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In the US, government played different roles at different stages in the industrialization of the American economy. In the earliest days of industrialization, the government did little but to provide a stable business environment and, perhaps, some infrastructure. When the Lowell mills were starting up as America’s first factories, the government was not strongly involved. It provided patent protections and law and order, but that was about it.
Later, the government became involved in creating infrastructure. The first really famous and impactful instance of this was with the building of the Erie Canal. The federal government was not involved in this, but the New York state government was. Later, the federal government became very involved in funding the growth of infrastructure when it subsidized the building of the transcontinental railroad. By doing these things, the government helped create the infrastructure that allowed raw materials to move to factories and finished goods to be distributed.
In the post-Civil War era, the government also provided a legal climate that was very conducive to business growth. The government essentially allowed businesses to do whatever they wanted to grow. The government also tended to suppress unions. These things helped business grow and industrialize.
Over time, then, the government has played a variety of roles in support of American industrialization.
In the United States, the industrial age consisted of two industrial revolutions. The first industrial revolution occurred between 1760-1840, while the second industrial revolution occurred between 1870-1914.
Although the US government mainly adopted a laissez-faire approach to business during the industrial revolution, it did act to restrict the growth of monopolies and to protect the rights of workers. To accomplish these aims, the federal government passed laws and created new bureaucracies.
For example, the federal government passed the Interstate Commerce Act (1887) and the Sherman Anti-Trust Act (1890) to protect the rights of emerging companies and workers. The objective of the Sherman Anti-Trust Act was to prevent the forming of monopolies through trusts; the law gave the government wide powers to dissolve these trusts, as they invariably stifled competition in the marketplace. It is important to note that this anti-trust legislation was the first of its kind in the United States.
Meanwhile, the Interstate Commerce Act sought to prevent railroad companies from abusing its industry advantages. At the time, many large railroad companies kept out their competition by leveraging economies of scale to charge lower prices. They also gave huge discounts to larger shippers that utilized their services. The Interstate Commerce Act sought to prevent these companies from monopolizing the railroad business.
To protect the rights of child workers, the government expanded the Department of Commerce and Labor to include the Children's Bureau in 1912. The Children's Bureau became the first American federal agency dedicated to the welfare of children and families. It was initially the brainchild of two activists, Florence Kelley and Lilian Wald. Their idea for the Children's Bureau received strong support from President Roosevelt, who convened a White House Conference on the Care of Dependent Children in 1909. Participants of this conference lobbied Congress for three years before the U.S. Children's Bureau bill was passed. President Taft signed the bill into law on April 8, 1912.
In 1915, the Bureau focused its efforts on pressuring Congress to protect child workers. At the time, many children were forced to work long hours while being paid outrageously low wages for doing so. Additionally, these children were also exposed to unsafe working conditions in the factories. The Bureau's goal was to end the practice of child labor altogether, and it took many years before some of its objectives were accomplished. One of its crowning achievements was the Fair Labor Standards Act, which was passed into law in 1938: it removed children under 14 years old from the labor force altogether. The Bureau made sure that companies complied with the law, and it also regulated the participation of children under 18 years old in the labor market.
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