In August 1910, Theodore Roosevelt ordered his train to stop in Osawatomie, Kansas, so he could speak to the farmers and shopkeepers of the town about his plan to tame America’s monopolies. “Combinations in industry are the result of an imperative economic law which cannot be repealed by political legislation,” he bellowed from the rear platform. “The effort at prohibiting all combination has substantially failed. The way out lies, not in attempting to prevent such combinations, but in completely controlling them in the interest of the public welfare.”1
It was less than two years since Roosevelt had turned both the White House and leadership of the Republican Party over to his vice president, William Howard Taft. Now he wanted the presidency back. Recently returned from safari across West Africa, where he had shot elephants, lions, rhinos, and hippos, Roosevelt’s promise was simple. He would bring the great corporate and banking beasts that threatened America to heel. And he would do so with the flaming spirit of John Brown, who in 1856 had led 40 abolitionists in battle against more than 200 pro-slavery “border ruffians” right there in Osawatomie. The apocalypse had come. And Roosevelt was ready to loose the fateful .405 cartridges of his terrible swift Winchester.
To this day, most American historians continue to fall for the myth that Teddy Roosevelt was a “trustbuster.” As his Osawatomie speech shows, along with his larger New Nationalism program, what he actually promised was to blend state and private power into a top-down command-and-control system of governance that would have made even Alexander Hamilton queasy.
Born to wealthy parents in Manhattan, Roosevelt had in fact long made clear his disdain for antimonopoly law. In 1907, as president, he had even called on Congress to overturn the Sherman Antitrust Act. “It is profoundly immoral to put or keep on the statute books a law, nominally in the interest of public morality, that really puts a premium on public immorality, by undertaking to forbid honest men from doing what must be done under modern business conditions, so that the law itself provides that its own infraction must be the condition precedent upon business success.”2
In the run-up to the 1912 election, Roosevelt collected some of the bright minds of the day. These young men believed that President Taft had been captured by the masters of industry. But unlike the populists in the Democratic Party, who demanded strong enforcement of antimonopoly law, the intellectuals in Roosevelt’s camp advocated instead a complete overthrow of many of the checks and balances put in place in the early years of the United States. Let the capitalists complete their concentration of power, they said. They would then use the state to direct those great combinations toward good.
Walter Lippmann, in the first years of his long career as a journalist and essayist, still under the sway of the socialist teachings popular at this time, in his book Drift and Mastery provided a concise statement of Roosevelt’s new philosophy. “We don’t imagine the trusts are going to drift naturally into the service of human life. We think they can be made to serve it if the American people compel them.”3 In place of checks and balances, Lippmann imagined a political economy governed by “the scientific spirit” and ruled by phalanxes of experts. The protection of democracy, Lippmann wrote, depended now on “the new science of administration. The development of that science is the only answer.”4
Even more influential was Herbert Croly, a son of New York writers. After marrying into wealth, Croly dabbled in architectural criticism until bursting to prominence with the 1909 book The Promise of American Life, in which he celebrated, much to Roosevelt’s delight, Hamiltonian nationalism, the concentration of control in a few outstanding leaders of men, and the use of state power to reward these “friends” of the administration with power and pelf. 5 In a passage that essentially defended a return to the autocratic practices of Queen Elizabeth and King James (and that also well presaged President Trump’s more recent efforts to use the Justice Department and State Department to promote his personal interests), Croly wrote, “in economic warfare, the fighting can never be fair for long, and it is the business of the state to see that its own friends are victorious … It must help those men to win who are most capable of using their winnings for the benefit of society.” Croly called this vision “constructive discrimination.”6
Roosevelt himself appeared less concerned about philosophy than about simply getting his own hands on the levers of control.7 In the first big antitrust case of his presidency, in 1902 against the banker J. P. Morgan’s Northern Securities holding company, his goal seemed less to protect rule of law than to chastise a man Roosevelt once termed a “rival operator” with whom he must either “come to an agreement” or “ruin.”8 In recent years, some have feared President Trump might misuse antitrust laws to concentrate personal power. To the extent Roosevelt used antitrust, it was with the intention of making himself boss, king, kaiser.
With the Republican Party still backing Taft, Roosevelt turned for support to the then-powerful Progressive Party, a sprawling confabulation of reformers pursuing many theories of change. His main competitor for the nomination was the Wisconsin senator Robert La Follette. In his Autobiography a year later, La Follette delivered one of the most scathing indictments any American politician ever published about a rival, and he focused specifically on Roosevelt’s embrace of monopoly power.
“Since Lincoln’s time no man had been offered such an opportunity to strike an effective blow for his country as was presented to Roosevelt,” La Follette wrote.9 “Instead, in his messages and public addresses, one finds the new President setting himself up as superior to the law.”10
Most damaging, La Follette wrote, was Roosevelt’s “denunciation” of the Sherman Antitrust Act. This served as “an executive sanction to violate the law. It opened the floodgates for trust organization, and upon Theodore Roosevelt, more than any other man, must rest the responsibility for the gravest problem ever to menace the industrial freedom of the American people.”11
The presidential election of 1912 was one of the most important in the history of the United States. Citizens believed themselves threatened by the greatest concentration of private power since the days of the slave masters, only this time the threat was posed by Wall Street financiers exercising their power through the industrial corporation and bank. During the campaign, the main candidates presented America’s voters with a bluntly honest debate that focused on different ways to structure and organize economic and political power.
Both major parties vehemently opposed—sometimes in the language of Armageddon—Roosevelt’s call to concentrate and centralize economic power in the state. Making the case for the Republicans, President Taft offered a vision largely British in nature, in which the government would use antimonopoly law to ensure that the lords of industry would not combine their powers into an oligarchic dictatorship over the state itself. But Taft also intended to leave these powerful men largely free to operate as autocratically as they wished within the walls of their industrial and banking estates. The Democrats, meanwhile, put forth a man named Woodrow Wilson, a constitutional scholar from Virginia with brilliant oratorical skills and a mystical turn. Wilson presented himself as the reincarnation of Jefferson and Madison and Lincoln, and promised to restore the democratic republic of the founding and of Gettysburg.12 Americans, Wilson preached, could easily avoid the traps of both statism and estatism. The key was not to use the state to direct the entire political economy but rather to use its antimonopoly powers to prevent any private actor from capturing such an ability. To the extent there would be any direction of the overall political economy, it would come from the American people themselves, their will expressed through democratic deliberation.
Human beings tend to view politics through the lens of the great leader, the great man. And Wilson’s powerful intellect, masterful use of language and imagery, and great political dexterity certainly played a huge role in his election and in the later success of his policies, which he called the New Freedom in direct contradistinction to Roosevelt’s New Nationalism. Yet in many respects Wilson was more a spokesperson for a citizen-led movement against the monopolists, and against the concentration of wealth and power, that had been building for two decades.
To understand the politics of the New Freedom, and later of the New Deal, it is vital to recognize the role played by these antimonopoly citizens, who at the time generally referred to themselves as “populists.”
This populist movement in America traced to groups of farmers, skilled working people, and shopkeepers—both white and black—who began organizing outside any party with the aim of using the ideology and language and tools of the founders to break the power of the monopolists and financers who increasingly threatened individual liberty and democracy. It was a movement that had long since captured real power, building up sufficient sway within the national Democratic Party to take the presidential nomination three times. In 1896, 1900, and 1908, the populists had sent their candidate—the small-town lawyer and orator William Jennings Bryan—to battle against the corporate and banking lords gathered under the Republican banner.13
By the time the Democrats nominated Wilson, the populist movement had both greatly expanded and to some extent gone mainstream, as the fears and goals of the farmer, skilled worker, and small shopkeeper in the South and Midwest had become the fears and goals of moderate and even conservative citizens in every town, and almost every line of business across the nation. The basic tenets of populism had also been embraced by a growing legion of progressive intellectuals—such as the lawyer Louis Brandeis—who believed that the American System of Liberty could be used even to make heavy industry, network technologies, and banking safe for democracy.
Woodrow Wilson was a deeply flawed man. Like Roosevelt, he was racist, and once in power he completed the segregation of the federal government, a process Roosevelt had set in motion in 1906.14 But during the campaign, Wilson was able to ride this wave of popular rage and hope in ways that helped to fully reconnect citizens to the original principles and language of the American System of Liberty.
Wilson spoke more bravely than Roosevelt of the threats posed by the monopolists and more practically of the nature of their power. “The masters of the government of the United States are the combined capitalists and manufacturers of the United States,” he said.15 “By tyranny, as we fight it now, we mean control of the law, of legislation and adjudication, by organizations which do not represent the people, by means which are private and selfish. We mean, specifically, the conduct of our affairs and the shaping of our legislation in the interest of special bodies of capital and those who organize their use. We mean the exploitation of the people by legal and political means.”16
Wilson also efficiently belittled Roosevelt’s command-and-control, “Iron Heel” approach to regulating monopoly.17 Roosevelt, Wilson said, “proposes to use monopoly in order to make us happy. [T]he project is one of those projects which all history cries out against as impossible … These gentlemen are not proposing the methods of liberty but are proposing the methods of control. A control among a free people is intolerable.”
After winning the White House, Wilson, as we will discuss in more detail shortly, helped to clear the way for the single most important reestablishment of citizen control over the American political economy since the founding. In doing so, he was simply delivering to the citizens of America what they had demanded for more than a generation; indeed Wilson’s presidency was the culmination of America’s second citizens’ rebellion. But whereas in 1861 America’s farmer citizens and shopkeeper citizens had stood against the planters, this time they marched against both the monopolist and the financier who stood behind him.
In doing so, America’s citizens established the basic ideas, principles, rhetoric, and institutional structures that would guide Franklin Roosevelt’s New Deal twenty years later and that ensured that twentieth-century industrial America was organized not according to any new science of power, or any blind faith in strongman leaders, but rather the democratic republican thinking of America’s first citizens more than a century earlier.
To understand the revolutionary nature of Wilson’s New Freedom, and its importance in establishing the intellectual framework of the New Deal policies of the 1930s, we must first address the extreme concentration of economic power in the United States in the period between the end of the Civil War and the election of 1912. This period, sometimes referred to as the plutocratic era, has long baffled historians. How was it that power and wealth became so fantastically concentrated immediately after 750,000 Americans died in a war that redeemed for all men—at least for a moment—the liberty promised in the Declaration?18 How was it that the whole American System of Liberty, built with such care over so many decades, suddenly failed?19
The confusion derives in part from the fact that many historians have embraced the same deterministic arguments used by Teddy Roosevelt and his team of young men. Looking through that frame, later writers often concluded that the rise of monopoly and other forms of concentrated power was inevitable, due perhaps to some inherent characteristic within capitalism. Many therefore missed the obvious story: the American System of Liberty was assiduously subverted by men who consciously intended to concentrate autocratic control over America’s citizens.
Immediately after the Civil War, a very different future had seemed possible. The power of the last great outlaw monopolists—the slave masters—had been broken, along with the rule of the lash. Citizens were using the Homestead Act and the Southern Homestead Act to manufacture new independent citizens through the distribution of 160-acre farms, much the same as in the days of the Northwest Ordinance. Most important, the American people had passed three great amendments to the Constitution—to ban slavery, to guarantee citizenship and equal protection of law to individuals of all races, and to protect the right of all men to vote, no matter their race, no matter whether they had ever been enslaved.
Yet during the presidency of Ulysses S. Grant, a citizen farmer who by the end of the Civil War had risen to command all U.S. armies, it became more and more evident that the money power had somehow broken fully loose from all government constraint.
During these years Americans were treated to a series of chaotic business conflicts and speculations, sometimes followed by devastating economic panics and collapses. One of the most audacious occurred only six months after Grant took office in 1869. The stock manipulator and railroad mogul Jay Gould, along with his partner in financial buccaneering, Jim Fisk, engineered a corner on the market for gold on Wall Street. Gould later claimed his effort was part of a complicated plan to raise the price of wheat and shift money to western farmers so they could afford to ship their grains east on his railroad. But few believed this story. And within days, Grant ordered the government to sell bullion in order to break the corner. This shattered not only the price of gold but also the price of grains and other commodities—and of the stock market itself—in the first of four “Black Friday” crashes in American history.20
To many Americans, such speculations were a sign of simple moral corruption. This was the message of Mark Twain in the 1873 novel The Gilded Age, which told a story of Washington influence peddling, and which provided us with the name some historians have used to describe the era as a whole. More bluntly, in an 1871 essay titled “The Revised Catechism,” the sometimes nihilistic Twain wrote, “What is the chief end of man?—to get rich. In what way?—dishonestly if we can; honestly if we must.” Decades later, after the rise of Theodore Roosevelt and the concentration of power on Wall Street, Twain would write, “Jay Gould taught the entire nation to make a god of the money and the man, no matter how the money might have been acquired.”21
Yet the real story was more one of financiers—then often called “robber barons”—breaking free from the structures and strictures that had held them in check for America’s first century. At a time when citizens had not yet armed the federal government with strong and fully modern regulatory agencies to counter the power of concentrated capital, America’s financiers enjoyed almost unlimited license to engage in experiments in corporate and bank structure and market speculation and manipulation.22
Three fundamental changes from antebellum America helped power their efforts.
One was that the biggest financiers had far deeper pots of cash with which to play. During the emergency of the war, as the Lincoln administration had experimented with a variety of instruments to pay for soldiers and materiel, J. P. Morgan, Jay Gould, Jay Cooke, and other New York bankers had concentrated much of that capital in their own hands. Although the National Bank Act of 1863 established strong, modern regulations on banking activities, including a ban on bankers owning non-banking businesses, the United States still lacked any central regulator to keep watch over Wall Street, and the newly crowned czars of finance were left largely free to entrench their power.
A second change was the introduction of new legal forms for the business corporation. In 1882, John D. Rockefeller’s Standard Oil Company created the first interlocking system of ownership to tie many corporations into one, which they called a “trust.” Tycoons in the whiskey, lead, and sugar industries soon followed. Then in 1888, New Jersey created the nation’s most liberal general incorporation law, making it much easier to create holding companies able to operate easily across state borders. This new law in turn triggered a second burst of concentration.23
The single biggest change was the maturation of revolutionary new technologies—especially the railroad and telegraph. These technologies did more than simply link people and towns more closely together. They also provided corporate masters with an extremely effective means of projecting power over distance in radically faster ways, and positioned them as essential middlemen able to exert extreme leverage in their battles for absolute supremacy in particular markets.
The railroad was, in fact, the most important source of the power of both Standard Oil and Carnegie Steel, two of the biggest and most politically potent corporations in U.S. history, relative to the overall economy in which they operated. Normally it was the railroad that held sway over the shipper, thanks to the power that came from being able to favor one company’s shipments over another’s. But both Standard and Carnegie controlled inputs—including lubricating oils and steel—that the railroads themselves needed. This enabled them to force the railroads to help them in their efforts to bankrupt or otherwise displace their rivals.
As a New York State investigative commission put it in 1880, “The parties whom [Standard Oil] have driven to the wall have had ample capital, and equal ability in the persecution of their business in all things save their ability to acquire facilities for transportation.” Or as Hans Thorelli, perhaps the most sophisticated historian of antimonopoly law, would put it many years later, “Standard’s monopolization of transportation facilities held the key to its success.”24
Unlike today’s historians, the Americans of the late nineteenth century, steeped as they were in the language and practice of democratic republicanism, fully understood not only the nature of the threat posed by these monopolists but the direction from which it came.
Indeed, by the early 1870s, many Americans began to fear that America’s capitalists had finally and fully escaped the box that the founders had put them into. One of the strongest early warnings came from Charles Francis Adams Jr., great-grandson of John Adams. The new monopolists, Adams wrote in an essay on Gould, Fisk, and the railroad boss Cornelius Vanderbilt, embody “the autocratic power of Caesarism introduced into corporate life.”
Forty years before the full implications of Theodore Roosevelt’s vision became clear, Adams predicted it “only remains for the coming man to … put Caesarism at once in control of the corporation and of the proletariat.”
By the 1880s it was clear that the Republican Party had fallen into the grip of the monopolist and financier almost as completely as the Democratic Party of the 1850s had become the tool of the slave master and the “money power.” But the remnants of the party of Lincoln, Douglass, Van Buren, Sumner, and Stevens—with its close ideological ties to the Democratic-Republican Party of Madison and Jefferson—did wage one last campaign to preserve the American System of Liberty.
In the late 1880s this democratic republican wing of the Republican Party passed two bills that aimed to break and harness the new monopolists. One worked. One failed. The one that worked was an effort to use common carrier principles and law to neutralize the power of the new technologies, especially the railroad.
Americans of the nineteenth century fully understood that providers of essential services, such as railroad and telegraph corporations, and even banks, could pose especially dangerous economic and political threats to the public. In response, citizens passed a wide range of laws at the state and local level to carefully limit the powers of these corporations. They also began to use the powers of the federal government. Even before the Civil War, for instance, citizens had inserted strong non-discrimination rules into the Pacific Telegraph Act of 1860, in the form of a requirement that all messages receive equal treatment.25 The National Bank Act of 1863, which modernized the U.S. monetary system to allow the federal government to pay for the war, decreed a complete separation between banking and commerce so as to protect the business of lending from conflicts of interest. Then immediately after the war, Senator John Sherman authored the National Telegraph Act of 1866 to extend the rule of common carriage across the nation as a whole.26
For a period it seemed that the judiciary fully shared this belief. The idea that the public has an absolute right to regulate certain types of business had in fact recently been expressed in resounding terms by the chief justice of the Supreme Court, Morrison Waite, in his opinion in Munn v. Illinois in 1876. In that case, 9 of 14 grain elevators in Chicago had been charged with fixing prices for handling and storing grain, and the state of Illinois had responded by regulating the prices and terms on which these companies could do business. The grain monopolists then sued the state, arguing that the elevators were fully private in nature, and that public officials had no right to take such action against private properties.
Waite’s first conclusion was that the grain elevators constituted “a ‘virtual’ monopoly,” based on the fact that the “vast productions” of grain from the “great States of the West” must pass through these elevators to get to “the States on the seashore.”
Waite then explained why all monopolists of vital goods and services must answer to the public. “Property does become clothed with a public interest when used in a manner to make it of public consequence, and affect the community at large,” he wrote. “When, therefore, one devotes his property to a use in which the public has an interest, he, in effect, grants to the public an interest in that use, and must submit to be controlled by the public for the common good, to the extent of the interest he has thus created. He may withdraw his grant by discontinuing the use; but, so long as he maintains the use, he must submit to the control.”
Then, quoting seventeenth-century legal scholar Matthew Hale, Waite concluded that the public can therefore reasonably require that the owner of such a monopoly attend the public “at due times,” keep their properties “in due order,” and “take but reasonable toll.”
The Munn decision was not unanimous, and the dissent in the case—with Supreme Court justice Stephen Johnson Field calling the decision “subversive of the rights of private property”—served as a warning of the new fashion afoot: applying the philosophy of the slave masters to the monopoly corporation and bank. And sure enough, in 1886, the Supreme Court in Wabash, St. Louis and Pacific Railway Co. v. Illinois all but entirely took away from the states the regulatory powers that had been so strongly defended by the Munn decision, with the majority basing its argument on the idea that such regulatory actions by state officials violated the Commerce Clause of the Constitution.
The prospect that America’s railroad barons, along with any corporation and bank already strong enough to demand special treatment from the railroads, would now be entirely untethered from all public authority raised a tight knot of fears across the nation. The most immediate fear was simply that these powers would now gouge individual members of the public or fail to provide reasonable service. More fundamental was the fear that the railroad masters would now engage in discriminations that allowed them to extort not only cash from those subject to their power but political favors as well, in ways subversive of democracy itself.
As members of Congress set out to fix the damage done by the Wabash decision, one of their most important guides to the fundamental dangers posed by the license to discriminate was a new book by a Yale professor named Arthur Hadley.
“[D]iscriminations made between individuals,” Hadley wrote in Railroad Transportation, in 1885, “is the most serious evil connected with our present methods of railroad management. Trade adjusts itself to almost any system of classification, and sometimes even to local discriminations. But where two individuals, under like circumstances, receive different treatment, no such adjustment is possible.”27
One result of such personalized discrimination, Hadley warned, is that “Differences are made which are sufficient to cripple all smaller competitors, and sooner or later drive them to the wall, and concentrate industry in a few hands.”28 “[T]he great majority of local and personal discriminations are in favor of the strong,” he wrote. “As such they do great harm to the community by increasing inequalities of power.”29
More dangerous yet was the direct collapse of rule of law, hence of the security of private property. “Where the system of granting special privileges becomes deeply rooted,” Hadley wrote, “a great many are granted without any principle at all, through the caprice or favoritism of the railroad companies and their agents.”30
In 1886 Republican senator Shelby Cullom responded to these fears by drawing up a bill designed to prohibit railroads from engaging in most forms of price discrimination, and that established a five-person commission to make sure the laws were enforced.31 Backed strongly by Republicans and Democrats from the Midwest and South, but opposed by most Republicans from the banker-controlled states of the Northeast, the Interstate Commerce Act was passed and signed into law in 1887 by Grover Cleveland, a Democrat from New York state.32
The Interstate Commerce Act would prove to be a highly incomplete law. In the years to come it would require many adjustments to ensure that railroads charged reasonable prices and provided reasonably efficient and effective service, and that the financiers were not able to manipulate capital structures in ways that allowed them to overcharge the public.33 But the law also got one really big thing right in outlawing discrimination. The era of the railroad lord was over, and though the families of Cornelius Vanderbilt, E. H. Harriman, Leland Stanford, and Jay Gould would retain great wealth to this day, never again would one man or group of men be able to leverage the railroad monopolies to the apex of power. The same, obviously, was also true for any powerful industrialist who aimed to follow the path of John D. Rockefeller and Andrew Carnegie.
In the years to come, America’s citizens extended the principles of common carriage to the telegraph, telephone, pipeline, trucking, air travel, broadcast, and Internet industries. Each time, they aimed specifically to prevent these corporations from discriminating in the delivery of their services. The basic goal was always to ensure that these public systems would serve the public, and not be transformed into tools for the extortion of money and political power in the name of a few private masters. In other words, the Interstate Commerce Act would prove to be one of the most important foundations of American democracy in our nation’s history.
Three years later, in 1890, the old Lincoln wing of the Republican Party made its final attack on the money power. This time their tool was a law designed to outlaw the trust ownership structure that Standard Oil had first mastered in 1882, and also—in very general terms—all other monopolies and artificial restraints on trade.
The main backer of the act was Ohio senator John Sherman, whose brother, General William Tecumseh Sherman, helped break the power of the Confederacy by marching his army across Georgia to the sea. The text of the Sherman Antitrust Act itself was short, as its original authors wanted it to have the simplicity of a constitutional statement. Yet Senator Sherman himself delivered a long speech on March 21, 1890, in defense of his bill, in which he made clear that he and his allies intended for the law to fully restore the original structures of the American System of Liberty.
“The popular mind is agitated with problems that may disturb social order,” Sherman said. “Among them all none is more threatening than the inequality of condition, of wealth, and opportunity that has grown within a single generation out of the concentration of capital into vast combinations to control production and trade and to break down competition.”34
In one of the most oft-cited statements from the speech, Sherman said what was at stake was American democracy itself. “If we will not endure a king as a political power, we should not endure a king over the production, transportation, and sale of any of the necessities of life. If we would not submit to an emperor, we should not submit to an autocrat of trade, with power to prevent competition and to fix the price of any commodity.”35
To ensure a proper understanding of the immediate purpose of the law, Sherman made clear that it was the “liberty” of the individual, as a producer, that the law must protect foremost. In words that blended the lessons of Madison, Smith, and Locke, Sherman said, “It is the right of every man to work, labor, and produce in any lawful vocation and to transport his production on equal terms and conditions and under like circumstances. This is industrial liberty, and lies at the foundation of the equality of all rights and privileges.”36
Sherman’s speech is a glorious document, one of the most important expressions of democratic republican thinking in our nation’s history, a resounding updating for the railroad age of the original American vision of propertied independence for the farmer, working person, shopkeeper, artist, and manufacturer. There was no speech quite like it in the fight for the Interstate Commerce Act. There would be few speeches like it—not even from Bryan—until the days of Wilson and Brandeis a generation later. It should therefore serve as the true touchstone for all enforcement of modern antimonopoly law and policy in the United States and indeed in the democracies of the world.
Yet Senator Sherman’s antitrust law itself, when put to the test, did not merely fail, it did so in spectacular fashion, serving mainly to accelerate the very consolidation of economic and political power that it sought to arrest and reverse.
At the time and in the years since, there has been much speculation about how the lawyers in the conference committee may have deliberately altered the original text of the law in ways designed not only to limit its effect, but to provide loopholes wide enough for the most elephantine of monopolists to amble through.37 Similarly, there has been much debate about the Senate’s decision not to establish a commission similar to that of the Interstate Commerce Act but instead to trust enforcement to the judiciary. But for the sake of our story, it does not matter whether the Sherman Act was intentionally sabotaged or whether the drafters simply lacked the ability to imagine the future cunning of the financiers and corporate executives with whom they were doing battle.
The fact is that even before the courts had really begun to make sense of their new responsibilities, America’s bankers responded with a series of mergers that created monopolies or near monopolies in dozens of businesses, ranging from the manufacture of locomotives, writing paper, cans, steam pumps, window glass, and pneumatic tools to the mining of salt and the distillation of sugar. Many of the monopolies that would dominate American and indeed world business for decades—including the chemical giant DuPont and Otis Elevator—were created or took their modern form during this time. In the case of electricity, one of the most durable cartels in history was created when J. P. Morgan in 1892 engineered the capture of control over the patents of both General Electric and Westinghouse and used that control to govern development of the entire electric power industry for decades.38
The “consolidation craze” that followed passage of the Sherman Antitrust Act, Hans Thorelli later wrote, “wrought an almost revolutionary change in the legal and financial structure of major segments of American industry.”39 From an “economic, social, and political point of view the industrial consolidation movement was doubtless of more momentous significance than any other development in American society around the turn of the century.” Not even the Spanish-American War and America’s emergence as a power in Asia, following the decision to colonize the Philippines, “affected American civilization … as much as the emergence of the giant concern as the dominant element in scores of the nation’s industries.”40
By 1901 Morgan had consolidated sufficient mastery of the capital market to break even the power of the steel magnate Andrew Carnegie. With Elbert Gary’s Federal Steel Company as his corporate tool, Morgan backed Carnegie into a position where he had no real choice but to sell out. The resulting deal made Carnegie the richest man in the world. And it made the monopoly that resulted—U.S. Steel—the largest corporation in the world, the first ever valued over $1 billion, with 532,000 workers and a 67 percent share of America’s booming market for steel.41
By 1903, according to figures compiled by the Wall Street publisher John Moody, the lords of Wall Street had rolled 8,664 companies into 445 corporations, most of which dominated entirely one market or another. And with Roosevelt in the White House, more was to come, including Morgan’s participation in the “rationalization” of America’s telephone industry, under the banner of AT&T, beginning in 1907.42
Less than two generations had passed since the American people had broken the power of the slave masters and the money masters who financed them. Barely more than 15 years had passed since Congress had taken from the money lords their ability to leverage the railroad monopolies to extort their way to wealth and autocratic control. Now the money power was back and more awesome than ever. It was able to leverage the monopoly industrial corporation, the monopoly trading corporation, and the monopoly of the technological patent to gain more or less autocratic control over vast swaths of the U.S. political economy.
More dangerous yet, Roosevelt’s embrace of monopolization had effectively licensed a tiny group of financiers, led by J. P. Morgan, to concentrate de facto control over the money power itself, through the weaving of an intricate web of cross ownership and control that extended from bank to bank and corporation to corporation. As La Follette explained in 1913, “The trusts and combinations at the beginning of Theodore Roosevelt’s term were but a handful. Limited in number, they stood unsupported, each by itself. They had not yet been fused and welded together with the Morgan system of interlocking directorates.”43
Indeed, as Moody detailed, J. P. Morgan’s group had even brokered a peace with the Rockefeller family and their own immensely powerful Wall Street operation, centered on the National City Bank, which today we know as Citigroup. “They are not only friendly, but they are allied to each other by many close ties,” Moody wrote. “It is felt and recognized on every hand in Wall Street to-day, that they are harmonious in nearly all particulars.”44
The full extent of the power that had been concentrated by Wall Street would not be made clear until Congress in 1912 approved a special subcommittee to investigate whether a banking trust did indeed exist on Wall Street. The committee report, published in early 1913, just before Wilson took office, found that Morgan and a few other Wall Street bankers had indeed captured control over America’s credit system.
“The acts of this inner group [have] been more destructive of competition than anything accomplished by the trusts,” the report explained, “for they strike at the very vitals of potential competition in every industry that is under their protection, a condition which if permitted to continue, will render impossible all attempts to restore normal competitive conditions in the industrial world.” At present, the report concluded, America’s business leaders had been reduced to “being subject to the tribute and good will of this handful of self-constituted trustees of the national prosperity.”45
It was at this time that Louis Brandeis finally turned his full attention to the threat posed by corporate and banking monopoly, first in the role of freelance agitator and then increasingly as Wilson’s intellectual partner in his antimonopoly thinking and writing. Raised in Louisville, Kentucky, Brandeis had practiced corporate law in Boston, where he earned the nickname “The People’s Lawyer” by leading fights against abusive employers and railroad monopolies—including Morgan’s use of the New Haven railroad to monopolize urban railway service in the Northeast. Like Wilson, Brandeis held that citizens must use the original principles of the American System of Liberty to guide the breaking and neutralization of the power of twentieth-century monopolists.
These few bankers, Brandeis warned, had captured control over the gate to the credit system itself. “Though properly but middlemen,” he wrote, “these bankers bestride as masters America’s business world, so that practically no large enterprise can be undertaken successfully without their participation or approval.” The “most potent factor in their control of business is not the possession of extraordinary ability or huge wealth. The key to their power is Combination—concentration intensive and comprehensive.”46
More galling yet, the bankers had captured their position using the funds deposited in their banks by the same hardworking and honest citizens whom they were now pillaging. “The goose that lays golden eggs has been considered a most valuable possession,” Brandeis wrote. “But even more profitable is the privilege of taking the golden eggs laid by somebody else’s goose. The investment bankers and their associates now enjoy that privilege. They control the people through the people’s own money.”47
The good news? The solution was simple and easy to understand. “We must break the Money Trust,” Brandeis concluded. “Or the Money Trust will break us.”48
Woodrow Wilson was in office only 16 months before Germany invaded Belgium on August 4, 1914, to start what we now call the First World War. Yet in that time his administration oversaw the most extensive reconstruction of the whole U.S. political economy since the Constitution and the Northwest Ordinance. This included the introduction or preparation of:
Under Roosevelt and Taft, antitrust enforcement had been ad hoc, sporadic, hypocritical, discriminatory, dangerous. The Wilson administration now carefully updated America’s whole antimonopoly system to promote rule of law, and distribution of power and opportunity, for a twentieth-century industrial era that looked fantastically different from the world of the founders. In place of the plow, stagecoach, and sailing ship, the new economy was a place of vast factories filled with immense machines, nation-spanning communications and transportation networks, electric power, chain stores, automobiles, and even airplanes.
Exactly as at the founding, and in close echo of Senator Sherman’s speech, Wilson, Brandeis, and their allies in Congress organized their thinking around a vision of the citizen as an individual seeking liberty to bring properties to market. Further, as Brandeis himself made clear, they were fully aware they were not simply making a smart new political economy but were also shaping the nature of American democracy itself and designing citizens capable of protecting that democracy.
“Democracy,” Brandeis wrote in a 1922 letter, “substitutes self restraint for external restraint … It demands continuous sacrifice by the individual and more exigent obedience to moral laws than any other form of government. Success in any democratic undertaking must proceed from the individual. It is possible only where the process of perfecting the individual is pursued.” In words that could have come from Madison, Brandeis said, “always and everywhere, the intellectual, moral, and spiritual development of … the individual is both a necessary means and the end sought.”51
The new administration’s approach was also highly pragmatic. Indeed, despite their repeated emphasis on the danger of size, and despite being often derided as backward looking and naïve, from the first Wilson, Brandeis, and their allies set out to ensure that the American people could benefit from nation-spanning transportation and communications networks, mass manufacture, and automation. To strike the right balance between their fear of bigness and their understanding that some industrial activities must be big, they carefully divided the political economy into three distinct realms, then adapted their competition philosophy to each particular set of human activities.
First, in the case of networked industries like railroads, telephones, and electricity, the democratic republicans of the early twentieth century aimed to treat these services as essential to the public. The goal was not to make them smaller but rather to make them neutral, in the sense that these intermediaries, with great potential power over the lives and businesses of others, had to provide the same pricing and terms of service to all comers. The intellectual and political challenge here was in fact relatively easy, given the lessons from the success of the Interstate Commerce Act and the fact that many of that act’s original problems had been fixed by the Mann-Elkins Act of 1910.52 (Numerous American communities took a far more direct approach to ensuring the widespread, affordable, and non-discriminatory provision of such services, which was—along the model of the original U.S. Postal Service—to own them directly.)
Second, and more challenging, these reformers of the industrial age needed to develop a formula for enterprises engaged in the art of applying science to mass production, for instance, making chemicals and metals or automobiles and tractors. In such instances, enforcers took a much more liberal approach to vertical integration, not wanting to get in the way of the engineers—in enterprises such as Ford and General Electric—who were experimenting constantly with different methods of construction and assembly.
In the industrial realm, the debate over bigness was far more engaged and complex. By this time, J. P. Morgan had largely rolled up the American steel industry into the vast and sprawling U.S. steel, based on the idea that such rationalization was more efficient. By contrast, in 1912, Brandeis had become fascinated with a study comparing the German steel industry, which was organized into a partial cartel, to the American industry. The study detailed how, even though the German government allowed companies to coordinate pricing and output levels in primary steel, the resulting competition in “specialty production” delivered far higher quality, lower prices, and more innovation than the American model.53
One result of such thinking, over the years to come, was a policy that aimed simply to ensure that at least four firms engaged in every industrial activity. Another result, beginning in the late 1930s, was a policy of forcing large industrial firms to license their patents for free to any comer.54
Third, in sectors of the economy that did not require high degrees of scientific expertise—such as farming, retail, and banking—the aim was to promote as wide a distribution of power and opportunity as possible, hence as wide a distribution of property, not only in the form of land but in the form of citizen-sized independent businesses. The new administration therefore adopted policies that promoted local control over retail, over livestock and grain markets, and over banking, essentially in the spirit of the Northwest Ordinance with its citizen-sized properties. In almost all such lines of business, the aim was to prohibit vertical integration and predatory pricing.55
In each of these three approaches, the Wilson administration aimed to set simple, easy-to-understand, bright-line rules to ensure citizens, businesses, enforcers, and the courts understood what was legal and what not. And in industries undergoing rapid technological change, it had empowered the FTC to carefully track industrial structures, conduct detailed research, and, when necessary, propose new rules.
One way to understand just how fully Wilson and Brandeis aimed to update the principles of the founding for the twentieth century is to look at their attitude toward the nature of the business corporation itself. Hearkening directly to the earliest days of the Republic, they held that the large industrial corporation was essentially public in nature and must be made ultimately to serve the public. In a statement published during his first year in office, Wilson wrote, “A modern … corporation cannot in any proper sense be said to base its rights and powers upon the principles of private property. Its powers are wholly derived from legislation. It possesses them for the convenience of business at the sufferance of the public.”56
If there was a single, paramount aim of their entire system, it was to once and for all break the power of Hamilton’s system, the power of concentrated capital, the power of Wall Street, the power of money, over the lives of individual citizens and businesses and over the nation as a whole. Wilson and Brandeis understood that it was the corporation that allowed the financier to reach into the world to extract, exploit, divert, and suppress. Stopping this required not only regulation of Wall Street but the use of antimonopoly law to disrupt the ability of the capitalist to engineer corporate monopolies powerful enough to manipulate main street.
In The Promise of American Life, Herbert Croly belittled Madison and Jefferson and their followers for failing to develop the tools necessary to protect their original vision of America. The founders’ system of liberty, Croly wrote, “has failed because it did not bring with it any machinery adequate even to its own insipid and barren purposes.”57 Wilson and Brandeis now answered Croly’s challenge by building both federal and state-level institutions strong enough and sophisticated enough to do just that. Theirs was also a system flexible enough—thanks to the mission and structure of the FTC—to adjust to suddenly changing circumstance and technology.58
In 1916, Wilson appointed Brandeis to the Supreme Court, ensuring that one of the authors of their revolution would be able to help protect it in the years to come. He did so over a set of vicious objections based mainly on the fact that Brandeis was Jewish.
When Franklin Roosevelt and the New Dealers began their work in the 1930s, they built upon the intellectual and institutional base established during the New Freedom. Indeed, over the course of the twentieth century, it was upon this intellectual and institutional base—this second System of Liberty—that the American people would complete the rebuilding of something like real democracy.
President Wilson signed the Clayton Antitrust Act into law on October 5, 1914. The following day, he sent the pen he had used to Samuel Gompers, head of the American Federation of Labor, the largest alliance of unions in the nation. Twelve days later, Wilson wrote that “justice has been done to the laborer.” He then connected this directly to the antimonopoly provisions of the Act, saying the outcome was but “the natural and inevitable corollary of a law whose object is individual freedom and initiative as against any kind of private domination.”59
It may seem strange that an antitrust law would be of such immediate concern to a labor leader and to working people. Yet going back to the founding, American common law had viewed the union of the worker in pretty much the same light as the business corporation. In much the way the corporation joined the money capital of many investors, this thinking went, the union joined the labor capital of many workers. This thinking, in short, was based on a vision of work itself as a type of property.
The idea that monopoly was a threat to working people was, in fact, very much on Senator Sherman’s mind as he drafted and defended his bill in 1890. Monopoly, he said, “commands the price of labor without fear of strikes, for in its field it allows no competition.”60 Yet part of the tragedy of the original Sherman Antitrust Act is that, in addition to failing to rein in corporate monopolists, for more than a decade it ended up providing those same corporate monopolists with a perfect tool to break strikes by workers and efforts by farmers to form cooperatives. The monopolists used the language in the act prohibiting “restraints of trade” to claim that unions and cooperatives—in essence—were illegal cartels.61
To stop this gross abuse of the law, the Wilson administration and Congress inserted language into Section 6 of the Clayton Antitrust Act. Nothing “in the antitrust laws,” this section read, “shall be construed to forbid the existence of labor, agricultural, and horticultural organizations, instituted for the purposes of mutual help.” Nor “shall such organizations, or the members thereof, be held or construed to be illegal combinations or conspiracies in restraint of trade.”
In Section 20 of the Clayton Antitrust Act, they added, “no such restraining order or injunction shall prohibit any person or persons whether single or in concert, from terminating any relation of employment, or from ceasing to perform any work or labor, or from recommending, advising, or persuading others by peaceful means to do so.”
In other words, the Clayton Antitrust Act—in addition to greatly strengthening U.S. federal law against monopoly—also made it unequivocally clear that citizens have a right to form labor unions and farmer cooperatives, to strike, and to encourage others to strike. In his autobiography, Gompers would later write that “Sections 6 and 20 [of the Clayton Act] constitute the charter of industrial freedom or, as I called it, ‘Labor’s Magna Charta.’”62
Once again, Wilson and Brandeis were simply aiming to restore a principle that traced to the early days of the Republic. In this case, it was the liberty to join unions and similar groups. Much like America’s farmers, America’s workers had established precedents for peaceful democratic organizing that served to inspire people around the world and indeed deeply influenced the thinking even of Karl Marx and Friedrich Engels.63
These precedents included the General Trades Union, which launched the first nationwide labor organization in 1834. It included, that same year, the first election of a labor leader—New York’s Ely Moore—to Congress. It included President Van Buren’s March 1840 executive order declaring that no person should work more than ten hours on a federal project.64 It included a March 1842 ruling by the Massachusetts Supreme Court that labor unions could not be charged with criminal conspiracy for forming closed shops or strikes. “We cannot perceive,” Chief Justice Lemuel Shaw wrote then, “that it is criminal for men to agree together to exercise their own acknowledged rights.”65 It included President Grant’s 1869 proclamation establishing an eight-hour day for all laborers, workmen, and mechanics employed by the government.
Throughout these years, America’s working people—like America’s farmers and shopkeepers—were staunch enemies of monopoly, which they saw as a threat to their skills and their properties. As the labor leader Terence Powderly said in 1886, “He is a true Knight of Labor who with one hand clutches anarchy by the throat, and with the other strangles monopoly.”66
The Wilson administration during these years also took more positive actions to make it easier for farmers to create cooperatives. This included the 1916 Federal Farm Loan Act. This act promoted the creation of locally organized and owned “land banks” to provide credit to farmers who otherwise found it hard to secure loans. In the words of Wilson, this put farmers “upon an equality with all others who have genuine assets.”67 It also included taking the first steps to frame and pass what is now known as the Capper-Volstead Act, which formalized farmers’ rights to form cooperatives for both the sale of their products and the purchase of supplies. And it included the first federal efforts to regulate markets for wheat and other grains, cotton, and commodity market futures in ways designed to stabilize the income of farmers.68
From today’s perspective, perhaps most surprising was the third area in which Wilson and Brandeis promoted liberty to associate. In addition to advancing that liberty for working people and farmers, they worked with Congress to extend this liberty also to the independent business owner and the trained professional. The idea here was that these individuals should be allowed to join together in trade associations, professional associations, and other organizations that would enable them to identify common problems and threats, as long as they did not engage in any outright cartelization.
Brandeis was especially fascinated with the promise of such associations of independent entrepreneurs. As the historians Gerald Berk and Laura Phillips Sawyer have detailed, Brandeis believed that independent businesspeople should be free to discuss the nature of their work with one another and to set standards, just like doctors and lawyers. Such an approach, he believed, would enable these businesses to focus more on improving products and processes rather than simply on trying to cut prices and wages.69
The vision of American capitalism the Wilson administration and Congress put into place just before the First World War could not be more clear. On one hand, limit absolutely the ability of bankers, financiers, and the superwealthy to combine their own capital and power. On the other, make it as easy as possible for working people, farmers, independent business owners, and professionals to cooperate with one another, not only to protect their rights and interests but to improve their products and services.
Here again we see, as in the earliest days of the Republic, a vision of competition as a form of cooperation, a way to forge a community of citizens based not on some utopian vision of human nature but on an honest appraisal of human character. It was a vision that understood that humans would always seek foremost their own personal advantage, leavened by the belief that such rivalry could be shaped to promote a better society for everyone.
In the 1912 presidential campaign, W. E. B. Du Bois endorsed Woodrow Wilson and praised the New Freedom. Since the Civil War and Reconstruction, this marked the first time that an important African American leader had broken with the Republican Party come election time. And Du Bois was someone important. A historian and civil rights activist born in Massachusetts just after the Civil War, in 1909 Du Bois had helped to found the National Association for the Advancement of Colored People (NAACP), where he would write and edit the journal The Crisis for the next 20 years. Though often today remembered for his late-career support for democratic Marxism, Du Bois in the early decades of the twentieth century was perhaps the single greatest prophet of American liberty, playing a role in many respects as important as that of Brandeis.
Du Bois’s endorsement was not based on any particular love for Wilson or trust in the man or his administration. As Du Bois was fully aware, Wilson’s home state of Virginia was still segregated, and the college over which Wilson had presided, Princeton, was the only Ivy League school that did not admit blacks.70 Yet Du Bois’s endorsement played a major role in some 100,000 African Americans deciding to vote for the nominee put forth by a party that had once been led by John C. Calhoun and Jefferson Davis.71
It was a hard decision made in hard times. Over the previous few years Teddy Roosevelt and the plutocrats had smashed the last remnants of the Republican Party of Lincoln and Stevens to chase the votes of white southern men. True, Roosevelt had shocked the nation by inviting the famous educator Booker T. Washington to dinner in 1901. But as soon as Roosevelt secured a second term in 1904, he shut and bolted the door. By the end of his time in office, Roosevelt had appointed fewer blacks than any of his predecessors, including the Democrat Grover Cleveland.72 And Roosevelt’s successor, Taft, had largely followed the same course.73
The African American rebellion against Roosevelt and the Republicans was not based merely on broken promises. Roosevelt had taken to outright disparagement of blacks as a “backward race” that was “altogether inferior to the whites.”74 Perhaps most outrageously, Roosevelt had used a February 1905 speech in honor of Abraham Lincoln to appeal for “white racial purity.”75
If any African Americans had any doubt about Roosevelt’s true character, he disabused them through his treatment of the all-black First Battalion of the 25th Infantry Regiment of the U.S. Army, after citizens in Brownsville, Texas, in 1906 charged that men in the unit had shot a bartender to death. The battalion was one of the most decorated in the U.S. military, with a total of six Medal of Honor winners in battles ranging from Cuba to the Philippines. This unit had even reinforced Roosevelt’s own Rough Riders at a “desperate moment” in his charge up San Juan Hill.
Although the white citizens of Brownsville could offer no proof of their charges, Roosevelt discharged 167 of the 170 men in the battalion without honor, cutting off pensions even to men with 25 years of service.
It didn’t take long, however, for Du Bois and other black leaders to discover that Wilson was in certain respects even worse than Roosevelt. Not only did Wilson refuse to appoint black ambassadors to Santo Domingo and Haiti, positions long reserved for African Americans, but he allowed Treasury Secretary William McAdoo and Postmaster General Albert Burleson to segregate their departments of government. In Georgia, the collector of internal revenue simply fired all black employees, saying, “There are no government positions for Negroes in the South. A Negro’s place is in the corn field.”76
The disillusionment came to a head in a meeting between Wilson and African Americans in the White House in 1914. William Monroe Trotter, a black newspaper publisher and activist who like Du Bois had endorsed Wilson in 1912, at one point asked, “Have you a ‘New Freedom’ for white Americans and a new slavery for your Afro-American fellow citizens? God forbid!”77
Yet that was exactly what was happening. The New Freedom, this new American democracy, was in fact designed mainly for white Americans. To be sure, to some extent the New Freedom did provide some new opportunities for African Americans; after all, the same antimonopoly policies that protected white businesses and farms helped to protect African American businesses and farms.78 But this was a mere byproduct of laws designed for others, what we might call trickle-down liberty.
Jim Crow has often been described as mainly a political tool of the powerful to prevent working people of different races and cultures from locking arms with one another. And to be sure, race has been used many times to tear white from black, and to suppress the votes of both African Americans and poor whites.
Martin Luther King Jr., just after the Selma march in 1965, retold the well-known story of one such time, in the early days of the populist movement, when in many parts of the South whites and blacks had marched side by side to, in King’s words, “drive the Bourbon interests from the command posts of political power.”
The Bourbon interests answered this challenge, King said, by preaching race hatred. “To meet this threat, the southern aristocracy began immediately to engineer this development of a segregated society,” he explained. “If it may be said of the slavery era that the white man took the world and gave the Negro Jesus, then it may be said of the Reconstruction era that the southern aristocracy took the world and gave the poor white man Jim Crow. He gave him Jim Crow. And when his wrinkled stomach cried out for the food that his empty pockets could not provide, he ate Jim Crow, a psychological bird that told him that no matter how bad off he was, at least he was a white man, better than the black man.”79
King’s story of how the white aristocracy used Jim Crow to divide white from black is not wrong in most fundamentals. But in a history of a democracy, and with citizens as well educated in the nature of power as those of the United States, it is important not to discount the conscious efforts by many white men to actively repress the black man and exclude him from citizenship without any help from the masters themselves.
Yes, time and again, the masters have used race to divide. And yes, time and again, great numbers of poor and middle-class whites embraced promises of favored treatment in exchange for beating their quondam allies. Yet we also see the active and intentional creation and enforcement, by middle- and working-class white men especially, of race-based unions and race-based business cartels, designed simultaneously to take wealth and power from those above them and to carefully prevent citizens from other races and cultures, especially African Americans, from sharing in any bounty that might result.
We can trace such race-based organizing to long before the Civil War itself, not least to a series of riots in the 1830s in Philadelphia, Washington, Baltimore, New York, and elsewhere that aimed to keep free African Americans out of certain skilled jobs. One of the most infamous examples of this attitude is Andrew Johnson, the Tennessee haberdasher who rose to the presidency upon the assassination of Lincoln. From the earliest days of Reconstruction Johnson worked hard to ensure that any land, jobs, or schooling that the federal government might distribute or subsidize would go only to poor white men, and never to any freed black man.80
To the extent the 1912 election confirmed anything about American racism, it was that both national parties had fully embraced Jim Crow. Which in turn made it that much easier for organizations like Samuel Gompers’s AFL to formally allow any of their member unions to exclude African Americans for any reason whatsoever.81 (The American racism of these years, as Daniel Okrent details in The Guarded Gate, also helped to shape attitudes in Europe, and especially Germany, in the period leading up to the Nazi takeover.82)
Du Bois himself, in 1917, as President Wilson prepared to take America to war in Europe, made one last demand to extend the promise of the New Freedom to the African American man and woman. In an essay in his magazine The Crisis, in emulation of Frederick Douglass’s similar demand of Lincoln more than 50 years earlier, he wrote:
Let us enter this war for Liberty with clean hands. May no blood-smeared garments bind our feet when we rise to make the world safe for Democracy … We cannot lynch 2,867 untried black men and women in thirty-one years and pose successfully as leaders of civilization. Rather let us bow our shamed heads and in sack cloth and ashes declare that when in awful war we raise our weapons against the enemies of mankind, so, too, and in that same hour here at home we raise our hands to Heaven and pledge our sacred honor to make our own America a real land of the free:
To stop lynching and mob violence.
To stop disfranchisement for race and sex.
To abolish Jim Crow cars.
To resist the attempt to establish an American ghetto.
To stop race discrimination in Trade Unions, in Civil Service, in places of public accommodation, and in the Public School.
To secure Justice for all men in the courts.
To insist that individual desert and ability shall be the test of real American manhood and not adventitious differences of race or color or descent.
Awake! Put on thy strength, America—put on thy beautiful robes. Become not a bye word and jest among the nations by the hypocrisy of your word and contradiction of your deeds.83
Yet the pleas of Du Bois and the rest of America’s black-skinned half citizens failed. America’s race crisis, if anything, became even worse after the war, as the nation witnessed some of the most deadly race riots in history, including in downtown Washington, as white citizens sought to shove America’s new black soldier citizens back to the end of the line and down into the boiler rooms and muck rooms of the capital. The federal government itself, as Richard Rothstein, Ira Katznelson, and others have detailed, became an active enforcer of Jim Crow in farming, services, and housing, from the New Deal well into the 1960s. Even as American soldiers fought to shatter the religious ghettos of Europe, progressive social “engineers” like Rex Tugwell were engineering racial ghettos in every city in America and driving black farmers off their land.84 If anything, “redlining” of black neighborhoods by the federal government amounted to a form of institutionalized monopolization of housing for the exclusive use of whites.85
The New Freedom broke the back of the autocracy of the financier and corporate master and cleared the way for the restoration of the American System of Liberty. But Wilson left America with a democracy with hard borders or, rather, with a hard caste system based mainly on the color of one’s skin. In short, he left it not yet truly a democracy at all.86