Chapter 27

1. Chapter 27 Living with Leviathan: Big Business and Great Wealth

2. Regulating Railroads and Trusts • Gap growing between very rich and very poor • Aristocracy’s money and power threaten American dream • Railroad problems • Railroads defile countryside • Railroads dangerous in cities • Most people welcome railroads • Railroads link farmers to markets • Americans distrust railroaders’ tactics

3. Regulating Railroads and Trusts (cont.’d) • Farmers’ grievances with railroads • Railroads charge unfair rates • Railroads charge to store crops • Railroads eat up farmers’ profits • Attempts at regulation • Patrons of Husbandry (Grange): farmers organize • Grangers pass state laws regulating railroads • Munn v. Illinois upholds laws (1877) • Wabash case weakens laws (1886)

4. Regulating Railroads and Trusts (cont.’d) • Interstate Commerce Commission • Congress passes Interstate Commerce Act • Sets up ICC to regulate railroads • ICC calms anti-railroad protests • ICC ineffective at regulating railroads • Consolidation • 1890s: trunk lines consolidate into five systems • 1890: two New York bankers control trunk lines • Bankers provide badly needed capital • Bankers improve railroads through consolidation

5. Regulating Railroads and Trusts (cont.’d) • J.P. Morgan • Investment banker • Controls many railroads • Organizes trusts • Extremely rich and powerful • Sherman Antitrust Act • Rules any restraint of trade illegal • Has very vague wording • Does not hold up well in court • Does little to break up trusts

6. Social Critics • Henry George • Writes Progress and Poverty • Sees rich as parasites • Wants to tax “unearned increment” • Wants a Single Tax to fund government • Edward Bellamy • Writes utopian novel, Looking Backward • Has socialist vision for America • Views reflect American ideals • Calls plan Nationalism

7. Social Critics (cont.’d) • Socialists and anarchists • Some immigrants opt for Marxist solutions • Revisionist Marxists want democracy • Social Democratic Party in Wisconsin • Anarchists call for violence to hasten revolution • Haymarket Square Riot • Police use violence against Chicago strikers • Rally in Haymarket Square to protest • Bomb thrown, riot breaks out • Anarchists convicted on little evidence

8. Defenders of the Faith • Social Darwinism • Herbert Spencer applies Darwinism to society • Believes that society is jungle; need to fight for survival • Justifies actions of businessmen and others • Too ruthless to appeal to many Americans • William Graham Sumner

9. Defenders of the Faith(cont.’d) • Success Gospel • Very influential with capitalists • Says wealth is a virtue and all should strive to be rich • Russell B. Cornwell: lack of riches a man’s own fault • Horatio Alger and Ragged Dick • Supports the Success Gospel • Writes “rags-to-riches” stories for boys • Heroes always righteous, hard working • Extremely popular books • Philanthropy • Many rich are not virtuous in business • Rich turn to philanthropy to justify fortunes • Carnegie says a rich man should not die rich

10. How the Very Rich Lived • Conspicuous consumption • Marry daughters to European nobility • Women little more than décor • Others resent and envy rich • Plays and publications ridiculed the wealthy

11. Discussion Questions • What was the Grange Movement? Where did it have its origins? What impact did it have on American society? • Examine the Sherman Anti-Trust Act. How effective was in regulating the trusts? • What was the Haymarket Square Riot and how does it indicate the problems facing labor in the late 1800s? • What is Social Darwinism? Why was its concepts popular amongst certain groups in the 1800s? Is it accurate?