In 1865 the American economy was still in some respects “colonial”; that is, it produced mainly foods and other raw materials, to be exchanged abroad for manufactured goods. In financial terms, it was dependent on foreign money markets.
But in the northern and mid-western states the industrial revolution had already accelerated, and by 1914 the United States was transformed into a great industrial nation. This transformation could not have taken place at the rate it did without the existence of an abundant work force, especially so after massive waves of new emigration, largely from eastern and southern Europe in the 1890s.
Also, the traditions of individual initiative and freedom of enterprise were a basis for a national sense of aggressive and buoyant optimism as the indigenous population was systematically pushed aside in the name of progress.
This great expansion in national wealth was achieved in a climate of opinion that overwhelmingly supported the view view that the federal government should not interfere directly with business enterprise beyond maintaining public order, enforcing contracts, exercising control over the coinage of money, and, for much of this time, maintaining a protective tariff. Nor were state and local governments supposed to go beyond such limits, though at times some did.
This laissez-faire view was reinforced by the Fourteenth Amendment to the constitution, which contained a “due process” clause: “nor shall any state deprive any person of life, liberty, or property without due process of law.” In the era of free enterprise that followed the Civil War, the Supreme Court of the United States interpreted the clause to mean that state governments should not deprive business owners of property by regulating wages, prices, conditions of labor, and the like.
Many of the same forces that produced reform in Britain gradually brought to the United States minimum wage acts, limitation of child labor and women’s labor, sanitary regulation, control of hours of labor, and workmen’s compensation. By the early twentieth century public opinion was ready for increased participation by the national government in the regulation of economic life.
During this time the women’s movement took on increased dimensions. Women had played important roles in the abolitionist and anti-slavery movements before the Civil War. They now turned to property rights, suffrage, and temperance. Elizabeth Cady Stanton (1815-1902) and Lucretia C. Mott (1793-1880) had worked together to call the first women’s rights convention at Seneca Falls, New York, in 1848.
Stanton became president of the National Woman Suffrage Association in 1869. She and Susan B. Anthony (1820-1906) lectured widely on women’s rights, which they felt had to precede any truly effective contribution to social reform more broadly. Anthony also supported black suffrage for male and female and the Women’s Christian Temperance Union. It was not until 1920, however, that women won the right to vote.
Theodore Roosevelt (1858-1919), Republican president from 1901 and 1909, promised to give labor a “square deal” and to proceed vigorously with trustbusting—attacks on great trusts or combinations that had come to monopolize important sectors of the American economy. Although Roosevelt did not fulfill all his promises, his administration did attack the trusts in railroads and tobacco and did press regulation of great corporations by the federal government.
Federal prosecution of John D. Rockefeller’s (1839-1937) Standard Oil Company resulted in 1911 in a Supreme Court decision dissolving the great holding company. The work of the social legislators of the early 1900s and of the muckrakers—who wrote exposes of questionable business practices for popular magazines—was not in vain. American big business in the later twentieth century was bigger than it had been in the day of Theodore Roosevelt, but it was also more aware of the need to court public opinion.
During 1913-1917, in the first administration of Woodrow Wilson (1856-1929), a Democrat, the process of regulation gained momentum. The Federal Reserve Act of 1913, for example, gave federal officials more control over banking, credit, and currency.
Meantime, the Sixteenth Amendment, legalizing a progressive income tax, and the Seventeenth, providing for direct election of senators rather than their appointment by state governments, made the federal republic more democratic in practice. Approval of such measures was not, of course, unanimous, since Americans differed loudly and widely about almost everything, from the use of the environment to organized sports.
To outsiders, and to many native critics, American life in the decades between the Civil War and 1917 often seemed one great brawl, a Darwinian struggle for wealth and power. Yet this apparently chaotic society achieved extraordinary material growth and political stability that required the tacit assent of millions of men and women holding to a generally common goal of modernization.
Despite general public distrust, government in the United States came to play a larger and larger part in the lives of all. Although this was also true of local and state government, it was especially so for the federal government. The gradually increasing importance of the federal government and the gradually decreasing initiative of state governments were as clear in the period 1789-1917 as was the material growth and increased nationalism of the United States.