THE GROWTH OF DISSENT
Important as was the legislation described in the preceding chapter,
there were sources of discontent which it could not, in the nature of
things, dry up. With the exception of the income tax, there had been no
decisive effort to placate the poorer sections of the population by
distinct class legislation. It is true, the alien contract labor law and
the Chinese exclusion act were directed particularly to the working
class, but their effects were not widely felt.
The accumulation of vast fortunes, many of which were gained either by
fraudulent manipulations, or shady transactions within the limits of the
law but condemned by elementary morals, and the massing of millions of
the proletariat in the great industrial cities were bound in the long
run to bring forth political cleavages as deep as the corresponding
social cleavage. The domination of the Federal government by the
captains of machinery and capital was destined to draw out a counter
movement on the part of the small farmers, the middle class, and the
laborers. Mutterings of this protest were heard in the seventies; it
broke forth in the Populist and Socialist movement in the nineties; it
was voiced in the Democratic campaign of 1896; silenced awhile by a
wave of imperialism, it began to work a transformation in all parties at
the opening of the new century.
* * * * *
This protest found its political expression in the organization of
"third" or minor parties. The oldest and most persistent of all these
groups is the Prohibitionist party, which held its first national
convention at Columbus, Ohio, in 1872, and nominated Mr. Black, of
Pennsylvania, as its candidate. In its platform, it declared the
suppression of the liquor traffic to be the leading issue, but it also
proposed certain currency reforms and the regulation of transportation
companies and monopolies.
Although their popular vote in 1872 was less than six thousand, the
Prohibitionists returned to their issue at each succeeding campaign with
Spartan firmness, but their gains were painfully slow. They reached 9522
in 1876, and 10,305 in 1880. In the campaign of 1884, when many
Republicans were dissatisfied with the nomination of Blaine, and
unwilling to follow Curtis and Schurz into the Democratic camp, the
Prohibition vote rose to 150,369. A further gain of nearly one hundred
thousand votes in the next election, to which a slight addition was made
in 1892, encouraged the Prohibitionists to hope that the longed-for
"split" had come, and they frightened the Republican politicians into
considering concessions, especially in the states where the temperance
party held the balance of power. In fact, in their platform of 1892 the
Republicans announced in a noncommittal fashion that they sympathized
with "all wise and legitimate efforts to lessen and prevent the evils of
intemperance and promote morality." The scare was unwarranted, however,
for the Prohibition party had about reached its high-water mark. Being
founded principally on one moral issue and making no appeal to any
fundamental economic divisions, it could not make headway against the
more significant social issues, and its strength was further reduced by
the growth of state and local prohibition.
* * * * *
Almost immediately after the Civil War, labor entered politics in a
small way on its own account. In 1872, a party known as the "Labor
Reformers" held a national convention at Columbus which was attended by
delegates from seventeen states. It declared in favor of restricting the
sale of public lands to homesteaders, Chinese exclusion, an eight-hour
day in government employments, civil service reform, one term for each
President, regulation of railway and telegraph rates, and the subjection
of the military to the civil authorities. The party nominated Justice
Davis, who had been appointed to the Supreme Court of the United States
by Lincoln and had shown Populist leanings immediately after the War;
but Mr. Davis declined to serve, and O'Connor of New York, to whom the
place was then tendered, only polled about 29,000 votes.
This early labor party was simply a party of mild protest. It originated
in Massachusetts, where there had been a number of serious labor
disputes and a certain shoe manufacturer had imported a carload of
Chinese to operate his machinery. Although Wendell Phillips, who had
declared the emancipation of labor to be the next great issue after the
emancipation of slaves, was prominently identified with it and stood
next to Justice Davis on the first poll in the convention, the party as
a whole manifested no tendency to open a distinct class struggle, and
the leading planks of its program were shortly accepted by both of the
old parties.
Standing upon such a temporary platform, and unsupported by any general
philosophy of politics, the labor reform party inevitably went to
pieces. Its dissolution was facilitated by the rise of an agrarian
party, the Greenbackers, who, in their platform of 1880, were more
specific and even more extensive in their declaration of labor's rights
than the "Reformers" themselves had been. It was not until 1888 that
another "labor" group appeared, but since that date there has been one
or more parties making a distinct appeal to the working class. In that
year, there were two "labor" factions, the Union Labor party and the
United Labor party. Both groups came out for the public ownership of the
means of transportation and communication and a code of enlightened
labor legislation. The former advocated the limitation of land ownership
and the latter the application of the single tax. Both agreed in
denouncing the "Democratic and Republican parties as hopelessly and
shamelessly corrupt, and, by reason of their affiliation with
monopolies, equally unworthy of the suffrages of those who do not live
upon public plunder." The vote of both groups in the ensuing election
was slightly over 150,000.
The labor groups which had broken with the old parties took a more
definite step toward socialism in 1892, when they frankly assumed the
name of the Socialist Labor party[34] and put forward a declaration in
favor of the public ownership of utilities and a general system of
protective labor legislation. Although the socialism of Karl Marx had by
this time won a wide influence among the working classes of Europe,
there are few if any traces of it in the Socialist Labor platform of
1892. That platform says nothing about the inevitable contest between
labor and capitalism, or about the complete public ownership of all the
means of transportation and production. On the contrary, it confines its
statements to concrete propositions, including the political reforms of
the initiative, referendum, and recall, all of which have since been
advocated by leaders in the old parties. The small vote received in 1892
by the socialistic candidate, 21,532, is no evidence of the strength of
the labor protest, for the Populist party in that year included in its
program substantially the same principles and made a distinct appeal to
the working class, as well as to the farmers.
* * * * *
Indeed, the discontent of the two decades from 1876 to 1896 was confined
principally to the small farmers, who waged, in fact, a class war upon
capitalists and financiers, although they nowhere formulated it into a
philosophy. They chose to rely upon the inflation of the currency as
their chief weapon of offense. A precursor to the agrarian movement in
politics is to be found in the "Granger Movement," which began with the
formation of an association known as the "Patrons of Husbandry" in
1867. This society, which organized local lodges on a secret basis and
admitted both men and women, was originally designed to promote
agricultural interests in a general and social way, and its political
implications were not at first apparent. It naturally appealed, however,
to the most active and socially minded farmers, and its leaders soon
became involved in politics.
The sources of agrarian discontent were obvious. During the War, prices
had been high and thousands of farm "hands" and mechanics had become
land owners, thanks to the homestead laws enacted by the Republican
party; but they had little capital to start with, and their property was
heavily mortgaged. When the inflated War prices collapsed, they found
themselves compelled to pay interest at the old rate, and they figured
it out that capitalists and bondholders were the chief beneficiaries of
the Federal financial legislation. In spite of all that had been paid on
the national and private debts, the amount still due, they reckoned,
measured in the products of toil, wheat and corn, was greater than ever.
They, therefore, hit on the conclusion that the chief source of trouble
was in the contraction of the currency which reduced the money value of
their products. The remedy obviously was inflation in some form.[35]
While the currency thus became the chief agrarian issue, the farmers
attributed a part of their troubles to the railway companies whose
heavily "watered" capital made high freight rates necessary, and whose
discriminations in charges fell as heavy burdens on shippers outside of
the zones of competition. The agrarians, therefore, resorted to railway
legislation in their respective states--the regulation of rates and
charges for transportation and the conditions under which grain should
be warehoused and handled. In Illinois, Iowa, Wisconsin, and other
states, the law makers yielded to the pressure of the farmers for this
kind of legislative relief, and based their legal contentions on the
ground that the railways "partook of the nature of public highways." The
Grangers were strengthened in their convictions by the violence of the
opposition offered on the part of the railways to the establishment of
rates and charges by public authority, and by their constant appeals to
the courts for relief.[36]
Of course, the fixing of flat rates without any inquiry into the cost of
specific services was open to grave objections; but the opposition of
the companies was generally based on the contention that they had a
right to run their business in their own way. The spirit of this
opposition is reflected in an editorial published in the _Nation_, of
New York, in January, 1875: "We maintain that the principle of such
legislation is either confiscation, or, if another phrase be more
agreeable, the change of railroads from pieces of private property,
owned and managed for the benefit of those who have invested their money
in them, into eleemosynary or charitable corporations, managed for the
benefit of a particular class of applicants for outdoor relief--the
farmers. If, in the era of progress to which the farmers' movement
proposes to introduce us, we are going back to a condition of society in
which the only sort of property which we can call our own is that which
we can make our own by physical possession, it is certainly important to
every one to know it, and the only body which can really tell us is the
Supreme Court at Washington."
Not content with their achievements in the state legislatures, the
agrarians entered national politics in 1876 in the form of the
Independent National or Greenback party, designed to "stop the present
suicidal and destructive policy of contraction." They declared their
belief that "a United States note, issued directly by the government and
convertible on demand into United States obligations, bearing a rate of
interest not exceeding one cent a day on each one hundred dollars and
exchangeable for United States notes at par, will afford the best
circulating medium ever devised." In spite of the small vote polled by
their standard bearer, Peter Cooper, of New York, they put forward a
candidate in the next campaign[37] and made a third attempt in 1884,
growing more and more radical in tone. In their last year, they
declared: "Never in our history have the banks, the land-grant
railroads, and other monopolies been more insolent in their demands for
further privileges--still more class legislation. In this emergency the
dominant parties are arrayed against the people and are the abject tools
of the corporate monopolies." The Greenbackers demanded, in addition to
currency reform, the regulation of interstate commerce, a graduated
income tax, labor legislation, prohibition of importation of contract
laborers, and the reduction of the terms of United States Senators.
Although their candidate, B. F. Butler, polled 175,000 votes in 1884,
the Greenbackers gave up the contest, and in 1888 yielded their place to
the Union Labor party.
The agrarian interest was, however, still the chief source of conscious
discontent, and the disappearance of the Greenbackers was shortly
followed by the establishment of two societies, the National Farmers'
Alliance and Industrial Union and the National Farmers' Alliance, the
former strong in the South and West, and the latter in the North. In
1890, these orders claimed over three million members, and in several of
the southern states they had dominated or split the Democratic party.
The Northern Alliance was likewise busy with politics, and in Kansas and
Nebraska, by independence or fusion, carried a large number of
legislative districts.
Although professing to be non-political in the beginning, the leaders of
these alliances called a national convention at Omaha in 1892 and put
forth the most radical platform that had yet appeared in American
politics. It declared that the newspapers were subsidized, corruption
dominated the ballot box, homes were covered with mortgages, labor was
impoverished and tyrannized over by a hireling standing army, and the
nation stood on the verge of ruin. "The fruits of the toils of
millions," runs the platform, "are boldly stolen to build up colossal
fortunes for a few, unprecedented in the history of mankind; and the
possessors of these in turn despise the republic and endanger liberty.
From the same prolific womb of governmental injustice we breed two
classes of tramps and millionaires." Their demands included the free
coinage of silver, a graduated income tax, postal-savings banks,
government ownership of railways, telegraph and telephones; they
declared their sympathy with organized labor in its warfare for better
conditions and its struggle against "Pinkerton hirelings"; and they
commended the initiative, referendum, and popular election of United
States Senators. On this program, the Populists polled over a million
votes and captured twenty-two presidential electors. Evidently the
indifference of the old parties to such issues could not remain
undisturbed much longer.
* * * * *
Fuel was added to the discontent in the spring of 1895, when the Supreme
Court declared null and void the income tax law of the previous
year.[38] The opponents of the tax, having lost in the Congress, made
their last stand in the highest Federal tribunal, and marshaled on their
side an array of legal talent seldom seen in an action at law, including
Senator Edmunds, Mr. Joseph H. Choate, and other attorneys prominently
identified with railway and corporation litigation. No effort was spared
in bringing pressure to bear on the Court, and no arguments, legal,
political, and social, were neglected in the attempt to impress upon the
Court the importance of stopping Populism by a judicial pronunciamento.
Conservative New York papers, like the _Herald_, boldly prophesied in
the summer of 1894 that "the income tax will be blotted from the statute
books before the people are cursed with its inquisitorial enforcement."
No easy victory lay before the opponents of the income tax, for the law
seemed to be against them. In 1870, the Supreme Court had upheld the
Civil War income tax without a dissenting voice, and had distinctly
said: "Our conclusions are that direct taxes, within the meaning of the
Constitution, are only capitation taxes as expressed in that instrument
and taxes on real estate, and that the tax of which the plaintiff in
error complains [the income tax] is within the category of an excise or
duty." Of course, the terms of the new law were not identical with those
of the Civil War measure, and the Supreme Court had been known to
reverse itself.
The attorneys against the tax left no stone unturned. As Professor
Seligman remarks, "Some of the important financial interests now engaged
a notable array of eminent counsel to essay the arduous task of
persuading the Supreme Court that it might declare the income tax a
direct tax without reversing its previous decisions. The effort was made
with the most astonishing degree of ability and ingenuity, and the
briefs and arguments of the opposing counsel fill several large
volumes.... The counsel's arguments abound in historical errors and
economic inaccuracies.... Errors and misstatements which might be
multiplied pale into insignificance compared with the misinterpretation
put upon the origin and purpose of the direct-tax clause--a
misinterpretation which like most of the preceding mistakes was bodily
adopted by the majority of the Court, who evidently found no time for an
independent investigation of the subject." Having exhausted their
ingenuity in the matter of technicalities and imposing historical and
economic and legal arguments, the counsel appealed to every class fear
and prejudice that might be entertained by the Court.
The introduction of the passions of a social conflict into what
purported to be a legal contest was intrusted to Mr. Choate. He
threatened the Court with the declaration that if it approved the law,
and "the communistic march" went on, a still higher exemption of $20,000
might be made and a rate of 20 per cent imposed--a highly important
statement, but one that had no connection with the question whether an
income tax was a direct tax. "There is protection now or never," he
exclaimed. The very keystone of civilization, he continued, was the
preservation of the rights of private property, and this fundamental
principle was scattered to the winds by the champions of the tax. Mr.
Choate concluded by warning the Court not to pay any attention to the
popular passions enlisted on the side of the law, and urged it not to
hesitate in declaring the law unconstitutional, "no matter what the
threatened consequences of popular or populistic wrath may be."
The Court was evidently moved by the declamation of Mr. Choate, for
Justice Field, in his opinion, replied in kind. "The present assault
upon capital," he said, "is but the beginning. It will be but the
stepping stone to others larger and more sweeping till our political
conditions will become a war of the poor against the rich; a war
growing in intensity and bitterness." If such a law were upheld, he
gravely announced, boards of walking delegates would be fixing tax rates
in the near future. Mr. Justice Harlan, in his dissenting opinion,
however, replied in behalf of the populace by saying: "The practical
effect of the decision to-day is to give certain kinds of property a
position of favoritism and advantage inconsistent with the fundamental
principles of our social organization, and to invest them with power and
influence that may be perilous to that portion of the American people
upon whom rests the larger part of the burdens of government and who
ought not to be subjected to the dominion of aggregated wealth any more
than the property of the country should be at the mercy of the lawless."
At the best, the nullification of the income tax law was not an easy
task. There were eight justices on the bench when the decision of the
Court was handed down on April 8, 1895. All of them agreed that the law
was unconstitutional in so far as it laid a tax on revenues derived from
state and municipal bonds; five of them agreed that a tax on rent or
income from land was a direct tax and hence unconstitutional unless
apportioned among the states on the basis of population--which was
obviously impolitic; and the Court stood four to four on the important
point as to the constitutionality of taxes on incomes derived from
mortgages, interest, and personal property generally. The decision of
the Court was thus inconclusive on the only point that interested
capitalists particularly, and it was so regarded by the Eastern press.
On April 9, the day following the decision of the Court, the New York
_Sun_ declared: "Twice in great national crises the Supreme Court of the
United States has failed to meet the expectations of the people or to
justify its existence as the ultimate tribunal of right and law. In both
instances the potent consideration has been neither right nor law, but
the supposed demands of political expediency.... Yesterday the failure
of the Supreme Court to decide the main question of constitutionality
submitted to it was brought about by political considerations. It was
not Democracy against Republicanism as before, but Populism and
Clevelandism against Democracy, and the vote was four to four." The
_Tribune_, on April 10, declared that "the Court reached a finding which
is as near an abdication of its power to interpret the Constitution and
a confession of its unfitness for that duty as anything well can be."
In view of the unsatisfactory condition created by its decision, the
Court consented to a rehearing, and, on May 20, 1895, added its opinion
that the tax on incomes from personal property was also a direct tax,
thus bringing the whole law to the ground by a vote of five to four.
Justice Jackson, who was ill when the first decision was made, had in
the meantime returned to the bench, and he was strongly in favor of
declaring the law constitutional. Had the Court stood as before, the
personal property income tax would have been upheld, but one Justice,
who had sustained this particular provision in the first case, was
induced to change his views and vote against it on the final count. Thus
by a narrow vote of five to four, brought about by a Justice who
changed his mind within the period of a few days, all of the essential
parts of the income tax law were declared null and void.
The temper of the country over the affair was well manifested in the
press comments on the last decision. The New York _Sun_, which had
roundly denounced the Court in the first instance, now joined in a
chorus of praise: "In a hundred years the Supreme Court of the United
States has not rendered a decision more important in its immediate
effect or reaching further in its consequences than that which the _Sun_
records this morning. There is life left in the institutions which the
founders of this republic devised and constructed. There is a safe
future for the national system under which we were all born and have
lived and prospered according to individual capacity. The wave of
socialistic revolution has gone far, but it breaks at the foot of the
ultimate bulwark set up for protection of our liberties. Five to four,
the court stands like a rock."
The _Tribune_, on May 24, added: "The more the people study the
influences behind this attempt to bring about a communistic revolution
in modes of taxation, the more clearly they will realize that it was an
essential part of the distinctly un-American and unpatriotic attempt to
destroy the American policy of defense for home industries, in the
interest of foreigners.... Thanks to the Court, our government is not to
be dragged into communistic warfare against rights of property and the
rewards of industry while the Constitution of its founders remains a
bulwark of the rights of states and of individual citizens."
The New York _World_, on the other hand, which had so stoutly championed
the tax in behalf of "the masses," represented the decision of the Court
as "the triumph of selfishness over patriotism. It is another victory of
greed over need. Great and rich corporations, by hiring the ablest
lawyers in the land and fighting against a petty tax upon superfluity as
other men have fought for their liberties and their lives, have secured
the exemption of wealth from paying its just share towards the support
of the government that protects it.... The people at large will bow to
this decision as they habitually do to all the decrees of their highest
courts. But they will not accept law as justice. No dictum or decision
of any wrong can make wrong right, and it is not right that the entire
cost of the Federal government shall rest upon consumption.... Equity
demands that citizens shall contribute to the support of the government
with some regard to benefits received and ability to pay."
* * * * *
Although the conservative elements saw in the annulment of the income
tax nothing but a wise and timely exercise of judicial authority in
defense of the Constitution and sound policy, the radical elements
regarded it as an evidence "that the judicial branch of the government
was under the control of the same interests that had mutilated the
Wilson tariff bill in the Senate." The local Federal courts augmented
this popular feeling by frequently issuing injunctions ordering
workingmen in time of strikes not to interfere with their employers'
business, thus crippling them in the coercion of employers, by
imprisoning without jury trial those who disobeyed judicial orders.
Although the injunction was an ancient legal device, it was not until
after the Civil War that it was developed into a powerful instrument in
industrial disputes; and it became particularly effective in the hands
of Federal judges. They were not popularly elected, but were appointed
by the President and the Senate (where corporate influences were ably
represented). Under the provisions of the law giving Federal courts
jurisdiction in cases involving citizens of different states, they were
called upon to intervene with increasing frequency in industrial
disputes, for railway and other corporations usually did business in
several states, and they could generally invoke Federal protection by
showing that they were "non-residents" of the particular states in which
strikes were being waged. Moreover, strikers who interfered with
interstate commerce were likely to collide with Federal authorities
whose aid was invited by the employers affected. Whenever a corporation
was in bankruptcy, control over its business fell into the hands of the
Federal courts.
The effectiveness of Federal judicial intervention in labor troubles
became apparent in the first great strikes of the seventies, when the
state authorities proved unable to restrain rioting and disorder by the
use of the local militia. During the railway war of 1877 a Federal judge
in southern Illinois ordered the workingmen not to interfere with a
railway for which he had appointed a receiver, and he then employed
Federal troops under the United States marshal to execute his mandate.
About the same time other Federal judges intervened effectively in
industrial disputes by the liberal use of the injunction, and the
president of the Pennsylvania Railroad Company pointed out in an article
published in the _North American Review_ for September, 1877, how much
more potent Federal authority was in such trying crises to give railway
corporations efficient protection.
From that time forward the injunction was steadily employed by Federal
and state courts, but it was not until the great railway strike of 1894
in Chicago that it was brought prominently before the country as a
distinct political issue. In that strike, the Democratic governor, Mr.
Altgeld, believing that the employers had fomented disorder for the
purpose of invoking Federal intervention (as was afterward pretty
conclusively shown), refused to employ the state militia speedily and
effectively, contending that the presence of troops would only make
matters worse. The postal authorities, influenced by a variety of
motives, of which, it was alleged, a desire to break the strike was one,
secured prompt Federal intervention on the part of President Cleveland
and the use of Federal troops. Thus the labor unions were quickly
checkmated.
This action on the part of President Cleveland was supplemented in July,
1894, by a general blanket injunction issued from the Federal district
court in Chicago to all persons concerned, ordering them not to
interfere with the transmission of the mails or with interstate commerce
in any form. Mr. Debs, president of the American Railway Union, who was
directing the strike which was tying up interstate commerce, was
arrested, fined, and imprisoned for refusing to obey this injunction.
Mr. Debs, thereupon, through his counsel, claimed the right to jury
trial, asserting that the court could not impose a penalty which was not
provided by statute, but which depended solely upon the will of the
judge. On appeal, the Supreme Court of the United States upheld the
lower court and declared that imprisonment for contempt of court did not
violate the principle of jury trial.
It was not merely labor leaders who were stirred to wrath by this
development in judicial authority. Many eminent lawyers saw in it an
attack upon the ancient safeguards of the law which provided for regular
proceedings, indictment, the hearing of witnesses, jury trial, and the
imposition of only such punishments as could be clearly ascertained in
advance. On the other hand others held it to be nothing new at all, but
simply the application of the old principle that injunctions could issue
in cases where irreparable injury might otherwise ensue. They pointed
out that its effectiveness depended upon speedy application, and that
the delays usually incident to regular judicial procedure would destroy
its usefulness altogether. To workingmen it appeared to be chiefly an
instrument for imprisoning their leaders and breaking strikes by the
prevention of coercion, peaceful or otherwise. At all events, the
decision of the Supreme Court upholding the practice and its doctrines
added to the bitterness engendered by the income tax decision--a
bitterness manifested at the Democratic convention at Chicago the
following year.
The crowning cause of immediate discontent was the financial policy
pursued by President Cleveland,[39] which stirred the wrath of the
agrarians already agitated over inflation, and gave definiteness to an
issue on which both parties had been judiciously ambiguous in their
platforms in 1892. The farmers pointed out that, notwithstanding the
increased output of corn, the total amount of money received in return
was millions less than it had been in the early eighties. They
emphasized the fact that more than half of the taxable acreage of Kansas
and Nebraska was mortgaged, and that many other western states were
nearly as badly off. The falling prices and their inability to meet
their indebtedness they attributed to the demonetization of silver and
the steady enhancement of gold.
For the disease, as they diagnosed it, they had a remedy. The
government, they said, had been generous to Wall Street and financial
interests at large by selling bonds at rates which made great fortunes
for the narrow group of purchasers, and by distributing its deposits
among the banks in need of assistance. The power of the government could
also be used for the benefit of another class--namely, themselves. Gold
should be brought down and the currency extended by the free coinage of
silver on a basis of sixteen to one. The value of crops, when measured
in money, would thus mount upwards, and it would be easier to pay the
interest on mortgages and discharge their indebtedness. Furthermore,
while the government was in the business of accommodating the public it
might loan money to the farmers at a low rate of interest.[40] But the
inflation of the currency and the increase of prices of farm products by
the free coinage of silver were the leading demands of the discontented
agrarians--an old remedy for an old disease.
FOOTNOTES:
[34] See below, p. 296.
[35] See above, p. 121.
[36] See above, pp. 67 ff.
[37] They polled about a million votes in the congressional
elections of 1878.
[38] See above, p. 137.
[39] See above, p. 106.
[40] It is interesting to note that agricultural credit--a
subject in which European countries are far advanced--is just
now beginning to receive some attention in quarters where the
demands of the farmers for better terms on borrowed money
were once denounced as mere vagaries.