Contested Meanings of Freedom: Workingmen's Wages, the Company Store System and the Godcharles v. Wigeman Decision

Laura  Phillips Sawyer

Article | Journal of the Gilded Age and Progressive Era

Contested Meanings of Freedom: Workingmen's Wages, the Company Store System and the Godcharles v. Wigeman Decision

Abstract

In 1886, the Pennsylvania Supreme Court struck down a law that prohibited employers from paying wages in company store scrip and mandated monthly wage payments. The court held that the legislature could not prescribe mandatory wage contracts for legally competent workingmen. The decision quashed over two decades of efforts to end the "truck system." Although legislators had agreed that wage payments redeemable only in company store goods appeared antithetical to the free labor wage system, two obstacles complicated legislative action. Any law meant to enhance laborers' rights could neither favor one class over another nor infringe any workingman's ability to make voluntary contracts. These distinctions, however, were not as rigid and laissez faire-oriented as depicted by conventional history. Labor reformers argued that principles of equity must supplement these categories of class legislation and contract freedom. This essay explores how legal doctrine helped both sides of the anti-truck debate articulate the contested meanings of liberty. Ultimately, the Godcharles ruling enshrined the specialness of workingmen's labor contracts and rejected the use of equity principles to justify contract regulations, but the controversy also informed future labor strategies, especially the turn to state police powers as the rubric under which workers' safety, morals, and health could be protected.

Keywords: Wages; Rights; Fairness; Lawsuits and Litigation; Laws and Statutes; Pennsylvania;

Format: Print

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Citation:

Phillips Sawyer, Laura. "Contested Meanings of Freedom: Workingmen's Wages, the Company Store System and the Godcharles v. Wigeman Decision." Journal of the Gilded Age and Progressive Era 12, no. 3 (July 2013): 285–319.

The key pieces of antitrust legislation in the United States—the Sherman Antitrust Act of 1890 and the Clayton Act of 1914—contain broad language that has afforded the courts wide latitude in interpreting and enforcing the law. This article chronicles the judiciary’s shifting interpretations of antitrust law and policy over the past 125 years. It argues that jurists, law enforcement agencies, and private litigants have revised their approaches to antitrust to accommodate economic shocks, technological developments, and predominant economic wisdom. Over time an economic logic that prioritizes lowest consumer prices as a signal of allocative efficiency—known as the consumer welfare standard—has replaced the older political objectives of antitrust, such as protecting independent proprietors or reducing wealth transfers from consumers to producers. However, a new group of progressive activists has again called for revamping antitrust so as to revive enforcement against dominant firms, especially in digital markets, and to refocus attention on the political effects of antitrust law and policy. This shift suggests that antitrust may remain a contested field for scholarly and popular debate.

Working Paper | HBS Working Paper Series | 2019

Voting Trusts and Antitrust: Rethinking the Role of Shareholder Rights and Private Litigation in Public Regulation, 1880s to 1930s

Naomi R. Lamoreaux and Laura Phillips Sawyer

Scholars have long recognized that the states’ authority to charter corporations bolstered their antitrust powers in ways that were not available to the federal government. But they have also argued that the growth of large-scale enterprises operating in national and even international markets forced states to stop prosecuting monopolistic combinations out of fear of doing serious damage to their domestic economies. Our paper has revised this conventional view by focusing attention on the lawsuits that minority shareholders brought against their own companies in state courts of law and equity, especially suits that challenged the anticompetitive use of voting trusts. Historically judges had been reluctant to intervene in corporations’ internal affairs and had displayed a particular wariness of shareholders’ private actions. By the end of the 19th century, however, they had begun to revise their views and to see shareholders’ private actions as useful checks on economic concentration. Although the balance between judges’ suspicion of and support for shareholders’ activism shifted back and forth over time, the long-run effect was to make devices like voting trusts unsuitable for the purposes of economic concentration.

Keywords: voting trusts; antitrust; Business and Shareholder Relations; Lawsuits and Litigation; History; United States;

Citation:

Lamoreaux, Naomi R., and Laura Phillips Sawyer. "Voting Trusts and Antitrust: Rethinking the Role of Shareholder Rights and Private Litigation in Public Regulation, 1880s to 1930s." Harvard Business School Working Paper, No. 19-109, May 2019. View Details

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Contested Meanings of Freedom: Workingmen's Wages, the Company Store System and the Godcharles v. Wigeman Decision

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