Dbq government Intervention in American Economy



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Kurt Smetana

Period 1


02/13/01

DBQ - Government Intervention in American Economy
As America encountered a revolution of industry in the late nineteenth century, the federal government increasingly began to intervene in the economy. It violated the principles of laissez faire by administrating railroad land grants and by controlling interstate commerce and antitrust activities. There were many mixed opinions on the issue during that time period. As consumers and small businesses thought the government should protect the people's right for opportunity, big corporations demanded that capitalism is one aspect of America that must not be twisted or bent. However, citizens of railroad-bound towns supported the government's actions in providing railroad land grants.

While many focus on the specific governmental actions, others examine the situation in a moral manner. Amasa Walker supports the people's will over the government's decisions regarding the nation's economy. A New York City merchant supports this statement and commented on the sole purpose of the government. A government's reason for existence is simply to maintain domestic tranquility, defend the people from invasion, and protect them while traveling. It is said that the individual enterprise should be responsible for America's capitalism.

Public opinions were scattered among the different geographical regions and specific topics. The high amount of railroad land grants incited mixed emotions throughout the country. A Democratic congressman from California points out that the government gave in to large corporations and monopolies by handing them millions of acres of public domain. He complains that the government has given corporations gifts of lands, bonds and money and gave American citizens burdens of taxation. Citizens of the agricultural community favor the government's contributions to the railroad industry. The National Agricultural Congress of farmers' representatives supports the government's actions because they believe it is in the country's interest that transcontinental trade be supported. However, they do wish that the trade is practiced with fair rates of freights. Jay Gould, a railroad financier and official, also supported the government's actions with railroad land grants. He believes the railroads have allowed for further settlement of rural lands and have given more opportunity to foreigners and citizens alike.

Yet another issue which created much debate was the government control of interstate commerce. This control was instituted by the Interstate Commerce Act of 1887. The act provided that: all charges made by railways must be reasonable and just, pooling of traffic or revenues was unlawful, price discrimination between customers or localities was unlawful, and long-haul, short-haul price discrimination was subject to the control of the Interstate Commerce Commission, a new administrative agency created by the act. The Interstate Commerce Commission justified the government's actions by stating the purpose of interstate commerce control is to converse and protect. This idea is further developed by William Oates, a Democratic congressman, who theorizes that the government must protect and direct the business of all the people in the country.



The last of the popular government interventions on America's economy was its antitrust activities. Trusts and monopolies allowed corporations and groups of companies to seemingly rise higher than the government itself. Joseph Keppler is able to depict this idea in a picture. Trusts of companies are shown as over-sized, greedy aristocrats who seem to stand over and overlook the congressman. The Sherman Antitrust Act was Congress' first measure in controlling the growth and size of these trusts. John Sherman, the proposer of the act, defends his actions by stating that the act aims only at unlawful combinations. It does not in the least affect combinations in aid of production where there is free competition. He denies the argument that the bill will interfere with lawful trade and the customary business of life.

Concluding, it seems that the government's violation of laissez faire economics from 1865 through 1900 was justified for that time. The dream that America offers is that all men are equal in their chance to become successful. Monopolies and trusts prevent this dream from occurring. It is the government's obligation to preserve the moral aspects which has trickled down from generation to generation. By 1900 the federal government's actions also seemed to cut the national debt in half while spending three times as much money as it did in 1870. The government's position in this country may not be to control the process of capitalism, but it does have the duty to preserve the basis in which the United States was founded.


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