Final answer:
The inspector couldn't impose the penalty because the Supreme Court decision in United States v. E. C. Knight established that manufacturing wasn't subject to federal regulation under the commerce clause, showing the manufacturing sector's significant influence and importance.
Step-by-step explanation:
Reason for Inspector's Inability to Impose Penalty
The inspector was unable to impose the penalty he asked for because of decisions such as in United States v. E. C. Knight, where the Supreme Court ruled that manufacturing was not subject to federal regulation under the Sherman Act. This legal precedent suggested that the factory owners and manufacturing industry had significant leverage and importance, which protected them from certain regulatory attempts by the government.
The Role of Factory Owners and Importance of Manufacturing
Early factory owners and managers pursued profit maximization by simplifying the manufacturing process to be executed by cheap, unskilled labor. This led to the exploitation of workers, including children. The court decision, by distinguishing between commerce and production, suggested that manufacturing was crucial to the economy to the extent that the court was hesitant to allow federal interference, consequently emphasizing the importance of the manufacturing sector and its influence over legal decisions.