Created in 1890, the Sherman Antitrust Act was the first legislation allowing the government to enforce regulations on trusts that interfered with free trade and market competition. Named after U.S. Senator John Sherman of Ohio, the act allowed government to establish proceedings against trusts in order to disassemble these organizations. Trusts had created many problems in the free market such as establishing monopolies over certain industries. This lead to extremely high prices and low supply which negatively affected consumers and impeded free enterprise.
Although the government had a laissez-faire approach to business during this time, they decided that it was necessary to intervene on the situation in order to maintain America’s free market …show more content…
The government knew that this act would satisfy the people but that it would be hard to implement. Often, courts had difficulty interpreting important phrases like “trusts”, “combinations”, and “restraint of trade.” One of the main ways that the exact interpretation of the act became relevant was through applying it different cases. For example, in the E.C. Knight case where a company acquired four businesses constituting 98% of the marketplace, the court ruled that the business was not in violation of the Sherman Antitrust Act because the businesses were all located in the same state and therefore did not affect interstate commerce. However, in the Addyson Pipe Company Case, the court ruled that six producers of pipe were forced to end an agreement that had explicit statements regarding limiting competition, fixed prices, and interfering with interstate competition. These statements were in direct violation of the Sherman Antitrust Act and therefore the previous ruling in favor of E.C. Knight did not apply to Addyson Pipe Company’s case. Additionally, finding clearer interpretations through court cases were not the only measures to support the Sherman Antitrust Act. President Theodore Roosevelt issued two legislative measures known as the Clayton Antitrust Act and the creation of the Federal Trade Commision. Both of these helped to further dissolve trusts and their illegal activities, providing support to the purpose of the Sherman Antitrust Act. Because of this groundbreaking measure, the American government is able to thoroughly conduct legal proceedings to protect free enterprise and our capitalist
Although the government had a laissez-faire approach to business during this time, they decided that it was necessary to intervene on the situation in order to maintain America’s free market …show more content…
The government knew that this act would satisfy the people but that it would be hard to implement. Often, courts had difficulty interpreting important phrases like “trusts”, “combinations”, and “restraint of trade.” One of the main ways that the exact interpretation of the act became relevant was through applying it different cases. For example, in the E.C. Knight case where a company acquired four businesses constituting 98% of the marketplace, the court ruled that the business was not in violation of the Sherman Antitrust Act because the businesses were all located in the same state and therefore did not affect interstate commerce. However, in the Addyson Pipe Company Case, the court ruled that six producers of pipe were forced to end an agreement that had explicit statements regarding limiting competition, fixed prices, and interfering with interstate competition. These statements were in direct violation of the Sherman Antitrust Act and therefore the previous ruling in favor of E.C. Knight did not apply to Addyson Pipe Company’s case. Additionally, finding clearer interpretations through court cases were not the only measures to support the Sherman Antitrust Act. President Theodore Roosevelt issued two legislative measures known as the Clayton Antitrust Act and the creation of the Federal Trade Commision. Both of these helped to further dissolve trusts and their illegal activities, providing support to the purpose of the Sherman Antitrust Act. Because of this groundbreaking measure, the American government is able to thoroughly conduct legal proceedings to protect free enterprise and our capitalist