What is the Sherman Antitrust Act?
The Sherman Antitrust Act was a legislative Act that was passed in 1890, which was proposed by Ohio Senator John Sherman. The precepts of the Sherman Antitrust Act enacted what is considered to be the foremost structural procedure addressing fair and ethical practices within business and commercial activity.
At the close of the 19th century, legislatures and lobbyists alike – such as John Sherman – had begun to notice that industry conglomerates were operating in a manner presumed to be antithetical to the general and public commercial prosperity within the commercial market in the United States of America; the passing of the Sherman Antitrust Act prompted the enforcement of regulatory standards and preventative measures with the regard to imposed limitations of businesses and subsequent market monopolies.
The History of the Sherman Antitrust Act
The event that is considered to have prompted the passing of the Sherman Antitrust Act is defined as the commercial practices undertaken by the Standard Oil Company, which was a conglomerate commercial operation owned and operated by john D. Rockefeller; the practices undertaken by the Standard Oil Company – in tandem with the presumed repercussions resulting from them facilitated the passing of the Sherman Antitrust Act:
The Beginnings of the Standard Oil Company
With the hope of assuming a totalitarian agency over the oil industry within the United States of America, the executives of the Standard Oil Company – under the direction of John D. Rockefeller – proceeded to undertake mass purchases of competing oil companies. The alleged methodology attributed to these purchases was believed to facilitate a national dominance of the oil market, as well as the ability to control both pricing and availability within the oil market.
The Development of Trusts
Upon the undertaking of the mass purchases of competing oil companies, the Standard Oil company attempted to mask the impending monopoly by allowing the companies purchased to retain their original names; this resulted in an inconspicuous dominance of the oil market within the eyes of the American public – although individuals assumed that they were purchasing oil from a company other than the Standard Oil Company, in reality they were patronizing the Standard Oil Company.
The Passing of the Sherman Antitrust Act
Subsequent to the development of this monopoly, legislatures and lobbyists had begun to notice that the Standard Oil Company had lowered its prices of oil so much so that competing oil companies were unable to match the pricing of Standard Oil; due to Rockefeller’s Standard Oil Company ownership of a multitude of oil companies, the availability of oil supply – and its corollary pricing – was in the control of a single entity. The Sherman Antitrust Act prohibited the establishment of trusts of these natures in order to enact discreet monopolies.
The Sherman Antitrust Act and the Constitution of the United States
A primary tenet of the Sherman Antitrust Act was to ensure the viability of the free market and economic ethics latent within the United States’ Commercial system; the dominance of a single entity in the form of Standard Oil was perceived to be a constitutional violation of the prosperity and livelihood of the general American Public.