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Since 1776 America has been dedicated to the core values of "republicanism." On the one hand republicanism means civic virtue, with the loyal citizen dedicated to supporting and improving the polity. On the other it means becoming politically aroused to stop violations of republicanism.
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The main violation is "corruption," or the perverse use of government power for illegitimate goals. Thus republicans recoiled in horror at treason (secession in 1861, loyalty to Germany in 1917), at rejection of the principle of civic virtue (by proponents of class warfare), at caesarism (alleged against presidents Jackson, Grant, and FDR), at yielding power to foreigners (such as the Pope, carpetbaggers, or the colored races); or the creation of private domains outside the reach of state power (such as Mormon cities, or the corporate domains of "Robber Barons", with the term "baron" more fearful than "robber").
In routine politics "corruption" meant use of government power for private financial gain, either by greedy individuals or insidious "special interests". Bribery (and selling pardons) were especially evil forms. Corruption also extended to illegitimate control of government itself by "bosses" who frustrated the civic virtue of honest people. Finally, "corruption" meant being a slave to ignorance, or, in the eyes of the more extreme republicanism, of being too timid or too traditional to support thorough-going reform.
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Republicanism meant that all public decisions had to be made in public forums, according to rather elaborate constitituional rules. It was "corrupt" for secret cabals to be in control; muckraking journalists became national heroes by exposing them. Coercion and violence were corrupt as well. The Progressives vigorously denounced lynching, and managed to reduce the number by an average annual decline of 2.5% from 1895 to 1930, by which time the practice had become uncommon throughout the south. Violence as used as a deliberate tactic by labor unions to stop copmpanies from operating with non-union workers was probably the major reason that unions failed to win widespread acceptance in public opinion.
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In 1890 the GOP waved the bloody shirt one last time, with a force bill to protect the honesty of elections; the party failed to hold together. Only a few surviving abolitionists seriously argued that neoconfederacy or neoslavery still threatened America's republican values. Senators from new western states with little memory of the War traded their votes to get silver coinage. "I shall vote against the Federal Election bill," announced Senator Don Cameron, Republican of Pennsylvania. "The South is now resuming a quiet condition. Northern capital has been flowing into the South in great quantities, manufacturing establishments have been created and are now in full operation, and a community of commercial interests is fast obliterating sectional lines, and will result, in the not far distant future, in forming one homogeneous mass of people, whether living in the North, South, East, or West." In other words, sectionalism was dying and the economic and social forces of modernization could to be relied upon to eventually resolve any remaining problems. The party system that revolved around Civil War issues was itself near death.
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Southern enthusiasm for War with Spain finally silenced any lingering doubts about the region's patriotism. McKinley appointed former Confederate general Joseph Wheeler to a senior command. As his white and black troops pushed the Spaniards off San Juan Hill, "Fighting Joe" excitedly yelled out, "We've got the damnyankees on the run!" Be that as it may, there was zero support for Spain from Southern whites, blacks or Hispanics.
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The Southern Redeemers, being republicans, found repugnant their use of violence and bribery to suppress or control the black vote. The conclusion was widespread in the white South--and in the North--that black voting led to such massive corruption and violations of the norms of republicanism that it made fair elections impossible. Repression of the black vote through bribery and violence was contaminating republicanism and had to end. The Redeemers began in the late 1880s to revise state constitutions to add the poll tax and other hurdles which effectively solved the "problem" by reducing ending black voting power to near zero by provisions that did not technically violate the 15th Amendment.
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Perhaps reformers were responding as well to the brief wave of populist insurgency among poor white farmers. By 1910 all the southern states had adopted the poll tax. Turnout plunged dramatically, and in most areas only the all-white Democratic primary mattered in the election of officials. Disfranchisement was presented as a purification of the ballot, a rejection of fraud and violence and a return to true republicanism. Instead of inciting fresh Yankee criticism, the southern policies were adopted as a model national policy with respect to Hawaii and the Philippines. After 1900 the northern states imposed literacy tests and registration requirements to purify and uplift their own electorate, and reduce the "ignorant" or boss-controlled votes in the larger cities.
The purity of the democratic process has always been a central theme of American republicanism. Constitutional amendments regarding voting never extended any purported "right to vote"; rather they prevented the use of ascriptive or group characteristics to restrict suffrage. In the Progressive Era the focus was on minimizing the number of corrupt voters and their bosses. With the civil rights movement of the 1960s, the fear was that restrictions against corruption (such as literacy tests) were themselves illegitimate or corrupt because they were deceptive and designed to restrict groups. Purification therefore came to mean the maximum extension of the franchise.
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In 1896 McKinley was in a advantageous position to promote ethnocultural pluralism. The status of the most highly contentious groups, Chinese, African-Americans and Mormons had recently been "settled" (by exclusion, segregation, and integration, respectively); prohibition had been shelved for the time being.
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That left the liturgicals, who comprised about 35 percent of the northern electorate (compared to 40 percent pietists, and 25 percent unaffiliated.)
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Liturgicals had been harassed by anti-Catholicism and language wars, angered by attempts at prohibition, impoverished by the Depression, and frightened by free silver, and disquieted by the explicitly religious moralism of the Bryanites. They could be moved. McKinley made a systematic appeal to the liturgicals, and his army of campaigners made sure they all heard his message: Jobs, sound money, no more prohibition, no more letting one ethic group use the government to insult another. McKinley broadened the republican concept of "equal rights" for individuals to mean fair play for all ethno-religious groups. All groups would share in the national prosperity, and the government would not target any of them for punishment, nor mobilize group hatred in a political cause. The strategy of pluralism worked brilliantly, as the Republicans strengthened their appeal to Germans in particular, and liturgicals generally. In 1894-96 the Republicans made major gains in all the nation's cities, and especially among Germans, who comprised from 15 to 50 percent of the urban vote.
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The Democratic party split on the modernization program. Strong support for banking and big business came from powerful Northeastern leaders, especially New York governors Samuel Tilden and Grover Cleveland. Before Bryan's crusade in 1896, the agrarian critics of modernization had diffuse support in the West and South, but never controlled the party. Financial debates were often on the agenda--especially regarding Greenbacks (paper money) and silver coinage-- but the divisions crossed the lines of party, section and industry.
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The theory of our institutions guarantees to ever citizen the full enjoyment of all the fruits of his industry and enterprise, with only such deduction as may be his share toward the careful and economical maintenance of the Government which protects him... the exaction of more than this is indefensible extortion and a culpable betrayal of American fairness and justice. This wrong inflicted upon those who bear the burden of national taxation, like other wrongs, multiplies a brood of evil consequences. The public Treasury... becomes a hoarding place for money needlessly withdrawn from trade and the people's use, thus crippling our national energies, suspending our country's development, preventing investment in productive enterprise, threatening financial disturbance, and inviting schemes of public plunder.
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The Republicans took up Cleveland's challenge, defeated him in 1888, and in 1890 passed the high McKinley tariff. Foreigners paid the tax, not Americans, they claimed, while American manufacturers and factory workers reaped higher profits and higher wages. Praising tariffs as a positive good that would speed up industrialization and urbanization, Republicans envisioned a golden future of high wages, high profits, and a rich "home market" for farmers and manufacturers. The problem was that long run gains came after the election, and short run costs could sting at the polls. The favorite Democratic argument was that the tariff was a tax on the consumer for the benefit of rich industrialists. To drive home the point the Democrats sent young partisans disguised as peddlers door-to-door in McKinley's Ohio district. They offered to sell tinware to housewives at double the usual price, and when the women complained they were told the new McKinley tariff was to blame. McKinley was defeated for reelection in 1890 as the GOP suffered its worst defeat in history, opening the way for Cleveland's reelection in 1892.
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In control of both Congress and the White House for the first time since 1858, the Democrats were obliged to pass a new tariff law. The unexpected consequence of winning so many marginal districts and GOP strongholds in 1890 and 1892, was that for the first time the Democratic caucus was overflowing with representatives of manufacturing and mining districts that supported high tariffs. In the event, enough Democratic senators from industrial areas cooperated with the GOP to moderate the Wilson-Gorman tariff act of 1894. Instead of slashing rates to zero it trimmed them to 41 percent from the 49 percent of the McKinley tariff. Cleveland, humiliated at this "party perfidy and party dishonor", allowed it to become law without his signature. When the Republicans returned to power they raised the rates back to 49 percent with the Dingley tariff of 1897, which stood for a dozen years.
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Although the tariff was central to political debates, it was peripheral to the American economy. The tariff had three economic effects. First it was an essential revenue source of the federal government; until displaced by the income tax after 1913, it funded half the federal budget and could not be dispensed with. When Democrats supported a "tariff for revenue only," they meant a moderately high tariff. Hence tariff rates could be changed only within a narrow range until the income tax was functioning. Second the tariff supposedly "protected" manufacturers and workers from cheap imports. The protection actually existed only if there was a potential for cheap imports. After 1885 the American economy was so highly productive that nowhere did there exist factories that could undersell the USA in its own home market. American workers were highly paid, and very highly productive. The one exception was the medium-sized woolen industry, based in Boston and Philadelphia, that manufactured clothing, blankets and other wool products. They had sharp competition from British factories. In every other industry, "protection" was meaningless.
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Thirdly, the tariff was a tax on imported raw materials, produced by farms or mines, such as sugar, raw wool, coal, lumber, hides and wheat. In general America was the low-cost producer in each area, but not always. From time to time a "glut" on the world market would make a particular commodity very cheap. American producers--chiefly farmers, ranchers, miners, or lumbermen--then faced an economic threat. On the other hand, these raw materials were purchased not by consumers but by American factories that refined sugar, or made wool or leather or other products. The factory owners wanted the cheapest product, and in turn they would pass along part of the savings to consumers. All of this economics was politically irrelevant. Politicians debated in a fantasy world in which hordes of European manufacturers were poised to flood the American market with goods that were either produced by pauper labor (said Republicans) or goods that would lower the cost of living to American consumers (said Democrats). In reality by 1885 Europe could no longer hope to compete with American advantages of large efficient factories, huge capital investment, vast internal markets, cheap internal transportation, ample raw materials, sophisticated advertising, and highly competitive retail distribution systems, not to mention a hundred million more affluent and more cost-conscious consumers. America had become the low cost, high volume producer of manufactured goods, with large aggressive corporations capable of moving their product. It was the British who watched in stunned horror as cheaper American products flooded their home islands. Wailed the London Daily Mail in 1900, "We have lost to the American manufacturer electrical machinery, locomotives, steel rails, sugar-producing and agricultural machinery, and latterly even stationary engines, the pride and backbone of the British engineering industry."
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The American market for British iron, steel and machinery collapsed in the 1870s as American producers became much more efficient. Appleton's Annual Cyclopedia: 1877 (1885) 127. However the tariff on steel perhaps did raise the cost of steel rails to American railroads before 1895; Taussig Some Aspects., 141-42. See also Bennett D. Baack and Edward John Ray, "Tariff Policy and Comparative Advantage in the Iron and Steel Industry: 1870-1929," Explorations in Economic History (1974), 11:33-51.
The charges, endlessly repeated, that the tariffs raised prices, diverted excess profits to the rich, fostered inefficiency, or were "the mother of trusts" provided excellent campaign fodder; all were completely untrue. There never was a wool trust, for example; the industry comprised many small and medium factories. Conversely, the Republicans were simply wrong when they argued after 1887 that high tariffs promoted infant industries, protected established ones, promoted modernization generally, raised workers' wages and protected them from low-wage competition, raised profits, and fostered a rich home market for farm goods. The tariff (apart from wool) had little real economic impact one way or the other. Regardless of the economics, the rhetoric was highly convincing to politicians and voters alike, and the fight between high and low tariff advocates remained a central theme issue throughout the Fourth party system.
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The 1880s saw the alarming emergence of trusts--that is, conglomerates that bought out small locally-owned factories, and merged them into conglomerates that tried to monopolize an entire industry. Supreme Court Justice John Marshall Harlan, a conservative Republican, later recalled the "deep feeling of unrest":
The conviction was universal that the country was in real danger from another kind of slavery... that would result from the aggregation of capital in the hands of a few individuals controlling, for their own profit and advantage exclusively, the entire business of the country.... All felt that it must be met firmly and by such statutory regulations as would adequately protect the people against oppression and wrong.The Interstate Commerce Act of 1887, and especially the Sherman Anti-Trust Act, passed almost unanimously in 1890, reflected a national consensus that monopoly was dangerous to democracy. Furthermore it was inefficient, because people though competition was the "natural" order. The "free labor" credo of republicanism was expanded to encompass free enterprise--the right of the businessman to operate without unfair competition or being forced to sell out. As Ohio Senator John Sherman put it, "If we will not endure a king as a political power we should not endure a king over the production, transportation, and sale of any of the necessaries of life."
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A central element in republican citizenship was "independence." Could a corporate employee of a big trust be truly independent, or would he be a servant to the will of his economic master? Antitrust rhetoric warned repeatedly of the danger, but seems not to have been based on careful analysis or experience. Claims in 1896 that corporations coerced employees fell flat--not a single example was offered. In reality, corporations created a bureaucratic system of employee relationships that guiaranteed a sort of due process, as well as a well-defined system of advancement. Bureaucrats had as much or more freedom of political choice.
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The money issue after the Civil War played out against falling prices. In economic terms, the deflation that steadily lowered prices had little adverse economic impact. The only possible harm, as pointed out repeatedly by Populists in the early 1890s claimed that steady deflation made interest payments on mortgages more burdensome--which was true to the small degree in which deflation was faster than expected. However this negative effect was far less damaging to farmers than the collapse of international markets for cotton and wheat. [To the extent that people *expected* prices to fall steadily, the decline was incorporated into mortgage rates. It is only an *unexpected* change in prices that causes damage.] Politically much more important was the demand for free silver. The silverite leaders--especially charismatic William Jennings Bryan--identified the international banking system and the gold standard as inherently evil, corrupt, "un-American" and inefficient to boot. The free coinage of silver promised to break the power of the bankers, put money in the pockets of miners and farmers (and eventually, wage earners too), and relieve the terrible depression. Economically the silverites were out of touch with reality. Their central argument was that the supply of gold grew too slowly, making more powerful every year the bankers who controlled the gold. In fact by 1890 a new "currency" had largely displaced gold--bank checks. While of course many transactions till took place in paper money and gold coins, the vast bulk of the nation's business was transacted through checking accounts. This hocus pocus alarmed the silverites, who denied its importance and promised to abolish paper money issued by bank. The Republicans met the silverite challenge head-on in 1896. They refuted the silverite's monetary ideas, demonstrated that free silver would bankrupt the railroad system (which had to pay its bonds and mortgages in gold), and would be of no benefit to workers. Worse of all, free silver was a repudiation of honesty, they argued: a bald-faced raid on private wealth that violated the commandment, "Thou Shalt Not Steal!" Taking a positive approach, McKinley argued that real economic recovery meant reopening the factories. getting the industrial economy moving again, and restoring the rich home market for farm products.
To answer the silverite charge that gold was inherently corrupt because it gave the rich bankers too much political power, the Republicans took a new and powerful tack: prosperity was the true test of national policy, not inequality. Cleveland had failed the prosperity test, and Bryan would make it even worse. McKinley's policies, the GOP argued, would make everyone more prosperous. They did not deny that the rich would indeed become richer. They warned voters instead that with free silver you will be poor and -- pointing to the silver-based economies of Mexico, China and Japan--your children will become paupers. Bryan was whipped on the silver issue; by the latter part of the campaign he had retreated to the argument that McKinley would bring about an oligarchy that would destroy republicanism.
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Bryan, however, did succeed in redefining the corruption issue. Whereas the Third party system had defined corruption in terms of secession and personal greed, attention now turned to the political party as the vehicle of corruption. This was possible because party loyalties had been weakened by the roller-coaster ride of the electoral returns in the 1890s. Because the realignment of 1896 seemed to guarantee continuation of government in the hands of the modernizers, reformers inside the GOP, such as governors Pingree of Michigan, LaFollete of Wisconsin, Cummings of Iowa, Johnson of California, and Roosevelt and Hughes of New York, now had more maneuver room to focus on corruption.
The Populists had come close to a direct challenge of the modern economy, but Bryan drew back, arguing that he only wanted to remove the corruptions and distortions, and enable the true wealth-creators--farmers, laborers, small businessmen-- to get the job done.
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After 1896 the economy revived, and with the fulfillment of McKinley's promise of a full dinner pail, the GOP position was vindicated. Industrial America now voted Republican--including most workers in factories, mines, mills and railroads, together with the engineers, foremen, superintendents and financiers of industry.
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Changes in party systems are realignments that involve changes in leaders, rules of the game, voter alignments, and issues. Typically only a handful of political leaders survive the realignment. Of the couple dozen top party leaders in 1890, only William McKinley was still a major player a decade later; every other major figure in 1900 was a new face.
The most dramatic rules change redefined who could vote. The strong trend was toward purification of the electorate to enhance true republicanism and suppress corrupt voting. This allowed for woman suffrage (1920), but otherwise the trend was restrictive. Black voters were disenfranchised in most of the deep South (but not in the border states or North), along with some poor white voters in the South. The Australian ballot (around 1890) and registration laws in large cities (after 1900) made voting more difficult for machines to control, and more difficult to navigate for men who could not read English. Furthermore, the dominant style of campaigning switched away from the "army" style, which assumed nearly every man was a committed partisan, so that the function of the campaign was to rally supporters and guarantee a high turnout. By 1892 the predominant campaign style was the "advertising" approach, which assumed that voters were not pre- committed to one party or the other, but could be convinced through advertising campaigns that this party or that candidate was the one to vote for.
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The rise of independent newspapers and Muckraking magazines around the turn of the century changed the media rules of the game of politics by weakening parties, and giving crusaders direct access to the public, unmediated by politicians. Before 1896 over 90 percent of the nation's newspapers were party organs, devoted to providing useful information to leaders and the rank-and-file. Editors and publishers were typically party leaders; they often were rewarded with lucrative postmasterships, and occasionally won nomination to national office as in 1920 for both Warren Harding and James Cox. Bryan in 1896 had amazing little newspaper support; he solved the problem by becoming the first candidate ever to barnstorm the country; by making himself newsworthy he forced hostile papers to report his speeches.
By 1898 publishers in major cities discovered that they could build their fortune (and enhance their political power) by achieving high circulations, which in turn would pull in advertising revenue. During the heady days of the War with Spain, William Randolph Hearst's New York Journal and Joseph Pulitzer's New York World sold upwards of a million copies a day on the streets of the metropolis. Being tied to one party meant relinquishing half their potential audience, so the move was on to political independence. Whereas a party newspaper could be counted on to expose the enemy's corrupt practices and defend its own people, an independent would profit by exposing both sides, and by endorsing candidates from both parties. Hearst tried in 1906 to leverage his media power into the governorship of New York. Winning the Democratic nomination, he crusaded as a progressive against corruption. He lost narrowly to a Republican crusader, Charles Evans Hughes. The rise of high-circulation, high-budget national magazines early in the century created for the first time a national market for exposure of corruption, duly provided by celebrity journalists. The readership was primarily middle class with a strong commitment to modernity and a loathing of corruption and waste. Bryan, LaFollette and Roosevelt edited national magazines to keep open a direct line of contact with their supporters. Thus by 1900-04 a media revolution had set the stage for nationalizing the purification of politics, in nonpartisan fashion. By the end of the Fourth Party System national and regional newspaper chains centralized editorial policies in the hands of 60 or so publishers, who reached over third of the nation's readers. Hearst, the most flamboyant, was considered the most powerful. He helped nominate Franklin Roosevelt in 1932; by 1935 he was instructing his editorial writers to attack the "Raw Deal" every day.
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The combination of new restrictions and a decreased emphasis on turnout had the effect of sharply lowering average turnout rates. In New York state, for example, turnout had averaged 88 percent of those eligible in presidential elections from 1840 through 1900, and now slipped to 72 percent in 1912, bottoming out after woman suffrage at 56 percent in 1920 and 1924.
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Woman suffrage, after decades in the doldrums, surged as a movement after 1900 when a younger generation downplayed the "equal rights" republican rhetoric of 1848 and emphasized the efficiency of having mothers and housewives-as-experts help decide questions of municipal housekeeping, schooling and child welfare. The woman club movement was essential to fostering the sense of efficiency at social engineering, as were the many muckraking articles in the "Big Six" woman's magazines. The opponents of woman suffrage argued that it would defeminize women and thus violated the norms of republican motherhood, that wives and daughters would be controlled by their menfolk and thus not be independent citizens, and that because women could not fight in the army they could not become full citizens. To gain suffrage women had to demonstrate that as a group they possessed the requisite republican qualities of virtue, intelligence, independence and service. Everyone agreed that women were naturally more virtuous than the men; the suffragists said this would help purify politics, the antis warned the inherent corruptions and evils of politics would degrade and defeminize women. The intelligence of women was underscored by their educational achievements--most male voters by 1910 had been taught by women teachers, after all--and by a feminist warnings about the ignorance of male immigrants. Were women independent of their husbands, brothers and fathers? Financially the answer for the vast majority of women over 21 was "no." Antis imagined a dystopia after woman suffrage in which the breadwinner-as-family head demasculinized men as women started "wearing the pants in the family." However, the feminists succeeded in rephrasing the question, by arguing they had different political interests--that women were "naturally" more interested than men in such vital public issues as municipal housekeeping, public health and the schooling of children--not to mention prohibition. True citizens fight for their country, and the issue of military service would haunt feminism for the rest of the 20th century. Aggressive British feminists who practiced violent action did not help the cause. What did the job was the remarkable wartime effort of housewives, mothers wives and girlfriends who enthusiastically supported the war effort, made major contributions in critical areas such as food supplies, and without tears sent their menfolk into war. Suffrage at the war's end was the inevitable reward.
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Ignorance was the problem and education was their favorite cure- all. The progressives dramatically expanded the educational system at all levels, with Andrew Carnegie's famous libraries providing access to knowledge for autodictats. Implicit in efficiency was the quest for modernization: the systematic transformation of the old into the new. The progressives assumed that if a practice or institution was old it must therefore be riddled with waste and inefficiency. The enemy was ignorance, and the progressives always insisted that the long run solution to every problem, even the most intractable, was education.
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The remarkable success of economic modernization in the last years of the 19th century, together with its massive political reaffirmation in four consecutive elections 1894-96-98-1900, encouraged America to broaden the concept to cover all forms of social and political modernization, and to sharpen it to attribute success to efficiency. The engineer as exemplar--even hero--of efficiency seized the public imagination--none more so than Henry Ford in industry, Thomas Edison in invention, Frederick Winslow Taylor in engineering, and Herbert Hoover in public service. Many movements flourished as they followed the suffragists and downplayed moralistic attacks on corruption in favor of an emphasis on efficiency instead. They included prohibition (drunkenness was bad for productivity), world peace (arbitration, conducted by experts, would replace warfare), philanthropy (where Rockefeller demonstrated the value of specialized welfare experts), medicine (revolutionized by the Flexner Report of 1910), civil service reform at the state and local levels, municipal reform, public health, and numerous other areas. Booker T. Washington gained national fame for his "Atlanta Compromise" of 1895, whereby African Americans would concentrate on making themselves more productive and efficient, in order to first modernize their communities and themselves, while underplaying political confrontations or assertions of equal rights. The debate over the Philippines in 1900 polarized between an older generation of moralists who thought government without consent of the governed violated a core value of republicanism, and a younger generation that discovered a national duty to modernize and make more efficient the backward races.
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In personnel management the American style looked for new, systematic ways to remove waste and find better, faster, cheaper ways to accomplish objectives. Frederick Winslow Taylor brought the stop watch to the shop floor, measuring every wasted second or useless motion, and thereby and inspired thousands of engineers to emulate his search for scientific management. Accompanied with the invention of new accounting techniques management now could measure inputs and outputs on a systematic basis, and better define profit maximization. They discovered that Ford was right--pay high wages, get much higher productivity from workers and machines, and profits will soar fastest of all. Some left-wing unions, distrustful of efficiency, opposed "Taylorization" as a benefit to management and a threat to worker solidarity. In actual operation most workers identified industrial efficiency with higher productivity, greater use of machines, more complex organizations and, starting in 1910, with Henry Ford's highly efficient assembly lines and $5 days. Socialism never had a chance against high wages. By the 1920s major corporations had adopted "personnel management" programs top identify and keep the best workers with a combination of higher wages, attractive fringe benefits, company unions, and bureaucratic policies that minimized autocratic foremen.
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The political implication of scientific management was that in the modernized sector of the economy--especially the factories--workers rarely joined unions and seldom became politically active as a working class. The Catholic Church played a major role in warning against Socialism. Not only did the atheism of the militants bother the bishops, but they had the challenge of proving their devotion to both Rome and republicanism. Most of the industrial districts in the Northeast were Republican strongholds (except of course for Irish Catholic Democratic enclaves), and indeed preferred Taft over TR in 1912. The protective tariff as the protector of high industrial wages protected the GOP base.
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Compulsory school laws and restrictions on child labor forced school attendance on students regardless of individual dislike for studies or preference for immediate cash income over deferred rewards. The resistance to compulsory education was passive--a matter of dodging truant officers, and neglecting school assignments. Child labor, however, was a contested area, with intense emotional interests at stake, underlined by the brilliant photographs of Lewis Hine. Besides "lost" opportunities for uprooting ignorance, child labor arguments covered the right of private parties to make contracts, the health and safety of minors, parental control of their children, the availability of cheap labor for southern textile mills, or the street sales of newspapers in cities, and the role of the ethnocultural community in protecting its youth. There was much hand-wringing about lazy fathers living off the wages of their children, and lazy children claiming legal protection for their leisure pursuits. Wilson's Congress prohibited child labor, but it was overturned by the Supreme Court. Advocates stressed the greater efficiency that could be achieved through human capital, as well as the republican need for an educated citizenry. Opponents, led by the Catholics, insisted that the republican ideal included a sanctuary for family rights, upon which the state must not intrude. (This principle eventually led to the Supreme Court's recognition of the right of privacy, in Griswold, 1965.)
Efforts in the 1920s to pass a Constitutional amendment failed because of Catholic opposition. Eventually the New Deal officially abolished most child labor. In real life, children were inefficient workers and after 1920 were rarely employed outside of farming. Compulsory schooling laws, on the other hand, probably did have a direct impact in providing cognitive skills to youth who otherwise would have lacked them; some fraction of the students forced to enroll in schools became modernized psychologically, thereby becoming alienated from the traditional mindset of their parents. The better educated youth did obtain better jobs and their greater productivity pushed the entire economy upward. As they moved up they adopted middle class values, and became more likely to vote Republican.
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In the early 1890s private reform organizations emerged in major cities to improve government efficiency and fight bosses, who were attacked as both corruption and inefficient. The progressives were big spenders and were always at risk of a taxpayer revolt, of the sort that defeated the movement in Wisconsin in 1914. Therefore they paid special attention to eliminating waste and mismanagement in local government, for municipal taxes were much higher than rural, statewide or federal taxes, and efficiency meant lower taxes.
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In Chicago the spectacular revelations of corruption by William Stead led to the founding of the Civic Federation of Chicago, with strong backing from leading newspapers and bankers. The chief organizer, Ralph Easley moved to the national stage in 1900 with his National Civic Federation. Its main objective--in large part successful--was to bridge the gap between capital and labor. By 1916 it had helped arbitrate or settle 500 labor disputes, and pioneered techniques of industrial arbitration and welfare capitalism. The goal was labor peace through mutually satisfactory agreements that would generate high wages, high profits, and few strikes.
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The 1890s were a decade of depression, but they also saw a remarkable technical revolution in every large city as electric streetcars replaced the much slower, less efficient horse-drawn or cable-drawn systems. New technology made them natural monopolies. They were controlled by national syndicates which collected a nickel every morning and evening from millions of clerks and office workers. The strap-hangers paid the dividends--that is, the companies made the most money when service was worse. So the strap-hangers disliked the streetcar companies. However the companies needed votes in the city council to obtain and renew their monopolistic franchises. Charles Yerkes, the "Titan" of Chicago, was representative of the energetic entrepreneurs who pioneered the new technology. Led by Detroit, where Hazen Pingree built a career as mayor and governor fighting the traction companies, city after city became alarmed at the bribery and manipulation typified by Yerkes. The electric street railways were easy to unionize, but strikes would be countered by hiring strikebreakers. At first the public sympathized with the unions-- until they had to walk a few miles to work, or until they were threatened by bricks aimed at scab conductors. The use of violence to settle disputes was a sharp violation of republicanism; anyone who promoted or tolerated violence was corrupt. The public always turned sharply against the violent strikers, and perhaps soured on labor unions in general. In a few cities, the unions won big; in most the strikers lost, but the companies' fare gouging also displeased public opinion. The stage was set for the sudden realization that both unions and corporations could be violators of republican norms.
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In the Fourth Party System, corruption was a sin; in political discourse it displaced the personal sins of intemperance and secessionism that had bedeviled the Third Party System. Theologically the idea came from the Social Gospelers ("the praying wing of Progressivism") who tried to replace personal with public sin. The point was made explicit in Sin and Society, a popular 1907 book by sociologist E. A. Ross, with a preface by Roosevelt. The new morality committed the progressives to active intervention in social and economic realms. Social control in the name of progress seemed an efficient way to apply the Social Gospel, and justified interventions along many different fronts.
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The great ends of the church are the proclamation of the gospel for the salvation of humankind; the shelter, nurture, and spiritual fellowship of the children of God; the maintenance of divine worship; the preservation of truth; the promotion of social righteousness; and the exhibition of the Kingdom of Heaven to the world.See Jack B. Rogers, and Robert E. Blade, "The Great Ends of the Church: Two Perspectives," Journal of Presbyterian History (1998) 76:181-186; Gary Scott Smith, "To Reconstruct the World: Walter Rauschenbusch and Social Change," Fides et Historia (1991) 23:40-63; Martin E. Marty, Modern American Religion, Vol. 1: The Irony of It All, 1893-1919 (1986) and Modern American Religion. Vol. 2: The Noise of Conflict, 1919-1941 (1991); Sidney E. Ahlstrom, A Religious History of the American People (1972), 804. Susan Curtis, A Consuming Faith: The Social Gospel and Modern American Culture (1991) points out the strain of efficiency.
The progressives expected to encounter ignorance, entrenched traditionalism, and selfish greed; they were always confident they would triumph. Echoing the millennialism that disposed Protestants to cleanse the world in preparation for Christ's Second Coming, Iowa's insurgent Republican Senator Jonathan P. Dolliver identified sin with greed in his analysis of the tariff:
For the day is coming--it is a good deal closer than many think--when a new sense of justice, new inspirations, new volunteer enthusiasms for good government shall take possession of the hearts of all our people. The time is at hand when the laws will be respected by great and small alike; when fabulous millions, piled hoard upon hoard, by cupidity and greed, and used to finance the ostentations of modern life, shall no longer be a badge even of distinction, but rather of discredit, and it may be of disgrace.... It is the outcome of centuries of Christian civilization....
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The introspection and yearning for self expression characteristic of 19th century romantic idealism gave way to the materialism and community solidarity of 20c pragmatism. Bertrand Russell decided the philosophy of John Dewey and William James-- so materialistic, so confident of progress yet oblivious to unintended consequences, and so much in need of personal reassurances-- perfectly fitted the "obnoxious aspects of American industrialism."
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The progressives indeed focused on materialistic factors, and so the worst kind of corruption was financial. "Tainted Money," was their bogey. Even when if money was decades old, if it had been acquired by dubious means it was still "tainted" and must be refused. Philanthropy represented efficiency and redemption, and could not be stretched to include perpetuating the original injustice. In 1903 the Congregationalists fought over accepting a $100,000 gift by Rockefeller. Carnegie, promoting a Gospel of Wealth that would dedicate industrial fortunes to modernize all of society was not amused. "Money may be the root of all evil in some sense,"he snapped, "but it is also the root of all Universities, Colleges, Churches and libraries scattered through the land."
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McKinley's pluralistic solution to ethnocultural conflict solution worked, and ended the threat of a "Kulturkampf" of the sort that ripped apart other countries. But it came at the cost of weakening democracy inside the Republican party, and opening up charges of bossism. The drys largely abandoned moralizing movements such as the WCTU and the Prohibition party, and turned instead to interest group lobbying, led by the Anti-Saloon League and funded by the pietistic churches. By stressing the inefficiency of boozy workers, the League won significant business support. It downplayed attacks on wet ethnoreligious groups and focused instead on purification of politics by the elimination of corrupt saloon-based machines.
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Bossism was a grave crime against republicanism for most progressives, who fought with considerable success in all the parties to expose backstage manipulators, root out organized corruption, destroy machines, weaken party loyalty purify access to the ballot, and eliminate patronage. But there was also an urban wing of the movement, centered around Irish Democratic politicians in the larger cities such as Al Smith of New York, who supported progressive reforms for the material benefit of their working class constituents, but who opposed woman suffrage, civil service and prohibition, and of course supported their machines with enthusiasm.
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Direct democracy was not necessarily controversial-- the secret ("Australian") ballot swept the nation after 1890; the direct primary to select the party ticket encountered little opposition in its spread from Wisconsin in 1903 to 39 states by 1913. Indeed much major legislation was uncontroversial, and passed Congress almost unanimously, including the Sherman Antitrust Act of 1890 and the Income Tax amendment of 1909.
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Ignorance and corruption, were the concepts the progressives used to explain opposition to their programs. Ignorance was bad enough. Deliberate support for bad programs in quest of personal rather than social goals was sin so terrible as to be almost unforgivable. The most lurid attack on Congress was a series of magazine exposes, "The Treason of the Senate" by David Graham Phillips, appearing in Cosmopolitan magazine in 1906. The "treason" consisted in voting in favor of parochial state interests, especially higher tariffs for local products. Phillips assumed there was such a thing as "the national interest," and that it was corruption if senators failed to vote for it.
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Were trusts good or bad? Did big business represent efficiency and modernity, or did it threaten to strip power from the citizenry, or both? As Americans pondered, the crisis came in 1905-6, under the influence of spectacular investigations and intense Muckraking coverage--not to mention Democratic partisanship. Explicit exposes of political corruption by giant corporations in numerous industries, especially railroads, oil, and insurance, shifted the burden of proof: indisputably there were bad trusts out there and bigness itself became evidence of perfidy. Hearst, Brandeis (and later Wilson) proclaimed that bigness was inherently bad. Somebody had to stop the evil trusts. That was Bryan's copyright issue, but Roosevelt stepped in and promised to reign in the bad trusts and not hurt the "good" ones. That is, TR had an efficient solution and could be trusted to discriminate as to which trusts were good and fostered national efficiency, and which were bad and threatened republican virtues.
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The left wing progressives argued that monopolies were both inherently sinful, and also inherently inefficient. They made excessive profits by leveraging market power, argued Louis Brandeis. More conservative progressives, including William Howard Taft and his Justice Department, focused primarily on inefficiency, arguing that monopolistic trusts made the rest of the economy inefficient by distorting prices and natural economic flows. Thus Taft took pride in breaking up more trusts than anyone else, including the most famous of them all, Standard Oil. The Supreme Court, in agreeing to break up Standard Oil in 1911, rejected moralistic arguments and imposed a "rule of reason." That is, monopolies that made the economy inefficient were unreasonable and illegal, but not efficient monopolies. Such powerhouses as US Steel and International Harvester therefore survived judicial scrutiny.
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The Panic of 1907 was a major financial crisis that exposed the fragility of a modern economy pivoting on an archaic banking system. In the summer and fall of that year a loss of confidence hit depositors, who began demanding cash for their deposits. The crisis was worldwide; one of the hardest hit centers was New York City, where trust companies proved especially vulnerable. Unlike regular banks, they held very small cash reserves, making them both profitable and unstable in time of panic. J. P. Morgan, in semi-retirement rallied the leading banks to assemble funds to prop up first this trust company, then that, and then the entire New York Stock Exchange and the city of New York itself. The severe shortage of cash was met in large part by new issues of clearing house certificates from the consortium of banks, which were accepted as currency and which eased the crisis. The final critical episode was the rescue of a brokerage whose debt was backed by stock of Tennessee Coal and Iron, the largest steel company in the South. The only solution, Morgan felt, was to sell TCI to US Steel. President Roosevelt personally approved the takeover, even though it strengthened US Steel's hold on the market. The panic was over, but the reverberations lasted for years. LaFollette charged that the bankers had engineered the whole panic to reap a big profit.
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The political tension surrounding the Panic of 1907 was deliberately escalated by Roosevelt in a major speech in August entitled, "The Puritan Spirit and the Regulation of Corporations." He blamed the crisis primarily on Europe, but then, after taking inspiration from the unbending rectitude of the Puritans, he lambasted the rich: "It may well be that the determination of the government... to punish certain malefactors of great wealth, has been responsible for something of the trouble; at least to the extent of having caused these men to combine to bring about as much financial stress as possible, in order to discredit the policy of the government and thereby secure a reversal of that policy, so that they may enjoy unmolested the fruits of their own evil-doing."
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Roosevelt knew his bear-baiting would ill suit Wall Street, but thought the reaction would merely be "a great flurry and stocks went down several points." The actual reaction to TR's attacks--his conversion to Bryanism one might say--was a new ice age; his stock in Wall Street went down permanently. In 1910 Wall Street helped defeat one of their own, Henry Stimson running for governor, because he was too much TR's protege.
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Taft seemed endlessly inept. He had none of TR's charisma; when an easy publicity opportunity came up, he ducked it. He had none of TR's energy; where TR concentrated intently on the text of a speech, Taft postponed writing his and when called to the podium had nothing to say. In dealing with Congress, Taft first seemed to favor the insurgents, but in the end angered them by switching to the stand-patter side. A major blowup came when Gifford Pinchot, a close Roosevelt ally and head of the Forest Service, attacked his boss Interior Secretary Ballinger for near- criminal malfeasance in allowing Morgan interests to control coal lands in Alaska. Taft finally fired the disloyal Pinchot, who rushed to TR for help and began organizing conservationists against Taft's reelection.
Where TR had postponed the tariff issue repeatedly, it came due on Taft's watch. The 1908 Republican promised tariff "reform," which everyone assumed meant a lower tariff. The House bill lowered rates; in the Senate Nelson Aldrich used uncharacteristic brute force to humiliate his enemies. Whereas Aldrich was a New England businessman and a master of the complexities of the tariff, the insurgents were Midwestern rhetoricians who apparently believed the theory, propounded by Democrats and Muckrakers, that the tariff was the mother of trusts, that it was responsible for the high cost of living, and that it was sheer robbery for the benefit of rich monopolists. Aldrich baited them. Did the insurgents want lower tariffs? Aldrich lowered the protection on their farm products. Agrarian America believed that its superior morality deserved financial protection, while the dastardly immorality of the trusts merited financial punishment. The Payne Aldrich Tariff of 1909 perversely had the opposite effects. Taft stumbled by going to Minnesota and, in another carelessly drafted speech, called it the best tariff ever. The tariff actually changed little and had very little economic impact one way or the other, but the insurgents felt tricked and defeated and swore vengeance against Wall Street and its minions Taft and Aldrich. For the first time LaFollette was able to assemble senatorial allies in his battles against the trusts.
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In 1911 Taft tried to win popularity with consumers (and publishers) by negotiating a reciprocity agreement with Canada allowing free entry of cheap Canadian wheat, fish and newspaper pulp in exchange for new markets for (eastern) factories. Canada had long sought reciprocity, but American politicians avoided it as too explosive. Regional hatreds flared again as Midwestern farming interests, along with upstate New York producers, rallied against the treaty. Fighting Republicans right and left Taft called a special session of Congress, cut a deal with the Democrats, twisted arms, and won Congressional approval for reciprocity. It was a less than brilliant victory, for Taft never won plaudits for his achievements, but instead took another barrage from Midwestern insurgents who wanted lower tariffs for the Northeast, not for their region. Barnstorming the States for reciprocity, Taft correctly but incautiously pointed to the inevitable integration of the North American economy, hinting that Canada would soon come to a "parting of the ways" with London. Canada's Conservative Party now had an issue to regain power; after a surge of pro-imperial anti-Americanism, the Conservatives won and Ottawa rejected reciprocity. Taft gained a sack of failures, a retinue of new enemies, and no rewards for his remaining political friends.
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Under heavy attack from inside and outside his party, Taft shook off his lethargy and counterattacked. He began well before TR, LaFollette or anyone else, in summer 1910, to control the 1912 convention. LaFollette began organizing the insurgents in early 1911, but just as he gained momentum he went into seclusion to write his autobiography. The baffled insurgents shifted their hopes to Roosevelt. The Rough Rider, however, was uncharacteristically paralyzed; he dithered, stalled and hesitated. By the fall of 1911 Taft had locked up alliances with party leaders in most major states, including Roosevelt's own New York. In February 1912, LaFollette's emotional hysteria during a major speech raised the unsurmountable charge that this crusader was mentally unstable. Roosevelt now announced his candidacy, sweeping up most of LaFollette's backers; the Wisconsinite turned away from Taft to refocus his crusade as an all-out attack on Roosevelt's betrayal. Meanwhile Taft's men rolled up state after state; Roosevelt supporters used a desperate strategy, setting out hundreds of artificial challenges (and a few genuine ones) to delegitemize Taft's delegates and fire their moral outrage.
In thirteen states the progressive forces had succeeded in setting up primaries, expecting the voice of the people would be calling them. In these primaries TR won 50 percent of the popular vote against the divided (Taft-LaFollete) opposition, but he gained 77 percent of the contested delegates. Democracy was working for TR, but it fell short. The Taft forces, using much the same patronage techniques Roosevelt himself had used in 1904 and 1908, were rolling up more delegates. Taft's people purchased southern delegates wholesale, while TR, promoting lilly-white tickets, made little headway in the rotten boroughs of Dixie. Our efficiency, said the Taftites; Your Corruption! roared TR.
TR's war against Taft for control of the GOP was largely personal, but the popular response focused on Roosevelt's crusade in the name of popular sovereignty against the corruption of politics by the bosses, by corporate interests, and by judges unresponsive to the will of the people. While the Democrats had been sounding such themes since Jackson's day; it was new for the Republicans. In 1901 Albert Cummins had sought the governorship of Iowa in order "to bring the individual voter into more prominence, and to diminish the influence of permanent organization in the ranks of the party."
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The more radical progressives, led by LaFollette, Pinchot, Hiram Johnson and Roosevelt, echoed Jefferson (and Bryan and John Dewey) with their faith in direct democracy. The people would always make the best decision, if only the rules of the game allowed them to do so. Not true, sputtered angry railroad leaders who had been attacked for a half century by demagogues, and threatened by politicians extorting bribes, paybacks or merely free passes.
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Explained one business magazine: "We have faith in popular opinion, when it is expressed through the forms of the constitution; when it is instructed, sober, moral and true. But we have no faith in popular opinion when it is rash, passionate, unjust, prejudiced and ignorant."
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TR slashed back, blaming the businessmen for the ills of society:
I have scant patience with this talk of the tyranny of the majority.... We are today suffering from the tyranny of minorities. It is a small minority that is grabbing our coal- deposits, our water-powers, and our harbor fronts. A small minority is battening on the sale of adulterated foods and drugs. It is a small minority that lies behind monopolies and trusts....the sweat-shops, and the whole calendar of social and industrial injustice.
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The Taft conservatives were not, however, defending corporate interests. In 1908 financiers were chilly to William Howard Taft, who indeed had an anti-business streak and a strong taste for anti-trust. "Wall Street, as an aggregation," Taft told his brother, "is the biggest ass I have ever run across." Roosevelt had advised Taft that antibusiness rhetoric "helps you in the West. It hurts you among all the reactionary crowd, both the honest reactionaries and the corrupt financiers and politicians in the East." In 1912 the contribution to the Taft campaign raised barely a third of the funds it had in 1908. Taft and his allies instead saw themselves defending a cornerstone of republicanism, the rule of law, as interpreted by the judiciary. The fundamental issue was who would have final interpretation of the laws and the Constitution.
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Attacks on the Supreme Court had antecedents back to Jefferson, and to the Republican party assault on the Dred Scott decision. The strengthened role for the federal judiciary had been a powerful achievement of the Civil War. In 1896 the Bryan Democrats vehemently attacked the Supreme Court for striking down the income tax and breaking the Pullman strike two years before. The devastating counterattack to Bryan's legal views was that he condoned anarchism (a reference to Governor John Altgeld's pardoning of the Haymarket anarchists). After 1900 federal courts frequently issued injunctions against labor unions, and on several occasions struck down protective labor laws. The climax came in 1905, when in Lochner vs. New York (198 U.S. 45) the Supreme Court declared unconstitutional a maximum-hours law for bakers, announcing that the 14th Amendment guarantee of liberty of contracts trumped the police powers of the state to eliminate work practices that were both inefficient and deleterious to workers' health.
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Stimulated by the dissent by Oliver Wendell Holmes, the radical progressives denounced the decision as a surrender to property interests--that is, the Supreme Court itself was corrupt.
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Roosevelt--who never trusted lawyers, judges or "the law"-- took up the banner. He went after the state courts as undemocratic and unrepublican. "The courts [are] the ultimate irresponsible interpreters of the Constitution, and therefore... represent a system as emphatically undemocratic as government by a hereditary aristocracy." He announced in late 1907 that federal court injunctions were sometimes "used heedlessly and unjustly."
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In terms of legislation the great political battle over the role of the courts came in 1906 as Roosevelt attempted to put independent experts in control of railroad rates, rather than profit-seeking railroad executives. The Hepburn bill passed the House overwhelmingly, but stalled in the Senate where most Republicans demanded explicit provisions for court review of rate decisions handed down by the Interstate Commerce Commission. The issue was not whether or not railroad rates should be regulated; everyone agreed on that. The issue was whether the decision regarding what rates were "fair" should be made by economists in the ICC or judges on the federal bench. Aldrich led the support for the letting the judiciary have the final say about fairness. He artfully put control of the bill in the hands of "Pitchfork Ben" Tillman, a vulgar demagogue from South Carolina who was the senior Democrat on the committee. Tillman was unable to secure enough Democratic votes, so Roosevelt was forced to accept the Aldrich version that gave control over rates to bureaucratic experts but allowed for appeals to the courts. The final synthetic bill passed with only three dissenting votes.
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To make the judiciary more responsive to democratic forces, Roosevelt called for state constitutional amendments that would create referenda whereby citizens could overrule state judges. If a helpless widow was disappointed by a ruling, her friends could organize a statewide vote to overturn it. It did not occur to Roosevelt that corporations would have the same privilege; he assumed that whenever a vote took place the people would find the one correct decision, without regard to advertising blitzes by one side or the other. It did not occur to him that the referendum campaign would probably feature catch-phrases and slogans more than legal briefs or reprints of law review articles. Roosevelt, like most left progressives, paid little attention to "constitutional rights" claimed by individuals, lest they be claimed by corporations to have reforms declared unconstitutional. Roosevelt's challenge to judicial finality dismayed his closest supporters, who saw the judges as professional experts in fairness, and the rule of law as a core republican value. They rejected Roosevelt's plan to bring in academically-trained scientific experts as the final arbiters of the economy, society and polity and insisted on the superiority of judge-made law to legislative enactments. TR had attended law school (while busy writing his first book) but never fell in love with the law. His closest political advisors, including Henry Cabot Lodge, Elihu Root, Henry Stimson and his own son-in-law Congressman Nicholas Longworth all tried to reason with TR to no avail; they were more in love with the law than with TR, and reluctantly they each announced for Taft.
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Root, a leading corporate lawyer, apostle of efficiency and modernization, and TR's Secretary of War and State, best made the conservative progressive case for the claim that only the judicary could transcend frivolous democracy to truly express republican values:
Judicial decisions are something quite distinct and different from the expression of political opinions or the advocacy of economic or social theories. Profoundly devoted to the reign of law, with its prescribed universal rules as distinguished from the reign of men with their changing opinions, desires and impulses, our people have always ascribed a certain sanctity to the judicial office, have invested its holders with special dignity, and have regarded them in the exercise of their office with a respect amounting to almost reverence, as above all conflicts of party, and of faction, because these officers are the guardians of the law as it is.
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Root presided over the GOP national convention; regardless of his Nobel Peace Prize, he was a fighter and ruled in favor of Taft at every point. By his official count, Taft held a slim but solid majority. Roosevelt cried theft, walked out, and formed a new "Bull Moose" Progressive Party. Very few office holders followed TR. The exception was California, where Hiram Johnson's Progressives controlled the GOP and kept Taft entirely off the ballot in November. The Bull Moosers were political outsiders, utopians, and former insiders who had fallen on hard times. The party was bankrolled by a rich, eccentric magazine publisher named Frank Munsey, and by its national chairman George Perkins. A former executive with life insurance companies, Morgan's bank and U.S. Steel, Perkins embodied the sinful Wall Street financier that attracted so much hatred on the progressive left. Perkins, however, was a genuine reformer, and a brilliant organizer totally dedicated to efficiency; he also made sure that the antitrust plank desired by the rank-and-file was left out of the Bull Moose platform. Roosevelt followed Perkins, and barnstormed the country on behalf of his "New Nationalism." He promised government acceptance and close oversight of giant corporations, plus a heavy dose of social welfare programs targeted on raising the efficiency of working men and women, and ending child labor.
When the Democrats nominated New Jersey governor Woodrow Wilson, the Bull Moosers realized they could never achieve a cross-party alliance. Although Wilson was conservative on economic matters, and did not attack trusts, bankers or railroads, he exemplified expertise in higher education. His successful crusades against corrupt political bosses in New Jersey validated his democratic credentials. Conservative businessmen and lawyers, alarmed at Roosevelt, realized that support for Wilson would be a safer bet than throwing away money on Taft's hopeless campaign. Taft hardly campaigned. It hardly mattered, for he had already achieved his goal: the GOP was purged of its radicals and never again would they regain power. The Progressives were a one-man show; by dividing the GOP they guaranteed the electoral vote for the Democrats, as well as control of Congress, and relinquished their own claims on the GOP.
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Taft, Root, and Aldrich represented the right wing of the progressive movement. They were not given to personal invective; they believed in original sin shared by everyone, rather than the new-fangled label of social sinner that could so easily be slapped on a political opponent. The threat of corruption of republicanism in their view came instead from demagoguery, mob action, defiance of Constitutionalism, and from judicial review. They sought to purify the Republican party and the judicial system, and they succeeded.
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During Taft's presidency he quietly seized control of the Supreme Court, with five conservative appointments. His own 1921 appointment as Chief Justice guaranteed the conservative control of the third branch of government, leaving the insurgents in the cold for another two decades.
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The most most lasting and important legislation of the Progressive Era was the creation of a powerful, efficient central bank, the Federal Reserve System. To the present day it overshadows the rest of Washington in the shaping of macroeconomics. After the gold triumphs in 1896 and 1900, the money issue had faded from the political agenda. Ida Tarbell and the handful of journalists drawn to economics focused on industrial trusts, or better the plight of child labor. Despite rhetorical attacks on the "Money Trust," and frequent negative references to Wall Street, most reformers--even Bryan--steered away from the topic, and never proposed specific reforms. Only Louis Brandeis knew much about banking, and he was fixated on his scheme for local savings banks. A congressional investigation, the Pujo Committee in 1912, concentrated on illegitimate power rather than economic efficiency. It revealed that Morgan controlled Wall Street, and that five New York banks controlled 341 seats on the boards of 112 major corporations. The threat was uncontrolled power beyond the reach of government, a clear violation of republicanism.
Morgan had single-handedly stopped the Panic of 1907. He did it not with "power" or his own control of money, but with the prestige that enabled him to bring all the powerful players together in one room, and keep them until they found solutions to the emergency. Only bankers seemed to appreciate the real problem: the United States was the last major country without a central bank that could provide stability and emergency credit in times of financial crisis, not to mention support for expanded foreign trade in good times. The threat perceived by the financial community was not so much excessive power around Morgan, but the frailty of a vast, decentralized banking system that could not regulate itself without the extraordinary interventions of one old man. There was much talk about the need for an elastic money supply that could expand or contract as needed; more accurately the need was for liquidity. That is, for a central bank that would loan money to banks on the basis of assets that would be hard to sell in a crisis. After the scare of 1907 the bankers demanded reform; the next year Congress established a commission of experts to come up with a nonpartisan solution. Nelson Aldrich, the Republican leader in the Senate, ran the Commission personally, with the aid of a team of brilliant economists. They toured Europe and were astonished at how successful central banks in London and Berlin were in stabilizing their economies and promoting international trade. Despite the vast size of the American economy, the dollar was an also-ran currency in world trade compared to the pound or even the mark. Aldrich's impartial investigation in the best tradition of progressive fact-finding led to his plan in 1912 to bring central banking to America, with promises of financial stability, expanded international roles, control by impartial experts and no political meddling in finance.
Aldrich realized correctly that central bank had to be decentralized somehow, or it would be ganged up upon by local politicians and bankers as had the First and Second Banks of the United States. His solution was a regional system. In Congress, Rep. Carter Glass of Virginia picked up Aldrich's core ideas; to be able to claim Democratic authorship, he made numerous small revisions such as headquartering an region in the financial backwater of Richmond, Virginia. Glass had once been a fervent silverite; he now accepted the ideas proposed by the experts. Wilson's main contribution was to insist that the new regional banks be controlled by a central board appointed by the president. Bryan, by now Secretary of State, had not forgotten the menace of Wall Street and threatened to destroy the bill. Wilson masterfully bargained, negotiated and cajoled, coming up with a compromise plan that pleased bankers and Bryan alike. The agrarian element was basically bought off by making Federal Reserve currency liabilities of the government rather than of private banks--a symbolic change--and by including provisions for federal loans to farmers. The agrarian demand to prohibit interlocking directorates did not pass. Something for everybody was the final result--the bankers got their central bank, their opponents got to boast they had stripped the titans of Wall Street of their monopolistic powers and returned to the people control of their economy and their polity.
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An excited Glass took personal credit for the new system, proclaiming it would "make financial panics almost impossible"; and as well "break the shackles Wall Street has put upon the nation's commerce"; and indeed would "give the Federal Government the power of control over the credit machine, for the benefit of all the people." The question for the historian is how accurate were his predictions?
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Wilson stunned the Bryanites by appointing conservative
bankers who would never dream of issuing fiat money like the old
Greenbacks. Power in the Federal Reserve soon gravitated to the
Wall Street branch; not until 1935 did New Dealers rewrite the
law to concentrate the system's powers at the Washington
headquarters.
Historians have correctly praised Wilson for
his brilliant political maneuverings in pushing the Federal
Reserve through the Democratic Congress. Less often have they
asked how well it performed according to the criteria of
efficiency and democracy. The Fed was indeed led by highly
efficient nonpartisan experts--the question is whether its
solutions were the best possible ones for the economy, or the
worst ones, and how they reflected democracy. When the Fed
sharply cut the money supply in 1920 sending the whole economy
into a severe depression, America was shocked to discover that
nonpartisan experts do not necessarily make the best decisions.
Indeed, once given so much power the central bankers proved they
could throttle the economy, as happened again in 1929-31. In that
instance, the Fed escaped blame for the Great Depression on the
part of the public--who searched for evil men to blame; they have
not escaped the obloquy of economic historians. The Crash of
1929 demonstrated that even if selfishness or partisanship could
be overcome, the power of expertise would not be sufficient. The
progressives seemed unaware of the "law of unintended
consequences." The appeared confident that all problems must
have solutions, the solutions could be found, and the one best
solution would not have terrible unforseen consequences.
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The progressives thought that presidential appointment guaranteed popular political control of the Fed, and therefore freedom from Wall Street, and from greedy souls not atuned with the national interest. They were proven wrong time and again. Down until the 1930s the New York City banks exercised effective control of the main Fed activities.
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The Great War had already started when the Federal Reserve opened in late 1914, and both its New York branch and system headquarters in Washington had to confront the question of financial support to Britain and France in terms of the national policy of neutrality. The New York branch, controlled by Governor Benjamin Strong, vigorously supported the Allied cause and facilitated vast loans, organized by the Morgan banks. It ignored neutrality, bending every regulation it could to benefit London and Paris. The reason for this action--and indeed, for the private bank loans in the first place--could not have been profit. By 1917 the Allies had exhausted their credits and additional loans carried a much higher risk than bankers would ever make without collateral. The reason for the loans must have been political--earnest money on behalf of the British cause. The top officials of the Reserve in Washington, however, decided the funding was unsound and fought New York every step of the way. Some, like Governor Harding were fearful of massive losses if the loans continued. His top aide was apparently sympathetic to Germany. Paul Warburg had immigrated from Germany in 1902 and became a naturalized American citizen only in 1911. His brothers remained behind and became leading financiers of the German war effort in Hamburg. Democracy did not play a role--the battles were fought out in secrecy, and only late in 1916 did Harding seek the President's advice on just what the official policy of "neutrality" meant. Wilson saw the federal Reserve as a private agency that he did not control; he did recommend that it support his foreign policy, which just then was designed to pressure the Allies to come to peace terms. The result was to reverse New York's latest moves and leave the Allies financially in dire straits. The British--and the bankers--were rescued only because Berlin had at the same moment rejected the latest peace overtures, decided to engage in unrestricted submarine warfare, and made overtures to Mexico for an armed alliance against the United States.
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Wilson and the Democrats actually believed that high tariffs begat monopolies; they sharply lowered the tariff in 1913, confident that no more ugly devils would be born. They then replaced the guillotine of the Sherman Act with a scalpel that could be used by expert surgeons. The result in 1914 was the creation of the Federal Trade Commission and passage of the Clayton antitrust act. The antitrust movement had climaxed; its moralistic and democratic mission had been achieved, leaving only efficiency. During the world war, southern agrarians attempted to link their standard antimonopoly rhetoric to the new theme of "corruption" among munitions makers who sought American preparedness for war, or even intervention, to obtain new sources of profit. "If our own citizens will mind their home affairs," said antiwar Congressman George Huddleston of Alabama, "and American financiers will confine their rapacity as heretofore to exploiting their own...resources, there need be little fear of war." For a decade, business had been on the defensive--now in the war years it managed to seize its leadership of efficiency and modernization once more, and redeem its claim to an honored place in the republican order.
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The agrarians made little progress because the mood was changing. The seething hatred so many Americans felt toward Rockefeller became less important than the national celebration of Henry Ford. He was as much a monopolist as Rockefeller, but he built 15 million cheap Model T's that put America on wheels, and at the same time lowered prices, raised wages, and promoted efficiency. Ford became the greatest hero of the day because he empowered the consumer. Americans (who never developed brand loyalties for gasoline) loved their Tin Lizzies. The government never tried to break up Ford's company; talk of trust busting faded away as America accepted bigness. Wilson promised the FTC would become an ally of legitimate business, and his Republican successors restructured it to promote efficiency through cooperation, with scant attention to trustbusting of giant concerns. The FTC did promote purification, however, by eliminating shady practices of marginal and fly-by-night businesses which threatened established forms more than anyone else. The pleasant discovery that some government prohibitions would help big business guaranteed its support for the securities regulations of the 1930s.
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Ethnocultural issues were muted after 1896, as the Republicans adhered to McKinley's vision of prosperity and pluralism for all groups in society, with no use of the government by one group to attack another. Pluralism collapsed, temporarily, during the war, as debates on national security policy turned into debates about whether or not certain groups of "hyphenated" ethnic were truly devoted to American republicanism. The German-American and Irish-American communities, hostile to Britain, came out strongly in favor of neutrality, condemning t