Federal administration and administrative law in the Gilded Age.

• Author: Mashaw, Jerry L.

ARTICLE CONTENTS INTRODUCTION A. A Nation Transformed B. Locating Public Administration and Administrative Law C. The Plan of This Study I. POLITICAL CONTROL OF ADMINISTRATION A. Appointments and Removals, Again B. The Path to Pendleton C. The Efficacy of Political Control II. LEGAL CONTROL OF ADMINISTRATIVE ACTION A. The Limits of Mandamus B. Officers vs. Offices C. From Mandamus to Merits Review? D. The Rigors of Indirect Review III. ADMINISTRATIVE ADJUDICATION AND THE "INTERNAL LAW" OF ADMINISTRATION A. The General Contours of Agency Adjudication B. The Case of Military Pensions 1. The Rise and Rise of Military Pensions 2. Making Pension Policy 3. Processes of Pension Adjudication 4. Center and Periphery at the Pension Office 5. Examining Surgeons 6. Pension Administration's Internal Law C. Regulation and Adjudication at the Post Office 1. The Emergence of Post Office Regulation 2. Fraud Order Jurisdiction 3. Implementation 4. The Fraud Order Process IV. ADMINISTRATIVE LAW IN THE GILDED AGE A. Political Accountability B. Legal Accountability C. Managerial Control Through Internal Law CODA: THE JURISPRUDENTIAL STATUS OF INTERNAL ADMINISTRATIVE LAW INTRODUCTION

According to historical convention, (1) federal administrative law emerged with the late nineteenth-century passage of the Interstate Commerce Act of 1887 (ICA). (2) The ICA initiated federal regulation, housed it in a novel administrative body, and elicited the first important judicial attempts to integrate national administrative governance into contemporaneous conceptions of the rule of law. When combined with the reforms of the Pendleton Civil Service Act of 1883, (3) the 1890 Sherman Antitrust Act, (4) the 1906 Pure Food and Drug Act, (5) and the 1914 Federal Trade Commission Act, (6) the late nineteenth and early twentieth centuries witnessed the gradual construction of a modest national administrative state, and with it a national administrative law.

Other students of American political development view even these events as leaving the national government largely in the hands of Congress, the courts, and political parties. For them, and for most twenty-first-century administrative lawyers, administrative law remains virtually invisible until the New Deal. (7) According to that familiar narrative, the plethora of New Deal agencies that were created in the 1930s and early 1940s finally broke the national government free from laissez-faire constitutionalism. But muscular national administration generated a backlash resulting in the explicitly transsubstantive (and now quasi-constitutional) federal Administrative Procedure Act (APA). (8) Here finally was administrative law worthy of the name. On this account federal administrative law is a twentieth-century creation and, perhaps, a mid-twentieth-century creation at that.

This Article, and its three predecessors, (9) have a simple message. The standard history of the development of American administrative law is at best partial and in many respects incorrect. The national government of the United States was an administrative government from the very beginning of the Republic. Moreover, that administrative government then, as now, was both constituted and constrained by law. In short, America had a federal administrative law long before that field of law was either recognized or named.

In some sense this claim is trivially true. Neither Congress nor the Constitution's two executive officers could deliver the mail, collect taxes, distribute military pensions, manage the public debt, award invention patents, survey and sell public lands, or carry out the host of other functions that emerged from legislation passed in just the first few Federalist congresses. (10) And notwithstanding the early shift in political authority, from "big government" Federalists to "small government" Jeffersonian and Jacksonian Democrats, the ratio of national civilian administrative officials to national population increased steadily throughout the antebellum period. (11) Moreover, as administrative capacity grew, both Congress and administrative officials constantly reorganized and reformed the structure and practices of national administrative institutions. (12)

In addition, these early builders of national administration were required to answer the same questions that administrative lawyers ponder today. What is the appropriate relationship of administration to the elected branches of government? Under what legal requirements should administrative departments, bureaus, or commissions conduct their business? And what legal remedies should be available to persons who believe that administrative action has not been conducted according to law?

But, if this is true, why the conventional story of administrative law as a twentieth-century creation? Why has nineteenth-century administrative law remained invisible to us? A complete answer to that question is more than a little complicated. The short answer is straightforward: what we find depends upon who is looking, what we look for, and where we look for it. For lawyers, early administrative law remains invisible in part because we have been trained to look for it in judicial opinions and in transsubstantive statutes or executive orders that apply to all, or most, administrative institutions. This is administrative law, to be sure. But it is not all of it. And, from the founding to the very late nineteenth century, neither of these sources of law produced much, if anything, of enduring interest for the administrative lawyer. A search of these sources from 1787 to 1887 is destined to disappoint.

But what if we followed the lead of the 1941 Attorney General's Committee, whose research provided the background materials for drafting the APA? (13) When seeking models of sound administrative governance, they looked at the way legislation structured agency organization, at agency practice, at the norms that had grown up around similar functions across multiple agencies, and at the approaches taken by courts whose reviewing functions were provided in scattered sections of the U.S. Code. The APA was surely something more than a mere restatement of existing administrative law. Yet much of it was drawn from that law--a law internal to specific statutory regimes and particular agency practices. Common normative threads in those statutes and practices included uniformity and consistency in the application of law, notice and hearing on contested issues, transparency of agency structures and processes, protections against agency bias, division of functions within agencies, and internal checks and balances.

My project in this Article and its predecessors is to push that inquiry back over a century. My claim is that the administrative practices that the Attorney General's Committee uncovered in mid-twentieth-century American administrative governance did not burst on to the scene in the New Deal or in Progressive Era reforms. They can be found as well in the age that Mark Twain indelibly branded as "The Gilded Age": an age that has become for us almost synonymous with private excess and government corruption.

Making out this case cuts against the grain of received understandings. The Gilded Age was an age of massive change, but the national government's response to new needs and new demands can rightly be seen as anemic, torpid, and too often corrupt. Nor is the historiography of the period simply mistaken in its claims that American governmental, and particularly administrative, developments lagged behind when compared with either the new American social reality or administrative state developments abroad. Hence we must begin by remembering what post-Reconstruction and pre-Progressive America was like and the bases for our widely accepted vision of how it was governed. It is only against this background that a revised understanding of administration and administrative law begins to appear.

1. A Nation Transformed

   Postbellum America witnessed the remaking of political, economic, social, and cultural life. (14) By war and constitutional amendment, national power triumphed over state prerogative, but with consequences that were hardly predictable given the war's ostensible aims or the content of the Thirteenth, Fourteenth, and Fifteenth Amendments to the Constitution. Reconstruction failed to produce either a substantially reformed Southern political economy or equal citizenship for African Americans. (15) And judicial construction of the Civil War Amendments eviscerated their civil rights purposes while providing new constraints on public regulation of business. (16) The new nationalism that the North's victory had promised was, instead, put in the service of a national, capitalist market. (17)

   The elimination of local barriers to commerce, new technologies, and the rapid development of the nation's physical and financial infrastructure transformed the economy. (18) This was an age in which inventors like Alexander Graham Bell and Thomas Alva Edison became national heroes, (19) and Americans were recognized as masters in the application of technology to enterprise. (20) Reacting to the exhibits in Machinery Hall at the 1876 Centennial Exhibition near Philadelphia, novelist and commentator William Dean Howells concluded that it was in engineering that "the national genius most freely speaks; by and. by the inspired marbles, the breathing canvases ... for the present America is voluble in the strong metals and their infinite uses." (21)

   Tremendous expansions in railroad transportation drove industrial development. (22) The railroads' demands for capital, labor, and materials stimulated the economy. Their capacity to move people and products cheaply buoyed other markets and spurred the development of territories underserved by earlier transportation revolutions in steamships and canals. American railroads conquered time as well as space. To produce a coherent and transparent national...