Concern Intensifies in 1910: What or Whom to Blame?

Abstract

President William Howard Taft concluded his annual message to Congress, on December 7, 1909, with a mixed assessment of rising prices: “We have just garnered a harvest unexampled in the market value of our agricultural products. The high prices which such products bring mean great prosperity for the farming community, but on the other hand they mean a very considerably increased burden upon those classes in the community whose yearly compensation does not expand with the improvement in business and the general prosperity.” Lest the rising cost of living reflect badly on the Republicans’ recently passed Payne-Aldrich Tariff, Taft observed that price increases were worldwide and argued that other factors—expanded gold production, population increase, a “more expensive mode of living,” and failure to increase agricultural production per acre—were to blame. Having absolved the tariff, Taft proposed no solution.

President William Howard Taft concluded his annual message to Congress, on December 7, 1909, with a mixed assessment of rising prices: “We have just garnered a harvest unexampled in the market value of our agricultural products. The high prices which such products bring mean great prosperity for the farming community, but on the other hand they mean a very considerably increased burden upon those classes in the community whose yearly compensation does not expand with the improvement in business and the general prosperity.” Lest the rising cost of living reflect badly on the Republicans’ recently passed Payne-Aldrich Tariff, Taft observed that price increases were worldwide and argued that other factors—expanded gold production, population increase, a “more expensive mode of living,” and failure to increase agricultural production per acre—were to blame.¹ Having absolved the tariff, Taft proposed no solution.

Taft can hardly have anticipated how divisive food prices would soon become. Early 1910 saw an explosion of alarm among city dwellers. Farm spokesmen voiced a sense of vindication now that their prices had risen, laced with resentment at urbanites’ alarm. With autumn elections pending, the high cost of living boded ill for Republicans as the party in power. Although rising prices had aroused intermittent concern already, 1910 marked a new level of agitation. Progressive-Era measures sometimes exaggerate, but recent estimates show an above-average consumer-price increase for 1910 (4.6 percent above 1909).²

Signs of farm prosperity and nonfarm anxiety were evident in the weeks after Taft’s message. “Record Prices for Hogs” reported the New York Times, December 29. On December 31, the Hand in Hand restaurants, which offered five-cent meals in poor districts of Manhattan, reported being forced by rising meat prices to charge six cents. Humorist Finley Peter Dunne’s Mr. Dooley joked that he expected to hear of safecrackers making off with a pound of butter and a scuttle of coal. On January 1, 1910, Bradstreet’s index reported reaching an all-time high.³

Politicians returned from holiday in an agitated mood. On January 2, some 40 Washingtonians, mainly congressmen and their wives, met to plan a meat boycott. When Congress reconvened, representatives jostled to issue calls for investigation. The House gave a nervous Ohio Republican (Albert Douglas, who would lose his seat in 1910) 30 minutes to complain that high prices were forcing some laborers’ families to forego meat. Democrat Cordell Hull proposed a study designed to blame the sugar and meat trusts and the Republican tariff. Picking the safest target, Agriculture Secretary James Wilson promised investigation of middlemen and price spreads between farmers and consumers.⁴

In Ohio, an industrialized state with a significant farm sector, agitation threatened to open the rural/urban divide, but outrage centered on middlemen. On January 12, the Democratic governor joined Republican legislators to back a state investigation of food prices. Only eight representatives dissented, one protesting that his constituents “are getting top prices for all their produce and are satisfied.” Cleveland workingmen began a meat boycott that claimed a 50 percent cut in city meat sales by January 18, and from there it spread. Belatedly, farm organizations tried to block the investigating committee’s $5000 budget, complaining that agitation lowered their prices. Committee supporters had to settle for $2500 on a divided vote.⁵

Nationwide, protest peaked in late January, in what one business writer described as “the great agitation, partaking of the proportions of a National revolt, against the high prices of food.” The protest movement drew in clubwomen, members of the salaried middle class, and workers but lacked national direction. Typical reports gave impressive but vague numbers such as 75,000 in the Pittsburgh area who were “estimated” by January 21 to have pledged to abstain from meat for 30 days. Even well-heeled clubwomen found higher prices unconscionable. Anita Comfort-Brooks, president of New York’s Gotham Club, complained that a small restaurant steak, formerly $0.75, now cost $1.25; she now lived “almost entirely on cake and candy.” Some potential supporters questioned the boycott. Harvey Wiley, the pure-food crusader, grumped that vegetarianism would breed “a race of mollycoddles.” Central labor unions in New York and Boston warned that boycotting meat would merely aid other food trusts. But elsewhere, in New Haven, Atlanta, Pittsburgh, St. Louis, and Omaha, unions reportedly signed up en masse. In Boston and New York, women’s clubs took the lead, and Pittsburgh’s Congress of Women’s Clubs suggested extending the boycott to butter and eggs.⁶

Boycotts were short-term affairs, hard to sustain in the face of mixed results. Initially, wholesale and retail meat, egg, and butter prices were, in a business journalist’s euphemism, “disorganized” and fell in numerous cities. Cattle raisers responded by withholding shipments and distributors placed perishables in cold storage. Protestors could often pressure local retailers into lowering prices a few cents, but with supplies short, prices rallied at wholesale by early February. Abstainers appeared to lapse, and news reports thinned out. Noting a March 17 announcement from Cleveland that the “meat strike” was “off,” a Times editorial declared the boycott a failure. Still, in April and May boycotts recurred in ethnic enclaves.⁷

Awkwardly for politicians with mixed constituencies, farmers regarded high prices for food products quite differently from protesting consumers. Although “contented farmers” seems an oxymoron, the years 1910–1914 have conventionally been labeled the “golden age of American agriculture,” the benchmark period that farmers later used when seeking “parity” prices for farm products. As the terms of trade swung in farmers’ favor, their spokesmen adopted a tone of vindicated superiority. Texas Governor O.B. Colquitt proclaimed: “It is the farmer who produces the real wealth of the Nation…. Of course the classes of our citizenship who produce no original wealth are affected by the high cost of living, but the general results of the high cost of living are good for the country at large.”⁸

This triumphalism was commonly tinged with bitter memories and continuing resentment of high urban living standards. Henry Wallace, a leading agricultural journalist from Iowa, complained that the farmer was “generally until about twelve years ago, forced to sell his products at and often under the cost of production. This gave the world cheaper food than it will ever see again, and made possible the wonderful growth of great cities.” Only now, in 1910, were agricultural prices approaching “normal.” The secretary of a Long Island agricultural society wrote Taft’s Secretary of Agriculture that the real problem in cities was the “Cost of High Living.” Even in a “laboring section” of New York, “consumers wanted either porter-house or sirloin stakes [sic].” Decrying boycotts by city clubwomen, a Dutchess County farmwoman complained that farmers can “put no ban on” opera, theaters, and lavish banquets, “but the great ladies can ride in their grand motors from house to house downing the farmer.” Closely related were complaints that consumers demanded a wastefully expensive distribution system. The Long Island farmer scoffed that “the grocer was expected to come to each house [and deliver] orders of 5c. worth of butter, 7c. worth of sugar, and 10c. worth of potatoes or apples.”⁹

Needing to placate consumers without offending farmers, politicians blamed the meat trust, assembled grand juries, and held hearings. Denying Democratic claims that American beef was cheaper in London than in New York because British free trade forced it to compete with Argentinian beef, Senator Henry Cabot Lodge (R-MA) blamed American high prices on the Chicago packers. The Justice Department convened a Chicago grand jury. Massachusetts’ Republican legislature authorized a study of the cause of “high prices of the necessaries of life” by a five-man commission. Lodge chaired a Senate investigating committee to consider wages and prices.¹⁰

Ohio’s bipartisan committee, which reported April 15, produced a cautious document that picked a safe target. An abundant 1909 harvest should have lowered prices; instead, prices were “exorbitant,” thanks to “the Trusts, their auxiliaries and smaller imitators.” It asserted that “all competitors engaged in manufacturing or distributing food stuffs have formed associations, pools, or leagues numbering more than 50,000 … from the holding companies organized under the New Jersey law down to the loose association of retail grocers officered and managed by some young lawyer.” Nearly all set minimum prices. Quotations from the butter board in Elgin, Illinois, provided price leadership for dealers nationwide. The packers controlled pork prices. And cold storage enabled speculators to hold eggs for higher prices. Proposed remedies included controls on food storage, regulation of price-making boards, and limits on profits analogous to usury laws. As for farmers, the committee declared that “the limit of profitable production was reached in 1909, and any material increase will bring disaster to the producers as it did in the Nineties.”¹¹

The Massachusetts Republicans’ Commission on the Cost of Living produced a detailed report that singled out no major villains. The commission noted that tariffs protected Massachusetts’ industries but suggested removing duties on food imports. As for trusts, the commission conceded potential for abuse of corporate power but asserted that trusts typically sought steady rather than spectacular profits. Regarding middlemen, the commissioners agreed that “a long line of commission men, produce merchants, jobbers, hucksters, retailers and what not, simply passing goods from hand to hand, like a bucket brigade at a fire, is not only inefficient and wasteful, but very costly.” The report also decried consumer-oriented commercialism: The shift toward packaged goods allowed manufacturers to disguise price increases by shrinking the contents, while advertising accounted for one-quarter of a packaged cereal’s price. And production of automobiles was condemned as wasteful luxury.¹²

With other causes minimized, the commission concluded: “The primary cause of the world-wide advance of prices since 1897 is the increase of the gold supply, which has reduced the purchasing power of money … and in the United States has served as the basis for a vast extension of credit.” This conclusion exonerated the Republicans’ tariff, but the expansion of gold and credit had an air of inevitability, precluding direct remedies. Instead, the report proposed mitigation: better regulation of packaging, weights and measures, and cold storage; promotion of municipal markets; a trolley freight service to link farmers and consumers; and attempts to lure immigrants into agricultural employment.¹³ These modest suggestions were unlikely to excite voters. The party in 1910 lost the governorship of a state that normally voted Republican.

Lodge’s Senate committee relied on information from government departments, plus rambling hearings. It issued a long majority (Republican) report and a shorter minority (Democratic) one.¹⁴

Unsurprisingly, the majority dismissed any tariff effect on prices. Rather, world prices had risen and US prices were moving closer to world levels. The Republicans avoided blanket indictment of trusts, although they echoed narrower complaints about current business practices—that clothing manufacturers shifted to lighter-weight fabrics without altering prices, that widely advertised brands of food shrank their package contents, and that middlemen used cold storage to raise prices. The committee’s Republicans recognized the “present abnormal production of gold” as a contributing factor in “forcing up” prices yet denied “that this increase is the dominant or even a principal cause of the rise of prices.” Instead, they declared “farm conditions” to be “the most important cause.” An account of soaring production costs designed to exonerate their agrarian constituency held that these costs “have risen very rapidly during the past ten years, wages of farm hands have increased … about 60 per cent, and the original investment necessary to secure land has practically doubled.… The richness of the virgin soil is disappearing and in many localities the crop average can be maintained only by the use of expensive fertilizers.” Thus, farmers’ prices were fully justified, nor were Republican policies to blame.¹⁵ Except for a bill regulating cold storage, the majority report offered no remedies.

The Democratic report called for action: lower the tariff and make trusts’ abusive practices illegal. Trust formation, Democrats charged, was hugely accelerated by the Republicans’ 1897 Dingley Tariff. Appealing to rural consumers, the Democrats concentrated on clothing prices rather than food. In maudlin tones the report declaimed that the prohibitive cost of “woolen garments and blankets” had “added its thousands to the silent tenants of the cemeteries and graveyards.”¹⁶

Politically motivated investigations of rising prices produced little consensus. Four reports singled out four different primary causes: the exactions of middlemen and monopolists; monetary inflation from increased gold production; rising costs of farm production; and tariffs that sheltered price gougers.

By the time these reports appeared, the high cost of living had established itself as a major public problem. In March, Current Literature’s editors declared that “nearly the whole American people developed last month into one stupendous debating society” and discussed “about one thousand and one various and diverse causes of high prices.” Another magazine writer observed that rising prices of manufactured products over the past decade had “not evoked anything like the temper now raging over the recent advances in meat, butter, eggs, vegetables and other necessities of living.” Historians have tended to overlook the suddenness and pervasiveness of this new concern. Starting in 1910, many more magazine articles than before discussed and bemoaned the high cost of living. The Readers’ Guide to Periodical Literature indexed 37 articles on “Prices” or the “Cost of Living” in 1908, 44 in 1909—and 128 in 1910. After declining to 45 in 1911, the number rebounded to 112 in 1912 and 119 in 1913. A search for the phrase “cost of living” in American Periodical Series online netted 93 references for 1908, 124 for 1909, then 376 for 1910, 212 for 1911, 332 for 1912, and 383 for 1913.¹⁷

Writing for the public or each other, academic economists often began with gold production. A leading voice was Irving Fisher of Yale University. Fisher asserted that the prodigious growth in gold production since 1896 had led to “inflation” of money and credit. With the price of gold in dollars fixed by the US government and similarly pegged to other gold-standard currencies around the world, increased gold production could not lower the price of gold but instead inflated the volume of currencies based on gold. Furthermore, the banking system issued credit based on fractional gold reserves, multiplying the effect of increased gold. This credit took the form of bank deposits subject to checking. These were spent, the proceeds redeposited, a large fraction of the new deposits lent out again, and so forth, greatly increasing the volume of spendable funds. When asked in 1913 why the cost of living was increasing, all but two of twelve leading economists assigned “a more or less prominent part” to world gold production and eight considered it “a factor of prime importance.”¹⁸

This partial professional consensus converted only a minority of the public. As an editorial writer observed sarcastically, the gold-based explanation was unsatisfyingly impersonal: “Popular resentment of the increased cost of living has given rise to a determination to find something or preferably some person that can be blamed for it. The excessive production of gold … is not regarded by the masses as a satisfactory explanation because William H. Seward and Cecil Rhodes are both dead and cannot be punished for their part in opening up the gold fields of Alaska and the Transvaal. Consequently the people direct their indignation against those concerned in the preparation and preservation of food on a large scale.” When commodity prices dipped in late 1910, the Chicago Record-Herald mocked believers that prices “must go on increasing, because of the superabundance of gold” and praised “the common-sense view” that multiple factors determined the cost of living—“combination, overproduction [sic], extravagance, waste, the multiplicity of middlemen, neglect of farming as compared to other industries, etc.”¹⁹

Problems with American agriculture enabled businessmen to disclaim responsibility for high prices. William Brown, president of the New York Central Railroad, blamed “failure to increase the product of our farms in anything like the ratio of the increase in consumption.” Frank Vanderlip, president of National City Bank, charged that “ignorance and inefficiency among the country’s farmers rather than big business make up the fundamental cause of the high cost of living.”²⁰

Railroad magnate J.J. Hill voiced similar warnings, but his most notorious contribution to public debate was the jibe widely credited to him: “It is not the high cost of living; it is the cost of high living for which the people must pay.” Given the source, Hill’s quip was mocked as well as mimicked. Yet with remarkable frequency businessmen took to the public print to echo Hill. The mining magnate S.R. Guggenheim provocatively declared that the wage earner “is more extravagant in proportion to his earnings than the multimillionaire.”²¹

Much masculine complaint about lack of thrift targeted wives. Economist Simon Patten grumbled, “The wife no longer contributes to the family income by creating values, and with the increased standard of elaborate dressing, she is often its chief burden.” Archbishop Ireland of St. Paul declared that “the American woman’s ignorance of housekeeping and the neglected art of cooking has caused many of the complaints of the high cost of living.”²²

Critics of extravagance perhaps sensed a sore point. Conceivably, anxieties about the high cost of living reflected difficulties prosperous Americans had in adapting to new commercially provided luxuries and conveniences. Some contemporary writers, as historian Daniel Horowitz has shown, sought to assure middle-class readers that prosperity brought praiseworthy possibilities for family “advancement,” including charity, education, and cultivation of mind and spirit. Home economists, though, found renewed need for thrift. Ellen H. Richards, the field’s founding authority, wrote in 1910 that amid the “current unrest” over rising prices “the complainants do not stop to think that the ever-increasing standards of style of living (not necessarily right standards of life) are causing greater demands” for products.²³ However, advice to seek advancement or pursue thrift did not stop the search for miscreants to blame for high prices.

Market dominance by large-scale food processors stirred fears of price-gouging. Meatpackers Armour and Swift were by 1917 the nation’s fourth and fifth largest industrial firms by assets and three other packers ranked among the top one hundred, as did two sugar refiners, National Biscuit Company, and Borden’s Condensed Milk. Muckraking journalist Samuel Hopkins Adams recognized the contention that many trusts’ prices had risen more slowly than average prices but insisted, “They never sell as low as the normal price.”²⁴

Critics of the trusts believed that monopoly power enabled them to exact high prices and the necessity of paying dividends on watered stock impelled them to do so. Stocks in the early twentieth century were expected to yield substantial dividends. Critics’ assessment of stock prices differed from today’s assumption that stock prices legitimately reflect expected profits. They believed stock values should represent actual invested capital, and a fair rate of return (or dividend) was analogous to interest on that capital. Any stock issued with a “par value higher than a corporation’s tangible economic value” was “water”—and a great deal was issued during the big merger movement around 1900. By some reckonings, even corporate profits reinvested in productive facilities were “false capitalization” because those profits had been exacted from the public. Estimates of water ran high—about half the capitalization of US railroads according to journalist Charles Edward Russell. “On this fictitious capital the interest and dividends must be dug from the shippers, who merely pass the tax along, with interest and profit, to the consumer.” Economist Scott Nearing ventured that if asked the primary cause of the high cost of living, “probably three people out of four would give an offhand answer, ‘The trusts.’”²⁵

Another standard complaint was that middlemen ran up prices through extortion or inefficiency. Estimates, often generalized from markups on perishable produce, held that middlemen took half to two-thirds of the consumer price. A long tradition of moral criticism portrayed merchants as parasites: “When Adam delved and Eve span,/ Who was then the middleman?” asked Social Gospel theologian Walter Rauschenbusch. Wholesalers and retailers protested that they too were productive citizens, but mostly in trade papers and among colleagues. Complaining that jobbers of foodstuffs were repeatedly targeted by legislators and agitators, one of them described “Feeding an Ungrateful Public” to presumably sympathetic Rotarians. The woman who attends high-cost-of-living lectures, he charged, pays her grocery bill only when “good and ready,” leaving the jobber to carry the merchant on credit. As an explanation for the recent surge of prices, criticism of middlemen was overused, since wholesaling and retailing had not changed dramatically.²⁶

Cold storage continued to arouse suspicion. The fact the meatpackers used refrigerated shipment and storage to dominate the national market tainted the technology in popular imagination. Its defenders pointed out that most owners of cold storage facilities other than the packers were independent operators who merely rented space to others, and rental charges made long-term storage expensive. Cold storage merely made seasonal products available year-round. But critics disagreed. Rauschenbusch proclaimed: “In the hands of profit-making commerce [cold storage] has to some degree been turned into a means of counteracting the prodigality of God and the summer, and of making food dear all the year.”²⁷

Another commercial innovation, widely advertised branded and packaged goods such as Kellogg’s Corn Flakes and Nabisco’s Uneeda Biscuit, played a minor role in cost-of-living discussions. Criticism centered on the cost of advertising.²⁸

Everyone interested in food policy agreed there were too many food stores—one for every 185 inhabitants in Boston and one for every 135 people in Philadelphia if one counted meat, delicatessen, and variety as well as grocery stores. Unable to cut prices, retailers competed by service: almost all extended credit, many gave trading stamps, and most delivered. Although only six million families had telephones by 1910, these increased deliveries. A grocer complained to Lodge’s committee that if he failed to deliver in five minutes customers phoned again. But what would limit the supply of grocers when start-ups were so easy? Wholesalers offered easy credit, and with $500 capital one could begin operations in an immigrant neighborhood, using one’s family as clerks.²⁹

Public discussion offered a surfeit of explanations for rising prices. A cartoonist who depicted some for Cosmopolitan produced a complex drawing (see Fig. 4.1). Lady Liberty, holding a market basket, gazes at foodstuffs whose 1910 prices are double those on an 1896 pricelist. The caption reads: “The filling of the market-baskets of the nation is becoming increasingly difficult, with the purchasing medium cheapened by overproduction and the natural law of supply and demand set aside by artificial agencies.” A rudimentary scale is pictured. At one end of its balance beam is a bag of dollars labeled “purchasing power 40% less than 1896.” The law of supply and demand is not operating because the balance beam, instead of moving freely, is grasped by five hands, labeled Farmer, Packer, Cold Storage, Middleman, and Speculator. Even this crowded drawing omitted tariffs and extravagance.³⁰

Fig. 4.1

A 1910 Attempt to Explain High Food Prices. Source: Cosmopolitan 49 (June 1910): 25

To compound anxiety, after 1907 the economy entered a period of recurrent contraction and urban unemployment that, in combination with rising prices, has led historian Ballard Campbell to call 1908 through 1914 a time of “stagflation.” Unemployment averaged 3 to 4 percentage points higher than from 1900 through 1907. Estimated GNP per capita (1958 dollars) rose from $865 in 1896 to $1258 in 1906, grew slowly to $1366 in 1912, and subsided to $1267 in 1914. After enjoying rising prosperity since the 1890s depression, American consumers found their living standard stagnating.³¹

In this atmosphere of gloomy economic weather, it seemed axiomatic that wages were falling behind the cost of living. The main partisan difference involved the duration, severity, and breadth of the shortfall. Senate Republicans held that wages had kept up until the panic of 1907 but since then had fallen behind, while salaries “had advanced but very little during the past ten years.” Democrats claimed that since 1896 prices had risen 60 percent but wages only 20 percent. “Prices,” they added, “go up on the elevator while wages climb the stairs.” Campaigning in 1912, Theodore Roosevelt proclaimed, “The cost of living in this country has risen during the last few years out of all proportion to the increase in the rate of most salaries and wages.”³²

These sweeping statements were formed in the absence of current, comprehensive wage or retail price data. When the Bureau of Labor Statistics published retail food prices retrospectively in 1914, they brought little comfort. The index number, which stood at 126 (1890–1899 = 100) when last reported for 1907, reached 163 by 1913. Food prices rose faster than most others, and the bureau no longer published a composite wage index. Economist I.N. Rubinow used single-industry statistics to conclude in 1914 that wages had fallen 10 to 13 percent from 1907 to 1912 as measured against the BLS food-price index. Other economists agreed that real wages were falling.³³

Later studies and some contemporary evidence suggest the fears of the early 1910s were somewhat overblown. Many underpaid workers simply quit. Such behavior was not new, but factory managers awakened to a “turnover crisis” between 1911 and 1913. Studies of personnel records found annual turnover rates ranging from 100 to 250 percent. To counter even higher turnover, the Ford Motor Company announced its celebrated five-dollar day in January 1914. Some railroad workers’ contracts were resolved by arbitration. In building their case for raises, railroad unions from 1910 onward relied heavily on claims that the cost of living had increased. Overall, real weekly earnings for employed railway workers remained constant or rose slightly from 1910 through 1914.³⁴

Whatever the workers’ problems, much of the grumbling in the public print about the rising cost of living came from the middle class. Writers assumed that salaries were relatively fixed and must have fallen behind the cost of living. This was obviously the case for federal employees in the District of Columbia, whose average pay rose just 5 percent between 1896 and 1914, far behind the cost of living. That was extreme, however. Clerical employees in manufacturing suffered a 4 percent decline in real income between 1896 and 1914 according to economist Paul Douglas, although he may have overstated the rise in cost of living. While railroad executives received massive salary increases, their clerical employees lost about 14 percent in real income over the same period by Douglas’s calculation. Average elementary and high-school teaching salaries rose 37 percent in real dollars from 1896 to 1914, but much of this gain resulted from longer school years, the expansion of city schools which paid better than country schools, and rapid growth in the more highly paid high-school teaching force. Data from schools in “small” cities (30,000 to 100,000), where school years were already long, show very modest increases in real income from 1904 to 1913—7 percent for elementary teachers and 2 percent for high school.³⁵

With some exceptions, these results do not suggest that salaried workers’ incomes were falling drastically behind the cost of living. Some assertions to the contrary reflected simple exaggeration. Charles Dabney, president of the University of Cincinnati, discounted reports of academic salary increases by claiming the cost of living had risen at least 40 percent between 1908 and 1914. In addition, professional people asserted they bore an extra burden—the cost of maintaining appearances and a lifestyle suited to their intended status, although that was nothing new. A woman school principal claimed her $1200 salary would not “go as far as $570 ten years ago. This is due to the increased cost of living as well as to the great number of duties both social and professional which we have been obliged to assume to keep up with the times.”³⁶

Salaries aside, savers and cautious investors within the upper middle class lost some ground to inflation. Conventional advice to prudent prewar investors limited them to bonds and preferred stocks, with a fixed par value.³⁷

Despite concern about the cost of living, federal legal initiatives in 1910 proved mostly ineffective. In an exception, the Justice Department sought and eventually won an injunction against the Southern Wholesale Grocers Association, which allegedly fixed prices across its region. Legal action against the meatpackers failed. After the circuit court dismissed the charges brought by the Chicago grand jury in early 1910, in September a second grand jury indicted ten men, including Louis Swift and J. Ogden Armour, for conspiring to restrain interstate trade in meat. The trial began in December 1911. The government’s case was complex, and the judge specifically cautioned the jurors that “the high cost of living, about which we have heard and read so much during the last year or more, has nothing to do with this case.” The government’s complicated statistical evidence so befuddled the jurors that they gave the locally prominent defendants the benefit of the doubt, acquitting them in March of 1912. The Justice Department, whose resources were limited, abandoned further prosecution. Its antitrust division had only five lawyers under Theodore Roosevelt and just two dozen as late as the 1920s.³⁸

The only legislation proposed by Lodge’s select committee was a bill to exclude from interstate commerce any food kept in cold storage more than one year. Lodge explained that “some limit ought to be put on the use of cold storage for the purpose of maintaining or advancing prices artificially.” Following hearings which raised alarm about the safety of long-term cold storage—not entirely unwarranted, considering the crudeness of temperature and humidity controls—an amended bill slashed the time limit for eggs, fish, poultry, and butter to three months. In its draconic form, the bill aroused intense opposition from food dealers and failed to pass.³⁹

One piece of congressional legislation passed in 1910 had potential to lower prices. The Mann-Elkins Act empowered the Interstate Commerce Commission to suspend railroad rate increases. To appeal, railroads had to show that the proposed increase was “just and reasonable.”⁴⁰

As the party in power, Republicans faced trouble in 1910 because of rising consumer prices—trouble that divergent interests within the party exacerbated. As representatives of the country’s industrial core, regular Republicans favored high tariffs. At the same time, urban Republicans feared worker discontent and wanted cheaper food. But the Republicans had a significant minority representing rural districts.⁴¹ Insurgent agrarian Republicans favored high prices for farm products but opposed high tariffs on the manufactured goods their constituents purchased. High consumer prices and high tariffs rendered regular Republicans vulnerable in the 1910 election. Insurgent Republicans benefited but Democrats made the major gains.

Historians, notably Lewis Gould, have recognized that rising prices hurt Republicans in 1910, compounding the congressional losses that the party holding the White House commonly suffers in off-year elections. Contemporary political observers expected the high cost of living to hurt Republicans. Taft himself predicted trouble in a letter to Theodore Roosevelt. Insisting that the tariff had not produced high prices, he added ruefully that “the argument post hoc propter hoc is as formidable in a political controversy as ever. It is likely to lose us the next House.” The Democrats’ 1910 campaign book opened with 171 pages on “The Tariff and Cost of Living.”⁴²

In November, Democrats gained control of the House of Representatives by adding 56 seats, while increasing their Senate strength from 32 to 41. Literary Digest summarized press reaction: “That the Payne Tariff and the high cost of living were the two chief factors in the Republican overthrow seems to be widely believed by both Democrats and Republicans alike.” In Massachusetts, Republicans held the legislature and thus Senator Lodge’s seat, but a Democrat won the governorship after a campaign centered on the tariff and the high cost of living. “There is no doubt,” wrote Lodge, “that the cry of the cost of living was what gave the Democrats their general victory throughout the country.”⁴³

In New Jersey and Wisconsin, only urban voters moved toward the Democrats, although Ballard Campbell has found Democratic gains in rural districts of New York, Ohio, and Illinois.⁴⁴ This partial divergence suggests the possibility that contrasting economic interests produced somewhat different urban and rural voting shifts. Farmers were not immune to cost-of-living issues. Democrats and insurgent Republicans focused much of their anti-tariff rhetoric on products such as woolen clothing that farmers as well as city folk bought. Still, popular protest suggested that food prices remained the overriding issue. If so, it helps clarify the analysis to remove southern states from consideration. The Democrats controlled the South, and the major food-producing areas were in the North and West. If voting was economic in those two regions, one should find an urban/rural divergence. As farmers reaped high prices, whereas nonfarm consumers faced rising food costs, the farm vote should have tended to move toward the Republicans as the party in power and the nonfarm vote toward the Democrats—once the disparity between the trajectories of the farm and nonfarm economic sectors became widely known. Since this awareness burgeoned in 1910, some shift in voting should be apparent between 1908 and 1910, before and after food prices gained major political salience.⁴⁵

Shifts in partisan voting in nonsouthern counties between the 1908 and 1910 congressional elections were as predicted, though modest in scale. There was an inverse relationship between the proportion of a county’s population that was urban and the change in percentage of total votes cast for the Republican candidate (r = −.112) and an identical but positive relationship between the proportion of the population that was rural and the shift in Republican vote percentages. In other words, Republican congressional candidates were slightly more likely to lose voting share in urban areas and to gain votes in rural areas. The Democratic pattern was the reverse. There was a weak but positive relationship between shifts in Democratic vote percentages and the percentage of urban population (r = .090) and a slightly stronger inverse relationship between the change in Democratic vote percentages and the number of farms per capita in a county (r = −.126).⁴⁶ Further analysis suggests that reactions for or against the Republicans mattered more than responses to Democratic blandishments. In counties with more than 25,000 people, which had greater electoral impact, there was a negative correlation between urban population and changes in the Republicans’ share of votes (r = −.163), while in counties with more farms per capita Republicans fared better (r = .207). Democrats were only slightly more likely to gain votes in urban than in rural counties (r + or −.090).⁴⁷

As of 1910, the high cost of living for urban consumers had become a volatile issue that did much to break the Republicans’ hold on national political power. But neither politicians nor contemporary commentators agreed on the causes of rising prices—let alone on solutions. Amid this confusion, remedial initiatives began to proliferate. Many aimed to narrow the gap between farmer and consumer and increase efficiency in distribution or bypass the middleman.