Period characterized by a variety of reforms and legislation aimed at improving the quality of life by regulating commerce and labor.

From the end of the Civil War in 1865 until the end of the nineteenth century, Americans devoted their energy to expansion of the urban and industrial segment of the economy at the expense of the worker. By the last decade of the nineteenth century, reformers began to attempt to control or limit the numerous problems that resulted from the rapid industrialization and urbanization.Commerce, regulation ofCommerce, regulation of

The growth of big business after the Civil War gave rise to monopolistic practicesMonopolistic practices such as the restraint of trade and price fixing in the oil, sugar, steel, meatpacking, and tobacco industries. The growth and development of the nation’s railroads, which spanned the continent and engaged in interstate commerce, enabled the growth of trusts that eliminated competition and drove the small entrepreneur out of business. Responding to public outcry against these corrupt business practices, Congress passed the Sherman Antitrust ActSherman Antitrust Act in 1890. The act protected the public against monopolies by making conspiracies to restrain trade in interstate commerce illegal, providing for triple damages to any person injured by the competition of an unfair business monopoly, and stipulating fines and imprisonment for violations of the act. In effect, the act prohibited every contract, combination in the form of trust or otherwise, or conspiracy that resulted in restraint of trade or commerce among several states or with foreign nations. The majority of business-related cases considered by the Supreme Court during the Progressive era sought relief under the provisions of the Sherman Antitrust Act.

During the two-term presidency of Theodore Roosevelt, a Progressive Justice Department filed forty-three cases under the Sherman Antitrust Act to restrain or break up monopolistic businesses, including the Northern Securities Company and the beef trust, and questionable practices, including employment contracts and child labor.

This early 1900’s New York shoe factory reled solely on child labor. Progressive legislation, which tried to stop exploitative preactices such as these, often was declared unconstitutional in the Supreme Court.

(Library of Congress)

In Northern Securities Co. v. United States[case]Northern Securities Co. v. United States[Northern Securities Co. v. United States] (1904), the Supreme Court decided by a 5-4 vote that a holding company formed by the Great Northern, Southern Pacific, and Union Pacific railroad lines to eliminate competition between two railroad lines was a combination in restraint of trade and therefore a violation of the Sherman Antitrust Act. It ordered the Northern Securities holding company to be dissolved. This ruling was an important departure from the Court’s decision in United States v. E. C. Knight Co.[case]E. C. Knight Co., United States v.[E. C. Knight Co., United States v.] (1895), in which it made a distinction between commerce and manufacturing and limited the scope of the Sherman Antitrust Act. In Northern Securities, the Court held that a holding company sufficiently affected commerce by restraining it even though it was not actually engaged in interstate commerce and therefore came within the purview of the act.

In 1904 the Court adopted the stream of commerceStream of commerce doctrine in which Congress can regulate local commerce (indirect) that is part of the interstate (direct) current of commerce. This stream of commerce doctrine was first enunciated in Swift and Co. v. United States[case]Swift and Co. v. United States[Swift and Co. v. United States] (1905), which involved a beef trust. A number of meatpacking houses made agreements among themselves to fix the price of livestock and meat bought and sold in Chicago stockyards and slaughtering houses. Swift claimed that the livestock slaughtered and packed was bought and sold locally and hence was not involved in interstate commerce.

The Court unanimously ruled the meatpackers’ agreements violated the Sherman Antitrust Act because meatpacking was a part of the process in which cattle were shipped from out of state to Chicago for slaughter and packing and then shipped out of Illinois to other states for sale. This stream of commerce, which clearly involved more than one state, meant that the act applied in this case. The Court invalidated the price agreements made by Swift and the others. In the opinion for the Court, Justice Oliver Wendell Holmes stated: “When cattle are sent for sale from a place in one state, with the expectation that they will end their transit, after purchase, in another, and when in effect they do so, with only the interruption necessary to find a purchaser at the stockyards, and when this is a typical constantly recurring course, the current of commerce among the states, and the purchase of the cattle is a part and incident of such commerce.” In subsequent cases, the Court would use the stream of commerce doctrine to regulate the actual production of goods, and it would also use the commerce clause of the Constitution to oversee modern business and industry.

The Court abandoned its literal interpretation of the Sherman Antitrust Act in Northern Securities. In an 8-1 decision in Standard Oil Co. v. United States[case]Standard Oil Co. v. United States[Standard Oil Co. v. United States] (1911), the Court ruled that only unreasonable business combinations and undue restraints of trade were violations of the act. Chief Justice Edward D. White, in the majority opinion, stated that the Sherman Antitrust Act applied only to unreasonable restraints of trade and that the rule of reason should be used in judging whether the act applied in any specific case. Although the Court effectively weakened the act, it upheld a lower court’s decision to break up the Standard Oil Trust. In subsequent cases, the rule of reason became the standard for judging violations of antitrust laws.

The police powersPolice powers granted to states allow them to protect the public’s health, safety, and morals. During the Progressive period, a number of state and federal laws were passed regulating minimum age and wages of workers, safety, and the number of hours worked in a day. In Muller v. Oregon[case]Muller v. Oregon[Muller v. Oregon] (1908) and other cases, the Court upheld much of this legislation. However, at other times, the Court ruled that Congress had overstepped the bounds of its federal police power. In Hammer v. Dagenhart[case]Hammer v. Dagenhart[Hammer v. Dagenhart] (1918), the Court ruled five to four against the Keating-Owen Child Labor ActKeating-Owen Child Labor Act of 1916 and held that Congress had overreached its power. It found that labor was an aspect of manufacture and not the product itself. Therefore, although goods produced for interstate commerce had been produced by child labor, the products themselves were not harmful and could not be prohibited from being shipped by interstate commerce. By the end of World War I in 1918, the Court began to retreat from its earlier liberal rulings as the Progressive era came to an end and the Court became more conservative under Chief Justice William H. Taft.

• Barbuto, Domenica M. American Settlement Houses and Progressive Social Reform: An Encyclopedia of the American Settlement Movement. Phoenix, Ariz.: Oryx Press, 1999.
• Buenker, John D., and Edward R. Kantowicz, eds. Historical Dictionary of the Progressive Era, 1890-1920. New York: Greenwood Press, 1988.
• Divine, Robert A., et al. America Past and Present. New York: Addison-Wesley, 1998.
• Gallagher, Aileen. The Muckrakers: American Journalism During the Age of Reform. New York: Rosen, 2004.
• Hofstadter, Richard, and Beatrice Hofstadter, eds. From Reconstruction to the Present Day, 1864-1981. Vol. 3 in Great Issues in American History. New York: Vintage Books, 1982.
• Klose, Nelson. Since 1865. Vol. 2 in United States History. New York: Barrons Educational Services, 1983.
• Wingate, Katherine. Political Reforms: American Citizens Gain More Control over Their Government. New York: Rosen, 2006.

Commerce, regulation of

E. C. Knight Co., United States v.

Hammer v. Dagenhart

Muller v. Oregon

Northern Securities Co. v. United States

Police powers

Rule of reason

Sherman Antitrust Act

Standard Oil Co. v. United States

Swift and Co. v. United States