Railroads were especially impor- tant to the expanding nation, and their practices were often criticized . Rail lines extended cheaper freight rates to large shippers by rebating a portion of the charge, thus disadvan- taging small shippers . Freight rates also frequently were not proportion- ate to distance traveled; competition usually held down charges between cities with several rail connections . Rates tended to be high between points served by only one line . Thus it cost less to ship goods 1,280 kilo- meters from Chicago to New York than to places a few hundred kilo-

meters from Chicago . Moreover, to avoid competition rival companies sometimes divided (“pooled”) the freight business according to a pre- arranged scheme that placed the to- tal earnings in a common fund for distribution .

Popular resentment at these prac- tices stimulated state efforts at regu- lation, but the problem was national in character . Shippers demanded congressional action . In 1887 Presi- dent Grover Cleveland signed the Interstate Commerce Act, which forbade excessive charges, pools, rebates, and rate discrimination . It created an Interstate Commerce Commission (ICC) to oversee the act, but gave it little enforcement power . In the first decades of its ex- istence, virtually all the ICC’s efforts at regulation and rate reductions failed to pass judicial review .

President Cleveland also opposed the protective tariff on foreign goods, which had come to be accepted as permanent national policy under the Republican presidents who dominat- ed the politics of the era . Cleveland, a conservative Democrat, regarded tariff protection as an unwarranted subsidy to big business, giving the trusts pricing power to the disadvan- tage of ordinary Americans . Reflect- ing the interests of their Southern base, the Democrats had reverted to their pre-Civil War opposition to protection and advocacy of a “tariff for revenue only .”

Cleveland, narrowly elected in 1884, was unsuccessful in achieving tariff reform during his first term .

He made the issue the keynote of his campaign for reelection, but Repub- lican candidate Benjamin Harrison, a defender of protectionism, won in a close race . In 1890, the Harrison administration, fulfilling its cam- paign promises, achieved passage of the McKinley tariff, which increased the already high rates . Blamed for high retail prices, the McKinley du- ties triggered widespread dissatisfac- tion, led to Republican losses in the 1890 elections, and paved the way for Cleveland’s return to the presidency in the 1892 election .

During this period, public an- tipathy toward the trusts increased . The nation’s gigantic corpora- tions were subjected to bitter attack through the 1880s by reformers such as Henry George and Edward Bel- lamy . The Sherman Antitrust Act, passed in 1890, forbade all combina- tions in restraint of interstate trade and provided several methods of enforcement with severe penalties . Couched in vague generalities, the law accomplished little immediately after its passage . But a decade later, President Theodore Roosevelt would use it vigorously .

Place Your Order Here!

Leave a Comment

Your email address will not be published. Required fields are marked *