The panic of 1907, as well as the growing strength of the Socialists, Wobblies, and trade unions, speeded the process of reform. According to Wiebe: "Around 1908 a qualitative shift in outlook occurred among large numbers of these men of authority…" The emphasis was now on "enticements and compromises." It continued with Wilson, and "a great many reform-minded citizens indulged the illusion of a progressive fulfillment."

What radical critics now say of those reforms was said at the time (1901) by the Bankers' Magazine: "As the business of the country has learned the secret of combination, it is gradually subverting the power of the politician and rendering him subservient to its purposes…."

There was much to stabilize, much to protect. By 1904, 318 trusts, with capital of more than seven billion dollars, controlled 40 % of the U.S. manufacturing.

In 1909, a manifesto of the new Progressivism appeared-a book called The Promise of American Life by Herbert Croly, editor of the New Republic and an admirer of Theodore Roosevelt. He saw the need for discipline and regulation if the American system were to continue. Government should do more, he said, and he hoped to see the "sincere and enthusiastic imitation of heroes and saints"- by whom he may have meant Theodore Roosevelt.

Richard Hofstadter, in his biting chapter on the man the public saw as the great lover of nature and physical fitness, the war hero, the Boy Scout in the White House, says: "The advisers to whom Roosevelt listened were almost exclusively representatives of industrial and finance capital-men like Hanna, Robert Bacon, and George W. Perkins of the House of Morgan, Elihu Root, Senator Nelson W. Aldrich… and James Stillman of the Rockefeller interests." Responding to his worried brother-in-law writing from Wall Street, Roosevelt replied: "I intend to be most conservative, but in the interests of the corporations themselves and above all in the interests of the country."

Roosevelt supported the regulatory Hepburn Act because he feared something worse. He wrote to Henry Cabot Lodge that the railroad lobbyists who opposed the bill were wrong: "I think they are very shortsighted not to understand that to beat it means to increase the movement for government ownership of the railroads." His action against the trusts was to induce them to accept government regulation, in order to prevent destruction. He prosecuted the Morgan railroad monopoly in the Northern Securities Case, considering it an antitrust victory, but it hardly changed anything, and, although the Sherman Act provided for criminal penalties, there was no prosecution of the men who had planned the monopoly-Morgan, Harriman, Hill.

As for Woodrow Wilson, Hofstadter points out he was a conservative from the start. As a historian and political scientist, Wilson wrote (The State): "In politics nothing radically novel may safely be attempted." He urged "slow and gradual" change. This attitude toward labor, Hofstadter says, was "generally hostile," and he spoke of the "crude and ignorant minds" of the Populists.

James Weinstein (The Corporate Ideal in the Liberal State) has studied the reforms of the Progressive period, especially the process by which business and government, sometimes with the aid of labor leaders, worked out the legislative changes they thought necessary. Weinstein sees "a conscious and successful effort to guide and control the economic and social policies of federal, state, and municipal governments by various business groupings in their own long-range interest…" While the "original impetus" for reform came from protesters and radicals, "in the current century, particularly on the federal level, few reforms were enacted without the tacit approval, if not the guidance, of the large corporate interests." These interests assembled liberal reformers and intellectuals to aid them in such matters.

Weinstein's definition of liberalism-as a means of stabilizing the system in the interests of big business-is different from that of the liberals themselves. Arthur Schlesinger writes: "Liberalism in America has been ordinarily the movement on the part of the other sections of society to restrain the power of the business community." If Schlesinger is describing the hope or intent of these other sections, he may be right. If he is describing the actual effect of these liberal reforms, that restraint has not happened.

The controls were constructed skillfully. In 1900, a man named Ralph Easley, a Republican and conservative, a schoolteacher and journalist, organized the National Civic Federation. Its aim was to get better relations between capital and labor. Its officers were mostly big businessmen, and important national politicians, but its first vice-president, for a long time, was Samuel Gompers of the AFL. Not all big businesses liked what the National Civic Federation was doing. Easley called these critics anarchists, opposed to the rational organization of the system. "In fact," Easley wrote, "our enemies are the Socialists among the labor people and the anarchists among the capitalists."

The NCF wanted a more sophisticated approach to trade unions, seeing them as an inevitable reality, therefore wanting to come to agreements with them rather than fight with them: better to deal with a conservative union than face a militant one. After the Lawrence textile strike of 1912, John Golden, head of the conservative AFL Textile Union Workers, wrote Easley that the strike had given manufacturers "a very rapid education" and "some of them are falling all over themselves now to do business with our organization."

The National Civic Federation did not represent all opinions in the business world; the National Association of Manufacturers didn't want to recognize organized labor in any way. Many businessmen did not want even the puny reforms proposed by the Civic Federation-but the Federation's approach represented the sophistication and authority of the modern state, determined to do what was best for the capitalist class as a whole, even if this irritated some capitalists. The new approach was concerned with the long-range stability of the system, even at the cost, sometimes, of short-term profits.

Thus, the Federation drew up a model workmen's compensation bill in 1910, and the following year twelve states passed laws for compensation or accident insurance. When the Supreme Court said that year that New York 's workmen's compensation law was unconstitutional because it deprived corporations of property without due process of law, Theodore Roosevelt was angry. Such decisions, he said, added "immensely to the strength of the Socialist Party." By 1920, forty-two states had workmen's compensation laws. As Weinstein says: "It represented a growing maturity and sophistication on the part of many large corporation leaders who had come to understand, as Theodore Roosevelt often told them, that social reform was truly conservative."

As for the Federal Trade Commission, established by Congress in 1914 presumably to regulate trusts, a leader of the Civic Federation reported after several years of experience with it that it "has apparently been carrying on its work with the purpose of securing the confidence of well- intentioned business men, members of the great corporations as well as others."

In this period, cities also put through reforms, many of them giving power to city councils instead of mayors, or hiring city managers. The idea was more efficiency, more stability. "The end result of the movements was to place city government firmly in the hands of the business class," Weinstein says. What reformers saw as more democracy in city government, urban historian Samuel Hays sees as the centralization of power in fewer hands, giving business and professional men more direct control over city government.

The Progressive movement, whether led by honest reformers like Senator Robert La Follette of Wisconsin or disguised conservatives like Roosevelt (who was the Progressive party candidate for President in 1912), seemed to understand it was fending off socialism. The Milwaukee Journal, a Progressive organ, said the conservatives "fight socialism blindly… while the Progressives fight it intelligently and seek to remedy the abuses and conditions upon which it thrives."