Activist State: The Myth of Laissez-Faire Economics in American History, Part I

in particular, namely the Union Pacific, the Central Pacific, and the Northern Pacific, who received over 70 million acres among themselves. Further, the Contract Labor Law of 1864 strengthened the employer's ability to break strikes with cheaper labor by allowing immigrants to sign one-year labor deals in return for their immigration to the United States.⁵

While the Civil War paved the way for pro-business legislation, the Reconstruction Era did much to contribute to what we now call corporate welfare. Eric Foner describes the national government's involvement in economic affairs in his excellent book on the period, Reconstruction: America's Unfinished Revolution:

The National Mineral Act of 1866 dispensed millions of acres of mineral-rich public land to mining companies free of charge. The Supreme Court repeatedly prevented municipalities from repudiating railroad-aid bonds even when evidence came to light that bribery accounted for their being issued. Between 1862 and 1872, the government awarded over 100 million acres of land and millions of dollars in direct aid to support railroad construction, mostly to help finance the transcontinental lines chartered during and after the Civil War. Blacks could not help noting the contrast between such largesse and the failure to provide the freedmen with land. Why, asked Texas freedman Anthony Wayne, "whilst Congress appropriate land by the million acres to pet railroad schemes...did they not aid poor Anthony and his people starving and in rags?" No one ever offered an answer.⁶

And with such government welfare came the kind of corruption most identified with the Grant Administration. State governments, too, participated in land speculation and grants, succumbing to bribery and other malfeasance in order to support business and their own political futures.

With Reconstruction coming to a political halt in 1877 and a de facto termination of Reconstruction in some areas of the country well before, a new crisis was unfolding. During the 1870s the American economy was going through significant changes and crises. The Panic of 1873 brought what was called the Great Depression, which lasted well into the late 1870s. Labor was organizing at alarming rates, demanding better pay and shorter workdays in the eight-hour day movement. Greenbackism - the demand for the elimination of bank notes in favor of national paper currency - became an intense political issue. In 1877 strikes would break out in the railroad industry all over the country. The new politics in what Mark Twain dubbed the "Gilded Age" would further the

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