Millionaire's Club Dbq Analysis

In the period after the Civil War, named the "Gilded Age" by author Mark Twain, big business blossomed, and a strong desire for free trade and the concept of self-interest flourished. Adam Smith, in his book An Inquiry into the Nature and Causes of the Wealth of Nations, introduced the policies of free enterprise and laissez-faire, or minimal government intervention in the economy. While the government often upheld this policy during the period of 1865 to 1900, it also violated it at times.
"Economically, it will ever remain true, that the government is best which governs least," declared American economist Amasa Walker in The Science of Wealth: A Manual of Political Economy (Doc A). This belief is supported by Social Darwinism, or the idea
that only the strongest should flourish in society, which naturally goes hand in hand with the policy of laissez-faire. It is based on Charles Darwin's theory of evolution by natural selection, yet the phrase "survival of the fittest" was actually coined by English philosopher Herbert Spencer. In his testimony before the Senate Committee on Education and Labor, New York City merchant Daniel Knowlton agreed with this theory, having said, "It is better always to leave individual enterprise to do most that is to be done in the country" (Doc B).
Numerous entrepreneurs adopted this mindset and used it to their advantage. James J. Hill, creator of the Great Northern Railroad and nicknamed the "Empire Builder," was one of those. He constructed the railroad from Lake Superior to Puget Sound without any government aid. Whereas the Union Pacific and Central Pacific Railroads had received generous grants of land, the Great Northern did not. This subject of land grants created much controversy. Jay Gould, a railroad financier and official, was strongly for them, and claimed that land grants to railroads "has not been an unmixed evil" and that the railroads have "gone to work and instituted a system of settlement on those lands" (Doc H). On the opposing side, Democratic Congressman J.K. Luttrell declared that speculators gained control of Congress and gave away millions of acres of public lands to "unscrupulous corporations", leading to the heavy taxation of the people (Doc G). In an attempt to resolve the problem, the 1876 and 1878 Congressional Records stated that no subsidies should be granted by Congress to associations or corporations engaged in either public or private enterprises (Doc F). On the other hand, laissez-faire had negative results as well, such as the Crédit Mobilier Scandal in 1872. Railroad insiders formed the Crédit Mobilier construction company and hired themselves at inflated prices to build the Union Pacific Railroad line, earning dividends as high as 348 percent. They distributed shares of their valuable stock to key congressmen, fearing that Congress might blow the whistle. This is only one of the countless instances of exploitation that provoked many people to advocate the government regulation of business, particularly railroads.
State governments tried to regulate the railroad monopoly, yet their efforts came to a halt in 1886 with the decision of the famed Wabash case, which decreed that individual states had no power to regulate interstate commerce. Only the federal government contained that power. The United States Senate Select Committee on Interstate Commerce then declared that the railway service is a corrupt business with the large and strong taking advantage of the small and weak, and that "Congress should undertake in some way the regulation of interstate commerce" (Doc J). This led to the government's first large-scale attempt to intervene in the economy, the 1887 Interstate Commerce Act. The Act stated that all charges made by railways must be reasonable and just, pooling of traffic or revenues was unlawful, price discrimination between customers or localities was unlawful, and that long-haul, short-haul price discrimination was subject to the control of the Interstate Commerce Commission, a new administrative agency created to enforce the legislation. In the Commission's First Annual Report, it is stated that its purpose is to "conserve and protect" and "regulate a vast business according to the requirements of justice" (Doc L). Yet not all agreed with this idea of government regulation, especially Southern Democrats. William C. Oates, a Democratic congressman from Alabama, expressed his discontent in a speech to the House of Representatives, claiming that the government should leave people with their freedom and only intervene in extreme circumstances (Doc K). Andrew Carnegie, the steel king; John D.
Rockefeller, the oil baron; J.P. Morgan, the bankers' banker; captains of industry or robber barons? There has been much debate over the answer of that question. Nevertheless, there is no doubt that these men helped create large trusts and monopolies in their respective businesses. The "Millionaire's Club", or the Senate, is portrayed as being ruled by large trusts in a cartoon by Joseph Keppler, exemplifying the popular belief that the government was just as corrupt as the trusts, and looked out for their interests (Doc M). To control these trusts and others, the largely unsuccessful Sherman Anti-Trust Act was signed into law in 1890. The Act declared illegal every contract, combination, or conspiracy in restraint of interstate and foreign trade and authorized the federal government to institute proceedings against trusts, yet federal authorities were prevented from using the act for some years due to Supreme Court rulings. Ohio Senator John Sherman, for whom the bill was named, proclaimed in his speech to the Senate that the bill does not interfere with lawful trade, only unlawful combinations (Doc N). "The power to regulate commerce is the power to prescribe the rule by which commerce shall be governed, and is a power independent of the power to suppress monopoly," professed Chief Justice M. W. Fuller, speaking for the Supreme Court in the case of United States v. E. C. Knight Company (Doc P). President Grover Cleveland agreed with the Act as well, stating in his Second Inaugural Message in 1893 that the existence of trusts that limit production and fix prices goes against the "fair field" and the government should alleviate people from their interference (Doc
O). Laissez-faire was both upheld and violated in the years of 1865 to 1900, particularly in regards to railroads, interstate commerce, and anti-trust. Economist Ludwig von Mises summarized the definition of laissez-faire in his own words; "Laissez faire does not mean let soulless mechanical forces operate. It means let individuals choose how they want to cooperate in the social division of labor, and let them determine what the entrepreneurs should produce."