Revisit Progressive Reforms

Much is being written these days in reference to the 2006 and 2008 elections about the relevance of the Progressive Era (1900-1920) and its champion, Theodore Roosevelt.

The era has been called the "Golden Age of Agriculture" and for many years after that, when old-timers talked about the "good ol' days," they meant this period. It was not without its problems, however, some of which persist and even fester to this day.

In contrast with the late 1800s, the dawn of a new century brought relative prosperity and abundance to American agriculture after the recurring depressions of the late 19th century. By 1910 the purchasing power of farmers would at last equal that of urban, industrial workers, resulting in a four-year period that would, in the decades following, become the basis for calculating "parity" prices for agriculture.

What happened in these first 20 years of the new century, therefore, is crucially important to any study of America's chronic agricultural crisis, not only because these decades would alter the character of American agriculture, but also because social transformations took place so rapidly that the farmers and the communities they supported lacked adequate time to adjust to such profound changes.

The influential Iowa farm editor, Henry C. Wallace, writing in 1900, described this period:

"The farmer is the main element in national prosperity because there are so many of him. When the farmers prosper, have money to pay their debts, provide for their families and make improvements, good times are clearly in sight, as they were in 1897. The farmer's money started the mills and factories all over the land. For two or three years they had been running on short time, the country was bare of manufactured products, the farmers had great need of them and this farm prosperity started a wave of prosperity among all classes, which has continued to the present hour."

Some economists at the time thought it was more than just the "farmer's money starting the mills and factories," but in fact it was the "surplus" of farmers themselves that was creating this new "wave of prosperity."

"In very truth," one observed, "when enough [farmers] have been driven into manufacturing ... they would be numerous enough to manufacture two or three times as much as this country could consume and the surplus would have to find a foreign market."

Others have even suggested that "[o]nce the farm surplus turned into a surplus of goods in general, the momentum generated in the drive for agricultural exports continued as a policy to expand manufacturing exports as well. The US was eventually drawn into conflict with the other great industrial nations in a world struggle over markets which culminated in World War I."

At this time farmers were also accelerating their struggle against the trusts and tariffs, believing as they did that protectionism, while benefiting the trusts, raised farmers' costs on the one hand and reduced their overseas markets on the other.

Many of the inadequacies found at this time in the nation's political and economic structure and which the agrarian populists had sought to remedy were soon to be championed by the so-called Progressive movement. As populist historian Lawrence Goodwyn points out:

"The countervailing idea of the 'progressive society' materialized slowly out of the symbolic values embedded in the gold standard. The 'sanctity of contracts' and 'the national honor,' it soon became apparent, were foremost among them. But, gradually and with the vast distributional range afforded by the Republican campaign treasury, broader themes of 'peace, progress, patriotism and prosperity' came to characterize the ... 'progressive society' advanced by Mark Hanna [William McKinley's 'campaign manager'] in the name of the corporate community [--] inherently a well-dressed, church going society. The various slogans employed were not mere expressions of a cynical politics, but rather the authentic assertions of an emerging American world view."

The Progressive era, which reached full flower in the early 1900s during the Theodore Roosevelt administration, while admitting that the US' "new wave of prosperity" was creating enormous social and economic problems, nevertheless believed that that same system could in turn solve these problems.

Consequently, progressives argued, if officeholders and businessmen were honest, upright, good and efficient, and applied the principles of science with the public good in mind, all the apparent evils of the time would disappear.

They also believed that scientific management and monopoly integration and power, if used wisely, could assuredly benefit all of society. To progressives, therefore, trusts were a fact of life; it was simply a matter of "good" and "bad" trusts. The key to the monopoly question became one of motive rather than the fact that monopolies existed at all.

When Edward Harriman and J.P. Morgan's fight for control of the railroads in the Midwest went to the Supreme Court and the Court ordered Morgan's Northern Securities Company dissolved because of its intent to restrain trade in interstate commerce, the "rule of reason" in antitrust judicial opinion was introduced.

"Rule of reason" considered only motives, good or bad, behind monopoly, not the de facto economic effects of the combination. Justice Oliver Wendell Holmes in dissenting from the majority opinion believed that precedents should be sought in common law to distinguish between "reasonable" and "unreasonable" intent in restraint of trade.

Justice John Marshall Harlan in writing for the majority had expressed the idea that every such combination restrains trade by its very size and is to the public's detriment.

To the scientists, professional people, businessmen and politicians -- the American elites -- bigness and vertical integration were the assured means for a more efficient, stable and prosperous society as a whole. Furthermore, they sincerely believed that vertical integration and/or monopoly was, in the words of environmental professor and author Joseph Petulla, "the manifest destiny of capitalism."

Ironically, however, while the Morgans and the Rockefellers were preaching this gospel from their Wall Street cathedrals, many small businesses were rapidly growing in number and often proving themselves to be more efficient than the corporate giants of the time. It was for that reason the American elites looked to the federal government for relief and for the maintenance of their control in industry. As Petulla observes:

"They became convinced that business and government could cooperate in 'rationalizing' the nation's economy for everyone's benefit. By the end of the first decade of the century, businessmen were actually initiating social reforms or at least suggesting national regulations when the demands of individual states and their laws regarding rates, competition or income taxes became oppressive."

A resolution of sorts to the trust and antitrust arguments in the "Progressive Era" came in 1914 with the passage of the Clayton Act, which sought to remove the ambiguities of the older Sherman Anti-Trust Act by more carefully defining what specific acts violated fair competition.

The Clayton Act also attempted to stress the value of competition even though it did little toward striking down the huge monopoly conglomerates that by their very size kept competition out of the market. Labor and agricultural organizations, however, were exempt from its provisions.

A.V. Krebs edits and publishes the online newsletter The Agribusiness Examiner, which can be obtained by contacting

From The Progressive Populist, Aug. 1-15, 2006

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