From the year 1865 to 1900 the United States government was attributed to following the standards of laissez-faire, an economic axiom in opposition of governmental moderation of or meddling in commerce beyond the merest essential for a free-enterprise organization to function according to its own economic regulations. The United States government took this stance of noninterference, however, apparent within the guiding principles concerning railroad land grants, management of interstate commerce, as well as antitrust actions we see direct governmental intervention and clear infringement and disruption of laissez-faire ideology.
During the late 19th century many Americans advocated the fosterage of a laissez faire administration to allow for the insurance of property rights as well as the upkeep of social order. However, many Americans believed that the government did not have the right to obstruct with expansion and commerce. Although the United States continued to be passive for the most part in regard to regulating commerce, the United States government did hold up commerce through the bulky number of land grants for railroads. The new railroads gained munificent land and money advancements from local, state, and federal governments.
These land grants would afterward turn out to be the foundation for thousand of railways fusing the complete Union in addition to lengthening out to supplementary regions throughout the country. Altogether, the governmental proceedings may have proved anti-laissez faire, nevertheless they were still an indisputably encouraging influence on United States commerce. However, the United States government would soon encounter severe problems. With large amounts of land grants, ample amounts of monopolies were formed.
It became obvious that the distinguishable laws of trade were able to function but were unsatisfactory at best. These economic difficulties craved governmental intervention, forcing the encroachment of the established laissez faire policy in an effort to manage price injustice and merging of traffic and revenues that thrived within expanding monopolies. State regulations tended to be inadequate and ineffectual against price injustices apparent in several Supreme Court cases in the 1860’s and 1870’s such as the Granger Movement, as well as others.
In response to prior faulty efforts, Congress developed the Interstate Commerce Act of 1887. This act constructed a commission designed to overlook railway rates to make sure that they were just and fair, as well as outlawing other inequitable practices taking place during this time. Apparent in a declaration from the committee of interstate commerce, melancholy and disagreement progressed amidst small farmers who believed that the government was dispensing the big dealer a favorable position over smaller traders.
As a result, Congress initiated the Interstate Commerce Commission, which was geared toward establishing an unbiased and just economic system handling the problems of arbitrary rates and practices. The Interstate commerce act would not stop issues involving railroad monopolies, although it would establish the archetype of federal moderation on transportation between states. Imposed by congress in 1890, The Sherman Antitrust Act was created to forbid trusts and various other limitations on trade. This new act, believed to end rivalry would prove to be a failure.
In the case of The United States vs. E. C. Knight Company (1896), the Supreme Court discharged the case, leading to eighteen antitrust proceedings over the period of eleven years. The anticlimactic anti-trust act caused a fluctuation in its use as means to incarcerate trade through the restriction of illegal labor unions. With the government playing a notable role in the Sherman Antitrust act and labor unions, it is understandable that throughout the late nineteenth century the government without a doubt did not follow the principles of a laissez-faire economic system.
From 1865 to 1900 the United States government violated the ideology of laissez-faire, particularly when monitoring railroad land grants, control of interstate commerce, as well as antitrust actions. Although the proceedings of the government for the duration of the late 19th century were in opposition of the main principles of laissez faire, these trials were accomplished with the support of governmental intervention in an effort to eventually improve and boost the economic system of the United States.