In elevating liberty of contract from one element of freedom to its very essence, the courts played a significant role. The Fourteenth Amendment had empowered the federal government to overturn state laws that violated citizens’ rights. By the 1880s, liberty of contract, not equality before the law for former slaves, came to be defined as the amendment’s true meaning. State and federal courts regularly struck down state laws regulating economic enterprise as an interference with the right of the free laborer to choose his employment and working conditions, and of the entrepreneur to utilize his property as he saw fit. For decades, the courts viewed state regulation of business—especially laws establishing maximum hours of work and safe working conditions—as an insult to free labor.
The Ironworkers’ Noontime, painted in 1880-1881 by Thomas Anshutz, an artist born in West Virginia, whose family owned iron factories. Unlike artists who depicted factories and workers earlier in the century, Anshutz does not try to reconcile nature and industry (there are no reminders of the natural environment). Nor does he emphasize the dignity of labor. The workers seem dwarfed by the factory, and some seem exhausted.
At first, the Supreme Court was willing to accept laws regulating enterprises that represented a significant “public interest.” In Munn v. Illinois, an 1877 decision, it upheld the constitutionality of an Illinois law that established a state board empowered to eliminate railroad rate discrimination and set maximum charges. Nine years later, however, in Wabash u Illinois, the Court essentially reversed itself, ruling that only the federal government, not the states, could regulate railroads engaged in interstate commerce, as all important lines were. The decision led directly to the passage of the Interstate Commerce Act of 1887. But on virtually every occasion when cases brought by the ICC against railroads made their way to the Supreme Court, the company emerged victorious.
The courts generally sided with business enterprises that complained of a loss of economic freedom. In 1885, the New York Court of Appeals invalidated a state law that prohibited the manufacture of cigars in tenement dwellings on the grounds that such legislation deprived the worker of the “liberty” to work “where he will.” Although women still lacked political rights, they were increasingly understood to possess the same economic “liberty,” defined in this way, as men. On the grounds that it violated women’s freedom, the Illinois Supreme Court in 1895 declared unconstitutional a state law that outlawed the production of garments in sweatshops and established a forty-eight-hour work week for women and children In the same year, in United States v. E. C. Knight Co., the U.S. Supreme Court ruled that the Sherman Antitrust Act of 1890, which barred combinations in restraint of trade, could not be used to break up a sugar refining monopoly, since the Constitution empowered Congress to regulate commerce, but not manufacturing. Their unwillingness to allow regulation of the economy, however, did not prevent the courts from acting to impede labor organization. The Sherman Act, intended to prevent business mergers that stifled competition, was used by judges primarily to issue injunctions prohibiting strikes on the grounds that they illegally interfered with the freedom of trade.
In a 1905 case that became almost as notorious as Bred Scott and gave the name “Lochnerism” to the entire body of liberty of contract decisions, the Supreme Court in Lochner v. New York voided a state law establishing ten hours per day or sixty per week as the maximum hours of work for bakers. The law, wrote Associate Justice Rufus Peckham for the 5-4 majority, “interfered with the right of contract between employer and employee” and therefore infringed upon individual freedom. By this time, the Court was invoking “liberty” in ways that could easily seem absurd. In one case, it overturned as a violation of “personal liberty” a Kansas law prohibiting “yellow-dog” contracts, which made nonmembership in a union a condition of employment. In another, it struck down state laws requiring payment of coal miners in money rather than paper usable only at company-owned stores. Workers, observed mine union leader John P. Mitchell, could not but feel that “they are being guaranteed the liberties they do not want and denied the liberty that is of real value to them.”