178 a short history of the united states
passenger fees. Members were particularly angry over the rates charged
by the railroads. The movement soon spread to the Midwest under the
leadership of Ignatius Donnelly. Illinois was the first state to enact leg-
islation that created a commission to set maximum rates to be charged
by railroads and ware houses. Wisconsin and Iowa followed by enacting
laws which maximized railroad freight rates. These Granger laws were
immediately challenged in the courts, but the Supreme Court upheld
them in Munn v. Illinois in 1877 , arguing that they were within a state’s
police power to protect the public interest. It said that the way to ap-
peal was through the polls, not through the courts.
As a further measure to unravel the effects of Reconstruction, south-
ern states began to enact Jim Crow laws. Tennessee passed the fi rst such
law in 1881 , when it segregated railroad coaches, followed by Florida
in 1887 , Texas in 1889 , and Louisiana in 1890. Again appeals reached
the Supreme Court, which in 1896 upheld these state laws in the case
Plessy v. Ferguson, so long, the Court said, as equal accommodations
existed.
The rise of monopolies and trusts to eliminate competition was an-
other important development during the Gilded Age. In 1882 , the
Standard Oil Company formed a trust with a number of other oil pro-
ducers and refiners to create a company that controlled ninety percent
of all the oil produced and refined in the United States. Investment
bankers financed consolidations in railroads, utilities, and other indus-
trial enterprises. The number of these trusts that were chartered by the
states reached nearly 300 , with investments ranging close to $ 250 mil-
lion. The perpetrators of this rapaciousness won the inelegant title
“Robber Barons,” and these moguls used their money to control legis-
lators and legislation, especially anything that would regulate or con-
trol their operations. The use of lobbyists to corrupt congressmen
became more extensive. They were journalists and former congressmen
who hovered around the Capitol building like “birds of prey.” They
also included women who were widows or daughters of former con-
gressmen and could not be “shaken off as readily.”
States with farming communities also witnessed heightened political
activity to gain advantages denied them because of the growing number
of business monopolies. Alliances were formed to protect farmers
against railroads, industrial monopolies, and advocates of hard money