The Problem of Monopoly

1. The Problem of Monopoly

2. The Slaughterhouse Cases (1873) The State of Louisiana gave a monopoly to the Crescent City Live-Stock Landing and Slaughtering Co., requiring small butchers throughout New Orleans to have it do their slaughtering. The state said it was for health reasons, but it was a kickback to the politically influential company. The butchers’ guild sued, calling it a “monopoly of a very odious character,” and claiming that it violated the 14th Amendment privileges and immunities clause and infringed on their right to work. One of the purposes of the 14th Amendment, according to those who wrote it, was to give the federal government the power to reach into the states to ensure states did not discriminate against workers. The Court rejected this purpose. It narrowly read the “privileges and immunities clause,” saying that it only related to the freedom of former slaves. The Court denied the butchers’ guild and upheld the law. In retrospect, the butchers should have pursued their case on “due process” grounds. The Court has been more willing to reject state regulations on account of their not following due process of law: a position that has significantly increased the power of federal courts throughout the country.

3. Farmers v. Railroads “The Grange” was founded in 1867 as a USDA outreach program to unite and educate farmers to improve crop science and production techniques. It soon became a movement to unite farmers into cooperatives to raise crop prices and compete for cheaper railroad rates for crop transport. As the farmers’ political clout grew, farm states enacted “Granger Laws,” regulating railroads and warehousing. Business fought the regulations, but in Munn v. Illinois (1877) the U.S. Supreme Court declared that states could use their “police power” to regulate private property if the property affected the public good. Later courts backed away from Munn, restricting state regulatory power over railroads. In Wabash v. Illinois (1886), the Court followed the Gibbons precedent, ruling that only the federal government could regulate interstate commerce.

4. “How long will it be until . . . a few railroad magnates shall own most of the property of the country, while the masses of the people must be reduced to a condition of serfdom, poverty and vassalage?” Rep. John Reagan (D-TX) Interstate Commerce Commission: Created by the Interstate Commerce Act of 1887, it is the first federal government regulatory agency. Its mandate was to regulate interstate trade, commerce, railroad rates, etc. Its powers were enlarged during the Progressive era by the Hepburn Act (1906) and Mann-Elkins Act (1910).

5. Sherman Anti-Trust Act of 1890: forbids combinations, conspiracies, or contracts in restraint of trade or commerce, or to establish monopolies in interstate or foreign commerce. Supreme Court rulings, such as in U.S. v. E.C. Knight & Co. (1895), the “Sugar Trust case,” weakened the law by narrowly defining trade; so it was not actively enforced until 1904 when TR took on J.P. Morgan’s railroad monopoly in the Northern Securities case. In 1911, it was used to break up the Rockefeller monopoly in the oil industry and Buck Duke’s monopoly in the cigarette industry: Standard Oil v. U.S. and U.S. v. American Tobacco Co. It was actually used against workers, by limiting the powers of unions, in its early days. The Clayton Anti-Trust Act of 1914 protected unions for antitrust litigation.

6. In re Debs (1895): In 1894, a labor dispute broke out at Pullman Palace Car Co. in Pullman, Illinois. What had begun as a model of industrial reform became just another factory town with the Panic of 1893. To maintain profits, George Pullman cut wages and raised rents on the company-owned houses. The workers struck. They blocked railroad traffic, causing President Grover Cleveland to send in troops despite Illinois Governor John Peter Altgeld’s opposition. Cleveland’s action broke the strike and the Supreme Court upheld Cleveland’s position, ruling that the federal government could use force to ensure “the freedom of interstate commerce or the transportation of the mails.”

7. How the Other Half Lived:

8. "I aimed at the public’s heart and by accident hit its stomach."

9. [In an economic slump] the big packers did not turn their hands off and close down, like the canning factories; but they began to run for shorter and shorter hours. They had always required the men to be on the killing beds and ready for work at seven o'clock, although there was almost never any work to be done till the buyers out in the yards had gotten to work, and some cattle had come over the chutes. That would often be ten or eleven o'clock, which was bad enough, in all conscience; but now, in the slack season, they would perhaps not have a thing for their men to do till late in the afternoon. And so they would have to loaf around, in a place where the thermometer might be twenty degrees below zero! There were weeks at a time when Jurgis went home after such a day as this with not more than two hours' work to his credit--which meant about thirty- five cents. There were many days when the total was less than half an hour, and others when there was none at all. The general average was six hours a day, which meant for Jurgis about six dollars a week; and this six hours of work would be done after standing on the killing bed till one o'clock, or perhaps even three or four o'clock, in the afternoon. . . . On Christmas Eve Jurgis worked till nearly one o'clock in the morning, and on Christmas Day he was on the killing bed at seven o'clock. . . .

10. Of the butchers and floorsmen, the beef-boners and trimmers, and all those who used knives, you could scarcely find a person who had the use of his thumb; time and time again the base of it had been slashed, till it was a mere lump of flesh against which the man pressed the knife to hold it. . . . There were the wool-pluckers, whose hands went to pieces even sooner than the hands of the pickle men; for the pelts of the sheep had to be painted with acid to loosen the wool, and then the pluckers had to pull out this wool with their bare hands, till the acid had eaten their fingers off. . . . Some worked at the stamping machines, and it was very seldom that one could work long there at the pace that was set, and not give out and forget himself and have a part of his hand chopped off. . . . As for the other men, who worked in tank rooms full of steam, and in some of which there were open vats near the level of the floor, their peculiar trouble was that they fell into the vats; and when they were fished out, there was never enough of them left to be worth exhibiting,--sometimes they would be overlooked for days, till all but the bones of them had gone out to the world as Durham's Pure Leaf Lard! 

11. Regulating the Workplace Lochner v. New Yorkand Muller v. Oregon: In the early industrial age workers worked ten to twelve hour days, six days a week. There was no such thing as overtime pay and no workmen’s compensation. Progressives, on the state level, pushed industrial reforms, such as maximum work hours and even pushed for minimum wages. The latter had to wait until the Great Depression, but New York, Oregon and other states enacted maximum work hours. In New York, bakers sued and in Lochner the U.S. Supreme Court struck down the law, saying that it unconstitutionally restricted the freedom of contract—apparently if a worker wanted to work more even without “overtime” compensation, he was allowed to do it. Two years later, the same Court upheld an Oregon law that set maximum hours for women working in a laundry. On its face, the ruling contradicts Lochner and therefore fails the stare decisis test. But the Court held that such rules made sense to protect the more delicate health of women.

12. Child Labor Laws: Progressives sought to end child labor because it not only hurt children, but also older workers because young workers kept wages down for all. In 1904, reformers, including Jane Addams, established the National Child Labor Committee; in 1906, John Spargo published The Bitter Cry of the Children. In 1912, the Taft administration created the Children’s Bureau in the Department of Labor to track child labor.

13. By 1914, most states had set minimum age laws for workers – most were at 14 years old. In 1916, Congress enacted the Keating-Owen Child Labor Act, banning interstate commerce of any item manufactured by laborers under 14 years old. That law was ruled unconstitutional in 1918 in the case of Hammer v. Dagenhart where a Charlotte, NC, father sued to have his two sons work with him in the mill. The Court said that there was nothing immoral about children working and that disparities among state and regional labor sources allowed for child labor to continue.

14. The New Deal, 1933-1940

15. National Recovery Administration: Created by the National Industrial Recovery Act, the NRA was designed to provide work relief for the unemployed. Under the "Blue Eagle" campaign, it set wage and price controls on industries, regulated competition, and protected Labor's right to collective bargaining. It ran "afowl" of the interstate commerce clause and was found unconstitutional in the “sick chicken case” – Schechter Poultry Co. v. U.S. (1935)

17. “Court-Packing Plan”: FDR’s response to the Supreme Court’s ruling many New Deal programs to be unconstitutional. He planned to add six new justices to the Court to create a majority that would favor of his policies. Many of the common people support it during the 1936 campaign, but opposition from politicians killed the plan. It cost FDR significant political capital and represents the lengths to which he was willing to go to solve the crisis. It never came to pass because the Court reversed itself, finding the National Labor Relations Board, the NRA’s replacement to be constitutional in N.L.R.B. v. Jones & Laughlin Steel Corp. (1937). The Social Security Act and minimum wage laws were also deemed to be constitutional, transforming the role of the federal government in the economy.

18. Jurisprudence of Free Speech and Assembly

19. Free Speech in WWI Espionage and Sedition Acts: Laws criminalizing most actions that could hurt the U.S. war effort. It was against the law to criticize the U.S. and say that it should not be at war. It targeted union leaders and socialists, notably Eugene V. Debs, who called WWI a “war for capitalism,” or who called for strikes at major industries. Schenck v. United States (1919): Schenck was convicted of sedition for passing out handbills calling for Americans to evade the draft and oppose the war effort; he appealed, claiming that the law violated his right to free speech. The Court ruled against Schenck, arguing that free speech had to be balanced with public safety. Schenck’s handbill posed a “clear and present danger,” akin to “someone shouting ‘fire’ in a crowded theater when there was no fire.”

20. Internment of Japanese Americans in WWII Supreme Court case involving a Japanese-American challenge to the U.S. military program of internment and relocation. After Pearl Harbor, the Justice Department began rounding up Japanese nationals in the U.S. as “enemy aliens.” Concern grew about spying and sabotage on the West Coast. In February 1942, FDR ordered the military forcibly to remove Japanese resident aliens and U.S. citizens of Japanese heritage (Nisei) to “War Relocation Camps,” or internment camps in the interior of the U.S., notably Arizona and Colorado. The relocation was accompanied by seizure of property; so many lost their homes. Several Nisei sued, calling their internment a violation of their 5th and 14th Amendment due process rights and equal protection. In Korematsu v. United States (1944), the Supreme Court ruled internment constitutional because of the war emergency.

21. The Cold War

22. “When the Communist International represented the only world force effectively resisting Nazi Germany, I had offered my services to the Soviet underground in Washington as one small contribution to help stem the fascist tide.” – Julian Wadleigh (Fourth Department) The Smith Act On the domestic front, Congress moved to restrict the activities of American Communists. The Smith Act (1941) had made it a crime to call for the overthrow of the U.S. government. In 1947, Truman charged several leaders of the Communist Party in the United States (CPUSA) under this act. The leaders were convicted and their convictions were upheld in Dennis v. United States (1951). The McCarran Act This law required Communist organizations to register with the government, establishing a special board to investigate Communist involvement. It made it illegal to plan a totalitarian dictatorship and prevented Communists from entering the U.S.

23. Senator Joseph McCarthy: Wisconsin Republican elected in 1946. In 1950, McCarthy announced that he had evidence that there were 57 known Communists in the U.S. State Department and declared that the Soviets were winning the Cold War, touching off what has become known as the “Second Red Scare.”

24. Army-McCarthy Hearings: Downfall of Sen. McCarthy and example of the alleged excesses of the second “Red Scare.” In 1953 and ‘54, he turned his attention on lax enforcement of anti-Communist security enforcement in the Eisenhower administration in a series of televised hearings involving the U.S. Army Signal Corps. Opponents of McCarthy circled the wagons: members of both parties started to call him reckless; the media stepped up their attacks. Six months after the hearings, the Senate censured him. He died of the effects of alcoholism in 1957. His name is a noun meaning vicious, unsubstantiated political attacks, a witch hunt: McCarthyism. In 1995, Congress declassified the Venona Project, where the FBI intercepted and decoded Soviet messages. Ironically, Venona proved many of McCarthy’s claims true.

25. Vietnam Anti-War Movement: In the early 1960s, anti-capitalist activists formed the Students for a Democratic Society (SDS) and issued the Port Huron Statement. Calling themselves the “New Left,” the SDS demanded democratization of government, corporations, labor unions, and universities. They focused opposition on the Vietnam War. By the mid-1960s, the violence of the civil rights movement, the JFK assassination, a belief that Vietnam was a quagmire, the SDS influence, the rebelliousness of youth, rock and roll, a new openness about sex, the ready availability of drugs, and a high level of prosperity among white suburban children merged into a full-fledge anti-war movement.

26. “ROTC must go because we oppose the policies of the United States and we oppose the military that perpetrates them. The lines are clearly drawn; the time to take sides is now.” In 1967, 500,000 protesters rallied in Central Park, chanting “Hey, hey, LBJ, how many kids did you kill today?” Some elements of the anti-war movement became violent. The Weather Underground bombed ROTC facilities, police stations, and the Pentagon, killing or injuring innocent bystanders. The protesters met with more severe violence by police and National Guardsmen, most famously at the Democratic Convention in Chicago (1968) and at Kent State University in 1970 – where guardsmen killed four demonstrators. As the movement grew, some began to resist the draft. Some “dodged” it fleeing to Canada, other burned their draft cards. The protests of all stripes strained the First Amendment guarantees of free speech, press, and peaceable assembly.

27. Since Vietnam, the Court has tended to err on the side of protecting protestors’ rights by enhancing Preferred Position Doctrine. In 1977, the Court upheld the Ku Klux Klan’s right to march through a town inhabited largely by Holocaust survivors. In the late 1980s, the question of the legality of burning the U.S. flag in protest became an issue. In two cases, Texas v. Johnson (1989) & U.S. v. Eichmann (1990), the Court upheld the right as symbolic political speech, on the state and the federal level. The Court’s action has led many to call for a constitutional amendment to prohibit flag-burning except for the honorary disposal ceremony.

28. Free Speech Cases – Seditious Speech Schenck v. United States (1919): Clear and Present Danger Doctrine Gitlow v. New York (1925): Bad Tendency Doctrine Anti-Communism Cases Dennis v. United States (1951): Clear and Present Danger Doctrine Yates v. United States (1957): Preferred Position Doctrine Symbolic Speech United States v. O’Brien (1968): Burning Draft Cards Unconstitutional Tinker v. Des Moines School District (1969): Black armbands Protected Speech Texas v. Johnson (1989) & U.S. v. Eichmann (1990): Flag-burning Protected Speech

29. Substantive Rights: The Right to Privacy While the Court has rejected the idea that citizens have economic rights beyond anything written in the Constitution, it has found substantive rights that involve other liberties. The most notable is the “right to privacy.” The Constitution does not explicitly guarantee a right to privacy. By combining the Fourth Amendment protections against unwarranted search and seizure with Ninth and Tenth Amendment reserved rights, and their “penumbras.”

30. Betty Friedan: An avowed Marxist, Friedan started the modern women’s liberation movement when she published The Feminine Mystique in 1963. The book shook American culture by declaring that women were dissatisfied being “just” wives and mothers: “the problem that has no name.” She became an activist for women’s rights and was co-founder of the National Organization for Women (NOW) in 1966. In 1969, she co-founded the National Association for the Repeal of Abortion Laws (NARAL) which became a leading advocate in the case known as Roe v. Wade. “The problem that has no name — which is simply the fact that American women are kept from growing to their full human capacities — is taking a far greater toll on the physical and mental health of our country than any known disease.”

31. Roe v. Wade (1973): Controversial case involving the legal right to abortion. It grew out Norma L. McCorvey’s (Jane Roe) challenge to a Texas law banning abortion. Building on Griswold v. Connecticut (1964), which established a constitutional “right to privacy,” the U.S. Supreme Court ruled that abortion was a constitutional right. The 7-2 decision followed a three-part policy based on the trimester pregnancy. In the first trimester, before “viability” of a fetus, abortion was absolutely legal; the second trimester was a gray area, dependent on doctor-patient agreement; in the third trimester abortion was not legal except to save the life of the mother. The trimester system has been refined by later decisions, notably Planned Parenthood v. Casey (1992). The case made a national issue of abortion as Americans divided into two camps – Pro-Choice and Pro-Life. The political parties divided: Republicans calling for a constitutional amendment to restrict abortion, and Democrats calling for expanded abortion rights. This created a “gender gap” that defined U.S. politics ever since.

32. Equal Rights Amendment The National Organization for Women (NOW) called for a constitutional amendment that would ban discrimination on account of gender. It wanted to ensure women access to jobs, to equal pay for those jobs, as well as rights of contract and any other area of public life. In the 1970s, Congress passed the proposed amendment; it went to the states for ratification. Three-quarters of states (38 states) had to ratify the ERA by 1982 for it to take effect. The ratification process became convoluted because some states initially ratified it only to revoke their approval upon further study. A counter-movement, named Stop-ERA, led by Phyllis Schlafly, challenged the ERA. Schlafly argued that it would eliminate several gender-based benefits that women enjoy in America. She effectively contended that it would lead to tax-payer funded abortions, same-sex marriages, and women in combat. By 1982, the ERA’s time had run out. Interestingly, those policies which Schlafly feared came to pass even without the ERA .