Two federal laws would be used to limit and eventually dissolve Rockefeller's trust.
Interstate Commerce Act of 1877
- Required equal railroad freight charges by prohibiting rebates.
- Established the Interstate Commerce Commission.
Interstate Commerce Act of 1877 from the National Archive. Cartoon from the Minneapolis Journal. 1904.
|
Click to enlarge
|
Sherman Antitrust Act of 1890
- Established regulations against trusts, monopolies, and restraint of trade.
"Sec. 1. Every contract, combination in the form of trust… is hereby declared to be illegal.
Sec. 2. Every person who shall monopolize, or attempt to monopolize... or conspire… shall be punished…
Sec. 3... restraint of trade or commerce in any Territory of the United States or of the District of Columbia… is hereby declared illegal. "
-Sherman Antitrust Act of 1890
Sherman Antitrust Act of 1890 from the National Archive. Cartoon from theodore-roosevelt.com. n.d.
|
Click to enlarge
|
|
Allan Goldener, lawyer and partner at Benesch, Friedlander, Coplan & Aronoff LLP
Q: What did the Interstate Commerce Act and the Sherman Antitrust Act state? Were they effective at restricting trusts?
A: It [Interstate Commerce Act] sought to make sure that monopolies didn't get created in railroads... They wanted to have a fairness, so that people got charged the same amount for freight... It was really the first successful example of the federal government regulating the commerce involving the largest companies in the United States, and it's the first time that the central government had the courage and the strength to do that. The Sherman Act which came later, I believe around 1890, that aimed itself at monopolistic activities across industries without regard whether it was railroad trains or trucking companies, which was what the Interstate Commerce Act should have dealt with.
|
Allan Goldener, lawyer and partner at Benesch, Friedlander, Coplan & Aronoff LLP
Q: Even though Standard Oil was a monopoly or trust, it still maintained low prices, which was the goal of the free market system, but why was it still banned?
A: ...If there was too much of a concentration of ownership [in an industry], there was a concern that there would be an abuse. The person would take that power of that kind of ownership, sometimes called monopolistic ownership, and use it to do things that would benefit himself, and might cause injuries to others... What many people were concerned about, including lawmakers, was while today the prices might be low, after a monopolist came to own a hundred percent [ownership of an industry]... Then the monopolist would be free to raise prices and have no competition to deal with. So today the prices might be low, tomorrow there was a risk they might go out of control, and there are many more "tomorrows" than there are "todays."