Indians returned to the Pine Ridge agency and surrendered their arms.

For several years the subject of railway management in its relation to interstate commerce was widely discussed, and in March, 1885, the Senate adopted a resolution appointing a committee to investigate the matter. This committee committee collected a vast amount of information and submitted its report to Congress on January 18, 1886. It summed up the testimony as follows:

"The complaints against the railroad system of the United States expressed to the committee are based upon the following charges: (1) That local rates are unreasonably high, compared with through rates; (2) that both local and through rates are unreasonably high at noncompeting points, either from absence of competition or in consequence of pooling agreements that restrict its operation; (3) that rates are established without apparent regard to the actual cost of the service performed, and are based largely upon what the traffic will bear; (4) that unjustifiable discriminations are constantly made between individuals in the rates charged for like service under similar circumstances; (5) that improper discriminations are made between articles of freight and branches of business of a like character, and between different quantities of the same class of freight; (6) that unreasonable discriminations are made between localities similarly situated; (7) that the effect of the prevailing policy of railroad management is, by an elaborate system of secret special rates, rebates, drawbacks, and concessions, to foster monopoly, to enrich favored shippers, and to prevent free competition in many lines of trade in which the item of transportation is an important factor; (8) that such favoritism and secrecy introduce an element of uncertainty into legitimate business that greatly retards the development of our industries and commerce; (9) that the secret cutting of rates, and the sudden fluctuations that constantly take place, are demoralizing to all business except that of a purely speculative character, and frequently occasion great injustice and heavy losses; (10) that in the absence of national and uniform legislation the railroads are able, by various devices, to avoid their responsibility as

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carriers, especially on shipments over more than one road, or from one state to another, and that shippers find great difficulty in recovering damages for the loss of property or for injury thereto; (11) that railroads refuse to be bound by their own contracts, and arbitrarily collect large sums in the shape of over charges, in addition to the rates agreed upon at the time of shipment; (12) that railroads often refuse to recognize or be responsible for the acts of dishonest agents acting under their authority; (13) that the common law fails to afford a remedy for such grievances, and that in case of dispute the shipper is compelled to submit to the decision of the railroad manager or pool commissioner or run the risk of incurring further losses by greater discriminations; (14) that the differences in the classification in use in various parts of the country, and sometimes for shipment over the same road in different directions, are a fruitful source of misunderstandings, and are often made a means of extortion; (15) that a privileged class is created by the granting of passes, and that the cost of the passenger service is largely increased by the extent of this abuse; (16) that the capitalization and bonded indebtedness of the roads largely exceed the actual cost of their construction or their present value, and that unreasonable rates are charged in the efforts to pay dividends on watered stock and interest on bonds improperly issued; (17) that railroad corporations have improperly engaged in lines of business entirely distinct from that of transportation, and that undue advantages have been afforded to business enterprises in which railroad officials are interested; (18) that the management of the railroad business is extravagant and wasteful, and that a needless tax is imposed upon the shipping and traveling public by the unnecessary expenditure of large sums in the maintenance of a costly force of agents engaged in a reckless strife for competitive business."*

On the basis of this report Congress enacted a law which was approved on February 4, 1887, during the second session of the Forty-ninth Congress, commonly known as the "Interstate Commerce Act" which became effective on April 3, 1887. This act established an Interstate Commerce Com

*Edward A. Moseley, article Interstate Commerce, in Encyclopedia Americana.

mission of five members vested with authority to regulate such matters pertaining to interstate commerce as were considered detrimental to public welfare, and to require all railroads to submit sworn reports of their financial conditions and operations on a uniform plan and for a uniform period.*

The financial operations of the government during this time had not been particularly noteworthy. The income of the government far exceeded its expenditures; in 1885, the surplus was over $60,000,000, in 1886, over $90,000,000, and in 1888, it had reached $119,612,115. The treasury officials, therefore, in order to avoid a direct contraction of the currency through an accumulation of money in the treasury, began to purchase outstanding bonds. In 1886, these purchases amounted to $50,000,000; in 1887, $125,000,000; and in 1888, $130,000,000.

President Cleveland, therefore, in his annual message to the Fiftieth Congress, December 6, 1887, dwelt chiefly on the question of revising the tariff. He called attention to the enormous surplus in the treasury and urged Congress to reduce taxation.†

*Burton, Sherman, pp. 337-343. For the various interstate commerce bills introduced see McPherson, Handbook of Politics, 1880, pp. 70-72; 1882, pp. 125-129; 1886, pp. 10-26, 136-146, 233, 234; 1888, pp. 7-13.

Richardson, Messages and Papers, vol. viii., pp. 580-591; McPherson, Handbook of Politics, 1888, pp. 91-96; G. F. Parker, The Writings and Speeches of Grover Cleveland, pp. 72-87; J. L. Whittle, Grover Cleveland, pp. 88-109; Hensel, Cleveland, pp. 268-284, 298-320; Stoddard, Cleveland, pp. 246-253.

A bill reducing the duties on many articles was therefore prepared and introduced in the House by Roger Q. Mills, of Texas, who called it up for consideration, April 17, 1888. A long debate followed, known as "the great tariff debate of 1888," but nothing of a definite nature was done until after the party conventions for nominating presidential candidates had been held. The debate in Congress then became largely political, for the chief issue in the compaign was the tariff, and speeches were made seemingly for the purpose of prolonging

the session without enacting a bill until after the election. This would thus enable the politicians to enact a law in accordance with the issue of the election.

The bill passed the House on July 21, by a vote of 162 to 114, and was referred to the Senate. On October 3 the Senate Committee on Finance reported its revision of the bill, the chief feature of the revision being a reduction of 50 per cent. in the duty on sugar. As the debate in the Senate was not finished at the close of the session, October 19, the Senate Finance Committee took the matter under consideration. In the meantime Harrison was elected President. When Congress again convened the matter was taken up in the Senate and debated nearly every day until January 22, 1889, when the amended bill was adopted as a substitute for the Mills bill by a vote of 32 to 30. The House then again

took up the bill, but nothing further was done by that Congress.*

These years has been years of great prosperity, tested by the usual rules.† Profits averaged well upon a large amount of business; the consumption of iron more than doubled; and after 1885, confidence in railroad enterprises having been restored, capital was freely spent in railroad construction, 12,982 miles of railroad being constructed in 1887.||

But labor troubles had been intermittent and some of them were very formidable. The working classes had combined into unions for the purpose of combatting the power of the great industrial corporations, but the local unions found themselves powerless. A local society, the "Knights of Labor," was then developed into a national organization. This society had only 52,000 members in 1883, but in 1886 the membership had grown to 500,000. The object of this order was to unite all classes and kinds of labor into one large and powerful organization, so that should a corporation or firm oppress its employees, the entire membership of the organization would refuse to buy the products of such

*Stanwood, Tariff Controversies, vol. ii., pp. 226-242; Dewey, Financial History, pp. 423-425; Sherman, vol. ii., pp. 1004-1010; Burton's Sherman, pp. 344-348; McPherson, Handbook of Politics, 1888, pp. 147-166; 1890, pp. 169-185.

For details see David A. Wells, Recent Economic Changes, chap. iv.

See Reports of the American Iron and Steel Association for April, 1887, and May, 1888.

I Lauck, Panic of 1893, pp. 3–4, giving a table showing the construction by States, compiled from Poor's Manual of Railroads.

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firm or corporation or to deal with those who bought or sold them. Thus the boycott was its principal weapon.

These boycotts increased in number and effectiveness, but their very effectiveness wrought harm to the labor cause, for the local assemblies, after one or two successes, went beyond the control of the central organization. A system of local dictators sprang up and these "rings" became tyrannical as well as irresponsible, ordering strikes whenever it so suited them, with or without cause, and in consequence business was in a very unsettled state during 1886 and 1887. Strike after strike took place.†

In May, 1886, large labor demonstrations took place in several cities, particularly in Chicago, where about 30,000 men paraded the streets. The principal demand was for a law restricting the hours of labor to eight a day, but this the employers were unwilling to concede. These demonstrations were peaceable at first, but later developed into turbulent mobs.

In Chicago, the McCormick Reaper Works was attacked, but the mob was finally driven off by the police after considerable damage had been done to the property and many people had been injured. The culmination of the

* Carroll D. Wright, Industrial Evolution of the United States, p. 246 et seq., and the same author's article on the Knights of Labor, in the Quarterly Journal of Economics (January 1887). See also Richard T. Ely, The Labor Movement in America, pp. 75-88.

See the Report of the American Iron and Steel Associations for April 1887. See also Wright's Industrial Evolution, p. 297 et seq.