american west and industrialization part 6

8/7/2019 american west and industrialization part 6

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American West and Industrialization

Part 6: Progressive Era Politics


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Overview

In the 1800s, many inventionsmade farming and ranchingmore productive, but they alsomade them more expensive.

Farmers went deeper into debt asrailroad shipping and storingrates soared, and many farmersstarted political organizations.

These organizations, like the

Grange and the Populist Party,called for the federal regulationof the railroad industry and agraduated income tax, amongother things.


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Farmers and Politics

In the late 1800s, many farmers were going into debt due to increased costs formachinery and shipping and decreased prices for crops.

The National Grange of the Patrons of Husbandry, known as The Grange,was formed in 1867 to help the interests of farmers.

Members of the Grange became involved in politics and worked to imposeregulations on the railroads.

As farmers became more actively involved in politics through organizations likethe Grange, they argued for more regulation of the railroads.

The only way most farmers could ship their crops to market was through the

railroads, and many farmers thought the rates the railroads charged wereunfair.

Railroads also owned many of the warehouses and grain elevators used byfarmers, and so farmers called for the federal government to regulate therates railroads charged for storing and shipping their crops.


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Munn v. Illinios (1877)

In Munn v. Illinois, theSupreme Court ruledthat states had theright to regulatecertain businesseswithin their borders,including therailroad.

The Supreme Courtupheld an Illinois

state law thatregulated the ratesrailroads couldcharge for storingcrops in grainelevators.

Facts of the Case: Illinois regulated grainwarehouse and elevator rates by establishingmaximum rates for their use.

Question: Did the state-imposed rates deny the

warehouse and elevator owners equal protectionand due process under the 14th Amendment?

Conclusion: No on both counts. Waite, for theCourt, took a broad view of the state's policepower. He argued that the states may regulate

the use of private property "when suchregulation becomes necessary for the publicgood." Waite resurrected an ancient legaldoctrine to support his view: "When property isaffected with a public interest, it ceases to bejuris privati only."


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Wabash v. Illinois (1886)

Less than ten years later, inthe 1886 caseWabashv. Illinois, the SupremeCourt ruled that statescannot regulate railroadrates because therailroads went acrossstate lines.

The Supreme Court statedthat only Congress couldregulate rates forinterstate railroads.

Facts of the Case: The specific allegation isthat the railroad company chargedBailey and Swannell, in Gilman, 10cents per pound more for transportinggoods a shorter distance than Elder &McKinney, in Peoria.

Question: Was the Illinois law prohibitingthis discrimination a violation of theexclusive powers of Congress toregulate interstate commerce?

Conclusion: Yes. The court declared thatthe Constitution reserves this power

exclusively for Congress. Thereforeany state law which conflicts would beunconstitutional. This decision promptsCongress to take action.


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Interstate Commerce Act (1887)

In 1887, Congresspassedthe InterstateCommerceAct.

This act allowedthe federalgovernment toregulate therailroadindustry.

Farmers welcomedthe federalregulation ofrailroads.

The Interstate Commerce Act created the InterstateCommerce Commission, the first true federal regulatoryagency. It was designed to address the issues ofrailroad abuse and discrimination and required thefollowing:

Shipping rates had to be "reasonable and just"

Rates had to be published

Secret rebates were outlawed

Price discrimination against small markets was made

illegal.Although the law granted the Commission power to

investigate abuses and summon witnesses, it lackedthe resources to accomplish its lofty goals. Laterpresidents would assure that reform would not go toofar, by appointing pro-railroad commissioners.


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Knights of Labor

The Populist Partysupportedthe Knights ofLabor, a veryimportant American

labor organization.

The Knights of Laborcalled for manychanges such as:

child labor laws

equal pay for women

progressive income tax


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Panics of 1873 and 1893

Both the Panic of 1873 and the Panic of1893 started because of the failures ofcompanies involved in the railroad industry.

In the mid-1800s, railroads in the United Stateshad expanded tremendously, and many

railroad companies had been quite profitableduring the boom in railroad construction.

Some companies, however, had overextendedthemselves during this time.

In 1873, Jay Cooke and Company, an investmentbank that had invested heavily in the Northern

Pacific Railroad, collapsed.

This started a depression that lasted until 1879.

In 1893, the Philadelphia and Reading Railroaddeclared bankruptcy.

This was the start of the Panic of 1893.


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Gold Standard

In the late 1800s, argument ensued in theUnited States over what the U.S. currencyshould be backed bygold, silver, orpaper.

Some believed the U.S. currency should be

backed only by gold.

This was known as the gold standard.

Others believed that the currency should bebacked by gold and silver.

William Jennings Bryan, a Democrat,

believed that the U.S

. currency should bebacked by silver, which he said would leadto a more stable economy.

Bryan voiced his opposition to the goldstandard in his famous "Cross ofGold" speech at the Democratic NationalConvention in 1896.

"You shall not press down upon the brow oflabor this crown of thorns; you shall not crucifymankind upon a cross of gold."


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Greenback Party

Yet another group, called the GreenbackParty, was formed in 1874 andsupported paper notes.

During the Civil War, Congress had issuedpaper money that was not backed by

silver or gold, called greenbacks.

The greenbacks had caused inflation andcut the value of the dollar in half.

Congress started taking greenbacks out ofcirculation after the Civil War, but theGreenback Party wanted to continue the

issuance of greenbacks.

Many members of this party were farmerswho had a lot of debt and had a hardtime repaying those debts.

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american west and industrialization part 6