What was the Sherman Anti-Trust Act? How was it used during the Presidency of Roosevelt? During the 19 th century the emergence of what we now call the "economy" was born. Prior to 1840 there were really no such thing as "big business." The first real "big business" was the Railroad. The building of the Railroad Empire and rail lines throughout the United States drastically changed the American way of life. Due to new abilities to travel long distances and communicate at a much faster pace than before, the American economy began to boom. Competition between Railroad lines was a cutthroat and fierce environment. Railroad executives were in line to become extremely wealthy.
Not only were the Railroad companies booming but also the steel manufacturing business was working overtime to supply steel for the railroad line. Steel companies were also experiencing stiff competition. The result of all of the competition between large industry was that the companies turned to Pools, Trusts, and Holding companies for a solution. The holding company's goal was to control price competition through cooperation and coordination of rival businesses. This resulted in large monopolies. Larger railroad companies would intimidate and buy out the smaller ones putting themselves in total control of the railroad business.
In 1890, with the support of President Benjamin Harrison, Congress passed the Sherman Anti-Trust Act. John Sherman, a lawyer and senator from Ohio, was the author of the legislation that attempted to curb the growth of monopolies. The act declared illegal any business combination that sought to restrain trade or commerce. Penalties for violation of the act included a $5, 000 fine and / or a year's imprisonment. Due to the vague wording of the act and the lack of a commission willing to enforce the act, it was rarely ever put into use. In 1904 President Teddy Roosevelt revitalized the Sherman Anti-Trust Act.
Roosevelt used his Presidency to advance "corporate progressivism." His goal was not to do away with corporations but to make sure that the management of these big businesses was kept in check. He feared that irresponsibility and greediness would result in social unrest and radical politics causing discord among American citizens and disruption of daily business. Roosevelt chose the Northern Securities Company to make an example of. The company had recently been involved in a large and bitter stock fight between railroad company owners that had resulted in a railroad monopoly. Roosevelt declared that this was just the sort of thing that the Sherman Anti-Trust act was implemented for. He ordered government attorneys to file suit against the Northern Securities Company for restraint of trade.
The Roosevelt administration won its case before the U. S. Supreme Court in 1904. Afterwards Roosevelt used the Anti-Trust Act in forty other cases. Roosevelt earned the reputation as the "trust buster" because of his relentless pursuit of large monopolies.