At the opening of the twentieth century the United States was in the midst of one of the most important transitional periods in her social, economic, and political evolution. It was an age of optimism and faith in the future. But each segment of society had its own interpretation of what the future would bring. Industrialists expected to dominate the markets of the world. Financiers were confident that New York City would soon replace London as the principal international money market. Farmers took on new hope as relative prosperity appeared in agriculture. Workers believed that the eight-hour day and the trade agreement would soon be universal. Imperialists were absorbed in the "white man's burden" in the Far East and the development of South American markets under "dollar diplomacy." Government functionaries saw themselves advancing steadily in importance in the economic and social scene.
Though not equaling the original expectations, the economic achievements of this era were substantial, especially during the years 1900 to 1905. According to the estimates of Professor Kuznets, per capita national income in constant prices in the decade 1899 to 1908 averaged 14.2 per cent more than in the previous decade, but in 1904 to 1913 it was only 9.6 per cent higher than in the previous ten years.
The years up to 1904 were also featured by vast consolidations of business enterprise and great expansion in trade-union membership. By 1904 it was estimated that 40 per cent of the total capital invested in manufacturing was controlled by trusts of one sort or other, and between 1899 and 1904 trade-union membership grew from 604,000 to 2,072,000. However, after 1904 the consolidation movement slowed down, while labor unions had difficulty in holding their own.
As the economy grew and became more complicated, more regulatory and other services by government were demanded. But even if these demands had not developed, the Federal government would still have been impelled to widen its sphere of activities. The United States was obtaining a "place in the sun," as imperialistic advocates expressed it, and the expansion of her colonial power and her influence in world affairs magnified the importance of the Federal government in the public eye and caused a greater activity on its part. Moreover, the philosophy of