Early Anti-Trust Legislation
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- The Progressives Demand Antitrust Laws
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By 1880, John D. Rockefeller had merged about 100 independent oil refineries with his Standard Oil Company. He controlled about 90 percent of the U.S. oil business. (Oil was used to light kerosene lamps, utilized throughout the country.) In 1882, Rockefeller formed the Standard Oil Trust. He set up a board of trustees to take control of all the stock from his many vertically and horizontally connected companies. The Progressives Demand Antitrust Laws By forming the Standard Oil Trust, Rockefeller was trying to hide the fact that Standard Oil was a monopoly. Soon corporate leaders in other industries such as railroads, cigarette making, and sugar refining organized their own trusts. The trusts speeded up mergers and eliminated competition among their members. They also concentrated control of national wealth in the hands of a few millionaire families. As monopolies, the trusts often could dictate whatever prices and wages they wanted with little fear of competition. Newspapers and magazines wrote stories raising questions about the trusts. As public criticism mounted during the 1880s, the American public called for government control over the powerful trusts. Reformers, called Progressives, demanded that states pass antitrust laws to make cartels and monopolistic practices illegal and to regulate railroad rates. These laws, however, were ineffective because most trusts operated across state lines. Only the federal government could regulate interstate commerce. In 1887, Congress passed the federal Interstate Commerce Act. This law required interstate railroads to charge “reasonable and just” rates. But the Interstate Commerce Commission, which monitored the railroads, ended up with little authority to enforce its rulings. In 1890, Congress passed the first federal antitrust law, the Sherman Act. It outlawed “every contract, combination in the form of trust or otherwise, or conspiracy in restraint of trade.” The Sherman Act also made it a crime “to combine or conspire . . . to monopolize any part of the trade or commerce among the several states.” In the decade following passage of the Sherman Act, the generally pro-business presidents did little to enforce it. In fact, during this period, more mergers occurred and trusts were formed than ever before. In 1895, the U.S. Supreme Court ruled that the Sherman Act could regulate interstate sales and transportation. But the court said the act could not ban the merger of manufacturing assets themselves, even by companies operating in interstate commerce who established monopolies. The court reasoned that manufacturing was not part of interstate commerce. In another case that year, the Supreme Court decided that the Sherman Act could bar union strikes that interfered with interstate commerce. Ironically, while Congress intended the Sherman Act to combat the big trusts, it was becoming a major weapon against organized labor. From: http://www.fairfightfilm.org/crf/TRTrustBustingProduction.pdf Excerpt from the Interstate Commerce Commission Act: Be it enacted by the Senate and House of Representatives of the United States of America in Congress assembled, that the provisions of this act shall apply to any common carrier or carriers engaged in the transportation of passengers or property wholly by railroad, or partly by railroad and partly by water when both are used, under a common control, management, or arrangement, for a continuous carriage or shipment, from one state or territory of the United States, or the District of Columbia, to any other state or territory of the United States, or the District of Columbia, or from any place in the United States to an adjacent foreign country, or from any place in the United States through a foreign country to any other place in the United States, and also to the transportation in like manner of property shipped from any place in the United States to a foreign country and carried from such place to a port of transshipment, or shipped front a foreign country to any place in the United States and carried to such place from a port of entry either in the United States or an adjacent foreign country: Provided, however, that the provisions of this act shall not apply to the transportation of passengers or property, or to the receiving, delivering, storage, or handling of property, wholly within one state, and not shipped to or from a foreign country from or to any state or territory as aforesaid. All charges made for any service rendered or to be rendered in the transportation of passengers or property as aforesaid, or in connection therewith, or for the receiving, delivering, storage, or handling of such property, shall be reasonable and just; and every unjust and unreasonable charge for such service is prohibited and declared to be unlawful. Section 2. That if any common carrier subject to the provisions of this act shall, directly or indirectly, by any special rate, rebate, drawback, or other device, charge, demand, collect, or receive from any person or persons a greater or less compensation for any service rendered, or to be rendered, in the transportation of passengers or property, subject to the provisions of this act, than it charges, demands, collects, or receives from any other person or persons for doing for him or them a like and contemporaneous service in the transportation of a like kind of traffic under substantially similar circumstances and conditions, such common carrier shall be deemed guilty of unjust discrimination, which is hereby prohibited and declared to be unlawful . Section 3. That it shall be unlawful for any common carrier subject to the provisions of this act to make or give any undue or unreasonable preference or advantage to any particular person, company, firm, corporation, or locality, or any particular description of traffic, in any respect whatsoever, or to subject any particular person, company, firm, corporation, or locality, or any particular description of traffic, to any undue or unreasonable prejudice or disadvantage in any respect whatsoever. Every common carrier, subject to the provisions of this act shall, according to their respective powers, afford all reasonable, proper, and equal facilities for the interchange of traffic between their respective receiving, forwarding, and lines, and for the delivering of passengers and property to and from their several lines and those connecting therewith, and shall not discriminate in their rates and charges between such connecting lines; but this shall not be construed as requiring any such common carrier to give the use of its tracks or terminal facilities to another carrier engaged in like business. Section 4. That it shall be unlawful for any common carrier subject to the provisions of this act to charge or receive any greater compensation in the aggregate for the transportation of passengers or of like kind of property, under substantially similar circumstances and conditions, for a shorter than for a longer distance over the same line, in the same direction, the shorter being included within the longer distance; but this shall not be construed as authorizing any common carrier within the terms of this act to charge and receive as great compensation for a shorter as for a longer distance: Provided, however, that upon application to the Commission appointed under the provisions of this act, such common carrier may, in special cases, after investigation by the Commission, be authorized to charge less for longer than for shorter distances for the transportation of passengers or property; and the Commission may from time to time prescribe the extent to which such designated common carrier may be relieved from the operation of this section of this act. Section 5. That it shall be unlawful for any common carrier subject to the provisions of this act to enter into any contract, agreement, or combination with any other common carrier or carriers for the pooling of freights of different and competing railroads, or to divide between them the aggregate or net proceeds of the earnings of such railroads, or any portion thereof; and in any case of an agreement for the pooling of freights as aforesaid, each day of its continuance shall be deemed a separate offense. Section 6. That every common carrier subject to the provisions of this act shall print and keep for public inspection schedules showing the rates and fares and charges for the transportation of passengers and property which any such common carrier has established and which are in force at the time upon its railroad, as defined by the 1st Section of this act. The schedules printed as aforesaid by any such common carrier shall plainly state the places upon its railroad between which property and passengers will be carried, and shall contain the classification of freight in force upon such railroad, initial and shall also state separately the terminal charges and any rules or regulations which in anywise change, affect, or determine any part or the aggregate of such aforesaid rates and fares and charges, Such schedules shall be plainly printed in large type, of at least the size of ordinary pica, and copies for the use of the public shall be kept in every depot or station upon any such railroad, in such places and in such form that they can be conveniently inspected. Section 11. That a commission is hereby created and established to be known as the Interstate Commerce Commission, which shall be composed of five commissioners, who shall be appointed by the President, by and with the advice and consent of the Senate. ...
Chap. 647. An Act to protect trade and commerce against unlawful restraints and monopolies. July 2, 1890. Sec. 1. Every contract, combination in the form of trust or otherwise, or conspiracy, in restraint of trade or commerce among the several States, or with foreign nations, is hereby declared to be illegal. Every person who shall make any such contract or engage in any such combination or conspiracy, shall be deemed guilty of a misdemeanor, and, on conviction thereof, shall be punished by fine not exceeding five thousand dollars, or by imprisonment not exceeding one year, or by both said punishments, in the discretion of the court. Sec. 4. The several circuit courts of the United States are hereby invested with jurisdiction to prevent and restrain violations of this act; and it shall be the duty of the several district attorneys of the United States, in their respective districts, under the direction of the Attorney-General, to institute proceedings in equity to prevent and restrain such violations. Such proceedings may be by way of petition setting forth the case and praying that such violation shall be enjoined or otherwise prohibited. When the parties complained of shall have been duly notified of such petition the court shall proceed, as soon as may be, to the hearing and determination of the case; and pending such petition and before final decree, the court may at any time make such temporary restraining order or prohibition as shall be deemed just in the premises. Directory: userfiles -> 184 -> Classes -> 1399 userfiles -> A good Man is Hard to Find userfiles -> Introduction userfiles -> President George Washington userfiles -> Unit 11: political developments in the early republic setting the stage: launching the new republic Classes -> Use the following links and other sources (E. G. ushistory org; hippocampus org; not wikipedia) to become an expert on antebellum (before war) reform movements; you will have 2 days in class, so some of this must be done as homework 1399 -> Great Depression-New Deal “dbq” 184 -> Supreme court cases Download 15.06 Kb. Share with your friends:
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