number coming from Austria-Hungary, Italy, and Poland in 1880. On the Pacific coast, railway building and industrial enterprise, in the great dearth of labor, resorted to the Orient for large supplies of Chinese coolies.

This industrial development meant the transformation of vast masses of the people into a proletariat, with all the term implies: an immense population housed in tenements and rented dwellings, the organization of the class into trades-unions, labor parties, and other groups; poverty and degradation on a large scale; strikes, lockouts, and social warfare; the employment of large numbers of women and children in factories; the demand for all kinds of legislation mitigating the evils of the capitalist process; and finally attacks upon the very basis of the industrial system itself.

This inevitable concomitant of the mechanical revolution, the industrial proletariat, began to make itself felt as a decided political and economic factor in the decade that followed the War. Between 1860 and 1870, the railway engineers, firemen, conductors, bricklayers, and cigar makers had formed unions. In the campaign of 1872 a party of Labor Reformers appeared; and a few years later the Knights of Labor, a grand consolidated union of all trades and grades of workers, came into existence as an active force, conducting an agitation for labor bureaus, an eight hour day, abolition of contract labor systems, and other reforms, and at the same time engineering strikes.

In 1877 occurred the first of the great labor struggles in that long series of campaigns which have marked the relations of capitalists and workingmen during the past four decades. In that year, trouble began between the management of the Baltimore and Ohio railway and its employees over a threatened reduction in wages—the fourth within a period of seven years. From this starting point the contest spread throughout the East and Middle West, reaching as far as Texas. Inasmuch as there was already considerable unemployment, the strikers saw that only by violence and intimidation could they hope to prevent the companies from moving their trains. Troops were called out by the governors of several states and Federal assistance was invoked. Pittsburgh fell almost completely into the hands of the strikers; railway buildings were burned and property to the value of more than ten million dollars destroyed. Everywhere the raw militia of the states was found to be inefficient for such a serious purpose, and the superior power of the Federal Government's regular troops was demonstrated. Where railways were in the hands of receivers, Federal courts intervened by the use of injunctions and the first blood in the contest between the judiciary and labor was drawn.

The last, but perhaps most significant, result of the industrial revolution above described has been the rise of enormous combinations and corporations in industry as well as in transportation. An increasing proportion of the business of the country has passed steadily into corporate, as contrasted with individual, ownership;[10] and this implies a momentous change in the rights, responsibilities, and economic theories of the owners of capital. Moreover, it involves the creation of a new class of men, not entrepreneurs in the old sense, but organizers of already established concerns into larger units.

The industrial revolution had not advanced very far before an intense competition began to force business men to combine to protect themselves against their own weapons. As early as 1879 certain oil interests of Cleveland, Pittsburgh, Philadelphia, and other centers had begun to control competition by making agreements through their officers. Three years later, they devised an excellent scheme for a closer organization in the formation of a "trust." They placed all their stocks in the hands of nine trustees, including John D. Rockefeller, who issued in return certificates representing the proportionate share of each holder in the concern, and managed the entire business in the interests of the holders.

The trust proved to be an attractive proposition to large business concerns. Within five years combinations had been formed in cotton oil, linseed oil, lead, sugar, whisky, and cordage, and it was not long before a system of interlocking interests began to consolidate the control of all staple manufactures in the hands of a few financiers. Six years after its formation the Standard Oil Company was paying to a small group of holders about $20,000,000 annually in dividends on a capital of $90,000,000, and the recipients of these large dividends began to invest in other concerns. In 1879, one of them, H. M. Flagler, became a director of the Valley Railroad; in 1882, William Rockefeller appeared as one of the directors of the Chicago, Milwaukee, and St. Paul; in 1887, John D. Rockefeller was connected with a syndicate which absorbed the Minnesota Iron Company, and about the same time representatives of the Oil Trust began to figure in the Northern Pacific, the Missouri, Kansas, and Texas, and the Ohio River railways. Thus a perfect network of financial connections throughout the country was built up.

But on the whole the decades following the Civil War were characterized by economic anarchy, laissez faire with a vengeance. There were prolonged industrial crises accompanied by widespread unemployment and misery among the working classes. In the matter of railway management the chaos was unparalleled.

Shortly after 1870 a period of ruinous competition set in and was followed by severe financial crises among the railways. Passenger and freight rate "wars" for the "through" traffic brought many roads to the verge of bankruptcy, in spite of their valiant efforts to save themselves by exorbitant charges on subsidiary branches where they had no competition. Crooked financiering, such as the watering of stocks, misappropriation of construction funds by directors, and the purchase of bankrupt lines by directors of larger companies and their resale at great advances, placed a staggering burden of interest charges against practically all of the lines. In 1873 nearly half of the mileage in the country was in the hands of court receivers, and between 1876 and 1879 an average of more than one hundred roads a year were sold under the foreclosure of mortgages. In all this distress the investors at large were the losers while the "inside" operators such as Jay Gould, Cornelius Vanderbilt, and Russell Sage doubled their already over-topping fortunes.

A very good example of this "new finance" is afforded by the history of the Erie Railway. In 1868, Vanderbilt determined to secure possession of this line which ran across New York State in competition with the New York Central and Hudson River lines. Jay Gould and a group of operators, who had control of the Erie, proceeded to water the stock and "unload" upon Vanderbilt, whose agents bought it in the hope of obtaining the coveted control. After a steeple chase for a while the two promoters came to terms at the expense of the stockholders and the public. Between July 1 and October 24, 1868, the stock of the Erie was increased from $34,000,000 to $57,000,000, and the price went downward like a burnt rocket. During the short period of Gould's administration of the Erie "the capital stock of the road had been increased $61,425,700 and the construction account had risen from $49,247,700 in 1867 to $108,807,687 in 1872. Stock to the amount of $40,700,000 had been marketed by the firm of Smith, Gould, and Martin, and, incredible as it may seem, its sale had netted the company only $12,803,059."[11]

The anarchy in railway financing, which characterized the two decades after the War, was also accompanied by anarchy in management. A Senate investigating committee in 1885 enumerated the following charges against the railroads: that local rates were unreasonably high as compared with through rates; that all rates were based apparently not on cost of service but "what the traffic would bear"; that discriminations between individuals for the same services were constant; that "the effect of the prevailing policy of railroad management is, by an elaborate system of secret special rates, rebates, drawbacks, and concessions, to foster monopoly, to enrich favorite shippers, to prevent free competition in many lines of trade in which the item of transportation is an important factor;" that secret rate cutting was constantly demoralizing business; that free passes were so extensively issued as to create a privileged class, thus increasing the cost to the passenger who paid; that the capitalization and bonded indebtedness of companies largely exceeded the actual cost of construction; and that railway corporations were engaged in other lines of business and discriminating against competitors by unfair rate manipulations. In a word, the theories about competition written down in the books on political economy were hopelessly at variance with the facts of business management; the country was at the mercy of the sharp practices of transportation promoters.

However, emphasis upon this great industrial revolution should not be allowed to obscure the no less remarkable development in agriculture. The acreage in improved farm lands rose from 113,032,614 in 1850 to 478,451,750 in 1910. In the same period the number of farms increased from 1,449,073 to 6,361,502. Notwithstanding the significant fact that "whereas the total population increased 21 per cent between 1900 and 1910, the urban population increased 34.8 per cent and the rural population 11.2 per cent," the broad basis of the population during the half a century here under consideration has remained agricultural, and in 1913 it was estimated that at the present rate of transformation "it will take a generation before the relative number of industrial wage workers will have reached half of all bread winners."

The Development of the West

When Hayes was inaugurated, a broad wedge of territory separated the organized states of the East from their sister commonwealths in the far West—Oregon, California, and Nevada. Washington, Idaho, Montana, Wyoming, Utah, Arizona, New Mexico, Dakota, and Indian Territory still remained territories. Their combined population in 1870 was under half a million, less than that of the little state of Connecticut. New Mexico with 91,000 and Utah with 86,000 might, with some show of justification, have claimed a place among the states because Oregon was inhabited by only 90,000 people. The commonwealth of Nevada, with 42,000, was an anomaly; it had been admitted to the Union in 1864 to secure the ratification of the Thirteenth Amendment abolishing slavery.

This vast and sparsely settled region was then in the second stage of its economic evolution. The trapper, hunter, and explorer had gathered most of their harvest, and the ranchmen and cowboys with their herds of cattle were roaming the great grazing areas, waging war on thieves, land syndicates, and finally going down to defeat in the contest with the small farmer who fenced off the fertile fields and planted his homestead there. So bitter were the contests among the cattle kings, and so extensive was the lawlessness in these regions during the seventies and early eighties that Presidents were more than once compelled to warn the warlike parties and threaten them with the Federal troops.

Of course, the opening of the railways made possible a rapidity in the settlement of the remaining territories which outrivaled that of the older regions. The first Pacific railroad had been completed in 1869; the Southern Pacific connecting New Orleans with the coast was opened in 1881; and two years later the Atchison, Topeka, and Santa Fe was finished, and the last stroke was put on the Northern Pacific, connecting Chicago and Portland, Oregon. Thus four lines of communication were established with the coast, traversing the best agricultural regions of the territories and opening up the mineral-bearing regions of the mountains as well. Lawless promoters fell upon the land and mineral resources with that rapacity which Burke attributed to Hastings.

Utah presented, in the eighties, the elements of an ordered and well-advanced civilization and could with some show of reason ask for admission as a state. The territory had been developed by the Mormons who settled there, after suffering "persecution" for their religious opinions and their plural marriages, in Illinois and Missouri. Notwithstanding an act of Congress passed in 1862 prohibiting polygamy, it continued to flourish. The territorial officers were nearly all Mormons and the remoteness of the Federal authority prevented an enforcement of the law. Consequently, it remained a dead letter until 1882, when Congress enacted the Edmunds law prescribing heavy penalties, including the loss of citizenship, for polygamous practices. Hundreds of prosecutions and convictions followed, but plural marriages were openly celebrated in defiance of the law. At length, in 1887, Congress passed the Edmunds-Tucker act authorizing the Federal Government to seize the property of the Mormon church.

Meanwhile the gentile population increased in the territory; and at length the Mormons, seeing that the country was determined to suppress polygamy and that, while the institution was maintained, statehood could not be secured, decided upon at least an outward acquiescence in the law. After much discussion in Congress, and notwithstanding the repeated contention that the Mormons were not sincere in their promises, Utah was admitted as a state in 1895 under a constitution which, in accordance with the provisions of the enabling act of Congress, forbade polygamous and plural marriages forever. Thus the inhabitants of the new state were bound by a solemn contract with the Union never to restore the marriage practices which had caused them so much trouble and "persecution," as they called it.

Although the Mormons were the original pioneers and homestead makers in that great region, theirs was in fact the last of the middle tier of territories to receive statehood. They had left the advancing frontier line far behind. To the northward that advance was checked by the enormous Sioux reservation in Dakota, but the discovery of gold in the Black Hills marked the doom of the Indian rights. Miners and capitalists demanded that the way should be made clear for their enterprise and the land hungry were clamoring for more farms. Indeed, before Congress could act, pioneers were swarming over the regions around the Indian lands. Farmers from the other northern states, Norwegians, Germans, and Canadians were planting their homesteads amid the fertile Dakota fields; the population of the territory jumped from 14,181 in 1870 to 135,177 in 1880, and before the close of the next decade numbered more than half a million. It was evident that the region was destined to be principally agricultural in character, inhabited by thrifty farmers like those of Iowa and Nebraska. Pretensions to statehood therefore rose with the rising tide of population.

Far over on the western coast, the claims of Washington to statehood were being urged. The population there had increased until it rivaled Oregon and passed the neighboring commonwealth in 1890. In addition to rich agricultural areas, it possessed enormous timber resources which were to afford the chief industry for a long time; and keen-sighted men foresaw a swift development of seaward trade. Between the Dakotas and Washington lay the narrow point of Idaho and the mountainous regions of Montana, now rapidly filling up with miners and capitalists exploiting the gold, silver, coal, copper, and other mineral resources, and rivaling the sheep and cattle kings in their contest for economic supremacy.

After the fashion of enterprising westerners, the citizens of these territories began to boast early of their "enormous" populations and their "abounding" wealth, and to clamor for admission as states. Finding their pleas falling upon unheeding ears, the people of the southern Dakota took matters into their own hands in 1885, called a convention, framed a constitution, and failing to secure the quick and favorable action of Congress threatened to come into the Union unasked. Sober counsels prevailed, however, and the impatient Dakotans were induced to wait awhile. Meantime the territory was divided into two parts in 1887, after a popular vote had been taken on the matter.

As had been the case almost from the beginning of the Republic, the admission of these new states was a subject of political controversy and intrigue at the national capital. During Cleveland's first administration the House was Democratic and the Senate Republican. Believing that Dakota was firmly Republican, the Senate passed the measure admitting the southern region in 1886, but the Democratic House was unable to see eye to eye with the Senate on this matter. In the elections of 1888, the Republicans carried the House, and it was evident that the new Congress would take some action with regard to the clamoring territories. Montana was probably Democratic, and Washington was uncertain. At all events the Democrats thought it wise to come to terms, and accordingly on February 22, 1889, the two Dakotas, Washington, and Montana were admitted simultaneously.

With less claim to statehood than any commonwealths admitted up to that time, except Nevada, the two territories of Idaho and Wyoming were soon enabled, by the assistance of the politicians, to secure admission to the Union. Republican politics and the "silver interests" were responsible for this step. Although neither territory had over 40,000 inhabitants in 1880, extravagant claims were made by the advocates of admission—claims speedily belied by the census of 1890, which gave Idaho 88,000 and Wyoming 62,000. At last in July, 1890, they were admitted to the Union, and the territorial question was settled for a time, although Arizona and New Mexico felt that their claims were unjustly treated. It was not until seventeen years later that another new state, Oklahoma, modeled out of the old Indian Territory, was added to the Union. Finally, in 1912, the last of the continental territories, Arizona and New Mexico, were endowed with statehood.[12]

The Economic Advance of the South

Notwithstanding the prominence given to the negro question during and after Reconstruction, the South had other problems no less grave in character to meet. Industry and agriculture were paralyzed by the devastations of the War. A vast amount of material capital—railways, wharves, bridges, and factories—had been destroyed during the conflict; and fluid capital seeking investment had been almost destroyed as well. The rich with ready money at their command had risked nearly all their store in confederate securities or had lost their money loaned in other ways through the wreck of the currency. Plantations had depreciated in value, partly because of the destruction of equipment, but especially on account of the difficulties of working the system without slave labor. The South had, therefore, to rehabilitate the material equipment of industry and transportation and to put agriculture on another basis than that of slave labor. Surely this was a gigantic task.

The difficulties of carrying forward the plantation system with free negro labor compelled the holders of large estates (many of which were heavily mortgaged) to adopt one of two systems: the leasing or renting of small plots to negroes or poor whites, or the outright sale in small quantities which could be worked by one or two hands. This disintegration of estates went forward with great rapidity. In 1860 the average holding of land in the southern states was 335.4 acres; in 1880 it had fallen to 153.4; and in 1900 it had reached 138.2. The great handicap was the difficulty of securing the capital to develop the small farm, and no satisfactory system for dealing with this problem has yet been adopted.

The very necessities of the South served to bind that section to the North in a new fashion. Fluid capital had to be secured, in part at least, from the North, and northern enterprise found a new outlet in the reconstruction of the old, and the development of the new, industries in the region of the former confederacy. The number of cotton spindles in the South increased from about 300,000 in 1860 to more than 4,000,000 at the close of the century; the number of employees rose from 10,000 to nearly 100,000; and the value of the output leaped from $8,460,337 annually to $95,002,059. This rapid growth was, in part, due to the abundance of water power in the hill regions, the cheap labor of women and children, the low cost of living, and the absence of labor laws interfering with the hours and conditions of work in the factories.

Even in the iron and steel industry, West Virginia and Alabama began to press upon the markets of the North within less than twenty years after the close of the War. In 1880, the latter state stood tenth among the pig-iron producing states; in 1890 it stood third. The southern states alone now produce more coal, iron ore, and pig iron than all of the states combined did in 1870. The census of 1909 reports 5685 manufacturing establishments in Virginia, 4931 in North Carolina, 4792 in Georgia, and 3398 in Alabama.

The social effects which accompany capitalist development inevitably began to appear in the South. The industrial magnate began to contest with the old aristocracy of the soil for supremacy; many former slave owners and their descendants drifted into manufacturing and many poor whites made their way upward into wealth and influence. The census of 1909 reports more than thirty thousand proprietors and firm members in the South Atlantic states, an increase over the preceding report almost equal to that in the New England states. The same census reports in the southern states more than a million wage earners—equal to almost two thirds the entire number in the whole country at the opening of the Civil War. The percentage of increase in the wage earners of the South Atlantic states between 1904 and 1909 was greater than in New England or the Middle Atlantic states.

With this swift economic development, northern capital streamed into the South; northern money was invested in southern public and industrial securities in enormous amounts; and energetic northern business men were to be found in southern market places vying with their no less enterprising southern brethren. The men concerned in creating this new nexus of interest between the two regions naturally deprecated the perpetual agitation of sectional issues by the politicians, and particularly northern interference in the negro question. Business interest began to pour cold water on the hottest embers which the Civil War had left behind.

FOOTNOTES:

[7] The following brief chronology of inventions illustrates the rapidity in the technical changes in the new industrial development:

1875—Bell's telephone in operation between Boston and Salem.

1879—Brush arc street lighting system installed in San Francisco.

1882—Edison's plant for incandescent lighting opened in New York City.

1882—Edison's electric street car operated at Menlo Park, New Jersey.

1885—Electric street railways in operation at Richmond, Virginia, and Baltimore.

[8] For the keenest analysis of this social transformation, see Veblen, Theory of the Leisure Class and Theory of Business Enterprise.

[9] See below, Chaps. VI and VII.

[10] See below, p. 234.

[11] Youngman, The Economic Causes of Great Fortunes, p. 75.

[12] By an act passed in August, 1912, Congress provided a territorial legislature for Alaska, which had been governed up to that time by a governor appointed by the President and Senate, under acts of Congress.

CHAPTER III

THE REVOLUTION IN POLITICS AND LAW

The economic revolution that followed the War, the swift and potent upswing of capitalism, and the shifting of political power from the South to the North made their impress upon every branch of the Federal Government. Senators of the old school, Clay, Webster, Calhoun, Roger Baldwin, John P. Hale, James Mason, and Jefferson Davis were succeeded by the apostles of the new order: Roscoe Conkling and Thomas Platt, James Donald Cameron, Leland Stanford, George Hearst, Arthur P. Gorman, William D. Washburn, John R. McPherson, Henry B. Payne, Matthew S. Quay, Philetus Sawyer, John H. Mitchell, and James G. Blaine. The new Senate was composed of men of affairs—practical men, who organized gigantic enterprises, secured possession of natural resources and franchises, collected and applied capital on a large scale to new business undertakings, built railways, established cities with the advancing line of the western frontier—or represented such men as counsel in the courts of law.

Not many of them were great orators or widely known as profound students of politics in its historical and comparative aspects. A few, like Blaine, Hoar, and Conkling, studied the classic oratory of the older generation and sought to apply to the controverted issues of the hour that studious, orderly, and sustained eloquence which had adorned the debates of earlier years; but the major portion cultivated only the arts of management and negotiation. Few of them seem to have given any thought to the lessons to be learned from European politics. On the contrary, they apparently joined with the multitude in the assumption that we had everything to teach Europe and nothing to learn. Bismarck was to them, if we may judge from their spoken words, simply a great politician and the hero of a war; the writings of German economists, Wagner and Schmoller, appear never to have penetrated their studies. That they foresaw in the seventies and eighties the turn that politics was destined to take is nowhere evident. They commanded respect and admiration for their practical achievements; but it is questionable whether the names of more than two or three will be known a century hence, save to the antiquarian.

Of this group, Roscoe Conkling was undoubtedly typical, just as Marcus A. Hanna represented the dominant politicians of a later time. He was an able lawyer and an orator of some quality, but of no permanent fame. He took his seat in the Senate in 1867 and according to his biographer "during the remainder of his life his legal practice was chiefly connected with corporations that were litigants in the district and circuit courts of the United States,"[13]—the judges of which courts he was, as Senator, instrumental in appointing. His practice was lucrative for his day, amounting to some $50,000 a year.[14] He counted among his clients the first great capitalists of the country. When he was forced to retire from New York politics, "the first person who came to see him on business was Mr. Jay Gould, who waited upon him early one morning at his hotel."[15] He was counsel for Mr. Collis P. Huntington in his contest against the state legislation which railway interests deemed unjust and unconstitutional.[16] He was among the keen group of legal thinkers who invoked and extended the principle of the Fourteenth Amendment to cover all the varieties of legislation affecting corporate interests adversely.[17]

Criticism of the Republican party, and particularly of the policies for which he stood, Mr. Conkling regarded as little short of treason. For example, when Mr. George William Curtis, in the New York state convention of 1877, sought to endorse the administration of President Hayes, whose independence in office had been troublesome to Mr. Conkling, the latter returned in a passionate attack on the whole party of opposition: "Who are these men who in newspapers and elsewhere are 'cracking their whips' over Republicans and playing schoolmaster to the Republican party and its conscience and convictions. They are of various sorts and conditions. Some of them are the man-milliners, the dilettanti and carpet knights of politics, men whose efforts have been expended in denouncing and ridiculing and accusing honest men.... Some of these worthies masquerade as reformers and their vocation and ministry is to lament the sins of other people. Their stock in trade is rancid, canting self-righteousness. They are wolves in sheep's clothing. Their real object is office and plunder. When Dr. Johnson defined patriotism as the last refuge of a scoundrel, he was then unconscious of the then undeveloped capabilities of the word 'reform.'"[18]

The political philosophy of this notable group of political leaders was that of their contemporaries in England, the Cobden-Bright school. They believed in the widest possible extension of the principle of private property, and the narrowest possible restriction of state interference, except to aid private property to increase its gains. They held that all of the natural resources of the country should be transferred to private hands as speedily as possible, at a nominal charge, or no charge at all, and developed with dashing rapidity. They also believed that the great intangible social property created by community life, such as franchises for street railways, gas, and electricity, should be transformed into private property. They supplemented their philosophy of property by a philosophy of law and politics, which looked upon state interference, except to preserve order, and aid railways and manufacturers in their enterprises, as an intrinsic evil to be resisted at every point, and they developed a system of jurisprudence which, as Senators having the confirming power in appointments and as counsel for corporations before the courts of the United States, they succeeded in transforming into judicial decisions. Some of them were doubtless corrupt, as was constantly charged, but the real explanation of their resistance to government intervention is to be found in their philosophy, which, although consonant with their private interests, they identified with public good.

Writing Laissez Faire into the Constitution

Inasmuch as the attacks on private rights in property, franchises, and corporate privileges came principally from the state legislatures, it was necessary to find some way to subject them to legal control—some juristic process for translating laissez faire into a real restraining force. These leading statesmen and lawyers were not long in finding the way. The Federal courts were obviously the proper instrumentalities, and the broad restrictions laid upon the states by the Fourteenth Amendment no less obviously afforded the constitutional foundation for the science of legislative nihilism. "No state," ran the significant words of that Amendment, "shall make or enforce any law which shall abridge the privileges or immunities of citizens of the United States; nor shall any state deprive any person of life, liberty, or property without due process of law; nor deny to any person within its jurisdiction the equal protection of the laws."

What unseen implications lay within these phrases the most penetrating thinkers divined at once. Protest was made by the New Jersey legislature against the Fourteenth Amendment in 1866 on the ground that it would destroy all the essential rights of a state to control its internal affairs; and such opinion was widespread. But the most common view was to the effect that the Amendment would be used principally to surround the newly emancipated slaves with safeguards against their former masters who might be tempted to restore serfdom under apprentice and penal laws and other legal guises. Still there is plenty of evidence to show that those who framed the Fourteenth Amendment and pushed it through Congress had in mind a far wider purpose—that of providing a general restraining clause for state legislatures.

The problem of how best to check the assaults of state legislatures on vested rights was not new when the Fourteenth Amendment was adopted. On the contrary, it was one of the first concerns of the Convention of 1787 which drafted the original Constitution of the United States, and it was thought by the framers that security had been attained by forbidding states to emit bills of credit and make laws impairing the obligation of contract. Under Chief Justice Marshall, these clauses were so generously interpreted as to repel almost any attack which a state legislature might make on acquired rights. However, in the closing years of Marshall's service, the Supreme Court, then passing into the hands of states' rights justices, rendered an opinion in the case of Ogden v. Saunders, which clearly held that the contract clause did not prevent the legislature from stipulating that future contracts might be practically at its mercy. When a legislature provides by general law that all charters of corporations are subject to repeal and alteration, such provision becomes a part of all new contracts. Marshall delivered in this case a vigorous and cogent dissenting opinion in which he pointed out that the decision had in effect destroyed the virtue of the obligation of contract clause.

The case of Ogden v. Saunders was decided in 1827. Between that year and the Civil War the beginnings of corporate enterprise were securely laid in the United States; and the legislatures of the several states began the regulation of corporations from one motive or another, sometimes for the purpose of blackmailing them and sometimes for the laudable purpose of protecting public interests. At all events, large propertied concerns began to feel that they could not have a free hand in developing their enterprises or enjoy any genuine security unless the legislatures of the states were, by some constitutional provision, brought again under strict Federal judicial control.

The opportunity to secure this judicial control was afforded during the Civil War when the radical Republicans were demanding Federal protection for the newly emancipated slaves of the South. The drastic legislation relative to negroes adopted by the southern states at the close of the War showed that even in spite of the Thirteenth Amendment a substantial bondage could be reëstablished under the color of criminal, apprentice, and vagrant legislation. The friends of the negroes, therefore, determined to put the substantial rights of life, liberty, and property beyond the interference of state legislatures forever, and secure to all persons the equal protection of the law.

Accordingly, the Fourteenth Amendment was adopted, enunciating the broad legal and political doctrine that no state "shall abridge the privileges or immunity of citizens of the United States; nor shall any state deprive any person of life, liberty, or property without due process of law; nor deny to any person within its jurisdiction the equal protection of the law."

Here was a restriction laid upon state legislatures which might be substantially limitless in its application, in the hands of a judiciary wishing to place the broadest possible interpretation upon it. What are privileges and immunities? What are life, liberty, and property? What is due process of law? What is the equal protection of the law? Does the term "person" include not only natural persons but also artificial persons, namely, corporations? That the reconstruction committee of Congress which framed the instrument intended to include within the scope of this generous provision not only the negro struggling upward from bondage, but also corporations and business interests struggling for emancipation from legislative interference, has been often asserted. In arguing before the Supreme Court in the San Matteo County case, on December 19, 1882, Mr. Roscoe Conkling, who had been a member of the committee which drafted the Fourteenth Amendment, unfolded for the first time the deep purpose of the committee, and showed from the journal of that committee that it was not their intention to confine the amendment merely to the protection of the colored race. In the course of his argument, Mr. Conkling remarked, "At the time the Fourteenth Amendment was ratified, as the records of the two Houses will show, individuals and joint-stock companies were appealing for congressional and administrative protection against invidious and discriminating state and local taxes. One instance was that of an express company, whose stock was owned largely by citizens of the State of New York, who came with petitions and bills seeking Acts of Congress to aid them in resisting what they deemed oppressive taxation in two states, and oppressive and ruinous rules of damages applied under state laws. That complaints of oppression in respect of property and other rights, made by citizens of Northern States who took up residence in the South, were rife, in and out of Congress, none of us can forget; that complaints of oppression in various forms, of white men in the South,—of 'Union men,'—were heard on every side, I need not remind the Court. The war and its results, the condition of the freedmen, and the manifest duty owed to them, no doubt brought on the occasion for constitutional amendment; but when the occasion came and men set themselves to the task, the accumulated evils falling within the purview of the work were the surrounding circumstances, in the light of which they strove to increase and strengthen the safeguards of the Constitution and laws."[19]

In spite of important testimony to the effect that those who drafted the Fourteenth Amendment really intended "to nationalize liberty," that is laissez faire, against state legislatures, the Supreme Court at first refused to accept this broad interpretation, and it was not until after several of the judges of the old states' rights school had been replaced by judges of the new school that the claims of Mr. Conkling's group as to the Fourteenth Amendment were embodied in copious judicial decisions.

The Slaughter-House Cases

The first judicial interpretation of the significant phrases of the Fourteenth Amendment which were afterward to be the basis of judicial control over state economic legislation of every kind was made by the Supreme Court in the Slaughter-House cases in 1873—five years after that Amendment had been formally ratified. These particular cases, it is interesting to note, like practically all other important cases arising under the Fourteenth Amendment, had no relation whatever to the newly emancipated slaves; but, on the contrary, dealt with the regulation of business enterprises.

In 1869, the legislature of Louisiana passed an act designed to protect the health of the people of New Orleans and certain other parishes. This act created a corporation for the purpose of slaughtering animals within that city, forbade the establishment of any other slaughterhouses or abattoirs within the municipality, and conferred the sole and exclusive privilege of conducting the live-stock landing and slaughterhouse business, under the limitations of the act, upon the company thus created. The company, however, was required by the law to permit any persons who wished to do so to slaughter in its houses and to make full provision for all such slaughtering at a reasonable compensation. This drastic measure, the report of the case states, was denounced "not only as creating a monopoly and conferring odious and exclusive privileges upon a small number of persons at the expense of the great body of the community of New Orleans, but ... it deprives a large and meritorious class of citizens—the whole of the butchers of the city—of the right to exercise their trade, the business to which they have been trained and on which they depend for the support of themselves and their families."

The opinion of the court was rendered by Mr. Justice Miller. The Justice opened by making a few remarks upon the "police power," in the course of which he said that the regulation of slaughtering fell within the borders of that mysterious domain and without doubt constituted one of the powers enjoyed by all states previous to the adoption of the Civil War amendments. After commenting upon the great responsibility devolved upon the Court in construing the Thirteenth and Fourteenth amendments and remarking on the careful deliberation with which the judges had arrived at their conclusions, Justice Miller then turned to an examination of the historical purpose which underlay the adoption of the amendments in question. After his recapitulation of recent events, he concluded: "On the most casual examination of the language of these amendments, no one can fail to be impressed with the one pervading purpose found in them all, lying at the foundation of each, and without which none of them would have been even suggested; we mean the freedom of the slave race, the security and firm establishment of that freedom, and the protection of the newly-made freeman and citizen from the oppression of those who had formerly exercised unlimited dominion over him. It is true that only the Fifteenth Amendment, in terms, mentions the negro by speaking of his color and his slavery. But it is just as true that each of the other articles was addressed to the grievances of that race and designed to remedy them as the Fifteenth. We do not say that no one else but the negro can share in this protection. Both the language and spirit of these articles are to have their fair and just weight in any question of construction.... What we do wish to say and what we wish to be understood as saying is, that in any fair and just construction of any section or phrase of these amendments, it is necessary to look to the purpose, which as we have said was the pervading spirit of them all, the evil which they were designed to remedy, and the process of continued addition to the Constitution until that purpose was supposed to be accomplished as far as constitutional law can accomplish it."

Justice Miller dismissed with a tone of impatience the idea of the counsel for the plaintiffs in error that the Louisiana statute in question imposed an "involuntary servitude" forbidden by the Thirteenth Amendment. "To withdraw the mind," he said, "from the contemplation of this grand yet simple declaration of the personal freedom of all the human race within the jurisdiction of this government—a declaration designed to establish the freedom of four million slaves—and with a microscopic search endeavor to find it in reference to servitudes which may have been attached to property in certain localities, requires an effort, to say the least of it."

In Justice Miller's long opinion there is no hint of that larger and more comprehensive purpose entertained by the framers of the Fourteenth Amendment which was asserted by Mr. Conkling a few years later in his argument before the Supreme Court. If he was aware that the framers had in mind not only the protection of the freedmen in their newly won rights, but also the defense of corporations and business enterprises generally against state legislation, he gave no indication of the fact. There is nowhere in his opinion any sign that he saw the broad economic implications of the Amendment which he was expounding for the first time in the name of the Court. On the contrary, his language and the opinion reached in the case show that the judges were either not cognizant of the new economic and political duty placed upon them, or, in memory of the states' rights traditions which they had entertained, were unwilling to apply the Thirteenth and Fourteenth amendments in such a manner as narrowly to restrict the legislative power of a commonwealth.

In taking up that clause of the Fourteenth Amendment which provides that no state shall make or enforce any law abridging the privileges or immunities of citizens of the United States, Justice Miller declared that it was not the purpose of that provision to transfer the security and protection of all fundamental civil rights from the state government to the Federal Government. A citizen of the United States as such, he said, has certain privileges and immunities, and it was these and these only which the Fourteenth Amendment contemplated. He enumerated some of them: the right of the citizen to come to the seat of government, to assert any claim he may have upon that government, to transact any business he may have with it, to seek its protection, share its offices, engage in administering its functions, to have free access to its seaports, subtreasuries, land offices, and courts of justice, to use the navigable waters of the United States, to assemble peaceably with his fellow citizens and petition for redress of grievances, and to enjoy the privileges of the writ of habeas corpus. It was rights of this character, the learned justice argued, and not all the fundamental rights of person and property which had been acquired in the evolution of Anglo-Saxon jurisprudence, that were placed by the Fourteenth Amendment under the protection of the Federal Government.

Within this view, all the ordinary civil rights enjoyed by citizens were still within the control of the organs of the state government and not within Federal protection at all. If the privileges and immunities, brought within the protection of the Federal Government by the Fourteenth Amendment, were intended to embrace the whole domain of personal and property rights, then, contended the justice, the Supreme Court would be constituted "a perpetual censor upon all legislation of the states, on the civil rights of their own citizens, with authority to nullify such as it did not approve as consistent with those rights as they existed at the time of the adoption of this Amendment.... We are convinced that no such results were intended by the Congress which proposed these amendments nor by the legislatures which ratified them."

In two short paragraphs, Justice Miller disposed of the contention of the plaintiffs in error to the effect that the Louisiana statute deprived the plaintiffs of their property without due process of law. He remarked that inasmuch as the phraseology of this clause was also to be found in the Fifth Amendment and in some form in the constitutions of nearly all of the states, it had received satisfactory judicial interpretation; "and it is sufficient to say," he concluded on this point, "that under no construction of that provision that we have ever seen or any that we deem admissible, can the restraint imposed by the state of Louisiana upon the exercise of their trade by the butchers of New Orleans be held to be a deprivation of private property within the meaning of that provision."

Coming now to that clause requiring every state to give all persons within its jurisdiction equal protection of the laws, Justice Miller indulged in the false prophecy: "We doubt very much whether any action of a state not directed by way of discrimination against the negroes as a class or on account of their race will ever be held to come within the purview of this provision." An emergency might arise, he admitted, but he found no such a one in the case before him.

Concluding his opinion, he expressed the view that the American Federal system had come out of the Civil War with its main features unchanged, and that it was the duty of the Supreme Court then as always to hold with a steady and an even hand the balance between state and Federal power. "Under the pressure of all the excited feeling growing out of the War," he remarked, "our statesmen have still believed that the existence of the states with powers for domestic and local government, including the regulation of civil rights—the rights of person and property—was essential to the perfect working of our complex form of government, though they have thought proper to impose additional limitations upon the states and to confer additional power on that of the nation."

Under this strict interpretation of the Thirteenth and Fourteenth amendments, all the fundamental rights of persons and property remained subject to the state governments substantially in the same way as before the Civil War. The Supreme Court thus could not become the final arbiter and control the social and economic legislation of states at every point. Those champions of the amendments who looked to them to establish Federal judicial supremacy for the defense of corporations and business enterprises everywhere throughout the American empire were sadly disappointed.

Nowhere was that disappointment more effectively and more cogently stated than in the opinions of the judges who dissented from the doctrines announced by the majority of the court. Chief Justice Chase and Justices Field, Bradley, and Swayne refused to accept the interpretation and the conclusions reached by the majority, and the last three judges wrote separate opinions of their own expressing their grounds for dissenting. The first of these, Justice Field, contended that the Louisiana statute in question could not legitimately come under the police power and was in violation of the Fourteenth Amendment, inasmuch as it denied to citizens of the United States the fundamental rights which belonged to citizens of all free governments—protection against monopolies and equality of rights in the pursuit of the ordinary avocations of life. In his opinion, the privileges and immunities put under the supervision of the Federal Government by the Fourteenth Amendment comprised generally "protection by the government, the enjoyment of life and liberty, with the right to acquire and possess property of every kind, and to pursue and obtain happiness and safety, subject, nevertheless, to such restraint as the government may justly prescribe for the general good of the whole." In other words, Justice Field would have carried the Amendment beyond the specific enumeration of any definitely ascertained legal rights into the field of moral law, which, in final analysis, would have meant the subjection of the state legislation solely to the discretion of the judicial conscience. The future, as we shall see, was with Justice Field.

In the opinion of Justice Bradley, the Louisiana statute not only deprived persons of the equal protection of the laws, but also of liberty and property—the right of choosing, in the adoption of lawful employments, being a portion of their liberty, and their occupation being their property. In the opinion of Mr. Justice Swayne, who dissented also, the word liberty as used in the Fourteenth Amendment embodied freedom from all restraints except such as were "justly" imposed by law. In his view, property included everything that had an exchange value, including labor, and the right to make property available was next in importance to the rights of life and liberty.

The Granger Cases

Three years after the decision in the Slaughter-House cases, the Supreme Court again refused to interpret the Fourteenth Amendment so broadly as to hold unconstitutional a state statute regulating business undertakings. This case, Munn v. Illinois, decided in 1876, involved the validity of a statute passed under the constitution of that state, which declared all elevators where grain was stored to be public warehouses and subjected them to strict regulation, including the establishment of fixed maximum charges. It was contended by the plaintiffs in error, Munn and Scott, that the statute violated the Fourteenth Amendment in two respects: (1) that the business attempted to be regulated was not a public calling and was, therefore, totally outside of the regulatory or police power of the state; and (2) that even if the business was conceded to be public in character, and therefore by the rule of the common law was permitted to exact only "reasonable" charges for its services, nevertheless the determination of what was reasonable belonged to the judicial branch of the government and could not be made by the legislature without violating the principle of "due process."

Both of these contentions were rejected by the Court, and the constitutionality of the Illinois statute was upheld. The opinion of the Court was written by Chief Justice Waite, who undertook an elaborate examination of the "due process" clause of the Fourteenth Amendment. The principle of this Amendment, he said, though new in the Constitution of the United States, is as old as civilized government itself; it is found in Magna Carta in substance if not in form, in nearly all of the state constitutions, and in the Fifth Amendment to the Federal Constitution. In order to ascertain, therefore, what power legislatures enjoyed under the new amendment, it was only necessary to inquire into the limitations which had been historically imposed under the due process clause in England and the United States; and after an examination of some cases in point the Chief Justice came to the conclusion that "down to the time of the adoption of the Fourteenth Amendment it was not supposed that statutes regulating the use or even the price of the use of private property necessarily deprived an owner of his property without due process of law." When private property "is affected with public interest" and is used in a manner to make it of public consequence, the public is in fact granted an interest in that use, and the owner of the property in question "must submit to be controlled by the public for the common good, to the extent of the interest he has thus created."

But it was insisted on behalf of the plaintiffs that the owner of property is entitled to a reasonable compensation for its use even when it is clothed with the public interest, and that the determination of what is reasonable is a judicial, not a legislative, matter. To this Chief Justice Waite replied that the usual practice had been otherwise. "In countries where the common law prevails," he said, "it has been customary from time immemorial for the legislature to declare what shall be a reasonable compensation under such circumstances, or perhaps more properly speaking to fix a maximum beyond which any charge made would be unreasonable.... The controlling fact is the power to regulate at all. If that exists, the right to establish the maximum of charge as one of the means of regulation is implied. In fact, the common law rule which requires the charge to be reasonable is itself a regulation as to price.... To limit the rate of charge for services rendered in a public employment, or for the use of property in which the public has an interest, is only changing a regulation which existed before. It establishes no new principle in the law, but only gives a new effect to an old one. We know that this is a power which may be abused; but that is no argument against its existence. For protection against abuses by legislatures the people must resort to the polls, not to the courts."[20]

The principle involved in the Munn case also came up in the same year (1876) in Peik v. Chicago and Northwestern Railroad Company, in which Chief Justice Waite, speaking of an act of Wisconsin limiting passenger and freight charges on railroads in the state, said: "As to the claim that the courts must decide what is reasonable and not the legislature, this is not new to this case. It has been fully considered in Munn v. Illinois. Where property has been clothed with a public interest, the legislature may fix a limit to that which shall be in law reasonable for its use. This limit binds the courts as well as the people. If it has been improperly fixed, the legislature, not the courts, must be appealed to for the change."

The total results of the several Granger cases, decided in 1876, may be summed up as follows:

(1) That the regulatory power of the state over "public callings" is not limited to those businesses over which it was exercised at common law, but extends to any business in which, because of its necessary character and the possibilities for extortion afforded by monopolistic control, the public has an interest.

(2) That such regulatory power will not be presumed to have been contracted away by any legislature, unless such intention is unequivocally expressed.

(3) That the exercise of such regulatory power belongs to the legislature, and not to the judiciary.

(4) And the dictum that the judiciary can grant no relief from an unjust exercise of this regulatory power by the legislature.

Although the denial of the right of the judiciary to review the "reasonableness" of a rate fixed by the legislature in the Granger cases had been dictum, a case was not long arising in which the issue was squarely raised. Had this case gone to the Supreme Court, the question of judicial review would have been decided a full decade or more before it really was. In this case, the Tilley case, a bondholder of a railroad operating in Georgia sought to restrain the railroad from putting into force a tariff fixed by the state railroad commission, on the ground that it was so unreasonably low as to be confiscatory. Judge Woods, of the Federal circuit court, refused to grant the injunction, basing his decision squarely upon the dictum in Munn v. Illinois, and declaring that the railroad must seek relief from unjust action on the part of the commission at the hands of the legislature or of the people.

It was not till seven years after the Granger cases that another case involving rate regulation was presented to the Federal courts.[21] The Ruggles case, brought to the Supreme Court by writ of error to the supreme court of Illinois, in 1883, involved a conviction of one of the agents of the Illinois Central Railway for violating a maximum passenger fare statute of that state, and raised substantially the same question as all of the Granger cases except the Munn case—the right of the legislature to regulate the rates of a railroad which was itself empowered by its charter to fix its own rates. The Court affirmed the doctrine of the Granger cases, Chief Justice Waite again writing the opinion. The case is noteworthy only for the opinion of Justice Harlan, concurring in the judgment, but dissenting from the opinion, of the Court, in so far as that opinion expressed, as he declared, the doctrine that the legislature of Illinois could regulate the rates of the railway concerned, in any manner it saw fit. Justice Harlan argued that inasmuch as the charter of the railroad had conferred upon it the right to demand "reasonable" charges, the legislature, when it resumed the power of fixing charges, was estopped from fixing less than "reasonable" charges; and should charges lower than "reasonable" be fixed, it would be within the province of the judicial branch to give relief against such an impairment of the obligation of contract.

Justice Harlan's opinion is interesting not only because it touches upon the possibility of a judicial review of the rate fixed by the legislature; but because the learned Justice bases his contention on the contract between the railroad and the state to the effect that rates should be "reasonable." This indicates plainly that not even in the mind of Justice Harlan, who later became the firm exponent of the power of judicial review, was there any clear belief that the Fourteenth Amendment as such gave the Court any power to review the "reasonableness" of a rate fixed by the legislature. In other words, he derived his doctrine of judicial review from the power of the Federal judiciary to enforce the obligation of contracts, and not from its power to compel "due process of law."

It is impossible to trace here the numerous decisions following the Ruggles case in which the Supreme Court was called upon to consider the power of state legislatures to control and regulate corporations, particularly railways. It is impossible also to follow out all of the fine and subtle distinctions by which the dictum of Chief Justice Waite, in the Munn case, to the effect that private parties must appeal to the people, and not to the courts, for protection against state legislatures, was supplanted by the firm interpretation of the Fourteenth Amendment in such a manner as to confer upon the courts the final power to review all state legislation regulating the use of property and labor. Of course we do not have, in fact, this clear-cut reversal of opinion by the Court, but rather a slow working out of the doctrine of judicial review as opposed to an implication that the Court could not grant to corporations the relief from legislative interference which they sought. There are but few clear-cut reversals in law; but the political effect of the Court's decisions has been none the less clear and positive.

The Minnesota Rate Case

It seems desirable, however, to indicate some of the leading steps by which the Court moved from the doctrine of non-interference with state legislatures to the doctrine that it is charged with the high duty of reviewing all and every kind of economic legislation by the states. One of the leading cases in this momentous transition is that of the Chicago, Milwaukee, and St. Paul Railway Company v. Minnesota, decided in 1889, which made a heavy contribution to the doctrine of judicial review of questions of political economy as well as law. This case involved the validity of a Minnesota law which conferred upon a state railway commission the power to fix "reasonable" rates. The commission, acting under this authority, had fixed a rate on the transportation of milk between two points.

The railroad having refused to put the rate into effect, the commission applied to the supreme court of the state for a writ of mandamus. In its answer the railroad claimed, among other contentions, that the rate fixed was unreasonably low. The supreme court of the state refused to listen to this contention, saying that the statute by its terms made the order of the commission conclusively reasonable; accordingly it issued the mandamus. By writ of error, the case was brought to the Supreme Court of the United States, which, by a vote of six to three, ordered the decree of the state court vacated, on the ground that the statute as construed by the supreme court of the state was unconstitutional, as a deprivation of property without due process of law.

The opinion of the Court, written by Justice Blatchford, has frequently been interpreted to hold, and was indeed interpreted by the dissenting minority to hold, that the judiciary must, to satisfy the requirements of "due process," have the power of final review over the reasonableness of all rates, however fixed. It is doubtful whether the language of the opinion sustains this reading; but the strong emphasis on the place of the judiciary in determining the reasonableness of rates lent color to the contention that Mr. Justice Blatchford was setting up "judicial supremacy." In the course of his opinion, he said: "The question of the reasonableness of a rate of charge for transportation by a railroad company, involving as it does the element of reasonableness both as regards the company and as regards the public, is eminently a question for judicial investigation requiring due process of law for its determination. If the company is deprived of the power of charging reasonable rates for the use of its property, and such deprivation takes place in the absence of an investigation by judicial machinery, it is deprived of the lawful use of its property, and thus in substance and effect, of the property itself without due process of law and in violation of the Constitution of the United States."

The dissenting members of the Court in this case certainly saw in Justice Blatchford's opinion an assertion of the doctrine that whatever the nature of the commission established by law or the form of procedure adopted, the determination of rates was subject to review by a strictly judicial tribunal. In his dissent, Mr. Justice Bradley declared that the decision had practically overruled Munn v. Illinois and the other Granger cases. "The governing principle of those cases," he said, "was that the regulation and settlement of the affairs of railways and other public accommodations is a legislative prerogative and not a judicial one.... The legislature has the right, and it is its prerogative, if it chooses to exercise it, to declare what is reasonable. This is just where I differ from the majority of the Court. They say in effect, if not in terms, that the final tribunal of arbitrament is the judiciary; I say it is the legislature. I hold that it is a legislative question, not a judicial one, unless the legislature or the law (which is the same thing) has made it judicial by prescribing the rule that the charges shall be reasonable and leaving it there. It is always a delicate thing for the courts to make an issue with the legislative department of the government, and they should never do it, if it is possible to avoid it. By the decision now made we declare, in effect, that the judiciary, and not the legislature, is the final arbiter in the regulation of fares and freights of railroads and the charges of other public accommodations. It is an assumption of authority on the part of the judiciary which, it seems to me, with a due reverence to the judgment of my brethren, it has no right to make.... Deprivation of property by mere arbitrary power on the part of the legislature or fraud on the part of the commission are the only grounds on which judicial relief may be sought against their action. There was in truth no deprivation of property in these cases at all.... It may be that our legislatures are invested with too much power, open as they are to influences so dangerous to the interests of individuals, corporations, and societies. But such is the Constitution of our republican form of government, and we are bound to abide by it until it can be corrected in a legitimate way."

The Development of Judicial Review

A further step toward judicial review even still more significant was taken, in the case of Reagan v. Farmers' Loan and Trust Company, decided by the Supreme Court in 1894. This case came up from the Federal circuit court of Texas which had enjoined the state railway commissioners from fixing and putting into effect railway rates which the Trust Company, as a bondholder and interested party, contended were too low, although not confiscatory.

The opinion of the Court, written by Justice Brewer, who, as Federal circuit judge, had already taken advanced ground in favor of judicial review, went the whole length in upholding the right of the judiciary to review the reasonableness, not only of a rate fixed by a commission, as in the case in hand, but even of one fixed by the legislature. The case differed in no essential way, declared the justice, from those cases in which it had been the age-long practice of the judiciary to act as final arbiters of reasonableness—cases in which a charge exacted by a common carrier was attacked by a shipper or passenger as unreasonable. The difference between the two cases was merely that in the one the rate alleged to be unreasonable was fixed by the carrier; in the other it was fixed by the commission or by the legislature. In support of this remarkable bit of legal reasoning, the opinion adduced as precedents merely a few brief excerpts, from previous decisions of the Court, nearly all of which were pure dicta.

The absence of any dissent from this opinion, in spite of the fact that Judge Gray, who had concurred in Justice Bradley's vigorous dissenting opinion in the Chicago-Minnesota case four years before, was still on the bench, indicates that the last lingering opposition to the doctrine of judicial review in the minds of any of the Court had been dissolved. Henceforth it was but the emphatic affirmation and consistent development of that doctrine that was to be expected.

If we leave out of account Mr. Justice Brewer's dicta and consider the Court to have decided merely the issues squarely presented, the Reagan case left much to be done before the doctrine of judicial review could be regarded as established beyond all possibility of limitation and serious qualification. Other cases on the point followed quickly, but it was not until the celebrated case of Smyth v. Ames, decided in 1898, that the two leading issues were fairly presented and settled. In this case the rate attacked was not fixed by a commission, but by a state legislature itself; and the rate was not admitted by the counsel for the state to be unreasonable, but was strongly defended as wholly reasonable and just. The Court had to meet the issues.

The original action in the case of Smyth v. Ames was a bill in equity brought against the attorney-general and the Nebraska state board of transportation, in the Federal circuit court, by certain bondholders of the railroads affected, to restrain the enforcement of the statute of that state providing a comprehensive schedule of freight rates. The bills alleged, and attempted to demonstrate by elaborate calculations, that the rates fixed were confiscatory, inasmuch as a proportionate reduction on all the rates of the railroads affected by them would so reduce the income of the companies as to make it impossible for them to pay any dividends; and in the case of some of them, even to meet all their bonded obligations. On behalf of the state, it was urged that the reduction in rates would increase business, and, therefore, increase net earnings, and that some at least of the companies were bonded far in excess of their actual value. Supreme Court Justice Brewer, sitting in circuit, on the basis of the evidence submitted to him, consisting mainly of statements of operating expenses, gross receipts, and inter- and intra-state tonnage, found the contention of the railroads well taken, and issued the injunctions applied for.

The opinion of the Supreme Court, affirming the decree of Judge Brewer, was, in the essential part of it—that asserting the principle of judicial review in its broadest terms—singularly brief. Contenting himself with citing a few short dicta from previous decisions, Justice Harlan, speaking for the Court, declared that the principle "must be regarded as settled" that the reasonableness of a rate could not be so conclusively determined by a legislature as to escape review by the judiciary. Equally well settled, it was declared, was the principle that property affected with a public interest was entitled to a "fair return" on its "fair" valuation. These principles regarded as established, the Court proceeded to examine the evidence, although it admitted that it lacked the technical knowledge necessary to a completely equitable decision; and sustained the finding of the lower court in favor of the railroads. There was no dissent.

With Smyth v. Ames the doctrine of judicial review may be regarded as fully established. No portion of the judicial prerogative could now be surrendered without not merely "distinguishing" but flatly overruling a unanimous decision of the Court.

The significance of Smyth v. Ames was soon observable in the activities of the lower Federal courts. Within the nine months of 1898 that followed that decision, there were at least four applications for injunctions against alleged unreasonable rates, and in three of these cases the applications were granted. During the years that followed Smyth v. Ames, Federal courts all over the country were tying the hands of state officers who attempted to put into effect legislative measures regulating railway concerns. In Arkansas, Florida, Alabama, Minnesota, Missouri, Illinois, North Carolina, Louisiana, and Oregon, rates fixed by statute, commission, or ordinance were attacked by the railways in the Federal courts and their enforcement blocked. In several instances the injunctions of the lower courts were made permanent, and no appeal was taken to the Supreme Court of the United States. With Smyth v. Ames staring them in the face, state attorneys accepted the inevitable.

The decision in Smyth v. Ames left still one matter in doubt. The allegation of the railroads in that case had been that the rates fixed were actually confiscatory—that is, so low as to make dividends impossible. In the course of his opinion, Justice Harlan had stated, however, that the railroads were entitled to a "fair return," an opinion that had been expressed also in the Reagan case, where indeed it had been necessary to the decision, and still earlier, but with little relevancy, in the Chicago-Minnesota case. In none of these cases, however, had any precise definition of the terms "reasonable" or "fair" return been necessary, and none had been made.

The first direct suggestion of the development of the judicial reasoning on this point that was to take place is found in the Milwaukee Electric Railway case, also decided in 1898. In that case Judge Seaman, of the Federal circuit court, found from the evidence that the dividends of the street railway company for several years past had been from 3.3 to 4.5 per cent, while its bonds bore interest at 5 per cent. Anything less than these returns, the judge declared, would be unreasonable, inasmuch as money loaned on real estate, secured by a first mortgage, was at that time commanding 6 per cent in Milwaukee.

Eleven years later, in 1909, the Supreme Court sustained virtually the same rule in the New York Consolidated Gas case, holding, with the lower court, that the company was entitled to six per cent return on a fair value of its property (including franchises and the high values of the real estate used by it in the business), because six per cent was the "customary" rate of interest at that time in New York City. On the same day the court decided that a return of six per cent on waterworks property in Knoxville, Tennessee, was also not unreasonable. In neither of these cases, however, did the Court attempt any examination or explanation of the evidence on which it rested its determination that six per cent was the "customary" rate in the places named; nor did it attempt to explain the principle on which such "customary" rate could be determined for other times and places. Plainly there is still room for a great deal of "distinguishing" on this point. The extreme vagueness of the rule was exemplified by the decision of Federal circuit Judge Sanborn in the Shephard case (1912), in which he decided that, for a railroad running through Minnesota, seven per cent was no more than a "fair" return, and that any reduction in rates which would diminish the profits of the road below that figure was unreasonable.

Equally important and of as great difficulty are the questions entering into the determination of a "fair" valuation. This point is both too unsettled and too technical to render any discussion of it profitable here. Attention may, however, be called to two of the holdings in the Consolidated Gas case. In arriving at a "fair" valuation of the gas company's property, the Court allowed a large valuation to be placed upon the franchises of the company—none of which had been paid for by the companies to which they had originally been issued, and which had not been paid for by the Consolidated Company when it took them over, except in the sense that a large amount of stock, more than one sixth of the total stock issued by the company, had been issued against them, when the consolidation was formed. The particular facts surrounding this case are such as to make it very easy for the Court to "distinguish" this case from the usual one, for the consolidation was formed, and its stock issued, under a statute that authorized the formation of consolidations, and forbade such consolidations to issue stock in excess of the fair value of the "property, franchises, and rights" of the constituent companies. This last prohibition the Court construed as indicative of the legislative intention that the franchises should be capitalized. Equally plain is it, however, that this particular circumstance of the Consolidated Gas case is so irrelevant that it will offer no obstacle whatever to the Court's quoting that case as a precedent for the valuation of franchises obtained gratis, should it so desire.

Another holding of great importance in the Gas case was that the company was entitled to a fair return on the value of real estate used in the business, that value having appreciated very greatly since the original purchase of the real estate, and there being no evidence to show that real estate of so great value was essential to the conduct of the business.

The importance of these two holdings is exemplified by the fact that in this particular case the combined value attributed to the franchises and the appreciation of real estate was over $15,000,000—more than one fourth of the total valuation arrived at by the Supreme Court. It will readily be seen that if these two items had been struck from the valuation by the Court, it would be possible for the state to make a still further substantial reduction in the rate charged for gas in New York City without violating the Court's own canon of reasonableness—a six per cent return.

The steps in the evolution of the doctrine of judicial review may be summarized in the following manner:

The Supreme Court first declared that the legislative determination of what was a "reasonable" rate was not subject to review by the courts.

The first departure from this view was an intimation, confirmed with increasing emphasis in several cases, that a rate so low as to make any return whatever impossible was confiscatory and would be set aside by the Court as violating the Fourteenth Amendment. For a time, however, the Court took the position (steadily undermined in subsequent decisions) that a rate which allowed some, even though an "unreasonably low" return, was not prohibited by the Fourteenth Amendment and could not be set aside by the Court.

Next in order came the holding that the determination of a commission as to what was reasonable could not be made conclusive upon the courts, at least when the commission had acted without the forms and safeguards of judicial procedure, and, probably, even when it had acted with them.

In the same decision appeared an intimation, which in subsequent decisions became crystallized into "settled law," that not only were totally confiscatory rates prohibited by the Fourteenth Amendment, but also any rates which deprived the owners of the property regulated of a return equal to what was "customary" in private enterprises.

This rule was applied by the Court for the first time against a rate fixed by a commission, and where the rate was admitted by the pleadings to be confiscatory. But it was shortly thereafter applied to a rate fixed by a legislature, and where the "reasonableness" (not the confiscatory character) of the rate was a direct issue on the facts and evidence.

Finally, the principle that what is a "fair" or "reasonable" rate is to be measured by the customary return in private enterprises under similar conditions, has been applied in several cases to warrant the requirement of a definite rate of interest; but no precise rules have been laid down for the determination of such rate in all cases.

The most striking feature, perhaps, of the development of the doctrine of judicial review here traced, as seen in the opinions of the Supreme Court, is the brevity and almost fortuitous character of the reasoning given in support of the most important and novel holdings. A comparison of the reasoning in Smyth v. Ames, for example, with that in Marbury v. Madison, in which Chief Justice Marshall first held a law of Congress unconstitutional, will forcibly exemplify this. The explanation is to be found largely in the fact that each step in advance in the building up of the doctrine had been foreshadowed in dictum before it was established as decision. It was thus possible for the judge writing the opinion in a case when a new rule was actually established, to quote, as "settled law," a mere dictum from a previous opinion. Justice Gray's citation, in this fashion, in the Dow case, of Chief Justice Waite's dictum in the Ruggles case (although he might, with equal cogency, have cited the Chief Justice's contrary dictum in the Munn or Peik cases), is a good instance of this curious use of "precedent"; and parallel instances could be adduced from virtually every one of the important subsequent cases on this subject.[22]

It is apparent from this all too brief and incomplete account of the establishment of judicial review over every kind and class of state legislation affecting private property rights that no layman can easily unravel the mysterious refinements, distinctions, and logical subtleties by which the fact was finally established that property was to be free from all interference except such as might be allowed by the Supreme Court (or rather five judges of that Court) appointed by the President and Senate, thus removed as far as possible from the pressure of public sentiment. Had a bald veto power of this character been suddenly vested in any small group of persons, there can be no doubt that a political revolt would have speedily followed. But the power was built up by gradual accretions made by the Court under the stimulus of skilful counsel for private parties, and finally clothed in the majesty of settled law. It was a long time before the advocates of leveling democracy, leading an attack on corporate rights and privileges, discovered that the courts were the bulwarks of laissez faire and directed their popular battalions in that direction.

Those who undertake to criticize the Supreme Court for this assumption of power do not always distinguish between the power itself and the manner of its exercise. What would have happened if the state legislatures had been given a free hand to regulate, penalize, and blackmail corporations at will during the evolution of our national economic system may be left to the imagination of those who recall from their history the breezy days of "wild-cat" currency, repudiation, and broken faith which characterized the thirty years preceding the Civil War when the Federal judiciary was under the dominance of the states' rights school. The regulation of a national economic system by forty or more local legislatures would be nothing short of an attempt to combine economic unity with local anarchy. It is possible to hold that the Court has been too tender of corporate rights in assuming the power of judicial review, and at the same time recognize the fact that such a power, vested somewhere in the national government, is essential to the continuance of industries and commerce on a national scale.

Thus far attention has been directed to the activities of the Federal Supreme Court in establishing the principle of judicial review particularly in connection with legislation relative to railway corporations, but it should be noted that judicial review covers all kinds of social legislation relative to hours and conditions of labor as well as the charges of common carriers. In 1905, for example, the Supreme Court in the celebrated case of Lochner v. New York declared null and void a New York law fixing the hours of work in bakeshops at ten per day, basing its action on the principle that the right to contract in relation to the hours of labor was a part of the liberty which the individual enjoyed under the Fourteenth Amendment. Mr. Justice Holmes, who dissented in the case, declared that it was decided on an economic theory which a large part of the country did not entertain, and protested that the Fourteenth Amendment did not "enact Mr. Herbert Spencer's Social Statics."

As a matter of fact, however, the Supreme Court of the United States has declared very little social legislation invalid, and has been inclined to take a more liberal view of such matters than the supreme courts of the states. The latter also have authority to declare state laws void as violating the Federal Constitution, and when a state court of proper jurisdiction invalidates a state law, there is, under the Federal judiciary act, no appeal to the Supreme Court of the United States. Consequently, the Fourteenth Amendment means in each state what the highest court holds it to mean, and since the adoption of that Amendment at least one thousand state laws have been nullified by the action of state courts, under the color of that Amendment or their respective state constitutions.

As examples, in New York a law prohibiting the manufacture of cigars in tenement houses, in Pennsylvania a law prohibiting the payment of wages in "scrip" or store orders, and in Illinois a statute forbidding mining and manufacturing corporations to hold back the wages of their employees for more than a week were declared null and void. Such laws were nullified not only on the ground that they deprived the employer of property without due process, but also on the theory that they deprived workingmen of the "liberty" guaranteed to them to work under any conditions they chose. In one of these cases, a Pennsylvania court declared the labor law in question to be "an insulting attempt to put the laborer under a legislative tutelage which is not only degrading to his manhood but subversive of his rights as a citizen of the United States."

Where the state court nullified under the state constitution, it was of course relatively easy to set aside the doctrines of the court by amending the constitution, but where the state court nullified on the ground of the Fourteenth Amendment to the Federal Constitution, there was no relief for the state and even no appeal for a review of the case to discover whether the Supreme Court of the United States would uphold the state tribunal in its view of the national law. Under such circumstances, the highest state court became the supreme power in the state, for its decrees based on the Federal Constitution were final. It was the freedom, one may say, recklessness, with which the courts nullified state laws that was largely responsible for the growth of the popular feeling against the judiciary, and led to the demand for the recall of judges.[23]

FOOTNOTES:

[13] A. R. Conkling, Life of Roscoe Conkling, p. 297.

[14] A. R. Conkling, Life of Roscoe Conkling, p. 699.

[15] Ibid., p. 671.

[16] Ibid., pp. 679 ff.

[17] See below, p. 57.

[18] Ibid., p. 540.

[19] Taylor, Origin and Growth of the American Constitution, p. 355. As a matter of fact, Conkling, who was a member of the committee that drafted the Fourteenth Amendment, voted against these provisions in Committee.

[20] It is to be noted that the demand of the warehousemen on the second point was not for a judicial review of the reasonableness of a rate fixed by the legislature, but a total denial of the power of a legislature to act in the matter. The question of the propriety of a judicial review of the reasonableness of the rates in question was not raised in the pleadings. It was not difficult, therefore, for judges in subsequent cases in which the question of judicial review was squarely raised to explain away as mere dictum this solemn statement by Chief Justice Waite to the effect that the power of the legislature to regulate being conceded, the determination of the legislature was binding on the courts and not subject to review.

[21] Except for two unimportant cases decided in the lower courts.

[22] It should be noted that the Supreme Court not only undertook to pass upon the reasonableness of such rates as the states were permitted to make, but also added in 1886 that no state could regulate the rates on goods transported within its borders, when such goods were in transit to or from a point in another state. Such regulation was held in the Wabash, etc., Railway Company v. Illinois (118 U. S. 557) to be an interference with interstate commerce which was subject to control by Congress only.

[23] Below, p. 287.

CHAPTER IV

PARTIES AND PARTY ISSUES, 1877-1896

It was a long time before the conditions created by the great economic revolution were squarely reflected in political literature and party programs. Indeed, they were but vaguely comprehended by the generation of statesmen who had been brought up in the days of the stagecoach and the water mill. It is true that the inevitable drift of capitalism in the United States might have been foreseen by turning to Europe, particularly to England, where a similar economic revolution had produced clearly ascertainable results; but American politicians believed, or at least contended, that the United States lived under a special economic dispensation and that the grave social problems which had menaced Europe for more than a generation when the Civil War broke out could never arise on American soil.

From 1861 to 1913, the Republican party held the presidential office, except for eight years. That party had emerged from the Civil War fortified by an intense patriotism and by the support of the manufacturing interests which had flourished under the high tariffs and of capitalists anxious to swing forward with the development of railways and new enterprises. Its origin had been marked by a wave of moral enthusiasm such as has seldom appeared in the history of politics. It came to the presidency as a minority party, but by the fortunes of war it became possessed of instruments of power beyond all calculation. Its leading opponents from the South deserted in a mass giving it in a short time possession of the field—all the Federal branches of government. It had the management of the gigantic war finances, through which it attached to itself the interests and fortunes of the great capitalists and bankers throughout the North. It raised revenues by a high tariff which placed thousands of manufacturers under debt to it and linked their fortunes also with its fate. It possessed the Federal offices, and, therefore, railway financiers and promoters of all kinds had to turn to it for privileges and protection. Finally, millions of farmers of the West owed their homes to its generous policy of giving away public lands. Never had a party had its foundations on interests ramifying throughout such a large portion of society.

And over all it spread the mantle of patriotism. It had saved the Union, and it had struck the shackles from four million bondmen. In a baptism of fire it had redeemed a nation. Europe's finger of scorn could no longer be pointed to the "slave republic paying its devotions to liberty and equality within the sound of the bondman's wail." The promises of the Declaration of Independence had been fulfilled and the heroic deeds of the Revolution rivaled by Republican leaders. As it declared in its platform of 1876, the Republican party had come into power "when in the economy of Providence this land was to be purged of human slavery and when the strength of the government of the people, by the people, and for the people was to be demonstrated." Incited by the memories of its glorious deeds "to high aims for the good of our country and mankind," it looked forward "with unfaltering courage, hope, and purpose."

Against such a combination of patriotism and economic interest, the Democratic party had difficulty in making headway, for its former economic mainstay, the slave power, was broken and gone; it was charged with treason, and it enjoyed none of the spoils of national office. But in spite of all obstacles it showed remarkable vitality. Though divided on the slave question in 1860, those who boasted the name of "Democrat" were in an overwhelming majority, and even during the Civil War, with the southern wing cut off completely, the party was able to make a respectable showing in the campaign which resulted in Lincoln's second election. When the South returned to the fold, and white dominion drove the negro from the polls, the Democratic party began to renew its youth. In the elections of 1874, it captured the House of Representatives; it narrowly missed the presidency in 1876; and it retained its control of the lower house of Congress in the elections of 1876 and 1878.

The administration of President Hayes did little to strengthen the position of the Republicans. His policy of pacification in the South alienated many partisans who believed that those who had saved the Union should continue to rule it; but it is difficult to say how much disaffection should be attributed to this cause. It seems to have been quietly understood within official circles that support would be withdrawn from the Republican administrations in Louisiana and South Carolina. Senator Hoar is authority for the statement "that General Grant, before he left office, had determined to do in regard to these state governments exactly what Hayes afterward did, and that Hayes acted with his full approval. Second, I have the authority of President Garfield for saying that Mr. Blaine had come to the same conclusion."

Charges based on sectional feeling were also brought forward in criticism of some of Hayes' cabinet appointments. He terrified the advocates of "no concession to rebels" by appointing David M. Key, an ex-Confederate soldier of Tennessee, to the office of Postmaster-General; and his selection of Carl Schurz, a leader of the Liberal Republican Movement of 1872 and an uncertain quantity in politics, as Secretary of the Interior, was scarcely more palatable in some quarters. He created further trouble in Republican ranks by his refusal to accede to the demands of powerful Senators, like Cameron of Pennsylvania and Conkling of New York, for control over patronage in their respective states. No other President for more than a generation had so many nominations rejected by the Senate.

On the side of legislation, Hayes' administration was nearly barren. During his entire term the House of Representatives was Democratic, and during the last two years the Senate was Democratic also by a good margin. Had he desired to carry out a large legislative policy, he could not have done so; but he was not a man of great capacity as an initiator of public policies. He maintained his dignity and self-possession in the midst of the most trying party squabbles; but in a democracy other qualities than these are necessary for effective leadership.

In their desperation, the conservative leaders of the Republican party resolved to have no more "weak and goody-goody" Presidents, incapable of fascinating the populace and keeping it in good humor, and they made a determined effort to secure the renomination of Grant for a third term, in spite of the tradition against it. Conkling captured the New York delegation to the national convention in 1880 for Grant; Cameron swung Pennsylvania into line; and Logan carried off Illinois. Grant's consent to be a candidate was obtained, and Conkling placed his name in nomination in a speech which Senator Hoar describes as one of "very great power."

Strong opposition to Grant developed, however, partly on account of the feeling against the third term, and particularly on account of the antagonism to the Conkling faction which was backing him. Friends of Blaine, then Senator from Maine, and supporters of John Sherman of Ohio, thought that Grant had had enough honors at the hands of the party, and that their turn had come. As a result of a combination of circumstances, Grant never received more than 313 of the 378 votes necessary to nomination at the Republican convention. After prolonged balloting, the deadlock was broken by the nomination of James A. Garfield, of Ohio, as a "dark horse." The Grant contingent from New York received a sop in the shape of the nomination of Chester A. Arthur, a politician of the Conkling school, to the office of Vice President.

In spite of the promising signs, the Democrats were unable to defeat the Republicans in 1880. The latter found it possible to heal, at least for campaign purposes, the breaches created by Hayes' administration. It is true that Senator Conkling and the "Stalwart" faction identified with corporation interests were sorely disappointed in their failure to secure the nomination of Grant for a third term, and that Garfield as a "dark horse" did not have a personal following like that of his chief opponents, the Hero of Appomattox, Blaine of Maine, and Sherman of Ohio. But he had the advantage of escaping the bitter factional feeling within the party against each of these leaders. He had risen from humble circumstances, and his managers were able to make great capital out of his youthful labors as a "canal-boat boy." He had served several terms in Congress acceptably; he had been intrusted with a delicate place as a member of the electoral commission that had settled the Hayes-Tilden dispute; and he was at the time of his nomination Senator-elect from Ohio. Though without the high qualities of leadership that distinguished Blaine, Garfield was a decidedly "available" candidate and his candidature was strengthened by the nomination of Arthur, who was acceptable to the Conkling group and the spoilsmen generally.

The Republican fortunes in 1880 were further enhanced by the divisions among the Democrats and their inability to play the game of practical politics. Two sets of delegates appeared at the convention from New York, and the Tammany group headed by "Boss" Kelly was excluded, thus offending a powerful section of the party in that pivotal state. The candidate nominated, General Hancock, was by no means a skilful leader. In fact, he had had no public experience outside of the Army, where he had made a brilliant record, and he showed no ability at all as a campaigner. Finally, the party made its fight principally on the "great fraud of 1876," asking vindication at the hands of the people on the futile theory that the voters would take an interest in punishing a four-year-old crime. In its platform, reported by Mr. Watterson, of Kentucky, it declared that the Democrats had submitted to that outrage because they were convinced that the people would punish the crime in 1880. "This issue precedes and dwarfs every other; it imposes a more sacred duty upon the people of the Union than ever addressed to the conscience of a nation of freemen." Notwithstanding this narrow issue, Hancock fell behind Garfield only about ten thousand votes, although his electoral vote was only 155 to 214 for his opponent.

Whether Garfield would have been able to consolidate his somewhat shattered party by effective leadership is a matter of speculation, for, on July 2, 1881, about four months after his inauguration, he was shot by Charles J. Guiteau, a disappointed and half-crazed office seeker, and he died on September 19. His successor, Vice President Arthur, though a man of considerable ability, who managed his office with more acumen and common honesty than his opponents attributed to him, was unable to clear away the accumulating dissatisfaction within his party or convince the country that the party would do its own reforming.

In fact, Arthur, notwithstanding the taint of "spoils" associated with his career, proved to be by no means the easy-going politician that had been expected. He took a firm stand against extravagant appropriations as a means of getting rid of the Treasury surplus, and in 1882 he vetoed a river and harbor appropriation bill which was specially designed to distribute funds among localities on the basis of favoritism. In the same year, he vetoed a Chinese exclusion act as violating the treaty with China, and made recommendations as to changes which were accepted by Congress. Arthur also advocated legislation against the spoils system, and on January 16, 1883, signed the Civil Service law.[24] He recommended a revision of the tariff, including some striking reductions in schedules, but the tariff act of 1883 was even less satisfactory to the public than such measures usually are. Judging by past standards, however, Arthur had a claim upon his party for the nomination in 1884.

But Arthur was not a magnetic leader, and the election of Grover Cleveland as governor of New York in 1882 and Democratic victories elsewhere warned the Republicans that their tenure of power was not indefinite. Circumspection, however, was difficult. A "reform" faction had grown up within the party, protesting against the gross practices of old leaders like Conkling and urging at least more outward signs of propriety. In this faction were Senator Hoar of Massachusetts, George William Curtis, Henry Cabot Lodge, and Theodore Roosevelt—the last of whom had just begun his political career with his election to the New York legislature in 1881. Senator Edmunds, of Vermont, was the leader of this group, and his nomination was warmly urged in the Republican convention at Chicago in 1884.

The hopes of the Republican reformers were completely dashed, however, by the nomination of Blaine. This "gentleman from Maine" was a man of brilliant parts and the idol of large sections of the country, particularly the Middle West; but some suspicions concerning his personal integrity were widely entertained, and not without reason, by a group of influential leaders in his party. In 1876, he was charged with having shared in the corruption funds of the Union Pacific Railroad Company, and as Professor Dunning cautiously puts it, "the facts developed put Mr. Blaine under grave suspicion of just that sort of wealth-getting, if nothing worse, which had ruined his colleagues in the Crédit Mobilier." Moreover, Mr. Blaine's associations had been with that wing of his party which had been involved or implicated in one scandal after another. Partly on this account, he had been defeated for nomination in 1876, when he was decidedly the leading aspirant and again in 1880 when he received 285 votes in the convention. But in 1884, leaders like Senator Platt, of New York, declared "it is now Blaine's turn," and he was nominated in spite of a threatened bolt.

The Democrats were fortunate in their selection of Grover Cleveland as their standard bearer. He had been mayor of Buffalo and governor of New York, but he had taken no part in national politics and had the virtue of having few enemies in that field. He was not a man of any large comprehension of the economic problems of his age, but he was in every way acceptable to financiers in New York, for he had showed his indifference to popular demands by vetoing a five-cent fare bill for the New York City elevated roads which were then being watered and manipulated by astute speculators, like Jay Gould. Moreover, Mr. Cleveland possessed certain qualities of straightforwardness and homely honesty which commended him to a nation wearied of scandalous revelations and the malodorous spoils system.

These qualities drew to Cleveland the support of a group of eminent Republicans, like Carl Schurz who had been Secretary of the Interior under Hayes, George William Curtis, the civil service reformer, Henry Ward Beecher, and William Everett, who were nicknamed "Mugwumps" from an Indian word meaning "chief." Although the "reformers" talked a great deal about "purity" in politics, the campaign of 1884 was principally over personalities; and, as a contemporary newspaper put it, it took on the tone of "a pothouse quarrel." There was no real division over issues, as will be seen by a comparison of platforms, and scandalous rumors respecting the morals of the two candidates were freely employed as campaign arguments. Indeed, the spirit of the fray is reflected in the words of the Democratic platform: "The Republican party, so far as principle is concerned, is a reminiscence. In practice, it is an organization for enriching those who control its machinery. The frauds and jobbery which have been brought to light in every department of the government are sufficient to have called for reform within the Republican party; yet those in authority, made reckless by the long possession of power, have succumbed to its corrupting influence and have placed in nomination a ticket against which the independent portion of the party are in open revolt. Therefore a change is demanded." Having enjoyed no opportunities for corruption worthy of mention, except in New York City where they had reaped a good harvest during the sunshine, the Democrats could honestly pose as the party of "purity in politics."

Their demand for a change was approved by the voters, for Cleveland received 219 electoral votes as against 182 cast for Blaine. A closer analysis of the vote, however, shows no landslide to the Democrats, for had New York been shifted to the Republican column, the result would have been 218 for Blaine and 183 for Cleveland. And the Democratic victory in New York was so close that a second count was necessary, upon which it was discovered that the successful candidate had only about eleven hundred votes more than the vanquished Blaine. Taking the country as a whole, the Democrats had a plurality of a little more than twenty thousand votes.

Cleveland's administration was beset by troubles from the beginning. The civil service reformers were early disappointed with his performances, as they might have expected. It is true that the Democratic party had posed in general as the party of "reform," because forsooth having no patronage to dispense nor favors to grant it could readily make a virtue of necessity; but it is fair to say that the party had in fact been somewhat noncommittal on civil service reform, and Cleveland, though friendly, was hardly to be classed as ardent. The test came soon after his inauguration. More than one hundred thousand Federal offices were in the hands of Republicans; the Senate which had to pass upon the President's chief nominations was Republican and the clash between the two authorities was spectacular. The pressure of Democrats for office was naturally strong, and although the civil service reformers got a few crumbs of comfort, the bald fact stood forth that within two years only about one third of the former officeholders remained. "Of the chief officers," says Professor Dewey, "including the fourth class post-masters, collectors, land officers, numbering about 58,000, over 45,000 were changed. All of the 85 internal revenue collectors were displaced; and of the 111 collectors of customs, 100 were removed or not reappointed."

Cleveland's executive policy was negative rather than positive. He vigorously applied the veto to private pension bills. From the foundation of the government until 1897, it appears that 265 such bills were denied executive approval; and of these five were vetoed by Grant and 260 by Cleveland—nearly all of the latter's negatives being in his first administration. Cleveland also vetoed a general dependent pension bill in 1887 on the ground that it was badly drawn and ill considered. Although his enemies attempted to show that he was hostile to the old soldiers, his vetoes were in fact based rather upon a careful examination of the merits of the several acts which showed extraordinary carelessness, collusion, and fraud. At all events, the Grand Army Encampment in 1887 refused to pass a resolution of censure. Cleveland also killed the river and harbor bill of 1887 by a pocket veto, and he put his negative on a measure, passed the following year, returning to the treasuries of the northern states nearly all of the direct taxes which they had paid during the Civil War in support of the Federal government.

On the constructive side, Cleveland's first administration was marked by a vigorous land policy under which upwards of 80,000,000 acres of land were recovered from private corporations and persons who had secured their holdings illegally. He was also the first President to treat the labor problem in a special message (1886); and he thus gave official recognition to a new force in politics, although the sole outcome of his recommendations was the futile law of 1888 providing for the voluntary arbitration of disputes between railways and their employees. The really noteworthy measure of his first administration was the interstate commerce law of 1887, but that could hardly be called a partisan achievement.[25]

Holding his place by no overwhelming mandate and having none of those qualities of brilliant leadership which arouse the multitude, Cleveland was unable to intrench his party, and he was forced to surrender his office at the end of four years' tenure, although his party showed its confidence by renominating him in 1888. He had a Democratic House during his administration, but he was embarrassed by party divisions there and by a Republican Senate. Under such circumstances, he was able to do little that was striking, and in his message of December, 1887, he determined to set an issue by a vigorous attack on the tariff—a subject which had been treated in a gingerly fashion by both parties since the War. While he disclaimed adherence to the academic theory of free trade as a principle, his language was readily turned by his enemies into an attack on the principle of the protective tariff. Although the performance of the Democrats in the passage of the Mills tariff bill by the House in 1888 showed in fact no strong leanings toward free trade, the Republicans were able to force a campaign on the "American doctrine of protection for labor against the pauper millions of Europe."

On this issue they carried the election of 1888. Passing by Blaine once more, the Republicans selected Benjamin Harrison, of Indiana, a United States Senator, a shrewd lawyer, and a reticent politician. Mr. Wanamaker, a rich Philadelphia merchant, was chosen to raise campaign funds, and he successfully discharged the functions of his office. As he said himself, he addressed the business men of the country in the following language: "How much would you pay for insurance upon your business? If you were confronted by from one to three years of general depression by a change in our revenue and protective measures affecting our manufactures, wages, and good times, what would you pay to be insured for a better year?" The appeal was effective and with a full campaign chest and the astute Matthew S. Quay as director of the national committee, the Republicans outwitted the Democrats, winning 233 electors' votes against 168 for Cleveland, although the popular vote for Harrison was slightly under that for his opponent.

Harrison's administration opened auspiciously in many ways. The appointment of Blaine as Secretary of State was a diplomatic move, for undoubtedly Blaine was far more popular with the rank and file of his party than was Harrison. The civil service reformers were placated by the appointment of Theodore Roosevelt as president of the Civil Service Commission, for he was a vigorous champion of reform, who brought the whole question forcibly before the country by his speeches and articles, although it must be said that no very startling gains were made against the spoils system under his administration of the civil service law. It required time to educate the country to the point of supporting the administrative heads in resisting the clamor of the politicians for office.

Harrison's leadership in legislation was not noteworthy. The Republicans were in power in the lower house in 1889 for the first time since 1881, but their majority was so small that it required all of the parliamentary ingenuity which Speaker Reed could command to keep the legislative machine in operation. Nevertheless, several important measures were enacted into law. The McKinley tariff act based upon the doctrine of high protection was passed in 1890. In response to the popular outcry against the trusts, the Sherman anti-trust law was enacted the same year; and the silver party was thrown a sop in the form of the Sherman silver purchase act. The veterans of the Civil War received new recognition in the law of 1890 granting pensions for all disabled soldiers whether their disabilities were incurred in service or not. Negro voters were taken into account by an attempt to get a new "force bill" through Congress, which would insure a "free ballot and a fair count everywhere."

There had been nothing decisive, however, about the Republican victory in 1888, for a few thousand votes in New York changed the day as four years before. Harrison had not proved to be a very popular candidate, and there was nothing particularly brilliant or striking about his administration to enhance his reputation. He was able to secure a renomination in 1892, largely because he controlled so many officeholding delegates to the Republican convention, and there was no other weighty candidate in the field, Blaine being unwilling to make an open fight at the primaries.

In the second contest with Cleveland, Harrison was badly worsted, receiving only 145 electoral votes against 277 cast for the Democratic candidate and 22 for the Populist, Weaver. The campaign was marked by no special incidents, for both Cleveland and Harrison had been found safe and conservative and there was no very sharp division over issues. The tariff, it is true, was vigorously discussed, but Cleveland made it clear that no general assault would be made on any protected interests. The million votes cast for the Populist candidate, however, was a solemn warning that the old game of party see-saw over personalities could not go on indefinitely. The issues springing from the great economic revolution were emerging, not clearly and sharply, but rather in a vague unrest and discontent with the old parties and their methods.

President Cleveland went into power for the second time on what appeared to be a wave of business prosperity, but those who looked beneath the surface knew that serious financial and industrial difficulties were pending. Federal revenues were declining and a deficit was staring the government in the face at a time when there was, for several reasons, a stringency in the gold market. The Treasury gold reserve was already rapidly diminishing, and Harrison was on the point of selling bonds when the inauguration of Cleveland saved the day for him. Congress was deadlocked on the money question, though called in a special session to grant relief; and Cleveland at length resorted to the sale of bonds under an act of 1875 to procure gold for the Treasury. The first sale was made in January, 1894, and the financiers, to pay for the bonds, drew nearly half of the amount of gold out of the Treasury itself.

The "endless chain" system of selling bonds to get gold for the Treasury, only to have it drawn out immediately, aroused a great hue and cry against the financial interests. In November, 1894, a second sale was made with similar results, and in February, 1895, Cleveland in sheer desperation called in Mr. J. P. Morgan and arranged for the purchase of gold at a fixed price by the issue of bonds, with an understanding that the bankers would do their best to protect the Treasury. To the silver advocates and the Populists this was the climax of "Cleveland's iniquitous career of subserviency to Wall Street," for it seemed to show that the government was powerless before the demands of the financiers. This criticism forced the administration to throw open the issue of January 6, 1896, to the public, and the result was decidedly advantageous to the government—apparently an indictment of Cleveland's policy. Congress in the meantime did nothing to relieve the administration.

While the government was wrestling with the financial problem, the country was in the midst of an industrial crisis. The number of bankruptcies rose with startling rapidity, hundreds of factories were closed, and idle men thronged the streets hunting for work. According to a high authority, Professor D. R. Dewey, "never before had the evil of unemployment been so widespread in the United States." It was so pressing that Jacob Coxey, a business man from Ohio, planned a march of idle men on Washington in 1894 to demand relief at the hands of the government. His "army," as it was called, ended in a fiasco, but it directed the attention of the country to a grave condition of affairs.

Reductions in wages produced severe strikes, one of which—the Pullman strike of Chicago—led to the paralysis of the railways entering Chicago, because the Pullman employees were supported by the American Railway Union. The disorders connected with the strike—which are now known to have been partially fomented by the companies themselves for the purpose of inducing Federal interference—led President Cleveland to dispatch troops to Chicago, against the ardent protest of Governor Altgeld, who declared that the state of Illinois was able to manage her own affairs without intermeddling from Washington. The president of the union, Mr. E. V. Debs, was thrown into prison for violating a "blanket injunction"[26] issued by the local Federal court, and thus the strike was broken, leaving behind it a legacy of bitterness which has not yet disappeared.

The most important piece of legislation during Cleveland's second administration was the Wilson tariff bill—a measure which was so objectionable to the President that he could not sign it, and it therefore became law without his approval. The only popular feature in it was the income tax provision, which was annulled the following year by the Supreme Court. Having broken with his party on the money question, and having failed to secure a revision of the tariff to suit his ideas, Cleveland retired in 1897, and one of his party members declared that he was "the most cordially hated Democrat in the country."

Party Issues

The tariff was one of the issues bequeathed to the parties from ante-bellum days, but there was no very sharply defined battle over it until the campaign of 1888. The Republicans, in their platform of 1860, had declared that "sound policy requires such an adjustment of these imposts as to encourage the development of the industrial interests of the whole country"; and although from time to time they advocated tariff reductions, they remained consistently a protectionist party. The high war-tariffs, however, were revenue measures, although the protection feature was by no means lost sight of. In the campaign of 1864, both parties were silent on the question; four years later it again emerged in the Democratic platform, but it was not hotly debated in the ensuing contest. The Democrats demanded "a tariff for revenue upon foreign imports and such equal taxation under the internal revenue laws as will afford incidental protection to domestic manufactures."

From that campaign forward the Democrats appeared to favor a "revenue tariff" in their platforms. It is true they accepted the Liberal Republican platform in 1872, which frankly begged the question by acknowledging the wide differences of opinion on the subject and remitted the discussion of the matter "to the people in their congressional districts and the decision of Congress thereon." But in 1876, the Democrats came back to the old doctrine and demanded "that all custom-house taxation shall be only for revenue." In their victorious campaign of 1884, however, they were vague. They pledged themselves "to revise the tariff in a spirit of fairness to all interests"; but they promised, in making reductions, not "to injure any domestic industries, but rather to promote their healthy growth," and to be mindful of capital and labor at every step. Subject to these "limitations" they favored confining taxation to public purposes only. It was small wonder that Democratic orators during the campaign could promise "no disturbance of business in case of victory."

Cleveland, in the beginning of his administration, faithfully followed his platform, for in his first message he "placed the need of tax reduction solely on the ground of excess revenue and declared that there was no occasion for a discussion of the wisdom or expediency of the protective system." But within two years he had seen a new light, and he devoted his message of December, 1887, exclusively to a discussion of the tariff issue, in vague and uncertain language it is true, but still characterized by such a ringing denunciation of the "vicious, illegal, and inequitable" system of taxation then in vogue, that the Republicans were able to call it, with some show of justification, a "free trade document." The New York Tribune announced with evident glee that Cleveland had made "the issue boldly and distinctly and that the theories and aims of the ultra-opponents of protection have a new and zealous advocate." Of course, Cleveland hotly denied that he was trying to commit his party to a simple doctrine of free trade or even the old principle of the platform, "tariff for revenue only." Moreover, the Democrats, in their platform of the following year, while indorsing Cleveland's messages, renewed the tariff pledges of their last platform and promised to take "labor" into a careful consideration in any revision.

In spite of the equivocal position taken by the Democrats, the Republicans made great political capital out of the affair, apparently on the warranted assumption that the voters would not read Cleveland's message or the platform of his party. In their declaration of principles in 1888, the Republicans made the tariff the leading issue: "We are uncompromisingly in favor of the American system of protection. We protest against its destruction, as proposed by the President and his party. They serve the interests of Europe; we will support the interest of America. We accept the issue and confidently appeal to the people for their judgment. The protective system must be maintained.... We favor the entire repeal of internal taxes rather than the surrender of any part of our protective system, at the joint behest of the whisky trusts and the agents of foreign manufacturers." Again, in 1892, the Republicans attempted to make the tariff the issue: "We reaffirm the American doctrine of protection. We call attention to its growth abroad. We maintain that the prosperous condition of our country is largely due to the wise revenue legislation of the Republican Congress," i.e. the McKinley bill.

The effect of this Republican hammering on the subject was to bring out a solemn declaration on the part of the Democrats. "We denounce," they say in 1892, "the Republican protection as a fraud, a robbery of the great majority of the American people for the benefit of the few. We declare it to be a fundamental principle of the Democratic party that the Federal government has no constitutional power to impose and collect tariff duties, except for the purposes of revenue only, and we demand that the collection of such taxes shall be limited to the necessities of the government when honestly and economically administered." Although elected on this platform, the Democrats did not regard their mandate as warranting a serious attack on the protective system, for the Wilson tariff act of 1894 was so disappointing to moderate tariff reformers that Cleveland refused to sign it.

A close analysis of the platforms and performances of the parties from 1876 to 1896 shows no clear alignment at all on the tariff. Both parties promise reductions, but neither is specific as to details. The Republicans, while making much of the protective system, could not ignore the demand for tariff reform; and the Democrats, while repeating the well-worn phrases about tariff for revenue, were unable to overlook the fact that a drastic assault upon the protective interests would mean their undoing. In Congress, the Republicans made no serious efforts to lower the duties, and the attempts of the Democrats produced meager results.

Among the new issues raised by the economic revolution was the control of giant combinations of capital. Although some of the minor parties had declaimed against trusts as early as 1876, and the Democratic party, in 1884, had denounced "land monopolies," industrial combinations did not figure as distinct issues in the platforms of the old parties until 1888. In that year, the Democrats vaguely referred to unnecessary taxation as a source of trusts and combinations, which, "while unduly enriching the few that combine, rob the body of our citizens by depriving them of the benefits of natural competition." Here appears the favorite party slogan that "the tariff is the mother of the trusts," and the intimation that the remedy is the restoration of "natural competition" by a reduction of the tariff. The Republicans in 1888 also recognized the existence of the trust problem by declaring against all combinations designed to control trade arbitrarily, and recommended to Congress and the states legislation within their jurisdictions to "prevent the execution of all schemes to oppress the people by undue charges on their supplies or by unjust rates for the transportation of their products to market."

Both old parties returned to the trust question again in 1892. The Democrats recognized "in the trusts and combinations which are designed to enable capital to secure more than its just share of the joint product of capital and labor, a natural consequence of the prohibitive taxes which prevent the free competition which is the life of honest trade, but we believe the worst evils can be abated by law." Thereupon follows a demand for additional legislation restraining and controlling trusts. The Republicans simply reaffirmed their declaration of 1888, indorsed the Sherman anti-trust law already enacted by Congress in 1890, and favored new legislation remedying defects and rendering the enforcement of the law more complete.

The railway issue emerged in 1880 when the Republicans, boasting that under their administration railways had increased "from thirty-two thousand miles in 1860 to eighty-two thousand miles in 1879," pronounced against any further grants of public domain to railway corporations. The Democrats went on record against discriminations in favor of transportation lines, but left the subject with that pronouncement. Four years later the subject had taken on more precision. The Republicans favored the public regulation of railway corporations and indorsed legislation preventing unjust discriminations and excessive charges for transportation, but in the campaign of 1888 the overshadowing tariff issue enabled them to omit references to railway regulation. The Democrats likewise ignored the subject in 1884 and 1888. In 1892 the question was overlooked by the platforms of both parties, although the minor parties were loudly demanding action on the part of the Federal Government. The old parties agreed, however, on the necessity of legislation protecting the life and limb of employees engaged in interstate transportation.

Even before the Civil War, the labor vote had become a factor that could not be ignored, and both old parties consistently conciliated it by many references. The Republicans in 1860 commended that "policy of national exchanges which secures to the workingmen liberal wages." The defense of the protective system was gradually shifted by the Republicans, until, judging from the platforms, its continuation was justifiable principally on account of their anxiety to safeguard the American workingman against "the pauper labor of Europe." The Democrats could not overlook the force of this appeal, and in their repeated demands for the reduction of the tariff they announced that no devotion to free trade principles would allow them to pass legislation which might put American labor "in competition with the underpaid millions of the Old World." In 1880, the Democratic party openly professed itself the friend of labor and the laboring man and pledged itself to "protect him against the cormorant and the commune." In their platform of 1888, the Democrats promised to make "due allowance for the difference between the wages of American and foreign labor" in their tariff revisions; and in 1892 they deplored the fact that under the McKinley tariff there had been ten reductions in the wages of the workingmen to one increase. In the latter year, the Republicans urged that on articles competing with American products the duties should "equal the difference between wages abroad and at home."

Among the more concrete offerings to labor were the promises of homesteads in the West by the Republicans—promises which the Democrats reiterated; protection against Chinese and coolie labor, particularly in the West, safety-appliance laws applicable to interstate carriers, the establishment of a labor bureau at Washington, the prohibition of the importation of alien laborers under contract, and the abolition of prison contract labor. On these matters there was no marked division between the two old parties; each advocated measures of its own in general terms and denounced the propositions of the other in equally general terms.

The money question bulked large in the platforms, but until 1896 there was nothing like a clean-cut division.[27] Both parties hedged and remained consistently vague. The Republicans in 1888 declared in favor of "the use of both gold and silver as money," and condemned "the policy of the Democratic administration in its efforts to demonetize silver." Again, in 1892, the Republicans declared: "The American people, from tradition and interest, favor bimetallism, and the Republican party demands the use of both gold and silver as standard money, with such restriction and under such provisions, to be determined by legislation, as will secure the maintenance of the parity of values of the two metals, so that the purchasing and debt-paying power of the dollar, whether of silver, gold, or paper, shall be at all times equal." The Democrats likewise hedged their profession of faith about with limitations and provisions. They declared in favor of both metals and no discrimination for mintage; but the unit of coinage of both metals "must be of equal intrinsic or exchangeable value, or be adjusted through international agreement or by such safeguards of legislation as shall insure the maintenance of the parity of the two metals." Thus both of the platforms of 1892 are paragons of ambiguity.

FOOTNOTES:

[24] See below, p. 130.

[25] Below, p. 133. The tenure of office law was repealed in 1887. The presidential succession act was passed in 1886.

[26] A judicial order to all and sundry forbidding them to interfere with the movement of the trains.

[27] See below, p. 119.