Did Government Violate Laissez-Faire?
After the Civil War, many businessmen endorsed the Laissez-Faire concept of government in order to promote industry. In this concept, government did not interfere with industry. But what came with this concept was unlimited freedom for businessmen and high prices for consumers. While many businessmen supported a Laissez-Faire concept of government between 1865 and 1900, the people did not benefit from it, which led government to violate this concept with their policies, but only to a moderate extent overall. They violated laissez-faire to a moderate extent by issuing Railroad Land Grants before 1870 and eliminating them after, to a great extent by Regulating Interstate Commerce with the Interstate Commerce Act in 1886, and only to a limited extent by attempting to control trust activities with the Sherman Antitrust Act in 1890, producing a moderate government involvement overall.
Government began to violate the concept of Laissez-Faire with its Railroad Land Grants. Laissez-Faire promoters believed that “…the government is best which governs least.” (Doc A.) While industrialists promoted this concept, it was already being violated when the Federal Government gave thousands of acres of land to Railroad companies in return for building railroads. These subsidies, in the form of loans and land grants, totaled over 130 million acres of public land. (Doc D.) The federal government issued these grants in hope that the railroad would increase the value of the land and provide better rates for carrying mail and transporting troops. More railroads continued to be built, including four other transcontinental railroads. Of these four, James Hill’s Great Northern Railroad was the only one to be built without federal subsidies. These grants benefited the Railroad financiers greatly, especially Jay Gould who went into the business to make quick profit by selling off the assets and watering stocks. The grants were justified by...
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