“Malefactors of Great Wealth”
Theodore Roosevelt looks on with glee as his commerce secretary puts the screws to trusts
(Puck magazine, Alamy Stock Photo)
By Burton W. Folsom Jr.
This article appears in the Summer 2026 issue of the Coolidge Review. Request a free copy of a future print issue.
The early twentieth century marked the height of the progressive movement, which sought to check the power of free markets and business. To understand what progressives did in the early 1900s, we need to understand what happened in the late 1800s, the period often called the Gilded Age.
After the Civil War, the United States experienced spectacular economic growth. The industries leading the way included railroads, oil, and steel. This expansion made the United States a global economic power. The profits of those businesses enriched the wealthiest—and the average American. That’s in part because bigger, more efficient businesses can offer cheaper prices. Between 1870 and 1880, for example, railroad freight prices fell by half. By 1890, they had fallen by half again. And by 1900, they had been cut nearly in half once more.
Similar advances occurred in many other industries. In the Gilded Age the United States saw perhaps the greatest burst of invention and economic development any country has ever experienced.
Consider the innovations to emerge in late nineteenth-century America: typewriters, the telephone, and, from Thomas Edison alone, the phonograph, the motion picture camera, the light bulb, and electric power generation and distribution. In the 1890s the Wright brothers and Henry Ford began experiments that would produce, in the early 1900s, the first powered flight and the first mass-produced automobile.
That such developments so transformed the lives of ordinary Americans is impressive. That they did it within a single generation is stunning.
Progressive Backlash
In the early 1900s, many Americans celebrated the innovations and rising prosperity that came under free markets and limited government. Calvin Coolidge observed the dynamism of a less-regulated America as a young lawyer and civil servant in Northampton, Massachusetts.
But others took a different view. Progressives of both parties, including Republican Theodore Roosevelt and Democrat Woodrow Wilson, argued that the rise of super-industrialists posed a danger.
In 1907, President Roosevelt declared his determination to “punish certain malefactors of great wealth.” He had in mind figures such as Standard Oil founder John D. Rockefeller, America’s first billionaire; railroad magnates including James J. Hill; and Wall Street tycoons like J. P. Morgan. To Roosevelt and other progressives, these men had become so powerful that they threatened to control Americans through concentrated economic influence.
Progressives responded by using government to check the power of American business leaders.
Federal Interference
Progressives relied on three tools to restrain business.
The first was the Sherman Antitrust Act. Passed in 1890, this law was used sparingly for a decade. Government enforcement proved difficult in part because the act’s language was vague: the Sherman Act outlawed any contract or “combination” in “restraint of trade or commerce.” In 1895 the U.S. Supreme Court interpreted the law narrowly. In a case involving a sugar-refining business, the Court held that the Sherman Act did not apply to manufacturing. Theodore Roosevelt later wrote in his autobiography that the ruling produced “governmental impotence.”
But soon after entering the White House in 1901, Roosevelt seized on the Sherman Act to engage in “trust busting.” He directed the Justice Department to dissolve the Northern Securities Company, a railroad holding company that Hill had created. This time, the Supreme Court upheld the government’s intervention. Referring to the 1895 ruling, Roosevelt crowed, “This decision I caused to be annulled by the court that had rendered it,” giving the federal government the power “to deal effectively with the trusts.” Roosevelt’s Justice Department soon targeted Standard Oil, which was eventually broken into thirty-four separate companies.
The second tool progressives used against business was the Interstate Commerce Commission. Although railroad rates had declined dramatically for decades, progressives objected to the way those rates were structured. Railroads tended to give the largest discounts to customers that transported the most goods. The railroads still profited from these volume discounts, and smaller customers still paid much lower rates than they had earlier. But progressives argued that it was unjust for smaller shippers to pay higher rates than larger businesses.
In his 1905 annual message to Congress, President Roosevelt demanded legislation to put “a complete stop to rebates in every shape and form.” The 1906 Hepburn Act accomplished that goal. The law was expanded to give the Interstate Commerce Commission the power to inspect railroads’ financial records, eliminate targeted rebates, and set “just and reasonable” rates. In other words, the federal government now had significant pricing power over railroads, America’s largest business sector.
The progressives’ third tool was the federal income tax. In 1909 Congress approved the resolution for a constitutional amendment to establish an income tax. The Sixteenth Amendment took effect in 1913, after three-quarters of the states had ratified it. That was the year Coolidge was elected president of the Massachusetts State Senate.
From the beginning, the tax system was progressive, imposing higher rates on larger incomes. In 1913 most Americans paid no federal income taxes, while the top marginal rate—for income exceeding the equivalent of $16 million in 2026 dollars—was only 7 percent. But within five years, tax rates had soared, with the top bracket paying 77 percent.
A Different Vision for America
Progressives like Theodore Roosevelt celebrated their use of government power to curb the influence of business leaders. But other observers questioned the interventionist approach—including Coolidge.
In January 1914 the Massachusetts politician used his opening speech as senate president to make clear his own views. In the address, Coolidge advised, “Don’t expect to build up the weak by pulling down the strong.”
Coolidge had lived through the age of progressive reform. He witnessed what government could do in the name of fairness, and he did not like what he saw. Given how Washington expanded its control over American life over the next century, his warning proved prescient.
Burton W. Folsom Jr. is professor emeritus of history at Hillsdale College. He is the author of several books, including New Deal or Raw Deal? and The Myth of the Robber Barons.
This article appears in the Summer 2026 issue of the Coolidge Review. Request a free copy of a future print issue.