With depression looming as a continual threat to the U.S. economy in the late-19th century, Americans debated how the government should respond to hard times—a question still unanswered today. At an 1878 Congressional hearing investigating “the causes of the general depression in labor and business,” most witnesses took the position that government should not interfere with the workings of the “free market.” But Texas-raised printer, socialist, and labor organizer Albert R. Parsons used his testimony to urge legislative intervention to cure the economic depression gripping the nation. In addition to calling for an eight-hour workday, Parsons challenged the notion that “freedom of contract” was possible “under our system of labor” and argued that the government should aid the people by loaning money to them, because “the people are simply borrowing money from themselves.”
Mr. (Calvin) Cowgill (Indiana): . . . Can the state control private contracts between individuals?
Mr. Parsons: It cannot under the Constitution as it exists. If you were to ask me the direct question what the State can do, I tell you that the State can do everything and anything.
The Chairman (Hendrick B. Wright of Pennsylvania): Through its constitution?
Mr. Parsons: It can change or abolish its constitution and can set up a monarchy or a republic when it gets ready to do so. With regard to the feasibility of this (eight-hour) law, Congress has the power, under the Constitution, to pass it. We ask it; we demand it, and we intend to have it. If the present Congress will not give it to us we will send men to Congress who will give it to us. . . . The eight-hour league, and the trades unions, and the other organizations of the country that are making this demand do not propose thereby to paralyze industry. They do not propose to bring an industrial confusion or a state of anarchy, or to precipitate revolution or a state of anarchy, or to precipitate revolution in this country. We are peaceable citizens, husbands, fathers. We are citizens of the State and law-abiding men. . . . The working classes simply seek to improve their condition. This is a natural feeling, and I cannot say that there is anything unnecessarily seditious or criminal in such a desire. We simply want less work and more pay, knowing that only through short hours and high wages can our condition be improved. We know this, and hence we struggle for it. We wish to get at it by degrees. . . . The first thing that we demand is a measure that will diminish the immediate power of wealth, and will remove the worst forms of poverty. The immediate power of wealth consists in this power to enforce men to submit to the terms dictated by wealth, out of which men will perform a day’s labor. That is the immediate power of wealth. This is an evil which should be removed, and we want to remove the worst disability of poverty by reducing the hours of labor; by the distributing of work that is to be done more equally among the workingmen. . . By making labor scarce we will increase its value. . . .
Mr. Parsons: . . . Under our system of labor there is no such thing as freedom of contract.
Mr. (J. C.) Sherwin (Illinois): What do you call freedom of contract?
Mr. Parsons: Freedom of contract is where the parties stand on an equality, and where either party is free to accept or reject the offer. . . .
Mr. Parsons: . . . I believe that . . . Congress should . . . relieve labor in the United States (by) . . . the passage of what is known as Wright’s supplementary homestead bill. . . . A great number of people in this city, I am sure, would avail themselves of its advantages. It would be a benefit to those who went, and a benefit to those who remained.
Mr. Sherwin: Do you think it is a good and safe principle of government, for the government to interfere by aiding men directly with money?
Mr. Parsons: I think that if the government aids the people by loaning money to them, the people are simply borrowing money from themselves. It is their own money, and surely they have a right to what they please with their own.
Mr. Sherwin: Then if that were so, the man who paid the largest tax would have the right to the largest loan.
Mr. Parsons: Yes, if this was a government of the wealthy classes, but it is a government of the people. . . .
Source: U.S. Congress, House, Investigation by a Select Committee of the House of Representatives relative to the Causes of the General Depression in Labor and Business etc, 45th Cong. 3d. Session, Mis. Doc. No. 29 (Washington D.C.: Government Printing Office, 1879).
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