638 ★ CHAPTER 16 America’s Gilded Age
The Courts and Freedom
In elevating liberty of contract from one element of freedom to its very essence,
the courts played a significant role. The Fourteenth Amendment had empow-
ered the federal government to overturn state laws that violated citizens’ rights.
By the 1880s, liberty of contract, not equality before the law for former slaves,
came to be defined as the amendment’s true meaning. State and federal courts
regularly struck down state laws regulating economic enterprise as an interfer-
ence with the right of the free laborer to choose his employment and working
conditions, and of the entrepreneur to utilize his property as he saw fit. For
decades, the courts viewed state regulation of business— especially laws estab-
lishing maximum hours of work and safe working conditions— as an insult to
free labor.
At first, the Supreme Court was willing to accept laws regulating enterprises
that represented a significant “public interest.” In Munn v. Illinois, an 1877 deci-
sion, it upheld the constitutionality of an Illinois law that established a state
board empowered to eliminate railroad rate discrimination and set maximum
charges. Nine years later, however, in Wabash v. Illinois, the Court essentially
reversed itself, ruling that only the federal government, not the states, could
regulate railroads engaged in interstate commerce, as all important lines were.
The decision led directly to the passage of the Interstate Commerce Act of 1887.
But on virtually every occasion when cases brought by the ICC against rail-
roads made their way to the Supreme Court, the company emerged victorious.
The courts generally sided with business enterprises that complained of a
loss of economic freedom. In 1885, the New York Court of Appeals invalidated
a state law that prohibited the manufacture of cigars in tenement dwellings on
the grounds that such legislation deprived the worker of the “liberty” to work
“where he will.” Although women still lacked political rights, they were increas-
ingly understood to possess the same economic “liberty,” defined in this way, as
men. On the grounds that it violated women’s freedom, the Illinois Supreme
Court in 1895 declared unconstitutional a state law that outlawed the produc-
tion of garments in sweatshops and established a forty- eight- hour work week
for women and children. In the same year, in United States v. E. C. Knight Co.,
the U.S. Supreme Court ruled that the Sherman Antitrust Act of 1890, which
barred combinations in restraint of trade, could not be used to break up a sugar
refining monopoly, since the Constitution empowered Congress to regulate
commerce, but not manufacturing. Their unwillingness to allow regulation of
the economy, however, did not prevent the courts from acting to impede labor
organization. The Sherman Act, intended to prevent business mergers that sti-
fled competition, was used by judges primarily to issue injunctions prohibiting
strikes on the grounds that they illegally interfered with the freedom of trade.