AP U.S. History Premium, 2024 by Eugene V. Resnick

Author:Eugene V. Resnick
Language: eng
Format: epub
Publisher: Barrons Educational Services
Published: 2023-05-08T00:00:00+00:00

Reform Efforts in the Gilded Age

Reformers and critics of the new industrial capitalist order pushed for government measures designed to regulate economic activities. These efforts were strenuously opposed by defenders of laissez-faire policies. Efforts at regulation were often hampered by the courts and by lax enforcement. Take, for example, the case of railroad regulation. In 1886 the Supreme Court, in the Wabash, St. Louis and Pacific Railway Company v. Illinois case, limited the ability of states to regulate railroads, asserting that states could not impose “direct” burdens on interstate commerce. In response, the federal government created the Interstate Commerce Commission (1887) to regulate railroads. However, the ICC was chronically underfunded and was, therefore, ineffective.

A similar pattern can be seen in antitrust legislation. The Sherman Antitrust Act (1890) was the first attempt by Congress to keep monopolistic practices in check. The act made it illegal for firms to make agreements with one another that limit competition. Also it became illegal for a particular firm to engage in practices that are designed to establish a monopoly in a particular field. The idea of the law was to encourage competition in the economy and to protect consumers from abusive practices. The act, however, had only limited usefulness. In the case of United States v. E. C. Knight Company (1895), the Supreme Court greatly limited the scope of the act by making a distinction between trade (which would be subject to the act) and manufacturing (which would not). Manufacturing, the Court ruled, was a local activity not subject to congressional oversight; trade, however, involved interstate commerce, and was, therefore, within the purview of congressional regulation.

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