The
March 4
Unconstitutionality
of the Monopolies
Tarrah Berry
2012
CIS 1020-020
Tarrah Berry
INTRODUCTION
At the turn of the century America’s economy was booming. New technologies
and improved transportation made producing and shipping goods more efficient. At the
top of this wave of success were a few of the nation’s biggest corporations. These
companies had combined with competitors to form huge conglomerates, or monopolies.
They were responsible for much of the success of industrialization in the 19th and early
20th century. However, despite the help these monopolies provided in catapulting the
American economy, these institutions undermined the founding ideals of this nation, and
could have had disastrous effects if left unchecked. Because of the relative silence of the
constitution on this matter, that checking was left up to virtuous leaders working for the
common good.
GOVERNMENT
The only words that exist in the constitution relative to business regulation are,
“The Congress shall have power . . . To regulate commerce with foreign nations, and
among the several states, and with the Indian tribes.” Due to the vagueness of this clause
many people, not just monopolies, were opposed to government intervention. They
believed that if the government were to meddle in the affairs of business it would
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encroach on the free enterprise system embraced by America (Mansfield, 6). On the other
hand, many feared that these monopolies and trusts posed a larger threat to the rights of
competition and success long since established in America. The Sherman Antitrust Act,
passed in 1890, was the first step Congress took towards playing a more active role in the
regulation of businesses. Although the opponents of the trusts saw this as a great victory
for the common man, for the first decade of its existence, the Sherman Act was relatively
ineffective in controlling the affairs of monopolies. Due to the lack of specifics in
defining what a monopoly is, the responsibility of defining antitrust laws largely rested
with the Supreme Court.
DEPRESSION
As a result of the ineffectiveness of the Sherman Antitrust Act, monopolies
multiplied and continued to grow. Along with the expansion of monopolies came an
increase in unjust treatment of American workers. As depression gripped the nation in the
1890s monopolies treated their employees ruthlessly. Those who were lucky enough to
have jobs were not making enough to support their family. Even families in which the
father, mother, and children were working could not make ends meet. In some areas of
the country unemployment was as high as 20 percent (Mason, 165). This sparked a series
of large, very dramatic protests across the country. Those gripped by poverty who
gathered at these protests chose to blame the ‘Robber Barons’ and their respective
monopolies for their hardships. Herein was the greatest crime of the monopolies. They
robbed the people with their ability to manipulate prices, and they left them jobless and
poor through their stronghold on labor numbers and wages. If for no other reason
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monopolies were esteemed as evil because they neglected the people this nation was built
by and for. More in this sense than any other were monopolies undermining the
principles of the American founding.
POLICY
Among the most important founding ideals of the America is competition. It is
seen in the checks and balances on the branches of government. Singular power can lead
to singular corruption, and the constitution was supposed to be a safeguard to that. By the
time Theodore Roosevelt took over the presidency in 1901, little had been done to
combat the leeching of competition by the trusts. Indeed, they had seen much growth
during and after the end of the depression in 1897. Roosevelt decided to make a stand
against the monopolies. It was this devotion to protecting free enterprise that gave him
the nickname the ‘Trust Buster.’ His policy was not to prohibit combinations of
companies, but to supervise and, with prudency, control it. In many respects he was an
archetype for the President of the United States of America (Jaycox, 247). Roosevelt was
a reformer and champion of the people. He was a leader with the high moral values that
America was so desperately in need of at that time. In 1902 Roosevelt encouraged the
filing of a suit that eventually led to the dissolving of the Northern Securities trust, one of
the biggest railroad trust companies in existence at the time. The success of this case won
Roosevelt the love of the people, and encouraged Congress to quickly pass new laws to
ensure and expedite antitrust legislation such as the Elkins Act in 1903.
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PRESIDENT
Although Roosevelt made huge inroads into defeating the malignant trusts, the
battle was still not over. Many states followed his example and began to implement
Corporation Commissions into their state constitutions. These commissions were
modeled after the Interstate Commerce Commission (ICC) started under Roosevelt
(Roswenc, 72). When Woodrow Wilson took over as President he had three things on his
agenda. One of them was to more fully protect the people from monopolies. He set up the
Federal Trade Commission (FTC) and saw the Clayton Antitrust Act passed in 1914. In
addition to further crippling monopolies, the Clayton Act also gave more rights to
workers. Provisions in the detailed bill affirmed that “the labor of a human being is not a
commodity or article of commerce (Jaycox, 393).” Leaders like Wilson and Roosevelt
that cared more for the citizens than for their pocketbooks saved America from
consequences of monopolies that could have been much more drastic.
Presidents
Roosevelt
Corporation Commissions
Cared for Citizens
Wilson
Federal Trade Commission
Cared for Citizens
REVOLUTION
 As this was transpiring in America there were violent revolts being led in
Russia. Just as had happened in 19th century France, the severely poor and
mistreated Russians induced a bloody revolution in the country.
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 Had American leaders been so noble to the cause of the American
Constitution and founding, it is highly possible that such a revolution
would have occurred in America, effectively ending throwing the nation
back into the Human Predicament they had all worked so hard to avoid for
over 100 years.
MONOPOLIES
In many ways the turn of the century was a coming of age for America.
1. It was a time of unheard of success, yet at the same time one of
unimaginable poverty. Both of these circumstances were due in large part
to the actions of monopolies.
2. Despite the achievements of the American economy in the times of these
monopolies, it could not have sustained itself for long.
3. In the end the economy, and possibly even the nation, was saved by
virtuous leaders – leaders carrying on the tradition of justice started by the
founders of this great nation.
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Bibliography
Jaycox, Faith. The Progressive Era. New York: Facts On File, 2005.
Mansfield, Edwin. Monopoly Power and Economic Performance. New York: Norton &
Company, 1974.
Mason, Edward S. Economic Concentration and the Monopoly Problem. Cambridge,
Massachusetts: Harvard University Press, 1957.
Roswenc, Edwin C. Roosevelt, Wilson and the Trusts. Boston: D.C. Heath and Company,
1950.
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