Problem Of Monopolies And Trusts In The Progressive Era

2. How did the federal government tackle the problem of monopolies and trusts in the Progressive Era?

The first trust, created by John D Rockefeller, was the Standard Oil Trust. There were 40 companies under this trust that had control of over 90% of all oil refining and oil marketing in the United States. Other trusts created during this time included sugar, cotton, tobacco, steel, and railroads. (http://www.linfo.org/sherman.html) These trusts had control of their respective industries and basically were monopolies, meaning there was not any competition and all prices were then set by the trust and the trust alone. To combat this practice, John Sherman (the younger brother of William Tecumseh Sherman) (http://www.linfo.org/sherman.html) drafted

This legislation became known as the Sherman Anti-Trust Act. (Keene, Chapter 16.1.6) It passed through congress with only one vote against it, (http://www.linfo.org/sherman.html) however, the wording in it made it hard to enforce and only 18 cases were filed between 1890 and 1904. (Keene, Chapter 16.1.6) The Sherman Anti-Trust Act was used successfully to take down the Northern Securities Company, a railroad company. (Keene, Chapter 18.2.1) Standard Oil was the next trust to be taken down. By breaking Standard Oil down into a number of companies it created an era of competition that was a boon to the industry as a whole. (http://www.linfo.org/sherman.html) When the Supreme Court handed down the Standard Oil ruling they cited the “Rule of Reason” to make sure no one believed that all trusts were bad, just when they used tactics to keep themselves in complete control. (Keene, Chapter 18.2.1) Other legislation passed after this just backed up the Sherman Anti-Trust Act. The Hepburn Act gave the Interstate Commerce Commission power to keep railroad rates from going too high. The Mann-Elkins Act kept the phone and telegraph rates