The GIlded Age of America
What’s known as the Guiled Age was a wonderful time for wealthy Americans. Not so much for the working class.
The “Titans of Industry” got richer at the expense of the rest of the nation. One big reason for this: The establishment of trusts, which helped industries monopolize business and destroy competition.
Things began to change on July 2, 1890 — 135 years ago Wednesday — when the Sherman Antitrust Act was signed into law.
What Were Trusts?
Once the Civil War ended and the nation was reconstructed, it was time for the United States to focus on its economy. The latter part of the 19th century saw the rise of big business.
Companies — banks and railroads and oil at first, but then spreading to other industries — accumulated wealth and began looking for ways to accumulate more wealth and to monopolize their sectors.
One way they did this was with trusts. Trusts were arrangements in which stockholders in several companies transferred their shares to a single set of trustees in exchange for a certificate that entitled them to a share of the consolidated company’s earnings.
As the big got bigger and the rich got richer, consumers increasingly felt crunched.
Sherman To The Rescue
The aim of the Antitrust Act was to preserve competition in the market by forbidding monopolies and other practices that restrained trade. This might include price fixing and market allocation.
Library of Congress
The bill was named for Sen. John Sherman of Ohio, chairman of the senate finance committee and secretary of the treasury under President Rutherford B. Hayes.
The Sherman Antitrust Act passed April 8, 1890, in the Senate with a vote of 51-1. In June 20, 1890, it passed the House unanimously and was signed into law by Benjamin harrison in 1890.
Sort Of
The act authorized the federal government to take action against trusts in order to dissolve them. Practices “in restraint of trade or commerce among the several states, or with foreign nations” was declared illegal. Fines and jail time for those found guilty of such practices were established.
But to a large extent, not much changed. The act went only so far.
In 1914 — 24 years later — Congress passed the Federal Trade Commission Act, which created the FTC and banned unfair methods of competition and unfair or deceptive practices. That same year, Congress passed the Clayton Antitrust Act that closed a number of loopholes by prohibiting certain practices that weren’t covered by the earlier law.
It wasn’t until the Theodore Roosevelt “trust busting” campaigns that significant progress was made against trusts and unfair business practices. Antitrust regulations have been used to great effect ever since.
A newspaper representation of big business back in the day.
Notable Federal Antitrust Action
The History Oasis web site compiled a list of landmark antitrust actions taken over the past 114 years.
