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Patent Politics: Intellectual Property, the Railroad Industry, and the Problem of Monopoly

Published online by Cambridge University Press:  27 April 2009

Steven W. Usselman  and
Richard R. John
Steven W. Usselman
Affiliation:
Georgia Institute of Technology University of Illinois at chicago
Richard R. John
Affiliation:
Georgia Institute of Technology University of Illinois at chicago
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Extract

As winter descended on Washington in December 1878, the Forty-fifth Congress gathered for what promised to be a hectic third and final session. Emotions ran high. In this era, Congress habitually reserved much of its business for these brief, intense “lame duck” sessions that fell between the election of legislators in November and the adjournment of Congress the following March. Compounding the usual sense of urgency was the startling result of the recent election: the Democratic party had gained control of the Senate and, when the next Congress convened, would control both the Senate and the House for the first time since before the Civil War. Senate Republicans well understood that they had but a few precious months to close ranks and enact legislation on some of the burning issues of the day: civil rights, the currency, the tariff. Yet when the session opened, none of these issues made their way to the floor. Instead, and despite howls of protest from senators eager to move on to what they plainly regarded as more urgent concerns, the Senate assembled on many afternoons for several weeks to debate a completely different matter: a proposed law concerning the rights of inventors. At this critical juncture in American politics, the Senate found itself embroiled in a long and complex discussion of the virtues and deficiencies of the patent system.

Type
Articles
Information
Journal of Policy History , Volume 18 , Issue 1: Ruling Passions: Political Economy in Nineteenth-Century America , January 2006 , pp. 96 - 125
Copyright
Copyright © The Pennsylvania State University, University Park, PA. 2006

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References

Notes

1. Arguments before the Committees on Patents of the Senate and the House, 45th Cong., 3d sess., 1878, S. Misc. Doc. 50, serial 1788 (hereafter Arguments).

2. The literature on the late nineteenth-century state is vast. For a brief introduction, see John, Richard R., “Farewell to the ‘Party Period’: Political Economy in Nineteenth-Century America,” Journal of Policy History 16: 2 (2004): 117–125CrossRefGoogle Scholar. Two useful review essays are Calhoun, Charles W., “Late Nineteenth-Century Politics Revisited,” History Teacher 27 (05 1994): 325–337CrossRefGoogle Scholar, and Calhoun, , “Political Economy in the Gilded Age: The Republican Party's Industrial Policy,” Journal of Policy History 8 (04 1996): 291–309CrossRefGoogle Scholar. For a critique of the “courts and parties” framework, see John, , “Governmental Institutions as Agents of Change: Rethinking American Political Development in the Early Republic, 1787–1835,” Studies in American Political Development 11 (Fall 1997): 347–380CrossRefGoogle Scholar.

3. On the monopoly problem in nineteenth-century America, see Hovenkamp, Herbert, Enterprise and American Law, 1836–1937 (Cambridge, Mass., 1991)CrossRefGoogle Scholar. On the link between the monopoly problem and patent policy, see Usselman, Steven W., Regulating Railroad Innovation: Business, Technology, and Politics in America, 1840–1920 (New York, 2002), chap. 4CrossRefGoogle Scholar.

4. Usselman, Regulating Railroad Innovation, chap. 1, and Livingston, James, Pragmatism and the Political Economy of Cultural Revolution, 1850–1940 (Chapel Hill, 1994), chap. 2Google Scholar. See also Chandler, Alfred D. Jr., The Visible Hand: The Managerial Revolution in American Business (Cambridge, Mass., 1977), part 2Google Scholar.

5. In 1847, the Patent Office received 1,531 patent applications and issued 572 patents (a 37 percent success rate). In 1871, it received 19,472 patent applications and issued 13,033 patents (a 67 percent success rate). Report of the Commissioner of Patents, 42d Cong., 2d sess., 1872, H. Ex. Doc. 86, serial 1511, 8.

6. For a brief but valuable discussion of patent lobbying during the Grant administration, see Thompson, Margaret Susan, The ‘Spider's Web’: Congress and Lobbying in the Age of Grant (Ithaca, 1986), esp. 264–270Google Scholar.

7. The nineteenth-century patent system has attracted a great deal of attention. See, for example, Meier, Hugo, “Technology and Democracy, 1800–1860,” Mississippi Valley Historical Review 43 (03 1957): 618–640CrossRefGoogle Scholar; Post, Robert C., Physics, Patents, and Politics: A Biography of Charles Grafton Page (New York, 1976)Google Scholar; Ferguson, Eugene S., Oliver Evans: Inventive Genius of the American Industrial Revolution (Greenville, Del., 1980), 52–59Google Scholar; Hindle, Brooke, Emulation and Invention (New York, 1981), 16–23 and 42–43Google Scholar; Sherwood, Morgan, “The Origins and Development of the American Patent System,” American Scientist 71 (09–10 1983): 500–506Google Scholar; Sokoloff, Kenneth L. and Khan, B. Zorina, “The Democratization of Invention during Early Industrialization: Evidence from the United States,” Journal of Economic History 50 (06 1990): 363–378CrossRefGoogle Scholar; Cooper, Carolyn C., Shaping Invention: Thomas Blanchard's Machinery and Patent Management in Nineteenth-Century America (New York, 1991)Google Scholar; Lubar, Steven, “The Transformation of Antebellum Patent Law,” Technology and Culture 32 (10 1991): 932–959CrossRefGoogle Scholar; Cohen, I. Bernard, Science and the Founding Fathers: Science in the Political Thought of Thomas Jefferson, Benjamin Franklin, John Adams, and James Madison (New York, 1995), 237–243Google Scholar; Khan, B. Zorina, “Property Rights and Patent Litigation in Early Nineteenth-Century America,” Journal of Economic History 55 (03 1995): 58–97CrossRefGoogle Scholar; and Khan, The Democratization of Invention: Patents and Copyrights in American Economic Development, 1790–1920 (Cambridge, forthcoming).

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12. On regional perceptions of the patent system, see Hoogenboom, Ari, The Presidency of Rutherford B. Hayes (Lawrence, Kans., 1988), 117Google Scholar.

13. Usselman, Regulating Railroad Innovation, chap. 2.

14. Patent totals are taken from the patent commissioner's annual reports, which appeared annually in the congressional serial set. For the period discussed here, these reports include only sketchy information about patents specific to railroads. For the 1852 total, see Report of the Commissioner of Patents for 1852, 32d Cong., 2d sess., 1853, Sen. Ex. Doc. 55, serial 667, 438. The total for 1865 appears in the Report of the Commissioner of Patents for 1865, 39th Cong., 1st sess., 1866, H. Ex. Doc. 52, serial 1257, 18.

15. The key cases are: Mowry v. Whitney, 14 Wall 620 (1872), reversing Whitney v. Mowry, 29 F. Cas. 1105 (1870); Mevs v. Conover, 131 U.S. 142 (1877), affirming Conover v. Mevs, 6 F. Cas. 322 (1868) and Conover v. Mevs, 11 Blachf. 197 (1873); and Cawood Patent, 94 U.S. 695, reversing in part Turrill v. Illinois Central Railroad Company, 24 F. Cas. 383 (C.C.N.D.Ill. 1867), 24 F. Cas. 385 (1871), and 24 F. Cas. 387 (1873).

16. Sayles v. Chicago and NW Ry Co., 21 F. Cas. 600 (1871). The case first came before the federal district court in 1865 and reached the Supreme Court in 1878. Sayles v. Chicago and NW Ry Co., 21 F. Cas. 597 (1865); Railway Company v. Sayles, 99 U.S. 554, 556–57 (1878). See also Arguments, 229; and Harrower, John J., History of the Eastern Railroad Association (1905), 23, 29Google Scholar.

17. For the relevant cases, see note 15 above.

18. On the forty-year contest between the government and the railroads over safety appliances, see Usselman, Regulating Railroad Innovation, chaps. 3, 8.

19. Stowell, David O., Streets, Railroads, and the Great Strike of 1877 (Chicago, 1999)Google Scholar.

20. On Adams, see McCraw, Thomas K., Prophets of Regulation (Cambridge, Mass., 1984), chap. 1Google Scholar.

21. McCurdy, Charles W., “American Law and the Marketing Structure of the Large Corporation, 1875–1890,” Journal of Economic History 38 (09 1978): 631–649CrossRefGoogle Scholar; Bensel, Richard Franklin, The Political Economy of American Industrialization, 1877–1900 (New York, 2000), chap. 5CrossRefGoogle Scholar.

22. On the Grangers' hostility to Singer, see Barron, Hal, Mixed Harvest: The Second Great Transformation in the Rural North, 1870–1930 (Chapel Hill, 1997), 172Google Scholar. The Grangers also supported state legislation to bar Singer agents from individual states. When the Supreme Court declared this legislation unconstitutional, it greatly hastened the emergence of national marketing networks. McCurdy, “American Law and the Marketing Structure.”

23. Arguments, 438. The Senate bill, according to one newspaper account, should have been enacted in March 1877, but it was “pushed over.” New York Times, 14 July 1878, 6.

24. Scientific American closely monitored legislative and judicial actions pertaining to the patent system, while its editors frequently commented on major policy changes. For the editors' shifting analysis of the patent bill, see Scientific American: 17 March 1877, 36: 161, 15 December 1877, 37: 368, and 13 April 1878, 38: 224.

25. Innocent purchaser bills often found their way to the House; their deliberations can be followed in the patent committee's annual reports. On the bond cases, see Fairman, Charles, Reconstruction and Reunion, 1864–1888: History of the Supreme Court of the United States, Part One (New York, 1971), chaps. 17, 18Google Scholar.

26. Sproat, John G., ‘The Best Men’: Liberal Reformers in the Gilded Age (New York, 1968)Google Scholar. On the liberals, see, in addition to Sproat, Montgomery, David, Beyond Equality: Labor and the Radical Republicans, 1862–1872 (New York, 1967)Google Scholar; Gillette, William, Retreat from Reconstruction, 1869–1879 (Baton Rouge, 1979)Google Scholar; McGerr, Michael, The Decline of Popular Politics (New York, 1986)Google Scholar; Foner, Eric, Reconstruction (New York, 1988), chap. 10–12Google Scholar; and Cohen, NancyThe Reconstruction of American Liberalism, 1865–1914 (Chapel Hill, 2002)Google Scholar. On the enthusiasm of liberals for administrative expertise, see Haskell, Thomas L., The Emergence of Professional Social Science: The American Social Science Association and the Nineteenth-Century Crisis of Authority, rev. ed. (Baltimore, 2000 [1977])Google Scholar, and Skowronek, Stephen, Building a New American State: The Expansion of National Administrative Capacities, 1877–1920 (New York, 1982), esp. 132–138CrossRefGoogle Scholar.

27. Arguments, 45.

28. Ibid., 110.

29. Ibid., 128.

30. Ibid., 32, 38.

31. Ibid., 114–15.

32. Ibid., 439.

33. Conkling, Alfred R., The Life and Letters of Roscoe Conkling, Orator, Statesman, Advocate (New York, 1889), 491–493, 571–73Google Scholar.

34. Cong, Rec., 45th Cong., 3d sess., 15 January 1879, 8: 460.

35. Cong. Rec., 45th Cong., 3d sess., 17 January 1879, 8: 523.

36. Cong. Rec., 45th Cong., 3d sess., 19 December 1878, 8: 305.

37. For a survey of the tension between proprietary and corporate (or “capitalistic”) values, see Freyer, Tony A., Producers versus Capitalists: Constitutional Conflict in Antebellum America (Charlottesville, 1994)Google Scholar.

38. The propensity of historians to exaggerate the corruption of post–Civil War public figures such as Conkling is a recurrent theme of Summers, Mark Wahlgren's Era of Good Stealings (New York, 1993)Google Scholar. Conkling, Summers concluded, was as “personally honest” as William H. Seward, though no less willing to “close an eye” to whatever “dirty deals” his lieutenants back in New York might be orchestrating (28).

39. So long as Conkling remained in Congress, railroad magnate Collis Huntington confided to his partners, he “would take nothing from us.” Rothman, David J., Politics and Power: The United States Senate, 1869–1901 (Cambridge, Mass., 1966), 196–197CrossRefGoogle Scholar. The extent to which Conkling was less solicitous than Republican rivals to the railroads and other organized economic interests was noted half a century ago by political historian Lee Benson. For example, Conkling gave New York Central Railroad lobbyist Chauncey Depew a “sharp going over” at the hearings of the Windom Committee in 1873—the first hearings at which Congress considered the subject of railroad regulation in any detail. Conkling remained antagonistic to the New York Central and other “corporate monopolies” until his resignation from Congress in 1881. Benson, Lee, Merchants, Farmers, and Railroads: Railroad Regulation and New York Politics, 1850–1887 (Cambridge, Mass., 1955), 156–160CrossRefGoogle Scholar. For a more skeptical view of Conkling's relationship with corporations, see McClain, Charles J., “From the Huntington Papers: The Huntington-Conkling Connection,” Pacific Historian 29 (Winter 1985): 30–46Google Scholar, and White, Richard, “Information, Markets, and Corruption: Transcontinental Railroads in the Gilded Age,” Journal of American History 90 (06 2003): 19–43CrossRefGoogle Scholar.

40. Cong. Rec., 45th Cong., 3d sess., 24 January 1879, 8: 717, 723; 6 February 1879, 8:1069; 8 February 1879, 8: 1146; and 1 March 1879, 8: 2257–59. Conkling resigned from the Senate shortly after the inauguration of President James K. Garfield in 1881 in a dispute over patronage appointments in the New York Custom House. Conkling's departure has often been interpreted as the last gasp of a machine politician. Rothman, Politics and Power, 32–35. Yet Conkling's position on patent law suggests that his quarrel with the Garfield administration might have extended to the “great commercial and industrial questions” that Garfield considered the real business of the day. Thompson, Spider's Web, 113.

41. Merges, Robert P. and Nelson, Richard R., “The Complex Economics of Patent Scope,” Columbia Law Review 90 (1990): 839–916CrossRefGoogle Scholar.

42. On Bradley's tenure on the Supreme Court, see Charles Fairman, Reconstruction and Reunion, whose analysis we follow closely here. See also White, Edward G., The American Judicial Tradition: Profiles of Leading American Judges (New York, 1976), chap. 4Google Scholar.

43. Railroad Company v. Lockwood, 17 Wallace 357 (1873), and Railway Co. v. Stevens, 95 U.S. 655 (1878).

44. An analogous argument informed Bradley's majority opinion in an influential 1879 copyright case, Baker v. Selden, 101 U.S. 99 (1879). Selden claimed that a book he had copyrighted in 1859 covered the essential principles of the bookkeeping method it described, and that subsequent books on the subject violated his copyright. Bradley ruled that Selden's book covered only the particular expression of his accounting method and not the idea itself. By firmly upholding the dichotomy between an idea and its expression, and by stressing the importance of empirically verifying the author's claims, Bradley extended to copyright law principles long central to patent litigation. “To give to the author of the book an exclusive property in the art described therein,” Bradley declared, “when no examination of its novelty has ever been officially made, would be a surprise and a fraud upon the public.” Quoted in Vaidhyanathan, Siva, Copyrights and Copywrongs: The Rise of Intellectual Property and How It Threatens Creativity (New York, 2001), 29–30Google Scholar.

45. Mitchell v. Tilghman, 19 Wallace 287 (1874).

46. Tilghman v. Proctor, 102 U.S. 707 (1881).

47. Brown v. Selby, 21 Wallace 181 (1874).

48. Fairman, Reconstruction and Reunion, 122–23.

49. Atlantic Works v. Brady, 107 U.S. 192 (1883), 199–200.

50. Annual Report of the Executive Committee of the Eastern Railroad Association 19 (1885): 16.

51. For a more extended discussion, see Usselman, Regulating Railroad Innovation, chap. 5–7, 9.

52. On the rise of corporate industrial research, and the concomitant changes in legal doctrine, see Noble, David F., America by Design: Science, Technology, and the Rise of Corporate Capitalism (New York, 1977), esp. chap. 6Google Scholar, and Hounshell, David A., “Industrial Research and Manufacturing Technology,” in Encyclopedia of the United States in the Twentieth Century, ed. Kutler, Stanley I. (New York, 1996), 2:831–57Google Scholar.

53. Sklar, Martin J., The Corporate Reconstruction of American Capitalism, 1890–1916: The Market, the Law, and Politics (New York, 1988)CrossRefGoogle Scholar.

54. For a variety of perspectives on early twentieth-century state-building, see Skowronek, Building a New American State; Keller, Morton, Regulating a New Economy: Public Policy and Economic Change in America, 1900–1933 (Cambridge, Mass., 1990)Google Scholar; and Carpenter, Daniel P., The Forging of Bureaucratic Autonomy: Reputations, Networks, and Policy Innovation in Executive Agencies, 1862–1928 (Princeton, 2001)Google Scholar.

55. For a related conclusion, see Bogue, Allan G., The Earnest Men: Republicans of the Civil War Senate (Ithaca, 1981), 296Google Scholar. No one who has studied closely the public pronouncements of mid-nineteenth-century senators, Bogue observed, can argue that they “took their tasks and obligations lightly”: “Obviously, too, they attached considerable importance to showing themselves to be consistent in their approach to specific issues.”

56. To emphasize the adversarial character of government-business relations in the 1870s calls into question the long-standing consensus of business historians that the so-called “adversarial relationship” between government and business originated in the period after 1880, and reached its peak in the period after 1900. For a convenient statement of this thesis—which has long been associated with Alfred D. Chandler Jr.—see McCraw, Thomas K., “Business and Government: The Origins of the Adversary Relationship,” California Management Review 26 (Winter 1984): 33–52, esp. 39–41CrossRefGoogle Scholar.

57. On the continuing involvement in patent issues of the Eastern Railroad Association, see Usselman, Regulating Railroad Innovation, chap. 4. On the growing legitimacy of organized groups in the framing of public policy, see Clemens, Elisabeth S., The People's Lobby: Organizational Innovation and the Rise of Interest Group Politics in the United States, 1890–1925 (Chicago, 1997)Google Scholar.