Progressivism and the Supreme Court

Date: 1900-1918

Description:A period characterized by a series of reforms and legislation aimed at improving the quality of life of laborers through the regulation of commerce and labor.

Significance:Progressive legislation was designed to counter problems stemming from the rise of business corporations. These included monopolistic practices and exploitive labor conditions. These efforts, however, were frequently challenged in the Supreme Court.

From the end of the Civil War in 1865 until the end of the nineteenth century, Americans devoted their energy to expansion of the urban and industrial segment of the economy at the expense of human laborers. By the last decade of the nineteenth century, reformers began to address the numerous problems that resulted from rapid industrialization and urbanization.

The growth of large corporations after the Civil War gave rise to monopolistic practices such as the restraint of trade and price fixing in the oil, sugar, steel, meatpacking, and tobacco industries. The growth and development of the nation’s railroads, which spanned the continent and engaged in interstate commerce, enabled the growth of trusts that eliminated competition and drove the small entrepreneur out of business. Responding to public outcry against these corrupt business practices, Congress passed the Sherman Antitrust Act in 1890. The act protected the public against monopolies by making conspiracies to restrain trade in interstate commerce illegal, providing for triple damages to any person injured by the competition of an unfair business monopoly, and stipulating fines and imprisonment for violations of the act. In effect, the act prohibited every contract, combination in the form of trust or otherwise, or conspiracy that resulted in restraint of trade or commerce among several states or with foreign nations. The majority of business-related cases considered by the Supreme Court during the Progressive Era sought relief under the provisions of the Sherman Antitrust Act.

Court Action Under Progressivism

During the two-term presidency of Theodore Roosevelt, a Progressive Justice Department filed forty-three cases under the Sherman Antitrust Act to restrain or break up monopolistic businesses, including the Northern Securities Company and the beef trust, and questionable practices, including employment contracts and child labor.

In Northern Securities Co. v. United States (1904), the Supreme Court decided by a 5-4 vote that a holding company formed by the Great Northern, Southern Pacific, and Union Pacific railroad lines to eliminate competition between two railroad lines was a combination in restraint of trade and therefore a violation of the Sherman Antitrust Act. It ordered the Northern Securities holding company to be dissolved. This ruling was an important departure from the Court’s decision in United States v. E. C. Knight Co. (1895), in which distinguished between commerce and manufacturing and limited the scope of the Sherman Antitrust Act. In Northern Securities, the Court held that a holding company sufficiently affected commerce by restraining it even though it was not actually engaged in interstate commerce and therefore came within the purview of the act.

In 1904 the Court adopted the "Stream of Commerce doctrine in which Congress can regulate local commerce (indirect) that is part of the interstate (direct) current of commerce. This stream of commerce doctrine was first enunciated in Swift and Co. v. United States (1905), which involved a beef trust. A number of meatpacking houses made agreements among themselves to fix the price of livestock and meat bought and sold in Chicago stockyards and slaughter houses. Swift claimed that the livestock slaughtered and packed was bought and sold locally and hence was not involved in interstate commerce.

The Court unanimously ruled the meatpackers’ agreements violated the Sherman Antitrust Act because meatpacking was a part of the process in which cattle were shipped from out of state to Chicago for slaughter and packing and then shipped out of Illinois to other states for sale. This stream of commerce, which clearly involved more than one state, meant that the act applied in this case. The Court invalidated the price agreements made by Swift and the others. In the opinion for the Court, Justice Oliver Wendell Holmes stated: “When cattle are sent for sale from a place in one state, with the expectation that they will end their transit, after purchase, in another, and when in effect they do so, with only the interruption necessary to find a purchaser at the stockyards, and when this is a typical constantly recurring course, the current of commerce among the states, and the purchase of the cattle is a part and incident of such commerce.” In subsequent cases, the Court would use the stream of commerce doctrine to regulate the actual production of goods, and it would also use the commerce clause of the Constitution to oversee modern business and industry.

The Court abandoned its literal interpretation of the Sherman Antitrust Act in Northern Securities. In an 8-1 decision in Standard Oil Co. v. United States (1911), the Court ruled that only unreasonable business combinations and undue restraints of trade were violations of the act. Chief Justice Edward D. White, in the majority opinion, stated that the Sherman Antitrust Act applied only to unreasonable restraints of trade and that the rule of reason should be used in judging whether the act applied in any specific case. Although the Court effectively weakened the act, it upheld a lower court’s decision to break up the Standard Oil Trust. In subsequent cases, the rule of reason became the standard for judging violations of antitrust laws.

Public Welfare Issues

Police powers are granted to states to allow the protection of the public’s health, safety, and morals. During the Progressive period, a number of state and federal laws were passed regulating minimum age and wages of workers, safety, and the number of hours worked in a day. In Muller v. Oregon (1908) and other cases, the Court upheld much of this legislation. However, at other times, the Court ruled that Congress had overstepped the bounds of its federal police power. In Hammer v. Dagenhart (1918), the Court ruled five to four against the Keating-Owen Child Labor Act of 1916 and held that Congress had overreached its power. It found that labor was an aspect of manufacturing and not the product itself. Therefore, although goods produced for interstate commerce had been produced by child labor, the products themselves were not harmful and could not be prohibited from being shipped by interstate commerce. By the end of World War I in 1918, the Court began to retreat from its earlier liberal rulings as the Progressive era came to an end and the Court became more conservative under Chief Justice William H. Taft.

The Minimum Wage

The constitutionality of a minimum wage for workers has been considered both a staple of progressive legislation, as well as settled law, since the early twentieth century. Since the mid-2010s, members of the Supreme Court have given indications that this may no longer be the case. West Coast Hotel v. Parrish was a 1937 signature Supreme Court ruling that upheld the state of Washington's ability to enforce a state minimum wage. Beginning in 2015, Justice Clarence Thomas indicated a different belief that Parrish was an example of the opinion of Supreme Court justices substituting for legal principles. The increasingly conservative orientation of the Roberts Court, demonstrated by its overturn of Roe v. Wade in June 2022, has led to speculation that social legislation such as Parrish may itself be under reconsideration in the near future.

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