After the Civil War, different regions took very different approaches toward regulation of the economy. In the 1870s, as railroads and industry grew in the Midwest and east, those states enacted a series of “Granger laws” to check corporate power. Granger laws provided for creation of corporations by general rules rather than special charters containing special favors; and for railroad commissions, which in some cases were granted power to regulate railroad rates and operations. Other laws directly regulated railroads and grain exchanges. The tide of regulation continued to rise after the 1870s. An increasing number of states enacted pure-food and public health laws; laws regulating physicians, pharmacists and other professions; laws for conservation of fish, game and soil; and laws regulating labor-management relations, unfair business practices and workplace safety. The regulatory tide peaked during the Progressive era (1900-1925). Railroads and businesses frequently challenged such laws as unconstitutional. They usually argued that the laws violated one or more of the following legal doctrines, collectively known as “substantive due process”:
In the 1890s, the U.S. Supreme Court and many American state courts began examining regulatory laws critically. The courts upheld most laws but struck down enough that reformers complained they were improperly interfering with necessary social change. Some reformers even argued that courts should not be allowed to examine reform laws at all. The Old South and the Deep South were much less industrialized and joined the regulatory movement more slowly and cautiously than other regions. Even Southern reformers believed that preserving the established racial order was paramount and were careful not to push reforms that might upset it. The mountain South took a middle path. Except for Arkansas, the entire region was substantially more industrialized than the rest of the South, and it had a substantial mining industry that was one of the leading subjects of late-19th-century government regulation. But like the rest of the South, reform in the mountain South was constrained by the desire to preserve the existing racial order. Reform laws came earlier and were moderately more extensive in the mountain South than elsewhere in the South and they prompted more legal debate, but except for Missouri, the debate was not nearly as extensive as it was in the north.Beginnings of substantive due process: scrip laws State v. Goodwill – West Virginia, 1889 (10 S.E. 285); Peel Splint Coal Co. v. State – West Virginia, 1892 (15 S.E. 1000); State v. Loomis – Missouri, 1893 (22 S.W. 350); Avent Beattyville Coal Co. v. Commonwealth – Kentucky, 1894 (28 S.W. 502); Harbison v. Knoxville Iron Co. – Tennessee, 1900 (53 S.W. 955), affirmed, 183 U.S. 13 (1901); State v. Missouri Tie & Timber Co. – Missouri, 1904 (80 S.W. 933)
“[Scrip laws] say to the mining and manufacturing employees: ‘Though of full age, and competent to contract, still you shall not have the power to sell your labor for meat and clothing alone, as others may.’ … They undertake to deny to the persons engaged in the two designated pursuits the right to make and enforce the most ordinary, everyday contracts – a right accorded to all other persons.” – Justice Francis Black, in Loomis “The legislature evidently deemed the laborer at some disadvantage under existing laws and customs, and by this act undertook to ameliorate his condition in some measure by enabling him … to demand and receive his unpaid wages in money, rather than in something less valuable. Its tendency, though slight it may be, is to place the employer and employee upon equal ground in the matter of wages, and, so far as calculated to accomplish that end, it deserves commendation … [The law will] promote the public peace and good order, and to lessen the growing tendency to strife, violence, and even bloodshed in certain depts. Of important trade and business.” - Justice Waller Caldwell, in HarbisonSubstantive due process: prompt-payment laws Leep v. St. Louis, Iron Mountain & Southern Railroad Co. – Arkansas, 1894 (25 S.W. 75); Commonwealth v. Reinecke Coal Mining Co. – Kentucky, 1904 (79 S.W. 287); Arkansas Stave Co. v. State – Arkansas, 1910 (125 S.W. 1001); State v. Missouri Pacific Railroad Co. – Missouri, 1912 (147 S.W. 118)
“These corporations represent aggregations of capital, and the employees are the laborers who are dependent on their wages for their livelihood. The inconvenience to the corporation to pay the wages semimonthly could not be as great as it would be to those, whose actual necessities require the frequent payments, not to receive such payment.” - Justice Sam Frauenthal, in Arkansas Stave Substantive due process: coal screening laws Peel Splint Coal Co. v. State – West Virginia, 1892 (15 S.E. 1000); Woodson v. State – Arkansas, 1900 (65 S.W. 465); McLean v. State – Arkansas, 1906 (98 S.W. 729), affirmed, 211 U.S. 539 (1909)
“[W]hen … the biz is of such a character that the parties do not deal upon an equal footing, and that the many are at a disadvantage in their contractual relations with the few, the legis may regulate these relations, with a view to prevent fraud, oppression, or undue advantage.” - Justice Daniel Lucas, in Peel Splint “The plain purpose of the act … is not to prevent the parties from contracting in any manner they deem proper for the production of coal, but rather, after they have contracted for its production according to the quantity produced, to see that such quantity is ascertained by a fixed and definite standard by which neither of the parties can be defrauded.” - Justice Carroll Wood, in McLean Shifting judicial views of reform: the case of Missouri State v. Julow – Missouri, 1895 (31 S.W. 781); McCully v. Chicago, Burlington & Quincy Railroad Co. – Missouri, 1908 (110 S.W. 711); State ex rel. Equitable Life Assurance Society of the U.S. v. Vandiver – Missouri, 1909 (121 S.W. 45); House v. Mayes – Missouri, 1910 (127 S.W. 305), affirmed, 219 U.S. 270 (1911); State ex rel. Barker v. Merchants’ Exchange of St. Louis – Missouri, 1916 (190 S.W. 903), affirmed, 248 U.S. 365
“If this law is a rightful
exercise of the police powers of Missouri,
as held by my Brothers, then the right of private contract … has received its
death knell in the state.” - Justice Waller
Graves (dissenting), in Vandiver (1909) “In these days it would appear that the state is to
assume the right to fix the terms of the contracts between private individuals
… Buyers and sellers of … commodities … are upon equal footing. … The state is
going beyond a reasonable and legit exercise of its police power when it
attempts to prescribe the terms, or any portion of the terms, of such contracts
between private individuals.” - Graves (dissenting), in
House (1910) | ![]() Lewis Hine - West Virginia coal miners (1908) - courtesy Yale University and Wikimedia Commons Scrip coin - courtesy Wikimedia Commons “It is a species of sumptuary legislation which has been universally condemned, as an attempt to degrade the intelligence, virtue, and manhood of the American laborer, and foist upon the people a paternal government of the most objectionable character, because it assumes that the employer is a tyrant, and the laborer is an imbecile.” – Justice Adam Snyder, in Goodwill “[W]here the number of employees is such that specific contracts with each laborer would be improbable, if not impossible, that in general contracts justice shall prevail as between operator and miner; and, in the company’s dealing with the multitude of laborers with which the state has by special legislation enabled the owners and operators to surround themselves, that all opportunities for fraud shall be removed. … [Scrip is] popularly known as the ‘pluck-me’ method of payment.” – Justice Daniel Lucas, in Peel Splint
Coal screening house, Kay Moor, West Virginia - courtesy Library of Congress and Wikimedia Commons “What more complete confiscation of the operator’s prop could possibly be enforced than to have a large percentage of his coal mined and put out in a condition that would be utterly worthless to him, and in addition to that to be compelled to pay the miner for his labor in producing it in that condition?” - Justice John English (dissenting), in Peel Splint
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EMPIRE OF LAWS - The Legal History of the 50 American States > 4. MOUNTAIN SOUTH LEGAL HISTORY > 4.4 Mountain South (1877-1920): The "New South" Era > 4.4.1 Mountain South (1877-1920): The Rise of Jim Crow >