Results tagged “Sherman Antitrust Act” from PlanetGreen.org

Conscious Commitment: "Against Public Policy, Unlawful and Void"

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Buccaneers.jpgPart 2 of 5 in a series of posts, "The History of Antitrust"

Much of the social and economic landscape of our modern nation was shaped during the latter half of the nineteenth century. The Civil War had ended, and sectional interests and prejudices gave way to a growing consciousness of the United States as a unified world power. The continent grew progressively smaller as the East and West were linked by rail and by telegraph wire, enabling news, ideas and commerce to flow unhindered through established metropolises and territorial outposts alike. All these factors led to the centralization of industry: changes which initially increased national efficiency and opportunity, but which quickly resulted in monopolization and oppression. By 1888, this unprecedented trend of consolidation had led to widespread calls for drastic reform and governmental regulation of American business.

Ohio icicle.jpgThat same year, U.S. Senator John Sherman introduced a bill that addressed these worsening conditions. Reserved and diffident to the extent that he was commonly referred to as the "Ohio Icicle," moderate in most of his policies - the perfect antithesis to his gregarious, aggressive brother William Tecumseh Sherman (of the notorious March to the Sea) - Sherman was an unlikely trustbuster. However, twenty-three years before members of the Senate were even elected by the popular vote of their constituents, he was one of the few politicians with both the willingness and the authority to attempt to rectify the situation. The bill itself, with its clear wording and unequivocal prohibition of all forms of oligarchy, met with determined resistance from conservatives claiming by turns that Congress had no constitutional authority to prohibit monopoly, that protective tariffs and not corporate wrongdoing was culpable for the lack of healthy competition, that no such problem currently existed, and that the proposed legislation would infringe upon and not help to secure the civil liberties enumerated in the Bill of Rights. After lengthy debates on the issue, Sherman's opponents succeeded in postponing any action on his bill for two full sessions. When the merits of the measure finally reached the floor in 1890, the Senator offered an eloquent exposition on the evils of monopolization: "The sole object of such a combination is to make competition impossible... If anything is wrong this is wrong. If we will not endure a king as a political power we should not endure a king over the production, transportation, and sale of any of the necessaries of life. If we would not submit to an emperor we should not submit to an autocrat of trade, with power to prevent competition." This appeal proved ineffective, however, and the bill was referred to the Senate Judiciary Committee for revision.

When it came back to the floor, both its text and its meaning had been eviscerated. The original text of the proposed legislation, designed to protect farmers' cooperatives and labor unions while specifically and unmistakeably banning corporate restraint of trade, read:

"That all arrangements, contracts, agreements, trusts, or combinations between two or more citizens or corporations, or both, of different Sates, or between two or more citizens, or corporations, or both, of the United States and foreign states or citizens or corporations thereof, made with a view or which tend to prevent full and free competition in articles of growth, production, or manufacture of any State or Territory of the United States with similar articles of the growth, production, or manufacture of other State or Territory, or in the transportation or sale of like articles, the production of any State or Territory of the United States, into or within any other State or Territory of the United States: and all arrangements, trusts, or combinations between such citizens or corporations, made with a view or which tend to advance the cost to the consumer of any such article, are hereby declared to be against public policy, unlawful, and void."

When directly contrasted with the forceful, unambiguous terms of the original statute, the impact of the familiar first section of the revised version, commonly known now as the Sherman Antitrust Act - "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 declared to be illegal" - is considerably lessened. Sherman himself was acutely aware that his landmark legislation had survived two long years of inaction and conflict only to be entirely vitiated a week before its passage. Perhaps he foresaw the disputes that would arise over the meaning of this vague sentence and the numerous court decisions that would deprive the law of much of its remaining force of the law in coming years; for, when a reporter asked him about the legislation bearing his name, he deprecated it as "totally ineffective in dealing with combinations and Trusts. All corporations can ride through it or over it without fear of punishment or detection." The first prosecutions brought under it illustrated the accuracy of his misgivings.

However, even though it was far from ideal, the Sherman Act was the law of the land and would now have to be enforced. The effort to do so would permanently transform American industry and do much to shape politics and law as the twentieth century approached.

Read the first part of this series, "The Trusts Take Control"

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